What is India's revised fiscal deficit target for the current fiscal year, and why is it being widened?

India is willing to let its fiscal deficit widen to 4.8% of GDP—up from the original target of 4.3%—due to rising fuel subsidy costs and broader financial pressures triggered by the war in Iran, which has disrupted energy supplies and driven up crude prices; the closure of the Strait of Hormuz has forced state retailers to raise petrol and diesel prices by about 8%, while the government has also cut cooking gas subsidies and expects fertiliser subsidies to jump 20% this fiscal year.

How is the Iran war affecting India's energy import dependence and fiscal planning?

As the world's third-largest oil importer and consumer—relying on imports for about 90% of its oil—India is among the countries most exposed to prolonged Iran war-related disruptions in global energy supplies; these disruptions have heightened fuel subsidy burdens, prompted price hikes in petroleum products, reduced non-tax revenues, and led authorities to defer final fiscal decisions until later this year when clarity emerges on subsidy needs and non-tax revenue performance.

India willing to let fiscal deficit widen to 4.8% of GDP, Bloomberg News reports

Jun 11, 2026

India intends to widen its fiscal deficit to 4.8% of GDP due to soaring fuel and fertiliser subsidies caused by global oil price spikes linked to the Iran conflict. The government is evaluating spending cuts as it remains highly exposed to energy supply disruptions.

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2026-05-13

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India willing to let fiscal deficit widen to 4.8% of GDP, Bloomberg News reports

India willing to let fiscal deficit widen to 4.8% of GDP, Bloomberg News reports

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