The Reserve Bank of India has cautioned around the ongoing US-Iran war and its impact on the Indian economy, stating that it will adversely affect growth going ahead and push inflation upwards. 

“Higher input costs associated with increase in energy prices and international freight and insurance costs along with supply-chain disruptions could constrain availability of key inputs for downstream sectors, thus impairing growth,” according the minutes of the RBI’s Monetary Policy Committee meeting released on Wednesday.

Along with this, elevated energy and other commodity prices coupled with supply shock due to disruptions in the Strait of Hormuz would act as a drag on domestic production in 2026-27, the RBI stated. The central bank added that amid the Iran war, it would be prudent to wait and watch before taking decisive action.

As far as supply shocks are concerned, another cloud hanging over the Indian economy is the potential disruption caused by weather phenomenon El Niño, which could have a negative impact on Southwest Monsoon. 

“Weather-related events – El Niño disturbances – pose downside risks to the domestic growth outlook, and an upside risk for the inflation trajectory,” MPC member Ram Singh said.

ALSO READ: Weak Monsoon Ahead? IMD Flags El Nino Risk For 2026 Season, Expects 92% Rainfall

El Niño is a natural climate phenomenon which occurs every two to seven years and is characterised by higher-than-average temperatures in central and eastern tropical Pacific Ocean. This impacts the Southwest Monsoon, leading to reduced rainfall during the June-September period in India. Generally, rainfall dependent sectors of the economy such as agriculture become more vulnerable in such conditions. 

While the El Niño is expected to hit the agriculture sector the hardest, the Gulf conflict has affected the Indian economy through several channels.

Considering the global and climate cues, the RBI revised its consumer price index-based inflation outlook upwards to 4.6% for FY27. At the same time, the central bank also pointed out that it maintains a cautiously positive outlook for India’s growth in the financial year. 

The RBI underscored that while the direction of impacts of the West Asia conflict and El Niño disturbances on growth and inflation is clear, how long they last will determine the quantum of said impact. 

MPC Keeps Rates Unchanged

The RBI on April 8 kept interest rates unchanged and reaffirmed its neutral policy stance, while signalling confidence in the country’s growth momentum even as it warned of rising global risks to inflation, liquidity and financial stability.

The MPC unanimously voted to retain the repo rate at 5.25%, in line with market expectations. The Standing Deposit Facility (SDF) rate remains at 5%, while the Marginal Standing Facility (MSF) rate was kept unchanged at 5.5%.

ALSO READ: RBI MPC Key Highlights: Rates, Stance Unchanged But A Warning On Inflation

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The United States government on Wednesday issued an urgent security alert for American citizens inside Iran, urging them to leave the country immediately as Iran’s airspace partially reopened following weeks of conflict between the two nations.

The advisory, posted by the US State Department’s official travel account on Wednesday evening, said, “US citizens should leave Iran now, monitor local media for updates, and consult with commercial carriers for additional information on flights out of Iran.”

ALSO READ: Mid-Air Accident: South Korea Probe Finds Jets Collided As Pilots Took Photos During Flight

The alert, issued as Iran’s airspace reopened partially on April 21 after being closed during the active phase of the US-Iran war, outlined multiple exit routes available to Americans still in the country. 

“Americans seeking to depart Iran may also depart by land to Armenia, Azerbaijan, Türkiye, and Turkmenistan,” the advisory stated, while adding a critical warning, “US citizens should not travel to Afghanistan, Iraq, or the Pakistan-Iran border area.”

The advisory also flagged the risk of deliberate obstruction by Iranian authorities. “Be aware that the Iranian government may prevent US citizens from departing or charge an ‘exit fee’ for departures from Iran,” it warned.

In a specific note for dual nationals, the alert stated that “US-Iranian dual nationals must exit Iran on Iranian passports.”

Iran: As of April 21, Iran’s airspace has partially reopened. U.S. citizens should leave Iran now, monitor local media for updates, and consult with commercial carriers for additional information on flights out of Iran. Americans seeking to depart Iran may also depart by land to… pic.twitter.com/yvVIqO0XoJ

— TravelGov (@TravelGov) April 22, 2026

The advisory comes at a volatile moment in the US-Iran standoff. 

A two-week ceasefire, which had been set to expire Wednesday, was extended by US President Trump at the request of Pakistani mediators — though the US naval blockade of Iranian ports remains firmly in place. 

Meanwhile, peace talks in Islamabad remain stalled, with allegedly Iran’s civilian and military leadership sharply divided over whether to engage with Washington’s conditions.

ALSO READ: Trump Offering Iran 3 To 5 Days To Respond On Peace Talks Amid Extended Ceasefire Deadline: Report

The partial reopening of Iranian airspace signals a fragile easing of hostilities, but US officials have made clear the situation remains deeply uncertain. 

With US Vice President JD Vance’s planned trip to Islamabad for a second round of peace talks postponed indefinitely and Tehran refusing to formally commit to negotiations, American citizens on the ground in Iran face an unpredictable and potentially dangerous environment.

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Prediction market apps such as Kalshi, Polymarket have come under the lens of Ministry of Electronics and Information Technology of India MeitY’s scanner. 

Platforms such as Kalshi, Polymarket are used for betting on election outcomes, IPL and many other events, and MeitY is currently mulling action against these apps. 

(This is a developing story)

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