Rising Crude Prices Could Impact India's Inflation and Economic Growth
Brent crude oil prices have increased to approximately $85 per barrel from $73 following recent US-Israel strikes on Iran. HDFC Bank projects FY27 inflation at 4.3% if crude averages $65, with potential increases of 20 to 50 basis points if prices rise to $75 or higher. CareEdge Ratings warns that sustained prices above $80 could raise inflation by about 10 basis points. India imports over 85% of its crude oil, with nearly half sourced from the Middle East. Higher crude prices may also widen India's current account deficit, potentially reaching 1.3-1.8% of GDP if prices remain elevated. Nomura estimates a more modest CAD of around 0.9% of GDP in FY26, assuming average oil prices of $65 per barrel.
Published 9 hours ago • 07 Mar 2026, 12:32 AM IST