president of china
There have been many fluctuations in crude oil prices in the international market lately. Despite rising tensions between Israel and Iran, crude oil prices did not increase because Israel did not decide to attack Iran’s oil facilities. Apart from this, crude oil prices are also under pressure due to weak demand from global economies, especially China. Jonathan Barratt, CIO of Probis Securities, said in his interview that due to weak economic data from China, oil prices are falling, so India can potentially reap big profits.
How beneficial is it for India?
China is the world’s largest oil importer and falling demand may lead to a drop in crude oil prices. This can directly benefit oil importing countries like India, because after China, India’s name also figures in the list of top importing countries. The thing to keep in mind here is that low oil prices will affect gasoline, diesel and other petroleum products. Falling gasoline and diesel prices can reduce inflation, which will directly benefit the general public. Apart from this, reducing fuel prices will reduce freight and production costs, which can also reduce the prices of everyday essentials.
This is how it affects
The slowdown in China’s economy may also lead to changes in the global supply chain. Many companies can move their production centers from China to other countries, and India can be an attractive option for this. Investment in the manufacturing sector may increase due to India’s large population, young workforce and attractive investment policies. This will create new employment opportunities and promote the ‘Make in India’ initiative.
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Why will India become the center?
Due to the slowdown in China’s economy, investors are looking for investment options in other countries. The good thing for India right now is that it has the ability to attract foreign investment due to its large market and fast-growing economy. Foreign investment will increase capital inflow into India, leading to infrastructure development and technological advancement. Apart from this, China’s economic slowdown may boost the ‘Make in India’ initiative as many companies may shift their production from China to India.
However, along with the benefits India gets from China’s slowdown, there are also some challenges associated with it. China’s slow economic growth may cause a global recession, so India may also be affected. Additionally, India will face stiff competition from countries like Vietnam and Indonesia, which are making similar efforts to attract investments in the manufacturing sector.
