India's economy has the potential to grow more than 7% per year despite crude oil costing $90-100 per barrel, according to a ASSOCHAM (The Associated Chambers of Commerce and Industry of India) statement on Wednesday.
India resilience to high energy costs have spiked notably across the years, with the country absorbing severe oil shocks with its growth staying strong, it said.
According to the industry body's analysis, India has shown that it has the ability to manage high energy prices without making compromises with the trajectory of its economic growth.
"Data analysed for the period 2000-01 to 2025-26 shows that India recorded some of its strongest growth years at moderate to high crude oil price levels," it said.
In 2022-23, growth was 7.6%, even with oil prices (Indian crude basket) at $93 per barrel (annual average), whereas in 2023-24, growth remained at 7.2% (new series) with oil prices at $82 per barrel, Assocham said.
It further said that despite oil prices above $100 per barrel during 2011-14, GDP growth remained at 5.2-6.4%.
During the period under analysis, the sharpest contraction of (-) 5.78% occurred in 2020-21, when prices were among the lowest in the last two decades (under $45/bbl), driven entirely by the COVID-19 pandemic.
"India's growth story is largely driven by its consumption segment, which in turn bolsters the supply side through factory expansion, the deployment of more workers, and higher income levels, creating a virtuous cycle of growth and strengthening the resilience of the economy," said Nirmal Kumar Minda, President of Assocham.
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Assocham expects India's GDP growth to stay above 7% in 2026-27, driven by robust consumption, steady exports, and rising capital investment, Minda said.
Meanwhile, according to the first advanced estimates of Gross Domestic Product released by the Ministry of Statistics and Programme Implementation (MoSPI) in January, the Indian economy is expected to grow by 7.4% in the current fiscal, maintaining its status as the world's fastest-growing major economy despite punitive US tariffs and geopolitical tensions.
The economy had grown at 6.5% in the previous fiscal.
However, Moody's Ratings earlier this month slashed India's economic growth estimates for the current fiscal to 6% from 6.8% earlier, saying the ongoing conflict in West Asia will moderate growth momentum and raise inflation risks.
Last month, the Organisation for Economic Cooperation and Development (OECD) projected India's GDP growth to moderate to 6.1% in the current fiscal from 7.6% growth recorded in 2025-26.
Domestic rating agency Icra expects the growth to moderate to 6.5% in FY27, owing to the adverse impact of elevated energy prices and concerns around energy availability amid the West Asia conflict.
(With PTI Inputs)
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