The Long Shadow of War: PM Modi Cautions Nation on Economic Fallout in Rajya Sabha

The Long Shadow of War: PM Modi Cautions 

Nation on Economic Fallout in Rajya Sabha

Addressing the Rajya Sabha on March 24, 2026, Prime Minister Narendra Modi issued a sobering caution regarding the ongoing US-Israel-Iran war, describing it as a crisis that has "shaken the global economy."

Drawing parallels to the COVID-19 pandemic, the Prime Minister urged the nation to remain united and resilient, warning that the economic and supply chain disruptions caused by the conflict could be long-lasting.

Key Takeaways from the PM’s Address

Global Energy Crisis: The Prime Minister highlighted that the war in West Asia has triggered a severe energy crunch. With the Strait of Hormuz facing significant disruptions, the supply of petrol, diesel, and gas has been affected globally.

Economic Strategy: PM Modi assured that the government is working on a multi-pronged strategy (short, medium, and long-term) to safeguard the Indian economy. He noted that India’s economic fundamentals remain strong despite the external shocks.

Internal Vigilance: He called upon state governments to act as "one team" to prevent black marketing and hoarding of essential goods, which often spike during such geopolitical crises.

Safety of Citizens: Over 375,000 Indians have already been evacuated from the conflict zone, including more than 1,000 from Iran. The PM emphasized that the safety of the nearly one crore Indians living in the Gulf remains a top priority.

Strategic Reserves: India is leveraging its strategic petroleum reserves (currently at 53 lakh metric tonnes) and working to expand them to over 65 lakh metric tonnes to ensure energy security.

Government Response Initiatives

To manage the fallout, the Prime Minister announced the formation of seven empowered groups tasked with monitoring and strategizing on:

Fuel and Energy Supplies

Supply Chain Logistics

Fertilizer Availability (to protect farmers)

Inflation Control

National Security (Coastal and Cyber)

Migrant Worker Welfare

Diplomatic De-escalation

"This war has created difficult global conditions that may persist for a long time. We must remain prepared and united... with patience, restraint, and calmness, we must face every challenge." — PM Narendra Modi

To support farmers ahead of the Kharif (summer) sowing season starting in June-July, the government has moved into "war footing" mode. While the US-Iran-Israel conflict has choked supply lines through the Strait of Hormuz—the transit point for nearly 30% of global nitrogen fertilizer—PM Modi has prioritized shielding the agricultural sector from the resulting price shocks.

Here is the breakdown of the specific relief and preparatory measures:

1. Fertilizer Security & Subsidies

Buffer Stocking: The government has built a massive stockpile of 18 million tonnes of fertilizers (a 37% increase over last year) as of mid-March to ensure no shortage during peak sowing.

Subsidy Expansion: For the 2026-27 fiscal year, the fertilizer subsidy was provisionally set at ₹1.71 lakh crore. However, with global urea prices jumping 30-50% since the conflict began, the government has signaled it will absorb these extra costs rather than passing them on to farmers.

Alternative Sourcing: To bypass the disrupted Persian Gulf routes, India is fast-tracking imports from Morocco (for Phosphates) and has made unprecedented approaches to China for urea cargoes.

2. Energy and Input Management

Gas Prioritization: Under the Essential Commodities Act (invoked March 9, 2026), the government has designated the fertilizer sector as a "Tier 2" priority for natural gas. While industrial users face steeper cuts, fertilizer plants are guaranteed at least 70-75% of their gas requirements to keep domestic urea production running.

Solar Shift: To counter the shortage of diesel (used for irrigation pumps), the Ministry is accelerating the deployment of solar-powered pumps under a modified PM-KUSUM scheme to reduce dependency on volatile fuel prices.

3. Expanded Insurance & Support (PMFBY)

The government has introduced new "Add-on Covers" under the Pradhan Mantri Fasal Bima Yojana (PMFBY), effective for the Kharif 2026 season:

New Risks Covered: For the first time, crop loss due to Wild Animal Attacks and Paddy Inundation (flooding) will be covered nationwide.

Faster Claims: A new 72-hour reporting window via the "Agriculture Rakshak" portal and app has been established to ensure immediate assessment of losses caused by any climate or conflict-related disruptions.

4. Procurement & Price Stability

Bumper Stocks: PM Modi noted that India currently has sufficient "bumper" stocks of wheat and rice from the Rabi season, which will act as a buffer against food inflation.

Focus on Pulses: Under the "Pulses Self-Reliance Mission," the government has committed to procuring unlimited quantities of Tur, Masur, and Urad at MSP to encourage farmers to diversify into crops that require less water and fertilizer.



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