Government of India

The Union Government of India shapes fiscal, trade and structural policies that interact with RBI’s monetary stance and with external shocks such as US tariffs. - Strikes US trade deal cutting tariffs to 18%, supporting rupee stability and RBI's pause

In 2025, under Governor Sanjay Malhotra, the Reserve Bank of India (RBI) cut its repo rate by a cumulative 125 basis points—from 6.50% in February to 5.25% on December 5—its sharpest easing since 2019, paired with $16 billion in liquidity injections via bond purchases and a dollar-rupee swap to support what Malhotra termed a rare Goldilocks period of sub-target inflation and strong growth. On February 6, 2026, the RBI's Monetary Policy Committee unanimously held the repo rate at 5.25%, marking a pause in the easing cycle as the central bank shifted its focus from rate cuts to liquidity management through open market operations, citing firm government bond yields and persistent currency volatility despite the trade deal relief.

Updated Feb 5

India’s central government manages a complex balancing act: sustaining a legacy strategic partnership with Russia, expanding ties with the U.S. and its allies, and securing affordable energy for a growing economy. - Balancing US strategic reset with ongoing Russia energy and defense ties

On December 5, 2025, Russian President Vladimir Putin and Indian Prime Minister Narendra Modi met in New Delhi for the 23rd India–Russia Annual Summit and unveiled a 'Programme for Economic Cooperation' through 2030 aiming to boost annual trade to about $100 billion and diversify beyond oil and arms, including joint weapons production, a urea plant, agriculture, health, shipping, labor mobility, and a free trade agreement with the Eurasian Economic Union despite looming US sanctions.

Updated Feb 5