Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that the tariffs imposed by the Donald Trump-led US administration on India is not a big concern since India is a domestic-driven economy.
“India is mostly a domestically driven economy, so while we are impacted, it’s not a matter of huge concern,” Malhotra said, speaking on the sidelines of the International Monetary Fund (IMF) and World Bank Fall meetings at the IMF headquarters in Washington, DC.
“There will be an upside if we are able to have an early resolution,” said Malhotra, who met the Indian team negotiating the trade deal with US counterparts, too.
What did the IMF say?
The International Monetary Fund warned that the global economy is showing signs of strain from sweeping US tariffs and protectionism, despite holding up better than expected so far.
The RBI is forecasting growth of 6.8 per cent in the fiscal year ending March 2026, a slowdown from the rates of growth recorded over previous years. That forecast assumes the 50 per cent duty remains in place.
The RBI lowered its key interest rate by a percentage point in June, but has since left borrowing costs at that 5.5% level.
FM Sitharaman skips meetings
Union Finance Minister Nirmala Sitharaman skipped this week’s annual World Bank and International Monetary Fund meetings in Washington, as India and the United States remain in talks over trade tariffs related to Russian oil purchases.
Instead, the Indian delegation will be led by Secretary of the Department of Economic Affairs, Anuradha Thakur. The team also included Reserve Bank of India Governor Sanjay Malhotra
The 2025 Annual Meetings of the World Bank Group (WBG) and the International Monetary Fund (IMF) began on Monday, 13 October and will run until 18 October at the IMF and World Bank Group headquarters, in Washington, DC.
The Finance Minister’s absence comes amid ongoing trade tensions, following the Donald Trump administration’s decision to impose a 50 per cent tariff on Indian goods — including a 25 per cent penalty linked to India’s purchases of Russian oil.
A negotiating team is currently in the US, trying to find a “win-win solution” for both sides. Government sources told news agency ANI, “Engagement between the two sides is going on.”
They informed us that the ambassador-designate was in India, where he met with all the stakeholders and had productive meetings.
Commerce Secretary Rajesh Agrawal will join the Indian delegation in the US on Thursday, October 16, for trade talks, as reported by PTI. The report claimed that India has indicated its readiness to step up energy imports from America.
India – US Ties
The relations between New Delhi and Washington have been reeling under severe stress after Trump doubled tariffs on Indian goods to a whopping 50 per cent, including a 25 per cent additional duty for India’s purchase of Russian crude oil.
India described the US action as “unfair, unjustified and unreasonable”. India has also been upset over Trump’s new policy on H1B visas.
However, the recent phone conversations between Prime Minister Modi and US President Trump have raised hopes for a positive outcome from the ongoing trade negotiations.
In our projections, we have taken into account the higher tariffs in the baseline. Although we are affected by high tariffs, it is not a major concern.
PM Modi spoke with President Trump to praise his peace plan for Gaza. Earlier in September, President Trump was the first global leader to call and speak with PM Modi as the prime minister turned 75 the next day on 17 September.
The two countries resumed negotiations for the trade deal after Modi-Trump phone calls.
