New Delhi, Oct. 1 -- India faces renewed pressure on its currency and capital flows as a sharp rise in oil prices and global bond yields worsens the external environment, even as domestic economic activity remains resilient, the September Monthly Economic Review said.

"India, as do other developing nations, faces a stiff challenge to attract capital flows," the review said, warning that the competition for global investment has intensified as developed economies seek capital for renewed manufacturing activity amid increasing weaponisation of global supply chains. "Thus, short-term pressure on Indian assets, including the currency, remains," it added.

The review said global conditions had "turned unfavourable again", with oil prices spik...