Nomura: Indian Prime Minister calls for reduction in energy usage, signaling future policy changes.

Nomura analysts Sonal Varma and Aurodeep Nandi stated in a report that Indian Prime Minister Narendra Modi's call for citizens to reduce energy consumption and save foreign exchange may signal changes in future policies. They mentioned that as concerns about the widening fiscal and current account deficits and the further weakening of the rupee intensify, the government's practice of using fiscal spending to cushion the soaring energy costs seems to be weakening since the outbreak of the Iran war. Nomura predicts that India's fiscal deficit will reach 4.6% of GDP by the end of the fiscal year ending in March 2027, higher than the government's target of 4.3%, while the current account deficit is expected to expand to 2.4%. Nomura stated that potential policy measures could include curbing gold imports, tightening rules on foreign remittances, and allowing domestic fuel prices to rise.