Rama Krishna Sangem
Indian economy is growing strong, in spite of US President Donald Trump’s tariffs – from 50 to 100 per cent on a range of goods and products. This shows the resilience of domestic economy and robust markets. Indian government is not unduly worried or panicked over the imposing of the US tariffs.
RBI has kept the repo rate unchanged at 5.50% with a neutral stance. It signals a balanced approach that supports economic momentum while ensuring financial stability. The report further highlights resilient domestic demand, supportive financial conditions, and a stable external sector, reflecting a cautiously optimistic outlook for the Indian economy.
The Reserve Bank of India (RBI) released its Monetary Policy Report (October 2025) following the 57th meeting of the Monetary Policy Committee held from September 29 to October 1, 2025.
RBI kept the repo rate unchanged at 5.50 per cent with a neutral stance. RBI revised India’s GDP growth forecast for FY 2025-26 upwards to 6.8% from earlier estimate of 6.5%. RBI has lowered its CPI inflation forecast for FY 2025–26 to 2.6%, down from 3.1%.
India’s current account deficit narrowed to 0.2% of GDP in Q1 FY 2025-26 from 0.9% a year ago. During April-September of FY 2025-26 so far (up to September 26), Indian equity markets remained on an upward trajectory
India GDP growth rate at 6.8 pc
The RBI revised India’s GDP growth forecast for FY 2025-26 upwards to 6.8% from earlier estimate of 6.5%. Domestic growth is performing well due to strong consumption, investments, and government spending, with supportive factors like a good monsoon, GST 2.0, better credit flow, and rising capacity utilisation sustaining the positive outlook.
India’s real GDP grew 7.8% in Q1 FY 2025-26, up from 7.4% in the previous quarter, the fastest pace in seven quarters, led by strong investment and consumption. Growth for FY 2025-26 is projected at 6.8% (Q1: 7.8%, Q2: 7.0%, Q3: 6.4%, Q4: 6.2%), while FY 2026-27 is estimated at 6.6%, assuming normal monsoon and stable conditions.
Consumers’ optimism for the year ahead, which is measured by the future expectations index, strengthened further for both urban and rural households, remaining in optimistic territory.
Global Agencies Reaffirm Growth
Several global agencies have maintained India’s strong economic growth prospects, highlighting the country’s resilience amid global uncertainties. IMF (FY26: 6.4%), Fitch (FY26: 6.9%, FY27: 6.3%), S&P Global (FY26: 6.5%).,
United Nations (FY26: 6.3%, FY27: 6.4%), CII (FY26: 6.4-6.7%) and OECD (FY26: 6.7%) have noted robust domestic demand, expanding investments, and a stable external sector as key drivers. Strong policy support, structural reforms, and a vibrant services sector are further reinforcing the positive growth outlook. These projections highlight broad confidence in India’s ability to sustain high growth amidst global challenges.
