RBI MPC Meet: 'Next Rate Cut Likely In December,' Says Goldman Sachs’ Chief India Economist Santanu Sengupta

New Delhi, Sep 30: US investment banking company Goldman Sachs’ Chief India Economist Santanu Sengupta said on Tuesday that the Reserve Bank of India is expected to maintain current rates and take a dovish approach in the current monetary policy committee, with potential cuts in December, if conditions permit.

Investors await the Reserve Bank of India’s monetary policy decision on Wednesday, in hopes for a potential lending rate cut.

Dovish stance with external headwinds

Sengupta said that the RBI’s stance will be impacted by the uncertain trade policy and external headwinds, despite a strong domestic growth outlook.

Sengupta anticipates a 25-basis-point rate cut in December, provided growth and inflation readings support it, according to multiple reports.

Domestic stability, global concerns

He said that a rate cut is likely in December, citing stable domestic growth but external challenges such as US tariffs and H-1B visa restrictions affecting sentiment.

GST reforms to revive consumption

He said that GST reductions will initiate a "mass consumption revival" starting in the October–December quarter when "the consumption growth will be felt."

If you are an FII investor looking at India, then you have tariffs and H1B, leading to outflows, which is the real headwind India is facing, he added.

Sengupta, however, downplayed concerns around US visa restrictions, calling the H1B visa rule impact “muted in the near term.”

He said the state of the domestic economy looks agreeable, adding that the GST reforms will feed into growth.

Fiscal deficit limits government options

Regarding room for one more economic lever being enforced by the government, other than the GST rate cuts, Sengupta said that he doesn't see much room for the government, as it has to maintain the fiscal deficit target of 4.4 per cent.

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Analysts had earlier reported that India’s economy is set to grow faster at 6.5 per cent in FY2026 GDP, up from the previous expectation of 6 per cent, due to GST reforms.

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