CII urges India to tackle fuel, fertilizer and food challenges together amid West Asia Crisis
New Delhi, May 21
The Confederation of Indian Industry on Thursday called for a coordinated national strategy to deal with rising pressure on fuel, fertilizer and food prices, stating that the ongoing West Asia crisis has exposed the interconnected risks facing the Indian economy.The industry body said disruptions in global energy and fertilizer markets due to geopolitical tensions in West Asia are increasing logistics costs, food inflation and currency volatility, making it necessary to treat the "3Fs" -- fuel, fertilizer and food -- as one integrated economic challenge."Fuel feeds into fertilizer, fertilizer feeds into food, and all three feed into inflation, fiscal stress, and household welfare," said Chandrajit Banerjee, Director General, CII. He added that treating the three sectors together would help India navigate external shocks more effectively.According to CII, India imports nearly 88 per cent of its crude oil, 90 per cent of phosphates and 25 per cent of its urea requirements, making the country highly vulnerable to global supply disruptions and price fluctuations. A large portion of crude oil and LNG imports also passes through the Strait of Hormuz, increasing risks from geopolitical instability in West Asia.
The industry chamber said the government's initial response in cushioning consumers from fuel price shocks and prioritising gas supply to critical sectors had been reassuring. However, it stressed the need for medium- and long-term reforms to strengthen economic resilience.On fuel security, CII recommended faster adoption of higher ethanol blends, expansion of flex-fuel vehicles, promotion of LNG trucking corridors and gradual transition towards alternative cooking fuels such as electric and ethanol-based solutions. It also suggested accelerating domestic oil and gas exploration, expanding strategic petroleum reserves and increasing investments in bio-CNG, coal gasification and nuclear energy.For fertilizers, CII proposed phased reforms including direct benefit transfer (DBT) of subsidies to farmers and integrating urea under the Nutrient Based Subsidy framework to improve efficiency and reduce excessive nitrogen usage."The objective is to strengthen support, not reduce it," Banerjee said, adding that direct subsidy delivery and data-driven systems could help protect small farmers and improve soil health.On food inflation, CII said India's record foodgrain harvest offers some relief, but rising fuel and fertilizer costs, along with monsoon uncertainties, could still increase prices of perishables such as tomato, onion and potato.The chamber recommended early release of buffer stocks, stricter action against hoarding, improved cold-chain infrastructure and expansion of farmer-to-consumer networks to reduce supply disruptions and price volatility."Food inflation hits the most vulnerable households first and fastest, requiring a decisive yet measured response," Banerjee said.
— ANI
Reader Comments
Good suggestions from CII but I'm skeptical about direct benefit transfer for fertilizers. We've seen how DBT works in other sectors - it's good in theory but implementation is messy in rural areas. Small farmers don't always have bank accounts or digital literacy. Need to ensure the system doesn't leave anyone behind.
Record foodgrain harvest is good, but tomato-onion-potato prices are still volatile every monsoon! 😤 CII's suggestion about cold-chain infrastructure is spot on. In my village, farmers lose 20-30% of produce just because of lack of storage. Government should focus on that instead of just importing more LNG.
Interesting to see an industry body pushing for integrated planning. India's vulnerability to Strait of Hormuz is a real concern - we saw what happened with oil prices in 2022. But I wonder if CII's recommendations are too focused on technology solutions. What about strengthening traditional agriculture and local food systems? Just a thought.
As someone working in logistics, I can tell you that fuel price volatility is killing small transporters. Margins are already thin, and every rupee increase in diesel hits our bottom line. CII's push for LNG trucking corridors is welcome, but infrastructure is decades behind. Start with cleaner fuels for urban deliveries first!
"Food inflation hits the most vulnerable households first" - finally someone said it! 🔥 During the onion price spike last year, my househelp's family was eating just dal-rice for weeks. If CII and government can actually implement these
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