India received a measure of relief after the United States waived, for the time being, additional tariffs of 100 per cent on major buyers of Russian oil. The decision reduces the immediate risk of fresh trade penalties for Indian refiners.
The waiver gives Indian refiners greater flexibility in crude purchases, though experts caution that the relief may be temporary. Renewed American pressure on Russian-oil buyers remains possible.
India’s inflation pressures remain significant. Headline CPI inflation rose to 4.8 per cent in August, marking the third consecutive month above the Reserve Bank’s 4 per cent target.
The Reserve Bank raised the repo rate by 25 basis points to 5.50 per cent and adopted a calibrated tightening stance. It also revised its baseline CPI inflation projection for 2026-27 upward to 5.2 per cent.
Higher crude oil prices, weather disruptions and a 13 per cent cumulative monsoon deficit are major drivers of food and fuel inflation. Core inflation also rose to 4.2 per cent in August.
India’s crude oil costs averaged about $114 to $116 per barrel in September, according to the Reserve Bank’s October Monetary Policy Report. The rise has increased transport, manufacturing and services costs.
The rupee has shown some recovery after Reserve Bank measures to support the currency. It had gained for four consecutive sessions and touched 95.17 against the dollar, its strongest level in a month.
The Reserve Bank created a special dollar window for state-owned oil marketing companies—Indian Oil, Hindustan Petroleum and Bharat Petroleum—to meet daily foreign-exchange requirements. The facility began operating on October 12.
The International Monetary Fund raised India’s FY27 growth forecast to 7 per cent. It also backed India’s GDP data revamp and said rupee pressure should not be seen as a sign of economic failure.
The rupee’s movement remains tied to global interest rates, investor risk appetite and oil prices. As a major oil importer, India remains vulnerable to energy shocks.
HCLTech shares rallied after the IMF’s improved growth outlook for India. Technology stocks are being watched closely amid global demand uncertainty and currency movements.
Global markets remain cautious as traders assess the impact of US sanctions policy, crude prices and geopolitical risk. Energy-importing economies face particular pressure from elevated oil costs.
China’s possible restrictions on exports of AI, biotechnology and solar-related technologies could affect global supply chains and clean-energy investment plans.
Corporate India is likely to face continued cost pressure from fuel, logistics and input prices. Companies with strong pricing power and export exposure may be better placed in the current environment.
