RBI signals tighter policy as governor warns of four global economic threats

The RBI’s Monetary Policy Committee, composed of six members, narrowly approved a move from a neutral stance to “calibrated tightening” in a 4-2 vote, leaving room for further rate hikes. Governor Sanjay Malhotra, speaking from the RBI headquarters in Mumbai, identified four principal challenges to the global economy: the ongoing West Asia conflict, lingering tariff uncertainties—especially a new U.S. law that could impose up to 100 % tariffs on Indian goods—elevated bond yields in advanced economies, and the risk of a sudden correction in AI-related stock valuations.

He stressed that while these factors strain the domestic growth-inflation outlook, India’s underlying economic strength helps mitigate the impact, and the RBI will aim for price and financial stability. Meanwhile, Brent crude rose roughly 1 % to $101.5 a barrel as storms and Houthi attacks on Saudi facilities outweighed increased Middle-East supply. Global bond yields have surged to multi-decade highs, with the U.S. 10-year Treasury reaching 5.3 %. AI firms such as Anthropic, xAI and OpenAI face heightened scrutiny and regulatory calls.