Rising energy costs and the trade shock from the Iran War are expected to put pressure on India’s GDP growth and fiscal deficit in FY27. According to an Emkay report, India’s real GDP growth is estimated to decline by 0.4 percentage points in FY26, dropping to 6.6 per cent. Further, the Emkay report stated that headline inflation is estimated to increase by 0.3 percentage points in the fiscal year 2026-27, reaching 4.3 per cent. Additionally, the current account deficit (CAD) is also expected to widen to 1.7 per cent of GDP, an increase of 0.4 percentage points.