RBI governor says India ramps up domestic oil and gas amid West Asia crisis

The article published on April 20, 2026, reports Malhotra's remarks that the West Asia crisis significantly affects India, including its impact on exports, imports, crude oil, fertilisers, and remittances. It notes India's move to ramp up domestic oil and gas production and diversify import sources, with some gas rationing for industrial use and price pressures on gas being passed to consumers. It reiterates India's 6.1% average annual growth over the past decade versus global 3.2%, and highlights RBI's wait-and-watch approach, neutral stance, and reliance on data. The piece also mentions fiscal consolidation progress, improved tax collection, better quality expenditure, and the role of supply-side measures in mitigating price pressures.

RBI Governor Sanjay Malhotra delivered a speech at Princeton University on April 18, 2026, describing how the West Asia crisis affects India. He stated that West Asia accounts for about one-sixth of India's exports, one-fifth of its imports, half of its crude oil imports, two-fifths of fertiliser imports, and almost two-fifths of inward remittances. He said India is increasing domestic production of oil and gas and diversifying import sources, adding that there is no oil shortage but some gas rationing for industrial purposes. Malhotra noted that oil marketing companies and the government have absorbed some oil price pressures, while some gas price pressures have been passed on to consumers. He highlighted India's average annual growth of 6.1% over the past decade, outpacing global growth of 3.2%, and attributed resilience to robust policy frameworks and credible institutions. He discussed monetary policy considerations, warning that second-round effects from prolonged supply disruptions could entrench inflation, and that the RBI should focus on inflation expectations rather than blunt demand suppression. He described the policy stance as data-dependent, wait-and-watch, and neutral to preserve flexibility amid evolving inflation-growth dynamics, and noted progress in fiscal consolidation, tax collection, and expenditure quality, along with supply-side measures to mitigate price pressures.