What does the analyst mean, when they say, Falling Crude Price is good for Indian economy?
India is an oil importing country and crude oil is the main source of all the raw material used in almost every industry. Therefore, if the crude oil prices are coming down, the raw material cost goes down, and hence the profitability goes up (because Sales- Cost= Profit).
If the profits go up, it’s good for the companies and of course, the economy.
Hope that helps!
I guess its some kind of Jumla.
Oil prices were low for the past 5 years and economy went to dogs… so…
Crude oil price is only one of the many factors that affect Indian economy. Crude price being lower is good but may not necessarily spurt growth. Case in point being what TraderVenk alluded to.