Janice R. Andrews
In the face of mounting geopolitical tensions and rising global oil costs, India is doing a difficult diplomatic balancing act. Pankaj Mishra of OneIndia recently spoke with Ravi Srivastava, the former chief manager of Hindustan Petroleum Corporation Limited (HPCL), and the discussion provides insight into the way the Modi government is handling this significant subject.
Srivastava talked on the current geopolitical issues, such as the war between Russia and Ukraine and the Western sanctions that followed, which seriously impacted the world’s energy supply systems. India, a significant oil importer, must manage the economic effects of these geopolitical changes while tackling the difficult challenge of obtaining inexpensive energy.
India’s Approach to Diplomacy with Russia
Developing ties with Russia is one important tactic India has used to stabilize oil supplies. Despite demands from around the world to cut ties with Moscow as a result of the conflict in Ukraine, India has remained neutral and has continued to sell oil with Russia. India now has access to cheap crude oil thanks to this partnership, which has lessened the impact of rising world prices.
Srivastava emphasized that India’s oil import costs have remained lower than they would have been in the absence of these agreements thanks in large part to diplomatic wrangling. One important factor in keeping inflation under control is the stabilization of local fuel costs, which has been facilitated by these subsidized oil imports.
Impact on Price Stability and Inflation
An increase in the price of oil often causes inflationary pressures in a number of industries, including manufacturing and transportation, which drives up consumer expenses. Srivastava did, however, highlight the steps taken by the Indian government to protect the populace from these consequences. Relative price stability in the domestic market has been sustained by the Modi government’s implementation of fuel subsidies and price limits on necessities.
Combining Financial Difficulties
Srivastava also talked on the more general economic difficulties that India is now facing. Fuel subsidies strain public coffers even as they aid in consumer protection. One of the main goals of India’s present economic strategy is to strike a careful balance between regulating subsidies, preventing inflation, and promoting economic growth.
In conclusion, India’s diplomatic efforts with Russia together with smart domestic policies are critical to stabilizing the nation’s energy sector and reining in inflation while geopolitical unrest continues to affect global oil prices.
