Impact of Increasing Crude Oil Prices on Indian Industries

India is an energy importing country, primarily of oil and soon of gas. Its imports are growing while its domestic production lags behind the fast pace of demand growth. The Indian government is conscious of the need to diversify its sources of supply and also to boost domestic supply of primary energy as well as final products (LPG, kerosene, natural gas, lubes, etc.). On the exploration and production front, developments are slow. They reflect in part the state of India's oil and gas reserves: mature fields, limited reserves or costly new developments. The response on the front of products is better and India's refining capacity is growing rapidly. Similarly, public and private companies are investing large amounts in the development of LNG terminals in order to be the first able to capture part of the Indian gas market.
This has a number of implications:
1. India's energy security is at stake and the country could play a leading role among developing countries
to set up emergency preparedness mechanisms.
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