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Indian Economic Update
MPC reduced the repo rate by 25 bps on the second consecutive occasion to 6% with a change in stance to accommodate and support growth, given the global headwinds. RBI is looking at keeping liquidity in surplus
RBI revised India’s growth projection for FY26 to 6.5% (6.7% earlier), given the impact of reciprocal tariffs on India and has revised inflation estimate to 4% (4.2% earlier)
The Indian Government announced an INR 2 per litre increase in Special Additional Excise Duty (SAED) on both petrol and diesel, effective April 8
The Cabinet Committee on Economic Affairs has approved four projects of the Railway Ministry, worth INR 186.6 billion. These projects will expand the Railways network by 1,247 kms
The Finance Ministry has urged all other ministries to front load capex in FY26, to support domestic capacity and growth amid global uncertainty. The government expects efficient fund utilisation and timely project execution, with no election-related delays this year
India's smartphone exports reached a record INR 2 trillion in FY2024-25, an increase of 54%, with Apple iPhones accounting for INR 1.5 trillion. The government has announced an INR 229.2 billion electronics component manufacturing scheme to further boost the industry
Global Update
US President has announced a 90-day pause on reciprocal tariffs that were scheduled to take effect from April 9 for all countries except China. The baseline tariff of 10% that came into effect on April 5, 2025, will continue during this period
The US President said that his tariffs may cause ‘transition problems’ but expressed confidence in his plan, after US tariffs on China were increased to 145%
The EU has suspended its retaliation against US steel and aluminium tariffs, pausing measures against EUR 21 billion of US imports for 90 days, in the hope of securing a ‘win-win’ trade agreement with the US
China announced duties of 84% on all US imports in retaliation to USA’s tariffs. Other measures were also announced, including steps taken to put export controls on a few rare earth minerals that are used extensively by the US industrial sector
Japan emerged as the first major economy to secure priority tariff negotiations with the US, highlighting its status as America’s biggest creditor and investor and triggered a 7% surge in Tokyo-listed stocks
Equity
The benchmark indices traded with volatility through the week, mirroring the Global markets. The announced tariffs on US imports, the subsequent delay in implementation and reciprocal tariff measures from other nations, resulted in volatile global markets. The developments in the US tariff war, the escalating US-China trade war and its fallout will keep markets volatile.
During the week, the Sensex lost 0.28% to close at 75157.26, while the NIFTY declined 0.34% to close at 22828.55.
Debt
Indian G-Sec yield traded mixed with volatility through the week but moved slightly upwards overall. Investors remained cautious as the tariff war developed and the MPC meeting was scheduled during the week. Investors will look at domestic CPI for fresh cues.
The 10Y benchmark G-Sec was trading at a yield of 6.44% on April 11, 2025 at 16:04 IST.
Oil
Oil prices traded downward through the week breaching the USD 63 mark and reaching a 4-year low. The ongoing trade war created fears of global growth slowdown that will impact oil demands, pushing crude prices downwards.
Brent was trading at USD 63.88 on April 11, 2025 at 16:04 IST.
Gold
Gold prices opened lower but traded upward through the week, crossing the USD 3200 mark. Safe-haven investment demand driven by economic uncertainty resulting from US’s reciprocal tariff announcements pushed gold prices upwards. Expectation of a Fed rate cut, lowering UST yields and the slump in U.S. dollar further supported the prices.
Gold was trading at USD 3225.46 per Ounce on April 11, 2025 at 16:04 IST.
Currency
The USD/INR pair traded mixed through the week. The markets reacted to the reciprocal tariff and ongoing developments with the situation. The USD/INR pair is likely to respond primarily to the CNY movements and INR may experience additional downside risk, if China allows the Yuan to weaken further. RBI continues to intervene and stabilise the currency by limiting volatility in the Indian Rupee.
USD/INR was trading at 86.05 on April 11, 2025 at 16:04 IST.
April 11, 2025
Source: ICICI Bank Research, Private Banking Investment Strategy Team, Bloomberg and CRISIL.
Disclaimer
The information set out herein has been prepared by ICICI Bank in good faith and from sources deemed reliable. ICICI Bank does not provide any assurance as regards the accuracy of such information. ICICI Bank does not accept any responsibility for any errors whether caused by negligence or otherwise or for any direct or indirect loss / claim/ damage caused to any person, arising out of or in relation to the use of information communicated herein.