Page 42 - DCICAI SOUVENIR 2018

same extent (as the Pound Data published by the the country had reported a
Sterling) in September 1949. Petroleum Planning and
Analysis Cell (PPAC) points
Now let me try to analyze that India’s total crude oil
some of the critical factors import bill in the current
behind the current worrisome financial year (2018-2019)
situation of depreciation of is expected to jump 24%
the Rupee: to $109 billion from $88
billion last fiscal year.
1. Increase in the price of
the crude oil: As we all know Therefore, increase in the
that India produces just 20% demand of crude oil will be
crude oil of her requirement followed by the increasing
and rest is imported from import bill in the form of
Iraq, Saudi Arabia, Iran and payment of more dollars
other gulf countries. Crude to oil exporting countries.
oil is the biggest contributor Hence, the demand of dollar
in the import bill of India. will increase in the Indian
According to a January market, which will reduce the
2018 report from energy value of Rupee.
research and consultancy
firm Wood Mackenzie; The 2. Increasing Trade Deficit
daily fuel demand of India of India:
is expected to more than Indian merchandise trade
double to 190,000 barrels deficit of $157 billion in
in 2018, up from last year’s 2017-18 was the widest since
93,000 barrels. 2012-13. In the FY 2012-13,
42 | DCICAI - 5th INTERNATIONAL CONFERENCE
merchandise trade deficit
of $190 billion. Trade deficit
was around was $ 118 billion
in the FY 2016.
It simply means that outflow
of foreign currency is more
from Indian market as
compared to inflow of foreign
currency. As per the law of
demand; if the demand of
a commodity increases, its
price also follows it. In the
same way; when more and
more foreign currency i.e.
dollar goes out of Indian
market, its domestic price
increases and the price of
Rupee decreases.
3. Outflow of Foreign
Currency:
It is worth mentioning that
when the foreign investors
find other attractive markets
in other parts of the world;