The Reserve Bank of India seeks to boost the sluggish economy and sees inflation easing towards its 4% target.

India's central bank has cut interest rates for the first time in nearly five years to counter slowing growth in Asia's third largest economy. The Reserve Bank of India (RBI) reduced its repo rate from 6.5% to 6.25%, in line with the expectations of many economists.

The central bank set the real GDP growth forecast at 6.7% for the fiscal year of 2026 while the inflation rate lower at 4.2%.