India in January 2026: the most important developments in economy
India's economy in January 2026 was dominated by the free trade agreement with the European Union. European Commission President Ursula von der Leyen said on January 20 that a deal was close, describing a common market of two billion people. Leaders announced the conclusion of talks on January 26, and the agreement was signed on January 27 after nearly two decades of negotiations, with implementation set for 2026. It is expected to cut tariffs on EU cars and spirits, excludes agricultural products, and is described as covering a quarter of global GDP. India also aims to supply defense equipment to the bloc.
Trade with the United States remained unresolved. Talks continued while Commerce Minister Piyush Goyal said on January 31 that a deal was "moving towards closure". US Treasury Secretary Scott Bessent called the India-EU agreement "disappointing", saying Europe put "trade ahead of Ukraine". India said a US deal was equally important. Washington also proposed 25% tariffs linked to trade with Iran, and Indian refiners were reported to be shifting away from Russian crude and being offered Venezuelan oil, though one report said India planned to resume Russian purchases.
The rupee weakened through the month, from about 89.92 per dollar on January 7 to a record low of 91.99 on January 28. The central bank announced it would inject over $23 billion of liquidity, and Indian shares posted their steepest weekly drop in four months. The IMF raised its growth forecast for India to 7.3% for the fiscal year. The Economic Survey presented on January 29 projected growth of 6.8% to 7.2% for the next year, and a budget speech was scheduled for January 31.
Other developments included a $3 billion LNG supply deal with the UAE, a record $2.45 million fine on IndiGo for mass flight cancellations in December, and a failed ISRO rocket launch on January 12 that did not place its 16 satellites in orbit. The government told quick-commerce platforms to end "10-minute" delivery promises. A proposal to require smartphone makers to share source code with authorities drew privacy objections.
by WorldBrief & Maksim Micheliov | AI-generated summary
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