Nomura Securities: India's Economic Growth to Slow Down Briefly Due to Middle East Conflict

NEW DELHI (CNA) – The Middle East war is impacting India's economy. According to Nomura Securities, India's economic growth is expected to slow in the first half of the 2027 fiscal year, with recovery likely only in the second half. The full-year economic growth rate is estimated at 6.8%, lower than the forecast for the 2026 fiscal year. Conflicts involving the US, Israel, and Iran led to the blockade of the Strait of Hormuz, causing energy supply shortages worldwide and impacting national economies. Nomura believes that while India's manufacturing and service sectors will be constrained, the overall growth outlook remains resilient due to government policy easing and improved trade relations with the US. India has introduced measures like fuel tax cuts and credit guarantees for SMEs. GDP growth for H1 FY2027 is projected between 6.3% and 6.7%, rising to 7.1%-7.2% in H2. However, prolonged conflict and high global oil prices remain significant risk factors for inflation and sustained growth.