The Reserve Bank of India (RBI) highlighted in its April bulletin that the persistent conflict in West Asia and ongoing supply chain disruptions could pose significant challenges to the Indian economy. These challenges may manifest as higher energy costs, increased input cost pressures, and disruptions in trade flows. The article noted that while domestic economic activity remains resilient in several sectors, some areas are experiencing a slowdown. The conflict has intensified pressures on global supply chains, particularly since March, although some easing was observed in early April. The RBI pointed out that inflation remains within the tolerance band, but risks are rising due to supply-side disruptions, including weather-related uncertainties. The potential for second-round effects, where supply shocks could lead to demand shocks, requires continuous assessment. A temporary ceasefire between the US and Iran has provided a brief respite for the global economy, but the RBI maintains that strong macroeconomic fundamentals will support India's resilience against these external shocks.