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US Tariffs to Have No Major Impact on Indian Economy: RBI
US Tariffs to Have No Major Impact on Indian Economy: RBI
Sputnik India
The announcement was made by Reserve Bank of India Governor Sanjay Malhotra after the critical Monetary Policy Committee (MPC) meeting from 4-6 August.
2025-08-06T11:33+0530
2025-08-06T11:33+0530
2025-08-06T13:46+0530
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The ongoing tariff wars emanating from the US may not have a "major impact" on the Indian economy, Reserve Bank of India (RBI) Governor Sanjay Malhotra told a post-MPC press conference on Wednesday.RBI Deputy Governor Poonam Gupta, also part of the MPC, also stated that there would be a "limited" impact on the inflation outlook due to global uncertainties. Commenting on the impact on inflation due to external factors, Malhotra said that India was "less dependent on the outside as far as the inflation is concerned".The RBI Governor said that the central bank was maintaining a "close vigil" on incoming data and was closely monitoring the macroeconomic conditions.RBI Keeps Repo Rate UnchangedThe central bank has decided to keep the repo rate unchanged at 5.5%, Malhotra announced earlier in the morning.Significantly, Malhotra lowered the CPI inflation projection for Financial Year 2025-26 to 3.1%, but said it may edge up to 4.4% in the final quarter of the current fiscal."The headwinds emanating from prolonged geopolitical tensions, persisting global uncertainties, and volatility in global financial markets pose risks to the growth outlook," he said.
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US Tariffs to Have No Major Impact on Indian Economy: RBI
11:33 06.08.2025 (Updated: 13:46 06.08.2025) The announcement was made by Reserve Bank of India Governor Sanjay Malhotra after the critical Monetary Policy Committee (MPC) meeting from 4-6 August.
The ongoing tariff wars emanating from the US may not have a "major impact" on the Indian economy, Reserve Bank of India (RBI) Governor Sanjay Malhotra told a post-MPC press conference on Wednesday.
"As of now, we dont see any major impact unless we have retaliatory tariffs," Malhotra said in response to a question posed by a journalist.
RBI Deputy Governor Poonam Gupta, also part of the MPC, also stated that there would be a "limited" impact on the inflation outlook due to global uncertainties.
"Nearly half of our inflation basket consists of food items, which do not get impacted directly due to global developments. A significant part consists of non-tradeables, which do not get impacted by global developments," Gupta said in response to the same question.
Commenting on the impact on inflation due to external factors, Malhotra said that India was "less dependent on the outside as far as the inflation is concerned".
The RBI Governor said that the central bank was maintaining a "close vigil" on incoming data and was closely monitoring the macroeconomic conditions.
RBI Keeps Repo Rate Unchanged
The central bank has decided to keep the repo rate unchanged at 5.5%, Malhotra announced earlier in the morning.
"The current macroeconomic conditions, outlook and uncertainties call for continuation of the policy repo rate of 5.5% and wait for further transmission of the front-loaded rate cut to the credit markets and the broader economy. Accordingly, the MPC unanimously voted to keep the repo rate unchanged," the RBI Governor said.
Significantly, Malhotra lowered the CPI inflation projection for Financial Year 2025-26 to 3.1%, but said it may edge up to 4.4% in the final quarter of the current fiscal.
Malhotra said that external demand remains uncertain due to Washington's tariff announcements and the ongoing India-US trade negotiations.
"The headwinds emanating from prolonged geopolitical tensions, persisting global uncertainties, and volatility in global financial markets pose risks to the growth outlook," he said.
Taking into account domestic and external factors, Malhotra projected the real GDP growth to be at around 6.5% for the current fiscal year.
