New Delhi: The International Monetary Fund (IMF) has said that India’s efforts to diversify its oil supplies have helped the country cope with disruptions in global energy markets amid the ongoing conflict in West Asia. However, it has cautioned that a prolonged rise in energy prices could create fresh inflationary pressures.
In its October 2026 Regional Economic Outlook for Asia and the Pacific, the IMF noted that major Asian economies, including India, Japan and South Korea, have adapted to disruptions in energy markets by securing oil from alternative sources outside West Asia, helping restore supplies to pre-conflict levels. The report said that while these efforts have helped strengthen energy supply resilience, a prolonged energy price shock could increase commodity prices, push up transportation and production costs, and put pressure on household budgets and economic growth.
The IMF also observed that prices of refined petroleum products, particularly diesel and aviation fuel, had risen more sharply than crude oil prices following the conflict. This could increase operating costs for businesses and affect consumers.
The Fund recommended targeted and time-bound support measures to protect vulnerable households, while cautioning against broad-based fuel subsidies and price controls that could put additional pressure on government finances. Beyond energy markets, the IMF identified uncertainty surrounding investments in artificial intelligence and tighter global financial conditions as other potential risks to regional growth. The report underscores the importance of India’s efforts to diversify energy sources, strengthen economic resilience and maintain stable growth amid global uncertainties..
[AIR news]