India's high-growth economy gets a Middle East oil shock

India's high-growth economy gets a Middle East oil shockJust nowShareSaveAdd as preferred on GoogleNikhil InamdarGetty ImagesIndia imports 60% of its natural gas and more than 90% of LPG from the Middle EastIt wasn't too long ago that India's central bank, the Reserve Bank of India (RBI), described the country's high growth-low inflation environment as a "Goldilocks" moment. But that optimism has proved ephemeral as the ongoing war in the Middle East and the accompanying disruption to oil markets gives its world-beating growth story an unexpected jolt.The impact is most starkly visible on the Indian currency, which has hit record lows and is down nearly 10% against the US dollar in the last year.There's been some relief in the rupee's slide after the central bank intervened to curb speculation, but that is likely to be temporary. Many experts are pencilling in sharper declines ahead, depending on how long the conflict lasts.In a worst-case scenario where the war persists for much of 2026, the repercussions could be "catastrophic" for the rupee, which could plunge beyond 110 to the dollar, according to Bernstein, a global equity research firm. But even if it ends much quicker, there's further pain ahead.Persistent weakness in the currency can negatively impact everything, feeding into higher prices for consumers, lower corporate margins, bigger government deficits and thinner capital flows into the stock market.India's benchmark equity indices are down some 12% already since the beginning of the year amid an outflow of foreign money, eroding the wealth effect - the behavioural tendency to spend more with a rise in the value of assets - that was prodding the rich to keep the consumption engine running.AFP via Getty ImagesIran has allowed some Indian ships to pass through the Strait of Hormuz but cooking gas shortages have triggered closures of restaurants and hotelsThe global tensions have also begun to negat...