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The Confederation of Indian Industry (CII) is calling for a unified approach to manage fuel, fertiliser, and food prices, viewing them as one interconnected economic challenge. This strategy is seen as crucial for protecting India's growth, its farmers, and its consumers from external shocks.
The industry group warned that soaring energy and fertiliser costs, fueled by global events, are driving up food inflation and causing currency volatility, leading to widespread economic consequences.
Integrated Approach Essential
"The 3Fs are not three disparate pressures," stated Chandrajeet Banerjee, Director General of CII. "Fuel feeds into fertiliser, fertiliser feeds into food, and all three feed into inflation, fiscal stress, and household welfare." CII argues that treating this as one integrated economic challenge will help India better navigate external disruptions.
India's reliance on imports, especially for energy (88% of crude oil) and fertilisers (90% of phosphates), leaves it vulnerable. The Strait of Hormuz, a vital shipping route for crude oil and LNG, also exposes the nation to risks originating from West Asia.
Fuel: Immediate Pressure, Big Opportunity
While fuel prices are the most pressing concern, CII views this area as the biggest opportunity to reduce import dependency. The organization recommends a clear plan for increasing ethanol blends (from E22 to E30), speeding up the adoption of flex-fuel vehicles, and establishing a national framework for LNG-powered long-haul trucks. CII also suggested exploring alternatives to LPG for cooking, such as electric, ethanol-based solutions, and green hydrogen. Additionally, they called for faster domestic oil and gas exploration and an expansion of strategic reserves.
Fertilizer Subsidies and Food Inflation
CII highlighted the strain on the fertiliser subsidy budget due to high global prices. They proposed a gradual shift towards a Direct Benefit Transfer system for farmers, connected to digital banking and soil health data. The group also recommended bringing urea under the Nutrient Based Subsidy framework over time to discourage excessive nitrogen use and prevent soil degradation.
Regarding food inflation, CII acknowledged India's advantage from a record harvest. However, they cautioned that rising fuel and fertiliser costs, a weaker rupee, and uncertain monsoon patterns pose risks. Suggestions include releasing buffer stocks of onions and tomatoes early, taking stricter measures against hoarding, and improving cold-chain infrastructure to cut supply chain costs and shorten the distance from farm to consumer.