Key takeaways

• The Reserve Bank of India (RBI) kept the policy rate unchanged at 5.5% for the second consecutive meeting and retained the monetary stance at “neutral”.
• The RBI raised its FY 26 (April 2025 – March 2026) GDP growth forecast to 6.8% from 6.5% previously. It also cut its inflation projection for FY26 to 2.6% (from 3.1% previously), owing to the good monsoon season, which should result in softer food price inflation. The RBI also released its 4QFY27 inflation forecast at 3.9%.
• Based on the guidance from the RBI, we believe that should the 50% tariffs continue till year-end, the central bank is likely to cut rates by 0.25% to 5.25% in the December MPC meeting. We retain our neutral stance on Indian equities and favour domestically oriented sectors, which should be relatively more resilient. We are overweight on the consumer discretionary, financials, industrials and healthcare sectors.

Please refer to the full report for details about the event and our investment view.

https://www.hsbc.com.my/wealth/insights/market-outlook/special-coverage/rbi-stays-on-hold-keeps-the-door-open-for-future-cuts/