INSIGHT: beneficiary of cheap oil

​The world’s third-largest oil importer (behind China and the U.S.), India is an unambiguous beneficiary of lower oil prices.  With limited domestic production, India relies on imports for more than 80% of its petroleum demand.  The country’s 2019 crude oil import bill exceeded $120 billion – equivalent to over 4% of GDP and accounting for more than four-fifths of its overall merchandise trade deficit.  Historically, significant declines in oil prices have for India been leading indicators of faster GDP growth, lower inflation, smaller current account deficits, and reduced fiscal deficits.