India Inc experienced a year-on-year revenue growth of 8.5-9% in the fourth quarter of fiscal 2026, driven by increased volumes in automobiles and white goods following GST rate adjustments in September 2025. However, projections suggest a moderation in growth for the first quarter of fiscal 2027, with an expected 8-8.5% revenue increase. This slowdown is attributed to rising prices influenced by geopolitical events like the West Asia conflict.
The impact of the conflict was evident in sectors directly linked to the region during the fourth quarter of FY26, with broader effects anticipated in the initial two quarters of FY27. India’s economy, highly reliant on West Asia for energy, trade, and remittances, faces sensitivity to prolonged disruptions, especially due to its significant crude oil and liquefied natural gas imports passing through the Strait of Hormuz.
Notably, West Asia plays a crucial role in India’s economic landscape, contributing to about 13% of goods exports and nearly 38% of remittance inflows. Sectors like gems and jewellery, as well as processed food categories such as rice and meat, have substantial exposure to the region.
