Capital Economics: Risks Facing the Indian Economy Go Beyond Oil

According to Golden Ten Data on March 6, Shilan Shah from Capital Economics wrote in a report that, as the United States temporarily eased sanctions on Russian oil purchases to alleviate price pressures, India has gained some breathing space. However, the economist pointed out that other factors, such as the surge in liquefied natural gas prices caused by production halts in Qatar, may force the government to increase fertilizer subsidies. Last year, the total amount of fertilizer subsidies was about $20 billion. Liquefied natural gas is used as a raw material for domestic fertilizer plants in India. Shah added that prolonged conflicts in the Middle East could also lead to a reduction in remittances from Gulf economies, which account for about one-third of India's total remittances. Remittances remain an important source of external funding for the Indian economy.