Iran-US-Israel war may cause short-term economic shortfall in India, says Piyush Goyal

Union Commerce and Industry Minister Piyush Goyal said India remains economically resilient despite the ongoing Middle East war, noting that while there may be a short-term impact on economic activity.

“India is a resilient country with strong fundamentals. While we have war raging on, Indians understand the challenges and are willing to work with the government. There will be a shortfall in economic activity in the short run, but we will make up for it in the coming months,” said Piyush Goyal during a fireside chat with CNBC TV18.

The Indian economy is expected to grow at more than 7% in the next financial year, on top of growth of 7.6% forecast for the current year.

If oil prices hold near $100 per barrel through the next financial year, GDP growth could fall to 6.6% and inflation could rise to 4.1%, the research department at the State Bank of India said in a report on March 7. If oil prices average $130 per barrel, GDP growth could plummet to 6%, it said.

India’s economy has been in a “Goldilocks” phase, Reserve Bank of India Governor Sanjay Malhotra said in December.

While growth has been strong, inflation is low – coming in at 2.75% in January, close to the lower end of the central bank’s comfort band of 2%-6%.