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Informist, Wednesday, Oct. 29, 2025

 

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--RBI Gupta: Exchange rate not a policy tool to boost export competitivenes 
--RBI Gupta: Policy environment very conducive to crowd in private invest 
--RBI Gupta: To share inputs on monetary policy framework with govt 
--RBI Gupta on monetary policy easing: When and how much remains to be seen 
--RBI Gupta: Room for monetary policy easing remains 
--RBI Gupta:Current slowdown in inflation led majorly by fall in food prices 
--RBI Gupta: India's GDP growing well, but see further potential for growth 
--RBI Gupta: See lot of scope for merchandise trade to pick up in coming yrs 
--RBI Gupta: Must reach full potential of goods exports in at least 1 sector 
--CONTEXT: RBI Deputy Governor Gupta speaking at Business Standard event 
--RBI Gupta: India yet to leverage full potential of goods exports
 

 

MUMBAI – India is yet to fully leverage the potential of its merchandise exports, Reserve Bank of India Deputy Governor Poonam Gupta said. Wednesday. "India's merchandise export market is highly diversified and there is a lot of potential for it to do well. We are starting to see some early signs. We have labour-intensive exports, we have capital-intensive, we have R&D (research and development) intensive, and we have skill-intensive. So, when you have a large and diverse country, such as India, and a large and diversified export potential, such as India, I don't see any reason why we cannot continue to do better than we have," Gupta said, speaking at the Business Standard BFSI Summit here on Wednesday 

 

The deputy governor said that, as a country, India has not even reached its export potential in any single sector. However, given the policy attention being paid to exports, there is significant scope for merchandise trade to pick up in the coming years, she said.

 

On India's GDP growth, Gupta said that while the country has been growing well, it can do much better. "... I will repeat what the (RBI) governor has been saying in his monetary policy statements that yes, we are growing very well at 6.5% and our forecast for this year is 6.8% but that's not India's destination, that's not our potential, that's not our aspiration," she said. 

 

Stating that there is still room for monetary policy easing, Gupta said the key is when and by how much.  

 

The deputy governor said the fiscal policy has also done its part in supporting India's growth. The reduction in tax rates, along with a shift in spending from revenue to capital expenditure, has been a key driver of growth, she said. "... all the infrastructure building that has been done through public spending and a steadfast focus on good fiscal outcomes, good fiscal narratives, which are equally important, and transparency of Budget outcomes. So, I think both fiscal and monetary policy are mindful of the role that they need to play," she said.

 

On the inflation front, Gupta said the current moderation is mainly due to a decline in food prices. "The current deceleration in inflation is mostly, if not fully, driven by full price inflation, which is in a deflation trajectory, which means that it will auto correct, right? I mean for something as simple as base effect," she said. 

 

Regarding the monetary policy and inflation-targeting frameworks, Gupta said the RBI has received feedback from a large number of people and will share its inputs with the government shortly. She also said the government will decide on the inflation target in the first quarter of 2026.  

 

Gupta said the current overall policy environment is very conducive to crowd-in private investment even more. "There are some early signs where you get data which says that the private sector probably is investing more in projects, maybe in a small measure, but there are signs," she said. India's policy frameworks have continued to evolve and are currently among the best globally. Its exchange rate, which was pegged until 1991, is increasingly market-driven. However, Gupta said that the exchange rate cannot be used as a tool to boost export competitiveness.  End

 

Reported by Kabir Sharma, Sagar Sen, and Krity Ambey

Edited by Saji George Titus

 

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