French asset-manager Amundi has advised the Reserve Bank of India (RBI) to move away from its current neutral policy stance and deliver around 50 basis points (bps) of rate cuts over the next 12 months. According to the report, the push for easing stems from rising external risks, especially potential U.S. tariffs that could slow India’s growth in 2026.
Amundi believes these tariff-related pressures could weigh on exports and broader manufacturing momentum, creating a drag on India’s economic trajectory. To counter this, the firm argues that domestic demand will need stronger support, and a more accommodative monetary policy could serve as a crucial buffer.
A 50 bps cut, though moderate, would signal a clear shift toward easing, likely shaping expectations across bond markets, credit flows, and investment activity. Lower borrowing costs could stimulate credit growth, encourage corporate capex, and cushion sentiment if global trade weakens.
However, the feasibility of this shift is tied to India’s inflation outlook. Even if growth risks rise, the RBI must ensure that inflation remains within target before committing to a cycle of cuts. The policy trajectory will also depend on how U.S.–India trade dynamics evolve and whether tariff threats escalate.
Going ahead, investors will watch for any RBI communication hinting at a stance change, the timing of potential cuts, and fresh macro data that might influence policy direction. With global uncertainty rising, the conversation on growth protection vs. inflation control is becoming more central to India’s monetary debate.