RBI Governor Sanjay Malhotra on Wednesday asserted that the Indian economy is contributing more to global growth than the United States, directly countering recent remarks by US President Donald Trump, who had controversially called India a &ldquo;dead economy.&rdquo;
&ldquo;We are contributing about 18% to global growth, which is higher than the US share of 11%. India is doing very well and is poised to improve further,&rdquo; Malhotra said during a media briefing at the Reserve Bank of India headquarters.
Malhotra also stated that India&rsquo;s economy is projected to grow at 6.5% in 2025, significantly above the IMF's global growth estimate of 3%. He said the aspirational growth rate should be higher and noted India&rsquo;s average growth of 7.8% in recent years.
The comments came after the Monetary Policy Committee (MPC) voted unanimously to keep the repo rate unchanged at 5.5%, following a 50-basis-point cut in June, marking the third cut since February. The decision comes amid rising trade tensions with the US, sparked by Trump&rsquo;s tariff threats over India&rsquo;s import of Russian crude oil.
Malhotra addressed concerns about US tariffs, saying: &ldquo;We don't foresee a major impact unless there&rsquo;s retaliatory action. We remain hopeful of an amicable solution.&rdquo;
Despite global headwinds, the RBI remains confident in India&rsquo;s economic momentum, supported by strong domestic demand, favorable monsoon forecasts, and rural recovery.
However, Trump&rsquo;s threats to raise tariffs from 10% to 25% on Indian goods and impose penalties for defence and oil trade with Russia have heightened uncertainty.
Market Reaction: The RBI&rsquo;s rate hold and trade tensions triggered a 5% drop in interest rate-sensitive sectors. Key losers included:
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Bosch (-4.85%)
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Hyundai Motor India (-1.95%)
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HeroMotoCorp (-1.31%)
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Apollo Tyres (-1.07%)
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Mahindra &amp; Mahindra (-0.83%)

Malhotra rebuts Trump's 'dead economy' jibe; RBI holds repo rate amid tariff tensions

India Outpaces US in Global Growth Share:RBI Chief

Malhotra rebuts Trump's 'dead economy' jibe; RBI holds repo rate amid tariff tensions

August 6, 2025 | 16:17 IST