Where Budget 2025 was largely dominated by the income-tax rate and slab relaxations, Budget 2026 has done away with Big Bang measures. Instead, its scattershot approach, through various sectoral and issue-based measures, when taken together, is aimed at propelling India’s growth over the medium term. Given the level of geoeconomic and geopolitical uncertainties that the Indian economy faces, this diffused approach is likely a more effective policy than targeted Big Bang announcements would be. This is not the time for further disruption. Budget 2026 contains announcements for the manufacturing sector, various services sectors, as well as particular provisions to help labour-intensive sectors such as textiles and leather. In terms of manufacturing, the Budget includes measures covering seven well thought-out areas: biopharma, semiconductors, electronics, rare earths, chemicals, capital goods and textiles. Semiconductor and electronics manufacturing are the few sectors that have gained from the government’s existing PLI schemes. The India Semiconductor Mission 2.0 and the increased allocation under the Electronics Component Manufacturing Scheme are appropriate follow-ups to this. These are sectors where India needs to become globally competitive. The Biopharma SHAKTI scheme is aimed at making India a global biopharma manufacturing hub with an allocation of ₹10,000 crore over the next five years. Pharmaceuticals, already a sector that India does well in, are exempt from the U.S.’s 50% tariffs. It is also important to support those sectors that are currently hit by those same tariffs. The National Export Promotion Mission announced in the last Budget was implemented only by December 2025, nine months into the financial year. The Centre should ensure that this Budget’s integrated programme for the textiles sector does not face similar delays. Also, the various measures aimed at creating ‘Champion MSMEs’, providing them equity, liquidity, and professional support, must be implemented quickly. MSMEs account for 48.6% of India’s exports, and the EU FTA, even if it is implemented soon, will not kick in quick enough to offset the ongoing pain caused by the U.S. tariffs. The services sector, too, stands to benefit from Budget 2026. The high-powered ‘education to employment and enterprise’ standing committee, announced by the Finance Minister, should get off the ground soon. The focus on health care and medical tourism, where India is already developing strengths, is a good start. In keeping with the Budget’s multipronged approach, the Centre has sought to cater to the election-bound States this year through several smaller announcements — such as dedicated rare earth corridors to benefit Odisha, Kerala, Andhra Pradesh and Tamil Nadu, a Coconut Promotion Scheme for Kerala, an integrated East Coast Industrial Corridor for West Bengal, and the first of the new national waterways to begin in Odisha — rather than through the consolidated packages of the past.

As for the Centre’s finances, Budget 2026 offers a mix of expenditure enthusiasm and revenue sobriety. The capital expenditure push, especially with regard to infrastructure creation, has continued, perhaps in reaction to the realisation that current conditions do not encourage private investment. Overall, capital expenditure is set to grow to ₹12.2 lakh crore in 2026-27, amounting to 4.4% of GDP, the highest in at least the last 10 years. This includes the announcement of dedicated freight corridors and training institutes for the manpower needed. These rail corridors are also to be supplemented by a Coastal Cargo Promotion Scheme to incentivise increasing the share of inland waterways and coastal shipping. It is noteworthy that the Centre has revised downwards its capital expenditure for 2025-26 to ₹10.9 lakh crore from the ₹11.2 lakh crore initially budgeted. It remains to be seen if this year’s target will be met, but even coming close will provide a substantial fillip to the economy. On the revenue front, the Centre did not announce any major tax cuts for individuals or corporations. In 2019 and 2025, respectively, corporations and individuals received substantial tax relief. To announce more would have put undue stress on central finances at a time when its expenditure commitments — known and anticipated — are substantial. However, while direct taxes have largely received procedural improvements, the Budget has included a slew of indirect tax relaxations for the promotion of marine, leather and textile products exports, and speeding up India’s energy transition. The tax revenue projections are largely sober. Corporate tax revenue is projected to grow nearly 14% over the Budget estimates of 2025-26. This is broadly in line with the revised estimates for 2025-26 coming in 12.4% higher than the actuals of the previous year. Income-tax revenue has been budgeted to grow 1.9% over the BE of 2025-26 — an expected outcome following last Budget’s substantial rate relaxations. Gross GST revenue has been projected to contract 13.5% in 2026-27, a reflection of the September 2025 rate rationalisation and the end of the Compensation Cess. Taken together, the Centre’s fiscal deficit has been projected at 4.3% of GDP in 2026-27, down from 4.4% estimated for 2025-26. While the Centre’s fiscal consolidation path since the COVID-19 pandemic has been admirable, continued aggression in reducing the deficit deserves some questioning. Even the Economic Survey argued for some fiscal flexibility for the Centre given the geoeconomic and geopolitical conditions. Overall, Budget 2026 may disappoint those looking for massive tax relief or subsidies, but is nevertheless a credible and creditable effort.

China outlined new curbs on exports of rare earths and related technologies on Thursday (October 9, 2025), extending controls over the use of the elements critical for many products ahead of a meeting later in October between President Donald Trump and Chinese leader Xi Jinping.

The regulations announced by the Ministry of Commerce require foreign companies to get special approval to export items that contain even small traces of rare earths elements sourced from China. Beijing also will impose permitting requirements on exports of technologies related to rare earths mining, smelting, recycling and magnet-making, it said.

China accounts for nearly 70% of the world’s rare earths mining. It also controls roughly 90% of global rare earths processing. Access to such materials is a key point of contention in trade talks between Washington and Beijing.

As Mr. Trump has raised tariffs on imports of many products from China, Beijing has doubled down on controls on the strategically vital minerals, raising concerns over potential shortages for manufacturers in the U.S. and elsewhere. It was not immediately clear how China plans to enforce the new policies overseas.

The critical minerals are used in a broad range of products, from jet engines, radar systems and automotives to consumer electronics including laptops and phones.

The new restrictions are to “better safeguard national security” and to stop uses in “sensitive fields such as the military” that stem from rare earths processed or sourced from China or from its related technologies, the Commerce Ministry said. It said that some unnamed “overseas bodies and individuals” had transferred rare earths elements and technologies from China abroad for military or other sensitive uses which caused “significant damage” to its national security.

The new curbs were announced just weeks ahead of an expected meeting between Mr. Trump and Chinese President Xi Jinping in late October on the sidelines of the Asia-Pacific Economic Cooperation forum in South Korea.

“Rare earths will continue to be a key part of negotiations for Washington and Beijing,” George Chen, a partner at The Asia Group, said in an emailed comment. “Both sides want more stability, but there will still be a lot of noise before the two leaders, President Trump and Xi, can make a final deal next year when they meet. Those noises are all negotiation tactics.” In April 2025, Chinese authorities imposed export curbs on seven rare earth elements shortly after Mr. Trump unveiled his steep tariffs on many trading partners including China.

While supplies remain uncertain, China approved some permits for rare earth exports in June 2025 and said it was speeding up its approval processes.