Policymakers lower the benchmark repo rate by half a percentage point to 5.5 per cent as fears over inflation ease

India's central bank cut interest rates more than expected on Friday, citing muted inflation and a need to kickstart economic growth as the impact of US tariffs weighed on the country's outlook.

India's economy expanded at a faster-than-expected annual rate of 7.4% in the quarter ended in March. That marked the country's strongest quarterly growth in the fiscal year of 2025. New Delhi could be next in line to clinch a trade deal with the U.S., following Washington's agreements with China and the U.K.