In the 60s and 70s, developed nations like the US, UK, Germany, France and Japan were racing ahead by developing newer technologies and consumer products that were change lifestyles leading to a shift from conservative to indulgent energy consumption.
Everything seemed fine until leading oil producing nations, grouped under OPEC and led by the largest oil producer of the time, Saudi Arabia, abruptly decided in 1973-74, to increase the price of crude oil. This sudden increase in oil price triggered a global crisis, whose impact was felt across all nations but the brunt of it was taken by those nations that were highly dependent on oil to power their respective economies.
As a result of this sharp increase in the price of oil, India experienced a runaway inflation that touched 28% in subsequent years, triggering an economic and political crisis. The same was true for several other oil-dependent nations. Another energy crisis was seen in subsequent years caused by political and economic isolation of Iran, another major oil producing nation. This too, led to a major crisis globally. India had been a major importer of oil from Iran and has had a tough time trying to maintain a balance between the international sanctions and preserving good relations with Iran.
Naturally, India was impacted on both critical phases. The problem for contemporary India is that our economy is on the verge of take-off and we desperately need energy to power the growth and unless India addresses this vital issue well ahead of time, we will be increasingly vulnerable to global events beyond our control, and that is certainly not reassuring for an emerging India, not by a long shot.
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