India’s monetary policy pivoted in February 2025 as concerns over food inflation gave way to comfort. Since then, with high-frequency food prices reassuringly corroborating this, most market participants have priced in a 25-bps rate cut in the upcoming policy review on Apr 9, 2025.However, on April 9, the same day as the Monetary Policy Committee statement, global trade will undergo a seismic shift. The imposition of discriminatory reciprocal tariffs by the US will come into effect, with as many as 57 countries subjected to a tariff rate ranging between 11% and 50%, with India facing a 26% tariff.
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