Petrol and diesel prices in India have been increased for the second time in a week, following a long freeze on revisions. The increase comes as global crude prices surge and state-run oil firms look to recoup losses.
External Affairs Minister S Jaishankar discussed the West Asia conflict's impact on the global economy, particularly energy security, with US Secretary of State Marco Rubio. He also engaged with GCC ambassadors and his Sri Lankan and German counterparts on the same issue.
Goldman Sachs has materially lowered its earnings growth forecast for Indian companies by a cumulative 9 percentage points over the next two years.
Moody's Ratings has reduced India's GDP growth forecast for 2026 to 6 per cent, citing subdued private consumption, capital formation, and industrial activity due to higher energy costs and global uncertainties.
The closure of the Strait of Hormuz has disrupted some 20 per cent of the global flows but even if it opens, damages to production facilities in the region will take time to repair, points out Sunita Narain.
Petrol and diesel prices in India have seen their fourth increase in less than two weeks, pushing cumulative hikes to nearly Rs 7.5 per litre since May 15, reaching their highest levels since May 2022. This surge, driven by global crude oil costs and the Iran conflict, is expected to exacerbate inflationary pressures and raise transportation costs across the economy.
A prolonged supply shock can transmit to lower incomes, and dampen confidence and sentiment, warns Aditi Nayar, chief economist, head-research and outreach, ICRA.
S&P Global Ratings projects India's economy to grow at 6.3 per cent even if crude oil prices average USD 130 per barrel in the current fiscal year, highlighting the nation's resilience amidst the West Asia crisis and strong commitment to fiscal consolidation.
The OECD projects India's GDP to grow at 7.6% in the current fiscal year and 6.1% in 2026-27, despite global economic challenges stemming from the Middle East conflict and energy price volatility.
'OMCs are incurring losses of Rs 1,000 crore per day due to the West Asia crisis.'
S&P Global Ratings has increased India's GDP growth forecast for the next fiscal year to 7.1 per cent, citing private consumption, investment, and exports as key drivers. However, the agency also cautioned that the conflict in the Middle East could strain India's fiscal position due to higher energy prices.
'Markets never fully lose hope. But an important shift could come if the Strait remains closed -- moving from high prices to no prices.'
Opposition MPs in the Rajya Sabha criticised the Modi government's economic policies, citing the LPG crisis, lack of energy security, and concerns over the Economic Stabilisation Fund.
Moody's Ratings has downgraded India's growth forecast for financial year 2026-27 (FY27) to 6 per cent from 6.8 per cent, attributing the revision to weaker consumption and industrial activity, elevated energy prices, and rising input costs stemming from the West Asia conflict.
RBI Governor Sanjay Malhotra stated that the central bank is closely monitoring whether the supply shock from the West Asia conflict will lead to a generalised price rise, potentially necessitating monetary policy action.
Uncertainties stemming from the West Asia crisis and its potential impact on inflation and economic growth were key factors in the Reserve Bank of India's Monetary Policy Committee (MPC) decision to maintain the status quo on interest rates, according to the recently released MPC meeting minutes.
India emerged reasonably well from 2025. But now, the oil shock and war-related supply disruptions have again driven funds out of India and significantly weakened the rupee, points out Ajay Chhibber.
One Indian oil tanker successfully crossed the Strait of Hormuz, while others turned back after Iran signalled the waterway's closure, amidst rising tensions and disruptions to global energy flows.
Escalating geopolitical tensions in West Asia are beginning to disrupt India's automotive supply chain, leading to rising commodity prices, logistics bottlenecks, material shortages, and pressure on consumer demand, with two-wheeler makers already raising prices.
India's retail inflation, measured by the Consumer Price Index (CPI), increased to 3.48 per cent in April, up from 3.40 per cent in March, primarily due to a surge in prices of gold and silver jewellery, as well as certain kitchen staples like tomatoes and cauliflower.
The Strait of Hormuz crisis is impacting lifestyles worldwide, from reduced gold purchases in India to energy conservation in Europe and Japan, as governments urge citizens to adapt to the global energy shock.
India's economy is projected to maintain growth above 7 per cent in 2026-27 (FY27), supported by strong domestic consumption and investment, even as global growth faces risks from geopolitical tensions, according to industry body Assocham.
Live updates on the US-Israel-Iran war: Trump escalates threats, Iran retaliates, and oil prices surge as the Strait of Hormuz crisis disrupts global markets.
If the conflict continues for a prolonged period, State-run oil companies may have to review retail fuel prices accordingly.
S&P Global Ratings warns that a sustained rise in crude oil prices to $130 per barrel could significantly slow India's economic growth, weaken fiscal metrics, and strain corporate and banking sector performance, potentially reducing growth by up to 80 basis points.
Even if there is an early agreement on a cessation of hostilities in West Asia, the price shock will not go away easily, points out A K Bhattacharya.
West Asia conflict triggers sharp sell-off in Indian markets, with realty, banking and auto stocks leading losses amid energy shock fears.
Indian stock markets extended their gains for a third consecutive day, with the Sensex climbing 753 points and the Nifty closing above 24,550, driven by a drop in crude oil prices and optimism surrounding potential peace talks between Iran and the US.
Despite a sharp increase in import duties on gold and silver to 15 per cent, the precious metals are trading at significant discounts in the domestic market, with gold seeing discounts of up to $200 an ounce and silver up to $6 an ounce.
Congress leader Rahul Gandhi has criticised Prime Minister Narendra Modi's call for citizens to make economic sacrifices in response to the West Asia conflict, calling it 'evidence of failure'. Gandhi accused Modi of shifting responsibility onto the public and being incapable of running the country.
Iranian Foreign Minister Abbas Araghchi is in India for a BRICS foreign ministers' meeting, where discussions will focus on the escalating crisis in West Asia and its impact on global energy supply chains.
Markets face risk of a prolonged bear phase as oil shocks and geopolitical tensions test inflation, growth and investor confidence globally, points out Debashis Basu.
A convoy of India-bound ships carrying crude oil and gas was stopped by the Iranian Revolutionary Guard Corps (IRGC) in the Strait of Hormuz, leading to several vessels returning to the Persian Gulf.
Indian stock markets experienced a significant sell-off, with the Sensex tumbling over 1,300 points, driven by escalating crude oil prices due to US-Iran tensions and Prime Minister Narendra Modi's call for austerity measures, which amplified investor concerns about India's economic outlook.
The escalating crisis in West Asia and its impact on the global energy supply chain are expected to dominate deliberations at a two-day meeting of BRICS foreign ministers to be hosted by India.
Indian benchmark equity indices, Sensex and Nifty, saw gains in early trade, driven by strong performance in banking shares and positive sentiment from Asian markets, alongside optimism surrounding the ongoing US-China Summit.
The Reserve Bank of India (RBI) has projected a 6.9 per cent GDP growth for the current financial year, citing concerns over commodity prices and supply chain disruptions stemming from the West Asia crisis.
Analysts say long-term investors may still benefit, but recommend limiting bullion exposure to around 10 per cent.
Infosys Q4 results beat estimates, but weak FY27 guidance triggers cautious brokerage outlook and target price cuts. Should investors worry?
For weeks, the war skirted the edge of catastrophe without tipping over. Missiles flew, there was much destruction, commanders were assassinated, cities across the Gulf and even in Israel struggled to absorb the shock. But one line held: Energy infrastructure, the arteries of the global economy, remained largely untouched. That is no longer true. Prem Panicker continues his must read daily blog on the Gulf War.
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