MPC meet: RBI revises India's GDP growth projection to 6.5% for FY26

RBI governor Sanjay Malhotra

Reserve Bank governor Sanjay Malhotra on April 9 revised India's growth rate projection for FY26 to 6.5 percent.

The central bank chief projected a GDP growth of 6.5 percent, revising down from 6.7 percent forecasted in the February meeting. Malhotra also projected the Q1FY26 GDP growth at 6.5, down from 6.7 percent, Q2 at 6.7 (down from 7 percent), Q3 at 6.6 percent (up from 6.5 percent) and Q4 at 6.3 percent (down from 6.5 percent).

Malhotra also said the recent tariffs announced by US President Donald Trump has dampened the global sentiment and fueled uncertainty. "The dent on global growth due to trade frictions will also impede domestic growth," the RBI chief said.

He also added that higher tariff shall have negative impact on net exports and there are several "known and unknowns".

"Slow down in global growth could entail further softening in commodity and crude oil prices. Prospects of agriculture sector remain bright, in the light of healthy reservoir levels and robust crop production."

The central bank's monetary policy committee held its quarterly meeting from April 7 to 9.

Malhotra also announced a 25 bps rate cut. The rate setting panel also decided to reduce its inflation forecast for FY26 to 4 percent from 4.2 percent.

"After a detailed assessment of the evolving macroeconomic and financial conditions and output, the MPC voted unanimously to reduce the policy repo rate by 25 basis points to 6 percent with immediate effect," said Malhotra

The rate cut was in line with Moneycontrol's poll of 21 economists that said the central bank is likely to go for a repo rate of 25 basis points (bps) in the upcoming monetary policy on April 9.

In its previous MPC meeting, the central bank governor had projected a GDP growth rate of 6.7 percent for FY26, saying the global economic situation remains challenging.

The MPC had also unanimously decided to reduce the policy rate by 25 bps to 6.25 percent from 6.5 percent and maintain its neutral stance in the February meeting.