Narendra Modi urges Indians to curb foreign travel and spending, promote austerity amid West Asia crisis and rupee slide – Firstpost

For two consecutive days, Prime Minister Narendra Modi has urged citizens to become partners in strengthening the nation amidst a West Asia crisis that looks far from over. Addressing a rally in Hyderabad, the Prime Minister made seven specific appeals. He urged citizens to help conserve foreign exchange reserves by reducing the consumption of imported fuel, advocating for public transport and carpooling. The PM also called for the revival of work-from-home practices and reduced consumption of edible oil, while urging farmers to cut dependence on imported chemical fertilisers. Furthermore, he asked citizens to rethink discretionary spending, including avoiding foreign travel for one year. He also appealed to the public to explore ways to reduce foreign expenditure by reconsidering destination weddings abroad or limiting excessive gold purchases.

Crude prices have remained above $100 per barrel, and the government has thus far subsidised vehicular fuel while capping price hikes for Aviation Turbine Fuel (ATF) for domestic consumption—measures that are putting stress on the exchequer. This comes as the
Indian rupee continues to slide against the dollar, making imports increasingly expensive. The rupee has weakened by 12.5 per cent since last May and has lost 30.5 per cent against the US dollar over the last five years.

The austerity appeals, coupled with the deadlock in US-Iran negotiations, spooked the markets; the Sensex lost 2,763 points in two days. Shares in jewellery, travel, and hospitality stocks also dipped, in many cases underperforming the benchmark indices.

Devil in details

Even before the
West Asia crisis, the 2025 annual report from the Ministry of Tourism highlighted a worrying situation. Last year, Foreign Tourist Arrivals (FTAs) stood at 9.02 million, a 9.4 per cent drop from 2024. Additionally, 10.62 million Non-Resident Indians (NRIs) visited India in 2025. The ministry provisionally estimated earnings from these visitors at Rs 2,33,638 crore, a 6.6 per cent decline from the previous year. In dollar terms, earnings reached $31.331 billion, a 10.5 per cent year-on-year drop.

In contrast, Indian National Departures (INDs) for 2025 stood at 32.71 million, representing a 5.9 per cent growth. This increase persisted despite the rising costs of outbound travel, driven by the weakening rupee and broader inflationary pressures.

The ratio of Indians travelling abroad to Foreign Tourist Arrivals (excluding NRIs) currently stands at 3.5:1—meaning for every foreigner visiting India, 3.5 Indians travel overseas. When NRIs are included, the ratio is 1.5:1. While such figures are expected for the world’s most populous nation, the imbalance strains foreign exchange reserves during economic volatility. Over the years, the introduction of Tax Collected at Source (TCS) on foreign tour packages and remittances has failed to slow outbound tourism. Starting this year, travelers must also provide a mandatory declaration to the Income Tax Department.

Why the Prime Minister’s appeal?

Past campaigns, especially those online, have demonstrated that public sentiment can shift travel trends. Indian visits to the Maldives dipped following local anti-India sentiments and the Prime Minister’s high-profile visit to Lakshadweep. Similarly, anti-Turkey sentiments following Operation Sindoor saw fewer Indians travelling there. While previous shifts were often tacit, this direct appeal from the Prime Minister indicates that economic headwinds are here to stay. There remains a nuance between a personal appeal and a formal call to boycott, though both evoke nationalist sentiment.

The immediate aftermath of the West Asia conflict saw a
decline in international traffic from India in March; April figures are still awaited. This decline is unwelcome news for IndiGo and Air India. For these carriers, international expansion served as a hedge against the weakening rupee, as foreign point-of-sale transactions in global currencies provided a financial buffer.

As the industry enters the lean season from June until the Diwali vacations, the impact on citizens remains to be seen. While a drop in foreign travel may hurt airports and airlines, the Prime Minister’s message is clear: in the current economic climate, individual industries are secondary to the broader national interest.