Reserve Bank of India (RBI) Governor Sanjay Malhotra stated on Friday, October 3, 2025, that India has emerged as an "anchor of stability" in a turbulent global landscape. Speaking at the Kautilya Economic Conclave in New Delhi, Malhotra highlighted India's strong macroeconomic fundamentals, policy continuity, institutional resilience, and reform momentum as key factors contributing to this stability.
Malhotra pointed out that India has successfully avoided major financial crises and remains among the fastest-growing large economies in the world. He expects inflation to return to the RBI's comfort zone of 4% by February 2026. The Governor contrasted India's performance with that of advanced economies in managing global economic uncertainties, including the fallout from trade friction and geopolitical shocks.
According to Malhotra, India's strong macroeconomic fundamentals include low inflation, healthy foreign exchange reserves, a narrow current account deficit, and strong balance sheets of banks and corporations. RBI data released on Friday, September 26, 2025, indicates that India's forex reserves stood at USD 700.236 billion. He attributed this success to the combined efforts of government policymakers, regulators, and regulated entities, leading to an equilibrium of resilient growth despite recent challenges.
The RBI Governor noted that central banks worldwide have had to shift from being "steady guardians of price stability" to "first responders" in an era marked by relentless shocks, including the 2008 financial crisis, the Eurozone debt crisis, the COVID-19 pandemic, and the Russia-Ukraine war. He stated that for India, navigating these challenges involved a mix of aggressive monetary easing during the pandemic, decisive liquidity support with clearly defined exit timelines, and a rapid tightening cycle once inflation exceeded tolerance levels in 2022.
The Reserve Bank has revised its growth estimates for the current fiscal year upward to 6.8% and lowered its inflation projection to 2.6%, citing an above-normal monsoon and the rationalization of GST rates. The central bank projects CPI-based inflation for 2025-26 at 2.6%, with 1.8% for Quarter 2 and 3, and 4.0% for Quarter 4.
Looking ahead, Malhotra cautioned that the global economy is likely to underperform its potential for years to come. He identified risks such as high tariffs, stretched public debt, and complacent equity markets that are not fully priced in, raising the possibility of fiscal dominance restricting monetary policy in several economies. He also suggested that gold prices are acting as a barometer reflecting global uncertainties.
