What's RBI Governor Sanjay Malhotra's Stance On Donald Trump's Tariff Tactics?

The Reserve Bank of India (RBI) Wednesday maintained its repo rate unchanged at 5.5 per cent as part of its Monetary Policy Committee meet held on August 6, 2025.

The central bank governor Sanjay Malhotra also expressed India's apex bank's views on growth trajectory, inflation, and on Trump's tariff tactics with India at a time when both nations are discussing a bilateral trade agreement, scheduled for its 6th round of talks later this month.

RBI Maintains Key Rates, Treads Cautiously On Trade Uncertainty

Governor Malhotra confirmed that the MPC had unanimously decided to maintain the policy repo rate at 5.5%. Other key rates, the Standing Deposit Facility at 5.25% and the Marginal Standing Facility and Bank Rate at 5.75%, also remain unchanged.

“The MPC met on the 4th, 5th and 6th of August. After a detailed assessment of the evolving macroeconomic and financial developments and the outlook, the MPC voted unanimously to keep the policy repo rate unchanged at 5.5%,” he said.

He added that the committee would continue to keep a close watch on new data and changing domestic and global conditions. “The MPC further resolved to maintain a close vigil on the incoming data and the evolving domestic growth-inflation dynamics to chart out the appropriate monetary policy path. Accordingly, all members decided to continue with a neutral stance,” he said.

Also Read: RBI Sees 3.1% in FY26, CPI Inflation Hits 77-Month Low

Is US Tariff Biggest Hurdle For India's Growth?

Commenting on Trump's latest tariff imposition on India, including a penalty threat and hiking the 25 per cent tariff substantially, RBI Governor Sanjay Malhotra noted that this could affect India's growth going ahead.

“Prospects of external demand remain uncertain amidst ongoing tariff announcements and trade negotiations. The headwinds emanating from prolonged geopolitical tensions, persisting global uncertainties, and volatility in global financial markets pose risks to the growth outlook,” he said.

Further, he noted that India’s domestic economy is indicative of strength, however, global trade issues like tariffs pose challenges.

“Growth is robust and as per earlier projections though below our aspirations. The uncertainties of tariffs are still evolving. Monetary policy transmission is continuing,” Malhotra said.

RBI Governor On Global Economic Outlook

“Political uncertainties have somewhat abated, even though global trade challenges continue to linger. Over the medium term, the Indian economy holds bright prospects in the changing world order, drawing on its inherent strength, robust fundamentals and comfortable buffers,” he said.

Signalling a tough task in hands for policy makers, the RBI Governor said they are faced with "muted growth and slowing pace of inflation, with some advanced economies even witnessing an uptick in inflation".

The current global order poses a difficult scenario for policymakers given they have to "navigate a world characterised by modest growth, sticky inflation and elevated public debt levels."