The RBI's October 7 shift to a "calibrated tightening" stance, coupled with its first repo rate hike in nearly four years to 5.50%, has anchored trader expectations for further tightening at the December 4 meeting. Elevated inflation risks—driven by deficient monsoon effects, El Niño conditions, high energy and commodity prices, and broadening price pressures—prompted the central bank to raise its FY27 CPI forecast to 5.2% and project 6.0% for Q3. Resilient 7.1% GDP growth provides room for policy action without immediate growth concerns. Most analysts anticipate a 25-basis-point increase, with a minority calling for 50 basis points amid sticky oil prices and rupee pressures, aligning with the market-implied odds favoring a measured hike over pause or reversal.