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India's economy could face rising pressure in 2026-27 as global uncertainties mount, according to the Reserve Bank of India's (RBI) annual report. The central bank highlighted risks from geopolitical tensions in West Asia, higher energy prices, supply chain disruptions, and weather-related shocks. The RBI noted that while India has shown resilience so far, external shocks remain a concern. Elevated crude oil and commodity prices could fuel imported inflation, disrupt trade, and trigger financial market volatility. Market turbulence already intensified in March following the West Asia conflict. Agriculture is another worry, with the outlook tied to the south-west monsoon. The possibility of El Nino conditions raises risks of below-normal rainfall, threatening farm output and rural demand. The India Meteorological Department has projected monsoon rainfall at 90% of the long-period average, but uneven distribution could stress crops. Despite these challenges, the RBI said growth will be supported by private consumption, investment activity, strong corporate and banking balance sheets, and continued government infrastructure spending. Inflation is projected at 4.6% in FY27, though risks remain on the upside if global fuel and commodity prices spike. Powered by Capital Market - Live News
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