As the conflict completes a month, 61.8 per cent of CEOs surveyed believe emerging challenges could push India’s growth towards the lower end of the 6.8-7.2 per cent range.
Heading into FY27, CEOs cited a fragmented global order, the prolonged impact of the West Asian conflict, and supply chain disruptions among their biggest concerns.
“Navigating global uncertainty while sustaining long-term growth investments is the biggest worry,” a CEO said, while another flagged the spillover impact of global geopolitical volatility on inflation and supply chains as a key watchpoint.
The report mentioned that the impact of the conflict on India will be felt through four channels: supply disruptions to oil, gas and fertilisers and more importantly, to exports as well; higher import prices; higher logistics costs (e.g., freight and insurance) and a possible decline in remittances by Indians in the Gulf countries.
The combined impact across the four channels on growth, inflation, the fiscal balance, and external balances could be significant, the CEA said.
About 44.1 per cent of CEOs believe geopolitical uncertainty would impact job creation. Artificial intelligence (AI) could also pose a near-term challenge, with 55.9 per cent saying it may affect jobs within their companies and across the industry.
The rupee has been under pressure from higher crude prices, dollar strength and foreign portfolio outflows amid the West Asia conflict. On Monday, it touched a record low of 95.21 per dollar. The CEOs’ forecast for the rupee by the end of FY27 ranges between 83 and 100 to a dollar. Of the 30 who provided a forecast, 19 expect it to range between 92 and 100; meanwhile, eight expect it to be between 83 and 90.
A weaker rupee could fuel imported inflationary pressures, pushing up the cost of goods such as fuel and other commodities. About 94.1 per cent of respondents said the war would have an inflationary impact.
Most CEOs believe the war could affect inward foreign direct investment (FDI) into India, as it heightens geopolitical uncertainty and financial market volatility.
Over the past month, the Sensex has fallen more than 10 per cent, weighed down by geopolitical tensions and foreign investor outflows. CEOs, however, are evenly split on the index’s near-term trajectory: 44.1 per cent expect it to remain in the 70,000–75,000 range, while an equal share believe it will stay above 75,000.
(Ishita Ayan Dutt with Shivani Shinde, Sharleen D’Souza, Aathira Varier, Prachi Pisal, Abhishek Kumar, Ruchika Chitravanshi, Gulveen Aulakh, Peerzada Abrar, Aashish Aryan, Udisha Srivastav, Shine Jacob, Sunder Sethuraman and Hemant Kumar Rout)
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