Fitch Ratings' India ratings and research arm, Ind-Ra, predicted on Tuesday that India's GDP growth will slow to 6.8% in fiscal year 2026-27, down from 7.6% in the previous fiscal year. Reasons cited include fuel and food inflation risks from uncertainty surrounding the Middle East conflict, a weaker local currency, and the potential impact of El Niño on agriculture. The agency forecasts GDP growth of 6.9%, 6.6%, 6.7%, and 6.9% for the first through fourth quarters, respectively, compared to the Reserve Bank of India's forecasts of 7%, 6.4%, 6.5%, and 6.8%. Furthermore, the agency now expects the average crude oil price to be $85 per barrel in fiscal year 2026-27 (down from $95 per barrel in May), and the average rupee exchange rate against the US dollar to be 93.98 (down from 94.28 in May), representing a 6.4% year-on-year depreciation.
Ind-Ra Chief Economist Pant stated that the average price of a basket of Indian crude oil is projected to be $101.31 per barrel in the first quarter of fiscal year 2026-27 (April to June 2026) and $96.49 per barrel in the second quarter (April to July 2026). “Our crude oil price assumption for fiscal year 2026-27 is $85 per barrel. Lower oil prices will have a positive impact on the Indian economy by reducing the trade/current account deficit. However, rising inflation due to El Niño may limit the upside potential for growth from lower oil prices,” Pant said.
