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After contesting an extraordinarily lavish election in Bengal, prime minister Narendra Modi’s appeal to citizens for austerity by consuming less oil, gold, fertilisers, foreign travel seemed naturally alarmist for most thinking Indians. The manner of the PM’s communication of a “Covid type” crises was also very unwise. The stock markets crashed and the rupee has further weakened trying to digest the enormity of the PM’s appeal. India was the worst performing currency among major economies in 2025. It is also the worst performing currency in 2026 so far.

In effect the PM was signalling to the world markets that one of the largest economies in the world was having a severe dollar shortage and wanted to curb dollar outflows of merely $16 to 18 billion that Indians spend annually on travelling abroad! Are we that badly off?

For the global markets this sort of communication shows palpable weakness especially coming from the prime minister himself. Curbing gold purchases or foreign travel by Indians are best handled quietly by the Reserve Bank of India (RBI) which manages India’s forex reserves and the stability of the currency. In a globally integrated financial system, communication to markets is a very sensitive exercise. It can’t be done the way PM Modi chose to do it.

Modi could have made a general appeal to Indians as done by other nations asking their citizens be prepared for the adverse impact of the US-Iran war. PM could have simply assured that the government would do everything possible to cushion the adverse impact of energy shortage. It was bad optics to detail the specific areas in which citizens must curb their spending. Effectively the PM was telling people to massively curb consumption across several........

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