US tariffs downplay impact on India, says RBI chief RBI Governor Sanjay Malhotra dismissed concerns over US tariffs imposed during Donald Trump’s tenure, saying India’s domestically-driven economy is strong enough to withstand trade pressures.
Reserve Bank of India (RBI) Governor Sanjay Malhotra dismissed concerns about US tariffs imposed during President Donald Trump’s tenure, saying India’s large domestic economy is resilient enough to easily withstand trade pressures.
“India is primarily a domestic economy, so we are affected, but it is not a major concern,” he said during the autumn meetings of the IMF and World Bank in Washington DC.
Speaking at the IMF Governors’ Dialogue session, Malhotra said India’s macroeconomic fundamentals remain strong despite global turmoil. “We are living through a period of unprecedented uncertainty for a number of reasons, including policy uncertainties. This is a risk that all emerging market economies must consider,” he said.
Malhotra said there could also be “potential gains” if trade talks with Washington reach a quick resolution. He met the Indian team conducting the talks and expressed hope that both sides were working towards a workable understanding.
RBI maintains stability despite pressure on rupee in India
As the rupee has faced fresh weakness amid Trump’s tariff moves, Malhotra reiterated that the RBI is not targeting any particular price level. “We believe in the markets deciding what the level should be,” he said. “Our effort is really to ensure that there is orderly movement of the rupee on both sides and any abnormal volatility is controlled.” The RBI’s repeated interventions have prevented the rupee from breaking its all-time low of 88.80, which was last touched on September 30.
Meanwhile, the Reserve Bank’s Monument Policy Committee (MPC) meeting on Wednesday revealed that six members retained all the documents on the 5.5 per cent rate, while maintaining the remaining globalisation assurance for domestic employees.
The next meeting of the rate-setting panel is scheduled to be held daily from December 3-5.
During the discussion, Governor Sanjay Malhotra had said that after the reduction in the estimates, the main and The softening environment for both the economies provides policy space to further support economic growth.
“Although there is scope for further reduction in the policy rate, I believe this is not the right time for it as it will not have the desired impact,” he said.
“Therefore, I would like to ask for the policy repo rate to be kept unchanged at 5.50%. However, the policy objective is to facilitate growth-enabling conditions,” he said, according to the minutes of the MPC meeting that concluded on October 1.
