New Delhi: In a bid to mitigate the impact of President Donald Trump’s newly imposed tariffs, India is proactively engaging with the US administration to address trade issues. This diplomatic effort comes as the Reserve Bank of India announced a crucial 25 basis point cut in the repo rate to 6 percent, part of a broader strategy to stabilize the economy amidst escalating global trade tensions. The move underscores India’s efforts to balance internal growth with external pressures.
At the heart of India’s monetary policy stance is a cautious optimism. The Monetary Policy Committee, comprising three RBI and three external members, decided on the repo rate cut to ensure financial stability. RBI Governor Sanjay Malhotra highlighted the challenges in quantifying the impact of global developments on domestic growth. Despite these uncertainties, there is confidence in managing domestic economic progress. This marks the second consecutive reduction in recent months, following an earlier cut from 6.5 percent to 6.25 percent on February 7.
Global trade and policy uncertainties, however, are expected to impede economic growth worldwide. President Trump’s sweeping tariffs, including levies exceeding 100 percent on Chinese goods, have dramatically intensified the global trade war. The US claims to be collecting nearly $2 billion daily from these tariffs, drawing attention to the profound economic implications. In response, Indian equity indices saw significant declines, with the BSE Sensex dropping 554.02 points and the NSE Nifty falling by 178.85 points, mirroring Market volatility across Asia.
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