JPMorgan Chase & Co. economist Jahangir Aziz cautioned that India's economy may be experiencing a "sugar high" from substantial policy support in late 2025, including borrowing cost cuts, GST reductions, and regulatory easing that spurred credit growth. Speaking to Bloomberg Television's Paul Allen, Aziz said the Reserve Bank of India will likely deliver an initial 25 basis point hike this year, but warned markets may be pricing in too many increases — implying about 100 basis points total. He noted that once the stimulus effects fade, rate hikes could impact both investment and consumption.

With another round of GST cuts unlikely and rapid credit expansion raising regulatory concerns, the RBI faces a difficult judgment on tightening tolerance. Excess banking liquidity has kept some market rates below the policy rate, but tighter financial conditions could eventually weigh on business investment and household spending. Aziz advised waiting to see the impact of hikes on financial conditions and real activity before confirming a hiking cycle.