The Indian rupee is set to face sharp and persistent volatility through 2026 as capital outflows, tariff-related trade disruptions and weak foreign investment flows continue to outweigh the country’s strong macroeconomic fundamentals, analysts and official data indicate, PTI reported.Despite steady growth and moderate inflation at home, the currency is unlikely to find a durable floor until uncertainty around tariffs eases, with market participants cautioning that a trade agreement with the US, while helpful, may not be sufficient on its own to stabilise the rupee.The rupee has weakened nearly 5% since crossing the 85-per-dollar level in January and has slipped past the historic low of 91 against the US dollar. Over the year, it has depreciated more than 19% against the euro, about 14% versus the British pound and over 5% against the Japanese yen, making it the worst-performing currency among Asian peers even as the dollar index fell over 10% and global crude oil prices remained weak.The slide accelerated after sweeping reciprocal tariffs announced by US President Donald Trump in April triggered sustained foreign portfolio outflows, as global investors shifted capital to other emerging markets offering better risk-adjusted returns.The pressure is evident in investment flows. On a net basis, foreign direct investment between January and October this year turned negative, while total investment inflows declined to minus $0.010 billion during the period, compared with inflows of $23 billion in the year-ago period. Net FDI stood at $6.567 billion, while net portfolio investment remained negative at minus $6.575 billion.“FDI acts as the anchor flow for the balance of payments. When that anchor weakens, the currency becomes more dependent on portfolio flows; forex markets turn more sensitive to global risk sentiment; and central bank intervention requirements increase,” said Anindya Banerjee, head of currency and commodity research at Kotak Securities, PTI quoted.The rupee’s fall gathered pace in the last quarter of the year. It dropped more than 1% in a single session on November 21 to 89.66 per dollar, breached the 90 level on December 2 and crossed the 91 mark on December 16.The government has attributed the depreciation to a widening trade deficit and delays in finalising a trade pact with the US amid weak support from the capital account. Minister of state for finance Pankaj Chaudhary told the Rajya Sabha on December 16 that the rupee’s slide had been influenced by the increase in the trade gap and developments related to the India-US trade agreement.RBI governor Sanjay Malhotra has said the central bank does not target any specific exchange rate level, while analysts note that recent rate cuts aimed at supporting domestic growth have reduced the rupee’s relative attractiveness.Dilip Parmar, research analyst at HDFC Securities, described the situation as a capital account-driven crisis, noting that shrinking inflows, rather than trade alone, are driving the decline. The RBI has also shifted towards a more flexible exchange rate regime, which the IMF classifies as a “crawl-like” arrangement.The depletion in net foreign investment inflows has further amplified volatility. “A sharp decline in FDI has reduced long-term dollar inflows, making the rupee more dependent on volatile portfolio flows,” said Jateen Trivedi, VP research analyst, commodity and currency, LKP Securities, PTI quoted.“Higher commodity prices and elevated risk on US trade deals kept FDI away and impacted the rupee majority due to lack of intent in inflows and going elsewhere, which are our competitors,” Trivedi added.RBI data also shows a depletion of $10.9 billion in foreign exchange reserves during July–September FY26, compared with an accretion of $18.6 billion in the same period a year earlier. The record $17.5-billion exit by foreign institutional investors in 2025 has added to dollar demand, intensifying pressure on the rupee.Analysts expect the current account deficit to widen to around 2% or more in 2026 as the full impact of US penalty tariffs feeds into exports, increasing structural demand for dollars. “A trade pact with the US would help, but it is not a silver bullet,” Banerjee said.Despite near-term stress, analysts say India’s growth trajectory and inflation profile provide a long-term anchor for the currency. Banerjee expects the rupee to test the 92–93 levels amid global volatility over the next three to four months, before potentially entering a phase of appreciation from April as capital flows realign and dollar weakness becomes more evident, with levels of 83–84 seen by the end of FY27.

New Delhi: India’s fiscal deficit in the first eight months (April-November) of the financial year 2025-26 was estimated at Rs 9.8 lakh crore, or 62.3 per cent of the budget estimate for the full financial year, data released by the Controller General of Accounts on Wednesday showed. 

The data showed that the government has stepped up its capital expenditure on big-ticket infrastructure projects such as highways, ports, and railways to spur growth and create more jobs in the economy. Capital spending touched 58.7 per cent of the full-year target, significantly higher than 46.2 per cent in the corresponding period last year. There was a 28 per cent increase in the government’s capex at Rs 6.6 lakh crore, up from Rs 5.1 lakh crore in the same period of the previous financial year.

While revenues have grown in absolute terms, the pace of collection slowed compared to the previous year, as the government has announced tax concessions for the middle class. Besides the GST rate cuts, which kicked in from September 22, are also beginning to reflect in the revenue figures. However, the reduction in taxes is playing a key role in accelerating growth in the economy.

Net tax revenue stood at Rs 13.94 lakh crore, or 49.1 per cent of Budget Estimates, compared with 56 per cent achieved during the same period last year. Overall revenue receipts were at 55.9 per cent of the annual target, compared with close to 60 per cent a year earlier.

However, there was a silver lining in the sharp increase in non-tax revenue, which touched 88.6 per cent of the Budget Estimates during the first eight months of the current financial year, as the government’s dividends from public sector undertakings (PSUs) surged during the current financial year due to the increase in profits.

Finance Minister Nirmala Sitharaman set the fiscal deficit target in the budget for 2025-26 at 4.4 per cent of GDP, which works out to Rs 15.7 lakh crore. This is part of the government’s commitment to follow a descending gliding path on the deficit to strengthen the country’s fiscal position. India’s fiscal deficit for 2024-25 stood at 4.8 per cent of GDP as part of the revised estimate.

A decline in the fiscal deficit strengthens the fundamentals of the economy and paves the way for growth with price stability. It leads to a reduction in borrowing by the government, thus leaving more funds in the banking sector for lending to corporates and consumers, which leads to higher economic growth.

A bottled water sold at Waitrose could contain glass and should be returned to the store, the Food Standards Agency (FSA) warned.

The 750ml No1 Royal Deeside Mineral Water and the sparkling variety are being recalled “because of the possible presence of glass fragments upon opening the bottles,” which the FSA said “may cause injury and makes it unsafe to drink”.

Waitrose apologised and said it was recalling “some” bottles as a precaution.

The supermarket is asking customers not to use the bottles and to take them back to Waitrose or contact the company for a full refund.

“If you have bought any of the above products do not drink it,” the FSA said in its recall notice.

It added that the supermarket would be putting up notices in its shops warning customers.

Deeside water is produced in Scotland from natural springs in the Cairngorms national park.

The firm produces special batches for Waitrose, which are affected by the recall. Each bottle costs around £1.60p at Waitrose stores.

It is not clear exactly how many bottles have been sold and what proportion of bottles are affected.

The batch codes for the recalled mineral water are: NOV 2027 28, DEC 2027 01, DEC 2027 02, DEC 2027 10, DEC 2027 11 and DEC 2027 16, with best before dates of November and December 2027.

The batch codes for the recalled sparkling water are: DEC 2027 01, DEC 2027 03, DEC 2027 12, DEC 2027 15 and DEC 2027 25, with a best before date of December 2027.

The FSA advised people contact Waitrose Customer Care on 0800 188 884, choosing option 4.