West Asia Conflict: Implications for India's Economic Trajectory

The prolonged conflict in West Asia presents a potential threat to India's economic outlook, particularly impacting crude oil and commodity prices, according to a recent report by Crisil Intelligence.

The report projects a moderation in India's real GDP growth to 7.1% by FY27, a figure considered healthy and slightly above potential, bolstered by strong private consumption and a rebound in private investment sentiment, with private capex seeing a recovery.

Inflation is anticipated to average 4.3% in FY27, up from 2.5% in FY26, with benign food prices assuming a normal monsoon. The Reserve Bank of India is likely to maintain stable policy rates, following a 125 basis points cut in 2025, ensuring financial resilience alongside supportive macroeconomic conditions.