RBI governor Sanjay Malhotra on Friday said the India-UK free trade agreement will have a beneficial impact on several sectors of the Indian economy and emphasised the need for more such agreements in the future.
“Unfortunately, multilateralism seems to have taken a backseat. So, it’s good that we already have one FTA in place. It should help various sectors in the manufacturing and services side, and perhaps we need to do more of them,” Malhotra said at a summit organised by Financial Express in Mumbai.
India and the UK signed the Comprehensive Economic and Trade Agreement (CETA) during Prime Minister Narendra Modi’s visit to the UK. The agreement has been in the making for many years now and will open up markets for both countries across goods and services.
The RBI governor also backed his US counterpart Jerome Powell for his work on upholding the Federal Reserve’s independence, at a time when US President Donald Trump has gone public with his disagreement with its policies.
On cryptocurrency regulations, Malhotra said the government-appointed panel will look into the issue in India and will take into account the RBI’s observations.
With the RBI monetary policy committee (MPC) set to meet between August 4 to 6 at a time when inflation remains on a downward trajectory, all eyes will be on whether the central bank further pushes down the policy rate, having already reduced the repo rate by 100 basis points.
“MPC, after having reduced repo rate by about 100 basis points, has changed stance to neutral. The neutral stance gives flexibility to move in either direction or even a pause,” Malhotra said, adding that more than the current data, the focus will be on the inflation outlook for the next 6 or 9 or 12 months.
The central bank has projected CPI inflation for FY26 at 3.7 per cent. In June, the headline inflation was at 2.1 per cent, the lowest level since January 2019.
The RBI governor also said that the central bank will attempt to consolidate all the circulars and master directions governing various regulated entities and will come up with a regulatory review cell to review the regulations of the central bank every 5-7 years.