RBI Governor Sanjay Malhotra Says India Can Withstand US Tariff Impact

Reserve Bank of India (RBI) Governor Sanjay Malhotra has downplayed concerns over the US tariffs imposed under President Donald Trump, emphasising that India’s domestic consumption-driven economy remains well-positioned to withstand such external shocks.

Speaking on the sidelines of the IMF and World Bank Fall Meetings in Washington, DC, Malhotra said, “India is mostly a domestically driven economy, so while we are impacted, it’s not a matter of huge concern.”

Strong Fundamentals Support Growth

During the IMF’s “Governor Talks” session, Malhotra reaffirmed that India’s macroeconomic fundamentals remain robust despite global headwinds. “We are living in times of unprecedented uncertainties due to various factors, including policy changes,” he noted, adding that emerging markets must stay prepared for such challenges.

He also pointed out a possible “upside” if trade negotiations with Washington reach a swift and constructive resolution, expressing optimism that both countries are working toward a balanced outcome.

RBI’s Stand on the Rupee and Policy Rates

Addressing the rupee’s recent weakness following the tariff announcement, the Governor clarified that the RBI does not target any fixed exchange rate level. “Our effort is to ensure orderly movement and curb abnormal volatility,” he said.

Active interventions by the central bank have kept the rupee from breaching its record low of 88.80, last seen on September 30.

Meanwhile, minutes from the RBI’s Monetary Policy Committee (MPC) meeting, released Wednesday, showed all six members unanimously voting to keep the repo rate unchanged at 5.5%. The committee cited global uncertainty and stable domestic inflation as reasons for maintaining the current stance.

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Conclusion

Governor Malhotra emphasised that while India has room for further monetary easing, this is not the right time to implement it. He reiterated the RBI’s commitment to ensuring growth-supportive conditions while maintaining monetary stability, signaling a cautious yet confident policy approach amid evolving global trade dynamics.

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