In a marked policy shift, the Reserve Bank of India has turned accommodative, focusing squarely on growth. Inflation concerns, it believes, have ebbed. A second 25-basis-point rate cut is now expected to stoke demand—on the assumption that India’s economy is largely shielded from the deepening global tariff war.This notion of near-insularity sits uneasily alongside Governor Sanjay Malhotra’s own caution that rising protectionism could unsettle trade and investment. Yet the central bank’s projection for real GDP growth in 2025–26—at 6.5%, just 20 basis points below its February 2025 forecast—suggests minimal external impact. The modest revision feels more symbolic than substantial.
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