India Watch: India macro trip takeaways: Risk Managing the economy

Research evidence excerpt

India Watch: India macro trip takeaways: Risk Managing the economy

lizing the rupee, with recent RBI measures on debt inflows and three days later than normal

FCNR(B) deposits seen as initial steps. The preference appears to be attracting capital India Watch: India growth Rahul 02 June

inflows rather than forcing a sharper growth slowdown to reduce external funding needs. meter – Mixed messages Bajoria 2026

India Viewpoint: The Rahul 26 May

#4. Energy burden-sharing will keep fiscal pressure elevated: The government is problem of the Rupee: Bajoria 2026

Fixing the flow,

likely to continue sharing higher energy costs with households and corporates through safeguarding the stock

subsidies and price controls, including on cooking gas, fertilizers and ATF. This keeps the (Part 3)

fiscal deficit at risk of widening toward ~5% of GDP, unless energy prices reverse India Viewpoint: The Rahul 12 May

Problem of the Rupee: Bajoria 2026

materially or expenditure cuts are undertaken. Anatomy of India’s

current account (Part 2)

#5. Inflation likely to rise, with upside risks: Despite subsidies, inflation is expected India Viewpoint: The Rahul 05 May

to move higher as fuel price increases and second-round effects gradually feed through. Problem of the Rupee: Bajoria 2026

Headline CPI could rise toward ~5.5% by September 2026, with risks skewed higher Examining the capital flows paradox (Part 1)

depending on monsoon outcomes and crop conditions.

#6. RBI likely to keep FX and rates policy separate: The RBI appears to be delinking

FX management from monetary policy, using capital-flow measures to support the rupee

while setting rates based on inflation and growth. With growth holding up and inflation

risks rising, August could be a live MPC meeting, with scope for modest rate hikes