RBI Ready to Support Sectors Impacted by US Tariffs, Says Governor Malhotra
RBI Governor Sanjay Malhotra assures monetary policy support and financial measures for Indian sectors affected by new US tariffs, while hoping for minimal impact through ongoing negotiations. RBI calls for stronger investment push amid challenges.
Amar Kant Srivastava 
The Reserve Bank of India (RBI) Governor Sanjay Malhotra has assured that the central bank stands ready to support sectors impacted by the new punitive tariffs imposed by the United States on Indian goods, which came into effect on August 27, 2025. He emphasized that while some sectors like gems and jewellery, textiles, apparel, shrimps, and micro, small and medium enterprises (MSMEs) may face pressure from the increased tariffs, the overall impact on the economy is expected to be minimal. Malhotra expressed hope that ongoing tariff negotiations between India and the US will lead to a resolution that limits adverse effects.
RBI's Monetary Policy and Liquidity Support
Since February, the RBI has pursued an easing monetary policy, reducing the repo rate by 100 basis points to provide ample liquidity to banks and the economy. The central bank is prepared to extend further policy measures to support economic growth and specifically assist sectors bearing the maximum brunt of the US tariffs. Malhotra highlighted the RBI’s dual focus on price stability and growth, committing to strengthen financial stability and deepen bank credit as needed.
Trade and Economic Outlook
The RBI Governor pointed out that 45% of Indian exports to the US are outside the tariff net, mitigating wider damage. Additionally, the government has constituted a committee to assess the tariffs’ impact and formulate support measures accordingly. Despite the heightened tariffs, India’s foreign exchange reserves remain strong at $695 billion, sufficient to cover 11 months of imports, underscoring economic resilience.
Call for Investment and Growth Push
Malhotra urged banks and corporates to leverage their strong balance sheets to fuel a new investment cycle amid global uncertainties, geopolitical tensions, and tariff challenges. He stressed the importance of pushing the frontiers of growth to navigate this choppy environment, reflecting optimism in India's economic potential and policy responses.
In summary, the RBI is proactively addressing the tariff challenges through monetary easing, liquidity support, and financial stability measures, combined with expectations for successful trade negotiations and government interventions to protect vulnerable sectors and sustain economic growth.
