Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2026, underlined the importance of trade cooperation and multilateral engagement at a time when India is facing mounting external pressures, including steep tariffs imposed by the United States.
“Today we face an external environment where trade and multilateralism is imperative”, Sitharaman said during her Budget speech, signalling that global economic engagement remains central to India’s policy outlook. She added that the government would continue to move towards its long-term development vision, Viksit Bharat, while sustaining the pace of economic reforms.
Calling the current phase a continuation of the “reform express”, the Finance Minister said, “Our Kartavya is to ensure every family, community, and sector has access to resources, amenities and opportunities”. She also referred to reforms such as labour codes and quality control orders that have been rolled out since August 15 in recent years.
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Reform momentum to continue
“The reform express is on its way” while the momentum will continue, Sitharaman said, framing the Budget as part of a broader reform trajectory rather than a standalone policy exercise. The emphasis, she noted, was on stability and long-term capacity building amid shifting global trade dynamics.
India is currently operating in a more challenging international trade environment, with the spotlight on tensions regarding tariffs and energy trade policies.
Trump tariffs and trade tensions
Going back to 2025, Donald Trump introduced a 25% tariff on Indian products, labelling India the “maharaja of tariffs” in a trade speech for Liberation Day. Later, Washington added a further 25% tariff, citing New Delhi’s acquisition of Russian oil.
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This makes a total of 50% duty, which means that Indian exports to the U.S. are facing some of the highest tariffs that Washington has ever imposed, second only to Brazil among its BRICS nations.
New Delhi has justified its energy trade policy by highlighting the interests of its own consumers. However, Trump has continued to indicate that there could be more trade measures in the offing as part of his efforts to pressure Russia in the wake of the Ukraine crisis. Notably, Trump has recently signed off on a bill that may make it possible to impose tariffs of as much as 500 per cent on countries that trade with Russia in oil, petroleum products, and uranium.
