The Reserve Bank will step in with policy measures if the 50 percent US tariffs—set to take effect from Wednesday—hit domestic economic growth, Governor Sanjay Malhotra said on Monday.
Speaking at the FICCI-IBA annual banking conclave, Malhotra noted: “We have provided ample liquidity to the banking sector, and whatever else is required to support economic growth, including for sectors that are more affected, will be done. If it so happens, we will not be found wanting in our job.”
He stressed that the central bank has not lost sight of growth while anchoring inflation amid global and domestic uncertainties.
The six-member Monetary Policy Committee has cut the repo rate by 100 basis points between February and June, keeping it unchanged at 5.5 percent in the August review.
Malhotra recalled that the RBI had trimmed its FY26 GDP growth projection to 6.5 percent in April, after the US proposed a 26 percent tariff hike. The Trump administration has since imposed an additional 25 percent duty on Indian imports over New Delhi’s purchase of Russian energy.
While the overall tariff impact is expected to be minimal, Malhotra cautioned that export-heavy sectors such as gems and jewellery, textiles, apparel, and MSMEs could face pressure.
“The government is also looking at free trade agreements, some of which have already been in the works for some time. And on our part, as you are aware, we have been on an easing cycle, reducing the repo rate by 100 basis points,” he said.
