Rising crude oil prices and supply disruptions following Russia’s invasion of Ukraine could further sap an Indian economy already slowed by Covid-19, posing risks to household spending and private investments, economists said.
India, which meets nearly 80 per cent of its oil needs through imports, could be hit by a widening trade deficit, weakening rupee and higher inflation after Brent crude prices shot above $105 a barrel last week, the economists said.
The “surge in oil prices as a result of the (Ukraine) crisis poses considerable risks to the Indian economy,” Aditi Gupta, an economist at Bank of Baroda, said in a note on Friday.
