Although the Reserve Bank of India (RBI) kept policy rates unchanged at this week's monetary review policy meeting, it is expected to cut repo rate thrice by April 2016, according to an economist at Bank of America Merrill Lynch (BofA-ML).

"The RBI will cut rate in June and will then pause for the Fed hike which is expected in September and then there will be another 50 bps of rate cuts in early 2016, Indranil Sengupta, Chief Economist India, BofA-ML said in an interview to CNBC-TV18

The RBI decided to keep key policy rates unchanged at Tuesday's meeting after having raised interest rates twice – in January and March this year. The central bank left the repo rate unchanged at 7.5%, the Cash Reserve Ratio (CRR) at 4% and Statutory Liquidity Ratio (SLR) at 21.5% on 7 April.

Sengupta said he expected inflation rate to come down in the short-term before rising by year-end on base effect, averaging 5-5.5 percent in the current fiscal.

India has witnessed disinflationary trend over the past few months, with CPI inflation falling from a peak of 8.6 percent in January 2014 to 3.3 percent in November. The fall was largely driven by a plunge in global crude oil prices due to oversupply.

But inflation rate is expected to go up again later in this financial year. "We expect inflation to average around 4.5% in 1H FY15-16, and rise to around 5.5% in 2H FY15-16," said Barclays Capital in a recent note.