India RBI Minutes A Hawkish Shift From the Governor’s Statement

Economics Research 19 August 2026 | 7:02PM IST

India: RBI Minutes: A Hawkish Shift From the Governor’s Statement

Bottom line: The August 2026 MPC minutes struck a more hawkish tone than the Santanu Sengupta | Governor’s 5th August policy statement. Members acknowledged that the rise in food Goldman Sachs India SPL and fuel-driven inflation could trigger second-round effects, but indicated that Arjun Varma broader and more persistent price pressures would be needed to warrant policy | action. Core-goods inflation pressure appears to be firming, while pass-through to Goldman Sachs India SPL

core services remains limited (Exhibit 1), as we had written earlier. We continue to expect 50bp of cumulative policy rate hikes by the RBI, with 25bp each in the December 2026 and February 2027 policy meetings.

Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification and other important disclosures, see the Disclosure Appendix, or go to

Exhibit 1: The breadth of price pressures has increased in core goods, while there is limited evidence of broadening of price pressures in core services Percent Percent Percent Percent Share of Core Goods Price Increases, mom sa annualized Share of Core Services Price Increases, mom sa annualized 90 Above 6% 90 90 90 Above 6% 80 Above 4% and below 6% 80 80 Above 4% and below 6% 80 70 Above 2% and below 4% 70 70 Above 2% and below 4% Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26 Jul-26 Mar-25 May-25 Jul-25 Sep-25 Nov-25 Jan-26 Mar-26 May-26 Jul-26

Source: CEIC, Goldman Sachs Global Investment Research

We highlight some of the key comments from the RBI MPC members and external members below.

n Governor Malhotra highlighted that the rise in inflation remains supply-led, with limited evidence of “generalisation of price pressures” or “de-anchoring of inflation expectations”. He noted that inflation is normalising from unusually benign levels, however, and that this “may suggest a recalibration of policy rate” once there is greater clarity on persistence and the levels at which inflation may settle. We interpret his remarks as neutral, but more hawkish than his statement in the August policy meeting. n Deputy Governor Gupta saw a modest improvement in both the growth and inflation outlook, supported by improved rainfall conditions, resilient high-frequency activity indicators, and lower oil-prices. She stated that “the scope for any further easing remains limited at this juncture” and that “a case for a hike may emerge during the course of the year”, given that the headline inflation is expected to peak at around 5.9% yoy in Q4 CY26 as per RBI’s forecast (GSe: 5.6% yoy). However, she favoured waiting for more clarity on uncertainty around weather and persistence of inflation. We interpret her remarks as the most hawkish among committee members. n Executive Director Bhattacharyya emphasized that the RBI’s projected inflation path over the next nine months — averaging at 5.6% yoy — is significantly above target. Furthermore, he highlighted that supply-side shocks could trigger second-round effects; however, he preferred to wait for more evidence of wider pass-through and generalization of price pressures, arguing that a pause in the August meeting “does not necessarily imply an extended pause”. We interpret his remarks as neutral-to-hawkish. n External member Bhattacharya highlighted the risk that persistent fuel-price pressures could generate second-round and tertiary inflation effects, particularly given elevated household inflation expectations. However, he argued that the costs of early tightening must be balanced against limited evidence of a further pickup in aggregate demand and “generalised price pressures” and supported maintaining the neutral stance. We interpret his remarks as neutral with a slight hawkish bias.