Just a Boy - Gachiakuta

Newspaper Summary 230126

Bulk of India’s Exports Lose EU Duty Preference Benefits

Effective January 1, 2026, the European Union (EU) has fully suspended import tariff preferences for approximately 87 per cent of India's goods exported to the bloc. This move, under the Generalised System of Preferences (GSP), forces the majority of Indian exports to face full Most Favoured Nation (MFN) tariffs.

Reasons for the Suspension According to an EC update from late 2025, these products lost their GSP benefits because the average value of their imports into the EU exceeded the threshold limit set under the scheme for three consecutive years. The suspension is slated to apply from January 1, 2026, through December 31, 2028.

Impacted Sectors and Products The EU has removed GSP benefits across almost all major industrial sectors that form the backbone of India's exports. The specific items now facing full duties include:

• Mineral products, chemicals, and plastics.
• Iron, steel, basemetals, and precious metals.
• Textiles, garments, rubber, and machinery.
• Motor vehicles and electrical appliances.

Previously, these products received a Margin of Preference (MoP), which averaged a 20 per cent reduction in the EU’s MFN tariff. For example, an apparel product previously subject to a 12% MFN tariff only paid 9.6% under GSP; exporters must now pay the full 12% duty.

Remaining Benefits The products that still retain GSP benefits—including agriculture and food, leather goods, footwear, wood and paper, and handicrafts—account for less than 13 per cent of India’s total exports to the EU.

Economic and Competitive Implications Trade analysts and officials have expressed concern over India's eroding price competitiveness:

• Competitor Advantage: Ajay Sahai of the Federation of Indian Export Organisations pointed out that the withdrawal erodes India's edge against countries like Bangladesh and Vietnam, which continue to enjoy duty-free or lower-duty access.
• The FTA Factor: While India and the EU are actively negotiating a Free Trade Agreement (FTA), experts note that even if a deal is signed soon, implementation could take a year or more.
• Carbon Taxes: The loss of these preferences coincides with the start of the tax phase of the EU’s Carbon Border Adjustment Mechanism, further increasing trade barriers for Indian exporters.

Bilateral trade between India and the EU reached approximately $140 billion in 2024, making the bloc India’s largest trading partner. Leaders from both sides are scheduled to meet in late January 2026 to attempt to close the remaining gaps in the ongoing FTA negotiations.

Based on the sources provided, here is a reproduction of the reporting regarding the increase in rupee invoicing for international trade:

Invoicing of External Trade in Rupee on the Rise

In a positive sign for the economy and the internationalization of the currency, recent data from the Reserve Bank of India (RBI) shows a notable pick-up in exporters and importers invoicing their trade in rupees.

Growth in Rupee Invoicing According to the data for the April-November 2025 period:

• Exports: Rupee invoicing for the export of goods and software reached ₹2,00,056 crore, representing a 4.7 per cent year-on-year increase.
• Imports: Invoicing in rupees for imports grew much more aggressively, rising 24.5 per cent to ₹1,97,127 crore.

For the full fiscal year 2025 (FY25), rupee-invoiced exports grew by 7 per cent, while imports invoiced in rupees saw a substantial 34 per cent surge.

The Vostro Account Mechanism This growth is facilitated by an RBI circular from July 2022, which allowed for the invoicing and payment of international trade in rupees to promote global trade. This system utilizes Special Rupee Vostro Accounts (SRVA) opened by specified banks for partner countries. Under this mechanism, export proceeds are paid in rupees from the balance in the designated vostro account of the overseas importer, while import payments are credited to the special account in rupees against invoices.

Key Global Partners Trade analysts report that India currently has SRVA facilities with 22 countries. Rupee-based trade is actively occurring with key partners such as:

• Russia, Sri Lanka, and Singapore.
• The United Arab Emirates (UAE): In 2023, India tied up with the UAE to allow trade settlements in both rupees and dirhams.

Industry Outlook Ajay Sahai, Director General and CEO of the Federation of Indian Export Organisations (FIEO), stated that the SRVA has emerged as a simple and effective mechanism for traders and has been gaining significant traction in recent months. He noted that recent moves by the RBI, such as increasing the timeline for the settlement of trade proceeds under FEMA regulations, demonstrate a strong commitment to promoting cross-border transactions in rupees.

However, the overall share of rupee invoicing remains modest. It currently stands at just 6.1 per cent for exports and 4.9 per cent for imports. Paras Jasrai, Associate Director at Ind-Ra, pointed out that while overseas trade in rupees reduces dependence on foreign currencies like the dollar, there is still vast room for growth given the continued domination of the US dollar and the euro.

According to the sources, here is a reproduction of the reporting regarding the need for India's automobile industry to decarbonize its manufacturing processes:

Green Auto Industry Must Go Beyond EVs

India’s automobile industry is currently at an inflection point; while electric vehicle (EV) sales are rising and now account for nearly 7.5 per cent of national vehicle sales, the industry faces a "quieter challenge" emerging inside its factory gates. While policymakers are focused on accelerating clean mobility and tailpipe emissions, manufacturing emissions from steel, rubber, and electricity-intensive production lines remain largely untouched.

The Manufacturing Emission Web The automobile industry contributes approximately 7.1 per cent to India's national GDP. While 65-80 per cent of a vehicle’s emissions currently come from the tailpipe, electrification is reducing that share, leaving behind a massive web of industrial emissions. For example, the steel required to manufacture just one car can add as much as 2.2 tonnes of CO2 to the atmosphere.

Future Projections and Scope 3 Challenges In a business-as-usual scenario, energy demand for vehicle manufacturing is expected to more than triple between 2020 and 2050, with associated emissions projected to more than double from 30.3 million tonnes of CO2 to 64 million tonnes. A breakdown of 2020 data shows the source of these emissions:

• Scope 1 (Direct factory emissions): 1 per cent.
• Scope 2 (Indirect electricity-related): 16 per cent.
• Scope 3 (Upstream supply chain): 83 per cent, primarily from steel and rubber production.

Decarbonization Strategy A study by the Council on Energy, Environment and Water (CEEW) found that switching to green electricity and low-carbon steel could cut the industry’s emissions by up to 87 per cent. To achieve this, the sources suggest three decisive fronts:

• Renewable Electricity: By 2050, the auto industry will require around 34 GW of renewable energy capacity to meet an annual demand of 54 TWh.
• Green Steel: OEMs should enter into Advance Market Commitments (AMCs) to secure green steel produced via hydrogen-based processes or recycled scrap, aiming for 100 per cent share by 2050.
• Material Electrification: Suppliers must be supported in accessing clean electricity to electrify the production of other materials, particularly rubber for tyres.

Cost and Competitiveness While the price of green steel could be 35 per cent higher, potentially raising vehicle prices by 2-5 per cent, analysts believe the impact on demand will be negligible because India’s per capita income is projected to quadruple between 2020 and 2050. The long-term benefits of a low-emission supply chain include resilient supply chains and export competitiveness, especially as global markets move toward carbon border taxes and green procurement standards.

The article was authored by Chetna Arora, Programme Associate, and Vaibhav Chaturvedi, Senior Fellow at the CEEW.

Based on the sources provided, here is a reproduction of the reporting regarding India’s strategy to leverage Artificial Intelligence as a tool of global diplomacy and influence:

How India Can Turn AI into Foreign Policy

The Global AI Summit marks India’s ambitious bid to be recognized as the world’s most trustworthy and deployable AI partner. Rather than a mere show of strength, the event serves as a declaration of intent, signaling that India’s governance-first model and ability to manage complexity are its greatest competitive advantages.

The Seven-Pillar Framework India has adopted a unique approach that avoids the "AI paranoia" of the West and the "techno-nationalism" of China. This strategy is built on a seven-pillar framework known as "AI chakras," which emphasizes:

• Safe and trusted AI.
• Democratized access.
• Inclusion by design.

Deployment in the "Wild" Unlike many nations stuck in the pilot stage, India is deploying AI at population scale. Real-world applications include AI-powered advisories for millions of farmers, diagnostic tools for TB and stroke in resource-strained clinics, and the Supreme Court’s use of AI for multilingual translation of records. These working systems prove that AI can serve public infrastructure without overwhelming it.

The "Governance Surplus" Advantage While other superpowers face credibility issues, India possesses a "governance surplus". Its AI "stack"—comprising Aadhaar, UPI, DigiLocker, and DEPA—is built on independent courts and open legislation, making it politically legitimate and hard to replicate. While China may have more mature models, it faces a structural trust deficit; India’s goal is to outpace rivals on credibility rather than just raw compute power.

India’s "Third Path" for the Global South For emerging economies, India offers a "Third Path" based on openness, interoperability, and inclusion. By exporting not just technology but governance capacity, India is moving from a follower to a framer of global standards. This AI diplomacy is shaping ecosystems and replacing dependency with mutual capacity, using AI as a primary vehicle for soft power.

Chaos as a Capability A strategic advantage of Indian AI is that it is tested in friction. Systems designed to work in India’s chaotic, low-bandwidth, and multilingual environments are inherently more portable and require less tuning for export. Essentially, if an AI system works in India, it can work anywhere.

Remaining Challenges and Risks To maintain its credibility as it exports this model, the sources suggest India must address several internal bottlenecks:

• Accountability: There is a need for clear liability norms to determine who is responsible when an AI system fails.
• Compute Access: National infrastructure like AIRAWAT must move from concept to transparent access for startups and researchers.
• Regulatory Sandboxes: India needs real, sector-specific zones with legal cover to test high-risk models.

Ultimately, the goal is to demonstrate that democratic AI at scale is a viable model for the world. The question is whether India will shape the global AI race on its own terms or inherit the terms set by others.

The article was authored by Sanchit Vir Gogia, Chief Analyst, Founder & CEO of Greyhound Research.

Based on the sources provided, here is a reproduction of the reporting regarding the decline in India's reservoir storage levels:

Storage in Key Reservoirs Down to 71% of Capacity

Storage in India’s 166 major reservoirs has continued to decline, with levels dropping to 71.23 per cent of the total 183.565 billion cubic metres (BCM) capacity. According to the Central Water Commission, the total level this week dropped to 130.753 BCM. While storage in 155 of these reservoirs is still considered more than 80 per cent of normal, water levels in four out of five regions have now fallen below 80 per cent of their total capacity.

Rainfall Deficiency The decline in storage is attributed to a significant lack of precipitation across the country. Data received from 726 districts shows that 91 per cent of them have received deficient or no rainfall since the beginning of the year.

Regional Storage Status The reservoirs are currently witnessing varying levels of stress across different geographic zones:

• Western Region: This is the only region where levels remain above 80 per cent, currently filled to 82.29 per cent of its 38.094 BCM capacity. This region benefitted from a large surplus of rainfall during the South-West monsoon.
• Southern Region: Storage continues to be a major concern here, remaining below last year’s levels at 65 per cent of the 55.288 BCM capacity.
• Eastern Region: The 27 reservoirs in this region are filled to 69 per cent of their 21.759 BCM capacity.
• Central Region: The 28 reservoirs here are at 73 per cent of their 48.588 BCM capacity.

State-Specific Highlights in the South Within the southern region, storage levels vary significantly by state:

• Telangana and Karnataka have the lowest storage at 59 per cent.
• Kerala is at 66 per cent.
• Tamil Nadu stands at 71 per cent.
• Andhra Pradesh maintains a higher level compared to its neighbors at 80 per cent.

Based on the sources provided, here is a reproduction of the reporting regarding the interest from global private equity firms in the Indian Premier League (IPL) franchise, Royal Challengers Bengaluru (RCB):

Global PE Giants Eye IPL Champions RCB

Global private equity heavyweights Blackstone Inc. and Temasek Holdings Pte have emerged as early aspirants for the reigning IPL champions, Royal Challengers Bengaluru (RCB). Diageo, the owner of RCB’s parent company United Spirits Ltd (USL), initiated the sale process in November and has mandated Citibank to scout for potential buyers.

Valuation and Potential Bidders The transaction is expected to value the franchise between $1.4 billion and $1.8 billion. While bidding interest in the IPL has historically been centered on domestic strategic investors and family offices, this move signals a shift toward global capital. In addition to Blackstone and Temasek, other global buyout firms evaluating bids include:

• Advent International.
• PAG.
• Carlyle Group.

Domestic Competition The global giants will face competition from prominent domestic names. Adar Poonawalla, CEO of the Serum Institute of India, recently announced via his official 'X' handle that he intends to table a "strong and competitive" bid for the team over the next few months. Other domestic groups previously linked to interest in the franchise include the JSW Group and Manipal Hospitals.

Franchise Performance and Sale Timeline The surge in interest follows a period of significant success for the franchise:

• June 2025: RCB Men won their maiden IPL title.
• March 2024: RCB Women secured the WPL title.

The team, which was renamed Royal Challengers Bengaluru in 2024, is currently one of the most valuable brands in the league. Diageo has set a target to complete the sale by March 31, 2026, just ahead of the start of the next IPL season on March 26.

Strategic Context United Spirits’ MD & CEO, Praveen Someshwar, stated that while the team is a valuable and strategic asset, it is considered "non-core" to their primary beverage alcohol business. The sale comes at a time when the franchise is also facing local pressure; the Karnataka State Cricket Association recently urged the team to keep its home matches at the M Chinnaswamy Stadium amid speculation that they might move home games out of Bengaluru for the 2026 season.

Based on the sources provided, here is a reproduction of the reporting regarding Blinkit's Q3 performance and the analysis of its future profitability:

Blinkit’s Q3 Profit: A Shift or Blip?

Eternal Ltd’s (Zomato's parent company) Q3FY26 financial results were highlighted by a significant turnaround in its quick commerce vertical, Blinkit, which reported a small profit of ₹4 crore, swinging from a loss of ₹156 crore in the previous quarter.

The Drivers of Profitability

• Inventory Model Shift: Blinkit has transitioned to an owned-inventory-led model, which now accounts for almost 90 per cent of its net order value (NOV), up from 80 per cent in Q2.
• Contribution per Order: The turnaround is largely attributed to a sharp improvement in the profit earned per order before fixed costs. Blinkit earned ₹30 per order, a 25 per cent increase over the previous quarter.
• Growth Metrics: Sequential NOV rose 14 per cent to ₹13,300 crore, even though growth was slightly dampened by GST cuts and store construction delays in the Delhi NCR region.

Store Expansion and Operational Challenges Blinkit added 211 net stores in Q3, bringing its total to 2,027. While it fell slightly short of its 2,100-store target for December due to construction curbs in Delhi, the company remains confident in reaching 3,000 stores by March 2027. However, analysts warn that if competition forces the company to accelerate this to 4,000 stores, the initial setup costs could dent future Ebitda.

Risks to Sustained Profitability Two major factors could turn this profit into a "blip":

1. Fee Waivers: In response to heightened competition, Blinkit has begun waiving delivery fees in some markets, which could impact margins.
2. Marketing Spend: Continued dark store expansion and higher branding and marketing costs in the quick commerce sector may weigh on future earnings.

Leadership Transition Just as Blinkit reached profitability, Eternal’s founder CEO Deepinder Goyal announced he will step down on February 1, 2026, to become vice-chairman. He is handing the reins to Albinder Dhindsa, the current CEO of Blinkit, who will lead the group.

Market Outlook Despite the positive Q3 results, analysts remain cautious about Eternal’s elevated valuation. Even after a 25 per cent drop from its October peak, the stock continues to trade at an EV/Ebitda multiple of 40 times based on FY28 estimates. While some brokerages like Motilal Oswal describe Blinkit as a "generational opportunity," they have cut future earnings estimates to account for the intense competition in the quick commerce space.

Based on the sources provided, here is a reproduction of the reporting regarding President Donald Trump’s shift in policy toward Greenland:

Inside the U.S. President’s Head-Spinning Greenland U-Turn

When President Trump arrived in the snow-covered Swiss Alps for the World Economic Forum on Wednesday afternoon, European leaders were panicking that his efforts to acquire Greenland would trigger a trans-Atlantic conflagration. However, by the time the sun set, the President had significantly backed down.

The Back-Channel Negotiations This abrupt about-face followed days of back-channel conversations between Trump, his advisers, and European leaders, including NATO Secretary-General Mark Rutte and German Chancellor Friedrich Merz. The Europeans employed a strategic mix of enticements—such as offers to boost Arctic security—and warnings regarding the dangers of a deeper rupture within NATO.

A New "Framework" Deal Following a meeting with Rutte on Wednesday, Trump called off his promised tariffs on European nations, announcing he had formed a "framework for a potential deal" regarding the island's status. While the exact contours are still in flux, the potential agreement includes:

• Stationing U.S. forces at bases in Greenland.
• Expanded European efforts to boost security around the Arctic.
• A U.S. "right of first refusal" on investments in Greenland’s mineral resources—a veto intended to prevent Russia and China from tapping the island’s wealth.

White House press secretary Karoline Leavitt stated that if the deal succeeds, the United States will achieve its strategic goals in the region "at very little cost, forever".

A Stark Shift in Tone The move represented a major pivot for Trump, who just days earlier had refused to rule out using military force to secure ownership of the territory. At Davos, he de-escalated his rhetoric, stating, "I don’t have to use force... I won’t use force".

Despite this de-escalation, the President continued to voice grievances, suggesting NATO members have an obligation to support the acquisition because of America's central role in the alliance. He also rebuked Denmark as "ungrateful," claimed Switzerland would not exist without U.S. support, and mocked French President Emmanuel Macron for wearing aviator sunglasses at the event.

Battered Relations and Relief While Danish Foreign Minister Lars Løkke Rasmussen welcomed the news, noting the day ended on a "better note than it began," trans-Atlantic relations remain strained. Trump has agreed to hold off on planned 10 per cent tariffs—which were set to increase to 25 per cent in June—to allow a team led by Vice President JD Vance, Marco Rubio, and Steve Witkoff to negotiate the Greenland deal.

EU leaders are scheduled to meet in Brussels to assess the state of their relations with Washington, as many remain wary of another sudden change of mind from the U.S. President. One EU diplomat noted that the episode has "badly shaken confidence" and that there is "no coming back to what it was".

Based on the sources provided, here is a reproduction of the article regarding the need for India to re-evaluate its foreign exchange reserves strategy:

Why India Needs to Rethink Its War Chest

India entered 2026 with $686 billion in foreign exchange (forex) reserves, a figure often cited as proof of the nation's external invulnerability. This is a significant evolution from the 1991 crisis, when reserves plummeted to barely $1 billion, forcing the Reserve Bank of India (RBI) to pledge gold to the Bank of England. Today, India consistently ranks among the top five countries globally for forex reserves.

Challenges in Reserve Momentum Despite the high total, maintaining the momentum of reserve growth has become difficult. In the last 26 years, the annual change in reserves has been negative only six times; notably, three of those instances occurred within the last four years. The RBI currently finds itself walking a tightrope between managing currency volatility and accumulating reserves when possible as the rupee continues to weaken.

Meeting Adequacy Benchmarks By traditional metrics, India’s reserves remain strong:

• Import Cover: At the end of 2025, reserves could pay for 11 months of imports, well above the recommended three-month norm.
• Short-term Debt Ratio: Reserves cover short-term debt obligations by 225%, far exceeding the 100% benchmark.
• Broad Money Ratio: The ratio remains above the 20% benchmark required to meet potential domestic demand for foreign assets.

The FDI Drain: A Silent Threat While the adequacy numbers are positive, the pattern of reserve accumulation has changed. Historically, reserves grew when foreign capital inflows were strong. However, a "worrying phenomenon" has emerged:

1. FDI Repatriation: Gross inflows are stable, but repatriation (money leaving the country) jumped from approximately $18 billion pre-pandemic to $51 billion in 2024-25.
2. Outward FDI: Indian entities are investing more abroad. Outward-bound FDI doubled from $13 billion in 2019-20 to $28 billion in 2024-25, often flowing to tax havens like Singapore, Mauritius, and the UAE.

Unlike China or Japan, which built reserves through trade surpluses, India's reserves are largely "lent" by foreigners through capital flows rather than "earned". This makes India vulnerable to shifts in market sentiment; if investors exit, it puts pressure on the rupee, forcing the RBI to draw down reserves to stabilize the currency, which can create a destabilizing cycle.

Strategic Recommendations The sources suggest that India must move away from the assumption that reserves will grow organically. To plug the "leak," the following strategies are proposed:

• Union Budget Initiatives: Use the upcoming budget to announce FDI-friendly measures and remove hurdles to doing business.
• Customs Reform: Rationalize customs rules—similar to the GST overhaul—to reduce duty slabs and remove duty inversion.
• Efficiency: Implement a single-window clearance system with time-bound approvals for large projects to compete with neighbors like Vietnam and Indonesia.
• Monetary Easing: The RBI has already taken steps by cutting the policy repo rate by 1.25 percentage points and reducing the cash reserve ratio to lower the cost of capital.

Ultimately, while India has built a substantial war chest, the focus must now shift from merely holding assets to securing the sources of reserve accretion to ensure long-term stability in a challenging international environment.

Based on the sources provided, here is a reproduction of the article concerning strategies for building an education fund in a high-inflation environment:

Here’s How to Build an Education Fund in a High-Inflation Economy

As education costs rise significantly faster than general inflation, many parents are beginning to plan early for their children’s higher studies. While the Consumer Price Index (CPI) inflation typically sits around 4–6%, education inflation in India is running at 10–12% annually. This surge is driven by a demand-supply imbalance, with limited seats in high-quality institutions coupled with growing aspirational demand.

Estimating Future Costs

The sources suggest that the first step is accurate estimation. To find the future cost of a degree, parents should take the current cost (e.g., ₹20 lakh for an engineering degree today) and apply a 10–12% annual inflation rate for the years remaining until college. For a child currently aged five, that ₹20 lakh degree will cost approximately ₹70 lakh by the time they turn 18.

Choosing the Right Product Mix

Experts emphasize that education planning works best when different financial products are used for specific roles:

• Equity Mutual Funds: These serve as the primary "growth engine" of the portfolio. Their ability to beat inflation over 10–15 years is considered unmatched by traditional instruments.
• Sukanya Samriddhi Scheme (SSY): For parents of a girl child, this is a highly tax-efficient component that offers assured returns.
• NPS Vatsalya: This allows parents to open a National Pension System account for a minor to fund long-term goals like education, potentially outperforming fixed-return schemes.
• Insurance: The "golden rule" is to use pure term plans to protect the funding goal if a parent is no longer around, while keeping actual investments separate in mutual funds.

A Guided Timeline for Asset Allocation

The sources provide a structured guide for how allocation should evolve as the child approaches college age:

• 15+ Years to College: Allocate 70–80% to equity mutual funds (large-cap or flexi-cap) via SIPs to ride out volatility and compound growth. The balance can be kept in PPF or SSY.
• 10 Years to College: Gradually reduce equity exposure to 60%, moving 40% into debt or hybrid funds. This is a good time to start using target-maturity funds.
• 5 Years to College: Decisively shift toward safety by reducing equity to 30–40% and increasing debt mutual funds and bank FDs.
• 2 Years Before College: Move the full expected fees into liquid or ultra-short-term debt funds. This protects the principal and ensures fees can be paid regardless of market movements at the last moment.

The Importance of Regular Review

Financial planners recommend reassessing the plan every 2–5 years. This allows parents to make incremental tweaks based on the child’s evolving age, changing educational goals, and shifts in the market cycle. As one expert noted, the goal is to ensure that money does not become a constraint when critical decisions about a child's future must be made.

Based on the sources provided, here is a reproduction of the article regarding the structural challenges and potential solutions for inequality in India:

India Needs Long-Term Solutions to Address Its Inequality Problem

The G-20 presidency of South Africa concluded last November with the release of a significant report on global inequality. Authored by a committee of independent experts chaired by Nobel laureate Joseph Stiglitz, the report called for a coordinated global effort to reduce inequality and suggested the creation of an international panel on inequality similar to the one for climate change.

A Global and Local Crisis

Inequality is no longer a phenomenon restricted to the Global South; it is a rising concern for governments worldwide as it fuels discontent and youth unrest. Recent instances of violence in India’s neighborhood, such as in Nepal and Bangladesh, serve as a reminder of the anger among youth against a status-quoist approach by governments.

In India, while few protests arise specifically against "inequality," it is an underlying element in most social friction. Demands for reservations, farmer agitations for remunerative prices, and protests for the rights of women and marginalized castes all reflect unequal underlying conditions where the privileged continue to bask in their privileges while others are denied basic rights.

The Role of the State

Every process of economic growth inherently creates winners and losers, making the role of the state critical in providing a level playing field. While India’s Constitution guarantees affirmative action through reservation policies, it remains relatively silent on the state's role in regulating the excessive concentration of wealth or income.

Currently, governments at both the Centre and State levels have used redistribution as a primary tool to combat this gap. The recent surge in cash transfers to women and youth is a direct acknowledgement of growing marginalization and the need to redistribute income, even if it has resulted in political competition over the "generosity" of these transfers.

The "Freebie" and Fiscal Dilemma

Experts warn that redistributive transfers, while helpful, come at a significant fiscal cost. In some cases, the pressure of these transfers has forced governments to reduce spending on essential services such as health, education, and nutrition. This is viewed as counterproductive, as it may lead to rising inequality in access to critical services.

Furthermore, for fiscal policy to be effective, taxation must be progressive. Unfortunately, the last few Union budgets have included large tax giveaways to the middle class and corporations—an approach that the sources suggest has failed to deliver economic growth while making it harder to reduce income inequality.

A Call for Market Intervention

The sources argue that redistributive transfers are an "easy way" for governments to respond to inequality because they yield tangible political dividends in the short run. However, they are no substitute for core measures required to fix the problem.

For a long-term solution, India must move beyond temporary relief and intervene strongly in the labour and capital markets to fix the distortions that widen the gap in the first place. Substantive efforts are needed to curb unfair market practices and restructure the environment to ensure all citizens can participate as equals in the workforce.

The article was authored by Himanshu, Associate Professor at Jawaharlal Nehru University.

Based on the sources provided, here is a reproduction of the article regarding the structural and social obstacles to reversing China's population crisis:

Sisyphean Challenge: Can China Reverse Its Demographic Decline?

China recently announced that births in 2025 plunged to 7.92 million, down significantly from 9.54 million the previous year. This figure represents almost half of the 14.33 million births projected when the one-child policy was repealed in 2016. In fact, China’s current birth level is comparable to that of 1738 CE, a period when the nation's total population was only about 150 million. Although authorities introduced new pro-natalist policies last year, experts describe the decline as a "boulder rolling down a hill" that will be nearly impossible to push back up quickly.

The Marriage Market Mismatch

A primary driver of this decline is a profound mismatch in the marriage market:

• Shrinking Base: The number of women aged 20–34, who account for 85 per cent of Chinese births, is expected to drop from 105 million in 2025 to just 58 million by 2050.
• Gender and Education Gaps: Decades of sex-selective abortion have created a shortage of women, while a "leftover women" phenomenon has emerged because female students now outnumber males in undergraduate admissions (a 59:100 male-to-female ratio in 2022). This leads to more men unable to find wives and more highly educated women remaining unmarried due to a preference for even more highly educated husbands.
• Rising Marriage Age: The average age at first marriage for men rose from 26 in 2010 to 29 in 2020; for women, it rose from 24 to 28. Furthermore, the share of unmarried women aged 25–29 surged from 9 per cent in 2000 to 43 per cent in 2023.

Density, Housing, and Economic Barriers

The sources highlight an "ecological law" where high population density inhibits growth:

• Extreme Urban Density: China’s average urban density is 8,900 people per sq km, with many districts in top-tier cities reaching 20,000–30,000 per sq km. This is far higher than Tokyo (6,000) or urban areas in the U.S. (800–2,000).
• Housing Costs: High density drives up housing prices, and China’s price-to-income ratio far exceeds that of Japan. Lowering these costs would require a massive demolition and rebuilding of cities, a move that could trigger an economic collapse.
• Income Constraints: Household disposable income in mainland China accounts for only 43 per cent of GDP, making child-rearing exceptionally difficult.

Comparative Failures and Policy Risks

China’s current efforts are seen as a scaled-down version of Japan’s ineffective response to demographic decline. Japan attempted to fund childbirth subsidies by raising consumption taxes, which ultimately burdened households and reduced disposable income. Similarly, Taiwan’s fertility rate fell to 0.72 in 2025, partly due to declining household income.

The sources suggest that China's best option—raising the household income share—is unlikely to be pursued by Beijing because it could weaken the state's finances and power, potentially reshaping the political landscape. Additionally, pro-growth policies such as the "new quality productive forces" may inadvertently lower fertility further by prolonging education and delaying childbearing. Experts warn that collectivist social benefits could weaken family structures and that fertility will only rise if China addresses its weak socioeconomic links without violating human rights.

The article was authored by Yi Fuxian, a senior scientist at the University of Wisconsin, Madison.

Investing in both US and India

 The video transcript features a discussion between Saurabh Mukherjea (CIO of Marcellus Investment Managers) and Nandita Rajhansa (Economist) regarding the strategic necessity of diversifying investments between the Indian and US stock markets.

The following is a summary of the key points discussed in the sources:

The Problem: Constant Rupee Depreciation

• Historical Trend: Since 1991, the Indian Rupee (INR) has consistently lost approximately 40% of its value against the US Dollar (USD) every decade.
• Economic Rationale: This happens because inflation in fast-growing developing economies like India (affecting costs for healthcare, education, and transport) is significantly higher than in richer countries like the US. To keep exports competitive, the currency naturally depreciates.
• Impact on Wealth: A typical Indian family faces heavy taxation (Income Tax and GST) followed by currency depreciation. Consequently, out of every $100 earned, a family may only have $30 left in real terms to fund retirement or education after these factors take their toll.

The Solution: The 50-50 Investment Strategy

• Double-Digit Returns: India and the US are the only two major global markets that have consistently delivered double-digit dollar returns over 10, 20, and 30-year horizons.
• Low Correlation: The correlation between the two markets is low, meaning they do not always move in tandem; when one market underperforms, the other often holds up well.
• The "Markowitz" Effect: By maintaining a 50-50 split and rebalancing annually, investors can achieve higher returns with lower volatility. For example, while both the Nifty 50 and S&P 500 gave roughly 14% returns over 20 years in rupee terms, a rebalanced 50-50 portfolio would have yielded 15% because rebalancing forces you to "buy low" in the cheaper market and "sell high" in the expensive one.

Regulatory Reforms and Accessibility

Prior to 2023, global investing was largely reserved for the elite due to high capital requirements and "brutal" taxes. However, the Indian government introduced four major reforms to democratize access:

1. Gift City (IFSC): Created a legal framework (International Financial Services Centre Act, 2020) that allows Indians to manage global investments from within India.
2. Tax Harmonization: In July 2024, the Long-Term Capital Gains Tax (LTCGT) for foreign investing was reduced from 20% to 12%, matching domestic investment rates.
3. Liberalized Remittance Scheme (LRS) Easing: The RBI simplified the process for individuals to use LRS funds to invest or spend abroad (e.g., for foreign education or holidays) via foreign bank accounts.
4. Overseas Portfolio Investment (OPI): Since August 2022, Indian corporates can invest up to 50% of their net worth abroad through Gift City.

Practical Implementation

• US Dominance: The US currently accounts for 70% of the world's market capitalization and 55% of global profits, largely driven by its dominance in technology (AI, Cloud, and software).
• Investment Options: Investors can access these markets through vehicles like the Global Compounders Fund based in Gift City or by investing in benchmarks like the Nasdaq, which has delivered nearly 20% returns in rupee terms over the last decade.
• Conclusion: The speakers emphasize that while it is important to maintain a presence in the home market (India), splitting investments 50-50 with the US market is the most effective way to combat rupee depreciation and build long-term wealth for global aspirations.

Newspaper Summary 220126

 Rules-based world order has ended: Canadian PM.

In a major address at the World Economic Forum in Davos, Canadian Prime Minister Mark Carney argued that the world’s middle powers must band together to resist coercion from aggressive superpowers. Carney stated that recent events have shown the “rules-based international order” is effectively dead, meaning Canada and other nations must create new alliances to oppose the pressure tactics and intimidation of great powers. He urged world leaders to "stop invoking the ‘rules-based international order’ as though it still functions as advertised," labeling the current system as a period where the most powerful pursue interests by using economic integration as a weapon of coercion.

Carney highlighted several key points regarding this new geopolitical landscape:

• Arctic Tensions: Canada stands firmly behind Greenland and Denmark, asserting they have a “unique right to determine Greenland’s future” despite U.S. claims that it must own the territory for security reasons.
• NATO Commitment: Despite the widening trans-Atlantic rift, Carney emphasized that Canada's commitment to NATO’s Article 5 remains “unwavering” as it works to secure the alliance’s northern and western flanks.
• Naming Reality: Citing Czech dissident Václav Havel, Carney called on leaders and companies to start "naming reality" rather than sustaining a system built on mutual lies.
• Strategic Advantages: He pointed to Canada’s move to dramatically hike defence spending and develop new trade infrastructure, leveraging its large reserves of conventional energy and critical minerals.

The Prime Minister concluded that such alliances among mid-sized countries are the last line of defence in an era where dominant states use economic and military might to impose their will. He asserted that Canada possesses the capital, talent, and fiscal capacity to act decisively in this new order.

Wall Street lenders push back on Trump’s cost-of-living proposals

Major Wall Street banks are pushing back on President Donald Trump’s proposals to lower the U.S. cost of living ahead of the upcoming mid-term elections. While the banking industry is attempting to help shape these policies through dialogue with administration officials, they have voiced significant doubts about the effectiveness of measures such as capping credit card interest rates, a proposal that has already negatively impacted major bank shares.

Key details regarding the standoff between Wall Street and the White House include:

• Proposed Alternatives: Rather than interest rate caps, banks are suggesting alternatives such as encouraging more retirement savings and facilitating the earlier transfer of wealth from parents to children. However, sources indicate that none of these ideas are likely to have a substantial impact on affordability, which has become a "hot-button issue" for voters.
• Housing and Retirement Funds: Trump has proposed allowing investors to use a portion of their retirement funds to make down payments on houses. Investors have questioned this approach, suggesting that the primary driver of high costs is the supply of houses rather than a lack of access to down payment capital.
• CEO Reactions: Citigroup CEO Jane Fraser publicly stated that she does not expect Congress to approve caps on credit card interest rates. While acknowledging that the President is right to focus on affordability, she warned that capping rates would not be good for the U.S. economy.
• Economic Pressures: Although inflation has decreased from its post-pandemic peak, the costs of housing and groceries remain high, threatening Republican prospects in the mid-terms. Trump is seeking dramatic reductions in borrowing costs so Americans can more easily afford homes, cars, and other large purchases.

On the sidelines of the World Economic Forum in Davos, banking executives have expressed a desire to find common ground, with one top executive noting, "We’re saying, ‘what are you trying to achieve? Let’s figure out ways to help you’". Despite this, lenders are waiting for further policy clarity before taking any definitive actions.

Trump says ready to pick the next Federal Reserve chair.

Speaking at the World Economic Forum in Davos, Switzerland, US President Donald Trump stated that he has interviewed several strong candidates to succeed current Fed Chair Jerome Powell. Trump noted that an announcement regarding the new chairman will be coming in the "not too distant future". While he praised the interviewees as "great" individuals who could do a "fantastic job," he expressed frustration that nominees often "change once they take office".

Key details regarding the selection process and the candidates include:

• The Final Four: Treasury Secretary Scott Bessent confirmed that the President has whittled the field down to four leading candidates: Trump Economic Advisor Kevin Hassett, Fed Governor Christopher Waller, former Fed Governor Kevin Warsh, and BlackRock’s chief bond investment manager Rick Rieder.
• Criticism of Jerome Powell: Trump used the platform to renew his criticism of Powell, accusing him of not lowering interest rates fast enough. Both Trump and Bessent have repeatedly taken aim at Powell’s handling of monetary policy.
• Legal Pressures: The selection comes at a time of high tension between the administration and the central bank; the Justice Department recently issued a subpoena to Powell tied to the renovation of the Fed’s headquarters.
• Wider Fed Conflict: While Trump looks to name a new chair, the U.S. Supreme Court recently expressed skepticism regarding his bid to fire Fed governor Lisa Cook. The justices seemed inclined to keep Cook in her job, which would potentially hinder Trump’s attempts to wrest total control over the nation's central bank.

Trump’s primary economic objective is to secure dramatic reductions in borrowing costs. He wants the government to borrow more cheaply and seeks lower costs for Americans purchasing new homes and cars, as high costs have negatively impacted voter sentiment regarding his economic management. Trump has remained dismissive of concerns that cutting rates too quickly could trigger higher inflation.

Rapido’s revenue crosses ₹1,000 crore in FY25.

The Bengaluru-based ride-hailing platform reported strong topline growth in FY25, with revenue reaching ₹1,002.87 crore. This represents a 44.2% jump from the ₹695.26 crore recorded in the previous year. Alongside this revenue surge, the company successfully narrowed its net loss by 30.3%, bringing it down to ₹258.44 crore from ₹370.72 crore in FY24. Its EBITDA loss also improved significantly by 30.6% to ₹252.83 crore, reflecting tighter cost controls and improved unit economics.

Key details regarding Rapido’s financial performance and operations include:

• Revenue Shifts: Revenue from subscription services surged to ₹275 crore last fiscal, up from just ₹19 crore in FY24, driven by the expansion of three- and four-wheeler services. However, revenue from platform services, primarily commissions from bike taxis, fell to ₹347 crore from ₹505 crore.
• Operational Expenses: Employee expenses increased by 20% to ₹207.01 crore as the firm continued to invest in talent and product development to support new business lines.
• Swiggy Exit: In September 2025, Swiggy exited its 12% stake in Rapido, selling it to existing investors Prosus and WestBridge Capital for a total consideration of ₹2,399 crore.
• Expansion into Food Delivery: Rapido has moved into the food delivery segment with its own app, Ownly. This service aims to differentiate itself from competitors like Zomato and Swiggy by pricing meals at offline-equivalent rates, allowing restaurants to avoid high platform commissions.

The company's performance indicates an improving operating leverage as it scales its multi-modal transport and delivery offerings. While some sources noted a revenue figure of ₹934 crore in filings, the data from market intelligence platforms confirmed the milestone of crossing the ₹1,000 crore mark.

Adani Group outlines $66 billion investment blueprint for Maharashtra

At the 56th World Economic Forum Annual Meeting in Davos, the Adani Group unveiled a massive $66 billion long-term investment roadmap for the state of Maharashtra. This proposal signals a decisive phase in the state’s infrastructure-led growth, shifting the conglomerate’s focus from mere asset creation to building integrated, future-ready ecosystems.

Key details of the investment blueprint include:

• Strategic Sectors: The portfolio spans aviation, clean energy, urban redevelopment, digital infrastructure, and advanced manufacturing.
• Dharavi Redevelopment: A cornerstone project involves transforming Dharavi, Asia’s largest informal settlement, into a planned, inclusive, and economically vibrant district.
• Digital Infrastructure: The group plans to develop green integrated data centre parks with a combined capacity of 3,000 MW.
• Advanced Manufacturing and Energy: The roadmap includes semiconductor and display fabrication facilities, as well as coal gasification projects aligned with state frameworks for private participation.
• Infrastructure Boost: Other projects include an integrated arena district situated near the airport.

Pranav Adani, Director of Adani Enterprises, noted that these plans are designed to span a 7–10 year horizon. The investments emphasize scale, sustainability, and technology-led inclusion, aligning private capital with India’s broader global economic ambitions.

Maharashtra Chief Minister Devendra Fadnavis welcomed the proposal, stating that the state would support any investor bringing such significant capital because "without investment, jobs will not be created for our youth".

Merits of user tax on infra services By Madan Sabnavis, Chief Economist, Bank of Baroda

Raising revenue has consistently been a challenge for the government, as high direct tax rates can impede consumer spending power and corporate tax rates have been trending downward for over a decade. Furthermore, indirect taxes like the Goods and Services Tax (GST) are outside the immediate ambit of the Budget, and the GST Council recently lowered various rates in September. To address the growing demand from industry and economists for increased infrastructure spending, a new system of taxation based on the "multiple of 10" principle could be introduced as a special charge on infrastructure-related goods and services.

Key arguments for this user-based tax include:

• Price Inelasticity of Demand: Historical trends show that cost increases seldom limit the use of services such as telecom, travel, or the purchase of vehicles. Because the contemplated tax increases are nominal, the demand for these services is expected to remain unaffected.
• Low Consumer Burden:
  • Vehicles: An average ₹1,000 tax on a two-wheeler costing ₹75,000 represents just 1.3% of the price. Since vehicles are typically purchased once every 4–5 years, such a charge is not considered onerous.
  • Telecom: With an average annual revenue per user (ARPU) of ₹2,100, a ₹10 annual tax would be an increase of less than 0.5% and would largely go unnoticed by consumers.
  • Travel: For railways, a ₹10 per ticket charge (which could be graded from ₹1 to ₹100 based on travel class) would average a 3.8% increase. For airlines, a ₹100 tax on an average ticket price of ₹7,500 would result in a mere 1.3% increase.
• Minimal Inflationary Impact: The components targeted for this tax have relatively low weights in the Consumer Price Index (CPI). Mobile bills carry the highest weight at 1.86%, while others, such as two-wheelers (0.79%), cars (0.48%), and rail fares (0.18%), are significantly lower.
• Significant Revenue Generation: It is estimated that these nominal charges could generate approximately ₹20,000 crore for the government.

This approach is particularly relevant in FY26, a year characterized by unusually low inflation that has resulted in lower-than-expected nominal GDP. In such a business cycle, the government needs to explore alternative revenue-raising options that do not significantly affect the consumption of goods or services. These charges could be periodically revised to ensure stable and sustainable revenue flows for infrastructure development.

An ASEAN answer for India’s data centre push By Anuj Gupta and Karishma Maniar Shah

While India possesses strong fundamentals for the data centre industry—including a billion internet users, a deep IT talent pool, and a rapidly digitising economy—it is currently being outpaced by Malaysia, which is expected to surpass India in data centre capacity by 2029. Between 2021 and 2024, Malaysia attracted an estimated $43 billion in data centre investments, with Johor emerging as a global AI-infrastructure hotspot by absorbing spillover demand from Singapore.

The Malaysian Model of Success Malaysia’s rise is attributed to a relentless focus on overcoming constraints that often derail such investments: certainty, regulatory clarity, and speed. Key factors include:

• Speed-to-Market: Power approvals, which previously took 3–4 years, have been reduced to approximately 12 months under Tenaga Nasional Berhad.
• Policy Coordination: In 2025, Malaysia formalised a multi-agency Data Centre Task Force to harmonise approvals and plan infrastructure through a single interface for investors.
• Operational Sustainability: The National Energy Transition Roadmap targets 31% renewable energy by 2025 and 70% by 2050, moving sustainability from voluntary pledges to enforceable requirements.
• Data Governance: 2024 amendments to Malaysia's Personal Data Protection Act aligned the nation with global norms on cross-border data flows, reinforcing investor confidence.

India’s Paradox: Intent vs. Execution India’s position is described as paradoxical; while it hosts Asia’s second-largest capacity (projected to reach 4,500 MW by 2030), execution remains a major constraint.

• The Power Bottleneck: Data centres are projected to consume 3% of India's power by 2030. Developers face significant hurdles in securing long-term green power with stable pricing due to grid congestion and stressed state utilities.
• Regulatory Delays: Land and environmental clearances in India routinely take 18–36 months due to overlapping processes and a lack of enforceable timelines.
• Competitive Federalism: Unlike Malaysia’s coordinated national strategy, India’s growth is fragmented by state-level competition. While leaders like Maharashtra and Tamil Nadu face saturation, states like Telangana and Andhra Pradesh are now appealing to hyperscalers with cheaper land and streamlined processes.

Lessons for India The Malaysian experience offers a blunt lesson: success requires more than market size or subsidies; it demands prioritisation, sequencing, and stability. To lead the data centre boom, India must:

1. Ensure power certainty through early-stage grid access and firm renewable energy commitments.
2. Adopt tiered sustainability standards, including measurable Power and Water Usage Effectiveness metrics.
3. Transition from a fragmented approach to one defined by coordinated execution, as capital and hyperscalers are increasingly mobile and impatient.

Gupta and Maniar Shah are the India Managing Director and Director, respectively, at BowerGroupAsia.

China’s growth divide is getting wider Bloomberg News

China’s consumer-sensitive sectors are lagging further behind growth in industries linked to manufacturing and technology, illustrating a sharp divide in an economy increasingly exposed to foreign demand. While the sector spanning software and information technology increased over 11 per cent last year—the largest gain among all industries tracked by the National Bureau of Statistics—expansion in hotels, catering, and retail trade softened to the weakest levels of the post-pandemic era.

The outcome is a skewed economy where emerging new industries are struggling to compensate for the fragility of older growth drivers. Key details regarding this widening divide include:

• Manufacturing vs. Construction: Manufacturing picked up to a four-year high of 6.1 per cent, shored up by surprisingly strong exports that helped factories manage domestic deflation. In contrast, construction was the only industry to suffer a drop in 2025.
• Real Estate Stagnation: The property sector recorded a negligible gain of 0.2 per cent following years of deep contractions.
• Export Primacy: Booming exports helped the economy meet President Xi Jinping’s annual growth target of approximately 5 per cent. However, the economy remains vulnerable due to a lack of strong domestic demand and uncertainty over global trade.
• Expert Analysis: Jacqueline Rong, chief China economist at BNP Paribas SA, stated that gains in emerging industries have not been sufficient to offset the downturn in cyclical sectors. She noted that downward pressure will persist unless real estate stabilizes, leading to expectations that overall economic growth will moderate.

Beijing appears unlikely to implement a massive stimulus or countenance a major appreciation of the yuan, as rate cuts tend to weigh on the currency. Economists anticipate only incremental easing through the remainder of the year as the "export juggernaut" maintains its primacy.

Subdued growth in smartphone market to continue in 2026 on rising memory costs.

The weak growth seen in the Indian smartphone market during 2025 is expected to persist through 2026. Analysts predict the market will slow further as shortages of specific memory storage components drive up prices and consumer upgrade cycles continue to lengthen. As 2026 begins with rising memory costs that show no sign of abating, average selling prices (ASPs) are expected to climb, which will likely decrease volumes in the lower-to-mid segment (sub-₹15,000) while increasing market premiumisation.

Key details regarding market performance and forecasts include:

• Shipment Trends: Global tech research firm Omdia reported that India’s smartphone market shipped 154.2 million units in 2025, representing a 1% annual decline. For 2026, Omdia expects a mid-single-digit decline as higher prices and limited incremental value in new models delay consumer upgrades. Counterpoint Research similarly anticipates a 2% decline in 2026, noting the market has been stuck at approximately 152 million units for four consecutive years.
• Rising Input Costs: The price of 64GB RDIMM (registered dual in-line memory module) storage, which was approximately $450 in Q4 2025, is projected to reach $700 by March 2026. Due to these costs and dollar movements, ASPs for Android smartphones are expected to rise 15-18% in 2026, a significant jump compared to the 10% increase seen in 2025.
• Barriers to Growth: Several factors are hindering new smartphone sales, including a lack of feature phone upgrades and the growth of the secondary/refurbished market. Additionally, users are now holding on to their existing smartphones for longer periods.
• Market Stability Requirements: Sanyam Chaurasia, Principal Analyst at Omdia, noted that with cautious consumer demand, retail execution—including inventory support, localized sell-through programs, and promoter strength—will be essential for maintaining stability.

While shipments remained flat or marginally down in 2025, IDC suggests that the decline in 2026 could potentially be even higher.

Indian space-tech firms win big overseas as credibility soars

Exports are rapidly emerging as a key growth engine for Indian space-tech start-ups, signaling a decisive shift from an ecosystem once primarily driven by domestic demand. As ISRO-led credibility deepens, cost competitiveness improves, and flight heritage builds, these start-ups are increasingly winning international customers and transitioning from national missions to global markets.

Several companies are leading this international expansion:

• Manastu Space: This start-up now derives approximately 40 per cent of its revenue from overseas markets, with significant traction in the US, Europe, Japan, Singapore, and Australia. While it currently routes exports through direct contracts, it is in discussions to forge OEM partnerships to serve government defense orders.
• Dhruva Space: CEO Sanjay Nekkanti aims to position the firm as a strategic supplier of critical systems to tier-1 OEMs globally, reporting active engagement with customers in France, Austria, Australia, and the Middle East. The company provides space-grade solar panels and satellite subsystems, and expects international business to eventually account for 40 per cent of its order backlog,.
• Digantara Industries: CEO Anirudh Sharma notes that Indian start-ups are increasingly recognized as credible global suppliers, with international customers engaging them as long-term strategic partners to co-develop mission-critical systems for defense and intelligence.
• PierSight: This firm is seeing overseas demand driven by differentiated capabilities, specifically its SAR+AIS-based persistent ocean surveillance, which fills a global gap.

Beyond topline growth, having a balanced mix of domestic and international customers allows start-ups to command stronger valuation premiums. Experts note that companies like Pixxel, which serve both markets, benefit from order books that reflect both market and technical de-risking. This transition is described as a transformational moment for both the industry and the country as a whole.

The few bright spots for India’s slowing IT sector

The $285-billion Indian IT services industry, which employs approximately 5.8 million people, is currently navigating a period of "glacial growth" driven by macroeconomic headwinds, cautious client spending, and prolonged decision-making cycles. Despite these challenges, India remains central to delivering technology services at scale, with several key areas and strategies emerging as pockets of resilience.

Key bright spots and trends identified in the sector include:

• Areas of Steady Demand: While discretionary projects are often deferred, there is consistent demand for cloud migration, cybersecurity, and data analytics as enterprises continue to modernize digital infrastructure.
• Sector-Specific Traction: Digital transformation programs within the healthcare, BFSI (Banking, Financial Services, and Insurance), and manufacturing sectors have shown selective traction.
• Large Deal Wins: Significant contract wins remain a highlight; Infosys reported a Q3 total contract value of $4.85 billion, and TCS maintained a strong order book of $9.3 billion. Additionally, Tech Mahindra recently bagged a five-year contract worth over $500 million from Spanish telecom major Telefónica O2.
• The AI Pivot: Industry leaders believe a shift toward AI-led solutions will help the sector regain its momentum. India's deep talent pool is considered a critical asset, though the nature of work is changing: many entry-level jobs are being automated, shifting the human focus to overseeing mission-critical software.
• Productivity through Automation: Automated coding platforms, such as Anthropic’s Claude Cowork, are enhancing productivity by allowing engineers to focus on higher-value design and innovation rather than repetitive coding.
• The Rise of GCCs: Global Capability Centres (GCCs) have become a stand-out growth driver in an otherwise gloomy phase. India now hosts over 2,000 GCCs employing nearly 2 million people. A recent example is L’Oréal SA’s plan to invest ₹3,500 crore in a new hub in Hyderabad, joining other multinationals like McDonald’s and Heineken that utilize India for critical functions like R&D and analytics.

While the sector is not yet "out of the woods," these specialized areas and the continued influx of global centers suggest a structural shift toward more premium, AI-enabled delivery models.

Power bills may rise in new tariff regime.

Electricity bills for consumers across India could begin rising automatically every year starting next fiscal, regardless of political reluctance at the state level. The Union Power Ministry has proposed index-linked tariff revisions in its draft National Electricity Policy (NEP) 2026, released nearly two decades after the original policy was issued in 2005. Under this framework, tariffs will automatically reflect costs if State Electricity Regulatory Commissions (SERCs) fail to issue annual tariff orders before the start of each financial year.

Key details of the proposed tariff regime and its impact include:

• Automatic Monthly Adjustments: The NEP stipulates that any increase in power purchase costs incurred by distribution companies (discoms) must be automatically passed on to consumers on a monthly basis. To manage these cost fluctuations, the ministry has recommended that discoms establish stabilization funds, which could lead to even higher monthly bills for users.
• Reduction of Cross-Subsidies: The policy proposes a progressive reduction of cross-subsidies, ensuring that no category of tariff falls below 50% of the average cost of supply. Currently, the average electricity supply cost in India is approximately ₹6.82 per unit, while households pay an average of ₹6.47 per unit and the industry pays significantly more to subsidize residential and agricultural categories.
• Elimination of Regulatory Assets: State commissions must ensure that tariffs fully reflect actual service costs without creating "regulatory assets"—a practice where regulators accept expenditures but defer their inclusion in current tariffs. These deferred costs currently burden the Indian power sector with approximately ₹3 trillion.
• Impact on Households: Experts anticipate that fixed charges paid by household consumers will rise significantly under the new mandate for cost-reflective pricing.
• Industrial Competitiveness: Power Secretary Pankaj Agarwal noted that Indian industrial tariffs (roughly $105 per MWh) are much higher than those in Thailand, the US, and China ($60-80 per MWh). The policy suggests exempting the manufacturing sector, metro rail, and Indian Railways from certain surcharges to keep them globally competitive.
• Service Standards and Compensation: For the first time, the policy aims to establish a consumer-centric framework with a 24x7 supply mandate. Licensees will be required to publicly share service quality data and pay adequate compensation to consumers for failure to meet performance standards or for non-compliance.
• Infrastructure and Future Goals: The NEP targets increasing per capita electricity consumption to 2,000 kWh by 2030 and over 4,000 kWh by 2047, up from 1,460 kWh in FY25. To achieve this, India will require an estimated investment of ₹200 lakh crore by 2047 for generation, transmission, and distribution.

The draft policy is intended to address the persistent financial strain on discoms, which saw 15.04% of electricity supply turn into technical and commercial losses in FY25. By enforcing tariff discipline and market-based procurement, the government seeks to move the sector toward long-term financial viability and energy independence.

AI-led cyber threats expose deep security talent crunch

India is currently facing a severe shortage of cybersecurity engineers needed to protect critical infrastructure, including power grids, telecom networks, banking systems, and government frameworks. While the country has approximately 350,000 cybersecurity professionals, the actual demand is for one million engineers, according to data from staffing firms Adecco and Quess IT Staffing. This talent gap has remained persistent even as the pool of professionals grew from roughly 300,000 in 2023.

The scale of the threat is being driven by artificial intelligence, which has allowed attackers to become more sophisticated and automate their tactics. According to the Data Security Council of India’s 2025 report, detections of behaviour-based cyber threats in India jumped from 13 million in 2022 to 54 million by the end of 2024, a more than fourfold increase. Experts note that while basic triaging can be automated, higher-level threats require greater skills that are currently scarce in the workforce.

Key factors contributing to this crisis include:

• Reactive Defense: Cyber defense remains reactive while AI helps attackers automate and scale their efforts.
• Persistent Attacks: The use of AI-powered coding tools has made cyberattacks far more persistent.
• Skilling Dearth: Most available training consists of short-term certificates or workshops lasting only a few days, rather than deep degree programs required to certify high-level roles like Chief Information Security Officers (CISOs).
• Grassroots Training: There is a stated need for a "cyber cadre" where state-level training is provided at a grassroots level.

Despite the talent crunch, salaries remain highly competitive. A cybersecurity engineer with five years of experience earns an average of ₹20 lakh per year, while senior-level engineers with a decade of experience can command up to ₹60 lakh per year.

To address the supply gap, the government and private sector have launched several initiatives. Cert-In operates training programs, including an eight-week professional development course in partnership with BITS Pilani. Furthermore, Sisa Infosec partnered with Meity and Cert-In to launch an intensive workshop known as Certified Security Professional for Artificial Intelligence (CSPAI). However, industry leaders warn that the pace of skilling has not yet kept up with the rapid escalation of AI-led threats.

With $1 bn AI data centre bet, L&T takes on Indian giants

Larsen and Toubro Ltd (L&T) is placing a billion-dollar bet on data centres, banking on its unique ability to control costs by owning land, physical infrastructure, and servers. India’s largest engineering and construction firm believes this end-to-end ownership will allow it to offer some of the cheapest services in the market, even as demand for data centres soars due to the global push for artificial intelligence (AI).

Key details of L&T’s strategic expansion include:

• Capacity Targets: The group expects to scale its data centre capacity from the current 32MW to 200MW by 2030.
• Navi Mumbai Project: On Wednesday, L&T laid the groundstone for a new 40MW data centre in Navi Mumbai, Maharashtra. This project is part of a plan for over 200MW in capacity with a net capital outlay of ₹10,000 crore ($1.2 billion).
• Vyoma and Hardware: L&T recently renamed its cloud and data centre business as Vyoma. To support its hardware needs, the firm is leveraging its 21% stake in IT infra firm E2E Networks, which will be a primary contributor of servers.
• Conglomerate Competition: By maintaining tight in-house control over all stages of operations, L&T aims to gain a cost advantage over rivals such as the Adani, Reliance, and Tata groups. The firm will also leverage existing enterprise ties built by its tech outsourcing arms, LTI-Mindtree and L&T Technology Services.
• Comparative Outlays: While L&T’s current bet is significant, it appears conservative compared to peers; TCS has announced a 1GW data centre with a $6.5 billion outlay, Adani is partnering with Google on a $15-billion centre, and Reliance has unveiled details for an $11-billion, 1GW joint venture.

Prashant Jain, head of L&T’s corporate centre, noted that the firm possesses the "full stack" to be a digital infrastructure provider, emphasizing that clients are increasingly drawn to L&T’s sovereign platform offerings. L&T’s leadership believes that its engineering forte and integrated model will be the decisive factor in facing rivals in the rapidly expanding AI data centre segment.

10 critical milestones for India’s Reform Express

On December 30, Prime Minister Narendra Modi announced that "India has boarded the reform express," signaling a new generation of reforms designed to modernize institutions, simplify governance, and ensure long-term inclusive development. While 2025 was the most significant year for reforms since the 1991 liberalization—marked by a restructured GST, unified labour codes, and a revamped Income Tax Act—experts argue this is only the beginning of an arduous journey to escape the middle-income trap.

India currently enjoys a "goldilocks period" of high economic growth (8.2% in Q2 FY26) and low inflation (1.33% in December 2025). however, to sustain this momentum in an increasingly protectionist global environment, economists have identified 10 critical milestones for the reform agenda:

• Land Reforms: Current land transactions involve multiple authorities, opaque processes, and high stamp duty rates that vary by state. The Confederation of Indian Industry (CII) has suggested a GST Council-like structure to achieve political consensus and co-ordinate reforms across states to unlock rural development and manufacturing potential.
• Agricultural Reforms: Addressing primitive practices and poor market access is essential to revive productivity. Reforms must tackle misdirected subsidies that have become fiscally costly and market-distorting to ensure food security and alleviate rural distress.
• Labour Reforms: While the government has consolidated 29 central laws into four labour codes, they are not yet fully operational. The milestone involves finalizing and notifying rules at the state level to ensure the codes effectively expand social security and simplify compliance.
• Judicial Reforms: Inefficient dispute resolution and massive backlogs in courts cost India an estimated 0.28% in annual GDP growth. Milestone progress requires better infrastructure, more judges, and a stronger alternate dispute redressal system.
• Insolvency Law Reforms: While the Insolvency and Bankruptcy Code (IBC) has resolved ₹26 trillion in bad debts over nine years, it faces delays and high "haircuts" for lenders. The IBC Amendment Bill 2025 is a key milestone to address cross-border insolvency and process costs.
• Educational Reforms: Five years after the National Education Policy (NEP) 2020 was introduced, it has had only a marginal impact on the ground. The focus must shift to implementation in higher education to ensure India’s demographic dividend is not wasted.
• Healthcare Reforms: Public investment in healthcare remains low at 1.2% of GDP. A critical milestone is boosting this spending to 3%–5% to address the chronic shortage of nurses, doctors, and hospital beds.
• Deregulation: Tighter regulations "suffocate" industry. There is an urgent need for a continuous process of reducing regulations across all departments to lower compliance costs and make domestic manufacturing globally competitive.
• Fiscal Roadmap: The government needs to transition from powering growth through public spending to a sustainable debt model. A milestone objective is a clear roadmap to reduce national debt from 57% of GDP to less than 50% by March 2031.
• Trade Strategy: As the world turns insular, India must use Free Trade Agreements (FTAs) to open new markets. This includes incorporating sunset clauses or review mechanisms in trade deals to ensure they keep pace with technological and geopolitical shifts.

Experts warn that the "Reform Express" faces an uphill journey because many of these milestones—particularly land, agriculture, and education—require the active support of state governments in India’s federal structure. Success will depend on executing reforms as a continuous, perfectly sequenced process rather than in "fits and starts".

Newspaper Summary 210126

 

Centre’s non-tax revenue tops ₹77,000 cr on CPSEs’ dividend, stake sale, InvIT earnings

Despite sluggish tax collection, the Finance Ministry may find relief in robust returns from Central Public Sector Enterprises’ (CPSEs) dividends and asset monetisation. The government has already secured over ₹77,000 crore against its ₹1.16 lakh crore target, with the majority coming from dividends.

Energy Sector Top Contributors The Budget set a specific target of ₹69,000 crore from ‘CPSE Dividends’ and ₹47,000 crore via ‘Miscellaneous Capital Receipts’. To date, dividend collections have reached ₹49,600 crore, or 72 per cent of the Budget Estimate (BE). Officials are optimistic that total receipts will not only exceed the BE but will likely surpass the ₹70,000 crore mark, with the oil, power, and coal sectors remaining the primary contributors to the dividend pool.

Significant Policy Shift The government’s 2024 policy marks a major departure from the previous framework, which required CPSEs to pay the higher of 30 per cent of Profit After Tax (PAT) or 30 per cent of the government’s equity. The new guidelines pivot towards net worth as a key benchmark, requiring the higher of 30 per cent of PAT or 4 per cent of net worth. However, a consistent 30 per cent PAT floor is maintained for financial sector CPSEs such as NBFCs.

UTI Stake Sale and InvIT Earnings CPSE stake sales are now categorized under the head ‘Miscellaneous Capital Receipts’ rather than using the word ‘disinvestment’. Stake sales and remittances from the Specified Undertaking of the Unit Trust of India (SUUTI) contributed over ₹8,700 crore. Additionally, approximately ₹18,800 crore in InvIT earnings brought the total mop-up for this category to ₹27,600 crore, representing 59 per cent of the BE.

(Author: Shishir Sinha, New Delhi)

BRICS reality: China, followed by India, dominates CBDC race

India, acting as BRICS Chair this year, may propose an mBridge-like system utilizing central bank digital currencies (CBDCs) to settle cross-border trade as a means to bypass the dollar. Current data indicates that China and India are far ahead of their other BRICS peers regarding the innovation and adoption of these digital currencies.

Global Leadership and Scale China remains the global leader in terms of scale, with CBDC transactions exceeding $980 billion by 2024. This was supported by the mBridge system, which allows for real-time cross-border settlements between participating central banks, including those from the UAE, Thailand, Saudi Arabia, and Hong Kong.

India has established the world’s second-largest CBDC pilot, surpassing $111.8 million in transaction value by March 2025. The value of India’s e₹ transactions has seen rapid growth, increasing over four times year-on-year from $26 million in 2024 to $112 million in 2025.

The India Model vs. China There is a distinct difference in strategy between the two leaders:

• China’s "digital yuan" has primarily been driven by wholesale and institutional use cases.
• India’s "e₹" pilot is driven mainly by retail demand, utilizing the nation’s extensive digital payments ecosystem.

This retail-led adoption is considered crucial for scaling cross-border use later, as it builds a broad user base and daily transaction familiarity.

BRICS Preparedness Other BRICS nations trail significantly behind the two leaders. Brazil and South Africa remain in the planning or early pilot stages. While Russia’s e-ruble transactions grew by 226 per cent year-on-year, they rose from a very small base of 17,500 in 2023 to only 57,000 in 2024. Consequently, any initial BRICS-level CBDC bridge would rely heavily on Chinese scale and Indian participation depth.

Benefits and Concerns CBDCs are digital versions of sovereign currency that combine the safety of cash with the efficiency of electronic payments. They offer several advantages over traditional bank transfers, including:

• Lower transaction costs.
• Improved settlement speed.
• Enhanced transparency.

However, they also prompt concerns regarding privacy, cybersecurity, and the evolving role of banks within a fully digital monetary system.

Global Trends Domestic and cross-border CBDC transactions are rising globally, even though the US has decided to stop all work on CBDCs under President Trump. In 2020, only 35 countries were considering a CBDC; by 2025, that number has jumped to 137 countries, signaling a major shift in how payments and trade may be settled in the future.

(Author: Sourashis Banerjee, Chennai)

Trump vows not to go back on Greenland

US President Donald Trump stated on Tuesday there is “no going back” on his objective to control Greenland, and he has refused to rule out the use of force to take the Arctic island. This push to wrest sovereignty from Denmark threatens to dismantle the NATO alliance that has served as the foundation for Western security for decades. Trump utilized social media to share mock-up AI images of himself holding a US flag in Greenland and maps depicting Canada and Greenland as US territory.

Trade War Tensions Following talks with NATO Secretary General Mark Rutte, Trump maintained that Greenland is imperative for national and world security. The tension has reignited a trade war with Europe, specifically involving Trump’s threat to impose 200 per cent tariffs on French wines and champagnes after President Emmanuel Macron questioned his motives. In response, the European Union has signaled it may hit back with tariffs on $109 billion of US imports or by deploying its anti-coercion instrument (ACI) to restrict trade in services, a sector where the US currently holds a surplus.

European Response Danish Prime Minister Mette Frederiksen told her parliament in Copenhagen that the “worst may still lie ahead”. European Commission President Ursula von der Leyen addressed the World Economic Forum in Davos, calling for the construction of a “new independent Europe” to capitalize on these permanent geopolitical shifts.

National Security Outlook US Treasury Secretary Scott Bessent suggested that a solution would eventually be found to ensure security for both regions, urging leaders to "sit back, relax" and avoid further escalation. He dismissed concerns regarding Europe potentially offloading US Treasuries as a "false narrative" that defies logic. Despite these reassurances, Trump’s administration continues to prepare plans for the “complete and total purchase” of the territory, which the President views as psychologically necessary for success.

(Source: Reuters Davos/Copenhagen)

RMZ Group to invest $10 b in GCC park, data centre in AP

RMZ Group has announced an investment of $10 billion to establish a global capability centre (GCC) park and a 1GW data centre in Andhra Pradesh over the next five to six years. The New Delhi-based company and the Andhra government made this announcement at the World Economic Forum Summit in Davos on Tuesday.

Infrastructure Development The company intends to develop large-scale, mixed-use digital and industrial infrastructure across the state. The proposed GCC Park will be located at Kapuluppada Phase-1 IT Park in Visakhapatnam, featuring a potential built-up area of 10 million sq ft across 50 acres to attract global enterprises. Additionally, the group plans to set up a hyperscale data centre cluster in Visakhapatnam with a targeted capacity of up to 1GW, requiring 500 to 700 acres in the region. These facilities will support next-generation digital and AI workloads with a focus on sustainability and green power integration.

Regional Impact and Job Creation RMZ Group also proposes to develop an industrial and logistics park at Tekulodu spanning 1,000 acres to promote manufacturing and warehousing in the Rayalaseema region. Collectively, these projects are expected to generate approximately one lakh jobs across the IT, data centre, industrial, and logistics sectors.

Broader Tech Collaborations During the summit, Andhra Pradesh Chief Minister N Chandrababu Naidu held further discussions with global tech leaders. He met with IBM Chairman and CEO Arvind Krishna to discuss a quantum computing centre in Amaravati, a quantum innovation centre, and training one million youth in AI skills. Additionally, Naidu met with Google Cloud CEO Thomas Kurian to fast-track the proposed Google AI Data Centre in Visakhapatnam.

(Source: Our Bureau, Hyderabad)

Tiger Global — corporate governance as farce

The decade following the Global Financial Crisis was defined by an unprecedented abundance of capital, creating a world where money was not just cheap, but impatient. In this environment, a new class of mega-funds emerged to capture "moonshot" growth, and Tiger Global stood out by behaving perfectly in tune with the market logic of its time. This period provides a lens to examine how capital abundance reshapes governance and how investors respond when speed becomes a primary virtue.

The Dilution of Governance When capital is plentiful, diligence becomes negotiable, leading to lighter term sheets and softened information rights. This "diligence-lite" investing was justified by a FOMO capital cascade, where governance safeguards were eventually viewed as friction rather than protection. For late-stage private companies, the role of directors shifted from stewardship to symbolic validation, where high valuations were taken as confirmation that all was well.

The Marquee Investor Fallacy When capital becomes impatient, governance becomes ornamental; it exists and meets, but it no longer bites. A significant myth of this era was the marquee investor fallacy, where the presence of blue-chip institutional investors was treated as a substitute for actual scrutiny. Independent directors often deferred to the reputation of global funds, causing substantive challenges to soften into consensus. The result was governance theatre, where board meetings were held and compliance boxes ticked, but the kind of challenge that forces recalibration was absent.

Private Markets and Delayed Accountability Under the Companies Act, 2013, directors hold personal duties of care and independent judgment that are not discharged by passive deference to an investor's pedigree. While public markets provide continuous feedback loops and quick valuation corrections, private markets allow problems to be buried under successive funding rounds at rising valuations. The law eventually enters the picture, as seen in the Supreme Court’s judgment in the Tiger Global case, which reaffirmed that transactional form yields to substance when sovereign taxing power is engaged. This mismatch is a structural feature of private markets, where the lesson is often one of delayed accountability.

India’s Ecosystem at a Juncture India’s growth has relied heavily on foreign institutional capital, which delivered speed but also imported governance norms from elsewhere. As domestic capital seeks to emulate global strategies, the risk is uncritical imitation. Replicating aggressive capital deployment without absorbing the lessons of governance failures would be costly and risks eroding trust in the startup-to-IPO pipeline.

The Virtue of Restraint Institutional investors cannot retreat behind the fiction that governance is solely a board’s problem. Their presence shapes behavior, and their duty includes asking inconvenient questions about controls, culture, and sustainability. Markets periodically rediscover the undervalued virtue of restraint, where the most disciplined act is to walk away or insist on terms that may cost a deal. The Tiger Global phase should be remembered as a lesson on the non-negotiable link between capital abundance and governance rigour. This choice determines whether capital remains merely powerful or becomes genuinely wise.

(Author: Rajasekhar VK, lawyer and former Judicial Member of the National Company Law Tribunal)

Time to sell India’s nuclear power plants

Now that the government has opened the nuclear power sector to private participation, the key question is how private investment can be pulled in quickly. The answer is simple and almost obvious: sell existing, operating nuclear power plants.

Current Inventory Government-owned Nuclear Power Corporation of India Ltd (NPCIL) currently operates 24 nuclear power reactors with a total capacity of 8,780 MW; another eight reactors, totalling 6,600 MW, are under construction. Of the operating reactors, 14 are under IAEA safeguards, while the remaining 10 are pressurised heavy water reactors (PHWRs) built using indigenous technology.

There is merit in putting the 14 safeguarded reactors and the eight under-construction units under the hammer. The unsafeguarded reactors are arguably of strategic and defence relevance and should remain with NPCIL.

The Benefits Selling these plants offers two immediate advantages: it strengthens the government’s asset monetisation programme and brings the private sector into the nuclear business without delay. In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman announced a second National Asset Monetisation Plan (2025–2030) with an ambitious target of raising ₹10 lakh crore.

The SHANTI Act, 2025, has provided a fresh catalogue of assets to monetise. Because building new plants is time-consuming, the private sector—particularly steel and cement companies under pressure to "green" their products—is likely to pay a premium for clean, reliable baseload power.

Valuation and Strategy According to rating agency ICRA, it currently costs ₹15 crore to set up a 700-MW plant and ₹35 crore for a 1,000-MW plant, while Small Modular Reactors (SMRs) will likely cost at least ₹30 crore. SPECULATIVE estimates suggest the government could raise at least ₹2 lakh crore through the sale of existing and under-construction assets. These plants could be individually corporatised and sold independently, similar to how the Ordnance Factory Board was split into seven companies.

Efficiency Improvements While NPCIL has operated its fleet reasonably efficiently with an average plant load factor (PLF) above 85 per cent, it operates under a cost-plus regime that results in relatively high tariffs. For example, the Rajasthan Atomic Power Project Unit 7 earns a tariff of ₹4.83 per kWh. With private operators, these "cosy arrangements" would likely end, leading to sharper cost control and better project execution. NPCIL’s own track record is mixed; for instance, Madras Atomic Power Station Unit 1 has been under prolonged shutdown since April 2018.

NPCIL’s Evolving Role The sector is clearly profitable; in 2024-25, NPCIL achieved a turnover of ₹20,350 crore and a net profit of ₹4,737 crore. Selling these plants does not mean the end of NPCIL. The SHANTI Act reserves heavy water production and uranium enrichment exclusively for the government. NPCIL will also continue to operate unsafeguarded reactors for strategic interests and serve as a consultant of choice for new private operators.

(Author: M Ramesh)

Only 9.5% of Indian households invest in markets: SEBI survey

India’s decade-long boom in capital markets has yet to translate into broad household participation, with only 9.5 per cent of households investing in securities market products, according to the SEBI Investor Survey 2025. This leaves over 30 crore households outside the formal market ecosystem. Of the 33.72 crore households in the country, 53.5 per cent are aware of securities market products but choose not to invest, while 37 per cent are completely unaware. Among those who are aware but do not currently invest, 22 per cent intend to do so within the next 12 months, suggesting a sizeable pipeline of potential new participants.

Urban Skew The survey highlights that market participation remains sharply skewed towards urban India. Urban household penetration stands at 15 per cent, which is more than double the 6 per cent penetration seen in rural areas. Within urban centers, the top nine metros report the highest participation at 23 per cent, followed by towns with populations between 10 lakh and 40 lakh at 16 per cent, and towns with 5-10 lakh residents at 14 per cent.

Intent vs. Participation While current participation is urban-centric, the intent to invest tells a different story. Nearly 50 per cent of all "intenders" come from rural India, whereas the top nine metros account for only 12 per cent of the total intender base. Among the states, Uttar Pradesh leads in investor intent at 11 per cent, followed by Maharashtra at 10 per cent and Tamil Nadu at 9 per cent.

Product Preferences Mutual funds and ETFs have emerged as the most popular entry products for households, as they are perceived as balanced risk-return options. Conversely, participation in futures and options remains marginal, with penetration sitting below 1 per cent.

Investor Awareness and Barriers Despite 63 per cent of households being aware of securities market products, only 8.5 per cent actually hold a demat account, indicating a significant awareness-participation gap. Engagement among current investors is also uneven; 60 per cent are active, while 40 per cent are dormant, having made no fresh investments in the past year. Gender disparity is also evident, with 11 per cent participation for men compared to 7 per cent for women. Key barriers to entry include complexity and a lack of confidence, with many potential investors citing they are still in a "learning stage".

(Author: Akshata Gorde, Mumbai)

SHADOW OIL FLEETS: WHO GAINS THE MOST

With the recent U.S. invasion of Venezuela and ongoing sanction threats against Iran, the global "shadow fleet" of oil tankers has returned to the forefront of international trade. This fleet, used primarily to transport oil from countries under Western sanctions, now accounts for an estimated 18.5% of total global tanker capacity. By the end of 2025, the size of this fleet had grown to approximately 3,313 vessels, a massive increase from just 97 vessels in 2022.

Major Buyers: India and China While Russia and Iran are the primary sanctioned sellers, India and China have emerged as the major buyers of this crude. Between October and December 2025, these two nations accounted for roughly a fifth of all imports conducted via the shadow fleet.

• China led with 34 million barrels (a 12.9% share).
• India followed with 23.8 million barrels (a 9.0% share).

China’s imports of Iranian oil often involve an opaque process where ships offload cargo to a second set of vessels in Southeast Asian waters before heading to Chinese ports.

Major Exporters: Russian Dominance The shadow fleet was largely initiated by Russia to evade global sanctions. In November 2025 alone, Russia accounted for 63.1 million barrels of the 299 million barrels shipped by the fleet. At the top end of the fleet (tankers over 27,000 tonnes), Russia holds a dominant 60% share of ownership. Other notable exporters utilizing these networks include the U.S., Turkey, Venezuela, Iraq, and Saudi Arabia.

Economic Impact and Operating Model In 2025, the shadow fleet moved approximately $100 billion worth of crude oil, representing 6-7% of global oil flows. The fleet operates as a "structural layer of global trade" rather than an anomaly, utilizing obfuscation tactics such as frequently changing ship names, switching flags, and turning off transponders to evade GPS detection. These vessels are typically much older than standard cargo ships and are frequently uninsured.

The India Connection Russia has provided 30-40% of India’s monthly oil imports over the past two years. In 2024, it was estimated that 9.5% of crude oil flows from Russia to India were moved using the shadow fleet. However, following U.S. tariffs in April 2025, India has noticeably reduced its reliance on Russian crude; Russia’s share of India’s imports fell from 45% in July 2024 to 32% by December 2025.

Outlook for 2026 Experts believe the shadow fleet is unlikely to shrink dramatically in 2026 because China remains the epicentre of demand and sanctions on major exporters like Russia and Iran are expected to persist. While a reduction might occur if sanctions on Venezuela are lifted, the fleet has become an operationally robust network supported by permissive jurisdictions and parallel service providers.

(Source: Kpler, S&P Global, HowIndiaLives.com)

Nostalgia is the vibe: Gen Z rewinds to reclaim yesteryear blockbusters

Films from the 1970s, ’80s and ’90s are finding a significant cultural afterlife among younger millennials and zillennials. This demographic is rediscovering yesteryear blockbusters specifically for their simple themes, timeless music, and the availability of restored streaming prints.

The Rediscovery Engine Social media acts as a powerful catalyst for this trend, with fan edits, reels, memes, and online film-appreciation threads sparking curiosity among those too young to have seen the films during their original release. Saurabh Srivastava, COO at media conglomerate Shemaroo Entertainment, notes that much of what Gen Z discovers today comes through "indirect familiarity".

Curated Time Travel Experts describe this behavior as "curated time travel," where Gen Z samples the past in a unique way. Devarshi Shah, chief growth officer at OML (Only Much Louder), explains that these viewers usually discover these cinematic worlds in fragments first—through a short clip or a reel—before building deeper interest.

Leisure vs. Binge Viewing The viewing habits for nostalgic content differ from modern releases:

• New content is "binge-driven": Viewers watch with high intent, finishing seasons quickly before moving to the next thing.
• Nostalgic content is "leisure-led": Viewers dip in and out, watching selectively or returning to familiar scenes and songs.

This relaxed engagement style helps build connections across generations and extends the time spent on streaming platforms.

Key Titles and Trends While classics like Pyaasa (1957), Half Ticket (1962), and Mother India (1957) are being rediscovered, the post-2000 Hindi blockbusters (such as Lagaan) remain the most-watched titles on platforms like Ultra Play. According to the Ultra Media OTT Insights Report 2025, this renewed interest in the past has not displaced newer favorites but has created a coexistence between old classics and modern hits.

(Author: Lata Jha, New Delhi)