Washington, April 15 (NationPress) Following the Iran-US conflict, escalating crude oil prices and wider commodity challenges may pose a risk to India’s inflation forecast and increase production costs across various sectors, cautioned Chief Economic Advisor V. Anantha Nageswaran on Wednesday.

At the US-India Economic Forum 2026, Nageswaran noted that the ramifications of global conflict reach beyond just crude prices, affecting a broader range of essential inputs. “It’s not limited to oil prices; it encompasses the commodities that are crucial,” he stated.

The cost of crude oil imported to India surged recently, hitting approximately $113 per barrel in March, while April rates linger around $110. He warned that even if market corrections are anticipated, prices are likely to stay well above the $60–65 range observed in prior years.

“I believe an average price closer to $90 would be a more realistic expectation,” he remarked, indicating ongoing economic pressures.

Increased energy prices directly contribute to inflation and production expenses. Nageswaran emphasized that India needs to consider the rising costs not only in oil but also in petrochemicals, fertilizers, and gas—critical inputs for both agriculture and industry.

“Given that 2025–26 was characterized by mild inflation, the implications of this situation need to be incorporated into macroeconomic assessments,” he added.

The surge in global commodity prices since late February is already showing effects in month-on-month and year-on-year increases, raising alarms over operational costs for businesses and potential price pressures on consumers.

Nageswaran mentioned that uncertainty remains elevated, especially regarding the pace at which energy markets might stabilize. “It’s one thing for the conflict to conclude… but quite another for energy markets to return to normalcy,” he pointed out.

The risks extend to India’s fiscal and external accounts, as rising import costs could exacerbate deficits, even if economic growth remains stable.

Nevertheless, he highlighted that India approaches this situation from a position of strength, with stable macroeconomic indicators and consistent growth momentum. “We are tackling these challenges from a position of macroeconomic strength,” he asserted.

India has experienced moderate inflation in recent years, aided by supply-side initiatives and enhanced infrastructure. The government has also intensified its monitoring of global commodity prices to address emerging economic pressures.

Now, the challenge lies in managing inflation without hindering economic growth, as policymakers contend with a volatile global landscape marked by geopolitical tensions and supply chain disruptions.

As the world’s fourth-largest economy, India is significantly reliant on imported energy, rendering it particularly susceptible to global oil fluctuations. Crude oil constitutes a substantial portion of the nation’s import expenses and directly impacts inflation and fiscal stability.

In recent years, the government has employed a combination of tax modifications, subsidies, and supply management strategies to mitigate the effects of price surges while bolstering foreign exchange reserves to cope with external pressures.