International oil prices are determined by factors such as global growth rates and geopolitics regarding oil producing countries, which are located outside the Indian economy. Recent developments and oil price movements suggest that India’s next government, which will assume office in a month, will most likely not inherit the benign oil price environment which its predecessor enjoyed. The Iran question notwithstanding, the oil price cycle has been on an upward trajectory for quite some time now. Any significant spike in oil prices, which cannot be ruled out in the medium term, will only increase the pressure on the fiscal front. India’s macroeconomic outlook, therefore, will remain uncertain for the next few months.

Source: Hindustan Times April 30, 2019 21:45 UTC