Chief Economic Adviser V Anantha Nageswaran warned that the ongoing conflict in West Asia could widen India's current account deficit (CAD) to over 2% of GDP in FY27, a significant increase from less than 1% in FY26. Speaking at the Isaac Centre for Public Policy Growth Conference, he identified four primary channels of economic impact: rising oil and petrochemical prices, a slowdown in global and Gulf trade, persistent logistics costs, and remittance pressures from the Gulf, which contributes 30-40% of India's annual inflows of $120 billion. Nageswaran noted that while India is managing supply disruptions, the prices remain influenced by international markets, making them difficult to control domestically. He expressed optimism about India's preparedness compared to other nations, citing gross FDI inflows projected to reach $90-95 billion in FY26, up from $70-80 billion. However, he cautioned that rising fertilizer and oil costs could challenge fiscal targets for FY27. Nageswaran emphasized the need for India to adapt to geopolitical changes and enhance domestic industry competitiveness through strategic reforms and investments in technology. He highlighted India's substantial refining capacity, which helps mitigate the impact of high crude oil imports, allowing for value addition through domestic processing and exports.