India’s gold duties and rate pressure may be the start of a deeper Iran shock fix

RBI may have to lift rates even if inflation cools

India is bracing for a “crunch time” after the US-Israel conflict in Iran escalates and the Strait of Hormuz faces blockade risk, pushing up essentials via higher crude prices and disrupting trade. Policymakers have begun with import duties on gold and silver, but warn that the real vulnerability is India’s dependency on imported oil, amplified by capital outflows that weaken the rupee. The article argues RBI should prioritize financial stability, potentially raising rates despite reluctance, while long-term fixes require credible oil-and-gas investment.