We are at a critical juncture’: RBI Governor describes global environment as ‘uncertain’

Reserve Bank of India (RBI) Governor Sanjay Malhotra described the global environment as uncertain, citing trade disruptions and geopolitical tensions, and said, “We are now at a critical juncture”.

Speaking at the annual banking conference FIBAC 2025 in Mumbai on Monday, Governor Malhotra said, “As we navigate the choppy global economic environment characterised by heightened trade uncertainty and persisting geopolitical tensions, we need to push the frontiers of growth. We all must step up our efforts to address emerging challenges and, at the same time, seize the opportunities that are coming our way.”

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He further stressed that the central bank’s Monetary Policy Committee (MPC) will continue to focus on keeping inflation under control while supporting growth.

Governor Malhotra said the foreign exchange reserves are strong enough to cover 11 months of merchandise exports, giving the economy a buffer against global shocks.

“We have very robust foreign exchange reserves, USD 695 billion as per the latest figures that are available with us, sufficient to cover 11 months of merchandise exports,” he added.

“This all has been possible because of very strong and prudent fiscal and monetary policies followed by the government and the various regulators over the last few years. Structural reforms, massive upscaling of both physical and digital infrastructure, improved governance, and enhanced productivity and competitiveness.”

His remarks come amid US tariffs on Indian exports that are set to take effect on August 27.

The Trump administration has announced an additional 25 per cent duty, doubling the overall levy to 50 per cent, linking the move to India’s continued imports of Russian crude oil.