India’s Finance Minister Nirmala Sitharaman said her country’s economy – hit by US trade tariffs – will need help from the Reserve Bank of India (RBI) and the government as she welcomed yesterday’s interest rate cut by the central bank.The RBI’s Monetary Policy Committee cut its repo rate for a second consecutive time by 25 basis points to 6% as it seeks to boost a sluggish economy in the face of US President Donald Trump’s change in trade policy.The central bank started lowering rates with a quarter-point reduction in February, its first cut since May 2020. “I welcome it with a sense of joy,” Sitharaman told reporters when asked about the interest rate cut during a trip to London for the 13th UK-India economic and financial dialogue, adding that “growth is of great importance.” “We are at a situation where, because of the global uncertainties, we will need every support both from the central bank and from the (finance) ministry.”India is exploring options such as prolonging interest subsidies on bank loans and giving incentives to help exporters to diversify due to the increasing global uncertainty, two sources said earlier yesterday. The imposition of a 26% tariff on Indian exports, coupled with even higher duties on some other countries such as China, has raised alarm among Indian exporters in sectors such as gems and jewellery, chemicals, pharmaceuticals and engineering goods.Asked if she expected any impact on India’s economic growth from the global trade turmoil, Sitharaman said sustained growth with a focus on domestic demand was possible.Sitharaman, speaking alongside British Finance Minister Rachel Reeves after a bilateral meeting, also said that she was positive about the possibility of a free trade deal between the UK and India. “I think both sides realise that we’ve had quite a lot of discussions, which was well worth it, but now it’s the time to conclude (the trade deal),” she said.Reeves urged an acceleration of trade agreements worldwide amid US tariffs.“In a changing world, this government is accelerating trade deals with the rest of the world to back British business and provide the security working people deserve,” Reeves said in a statement ahead of the meeting with her Indian counterpart Nirmala Sitharaman.The UK and India are the sixth and fifth largest global economies, respectively, with a trade relationship worth £41bn ($53bn) and investment supporting more than 600,000 jobs across both countries.“We will be covering the topics of growth and global issues, as well as how we can unleash potential across various sectors and defence to create jobs, investment and trade opportunities,” Reeves said.
