New Delhi, Dec. 31 -- The Reserve Bank of India (RBI), in its latest Financial Stability Report (FSR) released in December 2025, flagged that the Indian economy and financial system are set to face near-term risk from global uncertainties related to geopolitics and trade.

The central bank of the country highlighted that the global uncertainties can increase the exchange rate volatility, while dampening trade, in turn reducing the earnings. These external factors also have the capability to lower foreign investment.

"These factors could increase exchange rate volatility, dampen trade, reduce corporate earnings, and lower foreign investment," said the RBI in its report released on 31 December 2025.

RBI's Financial Stability Report is a h...