Nagesh Kumar, an external member of the Reserve Bank of India’s monetary policy committee, suggests that lower energy costs will alleviate pressure on the current account and public finances. This outlook marks a departure from the central bank’s more cautious stance three weeks ago, when it downgraded growth expectations to 6.6% due to the volatile situation in the Middle East. As a nation that imports over 85% of its oil, India remains acutely sensitive to energy price shocks.

To mitigate supply chain risks, Indian refiners are actively diversifying their import sources. Beyond traditional Middle Eastern partners, the country has turned to record volumes of Russian crude, while also securing supply lines from Brazil and Venezuela. With Brent Crude trading just under $73 and WTI slipping below $70, the market is responding to hopes that tanker traffic through the Strait of Hormuz will normalize. If these price levels hold, the resulting relief in inflationary pressure could solidify India’s trajectory toward its 7% growth target by the end of the 2027 fiscal year.