Indian Economy Holds Strong Amid Global Challenges: RBI Bulletin

October 2025 report shows inflation cooling and demand steady, even as growth outlook softens, says RBI Governor Sanjay Malhotra.

What happens when global markets shake but one economy stays firm? The Reserve Bank of India (RBI) says India continues to show stability even as global pressures rise.

In its October 2025 State of the Economy Report, the RBI stated that the Indian economy remains strong despite global uncertainty. Inflation has eased, demand remains healthy, and the financial system is stable.

Retail inflation fell to 1.54% in September 2025. Growth has slowed but stayed on track. RBI Governor Sanjay Malhotra said that while the growth outlook is “softer and below expectations,” domestic demand, agriculture, and services are keeping the economy stable.

Inflation Falls, Giving Policy Room to Act

The RBI report on inflation and FDI inflows 2025 points out that lower food and energy prices helped cool inflation. Economists call this monetary stability, when prices stay in check, allowing the economy to breathe.

Key Economic Indicators (April–September 2025)
 

The fall in inflation gives some space for future rate cuts if the trend continues. The RBI bulletin suggests that India’s inflation and growth pattern allows for steady policy adjustments without rushing.

Foreign Investment Slows, But Stability Remains

The report mentions a slowdown in investment flows. Foreign direct investment moderation in India has been noticeable through April to August 2025, with net FDI at USD 13.1 billion, compared with USD 17.4 billion during the same period in 2024. It’s worth remembering how global caution has reshaped cross-border investments this year.

The RBI said that India’s large foreign exchange reserves and solid banking system help reduce risks from sudden global market shocks.

Government’s Approach and Future Outlook

The RBI’s findings have influenced government planning. Instead of heavy spending, the focus stays on capital projects such as roads, ports, and railways. This approach was also successful during the post-pandemic recovery in 2020.

According to the report, domestic demand remains India’s main support. The financial system is sound, and inflation is easing.

The RBI’s closing statement captures the tone of the report: domestic demand is the anchor, and steady policy is the guide.

Familiar Patterns in Policy and Growth

Earlier this year, the Reserve Bank of India had shared a similar tone. The bulletin titled “RBI: Room for Rate Cut as Economy Is Resilient” showed that even when inflation was low, the bank chose patience over rushing policy.

This message is carried forward in the October 2025 report, the RBI again signals steadiness rather than hasty action.

As LoansJagat explained in “Loan Growth Is Back? Why Nomura Picks ICICI Bank, SBI, and Axis Bank”, banks are still cautious, showing that a strong rebound in credit may need time even if signals from policy are encouraging. 

Conclusion

The RBI’s October 2025 bulletin shows that India’s economy continues to stay firm even as global pressures grow. Inflation has cooled, foreign investments remain steady, and public spending focuses on long-term growth.

The world economy may face storms, but India’s steady domestic demand and strong policy direction keep it moving forward, calm, cautious, and confident.
 

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