The Reserve Bank of India has said the Indian economy is demonstrating sustained resilience despite escalating global uncertainty stemming from rising tariffs and geo-economic fragmentation. In its latest bulletin on the state of the economy, the central bank highlighted strong macroeconomic fundamentals, easing inflation, and favourable kharif prospects as key anchors for domestic stability.
The report notes that the front-loading of government expenditure and targeted fiscal measures are expected to bolster aggregate demand. Congenial financial conditions have already created space for faster transmission of recent interest rate reductions, potentially supporting consumption and investment.
With major global economies entering intense negotiations ahead of import tariff changes effective August 1, 2025, the RBI pointed to trade policy uncertainty as a growing concern. However, it remarked that financial markets appear optimistic, pricing in the possibility of minimally disruptive trade outcomes. Still, the central bank cautioned against macroeconomic risk underpricing, citing fluid global trade flows and unsettled supply chain dynamics as considerable headwinds.
Amid such challenges, the RBI asserted that India must leverage its position to forge more resilient trade partnerships, deepening integration with global value chains while remaining adaptable to emerging structural shifts. The bulletin also outlined the importance of accelerating domestic infrastructure investment and enacting productivity-enhancing reforms to boost competitiveness.
External forecasts echoed the central bank’s cautiously upbeat stance. Morgan Stanley projected India to become the world’s third-largest economy by 2028, doubling to $10.6 trillion in size by 2035. Meanwhile, the Asian Development Bank estimated GDP growth at 6.5 percent in 2025 and 6.7 percent in 2026, citing strong domestic demand, monetary easing and favourable monsoon conditions. The ADB also pegged inflation at 3.8 percent for 2025 and 4.0 percent in 2026—both well within RBI’s tolerance band.
The RBI bulletin reinforces that amid intensifying global turbulence, India’s economy continues to chart a stable course, supported by prudent macroeconomic management, policy agility and robust structural fundamentals.
