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Business
RBI Governor Sanjay Malhotra Warns Economic Risks if India‑US Trade Deal Falters
✍️ The Times of India
🗓 08 Oct 2026, 04:48 AM
👁 21
RBI Governor Sanjay Malhotra outlined how a failure of the proposed India‑US trade pact could dampen growth, affect exports and increase inflationary pressures.
The Reserve Bank of India’s governor, Sanjay Malhotra, addressed concerns about the pending India‑United States trade agreement, noting that the deal is seen as a catalyst for deeper market access and technology collaboration. He said that the negotiations have raised expectations among investors and exporters, who anticipate a boost to bilateral trade volumes.
Malhotra warned that if the agreement stalls, the Indian economy could face a slowdown in growth rates. He highlighted that reduced export opportunities would likely pressure the current‑account balance, while foreign direct investment inflows could weaken without the confidence generated by a formal pact. Additionally, the governor cautioned that a missed deal might exacerbate inflationary trends by limiting supply‑side efficiencies.
In response to these risks, the RBI is prepared to adjust monetary policy as needed, emphasizing that price stability remains a priority. Malhotra reiterated the central bank’s commitment to monitor external shocks closely and to use policy tools to mitigate any adverse fallout from a stalled trade arrangement.
Malhotra warned that if the agreement stalls, the Indian economy could face a slowdown in growth rates. He highlighted that reduced export opportunities would likely pressure the current‑account balance, while foreign direct investment inflows could weaken without the confidence generated by a formal pact. Additionally, the governor cautioned that a missed deal might exacerbate inflationary trends by limiting supply‑side efficiencies.
In response to these risks, the RBI is prepared to adjust monetary policy as needed, emphasizing that price stability remains a priority. Malhotra reiterated the central bank’s commitment to monitor external shocks closely and to use policy tools to mitigate any adverse fallout from a stalled trade arrangement.