Mumbai – The Reserve Bank of India’s Monetary Policy Committee (MPC) has warned that escalating US tariffs on Indian exports could weigh on growth, even as inflationary pressures remain largely contained.
Minutes from the August meeting, released Wednesday, showed that members unanimously voted to keep the repo rate steady at 5.50% and maintain a “neutral” stance after cutting rates by 100 basis points earlier this year.
RBI Governor Sanjay Malhotra said growth at 6.5% remains “resilient” but is below potential, citing uncertainty from global trade tensions and geopolitical risks. India faces tariffs of up to 50% on exports to the US starting August 27, following additional duties imposed by President Donald Trump over India’s continued Russian oil imports.
Inflation Outlook
- Retail inflation in July fell to its lowest in eight years, driven by easing food prices.
- Deputy Governor Poonam Gupta noted the decline was not broad-based, with core inflation likely to stay above 4%.
- MPC member Ram Singh described the overall CPI outlook for FY25–26 as “very benign,” though risks remain.
- External member Nagesh Kumar argued for caution on further policy action until trade uncertainties ease.
The RBI’s inflation target remains 4% (±2%), and members stressed the need for policy flexibility to respond to evolving global and domestic conditions. India’s latest GDP growth figures will be released on Friday.
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