India will manage high energy prices without compromising economic growth owing to the country’s increased resilience to high energy costs, industry body Assocham said, citing an analysis which states that India absorbed severe oil shocks while growth remained strong in the past.
“Data analysed by the industry body for the period 2000-01 to 2025-26 shows that India recorded some of its strongest growth years at moderate to high crude oil price levels. For instance, in 2022-23, growth was 7.6 per cent, even with oil prices (Indian crude basket) at $93 per barrel (annual average), whereas in 2023-24, growth remained at 7.2 per cent (new series) with oil prices at $82 per barrel,” it said.
India’s growth story is driven by consumption, which bolsters the supply side through factory expansion, deployment of more workers, and higher income levels, creating a cycle of growth, according to Nirmal Kumar Minda, president, Assocham. He said government spending on infrastructure, which consistently increases capital expenditure, mitigates the impact of external shocks on the economy.
“Despite oil prices above $100 per barrel during 2011-14, GDP growth remained at 5.2-6.4 per cent. During the period under analysis, the sharpest contraction of -5.78 per cent occurred in 2020-21, when prices were among the lowest in the last two decades (under $45 per barrel), driven entirely by the Covid-19 pandemic,” Assocham said.
Growth projections for India by organisations such as the Reserve Bank of India (RBI), at 6.9 per cent for 2026-27, are in line with India’s overall growth trend after accounting for energy price fluctuations. “India’s GDP growth will remain above 7 per cent in 2026-27, supported by strong consumption, steady exports and growing capital investment,” Minda said.
The country’s inflation trajectory has been benign, with a 0.19 per cent increase in the Consumer Price Index (CPI) in March 2026 compared with February 2026. This monthly increase in inflation is lower than increases recorded in advanced economies such as the US, Germany and France.
“As India is heavily dependent on crude oil imports and India’s economic expansion over the past two and a half decades has been accompanied by a deepening of energy demand, it is notable that India has responded dynamically to varying levels of crude oil prices over the years while maintaining steady economic growth,” the industry body said.
It added that the country has built macroeconomic resilience through foreign exchange reserves, trade diversification, fiscal policy tools, and diversified revenue streams, enabling it to absorb crude price shocks without compromising its economic growth path.
