Home / News / India /  Importing Russian oil part of inflation management: Nirmala Sitharaman

Finance minister Nirmala Sitharaman on Thursday said that importing Russian oil was part of the country's inflation management strategy and that other countries were also doing something similar.

While attending ICRIER Conference on Taming Inflation in Delhi, the finance minister said, "I give credit to the statesmanship of the prime minister to make sure globally that we did keep up the relationship with all countries but yet managed to get the Russian fuel which is what Japan is doing today, which is what some other countries are doing."

“I respect the PM for his courage to get it (crude oil) from Russia because they are willing to give on discount... our entire import had 2% of Russian component, it was ramped up to 12-13% within a couple of months," she said.

India has not condemned Russia's February invasion of Ukraine, instead called for a diplomatic solution to the crisis and an end to violence. 

Sitharaman said India's inflation management was "an exercise of so many activities, most of which are outside the (purview of) monetary policy".

Indian retail prices in July were 6.71% higher than a year earlier. Although the annual inflation rate has now fallen for three months, it has exceeded the central bank's tolerance band of 2% to 6% for seventh months in a row.

She further said that the Reserve Bank will have to be more synchronised with the fiscal policy and other factors in taming inflation.

Inflation management cannot be singularly left to the monetary policy, which has proved totally ineffective in many countries, she said.

There are economies where policy is designed in such a way that the monetary policy and the interest rate management is the one and the only tool to handle inflation, she said.

"I would say India's inflation management, the word taming inflation or the word keeping it within the tolerance limit is an exercise of so many different activities and majority of which is outside of the monetary policy given in today's circumstances," she said.

There could have been a time when people would have thought this is sacrilegious for the finance minister of a country to say so, she said.

(With inputs from agencies)

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