Chief Economic Advisor flags energy risk to India's growth story
India's Chief Economic Advisor warned that the energy crisis stemming from the Iran-US war poses risks to the country's growth trajectory. Rising oil and logistics costs are fueling inflation and threatening GDP expansion.
India's Chief Economic Advisor Anantha Nageswaran flagged that the energy crisis from the Iran-US war poses significant risks to GDP growth. With oil prices anchored near $104 per barrel, India's current account deficit will widen and inflationary pressures will persist.
India imports 85% of its oil, making it highly vulnerable to energy price spikes. Rising energy costs will filter through manufacturing, transport, and food processing sectors, creating broad cost pressures. The Reserve Bank of India will face pressure to maintain a cautious monetary policy stance.
Weak monsoon forecasts combined with the energy crisis could push down India's 2026 growth estimates. The government will need to carefully manage fiscal policy to support growth while managing inflation and external stability.
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