With less than a week past since markets globally fell into a tariff-driven tailspin, the Reserve Bank of India finds itself among the first high-profile central banks, along with New Zealand, to issue a formal policy response, due on Wednesday.
While Fed Chair Jerome Powell has demurred on whether to respond quickly with rate cuts to bolster growth, wary that a trade war could also trigger inflation, analysts say this is the RBI's moment to step up as a first-mover among the doves.
India's long-running worries about inflation and currency weakness have eased in recent months, while flagging GDP growth has made the central bank more amenable to policy easing that could shore up the world's fifth-largest economy.
Read here to catch up on expectations for the RBI's policy decision.
Weakness in the dollar - and potentially in China's yuan - as well as lower global crude oil prices, which have fallen 13% since last week's tariff announcements, can further help to keep inflation reined in. The RBI has forecast a comfortable inflation rate of 4.2% for 2025/26 - close to its 4% target.
Things are different on the growth front.
At first blush, India appears to have been spared the worst of the new U.S. tariffs, with a "reciprocal" rate of 26% compared with 34% for China and 46% for Vietnam, two of Asia's most heavily export-dependent economies. You can see a graphic on the global spread of tariffs here.
The tariffs' hit to Indian GDP growth is estimated by economists at a modest 20-50 basis points for this financial year, while the government believes its projected 6.3-6.8% growth rate will hold.
But India's policy makers are nervous all the same.
The RBI has forecast GDP growth this year at 6.7%, a slight improvement from a four-year low of 6.5% expected for the financial year just ended in March but still well short of what had become the norm for the world's fastest growing major economy in the post-pandemic years.
The tariffs could also deliver a heavy blow to consumer demand in sectors such as gems and jewellery, although others like textiles may have an opportunity to benefit from higher U.S. tariffs on competing nations.
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