On April 8, 2025, the Reserve Bank of India (RBI) cut its FY26 GDP growth forecast by 20 basis points, reducing it to 6.5% from the previously projected 6.7%. This revision comes as the global economy faces trade tariff disputes and concerns about a potential recession in the US. RBI also lowered its inflation forecast to 4% for FY26.

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• RBI cuts FY26 GDP growth forecast to 6.5%, down from 6.7%.
• CPI inflation projection reduced to 4% from 4.2% for FY26.
• Global trade tensions and tariff measures are increasing economic uncertainties.
• RBI governor highlights global tariff measures worsening global growth and inflation outlook.
• Financial markets have reacted with sharp declines in dollar index, equity sell-offs, and softening bond yields.
• Agriculture sector prospects remain positive due to healthy reservoir levels and strong crop production.
• Manufacturing activity shows signs of recovery, with robust business expectations.
• Investment activity is gaining momentum due to higher capacity utilization and infrastructure spending.
• Services sector activity remains resilient despite global trade disruptions.
• RBI cuts key repo rate by 25 bps to 6%, changes policy stance to ‘accommodative’.