Ongoing Middle East conflict to discourage investment into India, offset trade deal positives: BMI
Business 03 Mar, 2026

Ongoing Middle East conflict to discourage investment into India, offset trade deal positives: BMI

Business To Business, New Delhi, 03 March 2026: BMI, a unit of Fitch Group, on Tuesday cautioned that the ongoing conflict in the Middle East could dampen investment sentiment in India and potentially offset the positive impact of trade deals with the European Union and the United States on GDP.
Growth Outlook Unchanged — For Now
Despite the geopolitical uncertainty, BMI:

  • Maintained India’s FY2026/27 GDP growth forecast at 7%
  • Noted that policy uncertainty indicators had remained favourable so far in 2026
  • Flagged rising risks linked to escalating regional tensions
In its India outlook report, BMI stated:
“From March onwards, we expect uncertainty to increase sharply due to the ongoing conflict in the Middle East. We believe this will discourage investment in India, offsetting the (EU and US) trade deals' positive effects on GDP.”
Key Concerns Highlighted
  • Rising geopolitical instability
  • Potential spike in oil prices
  • Investor caution amid global uncertainty
  • Delayed capital expenditure decisions
BMI added that it is currently assessing the geopolitical developments to quantify their potential impact on India’s economic growth trajectory.
While trade agreements with the EU and US are expected to boost exports and market access, sustained global instability could weigh on private investment and capital flows.

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