Prime Minister Narendra Modi has asked Indians to work from home, avoid international travel and reduce gold purchases during the United States-Israeli war on Iran, which has caused global energy prices to surge, adding pressure on India’s foreign exchange reserves.

Modi’s Plea for Conservation

Modi made his appeal during a public event in the southern city of Hyderabad on Sunday — he encouraged people to adopt the work-from-home model used during the COVID-19 pandemic and to move to online meetings instead of in-person gatherings.

He also urged citizens to use public transport and carpooling to save fuel and called on families to reduce their cooking oil consumption, describing the move as both healthy and patriotic.

Modi asked Indians to avoid buying gold and to cut nonessential overseas travel for at least a year. He also urged farmers to reduce their fertiliser use by as much as half.

“In the current situation, we must place great emphasis on saving foreign exchange,” he explained as the justification for these lifestyle changes.

Economic Impact of the War on Iran

Modi was referring to the war on Iran and its broader economic consequences, especially for India. Oil prices have climbed due to the conflict, which began on February 28. A barrel of Brent crude, the international benchmark, was priced at $72.87 on February 27. As of Monday, the price had risen to $105.45, an almost 50 percent increase.

Iranian attacks on oil and gas facilities in the Gulf in the early weeks of the war have disrupted energy supplies. Since early March, Iran has restricted passage through the Strait of Hormuz, the narrow waterway through which 20 percent of the world’s oil and liquefied natural gas supplies pass.

Iran has allowed passage for vessels from select countries that negotiate their transit with the Islamic Major Guard Corps. In April, the US announced a naval blockade on ships entering or leaving Iranian ports, further disrupting global oil and gas supplies.

With rising fuel costs, airlines have increased ticket prices. According to the travel search site Kayak, the average international airfare from the US to all destinations was $1,101 in the last week of April, a 16 percent increase from the same period a year earlier.

Nearly half of the world’s traded urea, the most widely used fertiliser, and large volumes of other fertilisers are exported from Gulf countries through the Strait of Hormuz. Those supplies have now been dramatically disrupted.

“Patriotism is not only about the willingness to sacrifice one’s life on the border. In these times, it is about living responsibly and fulfilling our duties to the nation in our daily lives,” Modi said.

India’s Foreign Exchange Reserves and Economic Pressures

India’s foreign exchange reserves as of May 1 were $690.69bn, down $7.79bn, or about 1.12 percent, from the end of March, according to the Reserve Bank of India, the central bank. Compared with where India’s reserves stood before the war, the decline is more significant. As of February 27, India’s foreign exchange reserves stood at $728.5bn.

The International Monetary Fund projected that India’s current account deficit (CAD) will be $84bn in 2026. A negative CAD means that the country has spent more money than it has earned.

India is the world’s third largest oil importer after China and the US. From April 2025 to March, the last Indian financial year, the country imported crude oil worth $123bn. That is the single largest contributor to India’s import budget.

At second place is gold. Indians imported gold worth $72bn in the 2025-2026 fiscal year, second in the world only to China. According to the travel insurance firm ACKO, Indians travelling abroad spent $31.7bn in 2023-2024. In 2024, about 30.9 million Indian nationals departed India, according to data from the Bureau of Immigration. This was up from about 27.9 million Indian nationals in 2023.

India is also the world’s largest importer of urea – it imported about 10 million tonnes of the fertiliser last year, according to analysis from S&P Global.

India’s foreign exchange reserves are depleted by large volumes of imports of oil, gold, fertilisers and by Indians spending abroad. However, of these expenses, oil and fertilisers are hard for India to cut back on. Energy imports are essential to drive India’s economy, and fertilisers are critical both for the country’s agrarian economy – more than half of the country’s families depend on agriculture – and for food supplies.

That leaves gold and foreign travel as areas where India can more easily reduce spending. Whether Indians will take up Modi’s call, though, is unclear.