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Informist, Tuesday, Jun. 9, 2026

MUMBAI – Indian banks appear better positioned than many of their Asian peers in terms of withstanding the impact of higher energy prices resulting from the ongoing West Asia war, according to a report by Fitch Ratings released Tuesday. The ratings agency cautioned that banking systems across the Asia-Pacific region are facing divergent credit conditions in mid-2026, with elevated energy costs and slower economic growth exerting greater pressure on some markets than others.

For India, the impact on the banking sector is expected to remain manageable, Fitch said, although smaller borrowers could face greater stress if crude oil prices remain elevated for a prolonged period. Since the onset of the conflict, Brent crude prices have risen about 29% and had surged over 68% to as high as $122.53 per barrel in April.

Fitch noted that banks across the Asia-Pacific region remain vulnerable to higher inflation and weaker growth because of the region's heavy dependence on oil and gas imports from the Gulf Cooperation Council countries. Against this backdrop, the agency retained its "neutral" outlook on India's banking sector for 2026, citing the country's relatively stronger ability to absorb the fallout from higher energy prices compared to many regional peers.  End

Reported by Diksha Tripathy

Edited by Avishek Dutta

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