Oil and Gas in India
India's Oil Import Dependence
How India imports around 85 percent of its crude oil, what this costs, and why it makes the economy vulnerable to global price shocks.
India is the world’s third-largest oil consumer.
Imports
- India imports around 85 to 88 percent of its crude oil needs.
- Crude oil imports cost well over 100 billion dollars in many years.
Vulnerability
- When oil prices rise, India’s import bill rises, widening the trade deficit.
- Higher oil prices push up inflation and can weaken the rupee.
Suppliers
- Iraq, Saudi Arabia, the UAE, the US and, since 2022, Russia are major suppliers.
Domestic production
India’s own crude production is around 30 million tonnes a year and has been declining slowly.
Gas
India imports about half of its natural gas, much as LNG.
Energy security
Reducing dependence through renewables, EVs, ethanol and more exploration is a policy goal.
The oil shock
When crude oil prices jump by 20 dollars a barrel, India's annual import bill rises by billions of dollars, pressuring the rupee.
Thinking India produces most of its own oil
India imports around 85 percent of its crude.
Key takeaways
- India is the third-largest oil consumer.
- It imports around 85 to 88 percent of its crude.
- Oil price rises widen the trade deficit and raise inflation.
- Domestic production is declining.
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