Modi urges cuts to curb inflation

Narendra Modi’s message was basically this: India may be heading into a costlier oil environment, so households should start behaving like the country is under external pressure. At a rally in Hyderabad on May 10, he asked people to use less petrol and diesel, avoid foreign travel for a year, and even stop buying gold during festivals for a year. He also pushed carpooling, metros, rail freight, and a 10% cut in cooking-oil use. ### What did Modi actually say? The speech was not a vague “tighten your belts” line. Modi gave a checklist. Use public transport where possible. Use metros in cities that have them. Carpool. Move goods by rail. Delay non-essential foreign trips. Don’t buy gold for a year. Reduce cooking-oil consumption by 10%. He framed all of that as a way to cut dependence on imported fuel and foreign currency while conflict in West Asia threatens energy markets. (indianexpress.com) ### Why talk about petrol first? Because oil is the fast transmission channel. India is heavily dependent on imported crude, and that means a global price shock can move quickly into transport costs, factory costs, and then household prices. Official petroleum data show crude import dependence at 88.2% in FY25, with the crude import bill at $137 billion. That is the real backdrop to the speech — not just inflation in the abstract, but exposure to imported energy. (indianexpress.com) ### Why bring gold into it? Gold is not just jewelry in India — it is also a giant import category. When households buy more gold, dollars leave the country. Commerce data cited in recent coverage put India’s gold imports at $69 billion in April-February 2025-26, up almost 29% from a year earlier. So when Modi says “don’t buy gold for a year,” he is really talking about the current account and foreign-exchange pressure, not trying to change wedding culture for its own sake. (ppac.gov.in) ### Why mention foreign travel too? Same logic. Outbound travel means more spending in foreign currency at a moment when policymakers want to conserve dollars and steady the rupee. India still has a large reserve buffer, but it has been slipping. RBI’s weekly statistical supplement shows the reserve data are updated through May 8, and recent reporting on the May 1 week put reserves at about $690.7 billion after a $7.79 billion drop. (hindustantimes.com) That is not a crisis number. But it is the kind of move that makes governments more sensitive to oil and import-heavy consumption. ### Is this really about inflation? Yes — but indirectly. India’s inflation problem has often come from food, but fuel is the classic second-round risk. If diesel gets costlier, freight gets costlier. If LPG rises, household budgets tighten. If aviation fuel rises, travel costs go up. A Reuters poll published this week had April CPI seen at 3.8%, up from 3.4% in March, with higher fuel costs tied to the US-Iran conflict starting to feed through. (rbi.org.in) So Modi’s appeal looks like an attempt to get ahead of that pass-through. ### Why does the tone feel unusual? Because prime ministers do not usually tell people to skip gold and weddings abroad unless they want to signal that the external shock is serious. The catch is that this is also politics. Asking households to economize can sound like burden-sharing — but it can also sound like the state preparing the public for price increases it may not fully absorb. That is why the speech landed so hard online. (msn.com) ### So what is the real takeaway? This was less a lifestyle sermon than a warning shot. Modi was telling Indians that if West Asia turmoil keeps oil elevated, India’s weak spots are obvious — imported crude, gold demand, and dollar outflows. Whether people actually stop buying gold is another matter. But the government has now made clear what it is worried about. (indianexpress.com)