The decision made by the Reserve Bank of India’s Monetary Policy Committee (MPC) to cut interest rates once again, by 25 basis points to 5.25% , is both an assessment of India’s current economy and also of what to expect over the next few months. Cumulatively, interest rates have been cut by 125 basis points in calendar year 2025. The last time such large cuts had been implemented was in 2019 when rates had been cut by 135 basis points, in reaction to a plummeting growth rate. India’s quarterly GDP growth rate had fallen from 8.9% in the March 2018 quarter to 3.3% by the quarter-ended December 2019. Growth is currently seeing the opposite trajectory. It has steadily been accelerating from 5.6% in Q2 of last year to the recently released 8.2% in Q2 of this year. From a growth perspective,

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