How India withstood the crisis in West Asia
India successfully navigated the recent West Asia energy crisis by leveraging strategic diplomatic relationships and diversifying its global oil supplier base. Despite high import dependency, the government and state-run companies absorbed significant costs to shield domestic consumers from the extreme fuel price volatility seen in other nations.
Historically, sharp increases in oil prices have been among the biggest sources of macroeconomic instability for India. It was therefore unsurprising that when tensions in West Asia escalated, many thought that India would once again face an energy and economic crisis, derailing its growth path. It revived memories of the 1973 oil shock and the 1991 balance-of-payments crisis, with concerns over soaring fuel prices, imported inflation, and pressure on the external account. After all, India imports almost 90% of its crude oil and remains heavily dependent on the Gulf for oil, gas and fertilizers.
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