Will Budget 2026 offer incentives for the export sector?
28 Jan 2026

Sandeep Raina, the Senior Vice President of Research at Nuvama Group, has predicted that the upcoming Union Budget 2026 will focus on incentivizing the rural economy and export sector.

He believes this could be a response to global economic challenges and a break from fiscal consolidation.

In an interview with Mint, Raina said he hopes for some incentives for the rural economy driven by low food inflation and rising gold and land prices.

Raina's expectations for Budget 2026
Budget predictions

Raina also expects certain incentive schemes for the stressed-out export sector post-US tariffs. This comes after the Indian government announced several measures such as GST rationalization and tax cuts in CY25.

Government's fiscal support and market impact
Market influence

Raina emphasized that to sustain a short-term consumption boost, the government has to fiscally support the economy.

He said, "Our assumption, therefore, is that further fiscal consolidation should not happen in FY27 - we consider this to be very critical in this budget."

He also said he expects a pause in fiscal consolidation in FY27, which will be pro-growth and positive for investors.

Global factors and their impact on Indian economy
Economic effects

Raina spoke about global factors such as the US tariffs affecting the Indian economy and markets.

He said, "Before the current issue, the Indian economy - specifically corporate earnings - was already slowing down in CY24/CY25, and the US tariffs ended up putting additional stress on it."

He added that apart from the services, Indian exports to the US are limited in overall terms but highly profitable for exporters.

Outlook on Q3 earnings and investor strategies
Investor advice

Assessing the early trends of Q3 earnings, Raina said IT firms have reported decent earnings due to a low base and expectations.

However, he noted the banks and other companies (including RIL) missed the mark on an overall basis.

He advised investors to consider asset allocations, saying, "there will always be headwinds in the form of tariffs, wars pandemics."