A poor monsoon could drag overall economic growth and compound the impact of the West Asia conflict on the Indian economy.
India has managed high government debt-to-GDP, a slowing domestic revenue engine, lower household savings and a more hostile geopolitical environment separately in the past. But together, they threaten to undo the growth narrative on which today's optimism rests, warns Debashis Basu.
Aviation stocks experienced a significant surge following the announcement of a two-week ceasefire between the US and Iran, which led to a sharp decline in crude oil prices. This development has positively impacted stock markets and the broader economic outlook for India.
S Mahendra Dev, chairman of the Economic Advisory Council to the Prime Minister, expressed confidence that the rupee would stabilise around the 92-93 level against the US dollar, despite geopolitical tensions, and that foreign investment flows would return.
India's foreign exchange reserves decreased by USD 10.288 billion to USD 688.058 billion during the week ending March 27, according to the Reserve Bank of India (RBI). This decline follows a previous decrease and comes after the reserves reached an all-time high in February.
A foreign brokerage warns that sustained crude oil prices above USD 100 per barrel could push India's inflation above the RBI's tolerance level, potentially triggering interest rate hikes.
India, the world's fourth largest economy, is set to maintain the 'goldilocks' phase with tailwinds of good growth, low inflation and robust banking performance as well as reform initiatives poised to sustain the economic pace witnessed during 2025.
The Reserve Bank of India (RBI) Governor Sanjay Malhotra is now confronting the classic growth-inflation tradeoff, a situation exacerbated by the West Asia war, which threatens to end the 'goldilocks period' of low inflation and robust growth.
A new report suggests that prolonged conflict in the Middle East could significantly impact India's GDP growth and inflation.
India's foreign exchange reserves decreased by USD 7.052 billion to USD 709.759 billion in the week ending March 13, according to the Reserve Bank of India (RBI). This decline follows a previous drop and comes after reserves reached an all-time high in February.
The Indian rupee weakened against the US dollar due to a strengthening dollar, high crude oil prices, and foreign fund outflows amid geopolitical uncertainties.
In the present hyper-connected world, there are many domestic and global factors that affect financial markets. Of them, the most powerful and often least predictable are geopolitical events, which often boil down to one diplomatic headline.
Finance Minister Nirmala Sitharaman stated that it is premature to comment on the tariff changes announced by the United States, adding that the commerce ministry is currently reviewing the situation.
Moody's Ratings on Tuesday said tax cuts in the current fiscal has dented India's revenue growth, leaving less scope for fiscal policy support for the economy.
Amidst escalating tensions in West Asia, India voices strong concerns over the safety of its nationals and the potential disruption to energy supplies, urging dialogue and diplomacy for a swift resolution.
India's digital economy is projected to constitute nearly 20 per cent of the nation's GDP by 2030, fuelled by a growth rate twice as fast as the overall economy, according to a senior government official.
Foreign investors pulled out Rs 21,000 crore (around $2.3 billion) from Indian equities over the last four trading sessions amid deteriorating global risk sentiment triggered by the West Asia crisis.
India's foreign exchange reserves have surged to an all-time high, reaching USD 728.494 billion, according to the Reserve Bank of India. This increase is attributed to a rise in foreign currency assets and gold reserves.
'We are profoundly energy-dependent on the Gulf. That dependency must now be redirected towards the United States, because we require American permission to procure oil.' 'We additionally require Iranian permission to acquire oil from that source. So India now has to seek two separate permissions merely to secure its energy supply.' 'Should we be compelled to source from America, or from Venezuela -- which is, in effect, American-controlled supply -- that will inevitably carry a price premium, an elevated shipping cost, and a considerably extended delivery timeline, given the distances involved.'
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.
India on Tuesday expressed deep concern over the escalating conflict in Iran and the Gulf region, urging all sides to exercise restraint and prioritise civilian safety.
India's economy experienced a growth of 7.8 per cent during the October-December quarter of 2025-26, according to the new series of national accounts with 2022-23 as the base year.
Mukesh Ambani announced a 10 lakh crore investment by Reliance Industries to revolutionize artificial intelligence in India, focusing on building sovereign compute infrastructure and making AI accessible and affordable for all.
When everyone has footage and no one can verify it, the loudest voice wins, notes Prem Panicker who begins a daily blog on the War in the Middle East.
This year's Economic Survey and the Union Budget were more closely followed for more reasons than one.
India's retail inflation, which has stayed below the Reserve Bank of India's (RBI's) 4 per cent target in recent times, is likely to remain benign in the coming months, RBI Deputy Governor Poonam Gupta said in a speech, on Friday, which was uploaded on the central bank's website on Tuesday. Headline inflation dipped to multi-year lows of around 1.5-2.8 per cent in late 2025.
'Uncertainty level A in the morning, uncertainty level B in the afternoon. If I answer about tariff rates now, I'll be outdated by the evening.'
The deal shifts the US posture towards India from hostile to neutral, and that matters for growth, points out T T Ram Mohan.
After a 25 basis point rate cut in December, the RBI on Friday decided to pause on the policy rate front amid geopolitical uncertainties.
'Given that the population is almost evenly split, the Indian economy cannot grow without women participating in the workforce.' 'While women's participation has increased, it is still well below 40 per cent,' says Kartik Narayan, CEO of the professional networking and jobs platform, Apna.
Stock market benchmark indices Sensex and Nifty surged in early trading session on Tuesday after India and the US agreed to a trade deal under which Washington will bring down the reciprocal tariff on Indian goods to 18 per cent from current 25 per cent.
The Budget emerges as a measured, credible and forward-looking policy document that reinforces India's commitment to remaining a stable, reform-oriented economy amid an increasingly fragmented global landscape, says A Balasubramanian.
The idea of back-loading the target of fiscal consolidation is perhaps guided by the government's desire to be prepared for any adverse developments in the coming year, points out A K Bhattacharya.
Strong domestic growth will continue to draw foreign investment into the Indian economy, Reserve Bank of India (RBI) Governor Sanjay Malhotra said on Tuesday. He said this was reflected in recent free trade agreements and investment commitments by large technology companies.
The Securities and Exchange Board of India (Sebi) has granted a no-objection certificate (NOC) to the National Stock Exchange of India (NSE), paving the way for the country's biggest exchange - currently valued at 5 trillion in the unlisted market - to file draft documents for its long-awaited initial public offering (IPO).
'People become guided by emotions, fear of missing out, and greed. They tend to invest in booming sectors that may prove exceptionally expensive.' 'Typically, that represents the peak, and subsequently, they lose substantially.'
The Congress party has strongly criticized the Union Budget, calling it 'lacklustre' and 'disappointing,' claiming it fails to address the needs of farmers, unemployed youth, and other key sectors.
The IMF on Monday raised India's growth projection to 7.3 per cent for fiscal 2025-26, up 0.7 percentage point from its October forecast, on the back of better-than-expected performance of the economy. The Washington-headquartered multilateral lending agency has also revised India's Gross Domestic Product (GDP) growth forecast to 6.4 per cent for fiscal year 2026-27 beginning April 1, 2026, from its earlier estimate of 6.2 per cent.
Finance Minister Nirmala Sitharaman's biggest challenge will be to find a new growth driver, particularly against the backdrop of a global economy ravaged by heightened uncertainty and fragmentation, financial markets on a precipice, and global commodity prices on a continued uptrend.
This Budget positions India's taxation ideology as not merely a revenue source but as a strategic catalyst for growth, inclusion and long-term confidence.
© 2026 Rediff.com - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances