The Reserve Bank of India (RBI) lowered its key repo rate by 25 basis points to 6.00%, marking the second consecutive rate cut this year. At the same time, the central bank shifted its monetary policy stance from “neutral” to “accommodative,” indicating a more supportive approach to economic growth and the possibility of further rate cuts in the near future.
The decision, made unanimously by the six-member Monetary Policy Committee (MPC), comes as India’s economy shows signs of weakness amid global uncertainty. Recent U.S. tariff measures, introduced by President Donald Trump, are expected to weigh further on growth prospects, with economists estimating a 20–40 basis point negative impact on GDP this fiscal year.
Governor Sanjay Malhotra stated that while the Indian economy is gradually improving, growth remains below the central bank’s desired levels. The RBI has revised its growth forecast slightly downward from 6.7% to 6.5%, citing global trade tensions and uncertain external conditions. Inflation, on the other hand, remains moderate, with projections at 4%, down from the earlier estimate of 4.2%.
Since taking over in December, Governor Malhotra has adopted a more pro-growth stance than his predecessor, already cutting rates in February and injecting over $80 billion into the financial system to support liquidity. Analysts believe that, depending on how global risks evolve, the RBI could implement an additional 75–100 basis points in rate cuts over the coming months.