Mumbai: State Bank of India (SBI) Chairman C.S. Setty has said that a pause in interest rates by the Reserve Bank of India (RBI) would help stabilise economic conditions and support sustained growth, even as India continues to witness strong investment activity across key sectors despite global geopolitical uncertainties.
Speaking at the Citi India Conference 2026, Setty noted that financial markets broadly expect the RBI’s Monetary Policy Committee (MPC) to maintain policy rates at the current level when it announces its decision on June 5. According to him, while inflation trends remain an important factor in monetary policy decisions, a rate pause at this stage could provide greater certainty to businesses and investors.
“Broadly, the market expects that there could be a rate pause at this juncture. Inflation dynamics remain important, but I think a pause would definitely help stabilise conditions and ensure smooth growth,” Setty said.
The SBI Chairman also highlighted the resilience of corporate investment plans despite ongoing tensions in West Asia, which have raised concerns over higher energy prices, supply-chain disruptions and global economic uncertainty. He said there has been no visible pullback in capital expenditure (capex) plans by companies so far.
“We have not seen anyone pulling back on capex. We’ll have to see maybe three, four months or six months later how the new capex plans come into force,” Setty remarked, indicating that the long-term impact of geopolitical developments on investment decisions remains uncertain.
Emphasising India’s long-term economic potential, Setty urged investors to focus on the country’s structural growth story rather than short-term market fluctuations. He estimated that India would require nearly ₹650 lakh crore in incremental investments by 2035 to achieve its development ambitions. This includes around ₹200 lakh crore by 2030 and an additional ₹450 lakh crore between 2030 and 2035.
The investments will be required across a broad range of sectors, including infrastructure, manufacturing, urban development, energy transition, innovation and micro, small and medium enterprises (MSMEs).
“The scale of financing required over the coming decades will be unprecedented,” Setty said, adding that the banking sector would play a crucial role in funding the country’s growth trajectory as India works toward its goal of becoming a developed economy by 2047.
He noted that investment activity remains robust in sectors such as renewable energy, roads, data centres and manufacturing. Emerging industries, including electronics manufacturing, semiconductor production and electric mobility, are also attracting significant investor interest.
On the growing influence of artificial intelligence (AI), Setty said India is well-positioned to become one of the world’s largest adopters of the technology, particularly within the financial services sector. While concerns about AI-driven job displacement continue to be debated globally, he argued that the more pressing challenge for India is ensuring the availability of a skilled workforce capable of implementing and managing AI-based solutions effectively.
Setty’s remarks underline confidence in India’s economic outlook, with strong investment momentum, expanding industrial opportunities and a supportive policy environment expected to drive long-term growth.
