Focus: GS-III Indian Economy
Why in news?
Indian state refiners have stopped buying crude oil from China-linked companies, three sources said, after New Delhi’s recent regulation aimed at restricting imports from countries that it shares a border with.
- Since the new order was issued, state refiners have been inserting a clause in their import tenders on new rules restricting dealings with companies from countries sharing a border with India.
- Indian state refiners decided to stop sending crude import tenders to Chinese trading firms.
- India is the world’s third biggest oil consumer and importer and imports almost 84% of its oil needs.
- China does not export crude to India but Chinese firms are major traders of the commodity globally.
- Chinese companies also hold equity stakes in many oilfields across the globe ranging from the Middle East to Africa and the Americas and often submit competitive bids in crude import tenders by Indian state refiners.
- India has surplus refining capacity. Most refiners are operating their plants at below capacity as COVID-19-related restrictions have dented fuel demand.
-Source: The Hindu