Iran's missile strike on Israel sparks oil price surge, Raises economic concerns for India
A recent ballistic missile strike by Iran on Israel has heightened fears of a broader Middle Eastern conflict, driving crude oil prices up by 4% overnight due to concerns over potential supply disruptions. As oil prices continue to rise, experts are cautioning that India, heavily dependent on energy imports, could face significant economic challenges.
The missile strike followed Israeli military action in Lebanon, including the targeted killing of Hezbollah leader Hassan Nasrallah, escalating fears of wider regional instability. With OPEC+ controlling approximately 40% of the global crude oil supply, the organization's decisions could significantly influence oil prices, potentially impacting emerging economies like India.
Sugandha Sachdeva, Founder of SSWealth Street, explained that for every $10 increase in oil prices, India's inflation typically rises by 0.3%, while the current account deficit (CAD) widens by $12.5 billion, or around 43 basis points (bps) of GDP. "Higher fuel costs lead to increased transportation and production expenses, which ultimately raise the prices of goods and services, squeezing consumer purchasing power," Sachdeva noted.
Jigar Trivedi, Senior Research Analyst at Reliance Securities, echoed these concerns, warning that rising oil prices would result in larger dollar outflows from India, further weakening the rupee. Iran, a key member of OPEC, exports around 1.7 million barrels of oil per day. Its strategic location near the Strait of Hormuz — a vital passage for oil exports from Gulf countries like Saudi Arabia, Qatar, and the UAE — further elevates the risk of global energy supply disruptions as regional tensions escalate.
India is already showing signs of economic strain. The country's manufacturing Purchasing Managers' Index (PMI) fell to an eight-month low in September, while the CAD in Q1 2024 rose slightly to 1.1% of GDP, compared to 1% a year ago, according to Sachdeva. This underscores India's vulnerability to external shocks, such as rising oil prices.
A widening CAD leads to greater outflows of foreign exchange, further devaluing the rupee and making imports more expensive. Although fuel and light account for only 6.84% of India's Consumer Price Index (CPI), sustained oil price increases could push inflation higher, which in August stood just below 4%.
Data from the Petroleum Planning & Analysis Cell (PPAC) revealed that India’s oil import dependency increased to 87.8% in FY24, up from 87.4% in FY23 and 83.8% six years ago. This growing reliance on imported crude makes India highly susceptible to global oil price fluctuations, affecting inflation, the trade deficit, foreign exchange reserves, and the rupee’s value.
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CM Siddaramaiah alleges ‘criminal conspiracy’ in Sringeri recount, vows legal action
Bengaluru (PTI): Alleging a “criminal conspiracy” by BJP candidate D N Jeevaraj in the Sringeri Assembly poll recounting, Karnataka CM Siddaramaiah on Tuesday said the outcome was manipulated after valid postal ballot votes in favour of Congress leader T D Raje Gowda were tampered with during the recounting process.
Following a Karnataka High Court order on an election petition filed by Jeevaraj, challenging Raje Gowda’s election, the reverification and recounting were conducted on Saturday.
After the reverification and recount of postal ballots for the Sringeri Assembly constituency, votes polled in favour of Raje Gowda were reduced by 255, the returning officer said.
A report on the matter has been submitted to the Election Commission of India for further action, the officer added.
Congress leader Raje Gowda had won the 2023 Assembly polls from Sringeri by 201 votes, defeating his nearest rival Jeevaraj.
Addressing a press conference in Bengaluru, Siddaramaiah said the High Court had directed the recounting of postal ballots and that irregularities were noticed during the exercise conducted on May 2.
“This is a clear case of criminal conspiracy,” Siddaramaiah said, alleging that valid votes cast in favour of Raje Gowda were altered after being accepted by counting agents of all parties, including Congress, BJP, and JD(S).
He claimed that during the recounting of postal ballots, 255 votes were initially accepted as valid by all agents but were later tampered with by subordinate officials.
“There is a second mark on the votes polled in favour of Raje Gowda. They had accepted these as valid votes. Subsequently, another mark was made by officials. This is a clear case of criminal conspiracy,” he said.
When asked who was behind the alleged conspiracy, the CM replied, “It was hatched by Jeevaraj and others. It is planned.”
Siddaramaiah further alleged that the returning officer acted improperly by declaring the result despite the presence of an Election Commission observer during the recounting.
“Immediately after the counting, the returning officer announced the result. He should not have done so; this is against the law,” he said.
He pointed out that Raje Gowda had originally won by 201 votes, but after the recounting, the BJP candidate was declared the winner by 52 votes.
“The BJP has committed a criminal act of conspiracy. This is not vote chori but vote dacoity,” he alleged.
The CM said a police complaint had already been filed by Raje Gowda’s election agent, Sudhir Kumar, and emphasised the need for electoral integrity.
“We want transparency and free and fair elections. That is what our Constitution mandates,” he added.
Stating that the government would pursue legal remedies, Siddaramaiah said, “We are preparing an appeal challenging the returning officer’s announcement in a court of law.”
Responding to a separate query on elections in other states, the CM said there appeared to be an anti-incumbency factor in West Bengal, while results in Tamil Nadu were “surprising,” adding that Vijay’s party was emerging as the largest there.
Following the victory of party candidates in Bagalkote and Davanagere South, Siddaramaiah expressed confidence about future electoral prospects in Karnataka.
“Even in 2028, we will win the Assembly elections. We will come back,” the CM said.
Siddaramaiah added that he would order a forensic examination into the alleged tampering of postal ballots.
