$10 crude rise could raise India's headline inflation 55-60bp
Crude oil prices are climbing because of tensions in West Asia, and that could mean higher costs for everyone in India.
Revati Kasture from CareEdge Global IFSC Limited warns that a $10 increase per barrel could raise India's headline inflation by about 55-60 basis points in FY27, tough news since we rely on West Asia for most of our oil.
Oil shocks risk India's CAD, rupee
Higher oil prices could also make India's current account deficit (CAD) worse and put extra pressure on the rupee, especially with the US dollar getting stronger.
While Indian oil companies might shield us from price hikes at first, those costs could eventually hit consumers if high prices stick around.
On the bright side, things like sourcing oil from more countries and blending ethanol help soften the blow, and India's strong foreign exchange reserves provide a buffer against external shocks.