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India's annual budget for 2026/27 has been deemed "broadly neutral" for growth by Fitch Ratings, which noted a deceleration in fiscal consolidation efforts. Finance Minister Nirmala Sitharaman announced a target debt-to-GDP ratio of 55.6% and a fiscal deficit of 4.3% of GDP, aimed at bolstering manufacturing amid global uncertainties. While Fitch acknowledged the government's progress in fiscal management, it highlighted that the budget gap has widened compared to pre-pandemic levels, despite improvements in the quality of government finances. The report indicated that elevated general government deficits, debt, and interest payments remain a concern. Fitch maintains a BBB- sovereign rating for India, with Moody’s at Baaa3, while S&P upgraded India to BBB in 2025. The government anticipates economic growth between 6.8% and 7.2% for the upcoming financial year, with Fitch suggesting that sustained GDP growth could enhance India's credit profile over time. 
Published: Feb 02 2026, 10 ameznews.inMorgan Stanley has expressed an optimistic outlook on Indian equities following the recent Union Budget, emphasizing an overweight position in Financials, Consumer Discretionary, and Industrials. The report highlights the government's commitment to technology-led growth, particularly in semiconductors, which signals a strategic shift towards advanced manufacturing. Morgan Stanley anticipates a boost in capital expenditure, sustained growth in the services sector, and an increasing focus on artificial intelligence, all of which are expected to enhance earnings growth by fiscal year 2027. The Budget aims for a fiscal deficit of 4.3% of GDP, aligning closely with Morgan Stanley's estimate, while balancing debt reduction with growth-supportive measures. This approach is seen as conducive to maintaining economic momentum without jeopardizing fiscal stability. Overall, the report reinforces Morgan Stanley's positive stance on Indian equities, positioning key sectors to benefit from the government's growth strategy.
Published: Feb 02 2026, 11 ameznews.inIn a significant move to bolster India's recycling industry and reduce reliance on imported critical minerals, the recent Budget has introduced a duty-free regime for lithium-ion battery scrap. Sanjay Mehta, President of the Material Recycling Association of India (MRAI), highlighted that this initiative will enable local recyclers to import a wider range of battery waste at lower costs, facilitating the development of processing technologies for lithium extraction. The policy aims to create a circular supply chain for electric vehicle (EV) and electronics manufacturing, while also establishing critical mineral facilities in states like Odisha and Tamil Nadu. Additionally, customs duty cuts on processing equipment are expected to enhance domestic supply chains for solar and renewable energy sectors. The Budget's focus on critical minerals and battery energy storage systems is seen as a strategic push towards energy transition, reducing dependence on China amid tightening export controls.
Published: Feb 02 2026, 11 ameznews.inIn a bid to shield India's economy from the impact of US tariffs, Prime Minister Narendra Modi unveiled the Union Budget 2026, emphasizing support for exporters and strategic sectors such as rare earths and semiconductors. The budget includes an 18% increase in defense spending amid ongoing tensions with China and Pakistan, while maintaining fiscal discipline by adhering to debt targets and avoiding broad tax cuts. Finance Minister Nirmala Sitharaman highlighted the need for India to remain integrated with global markets despite external challenges. The budget's cautious approach has drawn mixed reactions, with shares declining due to a new tax on equity transactions. Critics argue the plan fails to address pressing issues like youth unemployment and low savings. As India projects growth between 6.8% and 7.2%, the government faces scrutiny over whether its measures will be sufficient to foster job creation and economic resilience in uncertain times.
Published: Feb 02 2026, 11 ameznews.inIn a significant budget announcement on February 1, 2026, Finance Minister Nirmala Sitharaman revealed that New Delhi plans to borrow ₹17.2 lakh crore ($187 billion) for the fiscal year starting April 1, marking an 18% increase from the current year and surpassing analysts' expectations. Following the announcement, India's benchmark 10-year bond yields surged to 6.78%, the highest in over a year, with projections suggesting they could reach 7% soon. This rise in borrowing costs poses challenges for an economy already grappling with high US tariffs and limited room for interest rate cuts by the Reserve Bank of India (RBI). The budget deficit is expected to ease slightly to 4.3% of GDP, but gross borrowing is sharply higher due to increased bond redemptions. The RBI is anticipated to enhance its bond purchases to maintain liquidity, as traders await its monetary policy decision on February 6.
Published: Feb 02 2026, 10 ameznews.inIndian bonds are set to open significantly weaker on Monday following the government's announcement of a larger-than-expected borrowing plan for the upcoming fiscal year. The benchmark 10-year bond yield is projected to rise to between 6.71% and 6.77%, up from Friday's close of 6.6963%. The federal budget unveiled on Sunday revealed a record gross borrowing of 17.2 trillion rupees ($187.38 billion) for 2026-27, exceeding market estimates and reflecting a 17% increase from the current fiscal year. Analysts noted that the budget lacked incentives for bond investors, contributing to market unease. The Reserve Bank of India’s recent bond purchases may provide some support, having infused over ₹10 trillion into the banking system this financial year. Meanwhile, overnight index swap rates are expected to face upward pressure in line with rising government bond yields.
Published: Feb 02 2026, 10 ameznews.inIndia's manufacturing sector showed a slight uptick in January, with the HSBC India Manufacturing Purchasing Managers’ Index (PMI) rising to 55.4 from December's two-year low of 55.0, although it fell short of the preliminary estimate of 56.8. The PMI has remained above the critical 50.0 mark, indicating growth, since July 2021. While factory output improved and new orders regained some momentum, export demand remained weak, primarily driven by domestic orders. Job growth saw a modest increase, reaching a three-month high, but overall hiring remained subdued as firms adjusted staffing levels. Business confidence, however, dipped to its lowest in three-and-a-half years, with only 15% of companies expecting increased output in the coming year. Input costs rose at the fastest pace in four months, driven by higher prices for various materials, yet output price inflation fell to its lowest in nearly two years, reflecting limited pricing power for manufacturers.
Published: Feb 02 2026, 10 ameznews.inIn a notable shift, the latest budget emphasizes ecosystem building over mere financial support for technology growth, highlighting a balanced approach to manufacturing, infrastructure, and human capital development. The Semiconductor Mission 2.0 exemplifies this strategy, addressing the entire semiconductor value chain, from fabrication to workforce training. Similarly, advanced manufacturing initiatives, such as duty exemptions for aviation components and the establishment of digitally enabled tool rooms, reflect a dual focus on hardware and skilled personnel. The budget also introduces tax incentives for AI and foreign data centers, positioning India as a global hub for data operations. Additionally, the introduction of 'Corporate Mitras' aims to alleviate compliance burdens for tech firms, while changes in share buyback taxation encourage reinvestment in businesses. Overall, the budget appears tailored for builders, integrating manufacturing incentives with substantial investments in talent and operational expertise.
Published: Feb 02 2026, 9 ameznews.inIn the context of India's evolving economic landscape, Budget 2026 emphasizes the integration of technology, particularly artificial intelligence (AI), into various sectors to enhance productivity and inclusivity. Venkatraman Narayanan, Managing Director of Happiest Minds Technologies, highlights the budget's focus on real-world applications of AI, which are now central to both large corporations and government services. The initiative includes the establishment of 15,000 creator labs in educational institutions, aimed at bridging the gap between education and employment. With a significant allocation for the IndiaAI Mission and support for the National Quantum Mission, the budget signals a commitment to advancing emerging technologies. Additionally, regulatory simplifications and tax incentives, such as a tax holiday for foreign cloud service providers, position India as a global hub for data and cloud services. Overall, Budget 2026 reflects a strategic vision for leveraging technology to drive economic growth and job creation.
Published: Feb 02 2026, 9 ameznews.inIndia's Finance Minister Nirmala Sitharaman presented a cautious Budget on Sunday, prioritizing economic stability amid rising global risks. The Budget increased spending on manufacturing and infrastructure while maintaining fiscal discipline, with a projected deficit reduction to 4.3% of GDP for the upcoming fiscal year. However, the announcement of higher taxes on equity transactions and increased government borrowing led to a slump in stock markets. Analysts noted that the Budget's focus on fiscal prudence could provide the predictability investors seek in uncertain times. Despite the government's aim for self-reliance and investment in key sectors, opposition parties criticized the Budget for not addressing critical issues like job creation and economic growth. The government anticipates economic growth of 6.8% to 7.2% for the next fiscal year, slightly lower than the current year's 7.4%. Key highlights include a record borrowing plan of 17.2 trillion rupees and increased capital expenditure.
Published: Feb 02 2026, 8 am
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