US Tariff Threat Puts Squeeze on India's Economy

India's economy is facing significant pressure due to the threat of 100% US tariffs on countries buying Russian oil, according to Sachin Gupta, Chief Ratings Officer at CareEdge Ratings. The potential impact includes higher crude prices, inflation, and a widening current account deficit.

Gupta warned that if India is forced to reduce its dependence on Russian crude while the Strait of Hormuz remains disrupted, global oil supplies could come under severe pressure. This could push crude prices beyond $100 per barrel, potentially reaching $110-120 per barrel in a worst-case scenario.

India's current account deficit could easily double from last year's level if crude reaches around $110-120 per barrel, solely on account of higher oil prices. The government may be required to pass on higher costs at fuel pumps, affecting domestic demand and inflation rates.