What is the key change in India budget 2026 for markets?

Two big moves stand out. Infrastructure capex rises to 12.2 trillion rupees, which supports growth in construction and capital goods. The budget also raises the transaction tax on equity derivatives, lifting trading costs. That can reduce near-term volumes and weigh on brokers and short-term strategies until activity normalizes.

How could the derivatives tax hike affect Singapore investors?

Higher trading costs in India’s futures and options can trim liquidity and raise volatility around events. Singapore investors with India exposure may see wider bid-ask spreads and sharper intraday moves. Consider staggering entries, using limit orders, and focusing on diversified funds to reduce single‑name execution risk.

Which sectors could benefit from the capex push?

Capital goods, EPC contractors, cement, materials, logistics, and select industrial parks usually gain when public works scale up. Manufacturers tied to local value addition can also benefit as supply chains deepen. Focus on firms with clean balance sheets, strong order intake, and improving cash conversion to capture the multi‑year cycle.

What are practical steps to adjust a portfolio from Singapore?

Use core India exposure via ETFs or mutual funds, add gradually with dollar‑cost averaging, and review expense ratios and sector caps. If currency risk matters, look for SGD‑hedged share classes where available. Revisit position sizing for brokers and trading platforms until derivatives activity stabilizes post-tax change.

Law and Government

February 02: India Budget 2026 Capex Push, Derivatives Tax Jolt Markets

ByHuzaifa Zahoor February 2, 2026February 2, 2026

India budget 2026 sets a record push into public infrastructure with 12.2 trillion rupees in capex and tighter taxes on equity derivatives. For Singapore investors, this mix supports long-term growth but may cool risk appetite in the near term. We assess sector impacts, what the manufacturing and AI tilt signals, and how higher trading costs could affect flows and volatility. We also outline practical steps to position portfolios from Singapore without chasing short-term swings.