The second term of U.S. President Trump is expected to focus on pro-growth policies, including deregulation, boosting energy supply, and promoting investment. However, his tariff policies could lead to volatility and trade disruptions, particularly with countries like Canada, Mexico, and China. For India, U.S. policies present both risks and opportunities, especially in trade agreements, lower energy prices, and the “China+1” strategy. Domestically, India faces growth challenges due to slower consumption, weaker exports, and sluggish investment. The upcoming FY26 budget is likely to target a fiscal deficit of around 4.5% of GDP, with a focus on boosting demand through tax relief and capital spending. Meanwhile, the RBI may begin a shallow policy rate cut cycle in February 2025 and implement measures to address liquidity challenges.