India's GDP growth forecast cut as crude oil prices surge

Fitch Ratings lowered its estimate for India's fiscal year 2026‑27 real GDP growth to 6.4%, down from an earlier 6.7% projection. The downgrade cites higher crude oil prices driven by geopolitical tensions, including the US‑Iran conflict and the prolonged closure of the Strait of Hormuz, which have pushed Brent crude toward $87 a barrel. Rising fuel costs are already inflating retail petrol‑diesel prices by 4‑5%, prompting concerns that inflation could climb to around 5.3% by year‑end and that the Reserve Bank of India may need to raise interest rates.

Energy analysts warn that if crude oil prices remain elevated, further hikes in petrol and diesel rates are likely, which would add pressure on transport costs, food prices and overall consumer inflation. The combined outlook points to weaker domestic economic momentum and heightened market volatility.