India, March 10 -- If a country of 1.5 billion people, which is also the world's fourth-largest economy, depends on imports for 80% of its energy supplies, it is bound to suffer when a global oil supply shock hits. The latest oil shock due to the ongoing war in West Asia is not the first in the history of modern capitalism, but it is the worst as far as Asian countries are concerned. This is because it is the first time that no oil or gas is moving through the critical chokepoint of the Strait of Hormuz, which supplies an overwhelming share of crude oil, gas, and other critical inputs such as fertilisers to Asia, including India.

This also means that the current oil shock is not just a terms of trade question for the Indian economy, for ...