What specific policy measures has the Indian government taken recently to conserve foreign-exchange reserves, and how have markets reacted?

The Indian government more than doubled import taxes on gold and silver, following Prime Minister Modi’s call to cut non-essential imports and preserve foreign-exchange reserves; this move triggered a 3% weekly slide in the NSE Nifty 50 Index, underperforming regional equities, as investors grew wary of further measures—including potential fuel price hikes—and heightened geopolitical pessimism linked to the Middle East conflict.

How does Modi’s belt-tightening push risk affecting India’s consumer demand and economic growth outlook?

Modi’s call to limit fuel and gold consumption—amid an energy shock from the Iran war—risks hurting a nascent recovery in consumer demand, particularly discretionary spending, with JM Financial revising down growth to 6%–6.5% for fiscal year 2027, below the central bank’s 6.9% estimate, while the NSE Nifty India Consumption Index—up over 8% this quarter—faces downward pressure from further austerity measures.

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May 12, 2026

India doubled import taxes on gold and silver while urging reduced fuel consumption, sending stocks down 3% amid economic uncertainty. Oil refiners face significant monthly losses as geopolitical tensions drive energy cost concerns.

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