Traditionally, sharp will increase in oil costs have been among the many largest sources of macroeconomic instability for India. It was due to this fact unsurprising that when tensions in West Asia escalated, many thought that India would as soon as once more face an vitality and financial disaster, derailing its development path. It revived reminiscences of the 1973 oil shock and the 1991 balance-of-payments disaster, with considerations over hovering gas costs, imported inflation, and stress on the exterior account. In any case, India imports nearly 90% of its crude oil and stays closely depending on the Gulf for oil, fuel and fertilizers.
This time round, nevertheless, when the Strait of Hormuz was the epicentre of world nervousness, India proved not solely the sceptics at residence and overseas incorrect, but additionally appears to have emerged stronger in managing its vitality wants. Was this resilience of India a matter of luck, or was it the result of deliberate coverage decisions, institutional studying, and strategic preparation?
Defying the chances
Few main economies had been as susceptible to the disruption within the Strait of Hormuz as India, the world’s third-largest oil importer. Heavy dependence on imported crude and LPG, mixed with rising freight prices and maritime dangers, created situations for a extreme exterior shock. Inside weeks, the Indian crude basket crossed $120 per barrel; the import-linked value of a home LPG cylinder rose above ₹1,600; and war-risk premiums escalated sharply. By typical measures, India appeared notably susceptible. Nevertheless, the actual problem was not merely managing larger vitality prices however stopping a world provide disruption from translating into inflation and shortages at residence.
Towards all expectations, one of many world’s most vitality import-dependent economies turned out to be among the many most price-resilient; India contained gas and cooking fuel inflation higher than many superior and rising friends.
The numbers inform a unprecedented story. Petrol costs in India rose by simply 7.5% in the course of the disaster, in contrast with almost 14% in Germany, 19% within the U.Okay., 45% within the U.S., over 50% in Pakistan and the Philippines, and nearly 90% in Myanmar. The distinction was even starker in diesel costs. Whereas the UAE noticed costs surge by about 85%, India restricted the rise to simply 8%.
One noticed an analogous story within the kitchen. Though India imports almost 60% of its LPG necessities, a home cylinder continued to value ₹942, or ₹642 for Ujjwala beneficiaries, which was cheaper than what it value in Pakistan, Nepal, and Sri Lanka, and dramatically decrease than within the U.S., Australia and Canada.
Nevertheless, the cushion got here at a price, as state-run Oil Advertising Corporations (OMCs) incurred ₹74,781 crore in losses on petrol, diesel, and LPG gross sales as much as June 30 as world crude costs surged in the course of the West Asia disaster. However that value reveals you the large image. As a substitute of passing the total shock to shoppers, the federal government and public-sector OMCs absorbed it, defending family budgets and protecting gas and cooking fuel inexpensive all through the disaster.
Weathering the storm
Whereas a number of components contributed to India’s resilience in the course of the West Asia disaster, 4 stand out. The primary lesson of the disaster is that strategic relationships are themselves a type of vitality safety. In instances of disaster, relationships matter as a lot as reserves. Many years of engagement with Iran and key Gulf companions ensured that channels of communication remained open even when tensions had been at their highest. Iran’s resolution to facilitate the motion of Indian ships and the willingness of Gulf producers to proceed supplying vitality underscored a easy actuality: overseas coverage will be as necessary to vitality safety as oil fields.
Second, India had quietly constructed an insurance coverage coverage in opposition to geopolitical shocks by diversifying its provider base. Vitality partnerships stretching from Russia and the U.S. to Africa and Latin America gave India the flexibleness to face up to disruptions much better than in earlier crises. In geopolitics, placing all of your vitality eggs in a single basket is not an choice.
Third, the disaster vindicated a decade of vitality planning. India had quietly constructed a number of layers of resilience similar to larger ethanol mixing, a quickly increasing renewable vitality base, bigger strategic reserves and stronger refining capability. These investments didn’t stop the disaster, however they made the financial system higher outfitted to soak up it.
Fourth, the disaster mirrored the worth of a whole-of-government method, reinforcing Prime Minister Narendra Modi’s emphasis on breaking down ministerial silos and strengthening institutional coordination. The Ministries of Exterior Affairs, Petroleum and Pure Gasoline, Ports, Transport and Waterways, the Indian Navy, and the Nationwide Safety Council Secretariat labored in shut coordination to observe dangers, handle logistics, and shield vitality provides.
The consequence was a coordinated nationwide response that turned potential disruption into an train in resilience.
The best way forward
The latest disaster reveals us that the foundations of resilience are laid in years of preparation, and never in moments of panic. India’s response mirrored the dividends of strategic foresight, diplomatic outreach and whole-of-government coordination. As world uncertainties deepen, this resilience might turn into a defining pillar of ‘Viksit Bharat’.
Sachin Kumar Sharma is Director Normal, RIS, New Delhi. Views expressed are private
Revealed – July 09, 2026 01:45 am IST
