“Openomics 2026: Prudence In the Time of Populism”, Open the magzine, February 06, 2026
“TWO DAYS BEFORE Nirmala Sitharaman presented her ninth consecutive Budget as finance minister of India, global gold and silver markets suffered a historic turmoil. After a record-breaking rally in prices into the New Year, there was a tumultuous fall shortly after the announcement by US President Donald Trump that Kevin Warsh would be the next chairman of the American central bank. Uncertainty and upheaval have been the defining features of global politics and economics in Trump’s second term. This was India’s first Union Budget since Trump’s April 2025 tariffs rocked the world. In a world where moderation is not necessarily seen as a virtue, there may have been expectations of a big-bang Budget. In the end, the Budget made no sound at all. It was status quoist in a time of dramatic change. And that may not be a bad thing.
Some part of the explanation for that may lie in two landmark events, one just before the Budget and one the day after. The Free Trade Agreement of India and the European Union signed during the course of the Republic Day visit of the two EU chiefs (António Costa and Ursula von der Leyen) freed trade between the world’s second-largest economic entity and the world’s fourth-largest economy. For India, which was under pressure after the imposition of punitive US tariffs, greater access to European markets was a big boost. In particular, the labour-intensive sectors like textiles would be the biggest gainers.
And then, the day after the Budget, Trump announced that a trade deal had been agreed with Prime Minister Narendra Modi. Not quite a free trade deal—American tariffs on India will be 18 per cent. But after several months of suffering a 50 per cent rate, this is an excellent outcome. It puts India in a better position than China and even ASEAN countries with respect to the US market. With two big boosts to growth and economic sentiment either side of the Budget, it isn’t surprising that the Budget stuck to a conservative course…….”
Read full article at openthemagazine.com
