Washington D.C. – Reserve Bank of India (RBI) Governor Sanjay Malhotra has stated that India's strong macroeconomic fundamentals mean that recently imposed US tariffs are "not a matter of huge concern". Speaking at the annual International Monetary Fund (IMF) meetings held this week, Malhotra addressed concerns about the impact of the tariffs, including those levied on India's crude oil trade with Russia, which now stand at 50%.

Malhotra emphasized that India's economy is primarily driven by domestic demand, giving it resilience against global headwinds. He acknowledged that while tariffs inevitably have some impact, they do not pose a substantial threat to India's overall economic stability. He highlighted the depth of Indian markets and pointed to increasing capacity utilization as a positive indicator of economic strength.

The Governor recognized the current era as one of "unprecedented uncertainties" due to various factors, including policy shifts, which present challenges for emerging market economies. Despite these uncertainties, Malhotra conveyed confidence in India's ability to manage inflation and navigate global disruptions.

According to Malhotra, India has successfully reduced inflation from a peak of 8% to around 1.5%, which he noted was the lowest level in eight years. He attributed some ongoing challenges to the significant role of food prices within India's Consumer Price Index (CPI) basket, which creates specific hurdles for the fiscal committee.

Malhotra also highlighted India's strong economic performance, with growth forecasts exceeding 8% in the past year. He stated that the country's fiscal deficit is under control, at 4.4% of GDP, and that overall debt remains among the lowest globally.

In related news, the IMF has slightly revised its global growth forecast downward for the coming year, but still projects a resilient world economy. IMF Managing Director Kristalina Georgieva noted that the global economy is performing "better than feared, but worse than needed," with trade tensions and the rise of artificial intelligence creating both challenges and opportunities. While the US tariff shock has been less severe than initially anticipated, Georgieva cautioned that continued changes in US tariff rates could trigger further inflation and retaliatory measures.