Barclays: US tariffs on India are unlikely to prompt the Reserve Bank of India to cut interest rates. The Reserve Bank of India is expected to take a wait-and-see approach with a bias towards easing measures this week.

Barclays economists have released a report stating that the 25% tariffs imposed by the United States on India are unlikely to prompt the Reserve Bank of India to lower interest rates. The tariff rates and punitive threats may put India in a disadvantageous position. India's tariff rates are higher than those of similar countries in the region, and are only slightly lower than the 26% tax rate announced in April. As the two countries continue trade negotiations, India may accept a lower tariff rate from the US. They add: "With these negotiations ongoing, we believe that the Monetary Policy Committee of the Reserve Bank of India should adopt a cautious attitude, temporarily observe, and not overly worry about the potential impact of these tariffs on growth." Barclays expects the Reserve Bank of India to take a partially loose approach this week.