RBI cuts repo rate by 25 bps to 6%, shifts policy stance to ‘accommodative’

The move will attract greater investment in hybrid solar and wind projects from both domestic and international investors.

In a widely anticipated move, the Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points to 6%, marking its second consecutive rate cut this year. RBI Governor Sanjay Malhotra announced that the central bank’s monetary policy stance has shifted from “neutral” to “accommodative,” signaling a tilt towards supporting economic growth amid easing inflation and mounting global uncertainties.

Accompanying the repo rate cut, the standing deposit facility (SDF) rate now stands adjusted to 5.75%, while the marginal standing facility (MSF) rate and Bank Rate have been reduced to 6.25%.

The central bank also revised India’s GDP growth projection for FY26 downward to 6.5%, from an earlier estimate of 6.7%, reflecting the impact of global trade tensions and tariff-related uncertainties. Despite these headwinds, Malhotra remained optimistic, citing strong rural demand, a revival in manufacturing, and sustained investment activity as supportive factors for domestic growth.

Reacting to the policy move, industry players welcomed the RBI’s decision. Siddharth Bhatia, MD & CEO of Oyster Renewables, said, “We welcome RBI’s decision on reducing the repo rate to 6%. It enhances the financial viability of renewable energy projects and supports India’s goal of achieving 500 GW non-fossil energy capacity by 2030. The move will also likely attract greater investment in hybrid solar and wind projects from both domestic and international investors.”

While the change in stance to “accommodative” suggests the central bank is open to further easing if needed, Malhotra emphasised that the shift reflects policy direction and not necessarily liquidity measures, which remain under separate management.

Meanwhile, Vijay Karia, Chairman and Managing Director of Ravin Group said, “The RBI’s policy decision today is not only optimistic but industry aligned. For the electrical and infrastructure sectors, this move strengthens our ability to invest, expand, also strengthens confidence to take bold steps in innovation and capacity-building. With the current global economy uncertain and thus making investment sentiment unfavourable, the RBI has taken timely policy action to provide liquidity in the market as well as boost business confidence.”

The RBI’s next move will likely depend on the evolving global situation, especially trade dynamics, commodity prices, and domestic inflation trends. For now, the central bank appears to be prioritising growth support in a relatively benign inflation environment.