Key Business Updates: Union Budget 2025-26 and Global Trade Dynamics

As of February 1, 2025, the business landscape is met with significant updates both domestically and globally. With India's Union Budget 2025-26 recently presented and new tariffs imposed by the United States, businesses find themselves in a time of both opportunity and challenge.

Union Budget 2025-26 Highlights

Finance Minister Nirmala Sitharaman unveiled India's Union Budget 2025-26, underscoring a commitment to economic growth and infrastructure improvements:

• Capital Expenditure: A historic allocation of ₹11.1 lakh crore aims to revitalize infrastructure projects, setting the stage for long-term growth.
• Tax Reforms: The government is simplifying personal income tax and rationalizing TDS/TCS, aimed at lessening the compliance burden for taxpayers.
• Support for MSMEs: Enhanced credit guarantees and increased investment limits for micro and small enterprises are designed to foster growth and employment in this crucial sector.
• Telecom Sector Boost: An allocation of ₹95,298 crore for IT and telecom, specifically targeting the modernization of BSNL, signals strong support for technological advancement.

Global Trade Tensions

In a significant development, U.S. President Donald Trump announced new tariffs effective today:

• Tariffs on Imports: A 25% tariff has been placed on imports from Canada and Mexico, alongside a 10% tariff on products from China. These tariffs are expected to disrupt global supply chains and increase operational costs for businesses, possibly leading to higher prices for consumers. [1]

Corporate Winners and Losers

The impact of these changes in the business environment has seen distinct winners and losers:

• Winners: The sectors of consumption, agriculture, and capital goods are expected to benefit from the budget provisions. Vodafone Idea saw a notable 10% increase in stock prices following the announcement of increased allocations to telecoms.
• Losers: The U.S. tariffs pose substantial challenges for the automotive and energy sectors globally, which may experience rising production costs and supply chain disruptions due to increased import costs. [3]

Economic Outlook

Looking ahead, India's GDP growth for FY26 is projected to be between 6.3% and 6.8%. The government sets an ambitious goal of achieving an annual growth rate of 8% to fulfill the