The ongoing Iran-Israel conflict might not be very good for India, said Chief Economic Adviser V Anantha Nageswaran, further adding that the global growth drop could also stretch on for several years. He however refused to equate the impact of the current situation with the 2008 global financial crisis. Nageswaran stated that if India was able to move faster, with more dynamism, the growth rate could improve even further. 

“The current conflict between Israel and Iran may not be too good for us. In the last week, crude oil prices have risen to about USD 73-74 per barrel… This raises essential risks for India. But in 2022, when the Russia-Ukraine war started, crude oil prices went above USD 100 per barrel. Yet the Indian economy was able to sustain a 7 per cent growth rate,” he told news agency ANI. 

“A lot depends on how much the crude oil prices rise further and how long that period lasts… As far as tariffs are concerned, it need not necessarily be against India’s interest. Ultimately, it also matters what tariff rates India’s competing countries get. It is premature to say that tariffs will make our exports difficult for now,” he said. 

Nageswaran said it would be premature to say now that the current situation could match the impact of the 2008 global financial crisis. “We may not have a big growth drop like it happened in 2009 globally… This time, it could be a slow-moving event that lasts several years. In some sense, its average impact may be more than the 2008 global crisis, but it will be spread out over many years,” he said. 

The CEA underscored the challenges in the global context, elaborating that economic and political conditions have become unfavourable for growth. “Given these situations, the Indian economy has maintained a good growth rate in 2024-25 at 6.5 per cent. In 2025-26, we have estimated it to be around 6.3 per cent to 6.8 per cent…” he said.

“The difference between India’s growth rate and the average growth rate of developed economies is much higher now than it was even between 2003 and 2008, when we were growing at 8-9 per cent. To achieve 6.5 per cent on a steady basis in this environment is a creditable achievement. India is poised to maintain that track record,” he added. 

“The current government came out with important policy measures in the last two budgets… If we are able to move faster and convey a sense of dynamism, then chances are high that we can even improve on our growth rate in the coming years,” he told the news agency. 

Nageswaran also said that the production-linked incentive had done well and improved India’s self-reliance in many sectors. “From nothing to today, we are exporting between USD 10-15 billion worth of mobile phones. We have created domestic capacity in many product areas regarding renewable energy…”