Even if India is compelled to reduce its dependency on Russian oil due to US pressure, RBI governor Sanjay Malhotra insisted that domestic inflation would remain unaffected.
Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that the new tariffs imposed by U.S. President Donald Trump on India are not likely to have a major impact on the Indian economy but only if India does not respond with its own tariffs. Speaking at a press conference after the latest Monetary Policy Committee (MPC) meeting, Malhotra said, “We don’t see any serious effect of the U.S. tariffs on our economy, unless we decide to hit back with counter-tariffs.”
Indian economy doing very well, says RBI governor amid Trump’s comments
Responding to recent remarks made by Trump about India’s economy, Governor Malhotra said that India’s economy is doing very well and is contributing more to global growth than the United States. Malhotra shared that India is expected to grow at a 6.5 per cent rate in 2025, while the global growth rate is likely to stay around 3 per cent.
Speaking at a press briefing after the RBI’s bi-monthly monetary policy review, he said: “India is contributing about 18 per cent to global growth, which is much higher than the 11 per cent contribution from the U.S.”
He also said that even if India is forced to buy oil from countries other than Russia, it would not have any major impact on domestic inflation. If needed, the government may reduce taxes on fuel to help ease the burden on common people.
RBI Deputy Governor Poonam Gupta added that current global tensions are not expected to directly affect inflation within India.
What did Trump say on Indian economy and new tariff?
Malhotra’s remarks came a day after former US President Donald Trump threatened to sharply increase tariffs on India within the next 24 hours. Trump accused India of supporting the Russia-Ukraine war by continuing to buy oil from Russia.
In an interview with CNBC, Trump said: “India has the highest tariffs compared to any other country… We had agreed on 25 per cent, but now I think I’ll raise it a lot in the next 24 hours because they are buying Russian oil. They are fueling the war machine.”
Last week, Trump went further, calling India a “dead economy”, comments that have drawn sharp criticism from Indian political and trade circles. “I don’t care what India does with Russia. They can take their dead economies down together,” Trump had said.
