Economists predict that the RBI may keep rates on August 6 due to ongoing trade negotiations with the US.

In its monetary policy review on August 6, the Reserve Bank of India (RBI) is anticipated to keep interest rates. Economists have told Moneycontrol that even as America puts tariff pressure on India, the central bank may decide to take a "wait and watch" stance as a result of ongoing trade negotiations with the US. Last week, US President Donald Trump proposed an unspecified penalty for purchasing Russian energy and weapons, along with a higher than anticipated 25 percent tariff on Indian imports. Even as the two countries continue their trade negotiations, the United States has been increasing pressure on India, particularly for purchasing Russian oil. Later this month, a US trade mission is anticipated in New Delhi for negotiations. According to Gaura Sengupta, an economist with IDFC First Bank, "trade negotiations are still ongoing, and there is still a possibility that a deal can be reached." She said that the RBI should hold off on changing its policies until external developments are more clear. The August policy is likewise expected to maintain the status quo, according to Suresh Ganapathy, Managing Director and Head of Financial Services Research at Macquarie Capital. The Reserve Bank of India (RBI) is widely expected to keep interest rates unchanged in its upcoming monetary policy review on August 6. Economists suggest the central bank will likely adopt a cautious stance due to increasing global uncertainties, especially arising from ongoing trade negotiations between India and the United States. With the US putting pressure on India over its energy and defense ties with Russia and proposing a 25% tariff on Indian imports, the RBI may prefer to maintain the status quo until the geopolitical landscape stabilizes. Recent statements from US President Donald Trump, which include warnings of penalties for India’s purchase of Russian oil and arms, have added to the tension between the two countries. A US trade mission is scheduled to visit New Delhi later this month, and its outcome could significantly shape the future of bilateral economic relations. Until there is more clarity from these talks, economists believe the RBI will avoid any aggressive policy moves. According to Gaura Sengupta, an economist at IDFC First Bank, while inflation remains under control and growth is relatively stable, the uncertainty surrounding external factors justifies a "wait and watch" approach. She notes that any premature action could destabilize financial markets or strain India’s global trade relations further.