Kolkata: The EEPC India on Wednesday reacted to RBI’s cut the repo rate, saying it was expectedly the Central bank has cut the repo rate for the second time in a row by 25 basis points to 6 percent.
The move should further support economic growth, which currently faces major challenges on the external front arising from the global trade tariff war, according EEPC India chairman Pankaj Chadha.
” Once fully transmitted by banks, the two back-to-back rate cuts should reduce the industry’s capital cost. They are also expected to bolster consumption demand and push private capex,” he opined.
The global uncertainty has been mounting, following the Trump administration’s decision to impose reciprocal tariffs. Markets worldwide have been volatile.
Overall business sentiments are down over possible supply chain and trade disruptions due to the tariff war. The global economic outlook remains cloudy.
” In light of the above, the industry, especially MSME exporters, needs constant monetary as well as fiscal policy support,” Chadha maintained.
He said the growing external challenges could lead to inventory piling up and order book decline for the engineering exports sector.
This would have a ripple effect in terms of fewer job creations and lower forex earnings, he added.
The engineering exports sector was already feeling the heat. India’s engineering goods exports declined 8.62 pc year-on-year in February 2025 to
$9.08 billion from $9.94 billion in the same month last year as shipments of iron and steel, aluminium, and copper fell significantly during the month.
“The ongoing trade negotiations by India with the US, UK, EU, and other countries should open new markets for engineering goods and other exporters.
“We hope the ongoing trade war will subside sooner rather than later, helping the normalcy to return,” the EEPC India chief concluded.
ANAROCK Group chairman Anuj Puri said RBI’s decision to reduce the repo rates by 25 bps (to 6 pc) second time this year was expected to the backdrop of moderating inflation. He said home loan borrowers may not see much meaningful or immediate interest rate relief. Banks have not transmitted earlier MPC rate cuts to borrowers because of higher funding costs, pressure on net interest margins, higher NPAs, and a cautious lending climate.
” If banks do pass on the benefits of the last two rate cuts, it will be a boost to homebuyers, particularly for those eyeing affordable housing. Many first-time homebuyers who had been hesitating to take the plunge may make their move if home loan rates reduce.” Puti added.
Housing prices have risen across the top 7 cities in the last one year. As per ANAROCK Research, Q1 2025 saw average housing prices rise by anywhere between 10-34 pc in the top 7 cities, with NCR and Bengaluru recording the highest 34 pc and 20 pc jump, respectively. The average prices in top 7 cities collectively stood at approx. Rs 7,550 per sq. ft. in Q1 2024-end, while in Q1 2025-end it increased to approx. Rs 8,835 per sq. ft. – a collective increase of 17 pc annually.
