On May 10, 2026, Prime Minister Modi stood in Hyderabad and made seven appeals to citizens. Use less fuel. Skip foreign travel. Defer gold purchases for a year. Eat less edible oil. Prefer Made in India. Carpool. Halve fertilizer use. He framed these as acts of "economic patriotism."
The crisis is real. Since late February, the war involving the United States, Israel, and Iran has disrupted shipping through the Strait of Hormuz, the corridor for roughly 30% of India's oil and 90% of its LPG imports. India spent $174.9 billion on crude oil and petroleum products last year, about 22% of all imports. Gold imports added another $72 billion. Both are paid in US dollars, drawing from the same foreign exchange pool.
The appeal is one instrument, not the whole policy
The PM's appeal does not exist in isolation. On March 27, the Centre cut excise duties on petrol and diesel by ₹10 per litre. Indian refiners have pivoted aggressively to Russian crude. Export duties on diesel and aviation turbine fuel have been raised to protect domestic supply. The Reserve Bank of India, meanwhile, has built its sovereign gold reserves from 794 to 880 metric tonnes between September 2025 and March 2026.
Citizen appeals are one tool in a broader response. But they raise a question worth examining: when conservation is asked of an entire population, who actually does the conserving?
The macro picture
India imports about 85% of its crude oil. Roughly half comes via Hormuz. When global prices rise, India's import bill swells and the rupee weakens. In March, it briefly fell near 92.40 to the dollar.
Growth forecasts have been revised down. The ADB had projected 6.9% for FY2027. The World Bank now expects 6.6%. UBS, in a May 4 note, cut its forecast to 6.2%. For an economy where tens of millions live close to the poverty line, even half a percentage point of foregone growth means fewer jobs and slower wage growth.
India's buffers, though, are not empty. Forex reserves stood at $691 billion at the end of March, about eleven months of import cover. The banking sector is healthier than in 2012 or 2018. These are the conditions of a country with room to manage a shock, if the room is used well.
The same ask, very different realities
For a software engineer in Bengaluru, deferring a European holiday is a sacrifice of comfort. For a construction worker in Jaipur who already buys his cooking gas one cylinder at a time, there is little left to cut. An LPG cylinder that cost ₹850 last year now costs ₹913 or more, which can consume two to three days of a daily wage.
Reporting from March documented a widespread return to firewood and biomass across low-income and rural households. The Pradhan Mantri Ujjwala Yojana connected over 330 million homes to cleaner cooking fuel. The current shock shows that connection is not the same as insulation. When global LPG prices climb, the subsidy structure does not always adjust quickly enough to protect the most vulnerable cylinder refill.
This is the central insight from Nobel laureates Abhijit Banerjee and Esther Duflo: poverty is not about poor choices. It is about living so close to the margin that any external shock forces genuinely harmful trade-offs.
The gold paradox
The appeal to defer gold purchases is macroeconomically coherent. A 20 to 30% reduction in household demand could shrink the import bill by $15 to $20 billion. But for hundreds of millions of households, gold is savings, not ornamentation. It is how rural families store value without bank accounts, the security a daughter carries into marriage, the asset pledged in emergencies.
Asking households to defer gold without offering an equally accessible alternative shifts financial vulnerability from the national to the household balance sheet. The industry's counter-proposal deserves serious consideration: monetize the 20,000 to 25,000 tonnes of gold already held by Indian households through improved bonds and trusted banking products.
Four policy options on the table
Four complementary responses are being discussed. None substitutes the others. They are most effective in combination.
1. Targeted top-ups to PMUY beneficiaries. An automatic cooking gas subsidy indexed to global LPG prices would prevent the regression to biomass already documented in early 2026.
2. A serious gold monetization push. Improved bonds with full liquidity guarantees. Reduces import demand without destroying jewellery sector jobs.
3. Centre-state fiscal coordination. Transfers calibrated so that fiscally weaker states can maintain welfare expenditure even as their own revenues come under pressure.
4. A credible energy transition timeline. Publicly tracked, quarterly updated, with clear targets for renewables, expanded strategic reserves, and reduced crude dependence. India's current strategic petroleum reserve covers about 9.5 days of full supply cutoff, far below the OECD benchmark of 90 days.
The longer view
Every oil shock is a stress test on a country's institutions, its safety nets, and its ability to distribute adjustment fairly. India's economy has real strengths. Growth is slowing, not stopping. But the 2026 shock makes structural questions visible in a way that is hard to ignore.
The PM asked the nation to act in the national interest. The national interest, fully understood, includes the daily wage worker rationing her cooking gas, the wheelchair user unable to reach a hospital because petrol has become unaffordable, and the goldsmith in Surat who does not know whether his workshop will open next month. They are the nation too.
A response that protects them is not separate from the macroeconomic response. It is the macroeconomic response, done well.