India’s economy can sustain growth above 7 per cent even if crude oil prices rise to USD 90–100 per barrel, industry body Assocham said, citing improved resilience to energy shocks over the years.
The analysis, based on data from 2000-01 to 2025-26, showed that India recorded strong growth even during periods of elevated crude prices. GDP growth stood at 7.6 per cent in 2022-23 when the Indian crude basket averaged USD 93 per barrel, and at 7.2 per cent in 2023-24 with prices at USD 82 per barrel.
Nirmal Kumar Minda, President, Assocham, said, “India’s growth momentum continues to be anchored in domestic consumption, which drives manufacturing expansion, employment and income growth.” He added that higher government capital expenditure, particularly on infrastructure, has helped cushion the economy against external shocks.
Strong Buffers Support Growth
During 2011–14, when crude prices remained above USD 100 per barrel, India’s GDP growth ranged between 5.2 per cent and 6.4 per cent. In contrast, the sharp contraction of -5.78 per cent in 2020-21 occurred when oil prices were low, reflecting the impact of the COVID-19 pandemic rather than energy costs.
The report said, “India has built macroeconomic resilience through foreign exchange reserves, trade diversification, fiscal policy tools and diversified revenue streams,” enabling it to absorb crude price shocks without derailing growth.
Growth projections remain in line with this trend. The Reserve Bank of India has pegged GDP growth at 6.9 per cent for 2026-27, while Assocham expects it to exceed 7 per cent, supported by consumption demand, exports and rising capital investment.
On inflation, the outlook remains stable. Consumer price inflation edged up to 3.40 per cent in March 2026 from 3.21 per cent in February, with the increase lower than that seen in major advanced economies. The report noted, “India’s inflation management has remained strong amid global commodity volatility.”
Assocham said post-pandemic reforms, including production-linked incentive schemes and easing of compliance norms, have strengthened economic fundamentals. It expects the policy repo rate to remain stable at 5–5.25 per cent, supporting growth.
Despite continued dependence on crude imports, the report said India’s structural strengths position it to navigate global uncertainties without significant disruption to its growth trajectory. |
