Oil, El Niño and capital flight: Can India retain its fast-growth tag?

Detailed summary

When International Monetary Fund (IMF) managing director Kristalina Georgieva termed India a 'bright spot' across the global economy, she was not overstating. Over the past three…

Chennai, Nov. 15 -- When International Monetary Fund (IMF) managing director Kristalina Georgieva termed India a 'bright spot' across the global economy, she was not overstating. Over the past three years, India's economic growth has averaged 7.3%, an expansion rate double that of the wider world. This momentum held firm despite elevated commodity prices triggered by geopolitical conflicts and disruptive trade tariffs.

That momentum has carried into this year. In the first quarter of 2026-27, India's GDP expanded by 7.8%. The World Bank, IMF, and the Reserve Bank of India have all lifted their growth projections to 7% or higher. On 11 November, Moody's Ratings raised its 2026-27 growth forecast for India's economy to 7% from 6.5%, citing resilient consumption, improving investment dynamics and the economy's ability to withstand the global energy shock.

India continues to outpace major peers like the US and China, anchoring global economic momentum.

"The financial, including the banking sector clean-up, and the physical infrastructure built in the second decade, is clearly helping," India's chief economic adviser V. Anantha Nageswaran told Mint. "Add to it the substantial tax reliefs in 2025-both direct and indirect. All of these appear to have built the Indian economy's resilience to tackle multiple shocks."

And in recent days, India's economic outlook appears to have brightened further. US President Donald Trump faced a major setback in the midterm polls, where voter anger over the Iran conflict and rising inflation forced him to dial down his bellicose rhetoric. In Israel, his key wartime ally, Benjamin Netanyahu, has been reduced to a caretaker role after losing his parliamentary majority in deadlocked elections. Meanwhile, peace negotiations have begun between Russia and Ukraine-Russian and Ukrainian negotiators agreed to a major prisoner exchange, Reuters reported on 11 November.

Consequently, benchmark Brent crude prices have retreated toward the $90-per-barrel…

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