February 2026 Recap: AI Disruptions, Trade Shifts, and Sporting Wins
February 2026 was a month of intense contrast. The “old world” of trade tariffs and geopolitics collided with the “new world” of generative AI. While India celebrated sporting victories and historic Olympic moments, the stock market faced a massive tech panic. The Nifty IT index dropped nearly 20% its worst monthly performance since 2008 as investors worried about AI disruption and trade uncertainties.
It was a month filled with rapid changes: diplomatic breakthroughs, major court rulings, new solar duties, and a market sell off that affected many sectors.
Trade Breakthroughs and Sporting Success
On February 6, Prime Minister Narendra Modi and US President Donald Trump announced an Interim Trade Framework. India lowered taxes on US products like apples and wine, while the US reduced tariffs on Indian textiles and leather. Investors initially celebrated this move, hoping it would make Indian exports more competitive.
At the same time, India excelled in sports. Skier Arif Khan made history at the Milano Cortina Winter Olympics in Italy. Meanwhile, the ICC Men’s T20 World Cup 2026 kicked off in India and Sri Lanka. India’s strong opening win against the USA in Mumbai created a wave of national pride.
The “Claude Crash” and the AI Reality Check
The market mood shifted during the “Claude Crash” in mid-February. AI company Anthropic released a new model capable of automatically rewriting old computer code. While tech experts were impressed, investors grew worried. They feared that traditional IT service companies might lose their main source of income to automation.
This led to the sharpest tech sell-off since the 2008 financial crisis. By the end of February, the Nifty IT index had fallen 19.7%. While the broader Nifty 50 managed a tiny 0.7% gain, other sectors like Metals, Energy, and Autos saw much stronger growth.
India’s AI Leadership and Global Legal Shocks
Despite the market fear, India worked to become a leader in AI regulation. New Delhi hosted the India AI Impact Summit, where over 80 countries discussed sovereign AI models for Indian languages and “AI for All.”
However, global markets were shaken again on February 20. The US Supreme Court ruled that the President did not have the authority to impose broad tariffs without approval from Congress. This ruling created confusion regarding existing trade taxes and caused volatility in shipping and export stocks.
Solar Duties and Diplomatic Updates
On February 24, the US introduced a preliminary 125.87% tax on Indian solar cells. This move hit India’s green energy exporters hard and added fresh tension to the trade relationship.
On the diplomatic front, PM Modi visited Israel on February 25 to establish a “Special Strategic Partnership” focused on AI defense and infrastructure. Shortly after, Canadian PM Mark Carney arrived in Mumbai to discuss investments in uranium and infrastructure.
Market Conclusion: A “Black Friday” for Tech
The month ended with a “Black Friday” for the Indian stock market. Fears of AI disruption, changes in global market indexes, and trade uncertainty caused Indian IT companies to see their steepest monthly decline in nearly 20 years.
While “old economy” sectors like pharma and energy performed well, technology stocks struggled under the pressure of a changing digital world. Banks and real estate remained steady but lacked the momentum to see significant growth.
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