- Policy Pause, Strategic Play: Repo Rate Steady at 5.25%
- Growth Resilient at 7.6%, But Global Risks Cast Long Shadow
- Inflation Eases, Yet Oil & Geopolitics Remain Wildcards
- Real Estate & Office Markets Draw Confidence from Stability
- Forex Buffer Strong at $697 Billion, FDI Momentum Improves
- Tier 2 & 3 Cities Emerge as Next Growth Frontier for GCCs
NE BUSINESS BUREAU
MUMBAI, APR 9
India’s central bank has chosen caution over haste, with the Reserve Bank of India (RBI) maintaining the repo rate at 5.25 per cent, signalling continuity in monetary policy amid a volatile global backdrop.
Announcing the decision, RBI Governor Sanjay Malhotra said the Standing Deposit Facility (SDF) remains at 5 per cent, while the Marginal Standing Facility (MSF) stays at 5.50 per cent, underscoring a calibrated approach to balance growth and inflation.
“High-frequency indicators up to February indicate sustained strength in economic activity,” Malhotra said, highlighting that growth continues to be anchored by domestic demand.
“Growth impulses remain supported by robust private consumption and sustained investment demand,” he added, noting that urban consumption is likely to gain further traction due to GST rationalisation and a buoyant services sector.
Growth Strong, But Global Faultlines Emerge
Despite strong domestic fundamentals, the RBI flagged rising global uncertainties—particularly geopolitical tensions.
“The intensity and duration of the conflict, along with possible damage to energy and other infrastructure, pose risks to both inflation and growth outlooks,” the Governor cautioned.
He further warned: “Elevated crude oil prices could increase imported inflation and widen the current account deficit.”
Concerns over weakening global growth and potential disruptions in the Strait of Hormuz were also highlighted as downside risks that could dampen exports and remittance flows.
GDP Outlook — Resilient Today, Moderation Ahead
Under a revised GDP series, India’s economy remains robust:
- FY26 Growth: 7.6%
- FY27 Projection: 6.9%
Quarterly projections indicate a mild moderation, with Q1 FY27 at 6.8% and Q2 at 6.7%, reflecting global headwinds.
“Global growth faces increasing downside risks as the sharp rise in energy rises have stoked inflation fears,” Malhotra noted.
Yet, domestic strengths remain intact—services expansion, manufacturing growth, and strong consumption continue to power the economy.
Inflation Trajectory & Liquidity Assurance
The RBI projects CPI inflation at 4.6% for FY27, with a steady quarterly glide path.
- Q1: 4.0%
- Q2: 4.4%
- Q3: 5.2%
- Q4: 4.7%
Food prices are expected to remain stable in the near term.
Reassuring markets, Malhotra said: “We will ensure sufficient liquidity in the banking system to meet productive requirements of the Indian economy.”
External Strength — Forex, FDI & Investment Pulse
India’s macro buffers remain strong:
- Forex reserves: $697.1 billion (as of April 3)
- FDI: Improving on last year’s base
“India remains attractive destination for greenfield FDI projects,” the Governor said, adding that private sector investment is expected to sustain due to high capacity utilisation.
Realty & Workspaces Cheer Stability
Industry leaders welcomed the RBI’s steady stance, especially for real estate and commercial sectors.
Shekhar Patel, MD & CEO, Ganesh Housing Limited, said: “The decision to maintain the repo rate reflects a calibrated approach in navigating prevailing global uncertainties… while safeguarding domestic macroeconomic stability. A stable monetary environment provides much-needed continuity for both investors and end-users, reinforcing confidence across sectors.”
He added: “Homebuyer sentiment, especially across the mid-income and aspirational premium segments, continues to demonstrate resilience… Ahmedabad is steadily emerging as a compelling office destination.”
Managed Offices & GCC Boom Extend Beyond Metros
Umesh Uttamchandani, Managing Director, Dev Accelerator Limited, welcomed the decision, stating: “The decision to maintain the repo rate at 5.25 per cent with a neutral stance strengthens policy stability during global uncertainty.”
“For the managed office sector, this stable rate environment enhances visibility and enables businesses to make long-term decisions with greater confidence.”
He further highlighted India’s expanding global appeal: “As India becomes a preferred destination for GCCs, we are witnessing steady momentum not just in metro cities but also in Tier 2 and Tier 3 markets.”
“With a strong growth outlook and stable borrowing costs, global enterprises are being encouraged to accelerate their expansion plans.”
On future demand trends, he added: “We believe this policy continuity will further strengthen demand for flexible and managed workspaces, as companies increasingly prioritise agility, cost efficiency, and speed-to-market across established and emerging business hubs.”
