Governor Sanjay Malhotra expressed confidence in India’s economic prospects despite concerns over tariffs imposed by President Trump.
The Reserve Bank of India (RBI) on Wednesday kept the key repo rate unchanged at 5.50%, as rising trade tensions with United States President Donald Trump added a new layer of uncertainty to the economic outlook.
The RBI move came after a unanimous vote by the central bank’s six-member Monetary Policy Committee (MPC), which opted to hold the repurchase rate steady after a surprise 50-basis-point cut in June — the third since February.
RBI governor Sanjay Malhotra addressed concerns over Donald Trump’s escalating threats to impose higher tariffs on Indian imports due to New Delhi’s continued purchases of Russian crude oil.
“We don’t see a major impact of US tariffs on the Indian economy unless there is a retaliatory tariff,” Sanjay Malhotra said, adding, “We are hopeful that we will have an amicable solution.”
Malhotra acknowledged the evolving global trade landscape but expressed confidence in India’s economic trajectory.
“Global trade challenges remain, but the Indian economy holds bright prospects in the changing world order. We have taken decisive and forward-looking measures to support growth,” he said.
India’s robust domestic demand, a forecast of above-average monsoon rains, and continued recovery in agriculture and rural consumption are expected to support GDP growth in the coming quarters.
However, Trump’s tariff rhetoric has heightened trade tensions. On Tuesday, the US President announced plans to “substantially” increase duties on Indian goods, adding to an earlier decision to raise tariffs from 10% to 25%, set to take effect on Thursday. He also warned of a separate penalty over India’s purchases of Russian military hardware and oil.
Last week, Trump went further, calling India a “dead economy”, comments that have drawn sharp criticism from Indian political and trade circles.
Interest rate-sensitive auto, realty, bank stocks decline as RBI holds rates steady
Interest rate-sensitive auto, realty and bank stocks on Wednesday declined 5 per cent after the RBI kept its policy interest rate unchanged, as policymakers weighed the risks posed by Donald Trump’s trade policies.
The scrip of Bosch declined 4.85 per cent to trade at ₹38,617.75, Hyundai Motor India fell 1.95 per cent to ₹2,146.15, HeroMoto Corp depreciated 1.31 per cent to ₹4,482.60, Apollo Tyres diminished 1.07 per cent to ₹435.10, and Mahindra & Mahindra dipped 0.83 per cent to ₹3,183.50 on the BSE.
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