The Reserve Bank of India (RBI) is expected to reduce the benchmark repo rate by 75 basis points in 2025, with 25 basis points cuts planned for April, June, and October policy meetings. According to the State Bank of India (SBI) report, inflation is projected to stay low, but imported inflation and global uncertainties may still impact the economy.

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• RBI likely to cut repo rate by 75 bps in 2025 with 25 bps reductions planned for April, June, and October policy meetings.
• CPI-based inflation forecasted at 3.9% in Q4 of FY25 and averaging around 4.7% for the year.
• Inflation expected to remain between 4.0% to 4.2% in FY26, with core inflation at 4.2% to 4.4%.
• SBI expects the rate cut cycle to begin in April 2025, followed by a second reduction in June and possibly another in October.
• India’s CPI inflation dropped to 3.6% in February 2025, mainly due to falling food prices, including vegetables.
• Vegetable inflation turned negative, the first decline in 20 months, driven by major drops in garlic, potatoes, and tomatoes.
• Imported inflation rising, up from 1.3% in June 2024 to 31.1% in February 2025, driven by higher prices of precious metals, oils, and chemicals.
• The rupee’s depreciation could add to inflationary pressures in the upcoming months.
• India’s industrial production (IIP) grew 5% in January 2025, led by a strong performance in the manufacturing sector.
• Corporate sector shows resilience, with 4,000 listed companies reporting 6.2% revenue growth in Q3 FY25 and an 11% rise in EBITDA.