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Indian shares are set to surge at open on Wednesday, tracking a global rally and a sharp drop in crude oil prices after U.S. President Donald Trump agreed to a two-week ceasefire with Iran.

Investor focus will be on the Reserve Bank of India's policy decision later in the day, with markets watching closely for updated growth and inflation forecasts amid lingering uncertainty from the Middle East conflict.

GIFT Nifty futures were trading at 23,825 as of 7:49 a.m. IST, indicating that the benchmark Nifty 50 will open about 3% above Tuesday's close of 23,123.65.

Other Asian markets climbed 4%, while crude prices slipped below $100 a barrel after Trump said the U.S. would suspend bombing and attacks on Iran for two weeks and that talks were progressing toward a long-term peace agreement.

Back home, the Nifty 50 and Sensex have dropped about 8.2% each since the Iran war began on February 28, while the rupee slid to record lows, weighed down by elevated crude prices and record foreign outflows.

The conflict had pushed oil prices above $100 a barrel, posing risks to the economy, corporate earnings and financial markets of India, the world's third-largest oil importer.

Against this backdrop, the RBI is widely expected to keep its interest rates unchanged at its policy announcement at 10 a.m. IST, as policymakers assess the fallout from the Iran war.

"Market expectations are that consumer price inflation, post the war, could be around 4.5% for FY27, up from 2.1% in FY26. If that indeed is the outcome, we don't rule out the possibility of a 25-50 bps rate hike in H2 FY27," said Suresh Ganapathy, analyst at Macquarie Research.

"The RBI will have to factor in the Iran war and its implications on economic growth and inflation while releasing its forecasts."

At its previous policy meeting on February 6, the central bank had kept interest rates unchanged at 5.25%.