On Sunday, Narendra Modi urged citizens to use critical resources like fuel judiciously, restrict overseas travel, and limit gold purchases. This appeal from the PM reflects the reality of many economies navigating the ripple effects of geopolitical volatility and external shocks while trying to cushion the impact.
The protracted conflict in West Asia has significantly disrupted energy markets and supply chains, even as rising energy prices are adding pressure to India's import bill. Past cushions for India, like services exports, may come under pressure in the near-medium term. Growth in services exports could potentially be impacted with AI's rising adoption. The West Asia crisis also poses a short-term risk to remittance inflows, which stand at about $140 bn.
