Reserve Bank of India Governor Sanjay Malhotra stated that the recent US tariff hike is unlikely to have a major impact on the Indian economy unless retaliatory tariffs are introduced, which he does not foresee. Speaking at a press conference following the monetary policy announcement, Malhotra expressed optimism about an amicable resolution to the rising trade tensions between India and the United States.
The RBI has revised its GDP growth forecast downward from 6.7 per cent to 6.5 per cent, factoring in global uncertainties. Malhotra assured that India’s foreign exchange reserves are sufficient to cover 11 months of imports, reinforcing confidence in the country’s external sector stability.
Addressing concerns about domestic inflation in the event of reduced purchases of Russian oil, Malhotra emphasized that India sources crude from multiple countries. He noted that any change in the import mix would depend on global commodity prices and government decisions on excise duties and tariffs. He added that no major inflationary impact is expected, as fiscal measures would likely mitigate any price shocks.
RBI Deputy Governor Poonam Gupta echoed this view, stating that the inflation impact would be minimal. She highlighted that nearly half of India’s inflation basket comprises food items, which are not directly influenced by global developments.
