New Delhi: The Confederation of Indian Industry (CII) has urged businesses to take practical and responsible measures amid the current energy shock caused by the ongoing war in West Asia, focusing on price stability, job protection and a shift away from traditional fuels.
The lobbying group also called for investment in clean energy and asked companies to work with the government to create strategic buffers for critical raw materials while building up reserves for them.
The CII’s call to businesses in a statement outlining a 12-point industrial agenda on Sunday comes after the government last week sharply cut excise duty on petrol and diesel and imposed a tax on diesel and jet fuel exports to ensure domestic price stability and uninterrupted supplies.
The group said the government’s “timely, measured and reassuring” actions had helped to contain inflationary pressures, sustain industrial activity and preserve confidence at a time of global uncertainty, while supporting jobs and livelihoods across sectors.
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The situation triggered by the ongoing conflict in West Asia is a case of supply-side disruption, with pressures transmitted through energy costs, logistics and working capital cycles, the CII said.
“The next phase requires the industry to build on this foundation with practical and responsible measures,” the statement quoted CII Director General Chandrajit Banerjee as saying.
The lobby group said the industry should work with the government to build strategic reserves and balancing mechanisms for critical raw materials, fuels and intermediates. Collaborative approaches to inventory holding, shared infrastructure and better data visibility can significantly enhance national preparedness for future disruptions, the company said.
Ensure stability
Businesses can “try to maintain price stability by ensuring that the benefits of stable fuel prices and moderate logistics costs are passed on to end consumers and downstream partners. This will support inflation management and strengthen industry credibility,” he said.
It also urged businesses to strengthen supply chains by identifying alternative sourcing corridors, diversifying supplier bases and building stockpiles for critical inputs. This will reduce exposure to disruptions arising from concentrated shipping routes, it said.
The CII also said companies should prioritize protecting employment and livelihoods by using internal efficiencies and cost management to absorb temporary shocks, thereby promoting workforce stability.
Businesses should also accelerate investments in the energy transition, including renewables, green hydrogen and industrial energy efficiency. The current situation reinforces the need to reduce dependence on conventional fuels and build long-term energy resilience, he added.
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In a virtual meeting on Friday, Prime Minister Narendra Modi urged state chief ministers to promote alternative energy sources such as biofuels, solar power and compressed biogas, Mint reported. The central government is closely monitoring the side effects of the energy shock from the US-Israeli war with Iran, which began on February 28.
Chief Economic Adviser V. Anantha Nageswaran said in the Finance Ministry’s March Monthly Economic Review that the projected 7-7.4% economic growth for FY27 now has significant downside risks due to the war in West Asia.
Nageswaran also suggested re-prioritizing spending on building long-term reserves, not just in energy but also in several commodities and materials. The report says the war in West Asia will be felt through four channels – disruption of oil, gas and fertilizer supplies and exports, higher import prices, higher logistics costs and a possible decline in remittances from Indians in the Gulf countries.
Larger firms can support MSME partners through faster payments, better credit terms and better order visibility, CII said. This will ease liquidity pressures across supply chains.
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