Govt may extend relief on West Asia impact

The Centre may roll out additional relief measures for vulnerable sectors, particularly MSMEs, if the West Asia crisis continues, with the aim of easing inflationary pressure and sustaining economic activity, sources said.
The government has already taken several steps, including slashing excise duty on petrol to Rs 3 per litre and exempting diesel, to shield consumers from rising global crude prices.
It has also reinstated export duties on diesel and aviation turbine fuel (ATF) to boost domestic availability. Global oil prices have surged nearly 50% since the United States and Israel launched strikes on Iran on February 28, with prices touching $119 per barrel before easing to around $100. India, which imports about 88% of its crude oil and half its gas—much of it through the Strait of Hormuz—remains highly exposed to such disruptions.
To support exporters, the government introduced the Rs 497-crore Resilience & Logistics Intervention for Export Facilitation (RELIEF) scheme to offset rising freight costs, insurance premiums and war-related risks.
It also restored full benefits under the RoDTEP scheme after earlier reductions drew criticism from exporters.
Escalating tensions in the Strait of Hormuz have disrupted shipping, leading to longer routes, congestion and higher logistics costs, impacting supply chains and creating uncertainty for export consignments.
Chief Economic Advisor V Anantha Nageswaran stressed the need for targeted relief to vulnerable sectors and households, along with reprioritisation of government spending to address both immediate and long-term challenges.
The latest Monthly Economic Review noted that the crisis is already pushing up input costs, tightening supply conditions and exerting pressure across sectors, with early signs of moderation in economic activity.
The near-term outlook remains uncertain, with external shocks posing risks to growth.
However, the report highlighted that strong macroeconomic fundamentals and robust domestic demand could help cushion the impact.
It added that the evolving geopolitical situation presents complex risks for India, given its dependence on energy imports and strong trade and remittance ties with the West Asia region.