India’s spectacular 7.8 per cent real GDP growth in Q1 FY27 deserves to be viewed in the context of the extraordinary circumstances in which it was achieved. This was a quarter marked by a severe West Asian conflict, disruption around the Strait of Hormuz, volatile crude prices and fears of an energy supply shock cascading across economies. Yet India kept moving. Factories ran. Trucks moved. Airlines flew. Restaurants remained open. Hotels functioned. Households cooked.

Cities continued to receive gas. Most importantly, the energy shock did not become an economy-wide supply crisis. Energy security was therefore not the sole reason for India’s 7.8 per cent growth, but it was a critical shock absorber that prevented an external geopolitical crisis from becoming an internal economic crisis. The most important part of that story was the speed and breadth with which India diversified its crude procurement when the crisis erupted. India imports nearly 90 per cent of its crude requirement. The Strait of Hormuz has traditionally been a critical artery for those supplies, with roughly 45 per cent of imports transiting the route before the crisis.

Yet within days of the disruption, India had substantially altered its sourcing map. By March 2026, around 70 per cent of India’s crude imports were arriving through routes outside Hormuz, compared with about 55 per cent earlier. India was sourcing crude from 40 countries, against 27 in 2006-07. The government also reported that the volumes exceeded what the disrupted Hormuz route would have delivered. The early weeks demonstrated the value of this strategy in hard numbers. In March, as Middle Eastern supplies plunged, Indian refiners almost doubled their Russian crude purchases, from about 1.04 million barrels per day in February to nearly 2.25 million barrels per day.

Russian crude consequently accounted for roughly half of India’s March imports, while supplies from the Middle East fell sharply. India did not stop there. Additional supplies were secured from the UAE, Venezuela and other producers, while refiners looked beyond traditional Gulf suppliers. By May, crude imports had rebounded to 5.27 million barrels per day. Russia supplied about 1.92 million barrels per day, while UAE supplies surged 41 per cent to 942,500 barrels per day – above pre-war levels. Venezuela and Iraq also contributed to the diversified basket.

There was another crucial element: India’s refiners were operating at very high capacity utilisation, allowing the country to convert this diversified crude supply into usable fuels even as global markets were under severe stress. The government noted that some refineries were operating above 100 per cent of nominal capacity. This was not crisis management improvised in March. It was the payoff from a decade-long strategy. India’s refiners had progressively expanded........

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