After a very strong 2025, economic growth in India is likely to ease in 2026 in the face of punitive US tariffs. However, India will remain a relative bright spot in the global economy, thanks to strong domestic demand. Inflation has bottomed out but a return towards the RBI’s 4% target will be gradual. That leaves scope for the RBI to deliver one final 25bp repo rate cut (to 5.00%) in February and keep policy accommodative throughout 2026.
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