Reserve Bank of India Governor Sanjay Malhotra said on Wednesday that though higher US tariffs will have some impact, they are not a matter of huge concern for India’s growth.
“India is mostly a domestic driven economy, and while we are impacted by the higher tariffs, it is not a matter of huge concern”, Malhotra said while speaking at the International Monetary Fund and World Bank Fall meetings at the IMF headquarters in Washington.
However, he said that early resolution of the tariff problem will bring an upside in the growth projections. Malhotra also met with the Indian team negotiating the trade deal with US counterparts.
The governor also remarked that the RBI had taken the higher tariffs into account for its projections.
The RBI has forecasted a growth of 6.8% in the fiscal year ending March 2026, a slowdown from the rates of growth recorded over previous years. That forecast takes into account the 50% punitive tariffs.
The RBI cut its key interest rate (repo rate) by a percentage point in June, but has since left borrowing costs at that 5.5% level.
Apart from the US tariff, the governor also spoke about other pressing issues such as the food price pressures, urging the government to address them.
He also commented on the corporate and bank balance sheets and remarked that they were “very healthy”.
IMF On US Tariffs
The International Monetary Fund warned against the US tariffs and said that the global economy is showing signs of strain caused by them and protectionism, despite staying afloat better than expected so far.
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