Modi's Austerity Appeal and Risks of Prolonged Iran War

PM Modi's call for fuel and FX conservation signals deep concern over India's exposure to a prolonged Iran war. Markets have reacted negatively as energy dependency and rising inflation threaten the previous Goldilocks economic environment.

Key Takeaways

• 1.India faces extreme macro risks from the Iran war due to 50% of crude and 70% of natural gas imports transiting the Strait of Hormuz.
• 2.PM Modi has issued an 'austerity appeal' to conserve fuel and foreign exchange, targeting gold buying and non-essential travel.
• 3.Inflation is expected to breach the RBI's 6% threshold by October 2026, ending the previous 'Goldilocks' period.

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