India, April 23 -- India's fiscal deficit is likely to breach the budgeted target for the current fiscal and hit 4.5 per cent of GDP as the Government's policy response to the West Asia conflict could strain public finances, research firm BMI said on Wednesday.

The Government in the 2026-27 Budget had projected a 4.3 per cent fiscal deficit, a tad lower than 4.4 per cent as per revised estimates for 2025-26. BMI also expects the Government to introduce policies to redirect critical inputs to key industries, restrain business costs and improve financial support for firms.

BMI said it also expects the Government to consider restrictions on exports of scarce inputs such as helium and sulphur - used for producing semiconductor chips.

It sa...