Harnessing civic responsibility: India’s response to the US-Iran energy shock

The US-Iran war has sent the global economic and energy machinery into a frenzy. From erupting Japan’s economic security vulnerabilities into full view, to hitting the macroeconomy of the non-combatant South Korea like a tidal wave, this war has led to global powers scrambling to establish self-reliance and a ‘homegrown energy’ framework to insulate themselves from external shocks. India, however, had already begun to plant the seeds of self-reliance six years ago through the ‘Aatmanirbhar Bharat’ policy.

While various nations and geopolitical unions established macro-fiscal shields, policy changes, and programmes, India took a unique and nuanced route towards defending the nation’s economy. Prime Minister Narendra Modi, in a recent major address in Hyderabad, flipped the script on all those expecting him to make complex claims and policy changes, and did what he does best — trusting his fellow Indians. He tugged at the patriotic heartstrings of the citizens and exclaimed that our national duty is not just to guard physical borders, but to guard the nation’s macroeconomic stability through civic responsibility and localised lifestyle restraint.

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The government seems to be drawing inspiration from its pandemic playbook. However, the metaphorical ‘virus’ they are currently combatting is the potential of industrial paralysis and non-essential dollar outflows. To conquer this battle, they need three main pillars of strength and cooperation: the urbanites, the agrarians, and the country’s dedicated strategic petroleum reserves.

The urbanites have been urged to turn their foreign vacations into domestic ones, avoid non-essential purchases of gold, as well as curb their usage of imported edible oils. Through these lifestyle cutbacks, citizens may aid the preservation of India’s foreign exchange reserves.

The agriculture sector is the backbone of the Indian economy, and protecting it has been the government’s primary goal during this global supply chain crisis. The agrarians have been strictly insulated from the international fertiliser spikes, and the Modi government is valiantly battling massive fiscal hits to maintain subsidies on domestic fertilisers. Moreover, they are investing Rs 9,400 crore to expand solar-powered irrigation systems to liberate Indian agrarians from their diesel dependency altogether.

Now, with daily demands as well as agricultural needs under control, the government turned to its greatest weapon and safety net — the country’s dedicated strategic petroleum reserves, which cumulatively hold 3.37 million metric tonnes of crude oil currently. Upon combining the reserves from the three SPRs and stocks held by commercial oil companies at depots across the nation, India can effectively command a 50-60-day operational buffer of total petroleum products. Additionally, the government enforced a tactical ‘Natural Gas Control Order’, i.e., a strict 10 per cent buffer on all incoming shipments, to protect the fertiliser and power sectors from the Qatari shipping disruptions. The lack of these buffers is precisely what has caused many other nations to panic during this energy shock.

Meanwhile, as the government was steering the nation through this volatile crisis, internal politics disintegrated into petty domestic scoring instead of solidarity in the face of a nightmare. The cynics in India truly showcased the epitome of political myopia by coordinating rhetorical assaults on the Modi administration. They hurled accusations, from calling the appeal to cut back on luxury “proof of failure”, to claiming that asking citizens of India to help protect their nation was “downright immoral”. The critics seem to be viewing this national challenge through rose-tinted glasses, because expecting the government to completely absorb the shockwaves without any civic participation is an extremely unrealistic and utopian outlook towards economics and national security.

However, what truly crossed the limits of absurdity was the allegation that the current geopolitical war was a “man-made disaster” engineered by the Indian government. It falls on deaf ears among the sceptics that no sovereign nation can unilaterally dictate the stability of West Asian shipping routes. If this were possible, US President Donald Trump would have swiftly succeeded in his attempts to open the Strait of Hormuz. The energy shock has sent tremors globally and led to powerful governments panicking behind closed doors. While the rest of the world is facing rigid, state-mandated economic freezes, Indian PM Modi’s strategy to harness civic responsibility as a response to the US-Iran Energy Shock undoubtedly stands out as a superior blueprint.

India is not just surviving this crisis, it is outmanoeuvring it. PM Modi’s strategy proves that true statecraft in the 21st century does not rely on government coercion, but on the ability of a leader to harness collective civic responsibility as a tool of sovereign defence. India is currently a flagbearer in teaching the world about the ultimate shock absorber and unity in the face of crisis: Economic patriotism.

(Anindita Mahapatra is the Research and Program Coordinator at Kalinga Institute of Indo-Pacific Studies and is a postgraduate in Journalism and Mass Communication. Views expressed in the above piece are personal and solely those of the author. They do not necessarily reflect Firstpost’s views.)