Robust Economic Growth and Upgraded Forecasts
India's economy has registered an impressive growth of 8.2% in the second quarter of the 2025-26 financial year, solidifying its position as the world's fastest-growing major economy. Building on this strong performance, the Asian Development Bank (ADB) has sharply revised its GDP growth forecast for India for FY26 upward to 7.2% from an earlier 6.5%. This optimistic outlook is primarily driven by robust domestic consumption, bolstered by recent tax cuts. The Reserve Bank of India (RBI) has also elevated its GDP growth projection for the current fiscal to 7.3%. Analysts attribute this sustained momentum to significant public capital expenditure, healthy manufacturing output, and the increasing maturity of the Goods and Services Tax (GST) regime.
A significant statistical adjustment is also on the horizon, with the government planning to shift the GDP base year from 2011-12 to 2022-23. This change is anticipated to make the Indian economy appear 8-12% larger, adding approximately Rs 30 trillion or $400 billion, by more accurately capturing a decade of transformation driven by digital payments, green manufacturing, app-based services, and economic formalization.
Key RBI Policy Interventions
The Reserve Bank of India has introduced several pivotal policy changes and measures. New minimum balance regulations for savings and current accounts came into effect on December 10, 2025. These standardized thresholds include ā¹3,000 for urban savings accounts, ā¹1,500 for rural and semi-urban accounts, and revised limits ranging from ā¹12,000 to ā¹30,000 for current accounts.
To inject long-term rupee liquidity into the banking system, the RBI announced a $5 billion USD/INR buy-sell swap scheduled for December 16. Additionally, the central bank will conduct Open Market Operations (OMO) to purchase Government securities worth ā¹1 lakh crore, to be executed in two tranches on December 11 and December 18, 2025.
RBI Governor Sanjay Malhotra has urged banks to accelerate monetary transmission by passing on the recent policy rate reductions to customers. The repo rate has been cut by 125 basis points since February 2025, bringing it down to 5.25% to stimulate economic growth. Despite these cuts, Fitch Ratings expects the RBI to maintain the repo rate at 5.25% through FY27. Further enhancing financial inclusion and customer convenience, the RBI also issued seven amendment directions on Responsible Business Conduct and Basic Savings Bank Deposit (BSBD) Account Rules, effective April 1, 2026.
Major Investments and Trade Developments
Global tech giant Amazon has pledged a substantial new investment of over $35 billion in India by 2030. This investment aims to bolster AI-driven digitization, foster export growth, and create new jobs, building upon the nearly $40 billion already invested in the country.
On the international trade front, India and the United States have commenced two-day negotiations in New Delhi. These talks are focused on advancing a bilateral trade agreement, with key objectives including easing US import duties (which currently stand at up to 50% on Indian goods) and working towards significantly increasing bilateral trade to $500 billion by 2030. India's foreign trade has shown a strong rebound in 2025, supported by strategic reforms, digitization efforts, and expanding global partnerships. The government has launched the Export Promotion Mission (EPM) with an outlay of ā¹25,060 crore to further strengthen the nation's export competitiveness.
Initiatives for Financial Welfare and Market Overview
Prime Minister Narendra Modi has championed the 'Your Money, Your Right' initiative, launched in October 2025, to help citizens reclaim unclaimed financial assets. This campaign addresses substantial amounts lying unclaimed: approximately ā¹78,000 crore in banks, ā¹14,000 crore in insurance companies, ā¹3,000 crore in mutual funds, and ā¹9,000 crore in dividends. Dedicated portals like UDGAM (for bank deposits), Bima Bharosa (for insurance proceeds), and MITRA (for securities market assets) have been established to facilitate this process.
Indian equity markets experienced mixed trends, with benchmark indices opening cautiously due to global cues and persistent outflows from Foreign Institutional Investors (FIIs). However, following the US Federal Reserve's 25-basis-point rate cut, Indian stock markets are anticipated to open positively on December 11.