India's growth outlook stays steady despite rising oil prices and energy route risks

According to DBS Bank executive Radhika Rao, the main external threats to India's economy are rising oil prices and potential disruptions to energy transit routes, yet these have not derailed the country's growth outlook. India's strategy of sourcing crude from multiple suppliers and its ability to secure alternative supplies cushion the shock. Rao expects growth to ease somewhat in the latter half of the year but maintains a 7.3% annual increase.

Inflation is projected to stabilize at a higher level following a period of benign rates. The Reserve Bank of India's unprecedented foreign-reserve accumulation provides a sizable safety net against currency volatility, commodity price spikes, and shifting global risk sentiment, granting policymakers greater flexibility than in previous cycles. Looking ahead, attention will turn to the maturity profile of foreign-currency non-resident deposits due in three to five years, with part of the reserve stock potentially earmarked to meet those obligations and limit dollar demand pressures.