| India is one of the countries believed to be benefiting the most from weak crude prices – with positive impact on growth, current account deficit (CAD), inflation and fiscal deficit. While this rationale looks intuitively appropriate (given that India imports about 80 per cent of its crude requirements), the actual gain is modest.
Available data suggests India’s GDP growth tends to be stronger when oil prices are higher and vice versa. Since the 1990s, oil prices seem to have reacted more to global demand (global GDP growth) than was the case earlier. In fact, from 1991 to 2014, the correlation between oil price changes and world GDP growth (per cent year-on-year) was as high as .71. This is not a surprise since India has become more integrated with the global economy since the 1990s...............................................Full Article: Source
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