'Neither A 1991 Moment, Nor A 2013 One': CEA Anantha Nageswaran On How India Weathered Gulf War

Published 29 June 2026 · india

'Neither A 1991 Moment, Nor A 2013 One': CEA Anantha Nageswaran On How India Weathered Gulf War Published By, Last Updated: June 29, 2026, 14:27

'Neither A 1991 Moment, Nor A 2013 One': CEA Anantha Nageswaran On How India Weathered Gulf War Published By, Last Updated: June 29, 2026, 14:27 IST CEA V Anantha Nageswaran says calibrated government measures, diversified energy sourcing and timely interventions helped India withstand the Gulf conflict's economic shock. An AI- generated, representative image for India's stability amid the Middle East war (News18) India successfully weathered the economic fallout of the recent Gulf conflict that temporarily disrupted shipping through the Strait of Hormuz, avoiding a potential fuel crisis and macroeconomic instability through a combination of calibrated policy measures and favourable global developments, Chief Economic Advisor (CEA) V Anantha Nageswaran has opined. According to a piece with Business Standard, Nageswaran reflected on the country’s response to the conflict and wrote that despite fears of an oil shock, supply disruptions and a balance-of-payments crisis, India managed to maintain uninterrupted fuel supplies, stable domestic prices and overall macroeconomic stability. “When strikes closed the Strait of Hormuz at the end of February, the script for India seemed already written," he wrote, noting that the country imports nearly 90 per cent of its crude oil and over half of its cooking gas through the Gulf. However, “nearly four months on, not a single retail outlet ran dry. Every household that wanted a cylinder got one. India faced neither a 1991 moment nor a 2013 one." He added that the outcome “was not an accident, and it was not luck alone," describing the government’s response as deliberate, gradual and similar in approach to its handling of the Covid-19 pandemic. HOUSEHOLDS GIVEN TOP PRIORITY According to the CEA, the government’s priority during the crisis was to shield households from supply shortages and price shocks. Although the import-linked cost of a standard LPG cylinder crossed Rs 1,600, the retail price for consumers was kept close to Rs 900, with even lower prices for poorer households. Commercial and bulk users were asked to reduce consumption to ensure uninterrupted household supplies.

“The memory of the early pandemic months, when panic among migrant workers set off a wave of reverse migration to the villages, was instructive," he wrote, explaining the rationale behind prioritising domestic consumers. SUPPLY CHAINS DIVERSIFIED, DOMESTIC OUTPUT RAMPED UP Beyond price support, India strengthened energy security by rapidly increasing domestic cooking gas production and diversifying import sources. Nageswaran said domestic refiners increased LPG production by nearly 50 per cent within a week, significantly replacing lost imports. At the same time, India expanded purchases from the United States and Russia, brought in additional suppliers and secured the necessary waivers to continue importing Russian crude. The government also accelerated longer-term initiatives, including expanding piped natural gas connections, promoting coal gasification, increasing ethanol blending and enhancing strategic crude oil storage following the Prime Minister’s visit to the United Arab Emirates. India, he noted, was among the few countries that managed to keep cargo movements uninterrupted even as shipping through the Strait of Hormuz fell sharply. GOVERNMENT ABSORBED COSTS TO PROTECT CONSUMERS To cushion the broader economy from rising fuel costs, the Centre chose to absorb much of the financial burden instead of passing it on to consumers, the CEA said. The government reduced excise duty on petrol and diesel by Rs 10 per litre, resulting in an estimated revenue sacrifice of about Rs 1.7 trillion. It also eased taxes on aviation turbine fuel while public sector oil marketing companies held retail fuel prices steady for over two months before implementing only a limited increase. “The logic is worth stating plainly: in such uncertainty, only the government has the balance sheet and the time horizon to bear the risk," Nageswaran wrote, adding that the government deliberately absorbed the fiscal impact rather than shifting the burden onto households and businesses. Support measures were also extended to airlines and micro, small and medium enterprises through targeted assistance and credit guarantee schemes modelled on the Covid-era response.