New Delhi, June 2 -- The finance ministry's economic review for May seems to acknowledge that the West Asia crisis may cause India prolonged pain. As hope of a quick return to normalcy fades, policymakers are on alert for good reason.

The review flags how long the Strait of Hormuz remains disrupted as the "single most consequential variable for India's external and price outlook." It notes a rise in inflation risk, with high wholesale prices expected to push retail prices up even as weak monsoon rainfall looks likely to combine with the Gulf war's oil shock against price stability.

The Reserve Bank of India (RBI) has a tough task as it reviews monetary policy this week, given this year's headwinds against growth. In a world that is star...