New Delhi, June 26 -- India's economic outlook has improved materially following the US-Iran peace deal, with lower crude oil prices reducing inflationary pressures, easing fiscal risks and strengthening the country's external balances, according to a new research note by Goldman Sachs.

The investment bank has raised its calendar year 2026 gross domestic product (GDP) growth forecast for India by 30 basis points to 6.8%, while lowering its inflation projection by 20 basis points to 4.4% and trimming its current account deficit estimate from 1.3% to 1.1% of GDP.

The upgrade comes after India weathered the Middle East conflict better than expected, aided by fiscal and quasi-fiscal measures that absorbed a significant portion of the energy...