Tag: India economy

Uday Kotak Flags India’s $90 Billion Gold Import Risk for FY27, Proposes Policy Panel

Veteran banker and Kotak Mahindra Bank founder Uday Kotak has urged the Indian government to rethink its approach to rising gold imports, warning that the country’s gross gold import bill could surge to $88–90 billion in the next fiscal year.

Speaking at the Conference on Financing India’s Journey Towards Viksit Bharat in New Delhi, Kotak said India must find a way to balance household demand for gold with the pressure that soaring imports place on the nation’s external finances. He suggested the government consider setting up a committee to examine the issue in depth.

Growing Current Account Deficit Concerns

Kotak projected that India’s current account deficit could widen to around $60 billion in FY27 if crude oil prices average nearly $90 a barrel. Against this backdrop, he expects gold imports to climb to as much as $90 billion.

The warning comes amid geopolitical tensions that have pushed energy prices higher and added strain to India’s import bill. According to Reuters, India’s crude oil imports rose 25.8% year-on-year to $16.69 billion in August, while the country’s crude basket averaged $90.19 a barrel during the month.

Gold imports, meanwhile, fell sharply to $2.3 billion in August. Data from the World Gold Council showed a 58% year-on-year drop, although the council anticipates that festive and wedding-related demand will support the market in the months ahead.

Household Gold and Fiscal Discipline

Kotak noted that Indian households hold substantial wealth in gold, but much of that wealth remains outside productive economic activity. Any policy response, he argued, should respect people’s demand for gold while addressing the pressure it creates on the capital and current accounts.

He also called for tighter fiscal consolidation, pointing out that India’s consolidated fiscal deficit remains above 7%. Experts say the government must maintain fiscal discipline even as it supports economic growth.

Kotak’s remarks highlight a long-standing policy challenge for India: how to accommodate strong household demand for gold without letting rising import values significantly worsen external-sector pressures.

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October 21, 2026
RBI Holds Repo Rate Steady at 5.25% Amid Middle East Tensions

The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged at 5.25%, maintaining a cautious stance as inflation risks and global uncertainties persist due to the ongoing conflict in the Middle East.

The decision was announced following a three-day meeting of the Monetary Policy Committee (MPC), which concluded on Wednesday. The six-member panel, led by Governor Sanjay Malhotra, voted unanimously to hold the rate steady. The MPC also retained its monetary policy stance as ‘neutral,’ signaling that future moves will be guided by incoming economic data.

In addition to the repo rate, the RBI kept the Standing Deposit Facility (SDF) rate unchanged at 5% and the Marginal Standing Facility (MSF) rate along with the bank rate at 5.5%.

Governor Malhotra noted during the announcement, “Crude oil prices, currencies, and financial markets remain volatile, fluctuating in line with the changing intensity and uncertainties of the West Asia conflict. In this backdrop, the MPC met for its third bi-monthly meeting of this financial year to deliberate and decide on the policy.”

The central bank last adjusted the repo rate in December 2025, when it was lowered from 5.50% to 5.25%. Since then, the RBI has held rates steady, aiming to balance inflation control with support for economic activity.

By keeping the repo rate unchanged, the RBI hopes to prevent inflation from accelerating further without putting excessive pressure on economic growth. The repo rate is the key interest rate at which the RBI lends to commercial banks, directly influencing loan and deposit rates across the economy.

August 8, 2026
Crude Oil Prices Climb as US-Iran Tensions Resurface, Brent Holds Above $70

Crude oil prices rose on Monday as renewed US-Iranian conflict revived concerns over supply disruptions. Brent crude futures rose 0.67% to $72.47 a barrel, while US West Texas Intermediate (WTI) advanced 1.80% to $70.05 a barrel. The rebound followed Brent’s drop below $70 on Friday, its first move below that level since February 27, before the latest escalation involving Iran.

The gains were modest, but traders remain focused on the risk of disruption around the Strait of Hormuz, one of the world’s key oil and liquefied natural gas shipping routes. Natural gas futures climbed 0.82% to 3.306 per MMBtu, gasoline rose 0.90% to 2.9836, and heating oil added 1.30% to 3.2499, reflecting continued concerns over energy supplies as tensions persist around the Gulf.

US-Iran Tensions Keep Oil Market on Edge

The jump in crude prices followed renewed military action between the US and Iran. Washington is said to have suspended talks over the conflict after an attack on commercial shipping off the coast of Iran by its military forces in the Strait of Hormuz, a move in response to Tehran’s attacks on the shipping vessels. The two sides are likely to meet in Doha on Tuesday for further discussions, according to an Axios report cited by Bloomberg. However, the weekend escalation has already slowed some oil and natural gas shipments through the region.

The large crude carrier Kiku, which was transporting some 2 million barrels of oil, was struck and was last seen near Fujairah, a major port in the United Arab Emirates on the Gulf of Oman. US Central Command indicated that while coastal shipping traffic was continuing, some tankers reportedly abandoned attempts to exit.

India Impact Remains Contained for Now

Crude price remains a key macroeconomic indicator for India, since it imports around 85% of its oil requirement. A prolonged increase in crude can put pressure on the rupee, increase the import bill, and raise inflation risks. “Crude oil prices are currently trading in the $69–70 per barrel range, remaining well below the highs witnessed during the recent Middle East conflict. Although the latest flare-up in regional tensions triggered a brief bout of volatility in energy markets, crude prices have remained largely contained, providing continued relief to India’s macroeconomic outlook,” said Ponmudi R, CEO of Enrich Money.

June 30, 2026