South Asia Adopts Austerity to Combat Energy Crisis

South Asian nations, home to a fifth of the world's population, have introduced a series of emergency measures to navigate an energy crisis triggered by the conflict involving the United States, Israel, and Iran. The geopolitical tension has severely constrained supplies and inflated global prices, forcing governments across the region to adopt conservation strategies and fiscal adjustments.

India has responded with a combination of tax cuts and supply management. The federal government slashed excise duties on petrol and diesel to ease the burden on consumers, while simultaneously imposing windfall taxes on the export of aviation fuel and diesel. To prioritize essential infrastructure, emergency measures were invoked to redirect gas supplies from non-priority sectors to critical users. Furthermore, oil refiners have been directed to prioritize the production of liquefied petroleum gas.