Reserve Bank of India (RBI) Governor Sanjay Malhotra has confidently responded to US President Donald Trump's recent "dead economy" comment about India, emphasizing that the Indian economy is performing very well and contributing significantly to global growth—more than the United States, in fact. Malhotra stated that India contributes about 18 per cent to global growth, while the US contribution is expected to be around 11 per cent, underscoring India's robust economic trajectory despite rising trade tensions with the US.
Malhotra highlighted India's expected economic growth of approximately 6.5 per cent for the fiscal year 2025-26, which exceeds the International Monetary Fund's global growth estimate of around 3 per cent for 2025. He expressed optimism that India's growth rate aspiration should be even higher, referencing India's historical average growth rate of 7.8 per cent annually. The governor remarked that the Indian economy continues on a strong path, supported by measures taken by the government and RBI to sustain growth.
Addressing concerns about the impact of President Trump's recent tariff hikes—totaling a 50 per cent tariff on Indian goods due to India's purchase of Russian oil—Malhotra clarified that these tariffs are unlikely to have a major impact on the Indian economy unless there are retaliatory tariffs from India. He stated, "We don't see a major impact of US tariffs unless there is a retaliatory tariff," and expressed hope for an amicable resolution to ongoing trade tensions.
Further, Malhotra underscored India's preparedness for challenges in the global economic environment, noting that global trade tensions and geopolitical risks persist, but domestic demand, above-average monsoon rains, and rural consumption recovery will help sustain economic momentum. He also assured that inflation remains under control, aided by declining food prices, particularly vegetables. Core inflation remains steady around the RBI's target of approximately 4 per cent.
On monetary policy, the RBI maintained the key repo rate steady at 5.50 per cent during its latest Monetary Policy Committee meeting despite uncertainties from trade issues. Malhotra acknowledged that the transmission of monetary policy is ongoing, and the RBI remains vigilant to support growth while managing inflation.
In summary, RBI Governor Sanjay Malhotra rejects the "dead economy" narrative pushed by Trump and portrays India's economy as resilient and growing strongly amid global challenges, including recent US tariff measures. While acknowledging uncertainties in global trade, Malhotra remains optimistic about India's prospects and stresses the importance of measured policy responses and diplomatic engagement to navigate economic challenges.
The Gifford fire in the central region has grown into the largest wildfire in the state so far this yearGetty Images
