The jumbo 50 bps rate cut by the Reserve Bank of India (RBI) will directly benefit home loan borrowers, especially existing ones, by reducing their interest burden, experts said on Friday.

The decision comes at a pivotal time, as India, now the world’s fourth-largest economy, is witnessing strong real estate momentum across metros as well as tier 2 and 3 cities.

“Lower lending rates will directly enhance home loan affordability, particularly in interest-sensitive categories like mid-income and affordable housing. Reduced EMIs are expected to significantly improve buyer sentiment and encourage first-time homebuyers to enter the market,” said Shekhar G Patel, President, the Confederation of Real Estate Developers' Associations of India (CREDAI).

The RBI has projected India’s GDP growth at 6.5 per cent for 2025-26, with domestic economic activity showing resilience on the back of a strong agriculture sector, industry picking up, and the services sector expected to maintain momentum.

The quarterly growth rates projected for the financial year are: Q1 at 6.5, Q2 at 6.7, Q3 at 6.6 and Q4 at 6.3 per cent.

“The provisional estimates released by the National Statistical Office (NSO) placed India’s real GDP growth in 2024-25 at 6.5 per cent. During 2025-26 so far, domestic economic activity has exhibited resilience. The agriculture sector remains strong. With a very good harvest in both the kharif as well as rabi cropping seasons, the supply of major food crops is comfortable. The reservoir levels remain healthy. The highest procurement of wheat in the last four years provides a comforting stock position,” RBI Governor Sanjay Malhotra said on Friday.

The Indian benchmark indices surged on Friday after the RBI Governor Sanjay Malhotra announced a jumbo 50 bps rate cut — from 6 per cent to 5.5 per cent — and a 100 basis point cut in the Cash Reserve Ratio (CRR), from 4 per cent to 3 per cent.

The immediate effect of the decision was seen on the Indian stock market. At around 10.46 am, Sensex was trading 505.7 points or 0.62 per cent up at 81,947.74 while the Nifty added 168.40 point or 0.68 per cent at 24,919.30.

Nifty Bank was up 682.95 points or 1.22 per cent at 56,443.80 . The Nifty Midcap 100 index was trading at 58,666.20 after rising 363.20 points or 0.62 per cent. Nifty Smallcap 100 index was at 18,480.85 after climbing 48.25points or 0.26 per cent.

In the Sensex pack, Bajaj Finance, Axis Bank, Maruti Suzuki, Kotak Mahindra Bank and IndusInd Bank were the top gainers. Sun Pharma, Infosys, Nestle India and HCL Tech were the top losers.

RBI Governor Sanjay Malhotra on Friday announced a jumbo 50 basis points cut in the repo rate from 6 per cent to 5.5 per cent to spur growth in the economy, as inflation has come down below the lower RBI band of 4 per cent.

A lower policy rate leads to a decline in interest rate on bank loans which makes borrowing easier for consumers as well as businesses resulting in higher consumption and investments in the economy leading to higher growth.

However, the effectiveness of this rate cut will largely hinge on how quickly and efficiently commercial banks pass on the benefits to borrowers.

The RBI Governor said the repo rate has now been reduced 100 basis points in quick succession since February this year and hence, the monetary policy stance has been changed from accommodative to neutral.

The domestic benchmark indices opened flat on Friday ahead of the key RBI monetary policy committee (MPC) decision on the repo rate, as buying was seen in the IT and PSU bank sectors in the early trade.

In today’s monetary policy, the RBI is likely to cut policy rates by 25 bps, which has already been factored in by the stock market.

At around 9.23 am, Sensex was trading 82.43 points or 0.10 per cent down at 81,359.61 while the Nifty declined 7.70 point or 0.03 per cent at 24,743.20

Nifty Bank was up 4.85 points or 0.01 per cent at 55,765.70. The Nifty Midcap 100 index was trading at 58,449.25 after rising 146.25 points or 0.25 per cent. Nifty Smallcap 100 index was at 18,498.10 after climbing 65.50 points or 0.36 per cent.

According to analysts, more important will be the RBI commentary on growth and inflation projections for FY26.

External Affairs Minister (EAM) S. Jaishankar on Thursday held a meeting with Kyrgyzstan Foreign Affairs Minister Zheenbek Kulubaev Moldokanovich, discussing ways to enhance cooperation between the two countries and also thanking him for Bishkek's support and solidarity in countering terrorism.

"A productive meeting with FM Zheenbek Kulubaev of Kyrgyz Republic. Thanked him for their support and solidarity in countering terrorism. Discussed our cooperation in banking, education, energy, health, connectivity and capacity building. Today's signing of Programme of Cooperation is a step forward in deepening our bilateral ties," EAM Jaishankar posted on X after the meeting.

Along with Kulubaev, four other Central Asian foreign ministers - including Bakhtiyor Saidov (Uzbekistan), Rashid Meredov (Turkmenistan), Sirojiddin Muhriddin (Tajikistan) and Murat Nurtleu (Kazakhstan) - are in New Delhi to attend the two-day 4th India-Central Asia Dialogue as India continues to put a strong foot forward in enhancing anti-terror and de-radicalisation partnerships across the region.

The last 11 years have seen steady reforms introduced by the Government to make life easier and more dignified for the middle class, with steps ranging from tax relief that leaves more money in their hands to pension schemes that promise security in the old age, according to an official statement issued on Thursday.

The government has cut through red tape, simplified rules and made everyday systems work better. Be it filing taxes, buying a home, commuting to work or affording medicines, things have become simpler and more accessible.

These are not scattered changes but a pattern of reforms that speak to the real concerns of ordinary citizens. The government has not only respected the hard work of the middle class but also recognised them as key drivers of India’s growth, the statement said.

The Indian stock market closed in the green on Thursday ahead of the key RBI monetary policy committee (MPC) decision on the repo rate.

At the end of trading, the Sensex was up 443.79 points or 0.55 per cent at 81,442.04 and the Nifty gained 130.70 points or 0.53 per cent at 24,750.90.

On Friday, the MPC decisions will be announced by RBI Governor Sanjay Malhotra and according to experts, the Central Bank is likely to cut the repo rate by 0.25 per cent.

Meanwhile, along with largecaps, midcaps and smallcaps also saw a rise. The Nifty Midcap 100 index was up 378.35 points, or 0.65 per cent, at 58,303, and the Nifty Smallcap 100 index rose 175.50 points, or 0.96 per cent, at 18,432.60.

Demand for polyvinyl chloride (PVC) resin in India is expected to grow by 8 per cent per annum to reach 5.5 million metric tonnes (MMT) by FY27, a report said on Wednesday.

Demand for PVC resin witnessed a healthy growth at a CAGR of 6.2 per cent during FY20-FY25, reaching 4.7 million metric tonnes (MMT) last fiscal.

This was achieved on the back of strong demand from end-user industries supported by favourable government policies, said the report by CareEdge Ratings.

In a major development, French major Dassault Aviation and Tata Advanced Systems Limited on Thursday signed four production transfer agreements to manufacture the Rafale fighter aircraft fuselage in India, marking a significant step forward in strengthening the country’s aerospace manufacturing capabilities and supporting global supply chains.

Tata Advanced Systems will set up a cutting-edge production facility in Hyderabad for the manufacture of key structural sections of the Rafale, including the lateral shells of the rear fuselage, the complete rear section, the central fuselage, and the front section.