India economy resilient but faces rising risks from Mideast war
India's economy remains resilient but faces rising risks from the Middle East conflict, which has disrupted energy supplies and raised costs, according to the government's monthly economic report. The report warned of higher inflation, wider fiscal and external deficits, and slower growth if energy and fertiliser supply disruptions persist.
India's economy is resilient but faces mounting risks from the Middle East conflict. The conflict has disrupted supplies of energy, fertilisers, and industrial raw materials, raised costs, and weakened trade. Real GDP growth was 7.6% in the previous fiscal year. The International Monetary Fund raised its 2026-27 growth forecast for India to 6.5% from 6.4%. India's crude oil basket averaged $113 per barrel in March and was just under $115 per barrel in April through April 24. Retail inflation rose to 3.4% in March from 3.2% in February, while wholesale inflation accelerated to 3.88% from 2.13%. Merchandise exports fell 7.4% year-on-year in March, with 24 of 30 major export categories declining. Remittances, which reached a record $135.4 billion in FY25, could come under pressure if the conflict weakens Gulf labour markets.
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