India

The Economic Times | English | News | Jan. 23, 2026 | UndeterminedTrade Issues and Numbers

US President Donald Trump expressed confidence in the India-US Bilateral Trade Agreement (BTA), stating that the two countries are "going to have a good deal." He praised Indian Prime Minister Narendra Modi as a close friend and a respected leader during an interview with Moneycontrol following his address at the 56th Annual Summit of the World Economic Forum.

India's Commerce Secretary Rajesh Agrawal indicated that the first tranche of the BTA is "very near," though he did not provide a specific timeline. The agreement, formally proposed in February 2025, aims to more than double bilateral trade between India and the US from USD 191 billion to USD 500 billion by 2030.

The trade talks were initiated during Prime Minister Modi's visit to Washington in February 2025. The Ministry of External Affairs confirmed that since February 2025, both countries have conducted multiple negotiation rounds to reach a balanced and mutually beneficial agreement, with several occasions where they were close to finalizing the deal.

Hindu Business Line | English | News | Jan. 23, 2026 | UndeterminedEconomic Growth

In 2025, India experienced a rare "Goldilocks" phase characterized by moderate and resilient economic growth alongside subdued inflation, supported by stable macroeconomic fundamentals despite global volatility. The Reserve Bank of India’s cumulative 125 basis points repo rate cuts and fiscal, monetary, and regulatory policies have fostered this growth environment, leading to a prediction-defying Q2 FY26 GDP growth of 8.2 percent. Both urban and rural consumption contributed, with rural demand boosted by good monsoons and government incentives. Manufacturing output grew impressively by 9.1 percent in Q2 FY26, driven in part by the Production Linked Incentive (PLI) program, which attracted investments totaling ₹2 lakh crore and generated over 12.6 lakh jobs.

Government capital expenditure remains the primary growth driver, while private capital expenditure is gradually picking up, supported by strong corporate balance sheets, easier banking conditions, and growth in corporate bond markets, which reached $642 billion by March 2025. India’s economic trajectory is fueled by comprehensive reforms including GST rate rationalization, income tax rationalization, labor code streamlining, and policies focusing on clean energy and energy self-reliance. The Insolvency and Bankruptcy Code (IBC), implemented nine years ago, has been pivotal in resolving ₹12 lakh crore of stressed debt and reducing non-performing assets, thereby improving the ease of doing business and enhancing investment attractiveness.

The investor base expanded notably in 2025, with increased participation from younger generations, women, and households in tier-2 and tier-3 cities, reducing dependency on foreign capital. Monthly Systematic Investment Plan (SIP) flows highlight growing retail investment, which supports capital formation and wealth creation. However, foreign portfolio investors showed caution, with net outflows of around $10.4 billion in 2025, exerting pressure on the Indian rupee. Regulatory initiatives such as SEBI’s ‘India Market Access’ platform and RBI’s proposal to expand External Commercial Borrowings framework aim to improve global investor participation and access to capital.

Looking ahead to 2026, India is expected to shift from policy intent to tangible outcomes with ongoing policy easing, regulatory clarity, and FDI openings in insurance and nuclear energy sectors supporting sustained growth. The financialisation of savings and increased capital expenditure in sectors like electronics manufacturing services and defence are anticipated to drive the next investment cycle. Strengthened corporate balance sheets, rising credit demand, and improved earnings position India to leverage its structural advantages and emerge as a significant global growth engine amid ongoing global uncertainty.

Obhan & Associates | English | AcademicThink | Jan. 23, 2026 | Regulation

The Reserve Bank of India (RBI) has notified the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, effective from October 1, 2026, replacing previous regulations from 2015 and related directives. These New Regulations aim to simplify cross-border trade compliance through consolidation, delegation, and procedural clarity without introducing new prohibitions or thresholds. They reorganize how exporters, importers, authorized dealers, and regulators manage foreign trade operations.

Key provisions include a defined timeline for service exporters to submit Export Declaration Forms (EDF) within 30 days from the month-end of invoice issuance, with consolidated EDFs allowed for multiple exports within a month. Software exports are now expressly categorized under services, aligning their procedural requirements accordingly. Export proceeds must be realized and repatriated within 15 months of shipment, invoicing, or overseas warehouse sale, with extensions permissible by authorized dealers. Project exports follow contract payment terms and may have extended timelines. For invoicing in Indian Rupees, the realization period extends to 18 months.

For transactions up to Rs. 10 lakh, authorized dealers may close export and import data entries based on self-declarations without full documentary proof, facilitating ease for smaller operators. Quarterly bulk closures of low-value entries are now permitted. Import payments are aligned with contractual terms, and authorized dealers can grant extensions as needed. Advance remittances remain allowed; however, future remittances may require financial guarantees if prior advances are not settled within the contracted period.

The New Regulations explicitly permit set-off of export receivables against import payables, third-party payments, and reduction or non-realization of export proceeds based on authorized dealers’ assessments. For transactions up to Rs. 10 lakh, exporters’ declarations suffice for realisation adjustments. Merchanting Trade Transactions are now formally regulated, requiring inward and outward remittances within six months, direct payment flows with conditional third-party involvement, and active monitoring by authorized dealers.

EDPMS and IDPMS systems have been upgraded from reporting tools to active compliance mechanisms, with authorized dealers responsible for timely entries, follow-up, and closure of transactions, including powers to close entries when advances are not repatriated or imports do not materialize. The overall framework is designed to provide predictable, system-driven foreign trade oversight anchored in clear timelines, value thresholds, and dealer-level discretion.