{"text":[[{"start":8.1,"text":"India’s economy has displayed impressive resilience in the face of recent shocks, from the Covid-19 pandemic to punitive tariffs imposed by US President Donald Trump last year. The Iran war could, however, prove to be a test too far. "}],[{"start":23.15,"text":"The fast-growing economy has been particularly exposed to the conflict. It imports 90 per cent of its oil, 60 per cent of its liquefied petroleum gas and about 85 per cent of the natural gas used to make fertiliser — and a significant portion of these commodities would usually pass through the Strait of Hormuz. But the longer shipping through the sea passage remains disrupted, the deeper the economic scars will be for the world’s most populous country. "}],[{"start":50.45,"text":"Since the US and Israel launched attacks on Iran over 100 days ago, the commodity supply shock in India has threatened to metastasise into a financial malaise as well. Inflation has edged higher while public finances have been strained by higher subsidy costs for fuel and fertiliser. As the country’s import bill has climbed, its currency has come under sustained pressure. The rupee fell to a record low against the dollar last month. Capital has also taken flight. As of early June, foreign ownership of Indian shares tumbled to a 10-year low. In recent weeks, India’s stock market capitalisation has been surpassed by Taiwan and South Korea, though valuations have been volatile."}],[{"start":90.80000000000001,"text":"New Delhi has tried to limit the fallout with emergency measures. It has sensibly planned to ease back on some subsidies, even though this risks putting greater strain on households. In May, it more than doubled tariffs on imports of gold and silver to shore up the rupee. Last week it scrapped a capital gains tax on foreign investments in government securities and launched a new blend of fuel that is 85 per cent ethanol, to help reduce the country’s dependence on imported oil. "}],[{"start":116.75000000000001,"text":"For now, the country remains at the whim of events in the Middle East — which is costing Indian lives too. Further economic sticking plasters may be necessary, from even tighter energy rationing efforts to interventions by the Reserve Bank of India, to stem capital outflows. But even if the current priority is crisis management, the government should note that turmoil from the war is also rooted in structural economic vulnerabilities, which ought to demand closer attention once the immediate pressures begin to ease."}],[{"start":145.95000000000002,"text":"First, India will need to move faster to diversify its supplies of key commodities and double down on renewable investments. Next, a stronger business environment would help India attract stickier foreign direct investment and reduce its exposure to flighty portfolio investors. Right now, firms still complain about over-reach by tax and law enforcement authorities, and even “tax terrorism”. Planning reform and further liberalisation of its large internal market would also help enterprise to scale and reap the benefits of AI. Finally, deeper trade deals will strengthen India’s supply chain and expose firms to competitive pressures."}],[{"start":185.3,"text":"Recent economic shocks have pressured Prime Minister Narendra Modi into important reforms. In the past year, the government has implemented new labour codes, overhauled taxes, removed limits on FDI in insurance and accelerated new trade deals. The latest crisis will ultimately demand a similar response. "}],[{"start":203.8,"text":"Emergency measures may soften the blow, but they will not insulate the economy from future shocks. If New Delhi wants to preserve its growth momentum and reclaim lost ground against its Asian competitors, it will need to emerge from this crisis not merely stabilised but also more resilient."}],[{"start":227.3,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1781233531_8437.mp3"}