Leader of Opposition Rahul Gandhi on Saturday warned that India could be headed for a fresh wave of inflation, linking it to the weakening rupee and rising fuel costs amid the US-Israel war on Iran. Rahul Gandhi argued the currency slide and fuel price surge would have a cascading effect across the economy, saying that the government may call it “normal” but this is not the reality. (File Photo: AICC)

“The rupee weakening against the dollar and heading towards 100, along with a sharp rise in industrial fuel prices — these aren't just numbers; they're clear signals of the inflation to come,” he wrote on X.

His remarks came a day after the rupee plunged 64 paise to close at an all-time low of 93.53 against the US dollar, amid pressure from rising crude oil prices and a broader risk-off sentiment among global investors.

‘Impact will hit every household’ Gandhi argued that the currency slide and fuel price surge would have a cascading effect across the economy, saying that the government may call it “normal” but this is not the “reality".

He outlined how this would certainly have a "direct and deep impact on every family's pocket”:

"Production and transport will become more expensive;

MSMEs will be hit the hardest;

Prices of everyday items will go up; and

FII money will flow out even faster, putting more pressure on the stock market." “And it's just a matter of time—after the elections, prices of petrol, diesel, and LPG will be hiked too,” he added. The Congress leader was referring to the upcoming assembly elections in four states, West Bengal, Assam, Kerala and Tamil Nadu; and the UT of Puducherry.

‘Empty rhetoric, no strategy’ Taking a direct swipe at the Centre, Gandhi said the government lacked a clear plan to tackle the unfolding economic challenges.

“The Modi government has neither direction nor strategy – just empty rhetoric. The question isn't what the government is saying – it's what's left on your plate,” he said.

LPG concerns add to anxiety The Congress leader’s concerns come against the backdrop of ongoing disruptions linked to the West Asia conflict, which have pushed up energy costs and raised fears of supply constraints in India.

The ministry of petroleum and natural gas has already urged commercial LPG users to shift to piped natural gas where available, in a bid to ease pressure on cylinder supplies. Despite government assurances of adequate stock, reports of panic buying and long queues at LPG depots have surfaced in several parts of the country.

The situation has been particularly acute in Kerala, where the ongoing LPG crunch has forced several restaurants and hotels to shut operations temporarily, earlier this month.

Tharoor flags global factors Senior Congress leader Shashi Tharoor, however, pointed to external pressures behind the rupee’s fall, saying the decline is “because of international forces beyond our government's control”.

He added that the situation should put in perspective similar currency movements during the Congress-led UPA government, and said the BJP-led Centre should have the “grace” to withdraw its earlier claims blaming the previous government for rupee depreciation.