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PMO plans FEMA easing and export push to shield India from West Asia war shocks
Economy
Published on 14 May 2026
Oil prices will be stress-tested in multiple bands
As India tries to contain the economic fallout from the West Asia conflict, the Prime Minister’s Office is coordinating across ministries to protect growth, inflation and the current account. Officials are mapping opportunities from the Iran-linked disruption while modeling the hit from soaring global oil prices under different price bands. Finance and commerce teams are considering easing FEMA, improving bilateral investment treaty terms, substituting select imports with domestic production, and tightening curbs on non-essential purchases like bullion and gems.
- PMO is coordinating steps to curb the war’s hit on growth, inflation and the current account
- Finance ministry officials are exploring further FEMA relaxations and more investor-friendly bilateral investment treaties
- Niti Aayog will likely produce a report on Iran-linked opportunities and oil-price impacts across price bands
- Commerce officials want import substitution, especially replacing some cheaper China supplies with domestic manufacturing
- Goods trade deficit excluding petroleum and gems jewellery is around $140 billion annually
- Current account deficit projections for FY27 range from 1.5% to 2.4% of GDP, versus 0.6% in FY25
Read the full story at The Economic Times
This summarization was done by Beige for a story published on 
The Economic Times