Economic Survey in Parliament sets Budget tone: India stays upbeat amid global fragility | Key highlights

Economic Survey tabled in Parliament, sets stage for Budget 2026–27

• Economic Survey tabled, setting stage for Union Budget 2026–27
• PM Modi urges reforms and quality manufacturing for India's growth
• Sitharaman to present her ninth consecutive Budget on February 1

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Finance Minister Nirmala Sitharaman on January 29 tabled the Economic Survey in Parliament, putting the government’s FY27 growth pitch on the record days ahead of the Union Budget for 2026–27. The Survey struck a cautiously upbeat tone: the world looks shaky, but India’s domestic demand and external buffers are keeping the economy steady.

Here are the key highlights

FY27 growth outlook: Domestic growth drivers are expected to keep supporting activity despite elevated global uncertainty; FY27 is framed as a year of adjustment as firms and households adapt, with domestic demand and investment gaining strength.

FY27 GDP growth estimate: 6.8–7.2%; the Survey says India’s medium-term potential growth has strengthened to 7%, positioning the economy on a path of steady expansion amid uncertainty.

Tone check: The FY27 outlook calls for caution, not pessimism, as the external environment remains uncertain.

Global outlook: The Survey flags that the outlook for the global economy remains dim over the medium term, with downside risks dominating.

External stability: India’s external stability is flagged as a significant strength, with adequate buffers and a manageable external position that helped contain spillovers from global volatility.

Rupee and external sector: what the Survey is flagging

Rupee underperformed in 2025: The Survey says the rupee underperformed in 2025 despite strong macro fundamentals.

Structural goods trade deficit: India’s structural goods trade deficit is identified as a key factor weighing on the rupee.

BoP and uncertainty pressures: The Survey notes a widened balance of payments (BoP) deficit and uncertainty around a US trade deal exerted pressure on the rupee.

Common risk across scenarios: Disruption of capital flows—and the knock-on impact on the rupee—is flagged as a common vulnerability.

What India needs: India will need higher foreign-currency earnings to fund rising imports as incomes grow, the Survey says.

Tariffs cushion: An undervalued rupee is described as partially offsetting the impact of higher US tariffs on Indian exports.

Electronics: the breakout export story

Export ranking jump: Electronics rose from the 7th-largest export category in FY22 to the 3rd-largest and fastest-growing by FY25.

FY26 pace: With exports at $22.2 billion in the first half of FY26, the sector is on track to become India’s second-largest export, the Survey says.

Production surge: Mobile manufacturing is the headline driver—output value jumped nearly 30-fold, from Rs 18,000 crore in FY15 to Rs 5.45 lakh crore in FY25.

Scale shift: India has moved from net importer to the world’s second-largest mobile phone manufacturer, with 300+ factories now versus two in 2014.

Risk flags: capital, FPIs, gold, and volatility

Investor hesitation: “Investor reluctance to commit to India” is flagged as a trend that warrants examination.

FPI volatility: Foreign Portfolio Investment trends in FY26 are described as volatile; Q2 and Q3 saw FPIs shift from net buyers to net sellers of equities.

Gold as a stress signal: Gold’s rise from $2,607 to $4,315 per ounce in 2025 is cited as reflecting a weakening US dollar.

Policy pressure points: Financial stress episodes, trade frictions and geopolitical escalations are seen creating volatility and potentially requiring government intervention to manage spillovers.

Trade and export strategy

Growth despite tariffs: The Survey says GDP growth has been supported by structural reforms and policy steps, even as US tariffs weigh on global trade conditions.

Services vs manufacturing: India’s services exports remain strong, but the Survey cautions they cannot substitute for manufacturing exports.

India-EU FTA: The Survey flags the India-EU free trade agreement as expanding market access for labour-intensive manufacturing.

Labour reforms

Labour codes: All four Labour Codes have been notified; the Survey says rules are expected to be in place in the next few months.

Earlier today, marking the start of the session, Prime Minister Narendra Modi framed the Budget Session as a moment for long-term economic decision-making anchored in reforms, quality manufacturing and the India–EU free trade agreement.

Speaking at the start of the session in New Delhi, Modi urged lawmakers to rise above partisan politics and back what he described as a decisive reform push, positioning the Economic Survey as a roadmap for India’s next phase of growth.

“It is important for the nation to focus on the Budget. Reform, Perform and Transform remain key objectives,” PM Modi added.