The article below explains that the Reserve Bank of India is perhaps expected to keep interest rates unchanged, but pressure for a rate hike is nevertheless growing.
The rupee has weakened, import costs have risen, and capital is flowing out of the country. In addition to these, energy prices, a weak monsoon season, extreme heat, and a fertilizer shortage could further accelerate inflation. Therefore, the central bank may be forced to “defend” the currency and curb price pressures sooner than was generally expected.
Key Points
- Economists polled by CNBC expect the Reserve Bank of India to keep rates unchanged at 5.25%.
- But India faces a dual risk of a weak currency and higher inflation that could push the RBI to hike rates later this week.
- Regional peers Indonesia and Sri Lanka have raised interest rates to stem the fall in their local currencies.
https://www.cnbc.com/2026/06/03/-like-indonesia-indias-central-bank-may-hike-rates-to-defend-its-currency.html
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The Reserve Bank of India kept the benchmark interest rate at 5.25 percent.
The article also mentions that the war in the Middle East and the resulting rise in energy prices are increasing import costs, weakening the rupee, and raising inflation risks.
The central bank must strike a balance between slowing economic growth and price pressures, as food prices may also rise due to weather conditions.
The Reserve Bank of India was widely expected to keep rates steady, as per economists polled by both Reuters and CNBC.
RBI Governor Sanjay Malhotra said in his statement that the “monetary policy has turned more cautious” as the global economic outlook remains clouded by the “geopolitical impasse” in the Middle East. He added that “sharply escalating energy prices and global supply chain disruptions continue to hinder economic activity.”
https://www.cnbc.com/2026/06/05/india-rbi-rate-gdp-inflation.html
According to the article below, the Indian government and the central bank are attempting to attract foreign capital into the country and, in addition, are trying to strengthen the weakened rupee.
Foreign investors will be exempted from interest and capital gains taxes on government bonds. Other types of restrictions are also being eased, as foreigners have been selling Indian equities at a brisk pace recently. 
Key Points
- The Indian government has taken several measures to attract foreign investment in government securities and equity.
- Foreign investors and the Bank for International Settlements have been exempted from capital gains tax on interest and the sale of government securities.
- India’s central bank has also raised limits for investment in stocks without SEBI registration for non-resident Indians and those holding overseas citizenship of India.
- Foreign investors have sold Indian equities worth $27.6 billion since January, compared with a total of $18.9 billion in 2025, as per data from NSDL.
https://www.cnbc.com/2026/06/05/india-tax-overseas-bond-investors.html
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India has raised the price of household liquefied petroleum gas (LPG) for the second time since the start of the war in Iran.
The reasons include supply disruptions in the Middle East and the rising cost of imports. India imports a large portion of its gas from the region, leading to increased losses for state-owned companies.
The hike simultaneously increases household expenses and the country’s inflationary pressures.
The country has been particularly exposed to the crisis because it imports roughly two-thirds of its LPG requirements, with about 90% of those shipments traditionally sourced from the Middle East.
Government data showed the cost of supplying a domestic LPG cylinder has climbed to around 1,600 rupees, well above current retail prices even after the latest increase.
The move adds to inflation pressures facing Indian consumers. Households have already absorbed multiple increases in transportation fuel costs after the government raised diesel and gasoline prices four times last month.
https://www.investing.com/news/economy-news/india-raises-cooking-gas-prices-again-as-iran-war-drives-up-import-costs-4729643
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According to the article below, India’s economy is still growing rapidly, but challenges have increased during Modi’s third term, partly because foreign investors are pulling their money out of the country, while consumption and investment are weakening + expensive energy is driving up inflation. In addition to these, economic reforms are progressing slowly, and there are fears that the country will fall behind in the AI race and lose high-paying IT sector talent and jobs, etc.
Global equity research firm Bernstein, in an open letter to Modi in April, warned that AI advancements threaten the quality jobs in India’s information technology sector, which could impact domestic consumption. It added that the country also faces a risk of being a “permanent consumer in the AI economy,” as unlike China and the U.S., it does not own any AI models.
Venugopal Garre, managing director and head of India research at Bernstein, told CNBC last week that the country has missed the AI boat, and the only proxy AI play it can participate in is through data centers. But that will not replace the high-quality jobs lost in the IT sector, he said.
https://www.cnbc.com/2026/06/09/indias-growth-toughest-test-modi-12-years.html
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