India Needs To View Fuel, Fertiliser and Food As Single Challenge To Tide Over West Asia Crisis: CII

New Delhi: Industry lobby Confederation of Indian Industry (CII) on Thursday said that India needs to view fuel, fertiliser and food as a single economic challenge rather than three separate issues, if it wants to shield growth, farmers and consumers from external shocks triggered by the West Asia crisis. The CII also warned that the country's inflation dynamics are increasingly being shaped not by isolated shocks but by a tightly linked chain connecting fuel, fertiliser and food.

In a statement, the CII has urged the government for coordinated policy approach on what it calls the Indian 3Fs challenge — fuel, fertiliser and food-stating that ignoring that these pressures are transmitted to India's economy in an integrated manner by the West Asia crisis means we are unable to grapple the situation properly.

“The 3Fs are not three disparate pressures. The 3Fs will stand for sustained growth today and better preparedness for the unknown tomorrow. Fuel feeds into fertiliser, fertiliser feeds into food, and all three feed into inflation, fiscal stress, and household welfare. That is why we believe it helps to treat this as a single, integrated economic challenge so that it makes navigating external shocks that much easier,” said CII director general Chandrajit Banerjee.

The country is highly reliant on imports, bringing in 88 per cent of crude oil, 90 percent of phosphates and 25 percent of urea. A considerable portion of imports also passes through the Strait of Hormuz. “Regarding fuel, greater utilisation of existing BIS standards on higher ethanol blends from E22-E30, expedite deployment of flex-fuel vehicles, establish an integrated national strategy on long-haul LNG trucking, further accelerate domestic exploration and expansion of strategic petroleum reserve,” the CII said.

On fertilisers, the CII also suggested a gradual shift to a direct benefit transfer or DBT model of subsidy using digitised land records and soil health cards, alongside gradual assimilation of urea under the nutrient based subsidy regime. Banerjee said that the goal is not to curtail support but to enhance it.

For food, the CII also mentioned that higher cost of fuel and fertilisers would ultimately translate to higher food prices and advocated timely release of onion and tomato buffer stocks held by price stabilisation fund prior to August-September, a period typically considered a lean season, and crack down on hoarding. “If we use this moment wisely we can be a much more resilient economy,” stated Banerjee.