Market Medley

  The Union Cabinet chaired by Hon’ble PM Shri Narendra Modi has approved amendments to India’s Foreign Direct Investment (FDI) policy governing investments from countries sharing land borders with India (‘LBCs’). The changes modify the framework introduced through Press Note 3 (2020)*, which required government approval for foreign investments in India from LBCs.

  As you are aware, on 20 February 2026 the reciprocal tariffs announced by the US government on 02 April 2025, was struck down by the US Supreme Court, ruling that the IEEPA does not confer any authority to the Executive to impose tariffs.

  The recently announced trade understanding between India and the United States marks a significant macro-positive development for India, resolving a prolonged period of uncertainty that had clouded the investment landscape. While not a formal, comprehensive Free Trade Agreement (FTA), this arrangement addresses immediate tariff barriers and signals a recalibration of a critical economic relationship. Its implications span foreign investment, currency stability, corporate margins, and market sentiment, though it comes with inherent caveats characteristic of U.S. trade diplomacy.

  In a decision that underscores the Federal Reserve’s delicate balancing act, the Federal Open Market Committee (FOMC) voted yesterday to maintain the target range for the federal funds rate at   3.50%-3.75% . This pause follows an aggressive easing cycle that saw rates cut by 100 basis points in 2024 and a further 75 basis points in 2025. While the majority of the committee favored standing pat, the policy statement revealed a notable dissent, with   two members advocating for an immediate 25 basis point cut , highlighting the ongoing debate within the central bank.

  Here is a summary of the important changes introduced by the RBI's   Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026 :

The unprecedented arrest of Venezuela's president has triggered immediate market turbulence.   Crude oil   spiked over 3% on supply disruption fears, as Venezuela is a major OPEC producer. This flight to safety also boosted   gold and silver , with gold nearing record highs as a geopolitical hedge. The  US Dollar Index  initially strengthened on safe-haven flows but faces later pressure from potential oil-induced inflation and global diplomatic strains. Debt markets  reacted sharply, with Venezuelan bond prices plummeting on default risks. Broader emerging market debt saw risk-off sentiment.  Global equity markets  turned volatile, with energy sector stocks gaining but broader indices dipping on growth uncertainty and higher input cost fears. Overall, the event injects significant geopolitical risk premium into commodities and volatility across asset classes