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Import demand of crude oil and economic growth: Evidence from India

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  • Ghosh, Sajal

Abstract

This study establishes a long-run equilibrium relationship among quantity of crude oil import, income and price of the imported crude in India for the time span 1970-1971 to 2005-2006 using autoregressive distributed lag (ARDL) bounds testing approach of cointegration. Empirical results show that the long-term income elasticity of imported crude in India is 1.97 and there exists a unidirectional long-run causality running from economic growth to crude oil import. So reduction of crude oil import will not affect the future economic growth in India in the long-run. India should take various energy efficiency and demand side management measures in transport sector along with other measures like expanding and strengthening indigenous resource-base, substituting imported fuels by domestic fuels and de-controlling the price of petroleum products to reduce its import dependence.

Suggested Citation

  • Ghosh, Sajal, 2009. "Import demand of crude oil and economic growth: Evidence from India," Energy Policy, Elsevier, vol. 37(2), pages 699-702, February.
    • Handle: RePEc:eee:enepol:v:37:y:2009:i:2:p:699-702
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    References listed on IDEAS

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