Does Crude Oil Price Effects Indian Agriculture? A Co-integration Test

The objective of study is to examine the impact of crude oil price fluctuations on Indian agriculture. Time series data for the period of 1990–2013 has been used to check the stationarity of variables applying Augmented Dickey Fuller (ADF), unit root test. Engle-Granger test was employed to check whether the dependent variable i.e. agricultural Gross Domestic Product (GDP)and explanatory variables, that is, price of crude oil, exchange rate, fertilizer intake and irrigation are Co-integrated. The study found that oil price and exchange rate have negative impact on agricultural GDP while fertilizer intake and irrigation have positive impact on agricultural GDP. It was also found that the dependent variable and the explanatory variables are co-integrated