New Delhi, March 6 -- Global uncertainty is expected to remain elevated for some time amid escalating geopolitical tensions in West Asia, and the implications of the ongoing conflict could have deeper and longer-lasting effects on India than currently understood, according to the Finance Ministry's February 2026 Monthly Economic Review.

The report noted, "If the crisis persists, it could have material implications for the exchange rate and the current account deficit and could stoke inflationary pressures."

The report says that the geopolitical situation intensified sharply following the United States and Israel's strikes on Iran on February 28, 2026, which killed Iranian Supreme Leader Ali Khamenei and triggered retaliatory threats fro...