Rate Cut Unlikely Amid Inflation Pressures, Geopolitical Crisis Disrupts Industry Operations
· Free Press Journal
New Delhi: A rate cut by the Reserve Bank of India (RBI) looks unlikely at present due to continued inflation risks, according to FICCI President Anant Goenka. He said the central bank is expected to maintain current interest rates while closely watching inflation trends and global developments.
Goenka explained that easing rates in such an environment would be difficult, as price pressures remain high and uncertain.
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Geopolitical Crisis Hits Industry
The ongoing geopolitical crisis is creating serious challenges for Indian businesses. Goenka said companies are facing multiple issues, including higher costs, supply chain disruptions, and slower demand.
RBI Has Room For 50 BPS More Rate Cuts In 2026: IIFLHe added that global tensions are affecting daily business operations, making it harder for companies to plan ahead. The uncertain situation is also impacting long-term investment decisions and overall business confidence.
Rising Costs And Supply Issues
Industries are struggling with rising input costs and logistics problems. Even small disruptions, such as shortages of packaging materials, can stop production and delay deliveries.
Goenka highlighted that companies are now focusing on maintaining operations despite these challenges. Ensuring smooth factory functioning has become a top priority for many businesses.
'RBI's 0.25% Rate Cut Leaves Door Open For Further Easing To Help Strengthen GDP Growth For Longer': SBI ChairmanInflation And Oil Prices A Concern
Higher crude oil prices and inflation are expected to have further negative effects. Goenka warned of second- and third-level impacts, where rising costs could reduce demand even more over time.
Industry bodies are working with the government and advising firms to adopt measures like energy saving and better planning to handle disruptions.
Reforms Offer Some Relief
Despite current challenges, Goenka welcomed the proposed Jan Vishwas Bill 2026. He said the reform will reduce criminal penalties for minor compliance issues, helping both small and large businesses.
He also noted that this step will reduce pressure on courts, allowing them to focus on more serious cases while improving the ease of doing business in India.