Newspaper Summary - 140126

 India’s Russia crude imports drop to lowest since first price cap as RIL cuts cargoes by half: CREA.

Recent US sanctions on Russian oil giants Rosneft and Lukoil, which took effect on November 21, 2025, have resulted in India's December 2025 crude oil imports from Moscow falling to their lowest levels since the G7 introduced a $60 per barrel price cap in December 2022. According to the Centre for Research on Energy and Clean Air (CREA), India’s Russian crude imports saw a sharp 29 per cent month-on-month reduction. This decline occurred despite a marginal growth in India's total global imports.

The drop was led primarily by Reliance Industries (RIL), which halved its cargoes; specifically, the RIL-operated Jamnagar refinery recorded a 49 per cent reduction in imports. State-owned refineries also saw their imports from Russia decrease by 15 per cent in December. Although the Jamnagar refinery cut its imports by half, the entirety of those cargoes were supplied by Rosneft, though they were purchased before the US OFAC sanctions officially took effect.

India remained the third-highest buyer of Russian fossil fuels in December 2025, importing a total of approximately $2.68 billion in hydrocarbons. Of this total, crude oil constituted 78 per cent, valued at roughly $2.10 billion, while coal and oil products accounted for $495 million and $96 million, respectively. Notably, Turkey displaced India as Russia’s second-largest fossil fuel buyer for the first time in nearly three years, purchasing around $3 billion in hydrocarbons.

CREA also noted that five refineries in India, Turkey, and Brunei that utilize Russian crude exported approximately $1.1 billion of oil products to sanctioning countries in December. Almost one-third of these exported products were refined specifically from Russian crude oil.

RBI’s $10 billion forex swap oversubscribed 3x.

The Reserve Bank of India’s (RBI) 3-year dollar/rupee buy-sell swap auction drew robust demand on Tuesday, receiving total bids of $29.94 billion, which is nearly three times the notified size of $10 billion. The central bank accepted 42 bids at the auction, setting the premium cut-off at ₹7.28 (728 paise). This premium has increased by 127 paise since the last 3-year swap conducted in February 2025, which saw a cut-off of 655 paise.

Market experts noted that the higher premium reflects the increased cost of buying dollars and the persistent pressure on the rupee compared to the previous year. Bankers attributed the strong demand to corporates looking to lock in hedges on overseas borrowings and capitalize on the gap between onshore and offshore swap rates.

The settlement for the initial leg of the swap is scheduled for Friday, through which the RBI will inject rupee liquidity into the banking system; the transaction is set to be reversed after three years. This intervention is part of a larger strategy by the RBI to inject a total of $32 billion in rupee liquidity to enhance the transmission of previous policy rate cuts. Despite a cumulative policy rate reduction of 125 bps in 2025, the yield on 10-year government bonds has only declined by 17 bps in that same period.

Textiles sector attracts over ₹60,000 crore in 2025

The Indian textiles sector recorded commitments and investments exceeding ₹60,000 crore in 2025, according to government officials. Authorities expressed optimism that this investment trend would continue throughout 2026, driven by a persistent focus on Production-Linked Incentives (PLI) and the PM MITRA scheme. One official noted that the industry is also seeing a strong movement toward decarbonisation and the development of eco-friendly and new-age fibers.

Key Initiatives and Job Creation

A primary driver of this growth has been the PM MITRA Park projects, which alone attracted committed investments of over ₹14,000 crore. These projects have the potential to generate 38,426 jobs, and authorities have already received interest for an additional ₹10,000 crore in funding. The Mega Investment Textiles Parks (MITRA) scheme was designed to provide world-class infrastructure with plug-and-play facilities, intended to help the Indian textile industry become globally competitive and create global champions in exports.

Foreign Direct Investment (FDI) Highlights

The sector has seen several significant FDI proposals and MoUs:

• Infinited Fiber Company: The Finland-based firm signed an MoU with Andhra Pradesh for an investment of ₹4,000 crore.
• Royal Golden Eagle (RGE): The Singapore-headquartered leader in man-made fibers announced a ₹4,953 crore investment to establish its first project in India.
• Other Proposals: Additional proposals currently under consideration represent potential investments exceeding ₹20,000 crore.

Infusing competition is not easy

By CKG Nair (The writer is former Director, National Institute of Securities Markets)

Following the IndiGo fiasco in early December 2025, the Central government attempted to "activate the competition button" in the civil aviation sector by granting NOCs to several new airlines. While the IndiGo crisis was not a case of corporate fraud, the resulting travel disruptions and regulatory bargaining—using passengers as "hostages"—sparked intense debate over corporate governance and market competition.

However, the author argues that in an era defined by high-tech and high-capital requirements, competition is not a simple, linear solution that can be ordered into existence. Drawing on the theories of Joan Robinson and Edward Chamberlin, the article notes that imperfect or monopolistic competition is now the dominant reality, requiring regulation to manage market failures.

Sectoral Case Studies

The article highlights three specific industries where attempts to "create competition" have faced significant hurdles:

• Civil Aviation: This sector has moved from private monopoly to state monopoly and back to a private-dominated "winner-takes-it-all" model. Despite entry being technically open, the massive capital costs and complex regulatory requirements mean that one or two large carriers (like IndiGo, which held a 54-55% share by 2021) inevitably dominate.
• Telecom: Characterized by massive infrastructure costs and quick consolidation, the Indian market has seen Airtel (34%) and Jio (44%) consolidate subscriber shares rapidly. This has pushed Vodafone-Idea (Vi) into a distant third and BSNL to the fringe, with the government essentially propping up these struggling entities as an "Albatross" around its neck.
• Stock Exchanges: This is a special "small group model" where high-end technological infrastructure and network effects ensure a natural monopoly or duopoly. In India, the NSE and BSE dominate the equity space, while MCX corners nearly 90% of the commodity volume, leading to the closure of smaller regional exchanges that could not attract sufficient volume.

The New Normal: Oligopolies

The article asserts that pure competition is a tale of the past; modern market structures are the result of "Schumpeterian-type creative destruction" and innovation rather than political-economy aspirations. Today, not only tech and capital-intensive sectors but even service networks like auditing and credit rating operate as global oligopolies.

Conclusion: The Regulatory Answer

The author concludes that creating competition through affirmative industrial policies is rarely successful. Instead, the government and regulators must focus on effective regulation and a realistic approach to competition policy.

Key recommendations include:

• Revisiting CCI norms on mergers and thresholds to match the dynamics of high-tech, networked global players.
• Improving the institutionalised coordination between the CCI and sectoral regulators.
• Developing a comprehensive regulatory vision and capacity building to address national and security interests within these concentrated private business models.

Passive funds’ inflows up 22% to ₹1.62 lakh cr

Inflows into passive funds increased by 22 per cent last year, reaching ₹1.62 lakh crore compared to the ₹1.32 lakh crore recorded in 2024. This growth was largely attributed to steady inflows into gold exchange-traded funds (ETFs). Consequently, the assets under management (AUM) for passive funds rose by 31 per cent, climbing to ₹14.57 lakh crore from ₹11.12 lakh crore.

Key Drivers: Gold and NFOs

According to data from the Association of Mutual Funds in India (AMFI), investments in gold more than tripled, reaching ₹42,962 crore, up from ₹13,250 crore the previous year. In contrast, the capital raised through passive new fund offers (NFOs) saw a significant decline of 48 per cent, dropping to ₹7,624 crore despite an increase in the number of NFOs from 135 in 2024 to 155 last year.

Expert Perspectives on Stability and Diversification

Industry experts highlight that passive funds are an attractive option for long-term investors because they provide low-cost exposure to the broader market and eliminate the need for frequent stock selection.

• Rishabh Nahar, Partner and Fund Manager at Qode Advisors, noted that the sharp increase in 2025 inflows was driven by investors seeking stability amid ongoing market volatility. He recommended using passive funds as a core holding while supplementing them with selective exposure to high-quality businesses with strong balance sheets.
• Asset Allocation: Nahar emphasized that gold and silver should be treated as portfolio diversifiers rather than speculative tools. Historically, these precious metals have helped mitigate portfolio risk during times of inflation, geopolitical events, and economic uncertainty.
• Balanced Approach: Jashan Arora, Director of the Master Trust Group, suggested that while passive funds are ideal for long-term core investing, active funds may perform better during specific market segments or periods of high volatility. He advised a balanced strategy that utilizes passive funds for the core and select active funds to seek higher returns.

No more 10-minute delivery: Govt to e/q-comm players

Following directives from the Central government, leading quick commerce platforms, including Blinkit, Zepto, and Swiggy Instamart, have moved to drop the “10-minute delivery” promise from their branding and advertising. Union Labour and Employment Minister Mansukh Mandaviya persuaded top executives of these platforms to remove the deadline, arguing that such claims put undue pressure on delivery partners and risk compromising worker safety.

Tagline and Branding Changes

Blinkit was the first to act on the directive, removing the 10-minute promise from its principal branding. The company’s tagline has been revised from “10,000+ products delivered in 10 minutes” to “30,000+ products delivered at your doorstep.” While other aggregators are expected to follow suit, they have sought to clarify that delivery timelines are not visible to last-mile workers and that riders are not penalized for delays.

Implicit Pressure and Safety Concerns

Despite platform explanations regarding backend route optimization and distance calculations, government officials countered that ultra-fast branding creates implicit pressure regardless of whether timelines are enforced on the ground. The Telangana Gig and Platform Workers’ Union (TGPWU) and the Indian Federation of App-Based Transport Workers (IFAT) welcomed the intervention as a major victory. Shaik Salauddin, founder-president of TGPWU, noted that the 10-minute model forced partners into dangerous road behavior, extreme stress, and unsafe working conditions. The move follows nationwide strikes by gig worker unions on December 25 and 31, 2025, which demanded the scrapping of ultra-fast options.

Operational Reality vs. Optics

Analysts believe the development is largely optics-driven and will not materially alter the growth trajectory or operations of the sector. The proposition of quick commerce continues to be anchored in proximity-led fulfillment through a network of roughly 5,000 dark stores nationwide. Because these stores are often located within 200 meters of customers, deliveries are frequently completed in four to five minutes anyway, even without the explicit branding. Eternal (Blinkit’s parent company) stated in a regulatory filing that there was no change to its business model that would have a material impact.

The quick commerce industry is still projected to grow significantly, with estimates suggesting it could reach $47 billion by FY30, up from approximately $6 billion in FY25.

World Bank projects India’s growth rate at 7.2% in FY26, 6.5% in FY27

The World Bank has raised India’s growth forecast for the current fiscal year (FY26) to 7.2 per cent, up from the 6.3 per cent projected last June. This projection remains slightly lower than the Indian government’s estimate of 7.4 per cent. The bank attributed this upward revision to robust domestic demand, including strong private consumption, tax reforms, and rising real household incomes in rural areas.

Projections for FY27 and Beyond

• FY27: Growth is expected to moderate to 6.5 per cent. This forecast assumes that the 50 per cent import tariffs proposed by the US will remain in place throughout the horizon.
• FY28: Growth is set to edge up to 6.6 per cent, underpinned by resilient services activity, a recovery in exports, and a pickup in investment.

Global and Regional Outlook

The World Bank’s latest Global Economic Prospects report notes that the global economy is proving more resilient than anticipated despite persistent trade tensions and policy uncertainty. Global growth is projected to remain steady at 2.6 per cent in 2026 before rising to 2.7 per cent in 2027.

In the broader South Asia region, growth is expected to rise to 7.1 per cent in 2025, driven by India's economic activity offsetting trade tensions, before slowing to 6.2 per cent in 2026 due to the impact of US tariffs on Indian exports. Indermit Gill, the World Bank Group’s chief economist, cautioned that while the global economy is resilient, it has become "less capable of generating growth" with each passing year.

End-Users to Call the Shots in Housing Market This Year

By Sobia Khan, Bengaluru

India’s residential real estate market is entering a buyer-led phase in 2026, as end-user demand takes precedence over investor-driven momentum. With supply becoming more selective and inventory offering greater choice, the market is shifting towards value, negotiation flexibility, and homes aligned with genuine ownership needs.

Market Maturity and Stability

This positive shift follows a post-pandemic boom. Since 2019, property values in top cities have surged impressively—Gurgaon and Hyderabad led with over 80% gains, followed by Bengaluru, Chennai, and Noida at 60–70%. By 2025, year-on-year growth moderated to healthy high single digits, reflecting market maturity backed by resilient developer balance sheets, smart capital use, and minimal distress. Prices are set to hold firm through 2026, offering stability for genuine buyers.

Developer Innovation and Discipline

Industry experts note that developers are innovating to include more buyers, especially in Noida (over 60% of prospects), Gurgaon (nearly 80%), and Bengaluru and Pune (over 40%). By prioritising premium and luxury projects with strong margins, the industry is aligning supply with evolving preferences to foster long-term value creation.

Developers are also responding with discipline; units per project are reaching record highs as they consolidate land to build scale-led gated communities.

Regional Supply Shifts

• Mumbai and Pune: These cities have entered a phase of supply contraction. The Mumbai Metropolitan Region (MMR) saw new unit launches decline by over 35% in 2025 due to inventory-led discipline, while Pune recorded a sharper 45% drop as builders shifted to smaller, lower-risk projects.
• Hyderabad: This stands out as the only major market to record a year-on-year increase in new supply, driven by sustained confidence in Outer Ring Road (ORR)-led corridors and steady employment growth.

While the sources do not contain a standalone article specifically titled "Google Valuation," they provide a detailed analysis of the valuation of US Big Tech companies (which includes Google’s parent company, Alphabet) through an interview with Ajay Rajadhyaksha, the Global Chairman of Research at Barclays.

Valuation of US Big Tech and the AI Rally

• Sustainability of the AI Rally: Rajadhyaksha argues that the current AI-driven market rally is "actually pretty sustainable," noting major differences between the current environment and the dot-com bubble of 2000. He highlights that US Big Tech is not a low-margin sector; instead, the vast majority of investment is currently coming from companies with "very fat margins" and significant cash flow.
• Price-to-Equity and Profitability: From a valuation standpoint, while the S&P 500 is trading at historically elevated price-to-equity (P/E) multiples, the index’s profitability is at a 25-year high.
• The "Top Seven" Names: He states that the top seven tech names (which includes Alphabet/Google) are "far less expensive than past bubbles" and that their price-equity-growth (PEG) multiples remain "very reasonable".

Contextual Mentions of Alphabet (Google)

• Global Minimum Tax Exemption: Under the recent OECD/G20 agreement to implement a 15% global minimum tax, US tech giants including Alphabet, Microsoft, Apple, and Amazon have been granted an exemption, meaning they will not be liable to pay this minimum tax in the various jurisdictions where they derive profit.
• Infrastructure and Competition: Tata Consultancy Services (TCS) CEO K. Krithivasan noted that while Google is establishing its own data centers in India, the demand for capacity is so immense that there is no direct competition, and "almost every known player" has discussed potential collaboration with TCS.
• AI for Shopping: Google CEO Sundar Pichai has commented on the future of retail, suggesting that AI will enable agents and systems to communicate with each other seamlessly throughout a consumer's shopping journey.

Bullish signal: Why FIIs are back in consumer durables

In December 2025, foreign institutional investors (FIIs) reversed a four-month selling streak, becoming net buyers of Indian consumer durable stocks with purchases totaling roughly $500 million. This shift is primarily driven by a significant improvement in the earnings growth outlook for the sector for fiscal years 2026 and 2027.

Key Growth Drivers

• Profit Projections: The sector is expected to see a 20-30% rise in net profit for the Q3 FY26 quarter compared to the same period last year.
• Consumption Recovery: Increased demand is being fueled by robust festive season sales and a notable recovery in rural household incomes, which have been outpacing urban consumption for nearly seven quarters.
• Policy Support: Recent indirect and direct tax reforms, including zero-percent GST on certain individual policies and potential slab reductions for mass-consumption items, have made consumer electronics and home appliances more attractive to buyers.

Market Dynamics and Reallocation

Analysts note that this trend represents a reallocation of capital as investors pivot away from defensive groups like FMCG to focus on high-growth potential within the durables space. While the S&P 500 is trading at historically elevated multiples, the price-equity-growth (PEG) multiples for top-tier tech and manufacturing firms remain "very reasonable" due to high profitability. Specific stocks seeing increased interest include Havells India, Voltas, Dixon Technologies, and PG Electroplast.

Remaining Risks

Despite the positive momentum, investors are closely monitoring several risks:

• Input Costs: Intensifying competition and rising input costs could potentially pressure margins.
• Seasonal Volatility: A "weak summer," characterized by unseasonable weather, could impact the sales of cooling products like air conditioners.
• Global Headwinds: Ongoing trade tensions and the potential for high US import tariffs remain a concern for broader economic stability through FY27.