India Projected for Growth Exceeding 7 Percent Despite High Crude Oil Prices: Assocham Assessment

India's Economy Expected to Grow Above 7% Annually Despite High Energy Costs

The Indian economy, driven largely by consumption, has the potential to grow over 7 per cent annually even if crude oil costs $90-100 per barrel, according to industry body Assocham. This assessment was made by Assocham on Wednesday, highlighting the country's resilience to high energy costs.

Assocham noted that India has absorbed severe oil shocks over the years while maintaining strong economic growth. The industry body analyzed data from 2000-01 to 2025-26, which showed that India recorded some of its strongest growth years at moderate to high crude oil price levels. During this period, India's growth was not compromised despite high energy prices.

The data also revealed that in 2022-23, growth was 7.6 per cent, even with oil prices at $93 per barrel (annual average), whereas in 2023-24, growth remained at 7.2 per cent (new series) with oil prices at $82 per barrel. Furthermore, despite oil prices above $100 per barrel during 2011-14, GDP growth remained at 5.2-6.4 per cent.

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However, the sharpest contraction of (-) 5.78 per cent occurred in 2020-21, when prices were among the lowest in the last two decades (under $45/bbl), driven entirely by the COVID-19 pandemic.

Assocham President Nirmal Kumar Minda attributed India's growth story to its consumption segment, which bolsters the supply side through factory expansion, the deployment of more workers, and higher income levels, creating a virtuous cycle of growth and strengthening the resilience of the economy.

According to Assocham, India's GDP growth will remain above 7 per cent in 2026-27, supported by strong consumption, steady exports, and growing capital investment.

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In contrast, the Ministry of Statistics and Programme Implementation (MoSPI) had earlier estimated the Indian economy to grow by 7.4 per cent in the current fiscal, maintaining its status as the world's fastest-growing major economy despite punitive US tariffs and geopolitical tensions. However, Moody's Ratings later slashed India's economic growth estimates for the current fiscal to 6 per cent from 6.8 per cent earlier, citing the ongoing conflict in West Asia.

The Organisation for Economic Cooperation and Development (OECD) also projected India's GDP growth to moderate to 6.1 per cent in the current fiscal from 7.6 per cent growth recorded in 2025-26. Domestic rating agency Icra expects the growth to moderate to 6.5 per cent in FY27, owing to the adverse impact of elevated energy prices and concerns around energy availability amid the West Asia conflict.