India oil import: This fiscal year, India has made billion-dollar savings by acquiring Russian crude oil.
Thus, an Investment Information and Credit Rating Agency (ICRA) study. According to Firstpost, India ranks among the top importers and consumers of crude oil globally.
Through the Strait of Hormuz, a small sea passage between Oman and Iran, India imports liquefied natural gas (LNG) from Qatar and oil from Russia, Saudi Arabia, Iraq and the United Arab Emirates.
Throughout the first 11 months of the fiscal year 2022–2023 India’s oil import bill was reduced by about $7.9 billion as a result of its strategy of continuing to buy cheap oil from Russia in defiance of Western pressures. This move also helped the nation reduce its current account deficit.
The government of Prime Minister Narendra Modi has been steadfast in maintaining its relations with Russia despite Western sanctions against Moscow.
Trade tracking organizations Kpler and LSEG reported that India imported more Russian oil in April of this year than it did a month prior.
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The figures reveal that imports increased by 13–17% in April.
The statistics show that Iran, Saudi Arabia, and Russia continued to be India’s top three oil suppliers in April.
According to the figures, Iraqi oil imports fell by 20 to 23%.
These substantial purchases of Russian oil have also contributed to maintaining prices in the global market at more acceptable levels, which has benefited other nations as well, given that India is the third-largest importer of crude oil worldwide.
According to Ministry of Commerce and Industry statistics, the percentage of crude petroleum imported from Russia increased to 36% in the first 11 months of FY 2024 from 2% in FY 2022, while that from West Asian nations (Saudi Arabia, the UAE, and Kuwait) decreased to 23% from 34%.
The discounts on Russian oil significantly reduced the cost of oil imports. The imputed unit value of imports from Russia was 16.4% and 15.6% lower than the comparable levels from West Asia in FY 2023 and the first 11 months of FY 2024, respectively, according to an ICRA analysis.
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This, according to ICRA, resulted in savings of $5.1 billion in FY 2023 and $7.9 billion in the first 11 months of FY 2024, which in turn compressed India’s current account deficit (CAD)/GDP ratio by 15–22 basis points in FY 2023–24.
ICRA estimates that a $10 per barrel increase in the fiscal average crude oil price raises net oil imports by $12–13 billion or 0.3% of GDP. Therefore, from our present projection of 1.2% of GDP for FY 2023–24, the CAD is anticipated to widen to 1.5% of GDP if the average crude oil price increases to $95 a barrel in FY 2025.
