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Indian shares are set to open little changed on Friday ahead of the central bank's policy decision, with markets awaiting guidance on growth and liquidity amid expectations of a rate pause.

The Gift Nifty futures were trading at 25,602.5 points as of 7:06 a.m. IST, indicating the benchmark Nifty 50 will open near Thursday's close of 25,642.8.

The Reserve Bank of India is expected to hold rates, helped by benign inflation and easing worries over U.S. tariffs after budget measures to boost manufacturing and exports and a trade deal with Washington.

Most economists polled by Reuters before the India-U.S. trade agreement was announced on Monday had also expected a status quo on interest rates.

"Given there is no pressing concern around growth or inflation, RBI is expected to hold rates unchanged in its upcoming policy," Bank of Baroda economist Sonal Badhan said.

The central bank is also likely to maintain a "neutral" stance, keeping the door open to one more rate cut if needed, Badhan added.

The RBI has cut rates by 125 basis points since February 2025, its most aggressive easing since 2019, supporting the economy and markets amid rare underperformance versus emerging-market and Asian peers due to weak earnings and record foreign outflows.

India's economy is expected to grow 7.4% in the current financial year, while the government's chief economic adviser projected growth of 6.8%–7.2% for the next fiscal year starting in April.

The RBI's policy decision comes after sharp market gyrations over the last few sessions, triggered by the budget and the trade agreement with the United States.

Markets slid in Sunday's special budget-day trading session after the government proposed a hike in the derivatives transaction tax, rebounded on the U.S.-India trade deal announcement, and fell again on Thursday.

Still, the Nifty 50 is up 1.3% this week, putting it on track for its best weekly performance in three months.

Other Asian markets opened 1.1% lower, while Wall Street equities slid overnight, dragged by tech stocks on worries about artificial intelligence disruption in the sector. [MKTS/GLOB]