Market Brief: India Strategic Outlook Indian equity markets are navigating a period of sharp volatility as of **February 24, 2026**. The **BSE Sensex** dropped **718 points** to **82,577** in early trade, while the **NSE Nifty 50** slipped below the **25,550** mark. This cautious sentiment follows a brief relief rally triggered by the US Supreme Court striking down certain reciprocal tariffs, which was quickly offset by a new **15% temporary global tariff** framework introduced by the US administration. Geopolitical tensions in West Asia and ongoing nuclear negotiations involving the US and Iran have further pressured domestic sentiment. Despite these headwinds, the **Nifty PSU Bank** index remains a pocket of resilience, gaining **1.36%** in recent sessions, while the **Indian Rupee** has stabilized near **90.66** against the US dollar. IT Services and the AI Pivot The Information Technology sector faces a dual challenge of trade uncertainty and rapid structural evolution. Heavyweights like **TCS** and **Infosys** saw declines of **3-4%** this week as markets weigh the impact of US trade policies. However, the long-term outlook remains centered on high-value transformation. India's IT industry is on track to reach **$350 billion** by the end of **2026**, contributing nearly **10%** to the national GDP. The focus has shifted from experimental AI pilots to large-scale deployment. Significant infrastructure commitments exceeding **$250 billion** have been secured to power data centers and semiconductor facilities, signaling a move toward "AI-native" service models. Digital Lending and Fintech Maturity Digital lending has emerged as a high-growth pillar within financial services. The market size for digital lending platforms is projected to hit **$23.8 billion** in **2026**, growing at a **CAGR of 23.5%**. The ecosystem has matured beyond simple customer acquisition, with companies now prioritizing retention and regulatory compliance. Underwriting has become increasingly AI-driven, utilizing behavioral data to replace traditional document-based scoring. With **UPI** processing over **16 billion** transactions monthly, embedded finance is now a standard expectation, integrating credit and insurance products directly into e-commerce and retail platforms. Auto Sector and Manufacturing Momentum The automotive industry is entering a phase of volume normalization. While the **2025-26** period saw record highs, growth is expected to moderate to **3-6%** in the coming fiscal year. Passenger vehicle volumes are forecasted to grow by **4-6%**, while the two-wheeler segment may see a **3-5%** increase. Sustainability and premiumization are the primary drivers of value. Electric vehicle (EV) adoption is accelerating, with major players like **Maruti Suzuki** launching mass-market models like the **e VITARA**. Despite potential cost increases of **₹9,000 crore** across the supply chain due to global trade factors, export volumes remain robust, growing at a **4.1% CAGR**. Ferrous Metals and Industrial Commodities The outlook for ferrous metals has improved significantly due to domestic policy support and infrastructure demand. Indian steel prices, which faced pressure in **2025**, are recovering following the imposition of a three-year safeguard duty on flat steel imports. Steel mills implemented price hikes of approximately **₹2,000 per tonne** in early **2026**, with further increases of **₹1,500-2,000** expected. Industrial demand is also being bolstered by the massive expansion of AI data centers, which is projected to drive a **165%** increase in power-related metal requirements by the end of the decade.