New Delhi, March 30 -- The Indian economy faces an uncertain near-term outlook, with the war in West Asia and the blockade of the Strait of Hormuz raising risk to inflation in medium term, the finance ministry's monthly economic review said on Saturday. The review flagged "subdued" net foreign direct investment (FDI), which has remained negative for five consecutive months. Gross FDI inflows rose to $79.3 billion during April-January FY26, up from $69.2 billion in the same period of FY25. "However, this momentum in gross inflows did not translate into higher net FDI, which remained subdued at USD 1.7 billion during the period," it said. The weak net position reflects persistently elevated repatriation by foreign investors ($49.5 billion) and increased outward investment by Indian firms ($28.1 billion). Geopolitical uncertainty has also dampened global risk appetite, pushing portfolio flows into negative territory in March 2026. Around $12.5 billion left on the portfolio side in March alone. Foreign exchange reserves, however, remain comfortable, providing import cover for more than 11 months. Beyond portfolio outflows, higher global prices and logistics costs have weighed on the rupee, which depreciated to Rs.93.88 per US dollar as of March 24, reflecting trade-related pressures and heightened risk aversion in global markets. The geopolitical developments have introduced a complex, multi-layered set of risks for India, given its position as a major energy importer with strong trade, investment, and remittance linkages with the West Asia region. "While India's relatively robust macroeconomic fundamentals and sustained policy efforts provide resilience, the evolving situation warrants close monitoring and calibrated policy responses," the review said. The near-term outlook remains uncertain, with external shocks posing downside risks to growth through higher input costs and supply constraints, even as domestic demand may help cushion the impact....