Pranab Mukherjee's warning came a day after he presented a populist budget in which he forecast that Asia's third-largest economy could grow by nine percent in the financial year starting April 1.
Mukherjee said India's economy had proved "remarkably resilient to external shocks" but added "we cannot afford to be complacent" about growth.
General inflation is running at over eight percent, while food inflation stands at nearly 11.5 percent, causing hardship to the hundreds of millions of poor who are the ruling Congress party's core supporters.
Mukherjee added that he feared Europe's debt crisis could spread to other countries in the continent amid mounting pressure on Portugal to seek an international bailout like Greece and Ireland.
"I am not confident from the recent G20 finance meeting that the European sovereign debt crisis will be contained," he told a business audience in New Delhi, adding he was worried it could "impact other European countries and lead to another crisis".
"Frankly speaking there is a question mark" about the debt crisis, said Mukherjee, who attended the Group of 20 meeting of the world's biggest wealthy and emerging market nations in Paris last month.
Mukherjee pledged India would narrow its budget deficit to 4.6 percent in the coming year from 5.1 percent currently, saying the gap in the nation's finances resulting from stimulus spending to shelter the economy from the global financial slump was "unsustainable".
He presented on Monday a subsidy-heavy pro-poor budget aimed at appeasing inflation-hit voters while pledging to cut the deficit via stronger tax revenues from high growth and privatisation earnings.
His budget won plaudits from economists for seeking to cap the deficit but some questioned whether the country would be able to meet the ambitious target set in the budget.
"While we applaud the lower deficit target, we believe the actual deficit will turn out higher than budgeted with revenue forecasts too optimistic," said HSBC's chief India economist Leif Lybecker Eskesen.
Indian newspaper The Hindu said Mukherjee had played safe in his budget by hiking social spending by nearly a fifth and avoiding contentious economic reforms ahead of five state elections this year.