RBI financial panel member sees no challenges in Indian financial system rising over 6.5% in FY26

Mr. Kumar, in an interview with PTI Videos, additional stated that the Indian financial system, amongst all economies, continues to stay a brilliant spot for the world.

“Actually, greater than a 3rd of world economies are underneath the debt disaster…The industrialised economies are going through quite a lot of stress, excessive inflation and the slowdown of financial development,” he stated.

But as a result of the Indian financial system is extra pushed by home consumption and home funding, and fewer by export or commerce, Mr. Kumar stated India continues to develop very robustly.

“I don’t see any challenges within the Indian financial system reaching upwards of 6.5% type of development within the present yr and the next yr. And, you understand, hopefully this type of development momentum will proceed for coming years but additionally be over time strengthened to 7-7.5%,” he stated.

Also learn: India to develop at 6.5% in FY26: EY Report

The Indian financial system is estimated to have grown at 6.5% within the earlier fiscal yr.

As per the Reserve Bank of India’s projections, the nation’s financial system will increase on the similar price within the present fiscal yr as effectively.

Responding to a query on inflation, Mr. Kumar stated the present price of CPI inflation is round 2% and that is largely a results of the coverage adopted by the MPC (financial coverage committee) or RBI, and now it has come right down to throughout the goal vary.

Asked if there may be room for the RBI for additional price cuts, he stated, “It will depend upon all completely different macro numbers, not simply inflation numbers. If inflation comes right down to 2% in a single month, then it doesn’t imply that it’ll keep there.”

The RBI has minimize the important thing charges by 1 proportion level this yr, and official knowledge pointing to headline inflation cooling to 2.1% in June in opposition to the 4% goal has led to expectations of additional easing.

The six-member financial panel of the RBI is anticipated to announce its subsequent bimonthly coverage in August.

“So, MPC should take a look at pattern projections, not solely inflation knowledge however all different macro-parameters and attain a conclusion on the premise of what the developments and patterns appear to be,” Mr. Kumar noticed.

The RBI has been tasked by the federal government to make sure retail inflation stays at 4% with a margin of two% on both facet.

Responding to a query on India’s proposed Bilateral Trade Agreement (BTA) with the U.S., Mr. Kumar stated, “If we are able to get via this settlement, then we’ll get entry to America’s huge market within the labour-intensive sector the place India has a aggressive benefit due to our considerable labour sources.”

Mr. Kumar identified that India has some considerations about opening up its agriculture sector, the dairy sector and some others.

Noting that commerce negotiations are primarily based on give and take, he stated, “Supposing sure issues, we comply with open up however there could possibly be a quota positioned, which can restrict the tariff benefit given to the accomplice just for a restricted amount.”

So, Mr. Kumar stated, there are numerous methods to handle a commerce negotiation and he’s certain that Indian negotiators try to guard the nation’s pursuits in the absolute best method whereas additionally gaining access to a number of the labour-intensive items markets.

U.S. President Donald Trump has stated the proposed commerce cope with India could be on the traces of what America has finalised with Indonesia on Tuesday (July 22, 2025).

Under the U.S.-Indonesia commerce pact, the Southeast Asian nation will present full entry to its market to U.S. merchandise, whereas Indonesian items would appeal to a 19% responsibility in America.

In addition, Indonesia has dedicated to buying $15 billion in U.S. vitality, $4.5 billion in American Agricultural Products, and 50 Boeing jets.

India has hardened its place on the U.S. demand for responsibility concessions on agri and dairy merchandise. New Delhi has, thus far, not given any responsibility concessions to any of its buying and selling companions in a free commerce settlement within the dairy sector.

India is looking for the removing of the extra tariff of 26% introduced by the U.S. in April. The implementation of the extra tariff has been suspended till August 1, 2025.

India can also be looking for an easing of tariffs on metal and aluminium (50%) and the auto (25%) sectors. Against these, India has reserved its proper underneath the WTO (World Trade Organisation) norms to impose retaliatory duties.

Responding to a query on the surge in internet outward overseas direct funding (FDI), Mr. Kumar stated so far as gross FDI numbers are involved, they’ve proven a very good enhance from $71 billion to $81 billion in 2024-25.

“Net FDI inflows look smaller as a result of there have been quite a lot of repatriations… I’m not too involved about outflows of repatriation, so long as the gross inflows continue to grow, which they’re at this second,” he stated.

Mr. Kumar asserted that the continued good and sturdy efficiency of the Indian financial system will proceed to draw world firms to India, and the FDI outlook for the nation will stay very optimistic and can appeal to increasingly more FDI inflows within the coming yr.

According to UNCTAD’s newest World Investment Report, world FDI flows declined by 11% to $1.5 trillion in 2024, marking the second straight yr of decline.