The Indian government’s chief economic adviser expressed confidence Friday that the world’s sixth-largest economy can weather the energy-price shock caused by the Iran war if the ceasefire holds.

“We feel that if the current ceasefire holds and also gets extended indefinitely, by the end of the calendar third quarter, energy supply and prices should normalize, and I think that is something we can absorb,” V. Anantha Nageswaran said at Semafor World Economy in Washington, DC.

The country has adequate stocks of fertilizer for the sowing season, he said, although rising prices of cooking oil are squeezing the poor. Still, the government has the fiscal firepower to provide support for the poor, if necessary, after more than halving its budget deficit in recent years. He described the fallout from the Iran war as “a minor, short term setback” to India’s goal of reducing poverty and expanding its middle class.

Longer term, Nageswaran pointed to India’s effort to diversify sources of energy and reduce its dependence on oil imports. The country recently opened its nuclear energy sector to foreign and private investment and has exempted imported capital goods for the sector from tariffs. “We are approaching this as a long term challenge,” he said. “We have to diversify our energy sources.”

India, the world’s most populous country, is among the biggest importers of crude oil, which contributes about a quarter of its primary energy supply. Imports account for almost 90% of India’s oil consumption.