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India's Growth Strong, But Global Risks Mount: Finance Ministry Flags Oil, Yields, Capital Flows
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Moneycontrol•01-10-2026, 10:44
India's Growth Strong, But Global Risks Mount: Finance Ministry Flags Oil, Yields, Capital Flows
- •India's economy is projected to grow 7.3% in Q2 FY27, despite a moderation in growth momentum and rising global risks.
- •The Finance Ministry warns of unsettled India-US trade relations, citing the Graham Bill empowering the US President to impose tariffs on countries purchasing Russian crude oil.
- •India faces a stiff challenge to attract capital flows amidst a global AI investment boom and increased competition for investment from developed economies.
- •Inflation risks are building due to climate conditions (El Niño), geopolitics, and monetary tightening, with potential impacts on Rabi crops and imported inflation.
- •The ministry emphasizes the need for India to become a more "competition-friendly" economy, rather than just "business-friendly," to foster innovation and manufacturing.
Key Questions Answered
According to the Finance Ministry's nowcasting model, India's real GDP is expected to grow by 7.3 percent in the second quarter of FY27.
The US Congress passed the Graham Bill, which received presidential assent and empowers the US President to impose tariffs of up to 100 percent on countries that purchase Russian crude oil.
Net FDI inflows into India rose to $13.4 billion during the April-July 2026 period, compared to $9.7 billion in the corresponding period of the previous year.
