India-US trade deal delay could trigger RBI rate cuts: Goldman

Mumbai: India’s strong economic fundamentals continue to support a healthy growth outlook, but prolonged uncertainty over the India–US trade deal could push the Reserve Bank of India to step in with further rate cuts.

According to Goldman Sachs, if trade-related headwinds persist beyond the first quarter of FY27 and start weighing on growth, the RBI may use its remaining policy space to support the economy through additional monetary easing.

The brokerage said India’s mass consumption story, especially in rural areas and among lower-income households in cities, is still in the early stages of recovery.

This recovery is being supported by a good crop cycle, higher state-level transfer payments to women in lower-income families and GST cuts that benefited the bottom end of the consumption ladder.

Goldman Sachs believes these factors are helping demand gradually pick up, even though broader global uncertainties remain.