India’s state election cycle has resumed, with voting now underway in Kerala and Assam, to be followed by Puducherry, Tamil Nadu and West Bengal later in April, with results due on 4th May. These states collectively account for around a quarter of India’s GDP and are politically significant given their role in electing 50 members of the Rajya Sabha, where the governing alliance’s majority remains narrow.
The Reserve Bank of India kept its repo rate unchanged at 5.25% earlier this week and signalled a continued neutral, wait-and-see stance amid heightened geopolitical uncertainty in the Middle East. While inflation is expected to rise over the coming months, it should remain within target, and as a result we expect the RBI to keep interest rates unchanged throughout this year.
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