After an exceptionally strong first half of 2025, India’s economy faces a more challenging rest of this year and 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 cut the repo rate by a further 50bps this year, taking it down to 5.00%.
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