India faces deeper oil shock as Hormuz closure hits rupee, inflation and growth

India’s oil shock is intensifying as the Strait of Hormuz remains closed, cutting off more than 40% of the country’s crude flows and pressuring consumer prices, foreign exchange reserves and growth. Prime Minister Narendra Modi urged Indians in mid-May to curb gasoline and diesel use, use public transport and reduce foreign travel and gold purchases. Oil Minister Hardeep Singh Puri said India has 69 days of crude stocks and 45 days of LPG supply, but oil marketing companies are absorbing losses of up to 10 billion rupees a day as they buy fuel at higher costs and sell at capped prices. The rupee hit a record low against the dollar on May 13, 2026, while foreign investors withdrew more than $20 billion from Indian equities in the first four months of 2026. BMI, part of Fitch, expects GDP growth to slow to 6.7% in fiscal 2026/2027 from 7.7% a year earlier.