Modi’s government has presented an annual budget focused on sustaining growth amid financial market volatility and trade uncertainty.

Indian Prime Minister Narendra Modi’s government unveiled its annual budget aimed at stabilizing growth in a global economy rife with uncertainty due to the recent tariff war.

Finance Minister Nirmala Sitharaman presented the budget for the fiscal year 2026-2027 in Parliament on Sunday, prioritizing infrastructure and domestic manufacturing with total expenditure estimated at $583 billion.

India’s economy has been tested so far punitive tariffs US President Donald Trump has imposed a 50% tariff on New Delhi’s imports of Russian oil. The government has tried to offset the impact of these tariffs by striking deals, such as its trade agreement with the EU.

Despite the challenges of the past year, indian economy Still one of the fastest growing countries in the world.

The budget for the new fiscal year, which starts on April 1, projects gross domestic product (GDP) to grow between 6.8% and 7.2%, according to the government’s annual economic survey tabled in parliament. Although it is lower than the 7.4% expected this year, it is still higher than the expectations of global institutions such as the World Bank.

To maintain strong growth, the government said it will spend 12.2 trillion rupees ($133 billion) on infrastructure in the new fiscal year, compared with 11.2 trillion rupees ($122 billion) last year. It also aims to promote manufacturing in seven strategic sectors, including pharmaceuticals, semiconductors, rare earth magnets, chemicals, capital goods, textiles and sporting goods, while increasing investment in niche industries such as artificial intelligence.

Despite plans to support economic growth through state spending, the government aims to reduce the federal debt-to-GDP ratio from 56.1% to 55.6% in the next fiscal year and reduce the fiscal deficit to 4.3% of GDP from the current projected level of 4.4% of GDP.

Without offering any populist giveaways, Sitharaman said New Delhi would focus on building domestic resilience while strengthening its position in global supply chains, a departure from last year’s budget, which lured the working-class middle class with big tax cuts.

Ahead of unveiling the budget, Modi said on Thursday that the country was “moving away from long-term problems and onto the path of long-term solutions”.

“Long-term solutions provide predictability and build trust in the world,” he said.

The Modi government has been working hard to increase the contribution of manufacturing to India’s GDP from the current below 20% to 25% in order to create jobs for millions of Indian labor force every year.

The value of the rupee has also fallen sharply, having recently hit a record low after foreign investors sold off record amounts of Indian stocks. Since last January, those sales have reached $22 billion.

“Overall, it’s a budget without fireworks – not a big positive, not a big negative,” Aishvarya Dadheech, founder and chief investment officer at Fident Asset Management in Mumbai, told Reuters.