Newspaper Summary 100226

 

Exporters cheer as US deal sparks revival in orders

By Amiti Sen, New Delhi

India’s exporters are riding a wave of optimism following the India-US framework agreement, as restored orders signal a new phase of growth. While the threat of US tariffs linked to Russian oil purchases remains, exporters are largely unfazed. The reduction of tariffs on labour-intensive sectors from 50% to 25%, with a further drop to 18% expected this week, is considered a game-changer that provides a massive competitive advantage.

Picking Up Threads

Sanjay Jain, a prominent Delhi-based textile exporter, noted that India's tariff levels are now half of China’s and below other competing nations like Vietnam and Bangladesh, which face 19-20% duties. In an industry with 10% margins, this represents a decisive edge. Nearly $31 billion of India’s $86.5 billion exports in FY25 were impacted by the 50% US tariffs imposed in August-September 2025. Although growth flattened by December, Jain stated that “enquiry flow has already started,” dismissing fears of tariff re-imposition as an unpredictable variable.

Sparkle Returns

Vipul Shah, a gems and jewellery exporter, echoed this sentiment, stating the industry is moving past a worst-case scenario. He noted that the US is a massive market, consuming more than 50% of global gems and jewellery products. The sector saw a drastic decline in exports, especially in diamonds, following the 2025 tariff impositions. With tariffs now at 25% and those on diamonds set to reach 0%, Shah anticipates an immediate surge in demand.

Leather Units Upbeat

Leather goods exporters, who previously offered 20-30% discounts to retain American clients, are now seeing a restoration of margins. Israr Ahmed, a Chennai-based exporter, said the 18% tariff allows for healthier pricing. He observed that US customers are already restoring orders to pre-tariff levels, calling it a “golden opportunity” for Indian manufacturing.

Engineering Goods

The engineering sector, which faced reciprocal tariffs on $13.5 billion worth of goods, is equally relieved. Pankaj Chadha, Chairman of EEPC India, explained that exporters had previously absorbed tariff costs at the expense of their margins to keep customers. With the new 18% rate, these exporters can finally restore profitability. Chadha also highlighted a critical safeguard: if the US changes its tariffs again, India is entitled to change its own in response.

EPFO to launch app for withdrawals via UPI

Our Bureau, New Delhi

The Employees’ Provident Fund Organisation (EPFO) is likely to roll out a mobile app by April, enabling its eight crore subscribers to withdraw a portion of their EPF directly into their bank accounts via UPI. The Ministry of Labour and Employment is working towards a liberalised regime to make restricted access to EPF more flexible, though the government intends to maintain a cap on the fund portion locked for retirement. Currently, EPF contributions—consisting of 12% of salary from both employee and employer—can be withdrawn through the UAN portal or the UMANG app, and these existing platforms will continue to offer services alongside the new application. Subscribers will be able to view their eligible EPF balance available for transfer within the app, similar to other banking services.

Safety Features

The Ministry is incorporating inbuilt safety features, allowing subscribers to use their linked UPI PIN to complete transactions and ensure secure fund transfers. The EPFO is currently conducting comprehensive trials using 100 dummy accounts to prepare for the April rollout. This new system aims to replace the current withdrawal process, which is often viewed as complex and time-consuming. Under present rules, 100% of the PF amount can only be withdrawn under specific conditions, such as retirement or extended unemployment.

Streamlining Claims

This initiative is the latest in a series of reforms, including the April 2020 introduction of an auto-settlement mode for advance claims to aid members during the pandemic. That facility was expanded in May 2024 to include claims for education, marriage, and housing. While members must still file claims to access their funds, withdrawal claims under the auto-settlement mode are processed electronically without manual intervention within three days of filing.

Limit Raised

The limit for this auto-settlement mode has already been increased to ₹5 lakh from the previous ₹1 lakh. The implementation of the UPI-based app is expected to significantly reduce the administrative burden on the EPFO, which currently settles more than 5 crore claims annually.

Crude oil import bill may rise if India stops discounted Russian buys

DATA FOCUS

By Sourashis Banerjee, Chennai

Although the joint statement on the interim US-India Bilateral Trade Agreement (BTA) was silent on the matter, a simultaneous executive order from US President Trump claimed that India has agreed to his demand to reduce the purchase of Russian crude to zero. While Indian authorities have not officially confirmed this, such a move is highly likely to increase India’s crude oil import bill.

Price Comparisons

Data from the Ministry of Commerce shows that while the discount for Russian crude has narrowed since the highs of 2022–23, it remains cheaper than most alternative suppliers as of December 2025. According to the Ministry, the average price per tonne of petroleum crude from various sources in December 2025 was:

• Russia: $469
• Saudi Arabia: $503.2 (7.2% premium to Russian crude)
• United States: $506.7 (7.9% premium)
• Nigeria: $527.9 (12.5% premium, predominantly light crude)
• UAE: $529.4 (12.8% premium)

Deep Discounts

Supplier-wise pricing indicates even deeper discounts from other sanctioned or distressed producers. In December 2025, crude from Mexico was about 11.0% cheaper and Colombia was 10.7% cheaper than Russian crude. Venezuela’s crude was roughly 17.4% cheaper in December 2024. However, these three nations export heavy to very heavy grades of crude, which require significantly higher processing costs.

Shifting Sourcing Patterns

Sourav Mitra, Oil & Gas Partner at Grant Thornton Bharat, noted that India’s Russian oil imports dropped from a peak of 2 million barrels per day (bpd) in June 2025 to 1.1 million bpd in January 2026. He noted that oil flows from Russia are unlikely to vanish entirely, as strategic decisions are guided by diplomatic alignments, pricing stability, and energy security.

India's crude import demand continues to grow alongside its economy, with total imports for April–December 2025 reaching approximately 201.5 million tonnes, a 9.9% year-on-year increase. During this period, sourcing patterns shifted significantly:

• Russia: 32.7% (down from 2024, but still high)
• Iraq: 18.8%
• Saudi Arabia: 13.2%
• UAE: 10.8%
• United States: 7.4%
• Venezuela: 0.3%

India announces $175 million economic package for Seychelles

Press Trust of India, New Delhi

India on Monday announced $175 million as development assistance to Seychelles after Prime Minister Narendra Modi held wide-ranging talks with the island nation’s President Patrick Herminie. The two sides also agreed on a broad vision to expand cooperation in areas of sustainability, trade and economy, and security.

President Herminie is currently on a six-day visit to India. Seychelles is considered a key maritime neighbour for India in the Indian Ocean Region.

“India and Seychelles are connected not just by geography, but by history, trust and a shared vision for the future,” Prime Minister Modi said in his media statement. He noted that the development partnership has served as the strong foundation of the relationship between the two nations.

Special Package

“All our efforts have been based on Seychelles’ priorities and needs. Moving forward in this direction, today we are going to announce a special economic package of $175 million,” Modi stated.

The Prime Minister explained that this package will support “concrete projects” in several key sectors, including:

• Social housing
• Mobility
• Vocational training
• Health
• Defence and maritime security

How affordable housing can be propped up

By Venkatesh Panchapagesan

It has been nearly 60 years since the slogan Roti, Kapda, Makaan was coined, and while India has seen meaningful results in food and clothing, providing dignified shelter to economically weaker citizens remains a significant challenge. Despite various government efforts, including direct construction, developer incentives, and credit subsidies, the "affordable housing" gap continues to widen.

Breaking the Logjam

The article argues that current solutions are often repetitive—redefining "affordable," lowering taxes, or pushing cheaper loans—and have had little impact on the actual shortage. To address this, three fundamental shifts are needed:

• Accept Incremental Progress: No single solution can fix the entire shortage.
• Ensure Financial Sustainability: Solutions must align incentives for all stakeholders.
• Shift to Social Rental Housing: Moving the narrative from ownership to decent living standards provides a more viable alternative for a large segment of the workforce.

Land and Capital Constraints

Housing fundamentally requires land and capital. In urban clusters, private land is priced for the wealthy, making it impossible for developers to pass on those costs for affordable housing. This leaves government-owned land as the only realistic option.

It is estimated that more than a quarter of India’s affordable housing requirements could be met using surplus land held by just four agencies: defence, ports, railways, and airports.

A Sustainable Model

The proposed model suggests a partnership where the government contributes land and private investors provide capital through a special purpose vehicle to create social rental housing at scale. This approach ensures:

• Revenue Generation: The government earns a steady income stream rather than facing a fiscal burden.
• Investor Exit via REITs: Early investors can exit through a Social Rental Housing REIT listing, which would attract long-term capital from pension funds and insurance companies looking for stable, yield-generating assets.

The tools for this model already exist; the article concludes that it is now a matter of implementation.

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The writer is Professor of Finance at IIM Bangalore and Chairperson of the Real Estate Research Initiative.

DIIs’ stake overtakes FIIs in Nifty50

By Akshata Gorde & Anupama Ghosh, Mumbai

The share of domestic institutional investors (DIIs) in the ownership of Nifty-50 companies has exceeded that of foreign institutional investors (FIIs) for the first time in the December quarter. At the same time, DIIs continued their dominance in the Nifty-500 companies for the seventh consecutive quarter.

A Fundamental Shift

According to an analysis by Motilal Oswal Financial Services, DIIs held a 24.8% share in Nifty-50 ownership as of December 2025, compared with 24.3% held by FIIs. While DIIs increased their shareholding in a majority of index constituents over the past year, FIIs pared their exposure due to global macro uncertainty.

In the broader Nifty-500, DII holdings rose to an all-time high of 20.6% in December 2025, widening their lead over FIIs, whose stake stood at 18.4%. This marks a massive shift from December 2015, when FIIs held 21.5% compared to just 12.1% for DIIs.

Stable Source of Liquidity

"DIIs holding a larger share than FIIs in the Nifty50 underscores a fundamental shift toward stronger domestic participation," said Himanshu Srivastava of Morningstar Investment Research India. He noted that this increasing dominance provides a more stable, long-term source of liquidity and reduces reliance on volatile foreign flows, helping cushion the market during global "risk-off" phases.

DIIs were aggressive buyers throughout the year, pumping in $23.4 billion during the December quarter alone and a total of $90.1 billion through 2025.

Mutual Funds and Retail Investors

Mutual funds (MFs) have been closing the gap with foreign investors even faster. MFs held 11.10% of NSE-listed companies at the end of December, marking their tenth consecutive quarter of increase. Conversely, FII holdings declined to a 13-year low of 16.60%.

Retail investors, while their holdings moderated slightly to 12.1%, are increasingly anchoring the market through monthly SIP flows. Pranav Haldea, MD of PRIME Database Group, noted that the combined share of DIIs, retail investors, and high-net-worth individuals reached an all-time high of 28% at the end of 2025, officially ending the era where FIIs were the largest non-promoter shareholder category.

Sectoral Trends

Both DIIs and FIIs increased exposure to financial services, which now accounts for roughly 28% of DII and 32% of FII holdings. On a year-over-year basis, DIIs raised stakes in 22 out of 24 sectors, with the largest increases seen in:

• Electronics manufacturing services
• Technology
• Telecom
• Retail
• PSU banks
• Healthcare

US deal to perk up coffee export

By Vishwanath Kulkarni, Bengaluru

The India-US trade deal is expected to provide a significant boost to Indian coffee exports, with speciality coffee shipments likely to rebound and instant coffees set to expand their presence in the American market. As part of the deal, the US has granted duty-free access to Indian coffee, reducing the duty from 25% to zero. This 25% reciprocal duty had been imposed just last year; prior to that, Indian coffee attracted zero duty in the US. “Definitely, it will be a big boost for, especially, the coffee sector. It will impact very positively for us,” stated Kurma Rao M, CEO and Secretary of the Coffee Board of India.

10th Largest Buyer

While the US is a major global consumer, it was the tenth largest market for Indian coffee in 2025, with shipments totalling 10,736 tonnes. Instant coffees accounted for the vast majority of these shipments (8,392 tonnes), followed by green beans (2,084 tonnes) and roasted beans (241 tonnes). Historically, the US has imported the bulk of its coffee from countries such as Brazil, Colombia, and Guatemala.

Exporter Optimism

Speciality coffee exporters anticipate a strong rebound in demand now that the cost barrier has been removed. “Last year, our buyers had reduced the purchases due to the 25 per cent duty and this year we expect them to come back,” said D.M. Purnesh, a speciality coffee exporter. Major instant coffee players, including CCL Products and Vayhan Coffee, are also expected to be primary beneficiaries of the duty-free access.

$1.7 Billion Shipments

India’s coffee exports reached a record high of over $2 billion during the 2025 calendar year, driven largely by higher global prices. For the current financial year ending March 2026, shipments have already crossed the $1.7 billion mark as of February. Officials remain hopeful that total exports for this fiscal year will exceed the previous year’s level of $1.8 billion. India currently stands as the world’s seventh-largest producer and the fifth-largest exporter of coffee.

‘At $40 billion by 2030, India will be 4th largest beauty and personal care market’

By Meenakshi Verma Ambwani, New Delhi

India is set to become the fourth largest beauty and personal care (BPC) market by 2030, with its valuation projected to reach approximately $40 billion, up from the current $23 billion, according to a report by Redseer Strategy Consultants. While this growth aligns with global benchmarks, it is uniquely driven by a structurally underpenetrated base.

The Rise of New-Age Brands

The report highlights a significant shift in the competitive landscape, predicting that nearly 150 new-age BPC brands will cross the ₹100 crore annual revenue mark. Collectively, these emerging players are expected to account for 25% of the total spending in the segment.

Generational Shift and E-commerce

Gen Z and Gen Alpha are forecasted to become the dominant consumer force, driving nearly 50% of India’s total BPC spend by 2030. Their influence is expected to reshape expectations regarding product innovation, brand experience, and pricing.

Digital channels will play a crucial role, with nearly one-third of BPC spending occurring via e-commerce. Notably, quick commerce is predicted to emerge as the largest online format, emphasizing the consumer's need for instant discovery and replenishment. Redseer identified five distinct e-commerce formats—D2C, horizontal marketplaces, vertical platforms, quick commerce, and value commerce—each of which is expected to contribute at least 10% to online demand.

Structural Market Evolution

Kushal Bhatnagar, Associate Partner at Redseer, noted that the real story is the shift in market structure rather than just size. Success will increasingly depend on a brand's ability to understand cohort-specific needs, such as the Gen-Z focus on ingredient transparency, quality, and individuality.

Historically, India has under-spent in this category due to broken distribution and high price sensitivity. However, the report concludes that rising incomes, digital reach, and changing social norms are finally unlocking long-term category expansion. For investors and brands, winning will require disciplined execution across specific acquisition and replenishment formats.

Starlink in pact with Gujarat to offer satellite-based internet

Our Bureau, Ahmedabad

The Gujarat government on Monday signed a letter of intent (LoI) with SpaceX subsidiary Starlink Satellite Communications Pvt Ltd to deploy high-speed, satellite-based internet to remote, tribal, border, and underserved regions of the State.

Pilot Project Scope

As part of a pilot project, Starlink’s broadband services will provide connectivity to:

• Common service centres (CSCs) and e-governance facilities.
• Government schools and primary health centres (PHCs).
• Tele-medicine centres and district disaster management control rooms.
• Ports and wildlife sanctuaries.

Regional Connectivity

The initiative will specifically target districts such as Narmada and Dahod. Officials stated that the partnership will ensure faster and more reliable delivery of government services, while also strengthening the connectivity of police outposts, disaster response systems, wildlife monitoring, and agricultural research centres. Additionally, smart connectivity is intended to support education in schools and provide rapid access to healthcare and tele-medicine services in remote areas.

Official Signing

The LoI was signed in Gandhinagar by the State’s Industries Commissioner P Swaroop and the Head of Starlink India, Prabhakar Jayakumar. The ceremony took place in the presence of Chief Minister Bhupendra Patel and Deputy CM Harsh.

India-US deal: An obscure item that is stirring the pot

By Sayantan Bera

Under the interim trade deal with the US, India will let in an animal feed item called distillers dried grain with solubles (DDGS), made from genetically modified (GM) corn. This move has renewed the debate on transgenics in India, amid fears that imports may depress domestic farm gate prices.

What’s DDGS and what does the deal say?

DDGS is a protein-rich byproduct of ethanol manufacturing using grains like corn and rice. While the US primarily uses GM corn for ethanol production, Indian manufacturers use non-GM corn (maize) and rice. Consequently, US-produced DDGS is a GM-based animal feed used for cattle, poultry, and fisheries. Under the new framework, India will allow the duty-free import of DDGS in limited quantities. While India has not granted direct market access to US-grown GM soybean and maize, it has allowed the import of DDGS feed and soybean oil, which India already imports from other nations that grow GM soy.

Why is DDGS facing opposition?

The move has drawn heavy criticism from the opposition, who argue that India has yet to allow the use of transgenic technologies in food crops (currently only GM cotton is permitted). Congress lawmaker Jairam Ramesh termed it a ‘backdoor entry’ of GM crops into food. Concerns have also been raised by the Bharatiya Kisan Sangh, a farmer union linked to the RSS. Experts worry that imported feed could depress farm gate prices for Indian farmers of soybean and corn, while domestic ethanol makers may see a decline in profitability.

Is DDGS a big concession?

Not really. At present, corn-based DDGS from Indian ethanol makers is cheaper than the landed price of imported US DDGS, suggesting that imports will likely remain limited. However, US-made DDGS is of better quality due to lower levels of aflatoxins (a fungus). It remains to be seen if Indian feed makers will replace home-produced DDGS with imports. Overall, India is seen to have protected its farmers by denying imports of high-yield US corn, soy, and ethanol for fuel, as well as dairy products and cereals.

How will this impact Indian dairy produce?

Research indicates that using GM-based feed does not pass on foreign genes to milk. The EU allows the import of GM feed for dairy cattle with a labeling mandate if GM matter exceeds 0.9%. In India, the food safety authority currently mandates that imports of 24 food items, including soy and corn, must carry a GM-free certificate.

What are the unknowns of the deal?

As trade talks are ongoing, several aspects remain unclear. It is not yet known if soybean oil will be imported at zero duty, nor is it clear which “additional products” are included in the tariff reduction agreement. Furthermore, India has agreed to address long-standing non-tariff barriers related to trade in US food and agricultural products, which may include specified import quantities and safety standards.

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Quote of the Day: “Every era has faced concerns with new technologies, whether computers or mobile phones. But the fear is unnecessary. Technology must not become the master of human life.” — Narendra Modi, Prime Minister

PLAIN FACTS — BUDGET TAX HOLIDAY: WILL IT LIFT AI INFRA?

By HowIndiaLives.com

India’s 21-year tax holiday for foreign cloud providers, announced by Union finance minister Nirmala Sitharaman in her latest budget, has fuelled optimism across the technology sector. Politicians, industry executives, and analysts expect a surge in data centre investments and employment. Ashwini Vaishnaw, India’s IT minister, stated the country could attract more than $200 billion in data centre investments over the years. Addressing a press conference in Houston, Nvidia chief executive Jensen Huang said data centres could generate huge upstream and downstream employment in India, just the way the internet did. However, execution faces several constraints, including land, energy, water, and talent.

Strained Resources

Data centre growth will drive power demand through 2030. Driven by AI, power demand is projected to touch 57 terawatt-hour (TWh) by 2030 from 13 TWh in 2024, according to S&P Global. AI workloads require 30-50 kilowatt (kW) per rack, compared with 6-12kW for traditional servers. They also require significant water for cooling; a single 100MW campus uses water equivalent to a town of 85,000 people annually. This creates friction in hubs like Mumbai, Chennai, and Delhi-NCR, where groundwater levels have dropped sharply. S&P Global predicts that 60-80% of India’s data centres will face high water stress this decade.

Land requirements are equally acute, with a 10MW facility needing roughly 10 acres. India has granted infrastructure status to data centres and offered state-level incentives, including electricity-duty waivers. The Centre has also set renewable-energy targets of 500GW by 2030, with a push for nuclear power and liquid-cooling technologies.

Shifting Centres

AI workloads are reinforcing a shift toward Tier-II regions that can offer larger sites and stronger substations. Budget 2026 will aid this dispersion. To qualify for the tax holiday, centres must be Indian-owned and notified by the Ministry of Electronics and Information Technology (Meity), encouraging expansion in Tier-II markets where land is cheaper.

Capacity Surge

India’s data centre capacity is projected to grow to over 2GW by 2027 from an estimated 1.3 gigawatts (GW) in 2025. Three categories of players currently dominate the market:

• Global hyperscalers such as Amazon Web Services (AWS), Microsoft, Google, and Meta.
• Indian operators and joint ventures, including Yotta, Nxtra, AdaniConneX, Sify, and CtrlS.
• Telecom-linked conglomerates such as Reliance Industries, which integrate cloud and connectivity.

To receive tax exemptions, foreign companies must use data centres owned and operated by an Indian company, and services to Indian users must be routed through an Indian reseller.

AI Imperative

AI is the primary driver of expansion; AI workloads accounted for 23% of data centre capacity in 2025 and are projected to reach 50% by 2030. While India generates nearly 20% of global data, most has been processed overseas. Major cloud providers are now shifting AI compute operations to India to narrow this gap. The broader goal is to support domestic AI development by anchoring early-stage training and model deployment within India. This could lower costs for Indian startups and reduce reliance on overseas centres.

Global Contest

India is part of a global race, with global capacity projected to grow to 200GW by 2030. India’s development costs are roughly $5.4-6.8 million per MW, which is cheaper than the US, UK, or Japan. Geographically, India sits at the intersection of major cable routes, with Mumbai and Chennai adding subsea capacity that rivals Singapore. However, India faces a risk of “data dumping,” where foreign firms relocate resource-inefficient workloads to the country.

MAT recast may spark some one-off damage

By Gireesh Chandra Prasad, New Delhi

A Union budget effort to march corporates into India's new low-tax regime may deal a one-time blow to several companies following the old tax regime. Restrictions on tax credits under minimum alternate tax (MAT) may force startups and power sector firms to shift to the new regime, or contend with the higher cost of staying in the old regime, experts said.

The Old Regime and MAT Credits

Under the old tax regime, companies are required to pay MAT at 15% of book profits when their tax liability, after claiming deductions, falls below the MAT level. If their taxable income after accounting for exemptions is below 15%, they must still pay MAT at 15%, but they get back the difference as credits—called deferred tax assets in accounting parlance—which can be used in later years.

While lowering MAT to 14%, the budget sought to disallow businesses in the old regime from using such set-offs in the future. Although set-offs continue in the new regime, their use has been capped; a company can only use 25% of the available tax credit in any given year.

Impact on Profits and Net Worth

Experts stated this will lead to partial or full write-downs of MAT credit, potentially impacting profits and net worth for some businesses in the old regime.

“Companies in the businesses of electricity generation, transmission and distribution... as well as start-ups... will have to evaluate if it makes sense for them to switch to the new tax regime from 1 April,” explained Ved Jain, former president of the Institute of Chartered Accountants of India. He noted that the budget proposal does not force a switch, but if companies do move to the new regime, they gain the advantage of setting off up to 25% of future tax liability using MAT credit.

Phasing Out Incentives

For companies with large accumulated MAT credits or a weak profit outlook, the change could translate into one-off hits to earnings and increased volatility in effective tax rates. Over the years, the government has been phasing out tax incentives under the old regime to nudge businesses to migrate. While the new regime is often lighter on the wallet, many companies have stayed in the old regime until the expiry of their specific multi-year tax breaks.

Accounting Challenges

Unused MAT credits due to these legislative changes effectively lose economic value. Amit K. Agarwal, partner and leader of accounting advisory at BDO India, stated that managements must now reassess assumptions around deferred tax assets. “Where recovery is doubtful, partial or full write downs may be required,” he added.

The Union budget for FY27 proposes that from 1 April 2026, MAT will be recharacterized as a final tax in the old regime, with no new MAT credits accruing for payments made from that date. This rationalization requires careful judgment under accounting standards to ensure financial statements reflect the changed economic reality of MAT credit utilization.

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CREDIT CHECK: REGIME CHANGE

• Old Tax Regime: Companies pay MAT at 15% of book profit in specific cases.
• The Difference: If taxable income is below 15%, the difference is returned as credits.
• The Recast: The Budget lowered MAT to 14% but sought to disallow using such set-offs for those staying in the old regime.

India to keep diverse energy sources, says foreign secy

By Rezaul H. Laskar, New Delhi

India will maintain multiple sources of energy and diversify them to ensure stability, with national interest guiding all purchases, foreign secretary Vikram Misri said on Monday. Misri offered the first official clarity on the matter amid speculation that India would end Russian crude purchases as part of a trade deal with the US. The issue gained prominence after US President Donald Trump issued an executive order removing a 25% punitive tariff on Indian exports on the condition that India would not continue with Russian oil purchases.

Strategic Diversification

The external affairs ministry has long maintained that national interest and energy security are the primary factors behind energy sourcing. “Our approach is to maintain multiple sources of supply and diversify them as appropriate to ensure stability. Therefore, I would say that the more diversified we are in this area, the more secure we are,” Misri stated. He added that business choices are based on factors such as adequate availability, fair pricing, reliability of supply, and logistics.

Shifting Import Patterns

India, the world’s second-largest crude oil importer, significantly increased its purchases of discounted Russian energy after Western sanctions were imposed in 2022. Russian oil surged from less than 1% of India’s crude basket to 35% to 40% in recent years. However, India has faced renewed pressure from the Trump administration, which accused New Delhi of funding Russia’s “war machine”.

Recent data indicates a shift in sourcing:

• In December, oil purchases from Russia hit a 38-month low.
• Energy imports from the US grew almost 31% in the same month compared to December 2024.
• Russian oil has accounted for less than 25% of India’s imports in recent weeks.

Inflation and Stability

Misri noted that India, which imports almost 85% of its energy, is highly sensitive to the possibility of inflation driven by energy costs. He emphasized that India and other nations share a common interest in ensuring stable energy prices and secure supplies. Noting that India imports crude from dozens of countries, he concluded, “We are neither dependent on any single source for this, nor do we intend to be”.

Jane Street carries on hiring from IITs despite scrutiny

By Pratishtha Bagai & Devina Sengupta, New Delhi/Mumbai

Even as it battles India’s market regulator, high-frequency trading (HFT) firm Jane Street has hired students from Indian Institutes of Technology (IIT) and could once again emerge as their highest-paying recruiter. The New York-headquartered company has recruited students from the class of 2026 for its Hong Kong team, even as its dispute with the Securities and Exchange Board of India (Sebi) is set to be heard by the Securities Appellate Tribunal (SAT) this month.

The Recruitment Drive

“Jane Street has recruited from IIT-Bombay, Delhi and Madras,” said an executive aware of the development. HFT and quant firms typically hire candidates who can analyze markets using mathematical and statistical models, offering crore-plus salaries for global postings. While the exact amount for this year was not ascertained, the package is expected to be similar to the batch of 2025, which was slightly above ₹4 crore.

Other HFTs that typically hire from the IITs include:

• Optiver
• Squarepoint
• Tibra
• JPMC Quant
• Maverick Derivatives

The PPO Route

Jane Street utilized its usual route of pre-placement offers (PPOs) rather than attending final campus placements. PPOs are offer letters given to shortlisted students following their summer internships, which for the batch of 2026 took place in the summer of 2025.

In December, other firms that recruited from the 2026 batch through PPOs or final placements included Quantbox Research, Graviton Research Capital, NK Securities, and Quadeye. Quant trading firm Da Vinci Trading reportedly offered approximately ₹2.6 crore.

The Sebi Dispute

The recruitment continues despite Sebi’s July 2025 action, which barred four entities of the Jane Street Group from accessing the securities market until they deposited alleged illegal gains into an escrow account. Jane Street appealed to the SAT, claiming its trades had already been examined and cleared in two earlier reviews by the National Stock Exchange (NSE) and Sebi’s own Integrated Surveillance Department (ISD).

The firm argues that Sebi issued its interim order based on a fresh line of reasoning without addressing those earlier conclusions. To regain market access while the appeal is pending (set for 25 February), Jane Street has placed ₹4,843.6 crore in escrow and has abstained from initiating fresh purchases as a sign of cooperation.

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TALENT HUNT

• Target Candidates: HFT and quant firms seek students capable of analyzing markets via mathematical and statistical models.
• High Salaries: Salaries for global postings from the IITs frequently exceed one crore plus.
• Hiring Strategy: Jane Street primarily uses pre-placement offers (PPOs) based on summer internship performance.
• Regulatory Status: Sebi barred four Jane Street entities pending the deposit of alleged illegal gains.

THE 18% EDGE: SET FOR BULL RUN 2.0?

Fiscal discipline and trade breakthroughs have now created prime entry points for equity investors.

By Abhishek Mukherjee, New Delhi

“Life is a storm, my young friend. You will bask in the sunlight one moment, be shattered on the rocks the next. What makes you a man is what you do when that storm comes.” — Alexandre Dumas, The Count of Monte Cristo

Sunny days, fresh winds, and quiet signs of life mark the onset of spring. Dalal Street was witnessing such weather last week until a storm barrelling across the global IT sector darkened the horizons again. However, those who have weathered many such storms attest that the market has the tendency to return to normalcy. A growth-oriented, fiscally prudent budget and the announcement of the long-awaited India–US trade deal have significantly improved the macro backdrop for Indian markets, according to experts. These factors strengthen the case for a medium-term recovery in investor confidence, following a period of global risk aversion and foreign outflows.

The Macro Picture

• WHAT: A disciplined union budget has prioritized long-term growth and fiscal prudence over populism. Meanwhile, the US trade deal has slashed punitive tariffs to 18%, removing a year of uncertainty.
• SO: Market analysts state that improved macro-fundamentals and falling trade frictions offer high-conviction opportunities for selective, long-term equity investors.
• NOW: Experts believe sectors like autos, chemicals, jewellery, wine, textile, electronics, EMS, and pharma are prime areas to watch. Domestic consumption themes are also expected to perform better.

Budget Highlights and Sector Impact

The union budget for 2026–27 focused on public investment-led growth while maintaining fiscal consolidation. The fiscal deficit target for FY27 is pegged at 4.3% of GDP, down from 4.4% last year. Capital spending allocation has been raised to ₹12.22 trillion (about 3.1% of GDP), with a tilt toward transport infrastructure, defence, and energy.

• Roads and Highways: Allocated ₹3.10 trillion, an 8% rise.
• Railways: Received ₹2.9 trillion, up 10% year-on-year.
• Strategic Focus: The budget signals a pivot toward semiconductors, AI, and electronics component manufacturing, with the India AI Mission receiving ₹1,000 crore.

One negative market reaction was the increase in securities transaction tax (STT) on futures to 0.05% and options to 0.15%, aimed at curbing retail investor speculation.

The India-US Trade Edge

The India-US trade deal is considered the biggest sentiment booster, removing prolonged ambiguity. Reciprocal tariffs are set to be lowered from 25% to 18% in the coming days. While sector-specific 50% tariffs remain for steel, aluminium, and copper, the deal includes zero-duty access for several US products like Harley-Davidson motorcycles. India has also committed to buying $500 billion worth of US goods over five years, including energy and technology products.

Renewed FII Interest

The deal is expected to trigger a positive cycle for foreign fund inflows. Since October 2024, Indian markets have seen equity outflows of about $34 billion, the largest among emerging markets. Analysts believe FIIs are likely to return this year, aided by rupee appreciation and a weakening of the global AI trade dominance. A comeback is most likely in sectors where earnings visibility improves and valuations remain reasonable.

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DEAL IS DONE

The US trade deal significantly reduces the effective tariff burden on Indian exports, restoring their competitiveness. In relative terms, India now faces lower tariffs than most large emerging market exporters, improving its standing across several categories. However, experts caution that sustainable rallies ultimately require corporate earnings to deliver.

Norway paradox: Half the salary is lost to tax, but life still feels rich

By Shipra Singh, New Delhi

When Sutirtha Chakraborty and Jayita Chatterjee moved to Norway in 2017, the decision was driven by time rather than money. Chakraborty, a senior doctor in India, accepted a role at a government hospital that offered a predictable work schedule, a slower pace of life, and the opportunity to work in a top-tier healthcare system. Nine years later, the family’s finances reflect a Scandinavian model: high costs and high taxes offset by total social security.

Job opportunities in Norway

The move was relatively smooth for Chakraborty, whose employer covered relocation and visa costs. However, Chatterjee faced a harder path, trading a stable multinational bank career in India for two years of uncertainty while she learned the mandatory local language. Language classes cost the family approximately 20,000 NOK (₹1.86 lakh). She now works as a permanent government administrative officer. While her absolute salary is comparable to her Indian earnings, it represents a pay cut when adjusted for purchasing power parity.

Career prospects are generally concentrated in the healthcare and oil and gas industries, though tech roles are available around Oslo. Doctors trained outside the EU/EEA face a long process to have their qualifications recognized.

High taxes but less need to save

Norway embodies a stark tax-for-services trade-off. Income tax rates range from 22% to 47%; Chakraborty is in the 42% bracket, while Chatterjee is in the 26% bracket. After taxes and a 2% social security deduction, Chakraborty’s take-home pay is 56% of his gross salary (private sector employees take home even less, often only half their gross pay).

While punishing to some, these high taxes fund extensive social benefits that eliminate the need for heavy personal savings:

• Healthcare: Free for all residents, with no need for private insurance.
• Education: Public schooling is free, and the state provides low-interest loans for college, 40% of which is waived if the student passes.
• Retirement & Emergencies: The state covers retirement, child allowances (about 2,000 NOK monthly), and job loss insurance (up to 62% of gross salary).

Shock of everyday expenses

Expatriates often face a "supermarket hurdle" when first arriving. Norway is routinely ranked among the most expensive countries globally, with a cost of living three to four times higher than Indian metros like Mumbai or Bengaluru, and 30-40% higher than the US. This is driven by high minimum wages, a 25% standard VAT, and a strong welfare state.

• Transport: A 10-km taxi ride costs roughly 600 NOK (₹5,600).
• Dining: A family meal at a local restaurant costs about 1,500 NOK (₹14,000), while a movie outing with snacks can exceed 1,200 NOK (₹11,200).

Investing globally, and in India

The couple maintains a globally diversified investment portfolio:

• 30% in MSCI World index funds.
• 15% in MSCI Emerging Markets.
• 17% in Indian equity mutual funds and 5% in Indian debt.
• 25% in Norwegian bank deposits and debt funds.

Chakraborty remains committed to the India growth story, maintaining at least a 15% allocation to India as a strategic geopolitical risk diversifier.

Time, the ultimate luxury

For the family, luxury is no longer measured by consumption but by free time. Chakraborty notes that high taxes make "chasing more money pointless" because half of every extra penny is taxed. Instead, they value the ability to spend quality time with family, which they consider the biggest luxury. While they miss family in India and convenience services like Amazon, they feel settled in Norway.

AI agents can do cool things but are hyped for the wrong reasons

By Nitin Pai

There are two ways to produce a line of Shakespeare. The first and obvious is for old William to write it. The second is to give a monkey a typewriter and an infinite amount of time. The infinite monkey theorem argues that a monkey independently and randomly punching keys on a typewriter will almost surely produce any piece of text, including a Shakespearean play, if given infinite time. If you don’t have that kind of patience, you can hurry things along by increasing the number of monkeys, giving them faster typewriters, and somehow introducing a literary bias in their mind.

So we should not be surprised if, when tens of thousands of AI assistants are put in a discussion forum, they produce serious conversations on various topics, including privacy, linguistics, mischief, religion, and philosophy. This is what happened recently when Clawd Clawderberg, an AI assistant, coded MoltBook, a social networking platform for AI assistants, at the behest of Matt Schlicht, its human principal. Both MoltBook and Clawderberg were built using AI-generated code. Unlike illiterate monkeys, AI agents are trained on a massive corpus of knowledge, and the computers they run on are far faster than typewriters. If you get 100,000 of these to prompt each other, Shakespeare-level text and Descartes-level philosophical insights should follow pretty quickly.

Hyperbole and Hype

This is not to discount the coolness of MoltBook, but to put it in perspective. A consistent problem with advances in AI is hyperbole. Every advancement is projected as a sign of the imminence of artificial general intelligence (AGI) or of the emergence of consciousness and sentience in machines. While entrepreneurs and investors have a vested interest in hype, AGI and consciousness hype deflates the actual technological achievements and distracts from real policy issues.

Practical Applications

MoltBook and agentic frameworks demonstrate that machines can have discussions on behalf of their human principals in a form legible to other humans. Indicators of more prosaic practical applications of Agentic AI include:

• Contract Negotiations: Complex contract negotiations could be carried out on technology platforms where AI agents negotiate for clients. Contracts could be stress-tested across millions of scenarios to produce the most robust business agreements possible.
• Lawmaking: Imagine if legislators could instruct AI agents on the needs of their constituents. These agents could negotiate and produce legislation that works for everyone, with the entire discussion captured in a humanly understandable form. For a hyper-diverse polity like India, such a system might produce better legislation than the current method.
• Judiciary: Complex cases with multiple parties, precedents, and points of law could be debated threadbare.

Reality Adjacent

Such applications are not sci-fi adjacent; they are reality adjacent, meaning it is possible to deploy such systems for limited purposes in the near future. While there is much to be concerned about regarding security, robustness, and accuracy, these challenges are superable. To the extent that the way a system arrives at a decision is clearly understandable, societies will be more ready to deploy AI for contractual and legislative negotiations. Someday, even international negotiations could be carried out by AI agents.

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The writer is co-founder and director of The Takshashila Institution, an independent centre for research and education in public policy.

Takaichi needs more than her electoral popularity to succeed

Japan’s leader scored a big win but her policy tests will come now

By Gearoid Reidy

The streets of Tokyo were dusted with a rare snowfall as election day broke on Sunday while a blizzard gripped much of Japan. However, the bad weather did not deter the electorate, who turned out in greater numbers than in the last vote in 2024. They were given a simple question: whether or not to endorse Prime Minister Sanae Takaichi with a mandate to rule.

While past prime ministers typically hung such votes on specific policy issues, Takaichi gambled on her personal popularity. She requested that the Japanese people decide directly whether to entrust the management of the nation to her. Management has been entrusted; now, she must repay that trust.

A Resounding Victory

The margin of victory was far more resounding than expected. Her 316 seats exceed the achievements of any leader of the Liberal Democratic Party (LDP), including her late mentor and Japan’s longest-serving leader, Shinzo Abe. A two-thirds majority in the lower house makes her minority position in the upper house largely irrelevant, as rejected bills can be forced through. This victory sets her up to be one of the country's most consequential leaders in years.

Takaichi benefited partly from the poor quality of her opponents, particularly the Centrist Reform Alliance, which was a disaster. However, any opponent would have struggled against Takaichi, arguably the most naturally gifted politician of her generation. While her government has been reactive so far due to its previous precarious position, she now has a mandate to enact her vision—though exactly what that vision entails remains somewhat unclear.

Defining Her Stance

It is important to clarify what Takaichi is not. Reports often brand her as an ‘ultra-conservative’ or ‘ultra-nationalist,’ labels that the author argues confuse more than they inform. While she is a conservative, her policies regarding a strong economy and a healthy defensive posture would be considered firmly centrist in most other countries.

One major change she may now pursue is the first-ever revision of Japan’s constitution. This has been a long-standing LDP goal that even Abe was never sufficiently emboldened to attempt. Takaichi has shown an appetite for risk, speaking on the campaign trail about revising the US-imposed pacifist constitution to recognize Japan’s military. With her lower house majority, this is an idea whose time might soon come.

Foreign Relations

A constitutional revision would be extremely unpopular in Beijing. China was a significant loser in this election, as its campaign to exert economic and political pressure on Takaichi over her comments regarding Taiwan backfired. This episode will likely push her closer to the US, which she is scheduled to visit next month. US President Donald Trump tends to like a winner, and Takaichi can leverage her victory to secure better terms on tariffs or more forceful backing against Beijing.

Economic Policy and Risks

Takaichi is not an advocate for irresponsible spending. Rather than spending recklessly, she seeks to change the national attitude to break free of austerity. The reality is that Japan saves far more than it should and spends less than it needs, though her practical plans remain unclear. Her proposal to temporarily cut the sales tax on food to zero, which disappeared during the campaign but reappeared after her triumph, is one she would be best advised to drop.

Takaichi must not let success go to her head. She needs to be more careful with her remarks; previous comments on Taiwan and the weak yen sparked unnecessary distractions. Most importantly, because her victory was based on personal popularity, she must maintain that connection with the electorate through swift action. While she previously had the advantage of being seen as an outsider within the ruling party, she now "owns it—warts and all".

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The writer is a Bloomberg Opinion columnist covering Japan and the Koreas.