But India's economy needs less stimulus than most and the inflation risks are higher.
Indian GDP growth slowed to 6.7 per cent in 2008/09 from nearly 9 per cent in the previous five years, but has held up better than most of its more export-reliant Asian neighbours.
Prices, meanwhile, are rising from a year earlier due to domestic demand. Indian consumer price inflation was 8.6 per cent in May, due mainly to rising food prices. Wholesale price inflation, the most closely watched price barometer, has been rising since February.
Bond markets are already expecting some kind of policy tightening by the RBI late this year, likely in the form of siphoning excess cash from money markets.
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