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23

OPEC bulletin 10/17

Modi, has put the country firmly on a sustainable dynamic growth

path — particularly when it comes to energy.

These reforms have included demonetization policy, the goods

and services tax (GST), and efforts to diversify the energy mix. They

have all been designed to move the country toward sustainable

growth and stability.

Additionally, the country’s expanding middle class represents a

growing source of demand — and not just for energy but for goods

and services from around the world.

Comprised of a young and increasingly educated population,

India’s middle class is vigorous, fast moving and upwardly mobile

— all key elements for long-term sustainable growth.

In addition, during this period, India is expected to see major

growth in the transportation sector, as well as an expansion in

exports of numerous goods and services. It has a world-renowned

IT sector, which today is one of the leading global start-up hubs

for technology companies, as well as a strong services sector and

solid manufacturing base.

India’s role in the global marketplace and its growing involve-

ment in international trading networks are admirable signposts for

a country undergoing a great economic transformation.

At OPEC, we have been paying close attention to these macroe-

conomic and business trends in India. Some of them shall directly

benefit the growing populations of OPEC’s own Member Countries.

In particular, we have been working to better understand the

potential impacts that such beneficial economic changes may have

on future oil demand.

OPEC even sees world oil demand growth increasingly shifting

to India. We anticipate, in fact, that by 2040, India’s oil demand

will increase by more than 150 per cent to 10.1 million barrels/day

from around 4m b/d currently.

The country’s total share of global oil demand is also seen ris-

ing to over nine per cent by 2040 from four per cent now.

The data clearly points to expanded energy use, as Minister

Pradhan himself has stated recently, which shall include roles for

other energy resources as well.

Relationship between OPEC and India

There are many factors helping to foster, strengthen and support

the deepening relationship between OPEC and India. In fact, since

2000, trade between India and OPECMember Countries has grown

substantially.

In the period from 2000–15, overall imports of India fromOPEC

Member Countries increased from $2 billion in 2000 to nearly

$140bn in 2015. OPEC Member Countries imports from India

increased from $5bn in 2000–01 to $56bn by 2015.

In terms of crude oil, what we see is similarly impressive in

terms of growth. India’s total imports have risen to close to 4.3m

b/d in 2016 from around 1.5m b/d in 2000. Nearly 80 per cent of

these total imports came from OPEC Member Countries.

Underlying all this, of course, is demand, which in India has

been remarkable in recent years. Last year, India had the fastest

rising oil demand growth in the world, with an increase of close to

340,000 b/d or 8.3 per cent. It is currently the world’s third-larg-

est oil consumer, with continued and sustained growth prospects

in the medium- to long-term.

In the downstream, India is already a major producer and net

exporter of refined petroleum products, with output of close to 5m

b/d, according to our latest

Monthly Oil Market Report

.

Dharmendra Pradhan (r), Minister of Petroleum and Natural Gas, India, with the

OPEC Secretary General.