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Informist, Friday, Dec. 5, 2025

 

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--RBI Malhotra: External uncertainties pose downward risk to econ outlook 
--RBI Malhotra: Merchandise exports faced some headwinds 
--RBI Malhotra: Speedy conclusion of various FTAs, trade deals present upside 
--RBI Malhotra: Conclusion of various trade deals present upside potential 
--RBI Malhotra: Healthy svcs exports, remittances to keep CAD modest 
--RBI Malhotra: Confident of meeting external financing needs comfortably 
--RBI Malhotra: India extenal sector remains resilient 

 

MUMBAI – Reserve Bank of India Governor Sanjay Malhotra Friday said India's external sector remains resilient. As on Nov. 28, the country's foreign exchange reserves stood at $686.2 billion, providing a robust import cover of more than 11 months, the governor said. 

 

India's external debt-to-GDP ratio declined to 18.9% at the end of June from 19.1% at end-March, while the net international investment position moderated to (-)8.0% of GDP at end-June from (-)8.6% of GDP at end-March.

 

India's current account deficit moderated to 1.3% of GDP in Jul-Sept from 2.2% of GDP in the year-ago period on account of robust services exports and strong remittances, the governor said. Merchandise exports contracted year-on-year in October, whereas merchandise imports continued to increase for the second consecutive month, resulting in a widening of the trade deficit, he said.

 

In October, India's services exports were $35.2 billio, up 2.2% on year, while services imports of $17.7 billion increased 2.9% on year. Net services exports grew 1.5% on year and stood at $17.4 billion.

 

"Healthy services exports coupled with strong remittance receipts are expected to keep CAD (current account deficit) modest during 2025-26," Malhotra said. "On the external financing side, gross foreign direct investment to India increased at a robust pace during the first half of the year."

 

Net FDI also increased significantly due to a decline in repatriation despite a rise in outward FDI. Foreign portfolio investment to India recorded net outflows of $0.7 billion so far in 2025-26 (Apr-Mar), due to outflows in the equity segment, the governor said. "Flows under external commercial borrowings and non-resident deposit accounts moderated as compared to last year," Malhotra said, adding that the central bank was "confident of meeting our external financing requirements comfortably". 

 

With the repo rate lowered to 5.25%, the Standing Deposit Facility has come down to 5.00% and the Marginal Standing Facility and bank rate to 5.50%. Minutes of the December MPC meeting will be published on Dec. 19. The next meeting of the MPC is scheduled for Feb 4-6.  End

 

US$1 = INR 89.90

 

Reported by J. Navya Sruthi

Edited by Avishek Dutta

 

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