India can absorb oil at $90 a barrel, but growth and inflation risks rise beyond that: Avendus

The Indian economy has demonstrated its ability to absorb the impact of elevated oil prices, with the current threshold standing at $90 per barrel. Despite the potential for short-term pressure on profit margins due to higher energy costs, the financial health of Indian corporations has improved significantly, enabling them to maintain their capital expenditure and resume growth once global conditions stabilize. This capacity to sustain investment and growth is crucial for the country's long-term economic prospects, as it allows businesses to adapt to changing market conditions and capitalize on emerging opportunities. The improved financial position of Indian companies is a result of prudent financial management and strategic planning, which has enhanced their resilience in the face of external shocks. Furthermore, the government's efforts to promote economic growth and stability have also contributed to the country's ability to navigate the challenges posed by high oil prices. As the global economy continues to evolve, India's capacity to absorb oil price shocks will be critical in determining its growth trajectory and overall economic performance. The potential risks to growth and inflation beyond the $90 per barrel threshold underscore the need for ongoing vigilance and strategic planning to mitigate the impact of external factors on the domestic economy. In conclusion, India's ability to withstand high oil prices is a testament to the country's economic resilience and its capacity to adapt to changing global market conditions.