The Demand and Supply of Certain Resources in India Free-Samples

Questions: Discuss about the Demand and Supply of Certain Resources in India. Answer: Essence of the Story Demand and supply are two important concepts in the area of economics. Both these factors are interconnected and have major effects on one another. The demand of a product and service directly influence the supply of that product and service. The supply of a product or service is directly linked to the demand of a particular product or service. Along with this, the increased demand of a product will increase the supply of a product in an automatic manner. The high demand of a product will increase the price of a product or service in a specified time period. Apart from this, the decreased demand of a product will reduce the supply and price of that product usually. These both demand and supply factors are unified and it is very hard to separate them. Moreover, all the nations all around the world depend on each other to fulfill their demand and supply requirements in an effectual manner. The export and import of products or services not only fulfill the demand and supply needs; but b oost the economy of nations as well. Furthermore, this research essay is useful to portray the demand and supply of certain resources in the context of India. Economic Analysis In this world, all the nations depend on each other to fulfill their needs related to products or services. There is no such nation that does not depend on another to meet its requirements effectively. India is the biggest example of such nation. India depends on other nations to fulfill its demand related to energy sources including oil, natural gas, petroleum, electricity, coal, and so on. The main reason of the dependency is that India does not make huge investments in renewable forms of energy sources(Soni, 2014). Along with this, the domestic production of crude oil of India is lower in comparison to its consumption (demand). The consumption of crude oil has increased by 8% in the year 2015. As a consequence, the imports of crude oil have enlarged approximately 510,000 b/d from the year 2010 - 2013. Moreover, it is also predicted that these imports will increase regularly in the upcoming years. The below graph is helpful to show the energy consumption of India in a proper manner : (Source: (Bhattacharya, 2016) On the other hand, according to the report of ESU (Economist Intelligence Unit), India is the fourth biggest importer of crude oil in the world. India mainly depends on Middle East to meet its demand of crude oil effectively. Moreover, there can be seen a big gap between the consumption (demand) and production (supply) of crude oil (Kumar Vimala, 2016). As per the report, the demand of crude oil has been reached almost 3.7 million barrels per day. But, the production of crude oil can be seen 1 million barrels per day. By considering these facts, the EIA (Energy Information Administration) estimates that, the demand of crude oil would be double by the year 2040. The Indian energy companies have diversified their supply sources because of the high dependency of crude oil on other nations (Bhattacharya, 2016). Moreover, the below graph is valuable to portray a wide gap between the demand and supply of petroleum and other liquids effectively. (Source:(MarEx, 2014) In addition to this, coal is considered as the most abundant and key component of the energy matrix of India. In other words, it is also can be said that, the energy mix of the nation relies on coal. Coal is the prime energy source within nation; and it is expected that the demand for coal will increase continuously. Moreover, it should also be noted down that, India is the fourth biggest coal reserves all around the world. It is the cheapest suppliers of coal in the world(Sharma, 2014). Apart from this, India relies on other nations for coal because it requires coal as a major input in the industrial production sectors such as: steel, textiles, cement, transportation equipment, etc. The production sectors of India are growing by 7.9% per annum. As a result, India depends on other nations to meet its requirements of coal in an appropriate manner. On the other hand, India relies on other nations for natural gas resources. It is because of the nation has limited natural gas resources. Moreover, natural gas resources are the second major energy sources after coal. India needs lot of gas resources due to the industrial production sectors. In India, the consumption (demand) of natural gas resources is high than the production (supply). So, India depends mainly on Russia to fulfill its demand of natural gas resources effectively. Moreover, according to EIA, in upcoming years, the production of natural gas will increase by 3.5% per annum in India. But, the consumption of natural gas will increase by 4.8% per annum. These percentage data shows enormous supply shortage that India might face in upcoming year. In consequence, imports can be anticipated to increase in future time period. Along with this, India depends on other notation to fulfill its demand related to petroleum electricity, refined products, and so on. The below graph is helpful to portray the projected demand related to energy sources of India. India is highly dependent on other nations to fulfill its demand related to energy source. The policy makers of the nation should make investment in the renewable forms of energy. Moreover, increased investment in these fields is essential to boost the economy and to reduce the dependency of nation on other countries. Conclusion On the basis of the above analysis, it can be concluded that, India relies on other nations to fulfill its needs related to crude oil, coal, natural gas, petroleum and so on. The demand of energy source is high in India. The production of these resources is lower than the consumption. So, other nations import energy resources to meet the demand of India in an effectual and an adequate manner. Along with this, it is also recommended that the, policy holders of the nation must make appropriate policies and strategies to reduce the dependency of India on other nations. Bibliography Bhattacharya, G. (2016). Natural gas, unconventional resources can assist India in meeting future energy demand. Retrieved from https://www.ogj.com/articles/print/volume-114/issue-11/exploration-development/natural-gas-unconventional-resources-can-assist-india-in-meeting-future-energy-demand.html Kumar, R., Vimala. (2016). ENERGY CONSUMPTION IN INDIA-RECENT TRENDS. Asia Pacific Journal of Research , I (XXXVI), 140-151. MarEx. (2014). India's Oil Supply and Demand Gap Widening. Retrieved from https://maritime-executive.com/article/indias-oil-supply-and-demand-gap-widening-2014-07-01 Sharma, S. V. (2014). Energy Trade Practices in India: Review of Tariff and Non-Tariff Barriers in Relation to ASEAN. ERIA Research Project Report FY2013 (29), 27-62. Soni, A. (2014). Global Oil Markets and Indias Vulnerability to Oil Shocks. 1-30.