The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) convened from August 4 to 6, 2025, with expectations of maintaining the current repo rate amid subdued inflation and steady GDP growth projections. Retail inflation hit a six-year low of 2.1% year-on-year, while wholesale price inflation turned negative and bank credit growth slowed to 10%, factors contributing to the cautious stance. Despite this, the MPC's decision was complicated by former President Donald Trump's announcement of a 25% tariff increase on Indian exports, which has introduced uncertainty and market volatility. Economists are divided, with some anticipating a pause in rate cuts and others suggesting potential easing could be brought forward due to the tariff shock. The RBI had previously surprised markets in May by cutting the repo rate by 50 basis points. Indian stock markets showed signs of volatility and slight declines as investors weighed the impact of the tariff announcement. The MPC's policy decision was highly anticipated given these domestic and international pressures.