The Indian rupee slipped to a record low, pressured by sustained foreign capital outflows and heightened geopolitical tensions that have amplified risk aversion.
Equity markets mirrored the currency’s weakness, with Indian shares extending losses after registering their steepest single-day fall in more than eight months in the previous session, largely driven by aggressive foreign selling.
Despite the near-term market stress, underlying economic signals remain encouraging.
According to the Reserve Bank of India’s latest assessment, high-frequency indicators continue to point to resilient growth momentum.
Metrics such as goods and services tax (GST) collections and e-way bill generation—both closely watched barometers of real-time economic activity—suggest that domestic demand and business activity are holding up well.
Adding to the optimism, economists expect a more growth-supportive fiscal stance in the coming months.
As India approaches the Union Budget, analysts anticipate that the federal government will gradually recalibrate its fiscal framework, shifting focus toward managing the debt-to-GDP ratio beginning April 2026.
This transition is seen as providing greater flexibility for public spending while maintaining medium-term fiscal discipline.
While external headwinds from global uncertainty and capital flows continue to weigh on markets, policymakers and economists alike believe India’s strong domestic fundamentals and evolving fiscal strategy could help cushion the economy and support a recovery in investor confidence over time.
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