India sees no immediate risks to its fiscal deficit target for the financial year that began on April 1, and will continue to prioritise capital spending, two government sources said, as New Delhi assesses the fallout from the Middle East crisis. ADVERTISEMENTIndia, in February, said it would aim for a fiscal deficit of 4.3 per cent of GDP for the current 2026/27 financial year, down from 4.4% last year. But the Iran war has sent oil prices soaring, putting a burden on the finances of India's federal government, which has already cut excise duties to prevent a pass-through of higher fuel costs to consumers. Higher spending burdenThe government is likely to face higher spending on fertilisers and petroleum subsidies, budgeted at 1.83 trillion rupees ($19.69 billion) for 2026/27, as global commodity prices rise, the officials said. Some of the additional spending will be offset by better targeting of subsidies and savings by ministries on schemes, the second source said, adding that capital spending "remains the top priority of the government."

Source: The Telegraph April 07, 2026 11:41 UTC