West Asia crisis hitting businesses with higher costs; govt working to shield MSMEs, exporters, citizens: FM Sitharaman

Finance Minister Nirmala Sitharaman on Monday said the West Asia crisis is not only a diplomatic and geo-political issue and is hurting businesses, MSMEs and citizens. FM said the government’s approach is to safeguard the business and the common citizens and maintain economic stability.

FM Sitharaman also said high international crude oil prices, unimaginable increase in the fertiliser prices, and high gold prices are creating challenges on the external front. Sitharaman also pointed out that India’s domestic economic situation remains positive and resilient even today.  

“The West Asia crisis is not only a diplomatic and geo political issue. For businesses and common people, it can mean higher fuel cost, delayed cargo, costlier shipping, shortage of inputs, pressure on working capital, and uncertainty in export orders. The government’s approach is to protect citizens, support MSMEs, safeguard exporters and keep supply chains moving,” Sitharaman said at the foundation day celebration of Sidbi.

“Just imagine all of the issues coming together due to the West Asia crisis. What will be the sense of uncertainty that small units will feel and will they be in a position to make any plans. It is a big challenge for the countries, not only India but for many other countries. The approach, therefore, has been and will have to be to protect the citizens, and maintain economic stability,”

FM explained the rationale behind Prime Minister Narendra Modi’s call for preserving foreign exchange reserves. “Hon’ble PM’s call to conserve foreign exchange as far as possible is very important in this context. There has been a lot of narrative but we need to understand the context. It is because of high international crude prices and the high crude prices are ever changing. It is seriously dynamic. The prices have been changing every week for eighty ninety days now,” she said.

“So, high and fluctuating international crude oil prices, unimaginable increase in the fertiliser prices, high gold prices, are creating challenges on the external front. Payments for all these three will have to be made in foreign exchange. There is no rupee trading. We should understand the context of three Fs. Fuel, fertilizer and foreign exchange. We need to understand this and appreciate that the challenges are more external driven,” she said.