Finance Minister Nirmala Sitharaman said foreign investment flows into India could see a positive shift following the announcement of a trade agreement between India and the United States. Speaking on Wednesday, she maintained that India’s macroeconomic fundamentals have remained robust throughout the period when overseas investors began withdrawing funds nearly a year ago.

She emphasized that while the country’s core economic indicators were strong before, during, and after the outflows, investor sentiment depends on additional factors. Referring to the recent phone conversation between Prime Minister Narendra Modi and US President Donald Trump on February 2, Sitharaman said market reactions and movements by large global funds suggest a clear change in sentiment. According to her, the investment climate now feels different, indicating that adverse conditions may be giving way to more favorable ones following the diplomatic engagement.

The finance minister also revealed that the government plans another round of Customs reforms, noting that the rationalisation announced in the Budget was not exhaustive. She explained that reforms were intentionally phased due to the complexity of the Customs system and added that some changes could be implemented through treasury amendments. She said the government intends to move forward with these measures as soon as possible. On banking reforms, Sitharaman said consolidation among public sector banks could move ahead independently of the recommendations of the proposed high-level banking committee, as Cabinet approvals are already in place.

Addressing fiscal consolidation, she acknowledged that the planned reduction in the fiscal deficit to 4.3 percent of GDP in FY27 may appear modest, but said the approach was deliberate to maintain flexibility amid global uncertainty. She noted that recent tax relief measures required retaining fiscal space to respond to unforeseen challenges. Regarding the debt-to-GDP path, Sitharaman rejected the view that consolidation is being deferred. While the FY27 target reflects a 50 basis point reduction, she said the government aims to reduce debt steadily and early where possible, rather than pushing the burden entirely to later years.