PM Modi, India’s economy is growing faster than most major economies, but global challenges are beginning to cloud the outlook.
From rising geopolitical tensions to concerns over trade and energy prices, policymakers are closely watching risks that could affect growth in the coming months.
Against this backdrop, Prime Minister Narendra Modi chaired a meeting of the Prime Minister’s Economic Advisory Council (PM-EAC) on June 6 to discuss measures aimed at keeping India’s growth story on track.
PM Modi and economic advisors discuss ways to strengthen growth
According to an official statement, the meeting focused on ideas and policy measures that could help boost India’s economic growth during a period of global uncertainty.
The discussions also covered reforms aimed at improving ease of living and ease of doing business, two priorities that remain central to the government’s economic agenda.
Officials said council members shared their assessment of the ongoing West Asia conflict and its potential impact on both India and the global economy.
Read More : SpaceX IPO May Wait Years for S&P 500 Entry Despite $1.8 Trillion Valuation
PM Modi Reviews Growth Strategy Amid Global Turmoil
Prime Minister Narendra Modi chaired a high-level meeting of the PM-Economic Advisory Council (EAC-PM) to assess the impact of global challenges and formulate measures to sustain India’s strong economic momentum. The discussions focused on shielding the economy from external shocks, particularly the ongoing West Asia conflict, while accelerating domestic reforms and investment-led growth.
Countering the Impact of the West Asia Conflict
The Council reviewed a detailed impact assessment prepared by NITI Aayog, covering potential risks across key sectors:
• Trade & Shipping: Rising freight costs and disruptions in major maritime routes could affect exports and imports.
• Energy & Inflation: Volatile crude oil and energy prices remain a key concern for inflation and household spending.
• MSMEs & Agriculture: Small businesses, manufacturers, and farmers may face higher input costs, supply-chain disruptions, and export challenges.
Strong Economic Momentum
The meeting comes against the backdrop of robust economic performance:
• FY26 GDP Growth: 7.7%
• Q4 FY26 Growth: 7.8%
• Manufacturing Growth: 8.8%
• Services Growth: 9.3%
These figures highlight India’s resilience despite slowing global growth and geopolitical uncertainty.
Reform Agenda
PM Modi emphasized accelerating structural reforms to strengthen long-term growth:
- Enhancing Ease of Doing Business through faster approvals and simplified regulations.
- Improving Ease of Living with citizen-focused governance reforms.
- Expanding opportunities for youth through infrastructure development, manufacturing growth, and job creation.
India’s growth momentum remains a key source of confidence
The meeting comes shortly after the release of strong economic growth data.
On June 5, PM Modi highlighted that India’s GDP expanded by 7.7% in FY26, while growth in the fourth quarter reached 7.8%.
The Prime Minister described the performance as evidence of the economy’s resilience and the effectiveness of ongoing reforms.
“GDP growth rate of 7.7% in FY26 and 7.8% in Q4 of FY26 reflect the inherent strength of our economy, the success of reforms and the hard work of 140 crore Indians,” Modi said.
The growth figures have reinforced investor confidence at a time when several global economies continue to face slowing expansion.
Ease of doing business reforms remain in focus
One of the key themes of the meeting was the government’s commitment to improving the business environment.
Policymakers reviewed measures that could simplify regulations, improve efficiency, and create new opportunities for businesses and entrepreneurs.
PM Modi reiterated that reforms would continue to play a major role in India’s development strategy.
“We shall leave no stone unturned to further Ease of Living, Ease of Doing Business and increase opportunities for our youth.”
For investors, reforms that improve business conditions often translate into stronger corporate earnings and higher long-term economic growth.
West Asia conflict remains an important concern
The ongoing conflict in West Asia was another major topic of discussion during the meeting.
The region is strategically important for global energy supplies, and any prolonged disruption could impact oil prices, inflation, and trade flows.
Last week, reports indicated that NITI Aayog submitted an impact assessment report to the Prime Minister’s Office outlining the possible effects of the conflict on trade, MSMEs, agriculture, farmers, and key industries.
The assessment highlights the government’s focus on preparing for potential economic disruptions before they affect domestic growth.
Key Indicators to Watch
The trajectory of Indian equities, bonds, and the rupee over the coming quarters will be shaped by a combination of domestic reforms and global macroeconomic developments.
| Indicator | Current Focus | Why It Matters |
|---|---|---|
| Crude Oil Prices | Sensitive to West Asia tensions | Higher oil prices can widen India’s trade deficit, raise inflation, and pressure corporate margins. |
| FPI/FII Flows | Driven by global risk appetite | Strong inflows support equities, bonds, and the rupee; outflows can trigger market volatility. |
| Inflation Data | Key RBI policy variable | Lower inflation improves the likelihood of stable or accommodative monetary policy. |
| Rupee Movement | Influenced by capital flows and oil prices | A stable rupee supports foreign investment and controls imported inflation. |
| Government Reforms | Ease of Doing Business & investment reforms | Structural reforms can boost productivity, FDI, and long-term growth. |
| Corporate Capex Trends | Manufacturing and infrastructure spending | Rising private investment signals confidence in future demand and economic expansion. |
| Manufacturing PMI | Expansionary territory | A leading indicator of industrial activity, production growth, and corporate earnings. |
Economic Data Box
| Indicator | Latest |
|---|---|
| FY26 GDP Growth | 7.7% |
| Q4 FY26 GDP Growth | 7.8% |
| Focus Areas Discussed | Growth, Ease of Doing Business, Ease of Living |
| Key Risk | West Asia Conflict |
| Major Concern | Oil Prices & Trade Disruptions |
Sector-Wise Investment Implications
Infrastructure & Capital Goods
The government’s continued emphasis on economic growth suggests that public capital expenditure will remain a key policy lever. Infrastructure, railways, power equipment, and construction-related companies could remain major beneficiaries.
Stocks to Watch: L&T, BHEL, Rail Vikas Nigam, KNR Constructions
Defence
Persistent geopolitical tensions in West Asia reinforce the strategic importance of defence spending. India’s ongoing defence modernization program could continue to benefit domestic defence manufacturers.
Stocks to Watch: HAL, BEL, Bharat Dynamics, Cochin Shipyard
Banking & Financial Services
Reforms aimed at improving ease of doing business and supporting MSMEs may strengthen credit growth across the economy.
Stocks to Watch: SBI, Bank of Baroda, Shriram Finance, MAS Financial
Manufacturing & Industrials
With manufacturing emerging as a key growth driver, sectors linked to the Production Linked Incentive (PLI) scheme and domestic industrial expansion remain well-positioned.
Stocks to Watch: Siemens India, ABB India, Cummins India, Dixon Technologies
Crude Oil Sensitivity Matrix
The biggest risk from the West Asia conflict remains crude oil prices.
| Brent Crude Price | Economic Impact | Likely Sector Winners | Likely Sector Losers |
|---|---|---|---|
| $80/bbl | Lower inflation, stronger rupee, lower CAD | OMCs, Aviation, Paints, Consumer Stocks | Upstream Oil Producers |
| $90–95/bbl | Manageable inflation pressure | Selective beneficiaries | Moderate margin pressure |
| $110+/bbl | Higher inflation, wider fiscal deficit, CAD pressure | Upstream Energy Companies | Aviation, Paints, Chemicals, Logistics |
Stocks Most Sensitive to Oil Prices
Beneficiaries of Lower Oil Prices
- BPCL
- HPCL
- InterGlobe Aviation (IndiGo)
- Asian Paints
Vulnerable to Higher Oil Prices
- Aviation companies
- Chemical manufacturers
- Logistics operators
- Consumer discretionary businesses
What Usually Follows EAC-PM Meetings?
Historically, recommendations emerging from EAC-PM discussions have often been reflected in:
- Union Budget announcements
- Expansion of PLI schemes
- Tax rationalisation measures
- Infrastructure spending programs
- Regulatory simplification initiatives
Investors should treat such meetings as early indicators of future policy direction rather than immediate policy action.
FII vs DII: Follow the Money
Strong GDP growth does not automatically translate into market gains.
Foreign Institutional Investors (FIIs) remain sensitive to global interest rates and geopolitical risks, while Domestic Institutional Investors (DIIs) continue to provide stability through sustained mutual fund inflows.
Key indicators to monitor include:
- FII inflows and outflows
- Monthly SIP collections
- Bond market participation
- Rupee performance
The ability of domestic investors to absorb foreign selling remains one of the key pillars supporting Indian equities.
The Underappreciated Risk: Gulf Remittances
India receives approximately $120 billion annually in remittances, with a substantial portion originating from Gulf countries.
A prolonged disruption in West Asia could impact:
- Employment of Indian expatriate workers
- Household income in rural and semi-urban regions
- Consumption spending
Sectors Most Exposed
- FMCG
- Affordable housing
- Two-wheelers
- Rural-focused financial services
Stocks to Watch: Hindustan Unilever, Dabur, Britannia, Hero MotoCorp
MSME-Focused Opportunities
The NITI Aayog assessment reportedly highlighted risks facing MSMEs from supply-chain disruptions, logistics costs, and export challenges.
Companies with significant exposure to MSME credit and manufacturing activity may serve as useful indicators of sector health.
Stocks to Watch:
- Shriram Finance
- MAS Financial
- Greenpanel Industries
- CreditAccess Grameen
Reform Expectations Tracker
| Reform Area | Potential Beneficiaries |
| GST Simplification | FMCG, Retail, Logistics |
| Land Acquisition Reforms | Infrastructure, Real Estate |
| Labour Code Implementation | Manufacturing, Textiles, Electronics |
| Ease of Doing Business Measures | Banking, Industrials, FDI-linked sectors |
| Export Facilitation Policies | Ports, Logistics, Manufacturing |
Economic Data Box
| Indicator | Latest |
| FY26 GDP Growth | 7.7% |
| Q4 FY26 GDP Growth | 7.8% |
| Key Focus Areas | Growth, Ease of Doing Business, Ease of Living |
| Primary External Risk | West Asia Conflict |
| Major Macro Concern | Oil Prices & Trade Disruptions |
