Follow India Renewable Energy News on WhatsApp for exclusive updates on clean energy news and insights

RBI's 50 bps Repo Rate Cut to 5.5% Offers Major Boost to Renewable Energy and Infrastructure Sectors

The Reserve Bank of India has cut the repo rate by 50 basis points to 5.5%, while shifting its monetary policy stance from 'Accommodative' to 'Neutral'. This move, driven by a favorable inflation forecast—now revised to 3.7% for FY26—aims to energize economic growth amid global and domestic uncertainties.

The decision is expected to have a significant positive impact on capital-intensive sectors, particularly renewable energy, infrastructure, and industrial manufacturing. Experts believe the reduction in borrowing costs will stimulate credit flow, enhance liquidity, and attract both domestic and international investments. Industry leaders highlighted how the rate cut would accelerate innovation and project execution in solar, wind, and hybrid systems, alongside improvements in grid modernization and storage technologies.

The rate cut is especially critical for the renewable sector, which relies heavily on affordable financing. With India targeting 500 GW of non-fossil capacity by 2030, the monetary policy shift is seen as aligning fiscal and monetary levers to catalyze long-gestation investments and enhance energy security.

RBI’s action also reflects confidence in India's macroeconomic fundamentals. Analysts and executives from Essar Capital, Hindustan Power, and Oyster Renewables emphasized that the lower cost of capital will unlock stalled projects, ease working capital stress, and encourage new capital expenditure across the energy value chain.

The cumulative 100 basis points rate cut over the last four months, combined with supportive regulatory measures, signals a strong commitment from the RBI to foster growth, resilience, and sustainable development in India’s power and infrastructure sectors.