To keep more fuel at home, India also slapped new taxes on oil exports: ₹21.5 per liter for diesel and ₹29.5 per liter for aviation turbine fuel.
These "windfall" taxes help cover some of the government's big spending on these cuts, but estimates put the cost to the government at about ₹1.7 trillion a year, and Madhavi Arora said the excise cut would help oil marketing companies absorb around 30-40% of their losses, though it would come at a cost to the exchequer.
If high crude prices stick around, though, it could put extra pressure on India's economy through higher inflation and trade deficits.