What are the two key external risks to India's economy highlighted by RBI Governor Sanjay Malhotra?

The two key external risks highlighted by RBI Governor Sanjay Malhotra are ongoing tensions in the Middle East—specifically the Iran war, which threatens oil supply routes like the Strait of Hormuz—and the prospect of a weak monsoon season, with rainfall so far 23% below its long-term average, endangering crop sowing and potentially fueling food inflation.

Why has the RBI kept its benchmark policy rate unchanged despite rising global oil prices and elevated domestic inflation?

The RBI has kept its benchmark policy rate unchanged at 5.25% because it assesses that the pass-through of higher global oil prices to domestic inflation has remained limited, and current inflationary pressures are largely supply-side driven—not yet broad-based across the economy; Governor Malhotra reiterated it is premature to discuss monetary tightening and emphasized a 'wait and watch' stance ahead of the August 3–5 MPC meeting.

Iran War, Monsoons Key Risk for Indian Economy, RBI Governor Says

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RBI Governor Sanjay Malhotra cites Iran conflict-driven oil price hikes and weak monsoon rains as key inflation risks for India. High dependence on imported crude and rain-fed agriculture exposes the economy to geopolitical and climate shocks.

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