India faces 4 pc output loss if Hormuz stays shut, oil stays high: Moody’s

Moody’s Analytics, in its latest Asia-Pacific outlook, warned India could face up to a 4% decline in output from its base trajectory if elevated oil prices persist due to the West Asia conflict, identifying India, alongside South Korea and China, as the most exposed economies in the region. It noted India and China face sizeable damage given their dependence on oil and gas imports from Gulf economies caught up in the conflict, while Asia-Pacific growth was already projected to slow to 4% in 2026 from 4.3% in 2025. Morgan Stanley separately calculated that every $10 per barrel rise in oil prices widens India’s current account deficit by 50 basis points. India’s 9-million-strong Gulf diaspora contributes 38% of total remittance inflows — equivalent to $51.4 billion annually — placing $50 billion-plus in remittances at additional risk. Moody’s projects India’s growth at 7.5% in 2026, down from 7.8%, but maintains India as the fastest-growing major economy, according to a report.

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