India’s oil well: 8 points investment advisor on the reason for the blessing of this segment

With oil prices dropping to the levels that were last seen in early 2021, India may stare in an unexpected silver lining. Brent crude fell to less than $ 61 a barrel, while WTI decreased to $ 57.22 – on the occasion of a 15 % decrease since Donald Trump revealed his identification plans.

Investment Adviser Goraf Jain says timing cannot be better for India, who imports most of the oil. From reducing inflation to enhancing Forex reserves, the raw slice can hand over the advantage that affects the need.

As oil prices drop sharply, India will gain multiple economic fronts. Gaurav Jain, an investment advisor, breaks how this prices can positively integrate through the economy.

Reduces the import bill
India imports approximately 85 % of crude oil requirements. In the 23rd year, the country imported about 232 million tons of crude, at a value of $ 158 billion. Jin notes, “The drop in oil prices of $ 10/barrel can reduce the import bill by $ 15 billion annually.”

Improves the current account deficit (CAD)
Connecting RBI CAD by 1.2 % of GDP in FY24. Jin explains, “Every fall/barrel in crude can reduce CAD by 1.5 to $ 1.6 billion,” strengthening the external sector of India.

The inflation cools
Raw prices affect fuel, fertilizers, transportation, plastic and FMCG. In 2022, high oil prices were pushed by WPI above 12 %. “Low oil price helps,” says Jin. “

Reduces financial deficit pressure
The financial deficit of India in the fiscal year is targeted 25 by 5.1 % of GDP. Raw discounts are cheaper in fuel and gas -related gas support. “This creates space for more capital spending,” says Jin.

Supports rupee
In fiscal year 22, high oil prices on the rupee pressed $ 83 per dollar. “The lower raw is an external flow of the dollar,” says Jin, who supports Forex reserves and currency stability.

It enhances consumption
Low fuel prices and liquefied petroleum prices increase the available family income. This can raise rural and urban consumption, which helps to maintain the momentum of GDP.

Essential AIDS sectors
Industries such as airlines, logistics services, paints, tires and FMCG benefit from cheaper oil. “Aviation fuel ~ 40 % of the airlines costs – a decrease in ATF improves the margins directly,” notes a gene.

It builds Forex reserves
With the low oil imports, India can provide the dollar external flows and enhance its Forex reserves – which enhances total stability.