India’s latest Union Budget put manufacturing in the spotlight, promising support for future-facing sectors such as semiconductors, biopharma and renewable energy. But for many investors and ordinary market participants, the measures fell short of expectations, triggering a sharp sell-off in equities.
Stock markets fell nearly 2% on budget day, their worst performance in six years, as the government avoided big-ticket reforms and instead raised the securities transaction tax on derivatives. For small investors and traders, the higher tax on futures and options added to the disappointment and dampened sentiment.
While the government highlighted India’s resilience amid global uncertainty and steep US tariffs, concerns remain. Foreign investors have pulled out about $22 billion from Indian equities since last January, and the rupee has slipped to record lows, raising worries about confidence in the economy.
Finance Minister Nirmala Sitharaman announced tariff cuts on capital goods, doubled funding for an electronics manufacturing scheme, and eased rules for foreign companies like Apple working with Indian suppliers. Manufacturing priorities were outlined across seven sectors, including pharmaceuticals, textiles and rare-earth magnets.
However, economists and market experts said the budget lacked bold moves that could have reassured investors or sparked immediate optimism. For the wider public, the budget signalled intent, but not the decisive push many were hoping for to strengthen jobs, markets and growth.