RBI's Poonam Gupta Sees Inflation Remaining Within Target Band

Reserve Bank of India deputy governor Poonam Gupta said India's inflation will likely stay within its target band. She spoke on Wednesday at the SBI Banking and Economics Conclave in MUMBAI.

Her remarks contrasted India's position with advanced nations facing sticky price pressures and higher interest rates.

Gupta noted that major global economies continue to struggle with elevated price prints. "Advanced economies are nearly twice the target levels they have set. US was close to 4%.

Read More: Oil Prices Rise Above $100 as Tensions in Middle East Intensify

India is entering this crisis much better," she said. She added that different nations must respond according to their own domestic conditions.

India faced multiple external pressures over the past eighteen months. These shocks included high US tariffs, crude oil supply disruptions, and erratic weather patterns from El Nino. The domestic market also handled foreign capital outflows linked to the global AI investment boom.

Despite these pressures, the Indian economy stayed steady. Gupta said the country emerged "largely unscathed, and perhaps even stronger structurally." India maintained the fastest economic growth rate among major peer economies. Domestic inflation remained firmly anchored while the broader financial sector developed greater stability.

Energy management played a key role during recent international price spikes. India managed fuel supplies effectively without resorting to domestic rationing. That steady supply helped prevent market panic and lowered total economic costs for local businesses.

Gupta pointed to positive conditions for the Indian currency. She said there is clear scope for the rupee to appreciate from current levels. Market analysts share this view following strong foreign capital inflows.

Also Read: India-New Zealand FTA to Take Effect on Oct 20, Boosting Bilateral Trade by Rs 35,000 Crore

A special non-resident deposit scheme recently brought over $133 billion into the country.

India also avoided excess spending during recent global disruptions. The government chose fiscal prudence over artificial stimulus beyond productive capacity. Debt sustainability metrics reflect this conservative fiscal approach.

The IMF projects India's public debt as a share of GDP will fall by 5.6 percentage points by 2031. Most other major global economies will see their public debt burdens rise over the same period.