A labourer works on a construction site near the Amazon India headquarters in Bengaluru on December 29, 2025.<\/p>\n
Idrees Mohammed | Afp | Getty Images<\/p>\n
In a quarter partially affected by the economic disruptions from the Middle East conflict, India’s economy grew at 7.8% year-on-year in the three months to the end of March, a faster-than-expected pace.<\/p>\n
As per a Reuters poll<\/a>, the economy was forecast to grow by 7.2% in Jan-Mar, lower than 7.8% in the previous quarter. <\/p>\n In the first half of the quarter, India’s trade prospects improved sharply as it finalized a “mother of all deals<\/a>” with the European Union and managed to get the U.S. to lower tariffs on its goods<\/a> from 50% to 18%. <\/p>\n These were further lowered to 10% after the U.S. Supreme Court struck down U.S. President Donald Trump’s tariffs as illegal<\/a>. <\/p>\n But then the Iran war began at the end of February, which has since become a severe risk to India’s economy<\/a> and is anticipated to hurt growth<\/a> and raise inflation.<\/p>\n On Friday, India’s central bank raised its inflation<\/a> projection for the financial year ending March 2027 by 50 basis points to 5.1%, while tempering the economy’s growth forecast to 6.6% for the year, down from 6.9% projected earlier.<\/p>\n Energy supply disruptions caused by the conflict have inflated India’s import bill, piling pressure on the rupee that has already been hit by record foreign investor outflows<\/a>.<\/p>\n