Wise Investing

  Oil is one of the most important commodities in recent times. Much of the economy depends on oil. This is why prices of oil matter to almost every economy. Here are 5 ways the fall in oil prices affects India: ·          Current account balance: India is one of the largest importers of oil in the world. It imports nearly 80% of its total oil needs. This accounts for one third of its total imports. For this reason, the price of oil affects India a lot. A fall in price would drive down the value of its imports. This helps narrow India's current account deficit - the amount India owes to the world in foreign currency. A fall in oil prices by $10 per barrel helps reduce the current account deficit by $9.2 billion, according to a report by Live mint. This amounts to nearly 0.43% of the Gross Domestic Product - a measure of the size of the economy. ·          Inflation: Oil price affects the entire economy, especially because of its use in transportation of goods and services