India’s economy is showing signs of entering a “Goldilocks” phase — steady GDP growth at 6.5% paired with low inflation at 2.1% as of June 2025. The Reserve Bank of India (RBI) is now considering further rate cuts to support growth. This positive momentum is driven by strong domestic demand and optimism surrounding a potential India-US trade agreement. Policymakers remain cautious, however, due to global risks like geopolitical tensions and volatile oil prices.