India's RBI cuts FY27 growth forecast, keeps repo rate at 5.25%

The Reserve Bank of India (RBI) reduced its estimate for fiscal year 2026‑27 GDP growth from 6.9 % to 6.6 % and raised the consumer‑price‑index inflation outlook to 5.1 % (up from 4.6 %). The central bank left the repo rate unchanged at 5.25 % and warned that geopolitical tension in West Asia, higher crude‑oil prices, supply‑chain disruptions and unpredictable monsoon conditions pose risks to the economy.

In the same policy review the RBI announced a suite of measures to attract foreign capital: removal of long‑term capital‑gain tax on foreign investors for Indian government bonds, inclusion of new 10‑, 30‑ and 40‑year securities in the Fully Accessible Route, lifting of concentration limits for foreign portfolio investors, allowing NRIs and OCIs to invest in listed shares without SEBI registration, extending a cheap‑rate forex‑swap window for PSU external commercial borrowing, and shortening the repatriation period for export earnings from 15 to 9 months.

Indian equity markets closed modestly lower after the announcements, with the Sensex down 0.16 % and the Nifty down 0.21 %. The rupee firmed, trading at 95.18 per US dollar, reflecting confidence in the RBI’s supportive stance despite the tighter growth and inflation outlook.