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Amid growing concerns over the economic fallout of the ongoing Iran conflict, former Planning Commission Deputy Chairman Montek Singh Ahluwalia cautioned that elevated oil prices could persist for several months even if tensions ease immediately. Speaking at the ABP Network India@2047 Summit, Ahluwalia outlined the potential implications of the crisis for India, stressing that uncertainty remains the biggest challenge for policymakers and businesses alike.

Oil Prices Likely To Stay Elevated

Ahluwalia noted that any resolution between the United States and Iran would take time to translate into stability in global energy markets. "If US and Iran agree today, it will still take 6 months. Through end of year, oil prices will remain in elevated levels. If crisis deepens, we cant control it. It is an uncertain outcome." His remarks come at a time when global markets are closely watching developments in West Asia, with investors concerned about disruptions to oil supplies and shipping routes. As one of the world's largest crude oil importers, India remains particularly sensitive to fluctuations in energy prices.

Global Uncertainty Adds To Economic Risks

According to Ahluwalia, the impact of the conflict extends beyond oil markets. He pointed to broader global economic conditions that are already weighing on growth prospects. "Interest rates in the US are high, uncertainity is high." Higher interest rates in the United States tend to strengthen the dollar and can trigger capital outflows from emerging economies, creating additional pressure on currencies and financial markets. Combined with geopolitical tensions, these factors can complicate economic management for countries like India.