The Ministry of Finance is closely monitoring the situation to assess the potential impact of the escalating tensions between Israel and Iran on the Indian economy. Officials have expressed concerns about the possibility of rising global oil prices, which could have a significant impact on India's economy.
India is one of the world's largest consumers of crude oil, importing approximately 85% of its requirements. Any increase in oil prices could lead to higher import costs, adding to inflationary pressures. The government has kept retail prices of petrol and diesel frozen for the past two years, but further escalation of the conflict could make it difficult to maintain this policy.
The Ministry of Commerce is also monitoring the situation and conducting stakeholder consultations to assess the potential impact on trade. The department has experience in managing similar situations, such as the Russia-Ukraine war, the Red Sea crisis, and the blockage of the Panama Canal.
The recent rise in Brent Crude prices is an indication of the potential impact of the conflict on global energy markets. Brent Crude for June delivery rose 46 cents, or 0.5%, to $90.56 a barrel by 0005 GMT. U.S. crude futures for May delivery rose 43 cents, or 0.5%, to $85.84 a barrel.