Mumbai, Jan 25 (NationPress) The robust economic fundamentals of India are fostering a positive growth perspective, but ongoing uncertainty regarding the India–US trade agreement may compel the Reserve Bank of India to implement additional rate reductions.

As stated by Goldman Sachs, should trade-related challenges extend beyond the first quarter of FY27 and start to impede growth, the RBI could leverage its remaining policy options for further monetary easing.

The firm pointed out that India’s consumption narrative, particularly in rural communities and among lower-income urban households, is still in the nascent stages of recovery.

This revival is being bolstered by favorable crop cycles, increased state-level financial transfers to women in lower-income families, and GST reductions that have positively impacted the lower end of the consumption spectrum.

Goldman Sachs believes these elements are gradually enhancing demand, although global uncertainties persist.

In a recent discussion with NDTV Profit, Santanu Sengupta, Chief India Economist at Goldman Sachs, indicated that the India–US trade deal is anticipated to be concluded by the first quarter of FY27.

However, he cautioned that if the agreement is delayed into the latter half of the upcoming financial year, it could pose challenges to growth.

In such a scenario, both the government and the Reserve Bank of India may need to utilize their policy flexibility to stimulate the economy.

Sengupta elaborated that while India's overall consumption outlook appears optimistic, the situation varies across different income brackets.

The affluent consumer segment, encompassing middle and upper-income groups, experienced significant growth following the Covid-19 pandemic but is now showing signs of deceleration.

He noted that the middle-income group is grappling with concerns regarding job creation and the rising influence of artificial intelligence.

On the policy front, the central government eased its fiscal consolidation efforts in FY26, shifting its focus towards enhancing consumption through income tax and consumption tax reductions.

This strategy enabled India to achieve a robust real GDP growth of 7.6% year-on-year during the calendar year 2025. However, nominal GDP growth reached a six-year low, excluding the pandemic period, primarily due to exceptionally low inflation.