All eyes are now on the Reserve Bank of India’s (RBI) three-day Monetary Policy Committee (MPC) meeting, which starts on Wednesday and will include the crucial repo rate decision on Friday, following the Union Budget 2026 and the historic India-US trade agreement.

Economists predict that any additional policy rate cuts by the MPC, chaired by RBI Governor Sanjay Malhotra, will be halted. To address the risks associated with currency, bond stability, and liquidity, the Central Bank is instead planning to take direct action.

In February 2025, the RBI reduced the repo rate to 5.25%, a reduction of 125 basis points.

There is no justification to make more cutbacks, analysts added, since inflation is expected to rise even in the new base year series that will be released on February 12.

According to a Yes Bank note, “the current real rate of 125 bps seems reasonable with the current repo rate at 5.25 percent and with inflation anticipated at around 4 percent (will wait to see if the new series changes the inflation view).”

It further stated that in the event of a growth collapse, the RBI should remain on hold, maintain a “neutral” attitude, and maintain its firepower.

Bond purchases are anticipated to continue this quarter and in April and June of 2026.

Radhika Rao, Executive Director and Senior Economist at DBS Bank., stated that, “the central bank may want to be agile and nimble in its money market related operations and keep borrowing costs in check because the FY27 Budget outlines a record high of borrowings.”

In order to relieve liquidity pressure, the RBI recently announced a number of liquidity-enhancing initiatives that will inject over Rs 2 lakh crore into the banking sector. The Central Bank stated that in order to improve liquidity conditions in the financial sector, it will employ a combination of open market bond purchases, a foreign currency swap, and a variable rate repo operation.

The actions are being taken after a review of the financial and liquidity situation.

The India-US trade agreement was warmly hailed by international and Indian brokerages on Tuesday, who described it as a significant boost to India’s GDP, business profits, and foreign investment sentiment.

The stock markets mirrored the strong support from financial professionals, with the Sensex rising more than 4,200 points during intraday trading to reach a record high of 85,871.73.

According to brokers, lowering reciprocal tariffs on Indian exports to the US will improve economic prospects and lessen the strain on India’s external balances.

According to Goldman Sachs, the reduced tariffs could reduce India’s current account deficit by around 0.25 percent of GDP in 2026, bringing it down to almost 0.8 percent.

Additionally, the company anticipates that capital inflows would rebound after the acquisition is fully executed, which could bolster the rupee and lower negative risks to its dollar-rupee estimate.

According to Goldman Sachs, the Reserve Bank of India is probably nearing the end of its cycle of rate reductions and might maintain the repo rate at 5.25 percent through 2026.

It also mentioned that, in terms of export competitiveness, the trade agreement places India in a marginally better position than other Asian rising nations.

Even though corporate profits have been weak recently, Bernstein said it’s a good moment for investors to enter the market due to the positive attitude around India.

Nomura emphasized that foreign investment in India is expected to resume. After a poor FY26, it anticipates a gradual reversal of both foreign direct investment (FDI) commitments and foreign portfolio investor (FPI) flows.

In FY27, the brokerage anticipates a balance of payments surplus of about $7 billion. Additionally, it noted that labor-intensive export industries like manufacturing and textiles will have less margin pressure as a result of the tariffs being lowered to 18%.

India may increase technology imports and attract long-term US investments if it opens its markets to more US goods, according to BofA Securities.

It further stated that the impact of the new pricing structure will be minimal, despite some currency weakening.

According to their projections, India’s effective tariff rate might drop from approximately 30–35% to about 12–13% after current US duties on goods like steel, aluminum, and cars are taken into account.

Markets will now pay greater attention to the improving trend in corporate results, according to domestic brokerage Motilal Oswal.

The deal is very good for Indian stocks, according to Antique Stock Broking.

The anticipated return of foreign investors, which has been a significant worry for markets over the previous year, would be the main advantage, according to the statement.

Given this perspective, Antique has set a target for the Nifty 50 of 29,500 by March 2027, favoring equities in industries including capital goods, consumer goods, financials, and defense.

To the pleasure of fans and movie enthusiasts, the producers of Rajkumar Periasamy‘s widely anticipated upcoming film, which stars Dhanush in the main role, welcomed actress Sai Pallavi and Sree Leela on board the film’s unit on Monday.

Actor Dhanush’s production company, Wunderbar Films, welcomed actress Sai Pallavi to their X timeline. Wunderbar Films is one of the production companies doing the movie.

It stated, “She embodies both grace and strength simultaneously. Welcome to @Sai_Pallavi92, everyone’s favorite, on board #D55. The popular pair makes a comeback to the big screen.

This will be Sai Pallavi’s second collaboration with Dhanush. She previously collaborated with Dhanush in “Maari 2,” a film directed by Balaji Mohan.

Recall that on January 30 of this year, actress Sreeleela was welcomed onto the film’s unit by the film’s producers, who are now working under the tentative name #D55.

Sree Leela was welcomed to the unit by the production company, which said, “You didn’t see this coming.” Greetings from #D55 to the stunning damsel @sreeleela14.”

Sai Abhyankkar, a rising musical sensation, was also brought on board by the producers.

To announce the news, Wunderbar Films posted on their X timeline: “Time is up. It fractures the SAI-lence. To have the amazing @SaiAbhyankkar create the music for #D55 is an exciting development. D55: The Musical #SaiAbhyankkar. A brand-new partnership is being loaded.

“Super excited and pumped working with @dhanushkraja sir on #D55! My dream collaboration @Rajkumar_KP, dear sir thank you so much!” was Sai Abhyankkar‘s response to the production house’s post. Thank you so much, dear @theSreyas Anna. @wunderbarfilms @RTakeStudios GIG. This is going to be a really special cooking.

The youthful music sensation was also welcomed by director Rajkumar Periasamy to join the crew of the movie, which is currently being referred to as #D55.

He posted on his X timeline: “Sai, you are a Wonder-kid! I’m thrilled to have you, my brother, as the music composer for #D55. @SaiAbhyankkar, may God bless you. Thank you, sir @DhanushKRaja. #D55 A Musical by Sai Abhyankkar. Shra2309 @azy905 @sandy_sashr @vishurams @theSreyas @wunderbarfilms @RTakeStudios.”

The producers have already revealed that the movie will be a masterpiece, which has created a great deal of anticipation.

Recall that only one week prior, R Take Studios, a different production company, stated that it would be collaborating with Wunderbar Films to produce this movie.

Prime Minister Narendra Modi announced on Monday that “Made in India” goods would now be subject to a lower tariff of 18% following US President Donald Trump’s announcement that a trade agreement had been achieved between the two countries.

On X, Prime Minister Modi wrote that it was “wonderful to speak with my dear friend President Trump today.”

“Happy to hear that the 18% tariff on ‘Made in India’ products will now be lowered.” The Prime Minister wrote on X: “The 1.4 billion Indians are very grateful to President Trump for this fantastic statement.

“When two major economies and the biggest democracies in the world collaborate, it benefits our people and opens up enormous possibilities for mutually beneficial cooperation. The peace, stability, and prosperity of the world depend on President Trump’s leadership. PM Modi added, “India fully supports his efforts for peace.”

He stated that he is eager to collaborate closely with Trump in order to “take our partnership to unprecedented heights.”

In a previous post on Truth Social, the US president claimed that the deal will instantly lower the reciprocal tariff between the United States and India from 25% to 18%.

He described it as a significant change in bilateral commercial relations that is connected to energy cooperation and more general geopolitical objectives.

The two leaders talked about “many things, including Trade, and ending the War with Russia and Ukraine,” according to Trump.

According to him, Modi consented to raise purchases from the US and possibly Venezuela and to cease purchasing Russian oil.

“This will help put an end to the ongoing conflict in Ukraine, where thousands of people are dying every week!” Trump penned.

Trump said the trade agreement would go into force right away. “We will proceed to lower our tariffs and non-tariff barriers against the United States to zero,” he declared.

Additionally, Trump said that Modi made a much stronger commitment to “BUY AMERICAN.”

“Over $500 BILLION DOLLARS of U.S. Energy, Technology, Agricultural, Coal, and many other products” will be bought by India, he continued.

The tariff reset, according to analysts, may also aid in reducing wider geopolitical trade concerns, especially now that India has finalized a separate free trade agreement with the EU.

However, finalization of sector-specific promises and implementation specifics is still pending.

The support from the government for emerging technologies through initiatives like the AI mission, National Quantum Mission, Anusandhan National Research Fund, and Research and Innovation Fund is expected to significantly benefit Indian higher education institutions that are shaping the country’s future entrepreneurs, industry leaders stated on Monday.

The Union Budget 2026 indicates a clear transition in India’s approach to technology, moving from simple adoption to the development of strategic capabilities.

“The focus on AI, semiconductors, cloud computing, and data infrastructure shows a solid recognition that excelling in the digital economy begins with having strong foundational elements. Enhancing the India AI Mission offers a unified framework to speed up AI research, implementation, and the ethical management of AI across various sectors,” remarked CP Gurnani, Co-Founder and Vice Chairman of AIONOS.

Crucially, this agenda goes beyond a limited technological focus. By integrating AI funding with skill development, workforce preparedness, and empowerment of MSMEs, the Budget acknowledges that growth, inclusivity, and competitiveness must advance in tandem, he stated.

The emphasis on incorporating technology across various sectors aims to support farmers directly, increase female participation in STEM fields, and provide youth with the skills needed to seize emerging opportunities, noted Chocko Valliappa, Vice Chairman of Sona College of Technology.

“The budget allocation of Rs 139,289 crore for the education sector is an increase of 14.2 percent compared to the revised estimate of Rs 121,949 crore for 2025-26. According to the revised estimate, the actual expenditure on education fell short by 5 percent relative to the budgeted figure,” he mentioned.

The budget proposal to establish five university townships near key industrial and logistics corridors, featuring a variety of universities, colleges, research institutions, and skill centers, is a positive initiative.

“States such as Tamil Nadu, Karnataka, and Maharashtra, which have a robust manufacturing sector and numerous higher education institutions, could easily host one of these university townships,” Valliappa commented.

As per industry experts, the Union Budget conveys a strong message that India’s upcoming growth phase will be driven by AI-focused digital capabilities, extensive skill development, and competitive technology services on a global scale.

“The suggested Education to Employment and Enterprise framework is a timely initiative aimed at closing the gap between curriculum and industry, especially in emerging fields like AI, data engineering, and digital platforms, where the demand for skilled professionals is exceeding the availability of prepared talent,” stated Sachin Alug, CEO of NLB Services.

The emphasis on tier 2 and tier 3 areas as Digital Economy Zones enhances India’s Global Capability Center ecosystem by tapping into new talent sources and fostering distributed, resilient operating models outside of metropolitan areas, Alug highlighted.

The creation of a unified IT Services framework with more defined tax regulations and safe harbour guidelines is also crucial, as it offers businesses long-term certainty, experts expressed.

Challa Sreenivasulu Setty stated that, Chairman of the State Bank of India, the Budget for 2026–2027 is a major step toward turning India into a global center for innovation and sophisticated manufacturing with global competitiveness as the cornerstone.

The budget attempts to strike a delicate balance between the rural and urban, legacy and sunrise industries while maintaining policy continuity and tax predictability.The budget for this year includes both futuristic and predictable components.

The predictable portion is the basic framework which remains focused on emerging and employment creating sectors.

“With an increase in proposed investments, the infrastructure sector continues to be an anchor,” he stated in the “Union Budget 2026-27 Analysis Report” published by State Bank of India.

The banking industry has a lot of advantages and prospects. Reinventing banking in quickly changing context and maintaining financial markets orderly and stable, thereby aligning with India’s next phase of growth continues to be crucial for the sector, Setty added.

Announcements on semiconductors, data centers, carbon capture utilization and storage, critical minerals, and other areas are part of the futurist push on sunrise industries.

“Starting with basic fiscal math, the budgetary allocations are based on the assumption of nominal GDP growth of 10 per cent which appears prudent given the way inflation is panning out.

According to him, this results in a budget imbalance of 4.3 percent of GDP.

The Budget has made some significant changes in the areas of agriculture and rural areas.

“The focus will now be on high value products such as sandalwood, cashews, fisheries though Integrated development of 500 reservoirs, coconut promotion scheme to increase production, rejuvenating old, low-yielding orchards and expand high-density cultivation of walnuts, almonds and pine nuts,” said the SBI Chairman.

There is additional attention on growing the use of AI in agriculture by integrating Agri Stack portals.

A focus on services, especially tourism, the orange economy, and education, is appropriate and complementary to the planned infrastructure expansion, connectivity, and future growth driven by digital capital expenditures.

As a key component of Viksit Bharat, the services sector will be the focus of the High-Powered “Education to Employment and Enterprise” Standing Committee.

The enormous scope of specialized building necessitates a local infrastructure equipment supply chain. In light of this, the budget suggests producing high-value, cutting-edge infrastructure and construction equipment domestically.

Setty stated, “On the financing side, an Infrastructure Risk Guarantee Fund will be established to provide prudently calibrated partial credit guarantees to lenders in order to further strengthen the confidence of private developers.”

The Budget has attempted to leverage the potential of urban agglomerations in recognition of India’s fast urbanization. In order to do this, city economic regions (CER) would be mapped according to their unique growth drivers, and each CER will get a five-year allocation of Rs 5,000 crore for the implementation of development plans.

According to Setty, the Budget has suggested expanding the present Indian Semiconductor Mission (ISM) in the sunrise industries by proposing India Semiconductor Mission (ISM) 2.0 to manufacture materials and equipment, create full-stack Indian intellectual property, and strengthen supply chains.

Keeping in mind the disruption in vital minerals, the existing National vital Mineral Mission will be complimented by a dedicated Rare Earth Corridors to be constructed and exemption from BCD for capital goods import.

The people oriented efforts, ease of doing business and living metrics which create the softer side of the tough decisions highlights the challenges that country faces, he observed.

The Union Budget 2026–27 presents a robust and credible blueprint to strengthen India’s competitiveness through fiscal discipline, structural reforms and targeted measures aimed at increasing private investment, business groups said on Sunday.

CII Punjab Chairman Amin Jain said the Budget features numerous major initiatives for the textile sector.

“These include the redevelopment of heritage textile parks, integrated plans for labor-intensive textile segments, and the development of mega textile parks, which he said will provide a significant boost to the domestic textile industry,” Jain continued.

Noting that the majority of MSMEs in the nation are in the textile industry, he also applauded the creation of a Rs 10,000 crore MSME fund.

According to Jain, “the new fund is expected to benefit the entire sector.”

The Budget, according to Naresh Pachisia, President of the India Chambers of Commerce, is well-balanced and would help sustain economic growth at about 7%.

He noted that in order to ensure widespread development, the Finance Minister has established targeted plans across industries.

Pachisia said that in order to limit inflation, the government has upheld strict fiscal restraint.

According to Pachisia, “the fiscal deficit for the current financial year has been pegged at 4.4%, with a target of 4.3% for the next fiscal year, which provides greater resilience against global economic volatility.”

The Budget is a positive move, according to Mukul Bagla, Chairman of PHDCCI’s Direct Tax Committee.

He stated that the present fiscal deficit of 4.4% is intended to be gradually reduced to 4%.

Bagla went on to say that although the previous budget had a number of tax relief measures, the new budget places a greater emphasis on stability.

The government has proposed a number of customs reforms, which is encouraging, according to Ashok Batra, Chairman of PHDCCI’s Indirect Tax Committee.

However, he added that similar reforms were also expected in the GST framework.

The Union Budget 2026 was praised by industry association Nasscom on Sunday for emphasizing technology as a key component of equitable, sustainable growth.

In her ninth straight budget, FM Nirmala Sitharaman offered a consultative and forward-thinking plan that strengthens the relationship between the government and business.

“The Budget reflects a continued focus on ease of doing business and on strengthening India’s position as a global technology and services powerhouse under the Viksit Bharat vision, with technology positioned as a core driver of inclusive and sustainable growth,” Nasscom stated.

According to the industry association, the rationalization of the international taxes and transfer pricing framework, as well as the obvious application of tax policy as a competitive lever, are significant advantages for the technology sector.

Additionally, Nasscom applauded the Budget for being in line with long-standing industry priorities that have been continuously expressed through ongoing engagement and input.

“Access to certainty mechanisms for routine cross-border IT service models is materially expanded by the consolidation of software development services, IT-enabled services, KPO, and contract R&D related to software development into a single category of information technology services with a uniform safe harbour margin of 15.5% and the enhancement of the Safe Harbour eligibility threshold from Rs 300 crore to Rs 2,000 crore,” the report stated.

The enhancement of the Advance Pricing Agreement structure was also praised by Nasscom.Long-standing issues with timeliness and access to certainty are directly addressed by the Budget’s plan to expedite unilateral APAs for IT services, with an aim to conclude them within two years and a restricted extension window, it stated.

Additionally, the Budget strengthens India’s cloud and digital infrastructure ecosystem through a significant involvement.

The industry body stated, “The proposal for a tax holiday until 2047 for foreign companies offering cloud services to customers worldwide using data center services from India, with services to Indian customers routed through an Indian reseller entity, sends a clear signal to attract long-term global investment and support the expansion of India’s compute capacity.”

The introduction of the India Semiconductor Mission 2.0 and the increased investment of Rs 40,000 crore for the Electronics Components Manufacturing Scheme are two examples of the ongoing emphasis on developing domestic capability in strategic technologies that Nasscom applauded.

Nasscom stated that the “Union Budget 2026 sets a clear direction by aligning policy certainty with digital and manufacturing capability” and that these actions indicate a more developed policy approach that centers India’s long-term competitiveness around technology, digital infrastructure, and tax certainty.

Finance Minister Nirmala Sitharaman outlined three “Kartavyas” (duties) to empower the impoverished, disadvantaged, and underprivileged while also boosting the economy.

Since this is the first budget created at Kartavya Bhavan, Sitharaman stated that “we are inspired by three Kartavyas” in order to fulfill the government’s “sankalp” (resolve).The first Kartavya is to increase productivity, competitiveness, and resilience to unstable global conditions in order to accelerate and maintain economic growth.

While delivering the Union Budget 2026–2027, she stated, “Our second Kartavya is to fulfill the aspirations of our people and build their capacity, making them strong partners in India’s path to prosperity.”

“Our third Kartavya aligned with our vision of ‘Sabka Saath Sabka Vikaas‘ is to ensure that every family, community, region and sector has access to resources,” she stated.

“The ‘Reform Express’ is well on its way and will keep up its momentum to help us fulfill our duties,” she added.

Scaling up manufacturing in a number of strategic and frontier sectors, revitalizing legacy industrial sectors, establishing champion MSMEs, delivering a strong push for infrastructure, guaranteeing long-term security and stability, and developing city economic regions are the six areas in which the Finance Minister suggested interventions.

“As the need for water, energy, and essential minerals rises dramatically, new technologies are changing industrial methods. By striking a balance between ambition and inclusivity, India will keep moving confidently in the direction of Viksit Bharat,” she stated.

As the nation’s first female finance minister, Sitharaman has presented the budget to Parliament nine times in a row.

Due to current geopolitical pressures, the budget is likely to concentrate more on capital expenditures, particularly in industries considered strategically significant.

India can retain “J‑curve” advantages despite rupee weakness, if trade diversion becomes ingrained in durable supply chains and is supported by logistics efficiency, a research stated on Friday.

In order to maintain the J-curve gains, the Emkay Global Financial Services study also emphasized limited tariffs on capital goods and intermediaries as well as consistent long-term FDI, stressing that these elements will be significantly more important in the medium run than tariffs.

It predicted that the 10-year government bond yield would end FY26 and FY27 at roughly 6.50% and 6.25%, respectively, with a current account deficit of 1.3% of GDP for FY27 and USD/INR trading in an 87–95 range.

According to the business, the Union Budget for FY27 will follow the same course of “calibrated fiscal consolidation, with the government shifting its fiscal anchor to debt-to-GDP.”

It was anticipated that the “Budget 2026” will seek to maintain India’s medium-term economic stability while striking a careful balance between fiscal discipline, growth support, and reform continuity.

According to the research, the RBI will be the bond demand-supply balancing element for improved monetary transmission, particularly as FY27 is expected to witness a $15 billion balance of payments deficit for the third time in a row.

According to the research, open market operations are expected to be valued over Rs 5 trillion in FY27.

“While RBI’s sizable unsterilised FX intervention in recent months has drained liquidity, past build-up of a heavy net dollar short position” is dragging both on foreign‑exchange and fixed‑income markets, the paper added.

It expected additional primary liquidity injections of around Rs 1.5 trillion throughout the rest of FY26.

According to the research, the government is expected to aim for a gross fiscal deficit of 4.3% of GDP, capital spending of about 3% of GDP, and gross tax budgeted growth of 8.2%.

“Fiscal consolidation is anticipated to continue at a moderate pace, even though the economic environment is still difficult. The government’s intention to prioritize medium-term debt sustainability without sacrificing growth is shown by the change towards debt-to-GDP as the anchor, according to Madhavi Arora, Chief Economist at Emkay Global Financial Services.