New Delhi, June 8 -- India's real gross domestic product (GDP) grew an impressive 7.7% in FY26, up from 7.1% in FY25. The drag from US tariffs was offset by the strength in consumer spending and domestic investment activity.

But FY27 is shaping up to be a roller-coaster ride. The West Asia conflict has meant high crude oil prices, rupee at record lows and fiscal slippage risks. High-frequency indicators such as freight movement and fuel consumption point to a moderation in activity over the past two months.

Consumer price inflation (CPI) is also expected to accelerate amid higher food prices, driven by El Niño risks, and rising fuel costs following a diesel price hike. Weaker purchasing power could, in turn, weigh on domestic consu...