Union Finance Minister Nirmala Sitharaman said high and volatile global prices of fuel, fertilizer and gold are creating the most serious external challenges for India, even as domestic economic indicators remain resilient

Speaking at the 37th SIDBI Foundation Day programme, the minister linked the uncertainty to the ongoing West Asia crisis and stressed that the government’s approach is to protect citizens, support MSMEs and keep supply chains moving.

“It is because of high international crude prices,” Sitharaman said, explaining the context behind the Prime Minister’s call to conserve foreign exchange. “And the high crude prices are ever changing. It’s seriously dynamic. One rate at one point in time, within a week another, within a week another, and so on. Like that it has been for over now 80, 90 days.”

She said that there are three pressure points together, “High international crude prices and very fluctuating one. High international fertilizer prices. Considerable increase in the fertilizer prices, high gold prices that is creating some challenges on the external front,” she said. “To just put it in context, all these three payments will have to be in foreign exchange. There is no rupee trading there. We should please understand the context of these three Fs.”

The minister spelled out the three “Fs” directly. “Three Fs, fuel, fertilizer, and foreign exchange. And the foreign exchange is for, in this context, purchase of gold,” she said.

Sitharaman said the West Asia situation was not only geopolitical but had immediate business consequences. “For businesses and common people, it can mean higher fuel cost, delayed cargo, costlier shipping, shortage of inputs, pressure on working capital, and uncertainty in export orders,” she said. “The approach, therefore, has been and will have to be to protect citizens, support MSMEs, safeguard exporters, keep supply chains moving, and maintain economic stability.”

While flagging external headwinds, she maintained that domestic fundamentals were strong. “We must also recognize that India’s domestic economic situation remains positive and resilient even today,” Sitharaman said. She cited GST collections, tractor and vehicle sales, and life insurance premiums as evidence. “Gross GST collections crossed $22,000,000 crores for the year 2025-26, rising 8.3%,” she said. “Domestic wholesale tractor sales rose by 26%. Passenger vehicle domestic sales grew by 25%.”

The minister also pushed back against negative narratives. “There is a section, I would think, of Indians who very quickly want to decry the achievements of our own people… a pessimistic, cynical narrative is generated which is just not right. It’s not right is one thing, but it is wrong because it is fear-mongering. India cannot afford fear-mongering,” she said.

On the government’s response, she highlighted tax cuts and credit support measures. Sitharaman said the Centre reduced excise duty on petrol and diesel by Rs 10 per litre to protect citizens and businesses from rising global crude oil prices, adding that the move would cost the government more than Rs 1 lakh crore in revenue.

For MSMEs, she said the Emergency Credit Liquidity Guarantee Scheme 5.0 aims to provide an additional Rs 2.55 lakh crore in credit, with 100% government guarantee coverage for MSMEs.