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India Says Growth Outlook Improves as West Asia Tensions Ease; Flags Monsoon, Geopolitical Risks

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India's economy remained resilient in the opening months of 2026-27 as easing tensions in West Asia have improved the growth outlook by reducing inflation and external sector risks, the Finance Ministry said in its monthly economic review.

Inflation is likely to remain relatively contained in the coming months, supported by lower global commodity and crude oil prices, easing input costs and government supply-side measures. Strong exports, foreign direct investment inflows and ample foreign exchange reserves also continue to support the economy.

Industrial activity and investment momentum remain healthy but some high-frequency indicators point to a moderation in growth. Uneven monsoon rainfall, emerging El Niño conditions and geopolitical uncertainties, including potential disruptions to oil supplies through the Strait of Hormuz, remain key risks to the outlook.

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^NZ50
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