Morgan Stanley analysts project that interest rate cuts in India are unlikely for the fiscal year 2024/25 due to changes in the Federal Reserve’s policy and robust growth in the country. With inflation above the 4% target and expectations of a steady key policy rate at 6.5%, real rates are expected to average 200 basis points. India’s Monetary Policy Committee aims to maintain inflation within target levels. The country’s strong growth trajectory, driven by capital expenditure and productivity, suggests that interest rates may remain elevated for an extended period. However, the potential impact of a higher terminal Fed funds rate on the rupee and imported inflation warrants a cautious monetary approach.