The Reserve Bank of India (RBI) announced its first monetary policy decision for FY26 amidst rising global tensions following recent US tariff hikes. RBI Governor Sanjay Malhotra highlighted the uncertain global outlook, citing falling crude prices, weakening dollar, and sliding equities as signs of financial turbulence.

In a move to cushion India's economy from external shocks, the RBI slashed the repo rate by another 25 basis points to 6%, offering relief to borrowers with lower EMIs. This marks the second consecutive cut, indicating a shift toward easing.

The central bank lowered India's GDP forecast to 6.5%, down from 6.7%, and warned of headwinds driven by global protectionism. CPI inflation for FY26 is expected at 4%, with food inflation falling to a 21-month low of 3.8% in February due to cheaper vegetables.

The RBI remains cautiously optimistic but prepared to act further if global volatility worsens.