Key Points

Hemant Jain, President of PHDCCI, said, "Monetary Policy Committee of the Reserve Bank has decided to maintain the status quo on the policy repo rate at 5.5 per cent given the backdrop of moderate headline inflation and high GDP growth in Q1 FY 26 at 7.8 per cent amidst tariff related uncertainties," Jain said. He added that good monsoon conditions, direct tax cuts, and monetary push are expected to lead to an upward revision of India's real GDP growth for the year.

Jain further noted that a healthy southwest monsoon, higher kharif sowing, adequate reservoir levels and comfortable foodgrain stocks have led to a projection of headline CPI inflation at 2.6 per cent for FY 2025-26. He also welcomed the RBI's announcement of 22 measures to improve ease of doing business, strengthen banking resilience, simplify foreign exchange management, enhance consumer satisfaction, and support the internationalisation of the Indian rupee.

Ranjeet Mehta, CEO and Secretary General of PHDCCI, said the RBI's commitment to remain "proactive, objective and consistent" in its communication and actions provides confidence in the adaptability of its policy framework.

ASSOCHAM President Sanjay Nayar said the RBI's decision underlines "a cautious yet supportive approach" by balancing growth with price stability. He said stable interest rates will help corporates plan investments and provide predictability for consumers on borrowing costs, while key sectors such as banking, infrastructure, and automobiles will benefit from steady demand conditions.

Echoing the view, ASSOCHAM Secretary General Manish Singhal said the move will help MSMEs access affordable loans and also maintain rupee stability in foreign exchange markets. "Stable rates support the Indian rupee, attract foreign investment, and manage external pressures like import costs and global capital flows," he said.

Pankaj Chadha, Chairman of EEPC India, called the move a "cautious approach" in view of current global uncertainties. He added that while the decision is welcome, a rate cut in the coming months could ease borrowing costs for exporters, especially as India's engineering exports saw a 5 per cent decline in August due to the 50 per cent tariff imposed by the US. He urged the government to reinstate the Interest Equalisation Scheme to support MSMEs in the export sector.

- ANI