This article describes India’s energy situation in the midst of current economic and geopolitical challenges while highlighting some of the key issues pertaining to India’s natural gas infrastructure.
Given India’s vulnerability to a rise in global crude oil prices as a result of its 75-80 per cent of its crude import dependency, the Iraq crisis could widen its current account deficit, while putting pressure on exchange rate, impeding government’s fiscal consolidation goal and putting off any nudge on interest rates by the Reserve Bank of India.
India is trying to deal with its domestic energy concerns through various measures including reforming its New Exploration and Licensing Policy (NELP), intensifying its efforts in developing domestic unconventional energy resources and diversifying its crude imports. In this regard Japan’s support holds special importance.
Nawaz Sharif’s political comeback has resulted in a fresh sense of optimism within the Indian industry. But it has to be seen whether it will it help in normalizing relations and bringing people together.
Iraq crisis: Lessons for India
Given India’s vulnerability to a rise in global crude oil prices as a result of its 75-80 per cent of its crude import dependency, the Iraq crisis could widen its current account deficit, while putting pressure on exchange rate, impeding government’s fiscal consolidation goal and putting off any nudge on interest rates by the Reserve Bank of India.