India’s Monetary Policy Committee highlighted escalating trade uncertainties as a key risk to growth, particularly following stalled India‑U.S. trade talks under Trump-era brinkmanship. Despite multiple negotiation rounds, a full trade agreement collapsed over disagreements on tariffs and industry access.
With Trump ratcheting up tariffs and threatening new duties tied to India’s energy diplomacy, the RBI now faces a complex choice: balance inflation risk amid tighter global liquidity or prioritize growth.
The committee pointed to dwindling clarity on trade policy as a factor lowering business confidence, especially among exporters.