The conflict in West Asia has demonstrated the speed with which geopolitical shocks have been transmitted to India’s domestic economy. The head of the International Energy Agency has described the current geoeconomic crisis as more severe than the combined shocks of 1973, 1979 and 2022.

The price of Brent crude oil rose to $109.03 per barrel after hitting highs of around $120 during the conflict. At a domestic level, India is projected to see its economy slow from 7.4% growth in FY26 to 6.5% in FY27 with a projected increase in inflation from 2.3% to 4.4% due to the impact of disruptions observed in the energy supply chains.