Though the hikes are not enough to cover the losses suffered by oil marketing companies, they will result in higher transportation cost, spike inflation and weigh in on growth.
The conflict has indeed disrupted supply chains and raised international freight and insurance costs. This, coupled with a depreciating rupee, will raise the cost of imported inputs, notes Crisil Intelligence. This sharp rise in the cost is expected to be passed on to consumers.
The Reserve Bank of India, in its recent bulletin, points out that the Indian economy demonstrated strength despite persisting geopolitical and trade-related uncertainties. Early results of listed private non-financial companies for Q4 2025-26 also showed an improvement in business performance over the previous quarter, with aggregate sales and operating profit recording a double-digit growth. The commentary from corporates along with the fourth quarter and FY26 earnings highlights cost pressures. Large companies have been able to maintain their profitability and protect margins through price hikes and good demand has helped volume growth. However, given the volatile situation, the corporates are uncertain about how long the situation will last.
Against this backdrop, the cover story of Industrial Economist focuses on Prime Minister Narendra Modi’s appeal for austerity measures and the challenges the country faces from the conflict.