The Iran war has impacted Indian equities, with foreign investors fleeing and valuations slipping to rare lows. The country's benchmark Nifty 50 fell more than 10% in March as foreign investors sold over $12 billion in equities. The index now trades at a price-to-earnings ratio of 19.6 times, a level rarely seen over the past decade. Fund managers believe that low prices alone will not attract investors. The escalating conflict in the Middle East has revealed that India is structurally exposed due to its vulnerability to rising energy costs and supply chain disruptions linked to the Iran war. India's Chief Economic Advisor V. Anantha Nageswaran warned that the country's forecast of 7.0%–7.4% growth for the financial year ending March 2027 faces "considerable downside" risk due to the conflict and warned of potential risks of rising energy prices and supply-chain disruptions related to the war. The Indian government has implemented key interventions to curb the falling rupee and prevent a spike in retail fuel prices. However, concerns remain about the lack of strong earnings growth and the potential impact of the war on India's future as a result of fuel prices artificially low could negatively impact government spending on capex and the future of India's consumption story.