New Delhi: A decline in crude oil prices to below $80 a barrel ahead of the proposed peace deal between the US and Iran is expected to discourage oil marketing companies (OMCs) from raising fuel prices further, improving India's inflation and growth outlook, economists said.The de-escalation in the West Asia conflict and the moderation in crude prices have revived optimism about the economy amid forecasts of below-normal monsoon rains. "While the impact of disruptions may linger in the system for some time, the eventual move of oil prices towards $70 per barrel over the coming months could help reduce the pass-through to consumers from elevated energy costs as well as moderate the risk of imported inflation through greater stability in the rupee," said Sakshi Gupta, principal economist at HDFC Bank.Easing commodity prices are also likely to improve corporate profit margins, providing support to manufacturing GDP growth, she said.Devendra Kumar Pant, chief economist at India Ratings and Research (Ind-Ra), said if crude prices move closer to $70-75 per barrel, it would provide a big boost to the economy. The impact would depend on how long crude prices remain near their three-month lows and where they settle during the year, he added.Pant said lower crude prices would help narrow the current account deficit and offset some adverse effects due to higher FY26 gross domestic product (GDP) growth. India's economy expanded 7.7% in FY26.He said the Wholesale Price Index (WPI) would respond quickly to the decline in crude prices, just as it moved up when oil prices surged."However, Consumer Price Index (CPI)-based inflation is unlikely to ease unless OMCs decide to reduce pump prices," Pant said. "Since OMCs are still carrying accumulated under-recoveries on the sale of petrol and diesel, retail fuel prices are likely to remain unchanged for some more time."Wholesale inflation rose to 9.7% year-on-year in May from 8.3% in April, while retail inflation increased to 3.9% from 3.5%. Transport inflation turned positive at 1.75% in May compared with a contraction of 0.01% in April.Sarbartho Mukherjee, senior economist at CareEdge Ratings, said while softer crude prices improve the macroeconomic outlook, the inflation trajectory will continue to depend on the external environment and domestic supply-side factors. He added that weather-related disruptions associated with El Nino could still put upward pressure on inflation. CareEdge Ratings projects FY27 inflation at 5%, assuming global crude oil prices at $90 per barrel during the year.HDFC Bank has retained its forecast at 5.2%, as these had implicitly assumed an end to the conflict.