Stating that high interest rates can make the Indian industry uncompetitive, Mahindra & Mahindra Vice-Chairman and Managing Director Anand Mahindra on Wednesday said RBI should cut rates further.

"I think that RBI needs to lower rates in the light of what is happening in the rest of the world; otherwise, Indian industry will become uncompetitive. I think what RBI should do is to benchmark with the moves of significant economies. It should see what is the interest rates needed to make Indian industry competitive and to stoke consumer demand," Mahindra said in Davos.

On Tuesday, the Reserve Bank of India (RBI) lowered the economic growth forecast to 7 per cent, but kept key policy rates and ratio unchanged in its quarterly review of the annual monetary policy.

Mahindra, who is co-chairing the annual meeting of WEF in Davos, Switzerland, where the world's top business and political leaders are participants in the five-day meet, said the Indian auto industry needs aggressive reduction of interest rates to be competitive.

"I am a little disappointed...I do think that we, as industry, need to impress upon them (RBI) in a more significant manner the need for reduction of consumer loan rates," he said.

"What RBI is focusing on right now is to impress upon the banks to lend, but I still think that interest rates have to be lowered down," Mahindra said. Low interest rates will first revive passenger car vehicles.

"Commercial vehicles segment is more linked to overall GDP and manufacturing growth. And, since GDP has come down, it will take little bit more time for overall GDP to crank up. I think commercial vehicles will take little longer to revive," he said.

However, for the revival of both segments, he advocated interest rate cuts. "Panacea for both passenger vehicles and commercial vehicles has to be more aggressive reduction of interest rates and not incremental steps that we have seen," he said.

When asked whether commercial vehicle manufacturers need another package, he said, "Nobody in India is asking for a bailout, but we need a reduction in interest rate."

Citing advanced booking of its multipurpose vehicle Xylo for one month, he said, "It proves that there is latent demand in India. There is latent demand for products in India if you price them correctly."

However, Mahindra complimented RBI for insulating India from the worst excesses of the crisis.

The apex bank has infused over Rs 4,00,000 crore into the system through a series of monetary easing measures taken since mid-September, 2008.