The Centre on Thursday said it had sufficient fiscal headroom to manage the impact of global economic turbulence despite an estimated revenue loss of nearly ₹1 lakh crore from the recent cut in excise duty on petrol and diesel, while outlining a series of measures taken over the past two months to shield the economy from external shocks.
Finance Ministry officials said the government’s ability to absorb the revenue impact while continuing with relief and stabilisation measures stemmed from “prudent fiscal management and sustained reforms over the last decade”.
“The ability to act proactively, allocate resources and provide relief where needed is the result of prudent fiscal management and sustained reforms over the last decade,” an official said, adding that the government remained committed to protecting economic stability amid global uncertainty.
The officials said the reduction in central excise duty on petrol and diesel by ₹10 per litre on March 26, announced in response to the sharp rise in global crude oil prices, could result in a revenue loss of around ₹1 lakh crore in the current financial year.
Fuel tax cuts, export duties and supply-side balancing
According to the government, the fuel tax cut was aimed at cushioning consumers from rising fuel prices, containing inflationary pressures, supporting transport and logistics sectors and easing pressure on oil marketing companies.
At the same time, the Centre imposed export duties and cesses on petrol, diesel, and aviation turbine fuel to discourage overseas shipments and ensure adequate domestic availability amid volatile global energy markets.
16-measure stabilisation push amid global shocks
Officials said the government had introduced 16 measures over the past 72 days to reduce the economic impact of the ongoing global crisis, particularly disruptions arising from tensions in West Asia.
Among the key steps was the creation of an Economic Stabilisation Fund with a corpus of ₹1 lakh crore to provide a fiscal buffer against supply-chain disruptions, sector-specific stress and other external shocks.
Industry relief and credit support measures
The government also announced targeted relief measures for the domestic industry. A special one-time SEZ Relief Window notified on March 31 allows eligible manufacturing units in Special Economic Zones to sell goods in the domestic tariff area at concessional customs duty from April 1, enabling companies to utilise idle capacity amid weakening global trade conditions.
In another measure, customs duty exemptions on specified petrochemical inputs were granted from April 2 to June 30 to support sectors such as textiles and pharmaceuticals that depend heavily on imported raw materials.
Officials also highlighted the Cabinet’s approval earlier this month of the Emergency Credit Line Guarantee Scheme (ECLGS 5.0), aimed at easing working capital stress among MSMEs, traders, suppliers, and service providers affected by the West Asia crisis.
The scheme is expected to facilitate additional credit flow of ₹2.55 lakh crore, including ₹5,000 crore earmarked for airlines, with 100 per cent government guarantee coverage for MSME loans.
Import duty tweaks and maritime insurance push
On Wednesday, the government also raised import duties on gold, silver and platinum to curb non-essential imports and reduce pressure on foreign exchange reserves and the rupee.
“Since these imports require foreign exchange, moderating avoidable imports helps save dollars, reduce pressure on the rupee, and preserve foreign exchange for essential imports such as oil, fertilisers and critical inputs,” an official said.
The same day, the government launched the Bharat Maritime Insurance Pool, with sovereign guarantee support of ₹12,980 crore, to ensure uninterrupted maritime insurance coverage for Indian trade and cargo movement, amid rising war-risk insurance costs due to geopolitical tensions.
Published on May 14, 2026