Oil shock weighs on India outlook

The Middle East conflict has kept oil markets tight, and India is feeling the pressure as higher energy costs feed inflation and weaken consumer sentiment.

At the same time, falling foreign investment, a softer rupee, and recent equity market volatility have highlighted India’s external vulnerabilities.

While the country still offers strong long-term growth potential, elevated valuations and a wider current account deficit make the near-term backdrop more challenging.

Global capital is also being drawn toward AI leaders in South Korea and Taiwan, leaving India with more indirect exposure through IT services rather than direct participation in the theme.