An internal working group of the Reserve Bank of India has suggested keeping the overnight weighted average call money rate as the operative target of monetary policy, and has recommended a shift to seven-day operations as the main tool.

The move was in line with expectations from economists polled by Reuters, and comes after the Reserve Bank of India delivered an outsized cut of 50 basis points

India's economy is expected to grow by around 6.5% in the current fiscal year but a 25% U.S. tariff on imports from India could shave off up to 40 basis points from that level, while stunting business investment, economists have said.