India’s budget bets on infrastructure, manufacturing amid global trade war

Modi’s government presents annual budget, focusing on sustaining growth despite volatile financial markets and trade uncertainty.Published On 1 Feb 2026Indian Prime Minister Narendra Modi’s government has unveiled its annual budget, aiming for steady growth in an uncertain global economy rocked by recent tariff wars.Finance Minister Nirmala Sitharaman presented the budget for the 2026-2027 financial year in Parliament on Sunday, prioritising infrastructure and domestic manufacturing, with a total expenditure estimated at $583bn.Recommended Stories list of 3 itemslist 1 of 3Trump says India will start buying oil from Venezuela ‘as opposed to Iran’list 2 of 3Who was Ajit Pawar, the Indian politician killed in plane crash?list 3 of 3What will be the impact of the EU-India trade pact?end of listIndia’s economy has so far weathered punitive tariffs of 50 percent imposed by United States President Donald Trump over New Delhi’s imports of Russian oil. The government has sought to offset the impact of those duties by striking deals, such as its trade agreement with the European Union.Despite the past year’s challenges, the Indian economy has remained one of the world’s fastest growing.The budget for the new financial year, which starts on April 1, projects gross domestic product (GDP) growth in the range of 6.8 to 7.2 percent, according to the government’s annual Economic Survey presented in Parliament. It is a shade softer than this year’s projected 7.4 percent but still outpaces estimates by global institutions such as the World Bank.To keep growth strong, the government said it will spend 12.2 trillion rupees ($133bn) on infrastructure in the new fiscal year, compared with 11.2 trillion rupees ($122bn) last year. It will also aim to boost manufacturing in seven strategic sectors, including pharmaceuticals, semiconductors, rare-earth magnets, chemicals, capital goods, textiles and sports goods while stepping up investments in niche industries like artificial intelligence.