Market Brief: India Trade & Investment Update – February 2026 **Strategic Trade Breakthroughs** India has secured landmark agreements with major Western economies as of early 2026, fundamentally altering its export landscape. The long-awaited **India-EU Free Trade Agreement (FTA)**, concluded in **January 2026**, eliminates duties on over **90%** of traded goods. This "mother of all deals" opens a duty-free corridor for Indian textiles, leather, and gems to a market of **450 million** consumers, leveling the playing field against competitors like Bangladesh and Vietnam. Simultaneously, a new framework with the **US** (announced **February 3, 2026**) slashes reciprocal tariffs on Indian goods to **18%**, down from earlier punitive levels of nearly **50%**. This reduction offers Indian exporters a distinct pricing advantage over rivals facing higher levies (e.g., China at **37%**). **Investment & Currency Impact** These pacts have triggered an immediate positive reaction in financial markets. The Indian Rupee (INR) staged a record single-day rally, strengthening to **90.32** against the USD on favorable sentiment. * **FDI Inflows:** Foreign Direct Investment equity inflows surged **18%** in the first half of FY26, reaching approximately **$35.18 billion**. * **EFTA Commitment:** The Trade and Economic Partnership Agreement (TEPA), effective **October 2025**, legally binds EFTA nations (including Switzerland and Norway) to invest **$100 billion** in India over 15 years, targeting **1 million** new jobs. **'Make in India' Acceleration** The **Production Linked Incentive (PLI)** scheme is capitalizing on this improved market access. PLI-linked exports have already surpassed **₹8.20 lakh crore**, with significant traction in electronics and renewable energy. The manufacturing sector's Gross Value Added (GVA) growth accelerated to **9.13%** in Q2 FY26, signaling that the 'Make in India' initiative is shifting from capacity building to global export integration. Market outlook remains bullish as these structural shifts are expected to narrow the current account deficit by **0.25%** of GDP in CY26. *** [Landmark India-EU Trade Pact Explained](https://www.youtube.com/watch?v=ic7USRu9Y80) This video provides a detailed breakdown of the recently concluded India-EU Free Trade Agreement, analyzing its strategic depth and the specific benefits for key Indian export sectors. http://googleusercontent.com/youtube_content/0