What will be the impact of the Iran-Israel war on India?
The war between Iran and Israel is taking a new turn every day. On Tuesday, Iran went a step further by attacking Israel with missiles. In such a situation, the possibility has now been reduced that this fire will be limited to only Israel, Iran and Lebanon, but its impact will be seen throughout Western Asia (Middle East) and India may also get burnt in this fire. Its impact will be seen on everything from the stock market to the country’s inflation.
Impact on inflation in India
The biggest impact of the Iran-Israel war can be seen in inflation in India. The reason for this is that India imports more than 80 percent of its oil needs. In India, petrol and diesel have a direct relationship with inflation because we still rely heavily on road transport for transportation of goods. In such a situation, if oil prices increase due to the war between Iran and Israel, then the prices of vegetables, milk and all other essential products in India will surely increase.
The effect of Iran’s attack on Israel on Tuesday was also seen on crude oil prices. A 4 percent increase in prices has been observed. The price of Brent futures rose 3.5 percent to $74.2 per barrel. While America West Texas Intermediate crude oil reached $70.7 per barrel with an increase of $2.54 or 3.7 percent.
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Will interest rates remain the same as before?
Following this new development in the Iran-Israel war, it now also remains to be seen whether the decision to cut the repo rate will be taken at the Monetary Policy Committee meeting of the Reserve Bank of India (RBI) to be held next week. . The RBI is facing not just one but many challenges right now.
First, the US Federal Reserve cut interest rates last month, second, China’s $142 billion bailout package for its economy and now the rise in oil prices due to the war between Iran and Israel and the fear of a rise in inflation due to it, in such The RBI will have to take a decision to prevent inflation, which it managed with great difficulty to control, from getting out of control again.
But the problem will not end here because the RBI will have to find a balance to increase demand in the country in the upcoming festive season. Currently, the demand situation in the country is such that car dealers worth more than Rs 70,000 crore have inventories. Car companies have offered great discount deals on cars.
