Amid geopolitical tensions, industry body Assocham has said that the Indian economy, largely driven by consumption, has the potential to grow at over 7 per cent in 2026-27 even if crude oil costs $90-100 per barrel. It noted that the growth will be supported by strong consumption, steady exports, and increasing capital investment. It said that India’s resilience to high energy costs has enhanced significantly over the years, as the country has absorbed major oil shocks while maintaining robust growth. Based on its analysis, Assocham emphasised that India has demonstrated the ability to manage elevated energy prices without compromising its economic growth trajectory.

It added that data analysed for the period from 2000-01 to 2025-26 shows India recorded some of its strongest growth years even at moderate to high crude oil price levels. For instance, in 2022-23, the economy grew by 7.6 per cent despite oil prices (Indian crude basket) averaging $93 per barrel. In 2023-24, growth remained strong at 7.2 per cent (new series), with oil prices averaging $82 per barrel. It further highlighted that even during 2011-14, when oil prices exceeded $100 per barrel, GDP growth remained in the range of 5.2-6.4 per cent. In contrast, the sharpest contraction of (-)5.78 per cent occurred in 2020-21, when oil prices were among the lowest in the past two decades (below $45 per barrel), primarily due to the COVID-19 pandemic.

Nirmal Kumar Minda, President of Assocham, said ‘India’s growth story is largely driven by consumption, which in turn strengthens the supply side through factory expansion, increased employment, and rising income levels. This creates a virtuous cycle of growth and enhances the overall resilience of the economy.’ Meanwhile, the Indian economy had grown at 6.5 per cent in the previous fiscal year. Moreover, according to the first advance estimates of GDP released by the Ministry of Statistics and Programme Implementation in January, the Indian economy is projected to grow by 7.4 per cent in the current fiscal year, maintaining its position as the world’s fastest-growing major economy despite punitive US tariffs and ongoing geopolitical tensions.