India, March 11 -- If a country of 1.5 billion people, which is also the world's fourth-largest economy, depends on imports for 80% of its energy supplies, it is bound to suffer when a global oil supply shock hits. The latest oil shock due to the ongoing war in West Asia is not the first in the history of modern capitalism, but it is the worst as far as Asian countries are concerned. This is because it is the first time that no oil or gas is moving through the critical chokepoint of the Strait of Hormuz, which supplies an overwhelming share of crude oil, gas, and other critical inputs such as fertilisers to Asia, including India. This also means that the current oil shock is not just a terms of trade question for the Indian economy, for which economists have an almost pre-ordained calculus - every $10 rise in crude oil prices shaving off 0.25 basis points from GDP growth or adding 50 basis points to inflation and trade deficit or some such. One basis point is one-hundredth of a percentage point. If the war does not end soon, India might face a situation where critical economic inputs - starting with gas, then other crude oil distillates such as petrol, diesel, and ATF, and eventually, fertilisers - will simply not be available in the quantities required for normal production. The longer the war lasts, the more difficult things will become. Given the damage to oil and gas-producing infrastructure in the region, the status quo ante, as far as normal production and supplies are concerned, will come with a significant time lag even after a ceasefire. The supply-shock-driven shutdown in the Indian economy seems to have already started in sectors such as industry and hotels/restaurants. Things are going to get much worse before they get better. What should the government do? Rationing is, almost always, a zero-sum game. It is difficult to find fault with the priorities listed by the government in its new supply protocol for gas supplies. What should not be ignored, however, is the quick change in the government's narrative which went from there-is-no-reason-to-worry-about-supplies to invoking the most draconian rationing law in a matter of days. Clearly, strategic stocks were not as adequate as they were made out to be. This is unbecoming of a large country that aspires to become a global power and be treated as such....