Economic Forum
In US, RBI Malhotra pitches for India, says govt to cut regulatory burden
This story was originally published at 15:23 IST on 27 April 2025
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NEW DELHI – Reserve Bank of India Governor Sanjay Malhotra has pitched India as an investment destination to foreign investors, pointing out that a variety of factors including the central government's commitment to "further reduce regulatory burden" made the country a "dynamic powerhouse of opportunities, innovation, and sustainable growth in the years to come".
Arguing that not only India offered political and policy stability despite changes in political parties in government, the financial sector was strong and vibrant, with the banking sector showing resilience with healthy balance sheets.
"We are committed to further enhancing the capacity, responsiveness, and resilience of the banking and non-banking financial sectors with emphasis on balancing regulation with efficiency and stability," Malhotra said while speaking at the US-India Economic Forum in Washington DC, US, on Friday. His speech was uploaded by the RBI on its website on Sunday. Malhotra is in the US for the annual spring meetings of the International Monetary Fund and the World Bank.
The RBI governor's comments come at a time of heightened global uncertainty, thanks to US President Donald Trump's on-and-off-again tariff war, which is widely expected to push up prices for the US and hurt economic growth globally. As per the IMF's latest projections, released last week, global growth in 2025 is now seen 50 basis points lower at 2.8%, while the forecast for 2026 has been cut by 30 bps to 3.0% due to the direct and indirect hit from new trade policies.
The Indian rupee, which suffered heavily in the run-up to and in the early months of the Trump presidency due to massive capital outflows, has since stabilised, with Malhotra saying the Indian foreign exchange market has the "required depth and liquidity to weather pressures". He also argued that the Indian economy has demonstrated "remarkable resilience and dynamism", with GDP growth averaging 8.2% over the last four years.
"Even this year, our growth is expected to remain robust at 6.5%. This is despite the tremendous increase in uncertainty and volatility in global financial markets. While this rate is lower than in recent years and falls short of India's aspirations, it remains broadly in line with past trends and the highest among major economies," the RBI governor said.
The RBI, earlier this month, cut its GDP growth forecast for 2025-26 (Apr-Mar) by 20 bps to 6.5%. However, even the reduced projection is seen as overly optimistic by economists from outside the RBI, with the consensus being that growth may be much closer to 6%, with some even predicting a sub-6% expansion.
"While there is indeed a scope for India's growth trajectory to rise over the medium to long-term, I am sanguine of our continued success," Malhotra added.
On Indian fiscal policy, Malhotra--who served as revenue secretary in the finance ministry until being named as RBI governor in the second week of December--said India's public debt-to-GDP ratio of 81.3 % in 2024 was "reasonable", with the quality of public expenditure having improved and the government investing heavily in physical infrastructure. "This is not only improving connectivity but also creating multiplier effects, stimulating demand across various sectors. This is also bringing down logistics cost for businesses considerably and improving productivity and competitiveness."
"India offers a policy ecosystem that is transparent, rule-based, and forward-looking--an ideal setting for long-term and productive investments...I invite you to be a part of this journey, to collaborate, innovate, and invest in India," Malhotra added. End
Reported by Siddharth Upasani
Edited by Vandana Hingorani
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