This is how the crisis in Iraq will have an impact on India

It will impact Indian economy...

India import’s crude oil from gulf countries and one of the major supplier is Iraq. The crisis in Iraq will definitely hamper India’s economy. If oil prices will go up then current account deficit will automatically go up. Rise in cost of oil will lead to rise in inflation and due to which interest rates will rise and economy will be under severe stress. The buying cost will increase and discretionary power to spend money of common man will reduce. Once crude oil such as petrol and diesel prices hike, the transportation and manufacturing price will increase consequently, which will lead ultimately to more expenditure for common man in their daily requirements. An external event cannot be control by Indian government. Due to inflation, demand decreases and so the supply stops, leading to cost cutting at industry level.

Janak Shah, Director, Sapient Wealth adviser

India shouldn’t worry...
I don’t think Iraq crises at present is such a big worry for the Indian economy. Such civil war crises have been continuously happening in some or the other gulf countries for a long time, so there is nothing new in it. If supply of oil is stopped for some reason, there are other sources which we can look for. It is right that the Iraq crises can affect our economy in some way. We should not get worried, as the Iraq crises does not look like an impending danger as of now. There are other countries besides India who are getting their supply from Iraq, so we can find a solution to resolve the Iraq crises. As of now it is not a disaster.

SK Jain, President, MCCIA

Reduce dependency on crude oil...
We import majority of crude oil from Arabian countries and Iraq plays a massive role in it. Current news flash discloses that militants have attacked the south part especially oil refineries. We are already going through food inflation and crude oil price hike will add to it. New government formed in center is trying to somehow curb inflation and accordingly has reduced the interest rates. We have to reduce our usage of crude oil such as Petrol and diesel. We can opt for public transport or use the alternative of car pool to reach our respective offices. Unprecedented external developments will be uncontrollable for the government.

Vikrant Ponkshe, CEO, Cosmos Bank

It’s an artificial crisis...
The inflation in oil prices all over the world has nothing to do with the ongoing Iraq civil war. It is an artificially created crisis. The inflation is only because of the oil cartels controlling the prices all over the world. These cartels have artificially pushed up the oil prices because last three years there has been no increase in demand for the crude oil. Iraq has never been a good supplier of oil. Our diesel supply basically comes from Malaysia. In fact Iran was a the biggest supplier of oil, but due US and other countries announcing an embargo, imposing a trade barrier for importing from Iran, the oil prices have risen. Now we are trying to import oil from approved (Organization of the Petroleum Exporting Countries (OPEC) and UN nations, like Malaysia, Indonesia and others.

Ali Daruwala, Treasurer, Pune Petrol Dealers Association

Don’t be sentimental about the crisis
India being one of the leading importer of oil, Iraq crises may hamper India’s economy. The reality is that this crisis is having an emotional and psychological impact on the country. Crude oil and its price is a very influencing factor in our politics. We have always been vulnerable regarding crude oil. However, saving resources can be an option to control inflation lead by oil price rise in future. Our countries are connected geographically and have to face the backlash if crisis happens in any part of the world. Inflation relating crude prices is yet to happen and its totally sentimental how we face the issue. Preserving resources is the best solution at the time of economic crisis.

Pradeep Bhargava,Past Chair, CII western