New Delhi: Indian economy could grow at 6.5 per cent in the current fiscal as lower prices of crude oil are expected to ease inflationary pressure and support domestic growth, despite intensifying global trade tensions, EY said on Friday.
The ‘EY Economy Watch’ report for April identifies four key interlinked effects which would have a bearing on India’s growth — reduced exports, global slowdown, falling crude oil prices, and the impact of global excess production capacities.
“With suitable fiscal and monetary policies, India may be able to sustain a real GDP growth at about 6.5 per cent in FY26 as also in the medium term, while maintaining a CPI inflation below 4 per cent.
“We also expect global crude prices to remain in the range of $60-65/bbl in FY26, which may be to India’s advantage,” EY India Chief Policy Advisor D K Srivastava said.
It said exports may slow due to higher tariffs and weakening global demand, but the overall GDP impact may be limited, given the subdued role of net exports in India’s recent growth experience.
Global slowdown may constrain growth worldwide, but India’s relatively strong fiscal space and monetary flexibility provide scope for calibrated stimulus.
Excess production capacities in major exporting nations could lead to dumping risks, requiring India to consider targeted anti-dumping measures.
Falling crude oil prices dropping from $75/bbl in early April to $65/bbl by mid-month, and remaining within an expected range of $60-65 during FY26, is expected to support domestic growth while easing inflationary pressures.