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#Operation Sindoor
Live Updates| From Sindoor to showdown? Track Indo-Pak conflict as it unfoldsIndia hits Lahore's Air Defence Radars in proportionate responsePakistan tried to hit military targets in these 15 Indian cities, New Delhi thwarts strikesMalhotra noted that while domestic growth momentum is gradually building, it still falls short of expectations. “The growth is improving but remains lower than what we aspire for,” he said.
The central bank revised its FY26 GDP growth projection to 6.5%, down from the earlier estimate of 6.7%. Quarter-wise, GDP is now expected to grow at 6.5% in Q1, 6.7% in Q2, 6.6% in Q3 and 6.3% in Q4 — a downward revision from 6.7%, 7%, 6.5%, and 6.5%, respectively.
According to the RBI, economic activity slowed to a four-year low of 6.5% in the year ended March 2025. The slowdown was attributed to shrinking urban demand, high inflation, and reduced loan disbursals due to stricter regulatory controls.
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Speaking on global policy developments, Malhotra pointed out, “First and foremost, uncertainty in itself dampens growth by affecting investment and spending decisions of businesses and households. Second, the dent on global growth due to trade frictions will impede domestic growth. Third, higher tariffs shall have a negative impact on net exports. There are, however, several known unknowns — the impact of relative tariffs, the elasticities of our export and import demand; and the policy measures adopted by the Government including the proposed Foreign Trade Agreement with the USA, to name a few. These make the quantification of the adverse impact difficult.”
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India's '26% tariff' era begins
Donald Trump's 26% tariff on Indian goods kicked in officially starting 9:30 am on Wednesday. The tariff comes as a part of his sweeping trade policy targeting several partners, which he says is necessary to address “unfair practices.”The tariffs are part of a two-tier plan. A flat 10% baseline tariff on all US imports came into force on April 5 under a national emergency order citing trade deficit-related security concerns. Starting April 9, higher tariffs apply to specific countries and products, including Indian goods.
"India very, very tough. The Prime Minister just left and is a great friend of mine, but you are not treating us right. They charge us 52 per cent and we charge them almost nothing," Trump had said at the White House's "Make American Wealthy Again" event in the Rose Garden.
Before the announcement, India’s Ministry of Commerce and Industry had been assessing various scenarios to manage the likely fallout. According to reports, the ministry held consultations with domestic industries and reviewed tariff imbalances and non-tariff barriers affecting Indian exports to the US.
A Reuters report noted that India expressed readiness to offer tariff cuts on over 50% of American imports worth $23 billion—a significant gesture in recent trade diplomacy.
In 2024, bilateral trade between the two nations stood at $124 billion. India exported goods worth $81 billion to the US, while imports were $44 billion, giving India a trade surplus of $37 billion.
Indian markets not liking the change?
Despite the RBI’s policy easing, domestic equity markets reacted negatively to the broader trade environment. The BSE Sensex fell 452 points to 73,774 while the Nifty50 dropped 159 points to 22,376 by mid-morning trade.Tired of too many ads? Remove Ads
Pharmaceutical stocks, in particular, came under pressure after reports emerged that the US may extend tariffs to the pharma sector. Shares of Gland Pharma fell 6% on the BSE, while Aurobindo Pharma and Dr Reddy’s Laboratories declined 5% and 4.2% respectively.
The RBI’s shift to an accommodative stance and continued liquidity measures signal a broader effort to mitigate the risks from external shocks and support domestic growth amid a changing global trade environment.
