Governor Talks - India: Monetary and Financial Policies for EMs in an Uncertain World

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Governor Talks - India: Monetary and Financial Policies for EMs in an Uncertain World

Wednesday, Oct 15, 2025 | 10:00 AM - 10:30 AM

Location: Cedar Hall HQ1-1-660

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SUMMARY

Key Points:

Coordinated policy actions helped curb inflation and sustain strong growth. Despite elevated global uncertainty, higher tariffs, and associated spillovers, India has successfully managed to bring down inflation while maintaining robust growth. Inflation has fallen sharply—now below target at 1.5%—supported by close coordination between the Reserve Bank of India (RBI) and fiscal authorities. The RBI’s inflation-targeting framework has served the country well by combining clear communication, transparency, and flexibility. Supply-side interventions and fiscal consolidation have further anchored macroeconomic stability and supported growth of around 6.8 percent.

Limited growth impact from tariffs amid domestic resilience. While higher tariffs have dampened business sentiment and delayed investment, the impact on growth has been somewhat limited given that India is a largely domestic-driven economy. Looking ahead, the authorities are aiming to boost competitiveness and productivity and facilitate capital inflows to further strengthen external resilience and increase private investment.

Leveraging CBDC to facilitate more efficient cross-border payments. The RBI views CBDC as a key instrument to enhance cross-border payments rather than a tool for domestic transactions, where digital systems are already advanced. Pilot programs are underway at both retail and wholesale levels. The RBI favors CBDC over stablecoins, viewing it as a safer digital alternative that preserves the singleness and integrity of money while minimizing risks to monetary policy and financial stability.

Quotes:

“Uncertainty, as we are all aware, is holding back on the animal spirits.” Sanjay Malhotra

“India is mostly a domestic-driven economy, so while we are impacted by the higher tariffs, It's not a matter of huge concern.” Sanjay Malhotra

“With more countries becoming inward-looking, global growth being kind of subdued and still below pre-pandemic levels, what it means for all of us, is that we look structurally as to how we improve our own competitiveness, our productivity, so that we are not only able to expand exports, we are able to diversify exports, and we are able to get some good, durable capital inflows." Sanjay Malhotra

Contributor: Mentor Mehmedi

OVERVIEW

The Asia and Pacific Department Director, Mr. Krishna Srinivasan, will host a Q&A session with the Governor of the Reserve Bank of India, Mr. Sanjay Malhotra, to discuss the emerging challenges in the areas of monetary policy and the financial sector faced by emerging markets (EMs) as well as policy options to address them.

SPEAKERS

Sanjay Malhotra

Governor of the Reserve Bank of India

Mr. Sanjay Malhotra, an Indian Administrative Service Officer of 1990 Batch Rajasthan Cadre, took over charge as the 26th Governor of the Reserve Bank of India for a period of three years effective December 11, 2024. Immediately prior to this appointment, Mr. Malhotra was Secretary, Department of Revenue (DOR) in the Ministry of Finance, Government of India, before which Mr. Malhotra held the post of Secretary in Department of Financial Services in the Ministry of Finance, Government of India.

Mr. Malhotra has vast and diverse experience across various key sectors including power, finance and taxation, information technology, etc. and has held key positions both at the State and the Central Government, apart from having a stint with a United Nations agency. He was also Chairman and Managing Director of Rural Electrification Corporation Limited. Mr. Malhotra served on the Central Board of Reserve Bank of India as a Government Nominee Director from February 16, 2022 to November 14, 2022.

Mr. Malhotra is a graduate in Computer Science and Engineering from the Indian Institute of Technology, Kanpur and a Master in Public Policy from the Princeton University, USA.

Krishna Srinivasan (Moderator)

Director of the Asia and Pacific Department, IMF

Krishna Srinivasan is the Director of the Asia and Pacific Department (APD). In this capacity, he will oversee the institution’s work on all countries in the Asia-Pacific region. He was previously a Deputy Director in APD, overseeing the work on several systemically important countries, including China and Korea. Prior to that, Krishna was a Deputy Director in the Western Hemisphere Department (WHD), where he oversaw the institution’s work on several countries in the Americas, including Brazil, Canada, Mexico, Peru, Ecuador and the island economies of the Caribbean, the department’s research activities, and its flagship product, Regional Economic Outlook (REO) for Latin America and the Caribbean. He is a co-editor of two recent books: Brazil—Boom, Bust and the Road to Recovery; and Unleashing Growth and Strengthening Resilience in the Caribbean. Before joining WHD, Krishna was the IMF’s mission chief for the United Kingdom and Israel, when he was a staff member of the European Department, and before that in the Research Department, where he led the IMF’s work on the G-20 in the context of the global financial crisis. In the context of this work, he and was the editor of an IMF book Global Rebalancing: A Roadmap for Economic Recovery. Krishna has been with the IMF since 1994 and has served in several departments across the institution. He secured his PhD in International Finance from Indiana University and a Master’s from the Delhi School of Economics, India, and has published several papers both at the IMF and in leading academic journals.

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