India entered the West Asia conflict from a position of relative strength with robust GDP growth and manageable inflation. February economic activity was steady, with the NIIF India Coincident Index (NICE) reflecting firm domestic demand even as logistics and industrial output softened. The conflict’s impact is, however, becoming visible in March: equities have declined, FPIs have withdrawn (offset by record DII inflows), and surging

energy and commodity prices are weighing on the Indian rupee. Forex reserves provide a buffer against currency volatility. However, the key monitorables remain energy price pass-through and any disruption to India’s trade ties with West Asia. 

Click the link to access the Annexure to NIIF’s Monthly Economic Report for March 2026