How India is weathering the energy shock
And why its troubles may not be over yet
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EARLY in the Gulf war, as almost a fifth of the world’s oil and gas supplies were choked off and countries all over Asia scrambled to protect their economies, India looked particularly vulnerable.
Not only did it rely on imports for most of its crude oil and more than half its gas, but most of the stuff came from the Middle East. At about a week’s worth of consumption, its petroleum reserves were more tactical than strategic. Its currency plummeted, worsening the US dollar-denominated pain.
Yet by the time America and Iran stopped (if briefly) lobbing missiles last month, India looked to be in surprisingly good shape. Analysts surveying the country’s growth prospects in the aftermath found little to worry about. Fuel prices had risen, but modestly. Inflation was under control. The currency had stabilised.
