As Prime Minister Narendra Modi addressed an assembly in Hyderabad on May 10, 2026, there was an air of patriotic solemnity about the country that India had not seen since the early days of the coronavirus lockdowns. This wasn't a statement regarding policy or politics; rather, it was a more elusive appeal from the prime minister to the country’s 1.4 billion people to rein in their spendthrift ways, keep themselves out of the gold shop, avoid their trip to Dubai, and work from home through a Zoom meeting instead of burning gas driving in for work. When the markets opened the following day, there was little doubt that the message had gotten across. On May 11, the BSE Sensex index fell by 1,313 points to end the day at 76,015, whereas the Nifty 50 lost 360 points and closed at 23,815. The Nifty 50 had lost more than 500 points in three straight trading days. The stock prices of jewellery firms took the worst hit, where Titan, which is part of the Tata Group, experienced an almost 6% drop during the early hours of trading. Other firms operating in the jewellery industry lost up to 10% of their share values. IndiGo's parent company, InterGlobe Aviation, saw its shares fall by 2.8% and reach an intraday low of around ₹4,276.80. SpiceJet recorded more than a 4% loss, whereas GMR Airports lost almost 4%. Overall, the total market value witnessed losses of around ₹4 trillion during the trading session.

To appreciate the gravity of the message of Modi's speech, one needs to appreciate the extent of the changes brought about by the Iran war in relation to India's economic base. India needs around 85 per cent of its oil requirement through imports - a percentage that had been relegated to the footnotes of debate but is now the centre of discussion across every boardroom in the country. Around 50 percent of the crude needs, 60 per cent of the LNG, and almost all the LPG of India flow through the Strait of Hormuz. As soon as the Strait became unusable after the US-Iran war broke out in early March 2026, Brent crude prices rose from about $80 to more than $120 per barrel in less than a week's time; an event called by the Observer Research Foundation an extremely important dislocation of supply. While prices may have eased subsequently, when Modi made his speech, they were still hovering around the $105 mark for Brent crude. The effect of an increase of $10 per barrel on crude prices, per ORF estimates, causes the CAD of India to widen by 40 to 50 basis points, and the rate of inflation increases by 35 to 40 basis points. It seems that India's state-owned companies engaged in the business of oil marketing, such as Indian Oil, Bharat Petroleum, and Hindustan Petroleum, were losing billions of rupees due to their inability to cover losses. It is reported that these companies lost more than ₹1 lakh crore in just ten weeks in order to save India from any price shocks. The import bill paints the other half of the picture. In the fiscal year that ended in March 2026, India imported $174.9 billion worth of crude oil and petroleum products, accounting for 22% of its total imports. Additionally, gold imports contributed another $72 billion to its foreign trade, positioning India as the second largest importer of the precious metal after China. While India’s foreign exchange reserves had surged to a high of $728.5 billion in February 2026, they had since fallen by more than $40 billion. The rupee, which was already under pressure, was hovering around record-low levels against the US dollar.

The request for saving fuel made by Modi must have been the most practical among all the requests that he made to the citizens. The reason was that the coronavirus period itself stood as an example for him because India, during the period, developed a very advanced infrastructure to hold online office sessions and other work-from-home processes. In some way or other, the structure proved the fact that there is enough white-collar labour force in India that does not need any physical commuting.

The evidence of the recent pandemic years further confirms this understanding. In the months between April and June 2020, India's consumption of petrol fell significantly by around 45–50% relative to the same period in the previous year, owing to constraints in mobility brought about by the lockdowns. Although there is no way that an appeal for wartime frugality in terms of fuel use can emulate such drastic cutbacks in fuel demand, a modest drop in non-essential fuel consumption, if sustained by 10–15%, would definitely take some strain off the supply side. Another suggestion made by Modi was for increased adoption of public transportation systems and car-pooling, which have been successfully adopted by many other Asian nations in periods of crisis. The remote work option becomes especially relevant for India, given its booming information technology and service sectors. If even 20-25 percent of the estimated 5 million people working in India’s tech capitals like Bengaluru, Hyderabad, Pune, and Chennai were to go fully or partially remote, then their combined cost savings on gasoline or diesel fuel would amount to several thousand crores per month. It is indeed a voluntary request, and voluntary requests are dependent on public mood swings. However, the sight of a prime minister calling for economic sacrifice in the name of national responsibility has had its effect in India before. The demonetization of 2016, despite its uncertain end results, proved that Indians are willing to suffer a lot of hardships if the request comes with a nationalistic pitch.

None of Modi’s suggestions was quite as culturally significant as his suggestion for people to refrain from buying gold. In India, gold does not exist only for its value; it exists in weddings, in savings accounts, in insurance policies against an uncertain future, and even as a statement of affluence in several communities. The per capita demand for gold in India goes beyond that of any other nation in the world. However, looking at India’s economy from a macroscopic point of view, the import of gold can be compared to bloodletting: money goes out, nothing productive comes in, and the foreign exchange reserve shrinks as a result.

The import of gold in India, worth $72 billion in FY2025-26, is staggering indeed when one considers its relative size in the greater scheme of things. In relation to crude oil imports, it is entirely different because, unlike gold, crude oil is put into use by industries and contributes to their efficiency in terms of production and jobs. 

The drop in jewellery inventories on May 11 was not solely attributed to the issue of demand, but rather was a realisation that if there is any change in government rhetoric that influences culture towards gold, then there is going to be a different outlook for demand trends altogether in this industry.

When India faced a balance of payments problem in 1991, leading to the government having to ship out 67 tonnes of gold to the Bank of England in exchange for foreign currency reserves, this situation highlights the importance of the relationship between India and gold from a macro perspective, which is quite complex. India has historically not been very susceptible to campaigns advocating decreased use of gold. Nevertheless, such symbolism can play an influential role at the right time, as seen through the 6% drop in the shares of

Titan. Now consider the impact of Modi’s address on individual families, instead of the nation, and reactions to his message take on a much clearer distinction depending on their economic background. In the case of a middle-class household in Bengaluru planning an international vacation, the call not to travel abroad for a year might come across as either convincing or irritating to many. Indeed, the airline company IndiGo had been working hard to expand its international operations and had envisioned 40 per cent of its flights being international by 2030.

In this regard, for the farmers, the call for reducing the consumption of fertilisers by up to fifty per cent might well be the most threatening aspect of the entire speech. India happens to be the largest consumer of urea in the whole world, consuming about ten million tonnes annually. The importation of fertilisers is one of the most costly activities in terms of foreign exchange and is also heavily subsidised by the government, thereby imposing a burden on the government’s budgeting especially during economic emergencies. However, the issue poses a tough choice since fertilisers have become the key to India’s legacy of the green revolution, and any decrease in their consumption may affect agricultural production at a time when food security is a matter of concern. Over half of the population in India depends on agriculture. Small enterprises that depend upon logistics such as transport firms, cold chain operations, tour operators, and events management agencies will be under pressure for an instant compression of demand, if any of the calls made by Modi are responded to in full or in part. Tour operators are in a spot of bother since they have to balance between the increased cost of aviation fuel, resulting in increased fares, and the call of the government urging its citizens not to undertake foreign travel. The third call to reduce cooking oil usage also impacts the hospitality industry, where hotels and caterers operate on slim profits.

Maybe the most intellectually stimulating query that arises from Modi’s speech concerns the possibility of patriotic economic appeals to change consumer behaviour en masse in contemporary India. There is indeed a good amount of ambiguity concerning this question. While it is quite clear from India’s demonetization experience of 2016 that people were willing to tolerate a lot of inconvenience in terms of lining up and facing liquidity problems because of a call from the country’s Prime Minister regarding fighting corruption and black money, it is also evident from the Indian experience during the pandemic that behavioral modifications such as increased reliance on digital payments, etc., have occurred in response to the appeal of a crisis, although some aspects are more lasting than others.

When pointed out, however, any such criticism would centre around the inequity of sacrifice. Commentators have rightly pointed out that the structural weaknesses, like the dependence on imports of crude oil, the habit of importing gold, or the growth of tourism overseas, are the results of decades' worth of policies, not consumer behaviour per se. To ask the citizens to make up for those policies in terms of personal sacrifices, while oil companies do not suffer from price increases due to government protection, would seem to be unjust. However, there is more to it than just the criticism, and this is where structural crisis response falls short.

In the period preceding his address, UBS Securities had reduced India's GDP growth forecast for FY2026-27 from 6.7% to 6.2%. However, in an interview with CNBC, former Indian Ambassador to the US, China, and Sri Lanka, Nirupama Rao, expressed her optimism and stated that there were no imminent shocks to be faced by India's economy. Her words sound much more comforting compared to the alarmist tone that has been raised. In fact, the truth

lies somewhere in between. Today's situation in India is surely not as gloomy as that of 1991. Although quite low, foreign exchange reserves of India are not in a worrying position today. However, there comes a particular moment in the history of any nation when the government realises that technocratic policies will no longer be enough and resorts to the moral imagination of the citizens. Modi’s address in Hyderabad was such a moment. While the politics of Modi can be disagreed with, the economic reasoning behind his appeal makes sense - the import bills of India are being destroyed by a combination of expenses on fuel, gold, and expenditure abroad, and each citizen who lessens their burden adds to the greater picture. But then again, the key challenge lies in figuring out what comes afterwards. The government did not merely call upon its people to make do with less in World War II Britain; it put in place systems that enabled them to be fair and measure the rationing process. The success of the 1991 stabilisation programme in India was not achieved by cutting consumption on the part of its citizens but rather through the implementation of structural changes that increased productivity. It may take one very persuasive speech to achieve a desired effect, but it cannot replace a transition plan towards energy efficiency or a change in the system of subsidies. Modi’s charm, in its finest form, is a bridge that helps bring everything together while the difficult task continues. Whether or not the bridge holds depends more on what the government does than on whether Indians forgo their Dubai vacation this summer.

REFERENCES

1. CNBC: "Modi says Iran war poses severe risks to India, urges cuts in fuel use and gold purchases" (May 11, 2026)- https://www.cnbc.com
2. Al Jazeera: "Iran war effect: Why is Modi asking Indians to avoid foreign trips, gold?" (May 11, 2026)- https://www.aljazeera.com
3. BusinessToday: "Work from home, avoid foreign trips & gold purchases: PM Modi's message amid West Asia oil crisis" (May 10, 2026)- https://www.businesstoday.in
4. OneIndia: "Rs 4 Trillion Wiped Out From Indian Markets As PM Modi's Appeal Triggers Panic Selling"- https://www.oneindia.com
5. The Federal: "Stock markets sink over 1.4 per cent after Modi warns on fuel costs amid US-Iran tensions"- https://thefederal.com
6. Serrari Group / ORF Analysis: "India Mulls Import Curbs to Shield Forex Reserves" (May 12, 2026)- https://serrarigroup.com
7. India Briefing: "Strait of Hormuz & India's Oil Supply: Import Dependencies & Mitigation Measures" (April 2026)- https://www.india-briefing.com
8. Vajiram & Ravi Current Affairs: "PM Modi's Austerity Call Amid Rising Forex Pressure and Gold Imports"- https://vajiramandravi.com
9. Tukkbook / Energy Statistics India 2026: "India's Oil Import Risk: Why Global War Still Hits Your Fuel Bill"- https://tukkbook.in
10. S&P Global / Al Jazeera: India's urea import data, approximately 10 million tonnes per year- https://www.aljazeera.com
11. UBS Securities Research Note (May 4, 2026): India GDP forecast revision to 6.2% for FY2026-27- referenced via CNBC report above
12. Ministry of Petroleum and Natural Gas, Government of India: Energy Statistics India 2026- https://ppac.gov.in
13. Reserve Bank of India: Foreign Exchange Reserves Data- https://www.rbi.org.in
14. World Bank / IMF: India External Sector and Current Account Deficit Analysis- https://www.worldbank.org

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