'Lack of data': RBI keeps GDP forecast unchanged despite Trump's 25% tariff

RBI Governor Sanjay Malhotra says global uncertainties were already factored in previous growth forecasts and that RBI will continue to monitor macro conditions before revising projections

The Reserve Bank of India (RBI) on Wednesday left its gross domestic product (GDP) growth forecast for the financial year 2025-26 (FY26) unchanged at 6.5 per cent, despite mounting global trade concerns, including US President Donald Trump’s surprise imposition of a 25 per cent tariff on Indian exports at the end of last month.

 

No sufficient data to revise forecast: RBI

RBI Governor Sanjay Malhotra, addressing the media after the Monetary Policy Committee (MPC) meeting, said the central bank had already factored in significant global uncertainties in its earlier projections.

 

He said that the MPC had already reduced the projections to 5.5 per cent from 6.7 per cent this year, stating that "global uncertainties were already factored in the forecast".

 

"We do not have sufficient data to revise our GDP forecast,” Malhotra said.  READ RBI MPC MEETING LATEST UPDATES LIVE 

US imposes 25 per cent tariff on India

The US tariffs, which came into effect on August 1, are expected to hit key Indian export sectors including gems and jewellery, textiles, pharmaceuticals, and engineering goods. Some analysts estimate the measure could shave 20–40 basis points off the GDP growth, but the RBI remains cautious.

 

RBI to monitor conditions policy-to-policy

Malhotra noted that the RBI had already implemented a 100 basis point rate cut in 2025, with the effects still feeding through the economy.

 

“Monetary policy transmission is still happening. We will continue to do whatever is required to facilitate good growth while also maintaining price stability,” he said.

 

“We will continue to monitor our macroeconomic conditions on a policy-to-policy basis and accordingly take a call. It’s all very, very uncertain,” Malhotra said.  ALSO READ | RBI lowers inflation forecast to 3.1% for FY26; growth outlook unchanged

Trump tariffs to have no major impact on inflation: RBI

On the tariff’s potential effect on prices, Malhotra said, “In India, we are less dependent on the outside in so far as inflation is concerned. If at all, there is an impact, there is also an impact on growth and demand, and this has a reverse impact. It moves in both directions."

 

He reiterated that the RBI MPC did not see "any major impacts" on inflation unless there were retaliatory tariffs, which Malhotra explained were unlikely.

 

Inflation projections for FY26 were revised down to around 3.1 per cent in the August MPC meeting.