India entered the second quarter of 2026/27 with strong domestic activity, exports, capital inflows and foreign-exchange reserves, but the Finance Ministry warned that geopolitical tensions, volatile oil prices, global trade disruptions and tighter financial conditions could undermine growth and increase imported inflation. In its September monthly economic report, the ministry said India could not rely on its post-Covid growth performance and that growth must be earned every quarter. A strong El Nino could hurt winter crops, while supply disruptions and energy-price volatility could pressure inflation, the rupee and capital flows. Retail inflation rose to 4.82% in August and food inflation to 5.95%, while wholesale inflation accelerated to 9.92%, partly because of renewed fuel and power price pressures. The report said government supply-side and market interventions could contain temporary price shocks, while the Reserve Bank of India's open market operations could support balanced financial conditions and curb undue demand-side overheating. Foreign-exchange reserves stood at $765.9 billion as of Sept. 18, covering about 11.1 months of imports, although unsettled U.S. trade relations, volatile portfolio flows and competition for global capital continued to pressure Indian assets.