Finance Ministry Highlights India's Strong Fundamentals Amid Middle East Conflict Risks

India's economy enters FY27 with strong macroeconomic fundamentals, including solid growth, moderate inflation, and stable external conditions, supported by ongoing reforms. However, the Finance Ministry's February 2026 review highlights risks from the escalating Middle East conflict, particularly disruptions at the Strait of Hormuz affecting oil supplies. Rising crude prices and geopolitical tensions could increase imported inflation, pressure the rupee, and impact the current account deficit if the crisis persists. Despite these challenges, India's sufficient foreign reserves and low CAD provide some resilience amid global uncertainties.