Mr. Rushabh Gandhi, Deputy CEO, IndiaFirst Life Insurance – views on the US-Iran turmoil on Indian economy

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Mr. Rushabh Gandhi, Deputy CEO, IndiaFirst Life Insurance

MUMBAI, 13th January 2020 (GNI): The recent incidents have caused crude oil prices to surge five days in a row. Indian economy is currently grappling with slowdown concerns with lacklustre GDP data while on other side inflation is inching up. India imports approx. 80% of its crude requirement and is quite dependent on middle-east countries for the same. As one of the world’s biggest oil consumers, India stares at a potential supply disruption and the consequent rise in the import bill. Since our dependence on crude imports as a percentage of consumption is the highest, the impact on economy and stock markets is also relatively higher. In this context, the ongoing Iran US conflict can result into surge in global oil prices as Iran and Iraq are significant producers of oil and any supply disruption may spike up prices. Moreover, Iran controls the Strait of Hormuz through which ~ 21% of the world’s crude oil passes via sea route.

Close to 50% of the country’s remittances come in from Indian’s settled in West Asia. Them losing jobs due to endangered economies arising out of these tensions will  jeopardise a rather crucial source of foreign exchange. Thus, apart from disturbing the global geo-political balance, surge in crude oil prices can further jeopardize and prolong the recovery of Indian economy. We can only hope the global leaders arrive at a decision that is favourable not just from the perspective of our sub-continent’s fiscal well-being, but also from prism of sustained world peace and prosperity, stated in the press release.ends