Morgan Stanley has revised its GDP growth forecast for India in fiscal year 2026-27 to 6.7%, an increase from the earlier projection of 6.2%. This adjustment occurs despite geopolitical concerns in West Asia and a downward revision of average crude oil prices to $87.5 per barrel from a previous estimate of $95. The firm's Chief India Economist, Upasana Chachra, noted that while growth is expected to peak in the quarter ending June 2026, it will face challenges from sustained high oil prices, which could significantly impact household and business consumption. Furthermore, external demand is anticipated to remain uneven, influenced by ongoing geopolitical tensions and the status of the India–US trade agreement. Despite these challenges, rural consumption in India has shown resilience, outpacing urban demand for the past eight quarters, supported by favorable monsoon seasons. However, concerns about a potentially weaker monsoon in 2026 due to El Niño conditions could affect agricultural yields and farm incomes. Overall, while growth risks are tilted to the downside, quicker normalization of global commodity prices could provide an upside for the Indian economy.