RBI cuts repo rate by 25 basis points | Accommodative stance

Amid the ongoing buzz around tariffs, Reserve Bank of India has cut the repo rate by 25 basis points to 6 per cent. This is indicative of an accommodative stance by India’s central bank. Due to this, home loan interest rates might come down and more business borrowing might occur. While both are positive signs for the economy, India’s central bank has cut India’s GDP projection for FY26 to 6.5 per cent from the earlier 6.7 per cent.

Some of the business leaders are sharing their reactions with Thought Habitat on the repo rate cut, and here are some of them.

Murthy Nagarajan, Head-Fixed Income, Tata Asset Management

RBI cut repo rate by 25 basis points as widely expected. RBI changed its stance to accommodative from neutral, which was not on expected lines given the global background. RBI seems to be comfortable with currency depreciation in the coming months. RBI has reduced its GDP growth forecast to 6.5 from 6.7 percent and CPI inflation has been revised to 4 from 4.2 percent. They highlighted future expectation of CPI over a 3 and 6 month time frame is lower.

The governor highlighted lower commodity prices specially oil prices due to tariff war and on the growth downside due to lower investments by companies. RBI made it clear they will provide liquidity in the banking system to support growth Rate cuts in India is expected to be deeper to support growth as CPI inflation is below target of 4 percent for most of the year as per RBI projections. The terminal rate on repo can go towards 5.25 levels from 6 percent at present. The ten-year yields can move towards 6 to 6.25 percent in the coming years as globally growth slows down.

Investors may consider investing in duration products to take advantage of fall in yields in the coming months. Gilt fund , corporate bonds and short-term bond fund may be part of core portfolio to take advantage of fall in yields. For accruals, investors may look to invest in money market and ultra short-term bond fund.

Avneesh Sood, Director of Eros Group

The 25 bps repo rate cut to 6% goes beyond affordability—it reshapes investor psychology. In a high-volatility global environment, policy consistency becomes the new catalyst. This rate cut signals predictability, which institutional and retail investors deeply value. For the Indian real estate sector, it’s not just about cheaper loans—it’s about reinforcing trust in long-term asset classes like housing. This clarity will unlock capital flows into underpenetrated Tier 2 and Tier 3 markets, where aspiration meets affordability. The RBI has subtly shifted the narrative from reactive relief to proactive confidence-building, and that’s what will define the next phase of real estate growth.

Amit Somani, Deputy Head-Fixed Income, Tata Asset Management

RBI delivered a 25bps rate cut, in line with market expectation. The policy stance has been changed to accommodative. The policy and stance continue to remain Growth supportive, as inflation is expected to remain benign. Both Inflation and GDP growth rates have been revised lower.

We expect the monetary policy to support greater transmission to help Economic grow in the current uncertain global environment. We expect market rates to remain well supported with 10-yr continue to trade in 6.40%-6.60% range, with positive bias. Short-term yields upto 1 year are also likely to trade in the current range after a sharp rally of 75-100 bps over the last one month. Beyond domestic monetary policy, markets will take further cues from current Global Tariff Wars and its impact on macro-economic parameters and financial stability.

Vinod Kumar Goenka, Chairman & Managing Director, Valor Estate

The RBI’s decision to cut the repo rate by 25 basis points and adopt an accommodative stance is poised to positively impact the real estate sector. Lower interest rates are expected to enhance home loan affordability, which can significantly boost housing demand, especially in the affordable and mid-income categories.

For developers, improved liquidity conditions may ease financing pressures, enabling faster execution and delivery of ongoing projects. The move also bodes well for commercial real estate, as lower borrowing costs could encourage business expansion and increase demand for office and retail spaces. While the GDP outlook has softened, the real estate market stands to benefit from the policy’s clear intent to support growth and investment. Overall, the industry is likely to witness renewed interest and improved sentiment, setting the stage for a more active and stable period ahead.

Ashish Bhutani, CEO, Bhutani Infra

The real estate industry is pleased and appreciative of the Reserve Bank of India’s recent decision to lower the repo rate by 25 basis points to 6%. Lower interest rates directly result in lower borrowing costs for prospective homeowners, increasing the affordability and accessibility of homeownership. Demand for a variety of housing segments is anticipated to increase as a result of this reduction. For example, large savings on home loan EMIs could result from a cumulative 75 basis point fall in repo rates, improving loan eligibility and enticing potential buyers to make real estate investments.

Reduced borrowing costs for developers will also help projects run more smoothly and may even speed up new construction projects, which would help close the current housing market demand-supply gap. Non-Resident Indians (NRIs) and the larger investor community may also change their investment portfolios as a result of the United States’ 26% tax on Indian goods. NRIs may be prompted by such tariffs to reevaluate their investment portfolios and possibly look into opportunities in India.

NRI investments have already significantly increased in the luxury and commercial segments of the Indian real estate market. Although it is yet too early to tell how U.S. tariffs would directly affect NRI investment in Indian real estate, trade policies of this kind may encourage more NRIs to put money into the Indian real estate market in search of steady and possibly profitable returns.

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