The World Bank has warned that India’s projected economic growth of 6.6% for the financial year 2026-27 (FY27) is tilted towards the downside, citing rising global uncertainties and domestic challenges. 

Nevertheless, the Bank has listed several reasons why the economy may grow at a slower rate than anticipated; primarily ongoing geopolitical issues regarding the Middle East (particularly with Iran) and potential closure or disruption to shipping in the Strait of Hormuz.

These will both increase India's oil import bill, create upward pressure on inflation, and negatively impact India's current account deficit through higher prices.

Other downside risks include:

Weak global demand

Volatility in financial markets

Slower recovery in private investment

Possible impact of erratic monsoon on agriculture