Overview
- Chief Economic Advisor V. Anantha Nageswaran, speaking Tuesday at a CII event, called the West Asia war a live balance‑of‑payments stress test and set FY27 priorities of managing the current account, securing financing, and limiting rupee losses.
- Markets showed strain as the rupee fell to a record 95.6 per dollar on Tuesday, with estimates now pointing to a current account deficit above 2% of GDP in FY27 and state fuel retailers facing about Rs 2 lakh crore of losses in the June quarter.
- India’s exposure is heavy because it imports 87% of its crude, about 46% moves through the Strait of Hormuz that has seen traffic collapse since February 28, it buys about 60% of its LPG with over 90% from the Gulf, and 38% of remittances come from that region.
- An editorial in Hindustan Times urged calibrated demand deflation, including higher fuel prices and lower fuel use, warning that vague austerity talk is unsettling investors who now whisper about drastic steps like capital controls.
- Nageswaran also pressed large companies to pay micro and small suppliers on time, noting that delays choke working capital and push up borrowing costs for firms already squeezed by pricier energy and a weaker rupee.