RBI Policy Outlook: Could Inflation, Tariffs Limit Rate Cuts?

India’s Q1FY26 GDP growth hit a five-quarter high at 7.8%, surprising analysts and fueling debate on policy direction. Rumki Majumdar, Economist at Deloitte, highlighted that while income tax and GST cuts, along with a 100 bps rate reduction, have supported momentum, the RBI is likely to pause for now amid tariff-driven global uncertainty. She noted that clarity may emerge by November, after which the central bank could deliver a limited 25–50 bps rate cut by fiscal year-end. According to her, any trade deal with the U.S. would ease uncertainty and guide India’s monetary path.