RBI: According to a Reserve Bank of India assessment, amid growing global uncertainty, a persistent emphasis on macroeconomic fundamentals and economic reforms is anticipated to maintain the Indian economy on a high-growth trajectory.

The research claims that an extraordinary change in international trade policy occurred in 2025, with a number of nations pursuing bilateral renegotiations on terms of trade and tariffs. Global trade flows and supply chains are still being affected by these shifts, which has increased uncertainty and raised worries about the future of global economy.

According to the statement, “Global trade rules underwent an unprecedented change in 2025. The Indian economy was not entirely immune to the challenges from the external sector. In the face of a rapidly changing global environment, sustained attention to macroeconomic principles and economic reforms should assist unleash efficiency and productivity gains to firmly maintain the economy on the high-growth trajectory.

The paper emphasized that monetary policy had sufficient room to promote growth while inflation was expected to remain benign. It is anticipated that sustained focus on bolstering macroeconomic fundamentals and implementing economic reforms would generate productivity gains and efficiency, bolstering India’s development momentum.

Regarding the financial markets, the RBI said that optimism around Big Tech firms was a major factor in the equities markets’ continued buoyancy for the most of the year.

But lately, there has been some risk-off sentiment in the equities markets due to worries over high valuations. As global caution has grown, portfolio flows to developing economies have also slowed in recent months.

The Monetary Policy Committee’s (MPC) December 5 decision, which was included in the report, increased India’s growth estimate for 2025–2026 by 50 basis points to 7.3% from 6.8% predicted in the October bi-monthly review.

Concurrently, the CPI inflation forecast for 2025–2026 was lowered from its initial estimate of 2.6% to 2.0%, a 60 basis point decrease.

The domestic economy’s high-frequency indicators for November indicated that demand conditions were strong and overall economic activity remained resilient. Despite a little increase, headline CPI inflation remained below the lower tolerance limit. Financial resources continued to flow steadily to the business sector, and financial conditions remained benign.

The RBI said that, in comparison to the same time last year, India’s current account deficit decreased in the second quarter of 2025–2026 thanks to a smaller goods trade deficit, solid remittance inflows, and strong service exports.

Overall, the research made clear that India is still in a good position to manage global issues and maintain rapid economic development.