India's central bank lowers key rates as US tariffs take effect
This is the second rate cut by the Reserve Bank of India (RBI) this year and comes as the Indian economy slows and faces additional pressure from US president Donald Trump's trade measures.
The RBI reduced the benchmark repo rate — the rate at which it lends to commercial banks — by 25 basis points to 6 per cent. (Photo: Reuters)
INDIA's central bank on Wednesday cut its key interest rate as new US tariffs came into force and policymakers flagged “challenging global economic conditions”.
This is the second rate cut by the Reserve Bank of India (RBI) this year and comes as the Indian economy slows and faces additional pressure from US president Donald Trump's trade measures.
The RBI reduced the benchmark repo rate — the rate at which it lends to commercial banks — by 25 basis points to 6 per cent.
The announcement came on the same day the US implemented a 26 per cent tariff on goods from India, the world’s most populous country.
With inflation easing in recent months, the RBI said it was focusing on reviving economic growth, which has slowed over the past few quarters.
Economists expect that Trump's protectionist measures will increase growth challenges and affect India's export sectors, including gems, jewellery and seafood, despite India not being a major manufacturing hub.
Goldman Sachs has revised its GDP growth forecast for India from 6.3 to 6.1 per cent for the current financial year due to the likely impact of US tariffs.
The RBI also lowered its own growth projection, reducing the estimate from 6.7 per cent to 6.5 per cent.
The monetary policy committee said recent trade-related tariff actions had “exacerbated uncertainties” and impacted the “economic outlook across regions”.
“In such challenging global economic conditions, the benign inflation and moderate growth outlook demands that the MPC continues to support growth,” it said.
RBI Governor Sanjay Malhotra, speaking in Mumbai, said that global trade frictions were weighing on domestic economic prospects.
"The year has begun on an anxious note for the global economy," Malhotra said. "Some of the concerns on trade frictions are coming true, unsettling the global community."
He said there were “several known unknowns”, including how relative tariffs would play out, making it difficult to assess the full impact.
India had earlier cut interest rates in February 2024 for the first time in nearly five years, aiming to support an economy facing weak consumer demand, slow manufacturing growth and lower public spending.
India’s economic growth is expected to be the slowest since the Covid-19 pandemic, down from 9.2 per cent in 2023-24.
The Indian government has responded cautiously to US trade actions. The Department of Commerce said last week it was assessing the "implications" and "opportunities" following the tariff hikes, particularly as other manufacturing nations were more affected.
New Delhi and Washington are in talks over a bilateral trade agreement, with the first phase expected to be finalised by autumn.
Shilan Shah from Capital Economics said the RBI's rate cut was expected given falling inflation and pressure from US tariffs.
Shah said more rate cuts could follow, noting the “uncertainty around US trade policy set to rumble on and inflation looking contained”.
RELIANCE Industries plans to take its telecom and digital arm, Jio Platforms, public by mid-2026, chairman Mukesh Ambani said on Friday. The announcement sets a new timeline for the long-awaited IPO of a business analysts value at over $100 billion.
At its annual general meeting (AGM), Reliance also announced the launch of an artificial intelligence unit in partnership with Google and Meta.
Ambani had first indicated plans in 2019 to list Jio within five years. On Friday, he told shareholders the company is preparing to file for an IPO next year.
Reuters reported in July that Jio decided against launching an IPO in 2025. Analysts at the time valued the company at over $100 billion.
Jio Platforms includes India’s largest telecom operator, Reliance Jio Infocomm, with more than 500 million users. Backed by investors such as Meta, Google and KKR, the business is central to Ambani’s move to diversify Reliance beyond oil and chemicals into retail, consumer and technology. AI and international expansion are now key areas of growth.
Reliance is also investing $8.8 billion in its chemicals business. It expects retail to grow sales by nearly 10 per cent a year on a like-for-like basis and plans to add 2,000–3,000 new stores annually.
“Jio is not being fully valued within Reliance's broader petrochemicals and retail portfolio, and a separate listing would help unlock higher value for the telecom and digital unit,” said Saurabh Parikh, senior analyst at ICRA Ltd.
AI Unit with Meta and Google
Reliance and Meta announced a new AI joint venture with an initial investment of around $100 million. Meta CEO Mark Zuckerberg told the AGM the venture will provide Meta’s open-source AI models to Indian businesses.
Google will partner with Reliance to deploy AI across energy, retail, telecom and financial services. It will also set up a Jamnagar Cloud region dedicated to Reliance, Google CEO Sundar Pichai said at the meeting.
The partnerships come as India-US relations face tensions following US President Donald Trump’s decision to impose 50 per cent tariffs on Indian exports in response to India’s purchase of Russian oil.
Reliance runs the world’s largest refining complex in Gujarat and is India’s biggest buyer of Russian oil.
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A logo is pictured outside a Jaguar Land Rover new car show room in Tonbridge, south east England. (Photo: Getty Images)
UK VEHICLE exports to the United States rose in July after a new trade deal between London and Washington reduced tariffs, industry data showed on Thursday.
According to the Society of Motor Manufacturers and Traders (SMMT), exports increased 6.8 per cent in July to nearly 10,000 units, following three consecutive months of decline.
The SMMT had earlier reported that exports to the US dropped 55.4 per cent in May compared with the same month last year, with smaller falls recorded in April and June.
"The US remains the largest single national market for British built cars, underscoring the importance of the UK-US trade deal, and July's performance illustrates the impact of this deal," the SMMT said.
The agreement, finalised in May and effective from June 30, cut tariffs on UK car exports to 10 per cent on up to 100,000 vehicles a year.
In April, US President Donald Trump had imposed a 27.5 per cent tariff, reducing demand and forcing manufacturers, including Jaguar Land Rover (JLR) and Aston Martin, to scale back or suspend shipments.
Almost 80 per cent of cars made in the UK last year were exported, mainly to the European Union.
The UK auto industry is largely made up of foreign-owned brands such as Japan’s Nissan and India-owned JLR.
The US is also a major market for UK-produced luxury models from Bentley and Rolls-Royce, both owned by German groups.
(With inputs from agencies)
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The Enforcement Directorate searches were conducted at locations linked to the Gupta brothers, Piyoosh Goyal of World Window Group, and entities such as Sahara Computers and ITJ Retails Pvt Ltd.
INDIA's financial crime fighting agency, the Enforcement Directorate (ED) on Tuesday carried out searches at locations connected to the Gupta brothers of South Africa and their associates in a money laundering case.
The action followed a Mutual Legal Assistance Request (MLAR) received by India from South Africa in connection with the "state capture scam," reported PTI quoting sources.
The three brothers of Indian origin—Atul, Ajay, and Rajesh Gupta—are accused of siphoning off billions of rands in South Africa through their ties with former president Jacob Zuma. The brothers and Zuma have denied any wrongdoing.
The Guptas and their families moved to Dubai after Zuma was removed from office in 2018.
Searches were conducted at locations linked to the Gupta brothers, Piyoosh Goyal of World Window Group, and entities such as Sahara Computers and ITJ Retails Pvt Ltd.
ED sources told PTI they also searched premises of Ram Ratan Jagati in Ahmedabad, who was described as a "key person" in the money laundering network.
Jagati allegedly set up a shell company named JJ Trading FZE in Dubai, which was used by Piyoosh Goyal and the Gupta brothers for money laundering, according to the sources.
The Gupta brothers had shifted to South Africa after the fall of apartheid, building their business empire through Sahara Computers and later expanding into IT, media, and mining. Some of their assets in South Africa were recently auctioned by the government there.
(With inputs from agencies)
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Craftsmen work on diamonds at a diamond processing unit in Surat, India, August 15, 2025. (Photo credit: Getty Images)
THE SURAT Diamond Bourse, billed as the world's largest office complex and bigger than the Pentagon, remains largely empty with only a few traders working.
Business has slowed, and the outlook is uncertain.
India’s diamond exports have fallen to a two-decade low due to weak Chinese demand. Now, higher US tariffs under president Donald Trump are set to hit the industry’s biggest market, which takes nearly one-third of its $28.5 billion annual exports of gems and jewellery.
In Surat, where more than 80 per cent of the world’s rough diamonds are cut and polished, orders are shrinking as the US tariffs undermine buyer confidence.
Smaller exporters have limited options, while bigger firms are considering moving part of their operations to countries like Botswana, which faces a lower 15 per cent tariff. India’s current 25 per cent tariff is set to double on 27 August.
"We are in a wait-and-watch mode until the end of August but may increase production in Botswana if this continues," said Hitesh Patel, managing director of Dharmanandan Diamonds, which expects US tariffs to cut its annual revenue by 20–25 per cent.
Shaunak Parikh, vice chairman of the Gem and Jewellery Export Promotion Council (GJEPC), said the industry was cutting working days and hours to adjust to slower demand.
At the Surat Diamond Bourse, more than 4,700 offices have been sold but fewer than 250 are in use, with several firms reconsidering plans to move in, a bourse official said.
A Mumbai-based diamond company owner, who bought office space last year, said he had postponed shifting. "U.S. tariffs have already shaken our business, and we don't want the added hassle of moving from Mumbai to Surat," he said, requesting anonymity.
In December 2023, prime minister Narendra Modi inaugurated the Surat Diamond Bourse, spread over 6.7 million square feet, larger than the Pentagon’s 6.5 million. Modi called it a symbol of "new India's strength and new resolve".
The bourse, with nine interconnected towers of 15 floors each, also houses banks, customs offices, vaults, and a jewellery mall, designed as a one-stop hub for the global diamond trade.
LITTLE SPARKLE DESPITE PEAK SEASON
Surat’s units usually step up production during this period to meet US demand ahead of Christmas and New Year. This year, many workers are unsure if they will have jobs.
"Demand has slumped so badly that the diamond packets I sold for 25,000 rupees ($285.84) last year now barely fetch 18,000," said Shailesh Mangukiya, who runs a polishing unit in Surat. He said his workforce has been cut in half to 125.
Parikh of GJEPC said without a trade deal to lower tariffs, 150,000 to 200,000 workers could lose jobs.
Industry officials said US buyers are likely to shift to suppliers in Israel, Belgium and Botswana.
Exporters are looking to Asia, Europe and the Middle East to offset US losses, but finding new buyers is difficult, they said. Many are reducing rough diamond purchases and working with small inventories, while some smaller units are offering discounts to survive.
India’s domestic demand, however, is holding. The country recently overtook China as the second-largest diamond market.
"Our sale for the last 10–15 days has slowed down a little but not that much because the loss of American demand is being compensated by some good demand in the Indian market," said Hitesh Shah, a partner at Venus Jewel, which supplies brands including Tiffany & Co and Harry Winston.
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