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Dear Readers,

We celebrated the worship of Devi Saraswati - the Goddess of learning, intellect, wisdom, music and arts - with devotion last month. On 26th January, we celebrated Republic Day, reaffirming our dedication to the Nation and our duty to act with righteousness and devotion.

This month, we will celebrate Maha Shivaratri, one of the most sacred festivals in Hindu tradition, dedicated to Lord Shiva and symbolizing the victory of light over darkness and ignorance. Devotees observe fasts, meditate, chant prayers, and offer sacred items such as milk, water and leaves of the Bael tree (along with its fruits) to Lord Shiva, seeking blessings for strength, wisdom and harmony. The Bael fruit is also known for its health benefits.

Indian Economy: The fiscal deficit stood at 54.5% of the full-year budget estimate during FY26 (April–December). Finance Minister Nirmala Sitharaman presented the Union Budget 2026–27 on 1st February 2026, aiming at further reforms and sustained growth amid global uncertainty. The Union Budget 2026–27, like the last few budgets, continues the government’s focus on infrastructure investment and job creation, with special emphasis on bringing in foreign investments in the sunrise digital sectors.

V. Anantha Nageshwaran, Chief Economic Advisor to Government of India, stated that to achieve continuous GDP growth of 7.5%, India must enhance export competitiveness over the next few years. Despite global uncertainty, India’s potential growth remains around 7%.

The International Monetary Fund (IMF) has revised India’s GDP growth forecast upwards, estimating it at around 7.3% for FY2025–26, which will keep India’s status of being the fastest-growing major economy intact.

The recently agreed upon India-U.S. trade deal is said to have reduced the tariff level of India’s exports to US from 50% to 18% while bringing down tariff level of certain US exports to India to zero. However, the trade deal is yet to be ratified, and only once the details become available, we will get to know which sectors stood to benefit from this deal. While service exports continue to rise steadily, the introduction of new AI, specifically agentic tools for Claude by Anthropic, led to a panic selling of Indian IT company shares. Investors fear that advanced automation would disrupt traditional outsourcing, reduce billable hours and squeeze margins, and this market-wide sell-off reflects fears of AI replacing, rather than assisting, human-intensive services.

In September 2025, U.S. President Donald Trump signed a proclamation dramatically increasing the fee for new H-1B work visa petitions to USD 100,000, a sharp rise from earlier costs. This move aims to limit the hiring of foreign skilled workers in technology, engineering and other sectors, while encouraging companies to hire locally instead of relying on foreign talent.

MSMEs continue to contribute 30% to GDP and 48% of India’s exports. The Economic Survey has emphasized strengthening the Indian manufacturing ecosystem through innovation, capital market support and digital governance.

However, high cost of capital and the absence of support for enterprises affected by external factors remain major deterrents to reviving investor confidence. When enterprises are impacted by factors such as global competition, regulatory changes, or global trade disruptions, they are often pushed into IBC proceedings, being portrayed as fraudulent by lenders. Earlier, lenders had supported such enterprises through loan restructuring and by granting time for recovery.

High capital costs are also eroding global competitiveness. The Survey highlights manu-facturing as a strategic national asset, especially amid geopolitical uncertainty and rapid techno-

logical change. It emphasizes the need for urgent government intervention to safeguard the manufacturing sector so it can contribute meaningfully to a ‘Viksit Bharat’. Sustaining a 7.8% growth rate is now the government’s top priority, as stated by Finance Minister Nirmala Sitharaman. There is also an urgent need to create jobs to support growth.

Cover Story: India is the second-largest producer of crude steel globally. This reflects not only the country’s ongoing infrastructure and industrial development but also strong global demand. Imports from China, the world’s largest steel producer, at cheaper prices have adversely affected India’s steel industry. In 2014, the government-imposed import duties to support the survival of the domestic steel industry.

Currently, India aims to double its steel production capacity. At present, the country produces around 151.14 million tonnes of crude steel and 145.30 million tonnes of finished steel, employing approximately 35 lakh people directly and indirectly. The government now targets production of 300 million tonnes per annum by 2030.

Steel mills are seeking the reimposition of anti-dumping duties on select products such as coated hot-rolled steel, flat steel products, cold-rolled flat steel products, colour-coated flat steel, wire rods, and others.

Global Economy: At the start of 2026, the global economy is growing steadily, though not rapidly, with moderate expansion expected at around 3–3.3% for the year ahead. Growth remains uneven across regions. The U.S. economy enters 2026 with moderate but steady growth, supported by resilient consumer spending and easing inflation. However, Donald Trump’s economic policy largely deprioritizes poorer countries unless they directly serve U.S. interests.

Conclusion: In an uncertain global economic environment, India is expected to continue growing by relying on the strength of its domestic economy, government reforms and policy support. Public investment continues to drive robust growth. Infrastructure development remains focused on highways, rail freight corridors, inland waterways, and coastal shipping.

There is also increased focus on the growth of healthcare, medical, tourism, skill development and education. Continued reforms in GST, tax rate rationalization, along with supportive lending mechanisms, are the need of the hour to sustain long-term economic growth. At the same time, private sector’s ‘animal spirits’ need to be revived, especially in the infrastructure sectors because government’s resources are limited and it cannot be expected to carry on doing the heavy lifting on infrastructure investments forever. Even if government is expected to build infrastructure assets, in the post-construction phase these assets need to be bid out to the private sector for operation and maintenance.