India’s efforts to strengthen its global trade ties, including the upcoming free trade agreement (FTA) with the UK, present a timely strategic opportunity amid rising global uncertainties, the Reserve Bank of India (RBI) has said. In its July bulletin released on Wednesday, the central bank noted that building resilient trade partnerships could help India deepen its integration with global value chains in an increasingly fragmented and unpredictable geo-economic environment.The RBI bulletin, as reported by ANI, highlighted that domestic economic activity remained steady through June and July despite geopolitical tensions and concerns over tariff policies worldwide. The bulletin comes a day before India is set to formally sign a comprehensive economic and trade agreement with the United Kingdom. Prime Minister Narendra Modi has already departed for London to attend the event.In a detailed article titled “State of the Economy”, the RBI pointed out that “the average trade tariff rates are set to touch levels unseen since the 1930s.” It added that intense negotiations were underway globally to close trade deals before new import tariffs take effect from August 1, 2025. “The focus is back on US trade policies and their spillover effects globally,” it said, even as New Delhi remains engaged in discussions for a separate India-US trade pact.Amid this fluid external landscape, the RBI said that prospects of a good kharif crop, strong momentum in services, and modest industrial growth had helped support the domestic economy. Headline retail inflation stayed below 4% for the fifth straight month in June, aided by falling food prices. “Easing inflation, improving kharif season prospects, front-loading of government expenditure, targeted fiscal measures and congenial financial conditions… should support aggregate demand,” the bulletin added.It also said the external sector remained stable, backed by ample forex reserves and manageable debt levels. However, the central bank clarified that the views expressed are not its official stance.
