New Delhi, Sep 30 (NationPress) The Chief India Economist at Goldman Sachs, Santanu Sengupta, indicated on Tuesday that the Reserve Bank of India (RBI) is likely to keep the current interest rates steady and adopt a dovish stance in the upcoming monetary policy committee. He mentioned the possibility of rate cuts in December, contingent upon favorable economic conditions.

Market participants are keenly anticipating the RBI's monetary policy announcement on Wednesday, speculating on a potential reduction in lending rates.

Sengupta highlighted that the RBI's policy decisions will be influenced by unpredictable trade policies and external challenges, despite a robust outlook for domestic growth.

He forecasts a 25-basis-point rate cut in December, provided that growth and inflation indicators are supportive, as suggested by various reports.

Sengupta noted that while domestic growth remains stable, external factors such as US tariffs and H-1B visa restrictions are impacting market sentiment.

He also mentioned that recent GST reductions are expected to trigger a "mass consumption revival" starting in the October–December quarter when the effects of consumption growth will be noticeable.

For foreign institutional investors eyeing India, the challenges posed by tariffs and H-1B regulations are significant headwinds, he added.

Nevertheless, he played down the impact of US visa restrictions, categorizing the H-1B visa rule's effects as "muted in the near term."

Sengupta expressed optimism regarding the domestic economy, asserting that GST reforms will contribute positively to growth.

When asked about the government’s capacity to implement further economic measures beyond the GST rate cuts, Sengupta remarked that the government must adhere to its fiscal deficit target of 4.4 percent, limiting its options.

Previous analyses suggested that India’s economy is poised to grow at a faster pace of 6.5 percent in FY2026 GDP, an increase from the earlier estimate of 6 percent, largely due to the impact of GST reforms.