The Fed should not matter.

"India's fiscal deficit is expected to be around 7.5 percent of the GDP in the current fiscal," more than double of the Budget estimate (BE) of 3.5%, ET. "The finance minister in Budget 2020-21 had pegged the gross market borrowing, which is also a reflection of fiscal deficit, at Rs 7.80 lakh crore (Rs 7.80 trillion) for the current fiscal." "The government's total receipts stood at Rs 8,30,851 crore (Rs 8.31 trillion) (37 percent of BE 2020-21) till the end of November 2020. This included Rs 6,88,430 crore tax revenue (net to Center), Rs 1,24,280 crore non-tax revenue and Rs 18,141 (Rs 181.41 billion) of non-debt receipts. Non-debt capital receipts consist of recovery of loans and disinvestment." "With the state governments' fiscal deficit projected at a relatively modest 3.3 percent of GDP in FY2022, the general government fiscal deficit is estimated at around 10.4 percent of the GDP," rating agency iCRA said, ET. And yet, it was so different just two months back. "Separate data showed that the Center's fiscal deficit at the end of November narrowed to 46% of the full-year target as robust revenue receipts helped in a better fiscal outcome," TOI. "India's goods and services tax (GST) revenue posted another strong month, rising 13% from a year ago to Rs 1.30 lakh crore (Rs 1.30 trillion) in December, official data showed," ET. GST revenue was 26% higher than in December 2019, that is before the pandemic. Nearly 58.9 million income tax returns for the year April 2020-March 21 were filed till December 2021, compared to 59.5 million filed by 10 January 2021, ET. Despite modest borrowing, "The cost of debt-funds for the states has touched the highest level so far this fiscal with the weighted average cut-off crossing the 7.16 percentage points at the latest auctions, up 11 bps (11 basis points) over the past week, reflecting the hardening of yields even for the government securities," ET. At such high rates of interest, servicing debt could become a problem in coming years. This is despite the repo rate, which is "the rate at which commercial banks borrow money from the RBI (Reserve Bank) by using government bonds as collateral," BHF, being held at 4% at the latest meeting of the Monetary Policy Committee of the RBI, ET. The benchmark 10-year bond yield rose by 5 basis points (0.05%) to 6.59%, indicating that the market is hedging against high inflation in the future, despite the rupee strengthening to 74.03 to the dollar, TIE. The RBI sells bonds to finance  central government borrowing, or fiscal deficit, and a stronger rupee should control rise in prices of imports. Exports rose by 38.91% to $37.81 billion in December, the highest ever monthly figure, but imports surged by 38.55% to $59.48 billion so that trade deficit widened to $21.68 billion, TOI. Trade with China rocketed by 43.3% to a record $125.66 billion in 2021. We exported just $28.14 billion and imported a whopping $97.52 billion, with a trade deficit of $69.38 billion, ET. What a generous gift to China. Our foreign exchange reserves fell by $897 million to $632.7 billion in the week ended 7 January, ET. Even though reserves seem ample, "India's enormous foreign exchange reserves faces its biggest test in the next 12 months as a record $256 billion of total overseas debt comes up for repayment amid a possible flight of capital due to monetary tightening by the Federal Reserve," ET. What the Fed does should have no effect if domestic finances are secure. Only the government and RBI know if they are. We are ignorant.