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February 03, 2026 February 03, 2026 - Current affairs for all the Exams: Landmark India-US Trade Deal and Union Budget 2026-27: Key Developments

India and the United States have finalized a historic trade agreement slashing reciprocal tariffs to 18% following a strategic shift in India's energy imports. Simultaneously, the Union Budget 2026-27 has introduced a new Income Tax Act and designated lightning as a major natural disaster due to rising fatalities.

In a series of high-impact developments over the last 24 hours, India has navigated significant shifts in international trade and domestic policy. The most prominent news is the announcement of a landmark trade deal between India and the United States, which is expected to reshape the economic landscape of South Asia.

1. India-US Strategic Trade Agreement

Following a high-level dialogue between Prime Minister Narendra Modi and U.S. President Donald Trump, the two nations have agreed to a reciprocal tariff structure. Under the new deal, the U.S. will slash tariffs on Indian goods to 18%, down from previous levels that had reached as high as 50% for certain categories. In exchange, India has agreed to halt the purchase of Russian oil and lower trade barriers for American products. This deal has already triggered a rally in the Indian stock market, with the iShares MSCI India ETF gaining significantly and the GIFT Nifty hinting at a strong opening.

2. Union Budget 2026-27 Highlights

The Government of India has presented the Union Budget for the fiscal year 2026-27, focusing on legislative simplification and disaster resilience. Key takeaways include:

  • New Income Tax Act, 2025: The budget confirmed that the Income Tax Act, 2025 will officially come into effect on April 1, 2026, replacing the six-decade-old 1961 Act. The new law aims to simplify compliance and reduce litigation through integrated assessment proceedings.

  • Disaster Management: In a major policy shift, lightning has been officially designated as a natural disaster. This comes after reports showed a 400% rise in lightning strikes since 2019, making it the leading cause of disaster-related fatalities in the country.

  • Nuclear Energy Mission: An allocation of ₹20,000 crore has been made for Research and Development into Small Modular Reactors (SMRs) to bolster India's clean energy transition.

3. T20 World Cup 2026 Controversy

On the sporting front, the T20 World Cup 2026 has been hit by a major controversy. The Pakistan Cricket Board (PCB) has announced a boycott of its group-stage match against India, scheduled for February 15. The International Cricket Council (ICC) is reportedly considering strict measures, including potential forfeiture of points and the possibility of replacement teams like Uganda taking Pakistan's spot if a resolution is not reached.

4. Technology and Space

In global tech news with Indian implications, Elon Musk’s SpaceX has merged with xAI at a staggering valuation of $1.25 trillion. The move aims to utilize space-based infrastructure for massive AI computations, a development that Indian tech analysts believe will influence future satellite and AI partnerships in the region.

Note: Students are advised to monitor official government gazettes and the Press Information Bureau (PIB) for detailed notifications on the new tax structures and trade clauses.

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