Finance Minister Nirmala Sitharaman has presented India’s 2026‑27 budget, focusing on higher infrastructure spending and measures to boost domestic manufacturing as global trade tensions rise. The budget forecasts a slight slowdown in GDP growth for the coming year amid the impact of new U.S. tariffs, while maintaining a path of fiscal restraint.
Key announcements include a 9% increase in capital spending to ₹12.2 trillion ($133.1 billion), a more than 20% rise in defense outlays, and strategic support for seven sectors including semiconductors, data centers, textiles, and rare earths. Incentives include a tax holiday until 2047 for foreign cloud companies investing in Indian data centers and dedicated rare‑earth corridors in four states. The government also shifted its fiscal target from a rigid annual deficit to a debt‑to‑GDP ratio goal of around 50% by 2030–31, aiming for greater spending flexibility. Markets reacted negatively to a hike in the Securities Transaction Tax on derivatives.
