If global crude oil prices average at $90 per barrel for the full year, Care Ratings estimates India’s gross domestic product (GDP) growth to moderate to 6.7 per cent in fiscal 2026-27 (FY27).

This is a downward revision from its pre-conflict growth forecast of 7.2 per cent for the fiscal, assuming crude oil averaging between $60 and $70 per barrel.

If global crude oil prices average at $90 per barrel for the full year, Care Ratings estimates India’s GDP growth to moderate to 6.7 per cent in FY27.
This is a downward revision from its pre-conflict growth forecast of 7.2 per cent, assuming crude oil averaging $60-$70 per barrel.
If crude oil prices average around $120 per barrel in FY27, it sees India’s annual GDP growth dropping below 6 per cent.

Downside risks to India’s growth outlook persist, given the possibility of a prolonged war situation and higher energy prices, the rating agency notes in a release.

In an extreme case scenario where global crude oil prices average around $120 per barrel in FY27, it sees India’s annual GDP growth dropping below 6 per cent.

Furthermore, the ongoing global headwinds also draw attention to India’s external sector vulnerabilities given its high energy import dependence, export and remittance exposure to the Middle East region and moderating capital flows.

Several other Asian economies like South Korea, Japan and China are vulnerable due to their relatively high energy imports from the Middle East. India’s total oil and gas import dependency is estimated to be around 4.2 per cent of its GDP (2024). Of this, reliance on the Middle East is estimated at about 2 per cent.

As India is dependent on imports to meet about 88 per cent of its total oil requirements and 51 per cent of its gas requirements, India’s consumer price index-based (CPI) inflation has become more sensitive to retail energy prices under the new series, with the combined weight of diesel, petrol, and LNG rising to 4.8 per cent from 2.4 per cent earlier, notes Care Ratings.

Assuming a full pass-through, a $10 increase in crude oil prices can lead to an estimated 55-60 basis points (bps) rise in headline inflation, with around 45 bps stemming from the direct effects and 10-15 bps from the indirect effects.

However, in the current scenario, the indirect inflationary pressures could be higher, given the risks of potential supply disruptions.

Overall, assuming global crude oil prices average at $90 per barrel in FY27, India’s CPI inflation is projected to average between 4.5-4.7 per cent—an upward revision from the earlier 4.3 per cent, which factored global crude oil prices ranging between $60 and $70 per barrel.

The revised inflation projection assumes that a large burden of the higher global crude oil prices will be borne by the government and oil marketing companies. Care Ratings has based its projection on the expectation that the these companies may be able to absorb an increase in Brent crude oil prices up to $106 per barrel.

A preliminary analysis by the rating agency suggests that the Indian government’s tax collections in FY27 could be lower by about ₹400 billion.

Overall, it estimates the fiscal burden from the excise duty cut on petroleum products, along with the possibility of an increase in fertiliser and fuel subsidy burden and lower tax revenue collections, to be around 0.5 per cent of GDP in FY27.

However, the government’s Economic Stabilisation Fund should provide some buffer to address rising fiscal pressures, it adds.

Fibre2Fashion News Desk (DS)

The challenges are real and mounting. Competitive pressure from regional rivals such as Bangladesh and Cambodia remains relentless, while labour, once Vietnam’s biggest advantage, is no longer as cheap as it used to be. Add to that the cocktail of weak global demand, volatile freight and energy costs, geopolitical tensions and the ever-present spectre of shifting US trade policies, and the operating environment looks anything but stable.

However, instead of retreating, Vietnam seems to be choosing to retool for growth. According to reports, the industry intends to sustain its export growth in ****, aiming for around $** billion, an increase of roughly * per cent, and the Vietnam Textile and Garment Association has reportedly outlined strategies to help achieve this goal.

American sportswear giant Nike, Inc has reported a decline in the third quarter (Q3) results reflecting mixed regional trends as China remains a concern and the company struggles with pressure in its direct-to-consumer (DTC) segment, even as wholesale revenues outperformed.

The company reported revenue of $11.3 billion in Q3 FY26 ended February 28, posting a 3 per cent year-on-year (YoY) decline. The weakness in digital and owned retail channels was partially offset by Nike Brand revenues posting marginal growth.

Nike has reported decline in Q3 FY26, with revenue at $11.3 billion, down 3 per cent YoY, reflecting DTC weakness and mixed regional trends.
Wholesale growth and modest Nike Brand gains provided some support.
Margins contracted but remained better than expected, while net income fell 35 per cent.
China weakness and broader cost pressures weighed on EBIT across regions.

“This quarter we took meaningful actions to improve the health and quality of our business. The pace of progress is different across the portfolio and the areas we prioritised first continue to drive momentum,” said Elliott Hill, president and CEO, Nike. “The work is not finished, but the direction is clear, our teams are moving with focus and urgency, and our foundation is getting even stronger to build the future of Nike.”

“We delivered third quarter results in line with our expectations, and our teams continue to execute with discipline,” said Matthew Friend, executive vice president and CFO, Nike. “Win Now actions will continue to impact results over the balance of the calendar year, and we remain confident in our ability to position the Company for profitable growth long-term.”

Nike Brand sees modest growth amid regional headwinds

Nike Brand revenues were $11 billion in Q3, up 1 per cent, driven by strength in North America and declines in Europe, Middle East and Africa (EMEA) and China, Nike said in a press release.

Wholesale revenues were up 5 per cent, primarily due to growth in North America, while Nike direct revenues fell 4 per cent to $4.5 billion amid weaker digital sales and store performance. Converse revenues declined sharply by 35 per cent to $264 million across all markets.

The gross margin contracted by 130 basis points to 40.2 per cent, majorly due to higher tariffs in North America and increased product costs.

Net income dropped 35 per cent to $520 million, with diluted earnings per share (EPS) also falling 35 per cent to $0.35. This suggests tariff and cost pressures were less severe than anticipated.

China’s weak profitability weighs on regional performance

The performance in China remained weak, with EBIT falling 9 per cent to $480 million, underscoring continued demand softness, with country’s total revenue standing at $1.62 billion, a decline of 7 per cent YoY. Asia Pacific and Latin America also declined 4 per cent to $332 million.

North America EBIT declined to $981 million from $1,103 million, signalling margin pressure even as the region supported revenue growth. EMEA showed relative resilience, rising 7 per cent to $515 million, making it one of the few bright spots.

Global brand divisions saw a sharp 20 per cent drop, while Converse EBIT fell 11 per cent, reflecting brand-specific challenges. At the group level, total Nike Brand EBIT declined 14 per cent, contributing to 18 per cent fall in total EBIT to $635 million.

Fibre2Fashion News Desk (SG)