While the Indian economy will certainly benefit from the windfall gains of lower oil prices and lower import bills, there are some additional points to understand.

· Clearly, lower Brent prices will reduce the import bill of India and therefore the current account deficit by a big margin. This will also reduce pressure on CPI inflation.

· The government has the option to increase excise duty on petroleum to earn additional revenues. However, imposing higher taxes in a slowdown could be risky.

· Oil companies are among the highest dividend payers and this could lower dividends. Already refining companies could get hit on lower inventory valuations.

· An important point is that Indians employed abroad could see impact on earnings. This will impact remittances from the Middle East countries that are oil-based.