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The crash in crude oil prices is making it harder for India to cut its dependence on imports. Cheaper imports not only boost local consumption but also dissuade oil companies from investing in raising domestic production. In March, Prime Minister Narendra Modi had laid a road map for the local industry to cut the country's import dependence by 10% in seven years from 78% at the time. In the four months since then, the import dependence has risen to nearly 80%.

Source: ET

SNP Insight:

The sharp slide in Global Oil prices spells good news for government finances since it reduces the outgo on subsidy and leaves more money for allocation to ther welfare programmes. For the consumers in turns it brings fresh round of cuts in kitchen & auto fuel prices giving room for household savings. However for the large private players across the globe, decling prices come as a big detterent and Companies are shelving projects as they are hestitant in allocating capital to projects economically viable only at higher crude prices. Moving forward in India if the story continues then only large PSU's like ONGC & OIL will be able to invest in new discoveries and project. Keeping all these buring issues in mind, may be become difficulyt for India to reduce its import dependance as envisaged by the Govenrment for energy security of the nation. 

Source : SNP Infra Research