The RBI’s Monetary Policy Committee (MPC) kept the policy repo rate unchanged at 5.50% and retained a neutral policy stance in its October meeting. The MPC decision to maintain the status quo on the policy rate was unanimous, though two committee members favoured shifting the stance to accommodative. The RBI lowered its FY26 CPI inflation forecast to 2.6% (from 3.1%) and raised its economic growth projection to 6.8% (from 6.5%) based on strong H1 momentum. Economic growth, however, is expected to moderate in H2 as US tariff headwinds weigh on activity, partly cushioned by GST cuts. Despite a more benign inflation outlook and the expectation of slower growth in H2, the MPC preferred a wait-and-watch approach to assess the impact of past rate cuts, GST reductions, and trade-related uncertainties. The policy statement carried a dovish leaning, with explicit recognition of increased policy space, as evidenced by the dropping of the phrase “limited space”. In our view, this keeps the door open for additional easing. We believe December could present an opportune window for a 25-bps cut, with greater clarity on GST-driven demand and US–India trade talks.