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Coronavirus: India to save $45 billion on oil imports next fiscal, says CII

Coronavirus: India to save $45 billion on oil imports next fiscal, says CII

New Delhi, March 24 - Neftegaz.RU. According to Confederation of Indian Industry (CII), with the spread of the coronavirus denting global oil prices, India, that imports 80 % of its crude oil needs, is likely to save a whopping $45 billion on oil imports next financial year, Indian ETEnergyWorld reported.

A $1 decline in the price of crude oil reduces the country's import bill by $1.5 billion. "In 2020, international crude oil prices are expected to average $35 per barrel from $65 per barrel in 2019, a fall of about $30 per barrel. India is expected to save about $45 billion on oil imports for full year 2020-21," the industry chamber said in a report.

The rapidly spreading Covid-19 has derailed the global economy, increasing the chances of a global recession setting in, it said, adding India has already been facing growth deceleration, with GDP growth having fallen to 4.7 % in 3rd quarter of 2019-20.

The impact of coronavirus is likely to pull it down further in the 4th quarter. GDP growth could slide to below 5 % in 2020-21 if policy action is not taken urgently.

In order to improve market sentiments, the government may consider removing Long Term Capital Gains tax of 10 % and fixing the total Dividend Distribution Tax at 25 %.

It has also suggested the RBI may consider relaxing the NPA recognition norms from 90 days to 180 days till September 30, 2020 to provide relief to the industry faced with payment issues as well as pressure on banks to classify loans as NPAs.

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