Goldman Sachs cuts India's growth forecast to 6.5% amid Iran war
Goldman Sachs has lowered its forecast for India's economic growth for the fiscal year starting April 2026 from 7% to 6.5%, thanks to the ongoing Iran conflict.
With global oil prices now above $100 a barrel and a large share of India's fuel imports transiting the Strait of Hormuz — roughly half of crude imports and a high share of LPG imports, this shift is putting extra pressure on the economy.
Broader economic impact
Rising fuel costs are already hitting Indian industries hard; almost all engineering firms in Gujarat have shut down, and Maharashtra isn't far behind.
Remittances from Gulf countries, which account for about 40% of India's remittances, could be at risk and may decline if the conflict persists.
On top of that, inflation could accelerate toward about 6% from current low-single-digit levels (for example, around 2.2%), making everyday essentials more expensive and forcing the government to spend more on subsidies.
Plus, with one-fifth of India's exports tied up with the Middle East, ongoing uncertainty could make things even tougher for jobs and businesses back home.