India Holds Rates, Revises Up FY25/26 GDP Forecast

The Reserve Bank of India (RBI) kept its key repo rate unchanged at 5.50% during its October 2025 meeting, as widely expected. The decision comes amid easing inflation, although concerns have intensified following the U.S. imposition of 50% tariffs on Indian exports and higher visa fees, raising fears of broader punitive measures on the services sector. The repo rate remains at its lowest level since August 2022, following a total 100 basis point reduction by the central bank since the beginning of the year. On the economic outlook, the RBI revised its GDP growth forecast for FY2025/26 upward to 6.8%, from a previous estimate of 6.5%. Meanwhile, headline inflation projections were lowered to 2.6% from 3.1%, keeping it comfortably within the central bank’s target range of 2%–6%. Core inflation stood at 4.2%. The RBI also held the Standing Deposit Facility (SDF) and Marginal Standing Facility (MSF) rates steady at 5.25% and 5.75%, respectively.