New Delhi, April 11 -- The Asian Development Bank (ADB) on Friday projected India's GDP growth to remain "robust" at 6.9% in the current fiscal, and rise to 7.3% in next fiscal driven by strong domestic demand, and supported by easing financing conditions and lower US tariffs on Indian goods. In its Asian Development Outlook April 2026 report, the ADB said a prolonged conflict in the Middle East could undermine India's macroeconomic performance through multiple channels, including higher energy prices, trade flow disruptions and weaker remittance inflows. It projected inflation to more than double from 2.1% in 2025-26 to 4.5% in the current fiscal due to a rebound in food prices from earlier declines, higher global oil prices, currency weakness, and rising precious metal prices. It projected inflation to ease to 4% in the 2027-28 fiscal on account of lower oil prices and moderating food prices. "A prolonged conflict in the Middle East is the single biggest risk to the (developing Asia and Pacific) region's outlook, as it could lead to persistently high energy and food prices and tighter financial conditions," said ADB Chief Economist Albert Park. "With renewed trade policy uncertainty posing additional risks, it is essential that governments implement sound macroeconomic policies to sustain growth and contain inflation, with targeted support measures to protect vulnerable households." ADB expects economic growth in developing Asia and the Pacific to slow to 5.1% in both 2026 and 2027, from 5.4% last year, weighed down by the conflict in the Middle East and continuing trade uncertainty. The recent surge in energy prices and potential disruptions to fertiliser markets linked to the conflict in the Middle East could lead to inflationary pressure on global food prices, it said. With regard to India, ADB said GDP growth is projected to decline to 6.9% in current fiscal (April-March), from 7.6% in 2025-26 primarily due to external challenges, and expand to 7.3% in FY2027 as consumption and investment benefit from favourable policies and the external environment improves. A key policy challenge of India is to rationalise subsidies and transfers to protect vulnerable groups while preserving fiscal space for growth-enhancing public investment, it said. "Despite a worsening global economic and geopolitical environment, growth in India is forecast to remain robust at 6.9% in fiscal year 2026 (2026-27). Activity will be underpinned by strong domestic demand, supported by easing financing conditions, and lower US tariffs on Indian goods," it said. ADB's growth projections compare with 6.9% estimated by the RBI, 6.6% by the World Bank, 6.1% by the OECD and 6% by Moody's Ratings. Growth is projected to rise to 7.3% in FY2027-28, driven by domestic reforms, the effects of trade agreements with the European Union, and expected government salary increases, it added....