India’s economy, according to Assocham, can maintain growth rates above 7% even with crude oil prices ranging from $90 to $100 per barrel. Over the last 25 years, India has managed to absorb various oil price shocks without disrupting its growth path. Notably, during 2022-23, when the Indian crude basket averaged $93 per barrel, the economy expanded by 7.6%, and it sustained a robust 7.2% growth in 2023-24 with oil prices at $82 per barrel.
Nirmal Kumar Minda, President of Assocham, emphasized that India’s growth momentum is fueled by strong domestic consumption, driving supply-side expansion through increased manufacturing, job creation, and higher incomes, creating a positive cycle. Government investments in infrastructure, especially through increased capital expenditure, have significantly shielded the economy from external shocks.
Analysis reveals that even during 2011-14, when crude oil prices exceeded $100 per barrel, India’s GDP growth remained steady between 5.2% and 6.4%. In contrast, the sharpest decline of -5.78% in 2020-21 occurred during relatively low oil prices, indicating that the downturn was primarily due to the COVID-19 pandemic rather than energy costs.
Looking forward, growth forecasts are optimistic. The Reserve Bank of India projects GDP growth around 6.9% for 2026-27, aligning with long-term trends. Assocham anticipates growth surpassing 7%, supported by strong consumption, stable exports, and increased capital investments.
