This episode of The Core Report analyzes India's delayed austerity appeal by Prime Minister Modi, urging citizens to cut fuel, gold, and cooking oil consumption amid the West Asia crisis. The host argues the appeal is two months late, critiques its potential to cause panic rather than reduce demand, and explores impacts on markets, inflation, and the rupee while discussing new investment options like Kotak's Indo-Pacific Defense ETF.
Summarized by Podsumo
India's austerity appeal by PM Modi is critiqued as 'two months late,' failing to raise fuel prices earlier despite crude oil staying above $100/barrel since February.
Petrol consumption rose 6.5% in April 2026 vs April 2025 due to unchanged prices, while diesel sales increased 0.3%, highlighting demand mismanagement.
Nomura warns the appeal signals fiscal pressure, with excise duty cuts on fuel costing ~0.5% of GDP and balance of payments deficit exceeding $70 billion.
Gold imports account for $72 billion (10% of India's total import bill), and the government's appeal may inadvertently spike demand due to cultural attachment.
Kotak Mahindra launches the Kotak Indo-Pacific Defense UCITS ETF (ticker: QUOD) focused on defense companies in India, Japan, South Korea, Taiwan, Singapore, and Australia, with Indian firms comprising ~30% of the index.
"We Indian don't buy gold, we consume gold. So ultimately we have to see whether our consumption would be dropping or not. But yes, from the jeweler perspective, things are very awkward... But I think we Indians have a DNA to buy gold."
"The Prime Minister's appeal to citizens to cut discretionary spending and conserve energy amongst the ongoing West Asia conflict signals that pressure on India's fiscal position may be reaching a tipping point."
"The government on Monday assured citizens on Monday as it has almost every day in the last six weeks or so that there is no shortage of petrol or diesel in the country. Monday's assurance of course came a day after the Prime Minister has people to reduce fuel dependence."