RBI Reduces Repo Rate and Boosts Liquidity
The Reserve Bank of India (RBI) has announced a 25 basis point reduction in the benchmark repo rate, bringing it down to 5.25%. This move, made during the Monetary Policy Committee (MPC) meeting from December 3-5, 2025, is aimed at fostering economic growth by making loans, including home and car loans, potentially cheaper.
In addition to the rate cut, the RBI unveiled significant liquidity measures, including Open Market Operations (OMO) purchases of ā¹1 lakh crore and a $5 billion dollar-rupee swap to inject durable liquidity into the financial system. The central bank also revised India's GDP growth forecast for FY26 upwards to 7.3% from an earlier 6.8%, while lowering the inflation projection to 2% from 2.6%. RBI Governor Sanjay Malhotra noted that India is currently in a "Goldilocks zone" of high growth and low inflation, despite a challenging global environment.
Finance Minister Projects Strong Growth and Upcoming Customs Reforms
Union Finance Minister Nirmala Sitharaman affirmed India's robust economic trajectory, stating that the country is on track to achieve 7% or higher GDP growth in the current fiscal year. Speaking at an event in Delhi, she highlighted that easing inflation, Goods and Services Tax (GST) rate rationalization, and strong consumer activity are contributing to India's resilience amidst global uncertainties.
Sitharaman also indicated that the next significant reform push would be in the area of customs. The government plans a comprehensive overhaul to simplify customs rules, enhance transparency, and ease compliance, following previous reforms in GST and income tax.
Implementation of New Labour Codes
In a momentous step towards economic modernization, the Government of India announced the implementation of four new Labour Codes in November 2025. These codes, covering Wages, Industrial Relations, Social Security, and Occupational Safety, Health and Working Conditions, rationalize 29 existing labour laws, many dating back to the pre-1950s era. This reform is expected to transition the Indian economy beyond colonial-era structures, align with global trends, and improve the ease of doing business by reducing compliance burdens and enabling flexible work arrangements.
Startup Ecosystem Shifts Towards IPOs
The Indian startup landscape is witnessing a notable shift, with many companies increasingly opting for public listings (IPOs) instead of pursuing large private funding rounds. This trend is driven by a booming IPO market that offers access to growth capital and provides liquidity for shareholders. While mega-deals exceeding $100 million have seen a dip, smaller and mid-sized investments are flourishing, indicating a maturing investor base receptive to new-age public offerings.