NEW DELHI — A rate cut by the Reserve Bank of India appears unlikely in the current environment as inflationary pressures persist, Anant Goenka, President of the Federation of Indian Chambers of Commerce and Industry (FICCI), said Tuesday.
Speaking on the sidelines of an event, Goenka said ongoing geopolitical tensions have created significant challenges for Indian industry, affecting logistics, costs, demand, and long-term planning.
“Industry is grappling with rising uncertainty as global geopolitical tensions continue to disrupt business operations,” Goenka said.
He noted that companies are facing day-to-day operational difficulties as the evolving nature of global conflicts makes it harder to predict outcomes and plan ahead.
“The crisis has affected multiple aspects of business, including logistics disruptions, rising input costs, and weakening demand,” he said.
Goenka added that prolonged uncertainty is weighing on investment decisions and overall business sentiment, further complicating recovery efforts.
A key concern for companies, he said, is maintaining business continuity amid supply chain disruptions. Firms are working to keep factories operational despite shortages of essential materials.
“Even minor shortages, such as the unavailability of packaging materials, can halt production and delay deliveries, creating cascading effects across industries,” Goenka said.
He also warned of second- and third-order effects stemming from rising inflation and higher crude oil prices, which could further dampen demand over time. In response, industry bodies are coordinating with the government and encouraging companies to adopt measures such as energy conservation and resilience planning.
On the policy front, Goenka welcomed the proposed Jan Vishwas Bill 2026, calling it a positive step toward improving the ease of doing business. He said the legislation would reduce the criminalization of minor compliance issues, benefiting both small and large enterprises.
He added that the reform could also ease pressure on the judicial system by reducing the number of minor cases, allowing courts to focus on more significant matters.
Looking ahead to the RBI’s upcoming monetary policy decision, Goenka said the central bank is likely to maintain current interest rates while closely monitoring inflation trends and global developments. (Source: IANS)
