Prime Minister Narendra Modi’s appeal for Indians to rationalise consumption of fuel, abstain from buying gold for a year and work from home, are “an appeal for intelligent substitution of the consumption” of goods that make a large part of India’s import bill and affect the Current Account Deficit (CAD), according to Gourav Vallabh, member of the Economic Advisory Council to the Prime Minister (EAC-PM).

Speaking to The Hindu, Mr. Vallabh said that there was “no ban on anything, nor any need for any panic” as the Prime Minister’s call for a considered change in consumption pattern was an appeal above all else.

According to Mr. Vallabh, there are three big geopolitical pressures shared across the world — the conflict in West Asia, the slowdown in Europe due to the Russia-Ukraine war, and the U.S.-China face-off that has directly hit commodities.

Crude oil and gold

“In the Indian context, we need to see all three overlaid on our import bills. The two biggest items in that bill are crude oil and gold. Figures from financial year 2026 show that we imported around ₹11 lakh crore worth of crude oil and gold for the same period was ₹6.5 lakh crore [totalling], approximately, ₹18 lakh crore. The price of crude oil, which was $70 per barrel, is now, after two-and-half months of war at $105, without it reflecting at the pump stations. The foreign exchange outflow on these two items alone have risen to ₹22-23 lakh crore to make up for that gap. Prime Minister Modi has appealed for an intelligent substitution of these consumables, if possible,” he said.

“If by this particular advice, we can reduce our forex outflows by 10% in a year, we will be saving close to ₹2.5 lakh crore of foreign exchange outflow [per year],” he said. “Prime Minister Modi’s appeal is for smart, intelligent substitution of the consumption of goods which have foreign exchange impact. In a geopolitical crisis, where there is a lot of uncertainty, the message is that there are certain measures which are the people’s own hands,” he said.

Prolonging war

He added that there was an expectation earlier that the West Asia war would end by March or later in April, but now a situation of uncertainty over outcomes prevails. “If it is going to continue for a long term, then naturally the world will find its own way, routes will be recalibrated, but currently not just fuel or gas, almost everything is undergoing supply stress and high prices, from parts for laptops, for cars, etc.,” he said.

Despite the difficult situation, he sounded optimistic about the growth prospects of the Indian economy, stressing that there was no need to panic. “Most agencies that look into these issues, like the Reserve Bank of India, World Bank and the IMF (International Monetary Fund), are predicting that the Indian economy is going to grow at 7% of GDP or more than that in this fiscal year. No other country is going to grow at the rate at which we are growing right now, as far as large economies are concerned,” he said.