Financial stability is a necessary condition for sustainable growth. The Reserve Bank of India’s latest Financial Stability Report provides a comprehensive assessment of the strength and resilience of India’s financial system.While domestic risks to financial stability appear largely contained, near-term global risks have increased. This is due to escalating trade tensions, particularly stemming from the Trump administration’s reciprocal tariffs, prolonged geopolitical conflicts, a likely slowdown in global growth, and potential spillovers to emerging market economies.