India VIX Goes Against the Trend

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India VIX Goes Against the Trend

On February 1, 2026, India's volatility index, known as India VIX, surged by 10.7% on Budget Day, marking a notable first in a decade where the index rose on such an occasion. The VIX peaked at an eight-month high of 16.11 before settling at 15.10, driven primarily by the government's increase in Securities Transaction Tax (STT), which triggered the sharpest intraday jump since November 2021. The India VIX, often referred to as a "fear gauge," reflects market sentiment and expectations of volatility over the next 30 days, indicating heightened investor caution amid ongoing geopolitical uncertainties and capital outflows. Analysts suggest that while selective stock opportunities may exist, the rising VIX signals potential market weakness, with projections indicating it could climb further, possibly reaching 20, before any stabilization occurs. Investors are advised to remain vigilant as the market navigates these turbulent conditions.

Published:
Feb 01 2026, 8 pm

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Dairy Sector Embraces Transformative Changes

Brahmani Nara, Executive Director of Heritage Foods Ltd, has praised the Finance Minister's recent budget proposals, which aim to bolster India's agricultural sector amid global challenges. The budget emphasizes support for small and marginal farmers, who constitute 86% of the farming community and often struggle with access to technology, quality inputs, and financial resources. Key initiatives include enhancing veterinary capacity, promoting entrepreneurship in livestock, and focusing on high-value crops like coconut and cocoa to boost export potential. The integration of digital technologies, such as precision agriculture and a multilingual AI tool named Vistaar, is expected to improve farming efficiency and yield forecasts. Additionally, a three-year tax exemption for cattle feed and cottonseed producers is seen as a positive move to stabilize incomes for small farmers. Overall, the budget reflects a commitment to increasing farmers' income and advancing agricultural growth in line with the vision of a developed India.

Published:
Feb 01 2026, 10 pm

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Post-Budget 2026: Changes in Buyback Taxation

The Budget 2026 has proposed significant changes to the taxation of buybacks on listed shares, set to take effect in FY27. Currently, buybacks are taxed as dividends according to the individual's tax slab, allowing for capital loss claims against other gains. Under the new proposal, buybacks will be taxed as capital gains, with long-term gains taxed at 12.5% and short-term at 20%. This shift means public shareholders will face tax liabilities if their total income, including buyback gains, exceeds ₹4 lakh, as the rebate applicable to other income does not apply here. For corporate promoters, the tax rate will be 22% for both long and short-term gains, while individual or foreign corporate promoters will face a 30% rate. This change aims to eliminate tax arbitrage advantages previously enjoyed by buybacks, balancing the interests of investors and management while addressing market signaling distortions.

Published:
Feb 01 2026, 10 pm

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India's semiconductor future relies on capability, not capacity

India's Semiconductor Mission (ISM) 2.0, with a budget of ₹40,000 crore, marks a significant shift towards building domestic capabilities in the semiconductor sector, rather than merely increasing production capacity for foreign firms. The initiative aims to foster Indian companies across the entire semiconductor value chain, from design to materials, thereby enhancing strategic control and resilience. By reducing import dependence, Indian firms could capture 30-40% of domestic demand, boosting their negotiating power within global supply chains. The focus on developing equipment and materials based on Indian intellectual property is crucial, as is the government's move to exempt customs duties on critical minerals. Emphasizing mature-node technologies aligns with domestic needs, particularly in renewable energy. Moreover, fostering talent through hands-on experience and practical training is essential for sustainable growth. If ISM 2.0 is executed effectively, India could transition from assembly-led growth to a position of design-led leadership in the semiconductor industry.

Published:
Feb 01 2026, 10 pm

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Budget underscores need for AI literacy in India

The Union Budget 2026 marks a pivotal move towards establishing an AI-driven economy in India, emphasizing the need for an AI-literate workforce to maximize its potential. While AI is not explicitly highlighted, the Budget's focus on semiconductors, rare earths, and advanced manufacturing underscores a vision to position India as a global technology hub. Key initiatives include the establishment of 15,000 AI labs in schools and 10,000 technology fellowships at premier institutions, aimed at fostering early AI literacy among students. Additionally, a high-powered panel will assess AI's impact on jobs and skills, acknowledging the necessity of workforce transformation alongside technological adoption. The development of energy-efficient data centres is also crucial, requiring skilled personnel to manage complex operations. Ultimately, the Budget intertwines investments in technology with a commitment to human capital, laying the groundwork for sustainable growth in an increasingly AI-centric global landscape.

Published:
Feb 01 2026, 10 pm

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FM Sitharaman aims to secure the future

Finance Minister Nirmala Sitharaman presented the 2026-27 Budget amid challenges of limited tax reforms and a pressing need for job creation. The Budget aims to navigate a complex landscape of geopolitics and trade disruptions while maintaining fiscal stability, with a fiscal deficit target of 4.3% and a debt-to-GDP ratio goal of 55.6%. Total expenditure is set at ₹53.47 lakh crore, with a significant 22.12% increase in effective capital expenditure. However, concerns arise from projected gross tax revenue growth of 8% and the reliance on optimistic income tax assumptions. Sitharaman's long-term vision includes investments in sectors like semiconductors and biopharmaceuticals, alongside a ₹10,000 crore SME Growth Fund. Despite these initiatives, the market reacted negatively, with the BSE Sensex experiencing its largest budget-day drop in six years, largely due to an increase in the Securities Transaction Tax aimed at curbing speculation. The success of these plans hinges on effective implementation.

Published:
Feb 01 2026, 10 pm

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$2 Trillion Export Target Achievable by 2032: Piyush Goyal

Commerce and Industry Minister Piyush Goyal has outlined how the Union Budget 2026-27 aims to enhance exports, attract investments, and generate employment, particularly in labour-intensive sectors such as textiles, marine, and leather. In an interview with _businessline_, Goyal emphasized the budget's potential to bolster India's position in global trade, especially through incentives for data centres, which will receive a tax holiday until 2047, encouraging foreign investment and job creation. He noted that infrastructure spending has increased by 10%, with an allocation of ₹12.2 lakh crore, which will further stimulate economic growth. Goyal also discussed new measures allowing Special Economic Zone (SEZ) units to sell a portion of their production domestically, aimed at reducing imports. He expressed optimism about reaching a $2 trillion export target by 2032-33, supported by free trade agreements and simplified business regulations, while also highlighting plans to promote the leather and footwear sectors through potential new schemes.