Reserve Bank of India (RBI) governor Sanjay Malhotra on Wednesday dismissed US President Donald Trump’s recent description of India as a “dead economy,” asserting that India’s growth performance remains strong and globally significant.
Speaking at the RBI headquarters, Malhotra said India is contributing about 18% to global growth — significantly higher than the US’s estimated 11%. “We are doing very well and will continue to improve further,” he told reporters, citing India’s robust domestic demand, favourable monsoon forecasts, and steady agricultural and rural recovery.
The RBI projects India’s GDP growth at 6.5% for FY25, well above the International Monetary Fund’s global growth estimate of 3%. Malhotra noted that India has averaged 7.8% annual growth in recent years and said the aspirational target should remain higher than the current forecast.
The remarks came amid heightened trade tensions following Trump’s announcement to raise tariffs on Indian goods from 10% to 25%, effective Thursday, along with threats of additional penalties over India’s purchases of Russian oil and defence equipment. Malhotra downplayed the impact of US tariffs, saying, “We don’t see a major impact unless there is a retaliatory tariff,” and expressed hope for “an amicable solution.”
The RBI’s six-member Monetary Policy Committee unanimously voted to keep the repo rate steady at 5.50%, after a surprise 50-basis-point cut in June. Rate-sensitive sectors, including auto, realty, and banking, saw stock declines following the policy announcement.
Despite the geopolitical headwinds, Malhotra stressed that India’s economic fundamentals remain sound. “Global trade challenges remain, but the Indian economy holds bright prospects in the changing world order,” he said.
