The implications of the Indian budget released recently are certainly being felt.  With this being the first budget presented following a narrower-than-expected victory for Prime Minister Narendra Modi, there will be much to watch out for over the coming months - especially in relation to job creation, renewable energy and potential tax reforms.

From the perspective of structured finance transactions, changes around the tax rate placed on equity derivatives and capital gains from equity investments are especially interesting.  India has a huge volume of retail derivative trading, which is rapidly growing.  Whilst these tax increases may seek to dampen the market to curb the more speculative parts of the market, one would hope it doesn't impact more vanilla transaction volumes over a longer time period.  

India is a much more resilient market than it was, say, 20 years ago, so we would expect to see a quick bounce-back with investors perhaps trading other financial instruments or using the increased rate of capital gains tax to hold investments for the longer term.  Perhaps this budget might be a catalyst for a more defensive market.  As always, it will be fascinating to see the long-term effects.