Here's how to tell when the oil industry is in trouble again

India has been described as the "bright spot" in the global economy, given its booming services sector.

And compared to the rest of the world, its demand for crude oil also stands out.

In the first quarter, India's demand grew at the fastest pace since 2007.

But a slowdown in India's oil demand could foretell a bigger trend, and more pain for the industry, according to Aidan Garrib, global market strategist at Pavilion Financial Corp.

"India has really been the bright spot among EMs, but also generally in terms of just global economic growth," said Aidan Garrib, global market strategist at Pavilion Corp.

"If you start seeing a slowdown in Indian demand - although it's only 4.5% of global oil demand - it still just doesn't bode well for overall demand, given the negative outlooks and the negative pictures that we're seeing everywhere else," he told Business Insider.

While India's oil demand is not contracting right now, small cracks are starting to emerge in its economy, according to Garrib.

For example, its economy grew at a 7.9% pace in the first quarter and slowed to a 7.1% pace in the second, which was lower than expected. Also, industrial production shrank by 2.4% in July, with manufacturing leading the declines.

"Because oil is a global macro asset class, it will trade depending on the outlook for global growth," Garrib said.

And with no shortage of global economic worries, a slowdown in Indian demand could unnerve the market.

"We do not think the recent pick-up in oil prices will persist over the near term, and expect oil prices to be range-bound at between $40 to $50/bbl," Garrib said in a client note on Thursday. "High inventories, lower refining margins, and signs of stabilizing - if not increasing - US oil production will weigh on prices in the short term."