RBI Cuts Repo Rate to 5.25%, Industry Lauds Pro-Growth Step

The Reserve Bank of India’s Monetary Policy Committee (MPC) has unanimously reduced the policy repo rate by 25 basis points to 5.25%, while retaining a neutral stance. The decision, in line with market expectations, aims to bolster economic growth amid a favourable inflation trajectory. Alongside the rate cut, the RBI announced substantial liquidity support, including ₹1 lakh crore in open market operation (OMO) purchases and a three-year USD-INR buy-sell swap worth USD 5 billion.

Industry bodies broadly welcomed the move as a continuation of the RBI’s growth-oriented policy approach. Rajeev Juneja, President of the PHD Chamber of Commerce and Industry, praised the central bank’s emphasis on sustaining momentum backed by robust festive demand, rationalised GST structures and softer crude prices. However, he cautioned that recent moderation in PMI Manufacturing, slower IIP growth, and challenges in merchandise exports indicate emerging softness. He also flagged persistent geopolitical risks and uneven global inflation trends.

PHDCCI CEO Dr. Ranjeet Mehta lauded the RBI’s consistency and proactive stance, noting that the MPC’s projection of headline and core inflation at or below the 4% target in the first half of 2026–27 offers clear policy flexibility and reassures industry stakeholders.

Real estate players echoed similar optimism. Manoj Dhanotiya, Founder and CEO of MicroMitti, highlighted that the rate cut will be especially beneficial for affordability-led tier-2 markets by accelerating sales cycles and boosting buyer confidence through lower borrowing costs.

From the automobile sector, SIAM President and Tata Motors Passenger Vehicles MD Shailesh Chandra emphasised that the cumulative effect of recent rate cuts enhances consumer sentiment. Combined with supportive fiscal measures, he expects this alignment to further propel growth in the auto industry.

The RBI’s liquidity initiatives were also widely appreciated, with industry leaders noting that OMO purchases and the forex swap will help maintain durable liquidity and support effective monetary transmission. Overall, industry reactions reflect confidence tempered with alertness to global uncertainties and domestic soft patches.