RBI Policy
Holds FY26 GDP growth view at 6.5%, quarterly view also retained
This story was originally published at 11:18 IST on 6 August 2025
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--Retains FY26 GDP growth forecast at 6.5%
--Retains Apr-Jun GDP growth forecast at 6.5%
--Retains Jul-Sept GDP growth forecast at 6.7%
--Retains Oct-Dec GDP growth forecast at 6.6%
--Retains Jan-Mar GDP growth forecast at 6.3%
--Projects Apr-Jun FY27 GDP growth at 6.6%
--Domestic growth holding up, in line with assessment
--Growth in industrial sector subdued, uneven
--Svcs sector expected to remain buoyant in coming mos
--Taken decisive, forward looking measures to support growth
--Headwinds from global uncertainty pose risk to growth view
--Headwinds from geopolitical tensions pose risk to growth view
--Risks to growth forecasts are evenly balanced
--Despite challenges, econ on steady growth path
NEW DELHI – The Reserve Bank of India Wednesday retained its GDP growth projection of 6.5% for 2025-26 (Apr-Mar). The central bank also retained its growth estimates for each of the four quarters of the current fiscal year.
The quarterly break-up of the RBI's latest growth forecasts is as follows: 6.5% for Apr-Jun, 6.7% for Jul-Sept, 6.6% for Oct-Dec, and 6.3% for Jan-Mar. The RBI also gave a growth projection of 6.6% for the June quarter of FY27.
The RBI's Monetary Policy Committee at its latest meeting decided to leave the policy repo rate unchanged at 5.50% and maintain the 'neutral' stance adopted in June. Describing the policy decision, RBI Governor Sanjay Malhotra said that the central bank, leveraging on the room provided by a significant moderation in inflation, took the measures to support growth.
"As for the growth outlook, the above-normal southwest monsoon, lower inflation, rising capacity utilisation and congenial financial conditions continue to support domestic economic activity," Malhotra said in his policy statement. The industrial growth is subdued and uneven across segments, pulled down by electricity and mining, Malhotra said. But that may be offset by steady services sector activity.
"The supportive monetary, regulatory and fiscal policies, including robust government capital expenditure, should also boost demand," Malhotra said. The RBI's growth projection for FY26 is in line with that of the finance ministry, which expects GDP to expand in the range of 6.3-6.8% in the current year.
While the domestic conditions have been holding up and are in line with the RBI's assessment, there are potential external risks arising from geopolitical tensions, global uncertainties, and volatility in global financial markets, Malhotra pointed. "Prospects of external demand remain uncertain amidst ongoing tariff announcements and trade negotiations."
The tariff announcements by the US, which is India's top export destination with a one-fifth share in total outbound shipments, pose substantial risks to India's external sector demand and growth. US President Donald Trump has already announced a 25% reciprocal duty on Indian goods in the US and has also said that he may raise the duty further to penalise New Delhi for its trade and strategic partnership with Moscow.
Taking into account the favourable domestic conditions and uncertain global situation, Malhotra said that the risks to the RBI's GDP projections are "evenly balanced". "Despite a challenging external environment, the Indian economy is navigating a steady growth path with price stability." End
Reported by Krity Ambey
Edited by Akul Nishant Akhoury
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