New Delhi, March 6 -- A 10 per cent increase in global oil prices is estimated to have a direct impact of approximately 0.7-1 per cent on India's Wholesale Price Index (WPI). According to a report by Bank of Baroda on the Middle East crisis, the overall effect could reach a 1 per cent increase in WPI inflation when indirect impacts are included.

As per the report, the external position of the economy faces pressure. With India importing roughly USD 5 million per barrel of crude in FY25, a "permanent 10% hike in oil prices is expected to drive oil imports up by USD 18bn or 0.5% of GDP."

The report noted that crude oil and related products currently carry a weight of 10.4 per cent in the WPI basket. In the new Consumer Price Index (CPI) s...