According to Reserve Bank of India Governor Sanjay Malhotra, in order to manage supply concerns resulting from current conflicts in West Asia, India is increasing domestic oil and gas production while diversifying import sources.
Speaking at Princeton University, Malhotra pointed out that India had retained sufficient oil supplies despite the worldwide unpredictability brought on by the US-Israel confrontation with Iran. Although there isn’t a shortage of crude right now, some gas rationing for industrial usage has been required.
He emphasized that West Asia continues to be vital to India’s economy, providing about half of its imports of crude oil, a substantial chunk of its exports, and a sizable amount of its remittances. While some gas price rises have been passed on to consumers, oil marketing corporations and the government have absorbed some of the increased costs in order to lessen price shocks.
Malhotra underlined that monetary policy will focus on preventing supply shocks from creating prolonged inflation. The RBI continues to take a flexible, data-driven approach while upholding an impartial policy position, he continued.
The governor also emphasized India’s economic durability, pointing to the country’s average annual growth rate of 6.1% over the previous ten years, which was bolstered by stable policies and sound fiscal management.
Source – Moneycontrol
