After a very strong 2025, economic growth in India is likely to slow in 2026 in the face of punitive US tariffs. But they could get rolled back and, even if they don’t, India will remain a relative bright spot in the global economy. Inflation has probably bottomed out but will rise only gradually back towards the RBI’s 4% target over the coming months. That leaves scope for the RBI to deliver one final 25bp repo rate cut (to 5.00%) in February and keep policy accommodative throughout next year.
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