How Rising Oil Prices Affect India’s Economy
The Impact of Israel-Iran Tensions on India
New Delhi: Rising oil prices worldwide, due to the Israel-Iran conflict, threaten India’s economy. The exact impact depends on how high prices go and for how long.
What’s Happening Now
The Israel-Iran conflict has pushed oil prices up. Last week, prices hit around $73-$74 per barrel. This surge is a concern for India.
Looking Back at History
In 2022, the Russia-Ukraine war caused oil prices to spike to $100 per barrel. Despite this, India’s economy grew by 7%.
Economic Forecast
Chief Economic Adviser V Anantha Nageswaran says the impact depends on further price hikes and their duration. India’s economy grew at 6.5% in 2024-25. For 2025-26, growth is expected to be between 6.3% and 6.8%.
A Notable Achievement
Nageswaran notes that maintaining a 6.5% growth rate in these conditions is commendable. India is on track to sustain this performance.
Comparing Growth Rates
The gap between India’s growth rate and that of developed economies is now larger than it was from 2003 to 2008. Back then, India’s economy grew at 8-9%.
Government Reforms
Nageswaran also highlights that the current government has introduced several reform measures. These should help boost growth. He adds, “If we act faster and show more dynamism, we can improve our growth rate.”
Key Takeaways
- Rising oil prices threaten India’s economy.
- The impact depends on the price increase and its duration.
- India’s economy grew by 7% despite high oil prices in 2022.
- The growth rate for 2024-25 is 6.5%, and for 2025-26, it’s expected to be between 6.3% and 6.8%.
- Government reforms aim to boost growth.
