Higher fuel costs and tighter financial conditions are already weighing on global demand and raising the cost of capital, with India better placed than several developed economies but still exposed through imported energy and foreign savings, World Bank Group Executive Director and UIDAI Chairperson Neelkanth Mishra said on Saturday.
Speaking on the sidelines of the Kautilya Economic Conclave, Mishra pointed to two of the four major channels — food, fuel, fertiliser and finance — through which geopolitical disruptions can hit economies, and said the impact was no longer a forecast but visible reality.
"The stress in the global markets is already visible, so fuel prices have risen. You look at fuel demand or fuel demand growth globally has already come off," Mishra said. "All of these issues are real, they are not in the future."
Oil demand under pressure
The warning lines up with the latest global data. The International Energy Agency, in its September Oil Market Report, forecast world oil demand to fall by 2.5 million barrels per day in 2026 as high fuel prices and supply disruptions weigh on consumption.
The fuel shock matters acutely for India because of its heavy dependence on imported crude oil. Data from the Petroleum Planning and Analysis Cell show India's crude oil import dependence is close to 90 per cent of consumption.
The finance squeeze
Mishra said pressure was also building through the finance channel, as higher global bond yields raised borrowing costs. "In finance, the bond yields have gone up so substantially that it is already pinching, so mortgage rates, new mortgage issuance, all of those stresses are now building up," he said.
He added, however, that India should not mechanically link its own interest-rate policy to developments in the United States or other advanced economies. "This linkage between global rates and Indian rates is something that I do not think is appropriate," Mishra said.
Sources: Fuel, finance shocks already hitting global economy; India better placed but not insulated: Neelkanth Mishra (Lokmat Times)
Speaking on the sidelines of the Kautilya Economic Conclave, Mishra pointed to two of the four major channels — food, fuel, fertiliser and finance — through which geopolitical disruptions can hit economies, and said the impact was no longer a forecast but visible reality.
"The stress in the global markets is already visible, so fuel prices have risen. You look at fuel demand or fuel demand growth globally has already come off," Mishra said. "All of these issues are real, they are not in the future."
Oil demand under pressure
The warning lines up with the latest global data. The International Energy Agency, in its September Oil Market Report, forecast world oil demand to fall by 2.5 million barrels per day in 2026 as high fuel prices and supply disruptions weigh on consumption.
The fuel shock matters acutely for India because of its heavy dependence on imported crude oil. Data from the Petroleum Planning and Analysis Cell show India's crude oil import dependence is close to 90 per cent of consumption.
The finance squeeze
Mishra said pressure was also building through the finance channel, as higher global bond yields raised borrowing costs. "In finance, the bond yields have gone up so substantially that it is already pinching, so mortgage rates, new mortgage issuance, all of those stresses are now building up," he said.
He added, however, that India should not mechanically link its own interest-rate policy to developments in the United States or other advanced economies. "This linkage between global rates and Indian rates is something that I do not think is appropriate," Mishra said.
Sources: Fuel, finance shocks already hitting global economy; India better placed but not insulated: Neelkanth Mishra (Lokmat Times)
