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Informist, Wednesday, Aug. 6, 2025

 

--RBI Malhotra: Contributing 18% to global growth, more than US 

--RBI Malhotra: Let us wait for two months and see how economy fares 

--RBI Malhotra: Hopeful of amicable solution to India-US trade talks 

--RBI Malhotra on growth: Some global uncertainties already factored in 

--RBI Malhotra: Difficult to predict impact of tariffs on growth 

--RBI Malhotra: Do no have sufficient data to revise GDP forecast right now 

--RBI Malhotra: Will continue to monitor macroecon conditions 

--RBI Malhotra: To monitor macro-econ conditions on policy-to-policy basis 

--RBI Malhotra: Will do what is required to support growth, price stability 

--RBI Malhotra: Uncertainties still continue, situation still evolving 

--RBI Malhotra: Will keep watching incoming data 

--RBI Malhotra: Took various steps to support growth beyond monetary policy 

--RBI Malhotra: We will not be found wanting in doing whatever it takes 

--RBI Malhotra: Too early to say impact of tariffs on foreign flows 

--RBI Malhotra: Aspirational growth rate is more than 6.5%

 

NEW DELHI – While the Reserve Bank of India's growth estimates for 2025-26 (Apr-Mar) already factor in some global uncertainties, it is difficult at present to predict the impact of the US' tariff announcements on India's GDP growth, the central bank Governor Sanjay Malhotra said Wednesday. The RBI is maintaining a close vigil on incoming data but as of now there is not enough data to revise the estimates, Malhotra added.  

 

Malhotra's comments come as Indian exporters brace for 25% reciprocal tariff on Indian goods in the US to be effective from Thursday. 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. Economists have already projected a downward revision of 20-30 basis points to GDP growth for the current financial year. 

 

Meanwhile, the RBI Wednesday retained its GDP growth estimate for FY26. "We had already reduced our forecast, which was earlier 6.7% to 6.5%," Malhotra said. "So, some of the global uncertainties have already been factored in the revised growth forecast." RBI had in April cut its GDP growth estimate for the year to 6.5% from 6.7%. 

 

"However, there is still a lot of uncertainty, as was mentioned in my statement, and it is really very difficult to predict as to what the impact will be," Malhotra said at the post-policy press conference. "Going forward, as we have mentioned, we will maintain a very very close vigil on the incoming data and take a call. As of now, we do not have sufficient data to revise our GDP forecasts."

 

The RBI would wait for another two months to gauge how the economy shapes up once the transmission of 100-basis-point policy repo rate cut is completed, Malhotra said, while assuring that the central bank would continue to do whatever is required to support growth and maintain price stability. "We have taken a number of measures to support growth. It is not only on the monetary policy--liquidity side, even on the prudential regulation side, we have taken measures," Malhotra mentioned. 

 

The RBI cut the repo rate by 100 bps between February and June. At the August meeting, the Monetary Policy Committee Wednesday decided to keep the repo rate unchanged at 5.50% and maintain the 'neutral' stance adopted in June. 

 

It is also too early to guess the likely changes to the inflow of foreign investment into the Indian financial markets due to the evolving dynamics between New Delhi and Washington, post US President Donald Trump's tariff announcement on Indian goods, according to Malhotra. The Indian external affairs ministry had issued a strong statement against Trump on Monday after the latter's reiteration of raising tariffs on India for its strategic partnership with Russia. 

 

"We are quite confident that our reserves - we have 11 months of merchandise imports reserves," Malhotra said. "And so, we are very confident of meeting whatever needs are there from the external sector." The RBI had $688.9 billion in foreign exchange reserves in the week ended Friday. 

 

The RBI is hopeful of an amicable conclusion of trade negotiations between India and the US, Malhotra said. Both sides have held five rounds of negotiations for a trade deal so far. The next round of discussions is scheduled Aug. 25 in New Delhi. The Indian exporters see the trade deal as a cushion against Washington's reciprocal tariffs.  

 

At the press conference, while responding to a question on Trump's remark that the Indian economy is "dead", Malhotra mentioned that India's contribution to global GDP growth is 18% compared to the US' contribution of 11%. 

 

Malhotra mentioned that India's GDP, in the past, has grown at an average of 7.8%. "So, certainly, we should aspire for a growth rate higher than 6.5%," Malhotra said.  End

 

Reported by Krity Ambey

Edited by Vandana Hingorani

 

 

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