India's Economy Holds Strong in June–July Despite Global Tariff Worries: RBI Bulletin

The Reserve Bank of India (RBI) has said that India’s economy stayed stable and strong during June and July 2025, even though there was global uncertainty about tariffs. The RBI’s latest bulletin highlights that domestic activity remained strong, backed by a good monsoon and strong kharif crop expectations. Agriculture is getting good support from the weather, and the services sector is also growing at a steady pace.

The industrial sector showed modest growth, but nothing worrying. The biggest good news was around inflation. Consumer price inflation (CPI) stayed below 4% for five months in a row, and in June 2025, it dropped to 2.10%—the lowest level since January 2019. This drop was mostly due to falling food prices.

The RBI warned, however, that a 10% rise in global oil prices could push up India’s inflation by about 20 basis points right away. But the good news is that India’s external sector is still strong. With high forex reserves and a stable external debt-to-GDP ratio, India is well-positioned to handle shocks from outside.

The RBI also pointed out that global tariff tensions are a possible risk. Many countries are putting up new trade barriers, and that could hurt trade. But India’s strong economy, good financial buffers, and low inflation give it the strength to handle these risks. The RBI has kept its policy supportive, with rate cuts and good liquidity, helping the economy grow without causing high inflation.

High-frequency data shows that consumer demand is still strong, and there is no major slowdown in activity. The RBI remains watchful of global changes and says it will act if needed to support the economy.

Overall, the bulletin paints a picture of balanced growth across agriculture, services, and industry, and highlights that India’s core economic strength is helping it stay stable, even as other economies face uncertainty.