The Price of Distant Wars: Impact of the Ongoing Conflict in West Asia on India

For an economy that imports nearly 85 percent of its crude oil and sources over two-thirds of its liquefied natural gas from West Asia, distant geopolitical fires quickly become domestic economic crises. This has placed policymakers in a critical position. An unenviable trade-off emerges: tightening monetary policy to contain inflation risks slowing growth, while expanding fuel subsidies places additional strain on public finances. Consequently, short-term stabilization through fuel prices management, ensuring energy supplies, and maintaining financial stability becomes necessary but these measures alone are insufficient to address the underlying structural challenges.