The S&P Global India Research Chapter (IRC) said in its latest report, “India Forward: Strategic Imperatives,” that energy price spikes and supply constraints triggered by the Middle East war are feeding into broader economic stress for India. The conflict has put a spotlight on energy and food security reforms linked to India’s goals of Viksit Bharat (Developed India) by 2047.
Some of the key findings of the report are:
A Test of India’s Macroeconomic Resilience: The Middle East war represents the biggest test of India’s resilience in recent years, with the largest energy shock on record triggering spillovers into freight and insurance costs, supply chains and fertilizers.
India Reconsiders Fiscal and Industrial Policy Options: The sustained nature of the conflict is changing India’s risk management focus from immediate buffers to a focus on medium to long-term strategies. India’s post-COVID fiscal consolidation—reducing the fiscal deficit from 9.2% of GDP in FY2021 to 4.4% FY2025-26 —now faces its toughest challenge.
India’s Energy Sector – A Moment to Reset: The current energy crisis underscores the need for a reliable and resilient energy system. While policymakers and regulators can accelerate the reform agenda, the pace of change will be dictated by the Indian energy market’s dependence on global energy flows and supply chains.
“India Forward” is prepared by S&P Global and Crisil’s cross-divisional India Research Chapter, a thought leadership initiative of the S&P Global India Leadership Council, bringing together local expertise, global perspectives and S&P Global’s full suite of capabilities.
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