NEW DELHI, April 15 -- The government sees limited impact of the West Asia war on India's FY26 growth, but a prolonged disruption could force some pass-through of elevated global oil prices into retail fuel, according to two officials aware of an internal assessment. The conflict, which began on 28 February, has heightened concerns around energy supply disruptions, particularly through the Strait of Hormuz, a key transit route for global oil trade. While the government has so far absorbed the shock through tax cuts and limited price increases, that cushion may narrow if high crude prices persist. In FY26, India's economy is projected to have grown 7.6%, according to the second advance estimates released in February. The fourth-quarter GDP data and provisional full-year figures will be released on 28 May. The government is assessing damage to global energy infrastructure. The situation so far has the potential to reduce India's FY27 growth by 0.3-4 percentage points, said one of the two officials, adding that it is hard to predict the full-year impact based on just 45 days of disruption. "Constant vigil, agility in decision making and preventing panic are central to government's approach in handling the situation," said the second official. Both spoke on condition of anonymity as the matter is sensitive. The conflict has led to the weaponization a key energy transit route, disrupting global supply chains soon after the world economy began recovering from tariff shocks imposed by the US administration in 2025. Washington imposed a 10% global tariff on imports late in February, after the US Supreme Court struck down last year's more hard-hitting tariffs under the International Emergency Economic Powers Act (IEEPA). If the conflict ends within weeks, its impact on global growth is likely to remain limited, easing concerns of a recession or stagflation, the first official said, adding that reconstruction activity could support growth. Suranjali Tandon, associate professor at National Institute of Public Finance and Policy, said the impact on FY27 would depend on the duration of the conflict and the extent of disruption to freight movement through the Strait of Hormuz. "India has cut excise duty to offer relief to consumers. If the conflict continues, it could subdue global demand in the June quarter, which India's exports may not be immune to," said Tandon. If the conflict is resolved soon, its inflation impact may be short-lived and could dissipate as the situation normalizes, she said. Some downside risks to FY27 growth estimates have materialized, said Rishi Shah, partner and economic advisory services leader at Grant Thornton Bharat. The Economic Survey had projected 6.8-7.2% growth for FY27 before the conflict began. "With energy production infrastructure destroyed across major oil facilities in Western Asia, energy price normalization will take quarters, not weeks-even post-ceasefire," said Shah. India's ability to shield consumers from higher global oil prices may come under strain if crude remains elevated....