West Asia Conflict Threatens India's Economic Growth Amid Shipping Disruptions

The ongoing conflict in West Asia presents severe implications for India's economy, as pointed out by CII President Rajiv Memani. The crisis threatens to lower India's GDP growth below 6.5%, driven by disruptions in shipping and increased energy costs. Measures to assist MSMEs and reform are needed.

The conflict in West Asia continues to raise alarms for India's economic stability, with significant shipping disruptions and soaring energy prices threatening to slow GDP growth to below 6.5%. This concern was highlighted by CII President Rajiv Memani on Tuesday.

Memani noted that the prolonged energy crisis, if unresolved, poses one of the largest risks to global and Indian economic growth. Should stability return, India could achieve a GDP growth rate between 6.5% and 7%. However, a prolonged crisis may slow growth further. Elevated crude oil prices, particularly if exceeding USD 100 per barrel, would also impact growth.

India's growth is expected to reach 7.6% in 2025-26, but interest rates might remain high. MSMEs require targeted relief to mitigate the West Asia conflict's impact, Memani suggested. Additionally, he called for enhanced ease of doing business and judicial reforms to address industrial challenges.