The Reserve Bank of India (RBI) has said that the Indian economy remains strong, supported by steady rural demand, a good monsoon season, and falling inflation. In its latest bulletin, the central bank noted that retail inflation in July dropped to just 1.55%, the lowest in nearly eight years, and well below the 4% comfort level. Lower food prices and improved rural earnings have created positive conditions for consumption, giving policymakers some breathing space.
The RBI pointed out that demand for goods and services is holding firm, while coordinated fiscal and monetary measures are keeping growth on track. The outlook for agriculture also looks stable, thanks to timely rainfall and improved crop prospects.
However, the central bank also issued a warning. It said that rising US tariffs on Indian exports could become a major downside risk. Several sectors, including textiles, agriculture, and chemicals, may feel the pinch if American trade policies continue to tighten. This, the RBI cautioned, could reduce external demand and slow momentum in the coming months.
Despite the global headwinds, the RBI maintained that India’s growth prospects remain resilient. The bank assured that it is closely monitoring global uncertainties and stands ready to act if needed.
