Indian Basket

Imagine a household that shops from three different vegetable vendors every week, and wants a single average price to track its actual grocery spend rather than any one vendor's individual rate. The Indian Basket is exactly that, a weighted average price of the actual mix of crude oil grades India imports, published daily by the Petroleum Planning and Analysis Cell.

Unlike Brent or WTI, which each represent a single grade of crude from a single region, the Indian Basket blends the sour and sweet crude varieties India actually buys, from suppliers like Russia, Iraq and Saudi Arabia, weighted by the volumes actually imported. Since crude import dependency has climbed to nearly 89 percent in recent years, the Indian Basket has become an increasingly direct proxy for the country's total fuel import bill.

When the Finance Ministry discusses the impact of oil prices on India's current account deficit or inflation, the Indian Basket, not Brent, is the number actually driving that arithmetic.