The rationalization in GST and the just concluded festive season in India have reinstated the domestic support to FY26 growth outlook. Though early, but lead indicators do point towards consumption picking up materially over the months of Sep-Oct-25. Further, despite the 50% cumulative tariff imposed by US on India continuing to remain, we see a space for the US to possibly advance a tariff relief to India.  As such, we now add the possibility of a 20 bps upside to our growth outlook to likely post 6.6% GDP growth for FY26. Inflation remains benign, with CPI undershooting the lower bound of inflation in Q2 FY26 for the first time since the adoption of the flexible inflation targeting framework. Taking on board the GST induced price cuts (as also greater than anticipated downside in food prices), we had reduced our FY26 CPI inflation projection at 2.6 We hold on to the view. However, we do acknowledge the emergence of further downside risk on continued correction in food prices. After undergoing a spike in Aug-25, g-sec yields have moderated a tad amidst an improvement in the inflation profile, which prompted a mildly dovish pause by the MPC at its Oct-25 policy review. We see a strong possibility of CPI inflation slipping below 1.0% in Oct-25. This will support rate cut expectations – scope for 25-50 bps rate easing has emerged, although timing remains uncertain. While money market liquidity could remain in surplus until Mar-26, RBI’s FX intervention to curb INR volatility is offsetting the impact of CRR cuts. To neutralize this, we expect Rs 500 bn OMO purchases in Q4 FY26. We retain our 10Y g-sec yield at 6.30% for Mar-26. The INR trajectory will be influenced by the new normal in international trade, overall BoP, and the USD backdrop. For FY26, the current account balance (and the BoP) could lie between -0.8% of GDP (and USD +10 bn) and -1.2% (and USD -20 bn). We maintain our USDINR forecast of 89.5 for Mar-26