Finance Minister Nirmala Sitharaman on Monday said that while India is aggressively prepping for supply disruptions from the West Asia crisis, a volatile mix of "moving parts"—from insurance hurdles to hazy global pricing—is complicating the government's advance procurement strategy.
Sitharaman flagged emerging risks on the supply side, particularly in energy and fertilisers, as the conflict begins to disrupt trade flows. Gas supplies from the region have been hit, with shipments being diverted and logistics becoming increasingly unpredictable.
“There are too many moving parts,” the minister said, pointing to challenges around insurance and freight. In some cases, insurers are unwilling to cover shipments, adding to uncertainty for importers even when supplies are available.
On fertilisers, Sitharaman said the situation for the upcoming kharif season remains comfortable, with adequate stocks of urea, DAP and potash already built up. However, she indicated that the government is moving early to secure supplies for the rabi season, even as global price discovery remains uncertain.
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Suppliers themselves are unclear on pricing amid the volatility, she said, complicating advance procurement decisions. At the same time, the government is mindful of demand pressures, noting that excess buying cannot be curtailed if it affects farmers.
"This is uncertainty, even if we want to prep in advance, there are so many ifs," she said.
The minister said the focus remains on staying prepared for contingencies, even as the situation continues to evolve with multiple uncertainties around supply chains, pricing and logistics.
Speaking on the macro outlook, Sitharaman indicated that India's fiscal position allows room for the Reserve Bank of India to consider rate cuts, signalling policy flexibility at a time when global uncertainties are rising.
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