Modi meets Trump

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Good morning. There is good news and bad news in the economy. Let’s get the bad over with first — India’s industrial production slowed to 3.2 per cent in December from 5.4 per cent in November. We’ll have to wait to see if this forces a further downward revision of GDP estimates. The good news is that inflation seems to be cooling off. Retail inflation in January came in at a five-month low of 4.3 per cent.

In today’s newsletter, we look at the new income tax bill that was proposed in parliament yesterday. But first, the latest from Narendra Modi’s meeting with Donald Trump.

Send us any questions you have about the Indian economy, we will answer them in a subsequent issue. Email indiabrief@ft.com or hit reply.

US and us

“Deal” was the word of the day in Prime Minister Modi’s meeting with US President Trump in Washington, as the two countries laid out a roadmap for military and trade collaboration. Trump announced that the US was expecting to increase weapon sales to India by “many billions” of dollars, paving the way to eventually sell F-35 stealth fighter jets. This is part of a framework for Indo-US defence co-operation for the next decade. The US is already one of the largest sellers of helicopters, transport and maritime patrol aircraft and other hardware to the world’s biggest arms-importing country.

Several big trade deals are also in the works, Trump said. The hope is to double India-US trade to $500bn by 2030 and reduce America’s deficit. Hours before the meeting, Trump ordered his trade advisers to come up with “reciprocal” tariffs on his country’s trade partners. India will be one of the hardest hit if this comes into play. During the press briefing, Trump specifically mentioned India’s tariffs of up to 70 per cent on American cars.

Other announcements included the prospect of US universities setting up campuses in India and the approval for extradition from the US to India of Tahawwur Rana, one of the people accused in the 2008 Mumbai attacks.

Modi also expressed India’s willingness to take back illegal immigrants. Last week, the US sent a plane full of shackled and chained Indians, which created an uproar in parliament. Local media reports suggest a second lot of 180 deportees are expected soon.

Modi’s first meeting in Washington was with the newly confirmed director of national intelligence, Tulsi Gabbard. While details of the meeting have not been made public, Modi wrote on the social media platform X that they “discussed various aspects of the India-USA friendship”. He will be counting on Gabbard to ease the tensions around a case in which US authorities have accused a former Indian official of plotting to assassinate Sikh activist Gurpatwant Singh Pannun in New York.

Modi also said he met Elon Musk (and his three children) and discussed “various issues, including those he is passionate about such as space, mobility, technology and innovation”. Musk’s Starlink has sought permission to operate its satellite services in India.

Tax returns

Commuters sit in cars in front of the income tax building during a traffic jam in Kolkata © REUTERS

The new income tax bill, which seeks to simplify the process of calculating and filing tax returns, was proposed in parliament on Thursday. The current law has been around since 1961 and many aspects of contemporary financial lives, such as employee stock options and cryptocurrencies, are laboured amendments force-fitted into the old framework. The bill will be sent to a parliamentary standing committee and is expected to come into effect from April 2026.

To be clear, the new bill does not materially change the way in which tax liability will be calculated. What it does do is seek to minimise disputes and litigation and the laborious process of cross-referencing between various sections and amendments. Think of the old bill as a shared document which various sets of people have been editing for more than 60 years, such that things are all over the place and sometimes contradictory.

In addition, finance minister Nirmala Sitharaman has said the new bill seeks to decriminalise non-compliance on some of its provisions. The income tax department consulted various stakeholders in the process of the preparation of the bill and some 6,500 suggestions from chartered accountants and others, including the general public, have been incorporated, according to media reports.

Whether the bill will make it easier for individuals to file their own tax returns without the help of a chartered accountant will only be known once it kicks in. (Here’s a quick test — the word “notwithstanding” has been replaced with the phrase “irrespective of anything”. If that makes sense to you, then you can probably do your own taxes). As for me, I am at least looking forward to not having to sit glassy eyed through another session where my accountant explains the difference between “financial year” and “assessment year” — the latter is being scrapped.

Go figure

China’s tech stocks have entered a bull market after the global breakthrough of DeepSeek.

Hong Kong’s Hang Seng Tech index is far ahead of the broader market since January 13.

Read, hear, watch

Ed Sheeran is playing in Gurugram on Saturday. I loved watching the videos of his India trip; he seems like quite a good sport and an adventurous traveller, getting a roadside champi (head massage), riding a scooter with musician Arijit Singh, and getting shut down by the local police while busking in Bengaluru.

I spent this week in Kerala at my parents’ home, but we missed our usual tradition of going to the local cinema to watch a film. If you are looking for a good introduction to Malayalam-language cinema, I’d say you can’t go wrong with a Fahadh Faasil film. (Another actor/director creeping up my list of favourites is Basil Joseph.) Speaking of Malayalam films, the Hindi version of The Great Indian Kitchen, titled Mrs, started streaming this week on Zee5. It’s an excellent illustration of the burden of cooking that women bear. You can stream the Malayalam original on YouTube.

I have also, after a post-election break, resumed listening to The Ezra Klein Show. I have been going on long walks through the paddy fields near my parents’ tiny town, and it’s an enjoyable and educative hour listening to Klein and his guest try to make sense of the Trump presidency. A bird flu scare may have caused an egg shortage in the US, but Trump is ensuring there is no dearth of content.

Oh! And Happy Valentine’s Day to those celebrating.

Buzzer round

Which country now controls more of the world’s supply of nickel than Opec did of oil at the cartel’s peak in the 1970s?

Send your answer to indiabrief@ft.com and check Tuesday’s newsletter to see if you were the first one to get it right.

Quick answer

On Tuesday, we asked: how are the constant (and often conflicting) decisions that Trump is making leaving you feeling? Here’s how you voted. I see that a large majority of you share my exhaustion!