India’s economic growth continues to show resilience, and concerns that rising crude oil prices could significantly disrupt the country’s growth trajectory are largely a matter of perception rather than reality, according to Neelkanth Mishra, India’s newly appointed Executive Director at the World Bank and a member of the Prime Minister Narendra Modi’s Economic Advisory Council.
Mishra, in an interview with ANI, discussed the outlook for the Indian economy amid ongoing tensions in West Asia. He maintained that India is in a stronger position than many other energy-importing nations to withstand elevated oil prices without suffering a major slowdown in economic growth.
Mishra is widely recognised for his contributions as an economist and market strategist.
Discussing India’s growth outlook, Mishra said the economy grew by 7.1 per cent in FY25 despite facing both monetary and fiscal tightening, which led to slower credit growth and efforts by the government to reduce the fiscal deficit. He argued that such growth under restrictive conditions demonstrated the economy’s underlying strength, stating, “If our growth was 7.1% despite fiscal and monetary tightening, it means without that, growth would have been higher.”
He added that with credit growth now picking up and the fiscal deficit budgeted at a level similar to last year, the economy was likely expanding at an annual pace of over 8% by February-March 2026.
To support his assessment, Mishra pointed to several indicators on the ground, including a 29 per cent year-on-year rise in car sales in May, robust footfall and sales at shopping malls, and cement demand growing at a high single-digit rate. Emphasising the significance of cement consumption as an economic indicator, he said, “You can’t build inventory of cement…whatever is being bought is being consumed,” arguing that such trends do not align with pessimistic views about the economy.
On the impact of higher crude oil prices, Mishra said India is less exposed to oil shocks than is often assumed. He explained that Indian oil marketing companies also operate refineries and therefore benefit when refining margins increase, particularly through higher diesel crack spreads. Illustrating the point, he said that while a pre-conflict crude price of USD 70 per barrel combined with a USD 20 diesel crack resulted in a landed cost of USD 90, a scenario with crude at USD 100 and a USD 50 crack would push costs to USD 150 in many countries. For India, however, the landed cost would be closer to USD 120 due to the gains from refining operations, he noted.
‘India does not need to raise any further fuel prices’: Mishra
He further noted that diesel crack spreads have since moderated and crude prices have eased to around USD 94-95 per barrel. As a result, “India does not need to raise any further fuel prices.” Mishra added that concerns about the need for an implicit fuel subsidy of ₹20-30 per litre were overstated, saying the existing cushion of around ₹8 per litre remains adequate, particularly as oil prices have softened following inventory releases by China and the United States.
Mishra argued that India is in a much stronger fiscal position than during previous periods of oil-price volatility. While he acknowledged that rising energy costs continue to pose a risk, he said a combination of robust domestic demand, easing fiscal and monetary constraints, and India’s advantage as a refining hub should enable the economy to maintain a growth rate of around 7.5-8% even if crude prices remain elevated.
According to Mishra, the greater challenge lies not in the economy’s fundamentals but in public perception, as concerns over oil prices continue to shape sentiment. He suggested that the prevailing narrative may take time to change until economic data clearly demonstrates the country’s resilience.
