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September 30, 2025 Indian Economy & Business: RBI MPC Begins, GDP Forecasts Upgraded, and Key Policy Changes Announced

The Indian economy saw a flurry of significant developments over the past 24 hours, particularly in monetary policy, economic outlook, and regulatory changes. The Reserve Bank of India's Monetary Policy Committee (MPC) commenced its meeting, with expectations leaning towards an unchanged repo rate. Meanwhile, leading agencies like EY and Moody's revised India's GDP forecasts upwards, affirming its position as the fastest-growing G20 economy despite global headwinds. The RBI also announced new lending norms and a transition to continuous cheque clearing. The stock market, however, continued its downward trend for the seventh consecutive session.

Mumbai, India – September 30, 2025 – The Indian economic landscape witnessed several crucial updates yesterday, spanning monetary policy, growth projections, and regulatory overhauls. These developments are poised to influence various sectors and are of particular interest to students preparing for competitive examinations.

RBI Monetary Policy Committee Meeting Underway

The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) began its three-day meeting on September 29, with the decision on the repo rate anticipated to be announced on October 1. Most economists widely expect the MPC to maintain the status quo, keeping the repo rate unchanged for the second consecutive time at 5.5% amidst strong GDP growth and expectations of benign inflation. This comes after a 50 basis point reduction in June 2025. A neutral monetary policy stance is likely to be maintained by the six-member rate-setting panel.

Positive Revisions in India's GDP Forecasts

In a significant boost to India's economic outlook, EY has raised its real Gross Domestic Product (GDP) projection for the financial year 2025-26 (FY26) to 6.7%, up from its previous forecast of 6.5%. This upward revision is attributed to robust growth in the June quarter and the positive impact of Goods and Services Tax (GST) reforms. Similarly, Moody's affirmed India's long-term issuer ratings at Baa3 with a 'Stable' outlook, forecasting GDP growth at 6.5% for FY26. Moody's highlighted India's strong growth potential, large domestic market, and favorable demographics as key strengths, noting that US tariffs are expected to have a limited near-term negative effect on the economy.

RBI Unveils New Norms for Lending and Cheque Clearing

The RBI introduced new directives aimed at easing lending norms for borrowers and banks. These changes, some effective from October 1 and others open for consultation, include greater flexibility in adjusting interest-rate spreads, allowing personal loan customers to switch from floating to fixed rates, and broadening gold and silver lending to include all manufacturers using bullion as raw material, extending credit's reach to smaller urban co-operatives. Furthermore, the RBI announced a transition from batch clearing to continuous clearing for cheques under the Cheque Truncation System (CTS), to be implemented in two phases starting October 4, 2025.

Stock Market Extends Losing Streak

Indian benchmark indices, the Sensex and Nifty, closed marginally lower on September 29, extending their losing streak to seven consecutive sessions. Investors remained cautious ahead of the RBI's policy decision and ongoing concerns regarding US tariffs. The Sensex ended down 61.52 points (0.08%) at 80,364.94, while the Nifty50 slipped 19.8 points (0.08%) to 24,634.9. The BSE Midcap index outperformed, rising 0.34%, but the Smallcap index declined. Top gainers included Titan, SBI, and Trent, while Maruti and Axis Bank were among the top losers.

Industrial Production and Economic Freedom Index

India's industrial production growth accelerated to 4% in August 2025, primarily driven by a robust performance in the mining sector, which saw a 6.0% output growth. Manufacturing production also rose by 3.8%. In other economic news, India ranked 128th globally and 26th regionally in the 2025 Index of Economic Freedom, with a score of 53.0. While this represents a marginal improvement, India remains categorized as "mostly unfree" in the index.

Key Corporate and Regulatory Updates

  • The Initial Public Offering (IPO) of Om Freight Forwarders opened for public subscription, aiming to raise ₹122.31 crore.

  • Bharat Electronics (BEL) saw its shares rise amid news of an Indian Army tender for 'Anant Shastra' missile systems, for which BEL will be the supplier.

  • HDFC Bank's Dubai branch faced restrictions from the Dubai Financial Services Authority (DFSA), barring it from onboarding new clients or undertaking fresh business.

  • Tata Motors appointed Shailesh Chandra as its new Managing Director and CEO, effective October 1, 2025.

  • Oil India announced the discovery of natural gas at its Vijayapuram-2 exploratory well.

  • Godrej Agrovet signed a non-binding Memorandum of Understanding (MoU) with the Ministry of Food Processing Industries (MoFPI) to invest ₹960 crore in manufacturing, processing, and research facilities.

  • The Supreme Court cleared JSW Steel's ₹19,700 crore plan for Bhushan Power & Steel.

  • From October 1, 2025, significant changes will be implemented in the National Pension System (NPS), including allowing non-government subscribers to invest up to 100% in equities under a single plan. Various banks, including PNB and YES Bank, are also revising service charges.

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