Why PM Modi Asked Indians To Avoid Foreign Trips And Gold Purchases

Prime Minister Narendra Modi has advised Indians to refrain from unnecessary foreign travel, delay gold buying, and economize on fuel due to the ongoing US-Israel war against Iran, which is affecting global energy supplies and putting pressure on India’s foreign exchange reserves.

Speaking at an event in Hyderabad, PM Modi said that the nation needs to concentrate on conserving its foreign exchange considering the increasing price of crude oil and uncertainty in the global scenario. Drawing a comparison between the present scenario and the coronavirus era, he advised the Indian citizens to restart the practice of working from home and conducting meetings online.

PM Modi called for using public transportation, metro rail services, car pooling, and electric vehicles where feasible. He also advised industries to switch their freight transportation from roads to rail to save diesel.

Oil Prices Rise Nearly 50%

This conflict has had a significant effect on the international oil market. The cost of Brent Crude Oil was about $72.87 per barrel before the outbreak of the war. The price has shot up to $105.45 per barrel, marking an increase of almost 50%.

The reason behind the disruption can be attributed to the crisis surrounding the Strait of Hormuz, a vital international shipping channel through which almost 20% of the oil and liquefied natural gas are transported. The limitations on passage and the naval blockade of Iran by the United States have resulted in fears of shortage.

India, being a major importer of crude oil, having almost 88% of its oil requirements coming from outside, has been severely hit due to the increased prices. The amount spent on the importation of crude oil during FY26 is estimated at $123 billion.

Pressure On Forex Reserves

Foreign exchange reserves in India have been estimated to be $690.69 billion as of May 1, according to information provided by the Reserve Bank of India. There has been a sharp decrease from the $728.5 billion that existed as of February 27 before the conflict began.

According to the International Monetary Fund, there will be a deficit of $84 billion in the current account in 2026 due to rising expenses on imports and foreign exchange outflows.

"Saving foreign exchange has become imperative in this 'current situation'," Modi said, alluding to the economic situation amid the current war and increasing cost of energy.

Why PM Modi Asked Indians To Avoid Buying Gold

Another important aspect that worked well for Mr. Modi was his request to Indians to stop purchasing gold for one year, including during weddings and festivals.

India is the second biggest importer of gold after China. The nation imported gold worth $72 billion in FY26. As the cost of importing gold involves US dollars, high levels of import lead to increased use of dollars as well as increase pressure on the rupee and balance of payments situation.

Gold import is seen by economists as discretionary spending since oil imports are necessary for production activities. In case of rising prices of crude oil and a weak currency situation, governments discourage gold imports to conserve foreign exchange resources.

The Prime Minister mentioned that buying gold uses huge foreign exchange and Indians should avoid such activities in national interest.

Overseas Travel Spending Also A Concern

Modi also encouraged Indians to defer unnecessary international travel, destination weddings, and holiday trips for at least one year.

International travelers from India were estimated to spend about $31.7 billion in 2023-24, while the number of Indians who traveled internationally in 2024 was close to 30.9 million people.

Furthermore, the hike in the cost of aviation fuel has increased airfares across the world. According to Kayak, an online travel platform, international flight tickets increased by 16% from last year in April due to increasing fuel prices.

The government thinks that minimizing overseas spending will assist in saving foreign exchange in times of crisis.

Fertiliser Imports Add To Pressure

The Prime Minister has also advised the farmers about reducing their dependence on fertilisers and going for organic farming.

India is the world’s biggest buyer of urea and buys almost 10 million tonnes annually. The Gulf countries act as a major transit point in the exports of fertilisers from the rest of the world, which makes them susceptible to any geopolitical turmoil.

High fertiliser prices can have implications for agricultural production cost and food prices in India.

Gold Prices Face Mixed Impact

The Iran crisis has also added to the volatility in global gold prices. Gold is usually seen as a safe haven in times of geopolitical tension, thereby raising the demand for gold during war.

But growing oil prices have raised fears of inflation and have boosted hopes of sustained higher interest rates in the global economy. This has made the US dollar strong and has capped gold prices.

Gold prices are believed to be affected by safe-haven buying and higher inflation and interest rates expectations.

The government’s concern remains centred on rising oil prices, a weakening rupee, inflation risks and pressure on India’s foreign exchange reserves as the West Asia conflict continues.