Crude oil Domestic inflation may rise by 0.20 percent if the global prices increase by 10 percent. This estimate has been made on Wednesday in a study by Reserve Bank of India experts. Sujatha Kundu, Annemasri Tiwari and Indranil Bhattacharya issued this paper on the relationship of oil and inflation in India. It has also demanded policy measures to reduce dependence on imported crude oil from methods such as the use of alternative non-givash fuel. However, the Reserve Bank has clarified that this study does not represent its authorized views.
Oil prices can derail global growth
According to the study report, it is important to understand in the current context that the bounce in oil prices can have an impact to the Indian economy. It states, “The current global economic scenario, which is characterized by increasing trade fragmentation, disruption in supply chain, and aggressive trade war, can reduce the global trade rapidly and thus derail the global growth. In such a situation, instability in oil prices can prove to be weakening the Indian economy at this time. ‘
If the oil becomes expensive, the Indian economy will have a bad effect
Describing the possible impact in the report, it is said that a sudden surge in oil prices may affect the process of falling inflation and policy generalization may also fail. According to the study, “empirical analysis shows that India’s main inflation can rise by about 0.20 percent when the international prices increase by 10 percent.”
Retail inflation rate came down to 2.1 percent in June
Let us tell you that due to softening of food prices, the retail inflation came down to 6 years in June 2025 to 2.1 percent. The Consumer Price Index based inflation (CPI) was 2.82 percent in May and 5.08 percent in June 2024. This was the fifth consecutive month when inflation remained below the 4% target of the Medium term of the Reserve Bank of India (RBI).
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