Apr 08: RBI’s decision to keep repo rate unchanged and with neutral stance reflects a tight rope walking that it faces given the evolving macroeconomic conditions, particularly geopolitical uncertainties and global supply chain disruptions. While domestic economic fundamentals remain robust, external risks weigh on inflation arising from the ongoing West Asia conflict—pose challenges to both growth and inflation rates.
“The RBI’s decision to maintain the policy rate underlines a balanced monetary approach in an environment marked by supply-side disruptions. With domestic demand growth remaining resilient and inflation largely within the target range of 2% to 6%, this position provides stability to industry while addressing emerging risks” said Mr. Rajeev Juneja, President, PHDCCI.
India’s GDP growth is projected at 6.9 per cent for FY 2026-27, supported by strong domestic demand, services sector momentum, and improving manufacturing capacity utilization. However, risks persist from elevated energy prices, disruptions in global trade routes, and financial market volatility, he added.
On inflation front, headline CPI is projected at 4.6 per cent for FY 2026-27, with upside risks from energy price volatility and potential weather-related disruptions such as El Niño. RBI’s “wait and watch” approach is appropriate given the supply-side nature of current shocks, he added.
Improving export competitiveness remains critical in the context of ongoing global trade disruptions and rising logistics costs. Overall, we remain optimistic about India’s medium-term economic prospects, supported by ongoing structural reforms, he added.
“This policy reflects a careful assessment of the evolving domestic and external macroeconomic background. While domestic growth drivers viz. consumption and investment remain healthy, rising global energy prices warrant continued vigilance” said Dr. Ranjeet Mehta, SG & CEO, PHDCCI.”
