India's Economy: 7% Growth Ahead Amidst Risks

India's economic growth is anticipated to remain around 7% in the current year, with positive momentum observed in the second quarter. This forecast, shared by Nilesh Shah, a member of the Prime Minister's Economic Advisory Council, acknowledges potential challenges such as elevated oil prices and rainfall deficits.

Shah elaborated on the multifaceted risks posed by escalating oil prices. Such increases can lead to higher inflation, necessitate interest rate hikes, weaken the Indian Rupee, dampen economic growth, and reduce corporate profitability. These factors collectively impact the earnings of businesses.

The discussion also touched upon the Merchant Discount Rate (MDR) for Unified Payments Interface (UPI) transactions. Shah pointed out that while UPI is a globally recognized financial product, its maintenance requires funding. He suggested that users might need to accept a small charge, akin to fees for international card transactions or road tolls, to ensure the continued quality of UPI services.

Shah's remarks were made during the 5th Kautilya Economic Conclave, where India's economic priorities and global uncertainties were discussed. The publication date of this report is October 3, 2026.