Falling Crude Prices, Easing Supply Chains To Support India’s Inflation Outlook: MoS Finance

New Delhi, Jul 27 (KNN) Easing global crude oil prices and improving supply chain conditions are expected to support India’s fiscal and inflation outlook, while maintaining that there is no proposal at present to revise budget projections, Minister of State for Finance Pankaj Chaudhary said.

In a written reply to a question in Lok Sabha the minister noted that global economic conditions have remained volatile in recent months, though some key pressures have moderated.

Crude Prices and Supply Chains Show Improvement

Chaudhary highlighted that International crude oil prices (Brent) have declined from a peak of USD 138.2 per barrel in April 2026 to USD 68.5 per barrel in July, and were around USD 87 per barrel as of July 20, 2026.

At the same time, the Global Supply Chain Pressure Index published by the Federal Reserve Bank of New York fell from 1.84 in April to 1.25 in June, indicating easing supply chain constraints.

He noted these trends are expected to reduce imported inflation, lower input and logistics costs, and provide support to the overall macroeconomic outlook.

Inflation Outlook and Fiscal Position

The Reserve Bank of India has projected Consumer Price Index (CPI) inflation at 5.1 per cent for 2026–27, while cautioning that risks remain from global commodity prices and potential supply disruptions.

On the fiscal front, the government reiterated its commitment to the budgeted fiscal deficit target of 4.3 per cent of GDP for 2026–27, while continuing to monitor global developments and their impact on the domestic economy, the minister said.

Multi-Pronged Strategy to Manage External Risks

He emphasised that the government has adopted a comprehensive approach to safeguard the economy against geopolitical uncertainties. Key measures include diversification of crude oil import sources, expansion of strategic partnerships, and augmentation of Strategic Petroleum Reserves.

Chaudhary also highlighted efforts to promote alternative fuels, boost domestic energy production, and implement initiatives such as the Coal and Lignite Gasification Scheme. Demand-side measures, including encouraging a shift from LPG to PNG, are aimed at improving energy efficiency.

(KNN Bureau)