“UNCERTAINTIES”
Analysts at Goldman Sachs have reduced their forecast for the current fiscal year from 6.3 % to 6.1 %, according to economists who believe Trump’s tariffs will have an impact on India’s GDP growth.
In a statement, the RBI’s monetary policy committee ( MPC ) stated that “recent trade tariff related measures” had “exacerbated uncertainties” and” clouded the “economic outlook across regions”
The mild inflation and modest growth outlook require that the MPC continues to support growth in such hard global economic conditions, the statement added.
In February 2024, India’s central bank cut interest rates for the first time in nearly five years as it sought to enhance an market that has been weighed down by subdued urban consumer sentiment, a slow developing market, and lower government spending.
The Indian economy is projected to have increased by 6.5 % in the most recent fiscal year, which is its slowest rate since the COVID-19 pandemic, from 9.2 % in 2023-24.
New Delhi has slowly responded to Trump’s erratic trade practices so far.
After Trump’s trek in jobs made it harder for rival manufacturers to be hit by the increase, the Department of Commerce announced last week that it was looking into both “implications” and “opportunities.”
Washington and New Delhi are now at the forefront of negotiations for a bilateral trade deal, the first of which they hope to finalize by the fall of this season.