India, April 24 -- Global uncertainty has hardened from a periodic disturbance into a defining macroeconomic condition. For India, this is no longer an external backdrop but a set of forces shaping domestic monetary policy, fiscal arithmetic and interGovernmental relations. The Reserve Bank of India (RBI) and the Ministry of Finance are navigating a world where energy volatility, geopolitical tensions, capital flow reversals and supply disruptions interact in persistent and complex ways. These pressures are increasingly transmitted through India's federal architecture, exposing state Governments to global shocks without commensurate policy flexibility.

The RBI's decision to hold the policy repo rate at 5.25 per cent reflects a calibrated...