Crude oil price is an important parameter for refining industries, which has a bearing on economy, because it is vital input for productivity. There is a vast gap in demand and production of crude oil in India. National oil companies are able to produce 23-24% of India's total requirements of crude oil. The production of crude oil from public sector enterprises in India has been decreasing due to old and the maturity of the fields. India is not self-reliant on crude oil production; therefore, it is necessary and inevitable to import the crude oil to bridge the gap between demand and supply. The increase in international crude oil prices will make import costly and raise the Indian crude basket price. Therefore, both international crude oil price rise and import dependency on crude oil are the problematic area that may damage the Indian economy. This paper focused on a study of relationship between crude oil prices and economic growth and also focused on the impact of crude oil prices on some economic variables i.e. exchange rate, inflation, and financial markets.To analyze the data statistical tools like Regression Analysis, correlation etc. are used. The result shows there is a significant impact of changes in crude oil prices on economic variables.