CII calls for national strategy on fuel, fertilizer, food prices

CII urges a national strategy to manage rising fuel, fertilizer, and food prices, citing the West Asia crisis. It recommends treating the '3Fs' as one integrated challenge and proposes reforms for fuel security, fertilizer subsidies, and food inflation.

The Confederation of Indian Industry (CII) 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.

India's High Import Dependency

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.

CII's Recommendations for Resilience

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

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 Fertilizer Reforms

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

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)

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