High crude oil prices pose a risk to the Indian economy, Finance Minister Palaniappan Chidambaram said on Monday, but he added he expected economic growth to exceed 7 percent in the fiscal year ending March 2006.
Chidambaram said the rise in global oil prices could push up inflation in India but the government and the central bank would take monetary and fiscal steps to control it.
Oil went above $69 a barrel at one point on Monday, trading at its highest since September, boosted by mounting tension over OPEC member Iran’s nuclear ambitions.
The Indian economy, Asia’s third largest, is vulnerable to rises in international oil prices as it imports 70 percent of its annual crude oil needs.
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