DESPITE TARIFF HEAT, POLICY EASING LIKELY TO STAY ON TRACK

India's inflation may undershoot RBI forecast by 40-50 basis points

- RADHIKA RAO

than a tenth of the total exports to the US, with other sectors still exposed to higher tariffs. Our growth impact framework marries export elasticities and bilateral trade/sector flows, signaling about 0.3-0.4% of GDP modest downside risk for India.

India has steered clear of retaliatory action, instead counting on a successful conclusion of the ongoing bilateral trade agreement with the US next quarter to lower the effective tariff rate on India's exports to the US.

Despite the tariff heat, multiple domestic data sets—low oil prices, easing inflation, slower growth and a firmer currency—have aligned to make way for the Monetary Policy Committee (MPC) to lower rates further.

An agreement by key OPEC+ producers to raise output from May has further depressed global oil prices, with world growth slowdown risks likely to keep over-supply risks in view.