Every $10 rise in crude may add 60 bps to India's inflation: CareEdge Global

Rising global crude oil prices due to tensions in West Asia could push up India's inflation significantly, according to Revati Kasture, CEO of CareEdge Global IFSC Limited.

A USD 10 increase per barrel in crude oil prices could raise India's headline inflation by 55-60 basis points in FY27.

"Every USD 10 rise in average crude prices in FY27 can increase India's headline inflation by 55-60 basis points, given the higher weight of fuel in the CPI basket," Kasture told ANI in a mailed interview.

She said oil marketing companies may absorb some of the initial impact, but "sustained high prices could lead to pass-through to consumers," increasing inflation further. Also Read| War fades the Goldilocks moment.

RBI's next move will matterLive EventsIndia is particularly exposed because it depends heavily on West Asia, which supplied about 51 per cent of its crude and petroleum imports in the first 10 months of FY26.

With crude prices currently above USD 115 per barrel, import costs have risen sharply, adding to inflation risks. Higher oil prices could also hurt economic growth by widening the current account deficit (CAD).

"Higher oil prices could widen the current account deficit (CAD) for FY27 by 30-40 basis points for every USD 10 increase in average price," Kasture said. Despite these challenges, India's growth for FY27 is expected to remain between 6. 5 per cent and 6.

8 per cent, supported by strong domestic demand. Currency pressures may also increase.