India's indirect tax collections for fiscal year 2025-26 have surpassed the government's target, with total collections reaching over ₹15.52 lakh crore according to Revised Estimates (RE). The collections comprised ₹2.58 lakh crore from customs duty, ₹3.38 lakh crore from excise duty, and ₹9.58 lakh crore from Central Goods and Services Tax (CGST). As per The Economic Times, customs duty collections came in at 102% of RE, excise duty at 101% of RE, and CGST at 100.8% of RE. Overall GST plus non-GST collections reached 101.2% of RE, reflecting resilient consumption and stable tax compliance trends throughout the fiscal year.
Despite strong overall performance, collections from the health and national security cess on pan masala manufacturing significantly undershot projections. The Revised Estimates had estimated ₹2,330 crore from the cess in FY26, but actual collections came in at just 63% of the target. The levy, introduced under the Health and National Security Cess Act and effective February 1, 2026, is imposed on the manufacturing capacity of pan masala units over and above the highest 40% GST slab. An official stated that the shortfall was likely transitional, with collections expected to strengthen as the new levy stabilises. For the current fiscal, the government has budgeted a sharp increase, targeting ₹14,000 crore from the cess.
Tensions in the Middle East have intensified with Iran issuing stern warnings to the United States and Israel against ground operations. Commander-in-Chief of the Iranian Army Amir Hatami warned that "no enemy troops should survive" if adversaries attempt a ground operation, according to state media reports. The warning comes despite U.S. President Trump suggesting the conflict is nearing completion, while American troop deployments raise concerns about potential land incursions. Army commander-in-chief Amir Hatami instructed operational units to track "enemy movements with utmost pessimism and accuracy" and remain prepared for all contingencies, signalling a hardline response to potential escalation.
Recent political developments have highlighted growing opposition to India's trade policies, particularly the India-US trade deal. At a rally in Assam, Rahul Gandhi strongly criticized the India-US trade deal, describing it as a loss for New Delhi, and claimed that former US President Donald Trump influences Prime Minister Narendra Modi's decisions. The Congress leader's comments reflect broader concerns within the opposition about India's trade and foreign policy decisions, adding to the political debate surrounding the country's economic partnerships.
According to Motilal Oswal Financial Services, Indian stock markets experienced a sharp decline in financial year 2026, underperforming global peers despite an improvement in earnings revision trajectory from what the brokerage called the 'depressing lows' of FY25. The domestic brokerage noted that FY26 was a near six-sigma year, marked by major geo-economic and geopolitical events that led to extreme volatility in equity markets and heightened economic uncertainty. As reported by The Economic Times, after a long period of outperformance, the Indian equity market was among the worst-performing major markets in FY26, with sentiment driven more by global headwinds than improving domestic trends in corporate earnings.
Both the government and the Reserve Bank of India were in policy overdrive through FY26 to stimulate demand, counter global headwinds and support growth. As reported by Motilal Oswal, the RBI implemented phased CRR and repo rate cuts, alongside liquidity injections via OMOs, FX swaps and other measures. On the fiscal front, the Finance Ministry introduced GST reforms, while FY26 saw progress on key bilateral trade agreements, particularly with the UK, EU and the US. Following India's sharp underperformance in FY26 and record FII outflows, a favourable base appears to have been set for Indian equities. According to Motilal Oswal, after a correction of around 10% since the onset of the Iran-Israel/US conflict, valuations have moderated significantly. The Nifty is now trading at 17.7x, a 15% discount to its long-period average of 20.9x.
As reported by The Economic Times, Motilal Oswal's top picks within the Nifty 50 include Bharti Airtel, SBI, ICICI Bank, M&M, Titan, Bharat Electronics, Tata Steel, Infosys and IndiGo. Outside the index, the brokerage prefers TVS Motor, Indian Hotels, AU Small Finance Bank, Dixon Technologies, Premier Energies, Coforge, Radico Khaitan, Delhivery and ACME Solar. The recommendations come as the brokerage expects FY27 to benefit from delayed effects of fiscal and monetary stimulus, narrower valuations, and a favorable base established by the challenging FY26 performance.
