economy
March 13, 2026
India's Modi Reaches Out to Iran as Energy Crunch Fears Grip the South Asian Nation
The closure of the Strait of Hormuz for longer could deepen the worries of the world's fastest-growing economy.
TL;DR
- Indian Prime Minister Narendra Modi contacted Iranian President Masoud Pezeshkian to address energy supply risks caused by the closure of the Strait of Hormuz.
- India's top priorities are the safety of its citizens and unhindered transit of energy and goods.
- The closure of the Strait of Hormuz is causing panic buying of LPG, leading to supply constraints for both households and businesses.
- Experts estimate that prolonged disruptions could significantly increase India's inflation and widen its current account deficit.
- India is increasing its crude oil purchases from Russia and exploring other supply routes, but rewiring energy chains quickly is challenging and costly.
- The government is prioritizing LPG supply to households and allowing the hospitality sector to use alternative fuels like kerosene, biomass, and coal.
- Rising fuel prices and potential inability to pass costs to consumers due to election campaigns are noted concerns.
- The rupee is hovering near record lows, influenced by the risk of higher oil prices.
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