If 2025-26 started with Donald Trump’s Liberation Day reciprocal tariffs, it ended in an even worse manner for India.In fact, March 2026 may go down as one of the worst months ever for the economy: prices are on the rise and economic activity has been curtailed in certain sectors due to reduced fuel supplies. At the household level, migrant labourers are having to go back to their home villages due to the scarcity of cooking gas cylinders.It is not surprising, then, that economists have begun to downgrade their growth forecasts for India for 2026-27 and raise inflation projections. Of course, much depends on how long the war in West Asia lasts. But if one goes by the dislocation of the financial markets last month, the hit from just one month of the conflict may be sizeable.The impact of the US and Israel’s war against Iran and the latter’s subsequent retaliation against American allies in the Gulf, their energy infrastructure, and the closure of the Strait of Hormuz may be far wider, but crude oil prices serve as a good proxy. And the average price of India’s crude oil basket surged to $112.39 per barrel in March, up 63% from February — the largest month-on-month increase on record.The impact of higher energy prices and the rise in risk led to Foreign Portfolio Investors (FPIs) pulling out money from Indian financial markets in March to the tune of $13.6 billion, second only to March 2020’s $15.9 billion when Covid-19 was declared as a pandemic.The exit of foreign investors reflects instantly in three key markets: the foreign exchange, stocks and debt. And they all fared rather badly in March. Also Read | Are India’s forex reserves really adequate?The rupee fell past the 92, 93, 94 and 95 mark against the dollar as it weakened by 4% against the greenback on its way to having its worst year in almost 15 years. Story continues below this adThe Nifty fell 11% in March, turning what was a 7% gain until the end of February into a 5% loss — its worst showing in six years.On the debt side, in a year (2025-26) in which the Reserve Bank of India (RBI) lowered the repo rate by 100 basis points (bps) to 5.25%, bond yields have increased by around half that. Bond yields and prices move in opposite directions.Delayed view of real economy impactOf course, these are all mostly indicators of the country’s financial sector; data gauging the performance of the ‘real’ sector — production, consumption, prices — will only come with a lag. First among these will be the quarterly results of listed companies for January-March, which will start trickling in over the next few days.Then, on April 8, the RBI’s Monetary Policy Committee (MPC) will announce its interest rate decision. And while the MPC is expected to neither hike nor cut the policy repo rate next week, markets will keep a close eye on how the central bank’s economic forecasts and the underlying assumptions about the exchange rate and crude oil prices change.Story continues below this adAlso Read | West Asia war impact: India’s private sector posts weakest growth in 3.5 years in MarchBack in early February, the RBI had forecast that GDP growth and CPI inflation would average 6.9-7% and 4-4.2% in the first two quarters of 2026-27. Of course, since the RBI made these projections, the CPI and GDP data series have been revised. As such, the updated forecasts that will be released on April 8 will not only reflect the new global realities but also the changes that India’s official statistics have undergone.“The impact of the geopolitical situation in terms of upside risks to inflation and downside risks to growth is too big an imponderable not to be simulated,” former deputy governor Michael Patra told The Indian Express in an interview, saying that RBI staff will simulate “various scenarios” to assess the balance of risks around the inflation and growth forecasts as part of the preparations for the MPC’s meeting.The week after RBI’s interest rate decision, on April 13, the statistics ministry will release CPI inflation data for March. Story continues below this adAlso Read | A perfect storm: Why gold prices are down after 2025’s historic surgeBut the impact of the war may show up first in the wholesale inflation data, also for March, which will be published by the commerce ministry on April 14. The next day, the Commerce Ministry will be in action again when it releases trade data for March.A week later, statistics on March production figures will start rolling, with the Commerce Ministry detailing the performance of the eight core sectors — coal, crude oil, natural gas, refinery products, fertilizers, steel, cement, and electricity — on April 20. This will be a lead indicator for overall industrial production data for March, which the statistics ministry will release on April 28. A picture of the full January-March quarter will only be available on May 29 with the GDP data.CEA’s warningsHowever, the impact of the war may not have been felt much in March. Chief Economic Advisor V Anantha Nageswaran warned over the weekend in the Finance Ministry’s Monthly Economic Review report that data for March “will not reveal much” as producers will be trying to meet their annual targets for 2025-26.“High-frequency data for April and possibly May may give us a better handle on the likely growth rate for the new financial year. Similarly, the current account deficit too will widen significantly in FY27,” the government’s top economist added.