Mumbai — Reserve Bank of India Governor Sanjay Malhotra has assured that the central bank is prepared to take necessary measures to shield the economy from the fallout of steep U.S. tariffs on Indian goods. Speaking at the FICCI-IBA Annual Banking Conclave, Malhotra said the RBI stands ready to support sectors that may be disproportionately impacted.
“Whatever support is required, we will not be found wanting in our job,” he said, stressing that the banking system has already been provided with sufficient liquidity buffers to manage external shocks.
The U.S. decision to raise duties on Indian exports to 50%, doubling the previous levy, is expected to hit key industries such as textiles, gems and jewellery, apparel, shrimp exports, and micro, small and medium enterprises (MSMEs).
While acknowledging the risks, Malhotra expressed confidence that ongoing negotiations between New Delhi and Washington could soften the blow. He emphasised that the RBI’s role would be to ensure that India’s growth momentum is preserved, even if global trade tensions intensify.
Sectors Under Strain
Exporters warn that the tariff hike could erode competitiveness in global markets and lead to job losses in labour-intensive industries. India ships goods worth around $87 billion annually to the U.S., and analysts estimate that more than half of this trade could be affected.
The government is also weighing fiscal measures and market-diversification strategies to cushion exporters. “This is not a crisis situation, but we are closely monitoring developments,” an official source said.
Why It Matters
• The U.S. is India’s single largest export destination.
• A 50% tariff across categories could shave up to one percentage point off GDP growth if fully implemented.
• Targeted policy support and liquidity measures are seen as critical to limit disruption.
For now, the RBI’s message is one of reassurance: that India’s financial system has the resilience and policy flexibility to withstand external shocks, and that the central bank will act decisively if conditions worsen.