Fitch Ratings has warned that rising global crude oil prices could increase inflation in India and moderate economic growth during the first half of FY2026-27.

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• Fitch Ratings stated that persistently high crude oil prices may push India’s consumer inflation higher than expected during the upcoming financial year.

• Rising inflation could reduce household purchasing power, limiting consumer spending and weakening economic momentum during the first half of FY2026-27.

• The agency expects India’s economy to grow around 7.5 percent in FY2025-26, supported by domestic demand, infrastructure investment and strong economic activity.

• However, economic growth may moderate to around 6.7 percent in FY2026-27 as inflationary pressures and weaker consumption affect overall economic performance.

• Retail inflation in India has already started rising due to higher food prices, indicating early signs of price pressure across the economy.

• Fitch projects inflation could gradually increase to around 4.5 percent by December 2026, though still within the central bank’s target range.

• The Reserve Bank of India has maintained its policy interest rate at 5.25 percent and continues to follow a neutral monetary policy stance.

• Geopolitical tensions in West Asia and possible disruptions in oil supply may further increase global crude prices, creating risks for energy-importing economies like India.