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www.newsindiatimes.com – that’s all you need to know Analysis-Iran War To Weigh More On Indian Growth Than Inflation, Keeping Interest Rates Low T he U.S. and Israel’s attack on Iran is expected to weigh more on India’s economic growth than its inflation, which will encourage the Reserve Bank of India to keep interest rates low, three sources familiar with policymakers’ thinking and analysts said. The conflict, which has rippled out across much of the Middle East, has pushed up oil prices by about 15%, disrupted gas flows from the region and triggered selloffs in Indian equity, debt and currency markets, with the rupee hitting a record low and bond yields rising due to concerns about India’s current account deficit and the risk of higher inflation. Despite a weaker rupee and higher crude prices, the central bank is unlikely to take a hawkish turn, all three sources familiar with policy deliberations said. Current assessments could change, one of the sources cautioned, in case of extreme developments in the Middle East. The thinking of policymakers appears to have di- verged from the market reaction. Interest rates have risen in emerging and global mar- kets since the Gulf conflict broke out. Traders in India’s swap markets have added to bets on at least one rate increase over the next 12 months. “I don’t feel the market has sufficiently priced the risk from oil prices rising significantly and there could be room for swap rates to move even higher if Brent oil holds above $80 per barrel over the next couple of weeks,” said Ritesh Bhusari, joint general manager for treasury at South Indian Bank. The RBI’s rate-setting panel, which meets for its next policy review in about a month, paused rate cuts at its last meeting in February after reducing the policy repo rate by 125 basis points in 2025. The sources declined to be identified as they are not authorised to speak to the media. An email sent to the RBI onWednesday seeking comment was not answered. Conflict in the Middle East has muddied the picture for central bank policy projections globally. Traders have pushed back wagers on rate cuts by the Federal Reserve while adding to bets on a hike by the European Central Bank. A rise in oil prices above $100 per barrel or a faster- than-expected pass-through of costs could run the risk of turning global monetary policy more hawkish, accord- ing to analysts at Goldman Sachs. QUICKER HIT TO GROWTH An immediate risk to India’s growth comes from dis- ruptions to gas supplies. On Tuesday, Indian companies reduced natural gas supplies to industries in anticipation of tighter flows from the Middle East, a move that could hurt output in sectors including fertilisers and power. If gas supply disruptions persist for more than four weeks, they could hurt economic growth for at least a quarter, one of the sources said. If oil prices remained above $90 to $95 a barrel for three to four quarters in a row, the source said, India’s expected 7%-plus economic growth in the next financial year would take a more sustained hit. Under that scenario, growth could slow to about 6.5% from the current expectation for more than 7%, the person added. Cuts in gas supplies to fertiliser and power companies could reduce output in those sectors in the near term, weighing on growth with a lag in the first and second quarters of the next fiscal year, a second source said. “If oil prices remain high for an extended period, the ‘Goldilocks phase’ for the Indian economy will end,” the person added. INFLATION BUFFERS Inflation, meanwhile, is likely to rise more modestly in the near term. Retail fuel prices in India have not moved in tandem with global crude prices, as fuel retailers often hold prices steady. The government can also cut excise duties to shield consumers if global prices remain elevated, the first source said. “There is plenty of room on the inflation front,” the third source said. “If inflation were closer to 5%, there might have been a case for a pre-emptive hike, but it is currently near the lower end of the RBI’s tolerance band.” India’s retail inflation was at 2.75% in January, closer to the lower end of the RBI’s 2% to 6% tolerance range. A 10% to 20% rise in global oil prices could lift Indian inflation by 25 to 50 basis points if fully passed through to consumers, according to a Deutsche Bank estimate. With a partial pass-through, consumer price inflation could rise to the 4.5% to 5% range, it said. -Reuters By Jaspreet Kalra and Ira Dugal “Witnessing Supply Chain Disruptions Amid Situation In Middle East”: Rajnath Singh Calls Conflict In West Asia “Highly Unusual” D efense Minister Rajnath Singh on Friday, March 6, acknowl- edged the global energy supply chain disruption amid the ongoing conflict inWest Asia, terming it “highly unusual.” Addressing the Sagar Sankalp Maritime Conclave in Kolkata, the Defence Minister said that the disruption of trade routes, including the Strait of Hormuz, has af- fected several sectors and global trade. The ongoing conflict between US-Is- rael and Iran has dragged theWest Asian region into a state of conflict, hampering the trade routes at the Strait of Hormuz and impacting the global oil and energy supply chain. The Defence Minister said, “What is happening in the Middle East is highly unusual. It is difficult to make any firm comment at this stage on the direction in which conditions in the Middle East, or in our neighbourhood, might proceed going forward. If we look at the Strait of Hormuz or the entire Persian Gulf region, it is an extremely important area for the world’s energy security.” “When there is a disturbance or disrup- tion in this region, it directly impacts the supply of oil and gas. Not only that, today we are witnessing supply chain disrup- tions not just in the energy sector, but in other sectors as well. The direct impact of these uncertainties falls on the economy and global trade,” he said. The Defence Minister also expressed concern over increasing strategic com- petition among nations across multiple domains, saying that the “abnormality is becoming the new normal.” “Nations are clashing with each other on land, in the air, in the waters and even in space. This is concerning and an ab- normal situation. What is more worrying is that this abnormality is becoming the new normal,” he said. Amid the changing geopolitical equa- tions and uncertainties, Rajnath Singh called for India to provide leadership in the maritime sector and termed ‘self- reliance’ as the only way to counter the supply chain disruptions. He said, “In this era of changing global geopolitics, oceans have once again come to the centre of the world’s power balance. At such a time, as a major maritime na- tion, it is India’s responsibility to provide leadership with confidence, capability, and a clear vision.” “In the Defence sector today, high-end and precision technologies are being utilised, and therefore, our government has, from the very beginning, believed that in this era of uncertainty, the only way to avoid supply chain disruptions is ‘self-reliance’. And one of the major pillars of our vision for self-reliance is Defence Public Sector Undertakings,” said Rajnath Singh. He gave the public and private players in the maritime sector the goal of plac- ing India among the top ten shipbuilding nations by 2030 and among the top five nations by 2047. -ANI PHOTO:ANI PHOTO: MAJID ASGARIPOUR/WANA (WEST ASIA NEWS AGENCY) VIA REUTERS India”s Defense Minister Rajnath Singh. Smoke rises following an explosion, amid the U.S.-Israeli conflict with Iran, in Tehran, Iran, March 5, 2026. News India Times (March 7, 2026 - March 13, 2026) March 13, 2026 16 Cover Story The fast-moving and rapidly changing situation in the Middle East has raised concerns not only about its impact on India’s economy but also for its more than 9 million citizens living in that region. New Delhi, and governments around the world, are grappling with the logistics of repatriating those who want to return home. Below are some aspects of the situation unfolding. As this goes to press, we carry only snippets from the impact on the Indian diaspora.