With inflation in India expected to remain close to target during the current fiscal year, the Reserve Bank of India (RBI) has room for further monetary easing, members of the Monetary Policy Committee said in the minutes of the April policy meeting, released on April 23, according to a Reuters report.

At that meeting, the Monetary Policy Committee—comprising three RBI officials and three external members—cut the key repo rate by 25 basis points to 6% and shifted its stance from “neutral” to “accommodative”, the report said.

The April cut followed a similar quarter-point reduction in February, which marked the start of the current easing cycle and the first rate cut in nearly five years.

India’s retail inflation fell to a more-than-five-year low of 3.34% in March, helped by continued moderation in food prices. Above-average monsoon rainfall could further ease food inflation in the coming months.

Members of the MPC acknowledged the uncertainty around the impact of the US-China trade dispute on the Indian economy, Reuters said. External member Saugata Bhattacharya observed that unless trade tariffs are substantially eased, global trade and growth could slow significantly, with spillover effects on India through external channels, further dampening domestic growth prospects.

RBI Executive Director Rajiv Ranjan added that the substantial progress made in bringing down inflation has given monetary policy the flexibility to shift its focus towards supporting growth.

Indian economy is facing a slowdown and lower rates are expected to boost growth. The International Monetary Fund (IMF) on April 22 revised India’s GDP growth forecast for FY26 downward to 6.2%, from its earlier estimate of 6.5% in January, citing persistent global uncertainty and trade tensions.

Despite the downgrade, the IMF described India’s growth outlook as relatively stable, supported by rural consumption. However, the new estimate marks a 0.3 percentage point decline from its January 2025 forecast.