India's 2026 Outlook: Modi 3.0 Tackles Reforms, Geopolitics, Fiscal Challenges

• Modi 3.0 faces a complex 2026 with major reforms like the Income Tax Act 2025, GST changes, and revised labour codes taking full effect, aiming to reinvigorate the economy.
• Geopolitical dynamics, including the Ukraine conflict and the sensitive relationship with China, will significantly shape India's policy environment and trade deals, with US and EU agreements expected.
• Fiscal space will constrict in 2026 due to tax concessions and GST changes, challenging capital expenditure and requiring programmatic restructuring.
• Welfare measures, especially direct cash transfers, will continue to be a key policy tool, driven by political returns and upcoming state elections, despite fiscal predicaments.
• Other key events include a new manufacturing policy, the Census, and a revision of the GDP base year, all impacting India's long-term socio-economic trajectory.

Why It Matters: India's 2026 policy agenda balances economic reforms, geopolitical challenges, and a strong welfare focus.