Ongoing trade talks with US expected to conclude during the year: Survey
New Delhi (PTI): Ongoing negotiations for a trade agreement with the US are expected to conclude during the year, a development that could help reduce uncertainty on the external front, according to Economic Survey 2025-26.
For India, it said, the global conditions translate into external uncertainties rather than immediate macroeconomic stress.
Slower growth in key trading partners, tariff-induced disruptions to trade and volatility in capital flows could intermittently weigh on exports and investor sentiment, the Survey said.
"At the same time, ongoing trade negotiations with the United States are expected to conclude during the year, which could help reduce uncertainty on the external front," it said.
India and the US are negotiating a bilateral trade agreement since March last year. So far, six rounds of negotiations have been held. Talks are going slow as the Trump-administration has imposed a steep 50 per cent tariffs on Indian goods from August last year.
A delegation from the office of the US Trade Representative, led by Deputy US Trade Representative Ambassador Rick Switzer, was here in December 2025 for trade talks.
The visit of US officials marks their second trip since the imposition of a 25 per cent tariff and an additional 25 per cent penalty on Indian goods entering the American market due to the purchase of Russian crude oil.
India is currently subject to an effective export tariff rate of 50 per cent on goods exported to the US, and this rate is among the highest imposed on any country.
"There has been progress in negotiations of the trade deal between the two countries," the Survey said.
It added that the global economic landscape is becoming increasingly unpredictable, driven by tariff increases, supply chain adjustments, and higher regulatory hurdles.
"For Indian industries, the current wave of US tariff implementations and stricter non-tariff barriers presents a significant challenge, particularly for export-oriented sectors," it said.
Further, it said there has been some specific impact of the tariffs, Indian exporters in some labour-intensive and small-scale sectors are showing resilience by shipping goods to alternative destinations.
India's exports to the US have declined during April-November 2025, but registered positive growth in other countries.
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RBI keeps policy rate unchanged amid inflationary pressure
Mumbai (PTI): The Reserve Bank on Wednesday expectedly kept interest rates unchanged amid hopes of a global recovery on the back of ceasefire in the six-week-long US/Israel-Iran conflict.
The policy decision comes as a month and a-half-long West Asia conflict has disrupted energy supplies, shot up crude oil prices and created fiscal and inflationary pressures for import-dependent nations like India.
This is the first monetary policy review after the government announced a fresh inflation target for the RBI last month. The government has asked the RBI to maintain retail inflation at 4 per cent with a margin of 2 per cent on either side for another five years ending March 2031.
Announcing the first bi-monthly monetary policy for the current fiscal, RBI Governor Sanjay Malhotra said the Monetary Policy Committee (MPC) has unanimously decided to retain short-term lending rate or repo rate at 5.25 per cent with a neutral stance.
The rate cut pause comes on the back of the consumer price index (CPI) based headline retail inflation that moved closer to the RBI's medium-term target of 4 per cent at 3.21 per cent in February.
Additionally, the rupee has depreciated by over 4 per cent since the war, which has consequences for pushing up import inflation.
However, the rupee has appreciated by 50 paise to 92.56 against US dollar following announcement of the ceasefire by the US and Iran.
Based on the recommendation of the MPC, the RBI reduced the repo rate by 25 bps each in February, April, and December 2025 and 50 basis points in June amidst easing retail inflation.
India's retail inflation dropped to a historic low of 0.25 per cent in October 2025, marking the lowest level since the Consumer Price Index (CPI) series was introduced.
However, the rupee declined to historic low and crossed 95 against a dollar last month making imports costlier, raising fears of rise in inflation. Rupee touched a record low of 95.21 on March 30, 2026.
