India's opposition urges government to absorb oil price shock, warns on growth

Business Recorder

India's opposition urges government to absorb oil price shock, warns on growth

NEW DELHI: India’s main opposition Congress party urged the government on Tuesday to absorb higher crude oil costs rather than pass them on to consumers, saying that rising prices of fuel and essential goods would hurt demand and slow economic growth. Higher crude prices and supply disruptions after the closure of the Strait of Hormuz have hit India, the world’s third-largest oil importer and consumer, prompting s ate retailers to raise petrol and diesel prices by about 8%. The government has also cut subsidies on cooking gas cylinders for households. Releasing a 76-page report on the government’s performance, titled “Promise vs Reality: Year 2 of Modi 3.0”, Congress said capital outflows, weak private investment, falling confidence and high unemployment undercut Prime Minister Narendra Modi’s economic claims. Rajeev Gowda, a senior Congress leader and former central bank board member, said the government had benefited from years of lower crude oil prices but chose to raise taxes and collect windfall gains instead of passing relief to consumers. He said the government should not now shift the burden of higher crude prices to consumers. “Please don’t do that. Swallow that bitter pill for a little while because you have been enjoying the fruits,” he said. Oil Minister Hardeep Singh Puri, defending the government’s measures on Monday, said India expected oil and gas prices to drop in the coming months, and had adequate stocks despite the U.S.-Israeli war with Iran that is squeezing energy supplies. Gowda said repeated price hikes in fuel and essential goods would reverse growth. The Congress report also said India had slipped to the world’s sixth-largest economy in 2026 after being ranked fourth last year, while the rupee fell to a record low of 95 against the dollar in May. Foreign portfolio investors pulled out about 2.1 trillion rupees ($22 billion) from India in the first five months of 2026, it said, while net foreign direct investment turned negative in most months of the fiscal year that ended in March. Gowda also blamed weak investment on fear among businesses.

Go to News Site

Google Play

App Store