RBI Governor vows swift policy action amid global trade and inflation risks
Mumbai
Reserve Bank of India (RBI) Governor Sanjay Malhotra on Monday said the central bank is prepared to extend financial assistance to sectors most affected by the impending U.S. tariff hikes, ensuring that the Indian economy can withstand potential disruptions.
Speaking at the annual FIBAC banking conference in Mumbai, Malhotra noted that the RBI has consistently stepped in during crises, citing the COVID-19 pandemic as a key example. “During the pandemic, the RBI had announced moratoriums on term loans, eased credit access for micro, small, and medium enterprises (MSMEs), and deployed a series of liquidity measures to stabilize the economy,” he said.
Malhotra emphasized that the RBI’s approach will remain proactive, with measures tailored to shield vulnerable industries and sustain overall financial stability. While he refrained from outlining specific interventions, he assured that policy support would be swift and effective should the tariffs imposed by U.S. President Donald Trump come into force.
Economic analysts have warned that new U.S. trade restrictions could pressure export-driven industries such as textiles, IT services, and auto components. States like Kerala have already expressed concerns, with local ministers warning of a possible regression to “COVID-era conditions” if punitive tariffs significantly curtail foreign trade.
Highlighting the importance of resilience, Malhotra said, “The RBI remains committed to ensuring that Indian businesses, particularly MSMEs, are not left vulnerable to external shocks.” He added that the central bank would work in tandem with the government to safeguard jobs, maintain liquidity, and protect growth momentum. The assurance comes at a crucial juncture when global trade tensions, rising inflation, and currency fluctuations pose significant challenges for emerging economies like India.