India is increasing its domestic production of oil and gas to reduce the impact of the ongoing West Asia crisis, Reserve Bank of India (RBI) Governor Sanjay Malhotra said, outlining the country’s efforts to manage energy supply risks and protect the economy.
Speaking at Princeton University, Malhotra explained that the tensions in West Asia carry serious implications for India. The region is vital for the country’s energy security, trade, and remittances. A large share of India’s crude oil imports comes from this region, making any disruption a matter of concern.
To address this, India has stepped up domestic oil production while also looking at import diversification. This approach is aimed at reducing dependence on a single region and ensuring a steady supply of energy. Malhotra reassured that India has sufficient oil reserves and there is no immediate shortage. However, he noted that some level of gas rationing has been necessary for industries.
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He also pointed out that both the government and oil companies have absorbed part of the rise in global crude prices to protect consumers from sudden price hikes. At the same time, some increase in gas prices has been passed on, reflecting the pressures in global markets.
The situation remains challenging as geopolitical tensions continue to affect global energy supply chains. Key shipping routes, such as those in the Middle East, are under close watch, raising concerns about potential disruptions and imported inflation.
Despite these uncertainties, Malhotra highlighted the strength of the Indian economy. He noted that India has maintained steady growth over the past decade, supported by strong policies and financial stability. This has helped the country better handle global shocks compared to many other economies.
The RBI, he added, is closely monitoring the situation, especially the risk of rising inflation in India due to higher energy costs.
As global uncertainty continues, India’s focus on boosting domestic production and diversifying its energy sources is expected to play an important role in maintaining stability and ensuring long-term economic resilience.
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