India Should Build Larger Oil, Fertiliser & Medicine Buffers To Protect Consumers: EY

New Delhi, May 29 (KNN) Consultancy firm EY has called for a significant reorientation of India's economic strategy amid the West Asia crisis, urging the government to expand reserves of critical commodities and reduce dependence on volatile global supply chains.

In its Economy Watch May 2026 report, EY cautioned that the ongoing West Asia crisis has exposed India's vulnerability to imported energy and critical supplies, with direct consequences for fuel prices, food inflation, and household expenses. 

"In view of the West Asian crisis and other unfavourable economic developments, a substantial reorientation of policies may be needed," ANI reported, citing the report.

What India Should Stockpile

EY recommended that India build "relatively larger reserves" of commodities where import dependence is high, specifically identifying crude oil, LPG, fertilisers, rare earth materials, basic medicines, and critical medical equipment as priority areas.

The report flagged India's strategic crude oil reserves as critically thin — sufficient for only four to five days of domestic consumption — comparing this unfavourably with significantly larger stockpiles maintained by China and Japan. 

This concern is particularly timely given that global crude prices rose to USD 103.9 per barrel in April 2026, the highest level since July 2022. EY warned that if oil prices remain elevated, India's current account deficit and inflation could come under sustained pressure.

Higher fertiliser costs, the report noted, feed directly into food inflation, while expensive crude oil pushes up transport costs, electricity prices, and daily household expenditure.

Reducing Supply Chain Vulnerability

Beyond stockpiling, EY called on India to diversify its energy import sources and accelerate alternative trade corridors, including the India-Middle East-Europe Economic Corridor (IMEC) and Indo-Pacific routes, to reduce dependence on vulnerable global supply chains.

The report also urged faster adoption of green energy, electric vehicles, and domestic energy production to structurally reduce long-term reliance on imported fossil fuels.

A Strategic Rethink

EY said, “In view of the mounting pressures emanating from the West Asia crisis and the changing world trade and economic order in general, India may recast its growth strategy,” adding that economic security is becoming as important as economic growth — particularly for large import-dependent economies navigating an increasingly uncertain world order.

(KNN Bureau)