Amid the ongoing crisis in the Middle East, which has directly impacted global energy markets, the government provided Rs 1.23 lakh crore to state-run oil marketing companies (OMCs) to keep retail fuel pump prices steady, sources said on Tuesday. They also said that surging global crude oil and fertiliser prices have driven up the country’s import bill, but India’s growth is not under stress, and strong domestic consumption and robust fiscal buffers are keeping the economy steady. According to sources, the high-growth momentum witnessed in the March quarter of the previous fiscal year has seamlessly carried over into the first quarter of the financial year 2026-27.
“Fuel retailers are still incurring Rs 650 crore per day loss for selling fuel at a lower rate than the prevailing global crude prices,” sources were quoted as saying by PTI.
Fertiliser minister seeks doubling of subsidy
Sources also said that the fertiliser minister has approached the Finance Ministry and sought doubling of the budgeted fertiliser subsidy for FY27. The currently allocated budget subsidy stands at Rs 1.77 lakh crore.
Earlier, the Ministry of Chemicals and Fertilisers said the overall fertiliser stock position in the country is comfortable.
“Total of approx. 147.40 LMT fertilisers through imports and domestic production have been added to the availability after the crisis situation. In June, it is expected to reach more than 25 LMT imported Urea, DAP and NPKs on the Indian ports,” the government said.
Fiscal buffers and disinvestment targets
Despite these rising subsidy pressures, government sources stated that India’s growth is “not under stress.” Importantly, inbound remittances from the large Indian diaspora – a major source of foreign exchange – have shown no adverse impact from the regional geopolitical tensions so far.
FDI and capital outflows
Going forward, the government aims to roll out more structural measures to boost Foreign Direct Investment (FDI) inflows into the economy. Amid global market volatility, officials categorically rejected any plans to restrict financial markets, confirming there is absolutely “no proposal to curb capital outflows” from the country.
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(This article is for informational purposes only and should not be construed as investment, financial, or other advice.)
