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Sunday, May 31, 2026

Newspaper Summary - 010626

 US may push India to lock in 18% tariff deal, offer Section 301 relief DEAL DYNAMICS. It may seek deeper tariff cuts; India wants assured trade advantage Amiti Sen New Delhi

To clinch an early free trade deal with India, the US is likely to press New Delhi to accept a tariff package that locks in import levies on Indian goods around 18 per cent, as agreed to in the February framework deal. This will be backed by an assurance that more penalties won’t be added after the ongoing Section 301 investigations against India conclude, sources said.

The high-level US trade team visiting India on June 1-4 to push negotiations to conclude the interim trade deal may also throw in a sweetener, guaranteeing further tariff reductions in the future aligned with the reduction in America’s trade deficit with India, a source told businessline.

TARIFF LOCK-IN “The US is keen to close the deal very soon, but it may take a while for its domestic tariff situation to settle down. That is why negotiators are likely to lock in a tariff rate around the 18 per cent level agreed to in February. This means additional penalties will not be imposed even if the Section 301 investigations result in an adverse verdict for India in the coming months,” the source explained.

However, India remains uncertain about what tariffs competitors like Vietnam, Bangladesh, Indonesia or Cambodia will face, which determines how good its own deal is.

“Commerce Minister Piyush Goyal has stated that while India looks forward to sealing a bilateral pact, its primary objective remains securing a competitive advantage over other economies. If India agrees to a tariff level now, it needs to be sure it fares better than others,” a second source said.

PACT FRAMEWORK While this interim deal will focus mainly on tariffs and non-tariff barriers, the pact will subsequently expand to include elements like intellectual property, government procurement, investment protection, data flows, and customs and trade facilitation.

Under the February 2 framework, the US offered to lower reciprocal tariffs to 18 per cent from 25 per cent and remove the 25 per cent penalty for buying Russian oil, over and above the normal MFN tariffs. In return, India agreed to significantly reduce tariffs on US industrial and agricultural products. The US removed the oil tariffs, but reciprocal tariffs remained.

However, a landmark February 20 US Supreme Court judgment invalidated those reciprocal tariffs, leaving most countries facing a temporary 10 per cent global tariff above regular MFN rates.

The US’ counter-argument to India’s caution is that its competitors also face Section 301 investigations. “Every country realises Section 301 penalties could be huge. It will suit competitors to implement older trade deals clinched before the reciprocal tariffs were invalidated. The US is starting talks with many of them,” the first source said.

India’s trade surplus with the US declined in FY26 to $34.41 billion from $40.88 billion in FY25 as imports of American goods increased. However, the US remained India’s largest export market in FY26 at $87.31 billion.


TRADE BARGAIN

  • US wants India to accept capped tariffs of 18% that it had agreed to in the February framework.
  • It is likely to offer a guarantee that additional penalties under Section 301 will not be slapped.
  • Further tariff rollbacks for India, tied to the narrowing of the US trade deficit, may be proposed.
  • New Delhi wants assurance of tariff advantage over competitors such as Vietnam and Bangladesh.
  • Interim deal to focus on tariffs and non-tariff barriers, and will be expanded to include investments, IPR and government procurement.

CBSE admits that there are vulnerabilities in evaluation portal, more than week later Meenakshi Verma Ambwani S Ronendra Singh New Delhi

Days after asserting that its online answer sheet evaluation system had been “neither compromised nor suffered from vulnerabilities”, the CBSE on Sunday acknowledged that weaknesses had been identified in the OnMark portal operated by its service provider and said that they had been contained.

In a statement posted on X, the Board said: “We have been closely monitoring the vulnerabilities in the On-Mark portal of our service provider that are being flagged in the public domain. An expert team of cybersecurity professionals has been deployed over the last few days from across various arms of the government and IITs to fortify these systems, including taking them over to a more secure setup. The identified vulnerabilities have been contained, and other exploitable weaknesses are being ruled out.”

The Board also said: “We are grateful to all alert citizens and ethical hackers pointing out such weaknesses, and have gotten in touch with some of them directly. We request any others to reach out to our security teams at secy-cbse@nic.in for any further inputs.”

However, 19-year-old ethical hacker Nisarga Adhikary, who has been publicly flagging the alleged security flaws in the system, disputed the CBSE’s assertion that it had reached out to those raising concerns.

ETHICAL HACKER’S REPLY “I mailed their security team hours ago,” Adhikary told businessline. “I haven’t heard back,” he said, adding that “no one has contacted me”. He alleged that “they are still being dishonest and deceiving”.

In his post on X on Sunday, Adhikary alleged that an AWS bucket containing 2026 answer sheets and question papers could be accessed without authorisation.

“CBSE people didn’t configure their AWS bucket properly and now we can paginate & enumerate all their media, which has 2026 answer sheets and question papers. ListObjectsV2 works without any auth, and the bucket root is listable too — anyone on the internet can download any scanned booklet — across institutions. Multiple institutions are using the same bucket, insanely insecure. (sic),” he said.

CHECKS UNDERWAY CBSE did not specifically address these latest allegations but maintained that the vulnerabilities identified in the system had been contained and that checks were underway to rule out other exploitable weaknesses.


Fire at Hyundai Mobis plant near Chennai; no casualties reported T E Raja Simhan Chennai

A major fire broke out on Sunday at the Hyundai Mobis facility near Hyundai Motor India’s manufacturing plant at Irungattukottai on the outskirts of Chennai. No casualties were reported, though firefighting operations continued for several hours as the authorities worked to bring the blaze under control.

According to sources, the fire is believed to have originated in the soldering line of the assembly section before spreading rapidly through the plant. Multiple fire tenders were deployed to contain the flames, with firefighters continuing efforts even as the report was filed.

The facility supplies audio and electronic components to Hyundai Motor India and is located in close proximity to the automaker’s manufacturing complex at Irungattukottai. Company sources said it was too early to assess the extent of the damage.

Officials indicated that a detailed evaluation would be carried out once the fire was completely extinguished and the site declared safe for inspection. It will take a day or two to get full details, according to sources.

The cause of the blaze is yet to be officially determined, and an investigation is expected to be launched to ascertain the circumstances leading to the incident.

The fire has raised concerns about disruptions to component supplies, although there was no immediate word on whether production at Hyundai Motor India’s plant would be affected. The company has not yet made an official statement.


The protein-peptide bonds that heal JOINT ENDEAVOUR. Researchers at IIT-Bombay engineer stapled peptides to aid in the fight against cancer and other diseases K Bharat Kumar

Peptide-based drug discovery has gained currency in the past decade. This branch of pharmaceuticals promises solutions to tricky health issues such as cancer. Now, two researchers from IIT-Bombay and one from the Technical University of Darmstadt, Germany, have reported work that suggests ways to improve peptide-based drug discovery.

Inside every living cell, thousands of proteins constantly interact with one another, switching genes on and off, repairing damage, carrying signals and deciding whether a cell should live or die. Many diseases, including cancer, arise when some of these protein–protein interactions go wrong.

One such interaction involves two proteins called p53 and MDM2. Normally these two proteins function together in a checks-and-balance manner. The p53 protein is a sort of sentinel — it triggers the destruction of cells that have gone bad, such as with cancer. Excess of p53 can be a problem. MDM2 comes in and suppresses p53. This is fine but sometimes p53 is less or MDM2 is more; when this happens, MDM2 prevents p53 — the guardian angel — from doing its job. Keeping track of such happenings in cells has given rise to the study of ‘protein-protein interaction’.

PRECISE STAPLING Scientists have discovered that stapled peptides can bind themselves to MDM2 and prevent it from suppressing p53. This is because scientists have engineered the stapled peptides to resemble p53, and MDM2 attaches to them. This leaves p53 free to do its job, without hindrance from MDM2.

Drug discovery is about making the right kind of stapled peptide. In a paper, the three researchers have used computer simulations to demonstrate that medical researchers should look not just at protein combinations but also the behaviour of the molecules in the solvent in which the proteins are immersed. In their study, the researchers focused on the behaviour of water molecules — the solvent — in the presence of stapled peptides.

They found that stapled peptides also altered the behaviour of water molecules. When a stapled peptide binds to its target protein, the water molecules gain ‘entropy’ or freedom, while the peptide itself becomes more stable and rigid. The behaviour of the water molecules could be manipulated to create more effective and ‘stickier’ medicines. Put simply, this means medicines (stapled peptides) can be made more effective by controlling how a drug interacts with the water molecules rather than by focusing only on the drug molecules’ shape and binding capability.

A more stable peptide binds better with its target — its efficacy increases. “Peptide-based drug discovery is an emerging field... Using in-silico (computer-based) approaches, effective peptide drug candidates can be identified and filtered at early stages. However, the detailed thermodynamics at the binding interface are often overlooked,” the researchers say in a joint statement to businessline. They point out that in many ongoing drug discovery pipelines, the ‘entropic effects’ (freedom of movement of molecules) are largely ignored.

THERAPEUTIC PATHWAY If a peptide’s binding property is improved, will it translate into a drug that requires lower doses or has fewer side effects?

“Stronger binding affinity can provide several practical advantages, including lower therapeutic doses, reduced off-target effects and potentially lower treatment costs. Importantly, understanding how stapling affects both peptide structure and surrounding water dynamics provides a... basis for the rational design of more effective peptide therapeutics,” the researchers respond in their statement.

However, they caution that translating the computational insights into clinical applications calls for more extensive experimental and clinical validation. Interestingly, research into stapled peptides could well open the door to improved treatment for other diseases. “Researchers can identify optimal stapling positions and cross-linker chemistries that enhance binding affinity. This strategy expands opportunities for targeting challenging protein-protein interactions in areas such as oncology and immunology,” the statement says.


PROTEINS AND PEPTIDES

  • Peptides are short chains of amino acids. In a sense, they are “dwarf proteins”.
  • Most people know proteins as body-building molecules — which is true — but there are thousands of different proteins. For example, snake venom is a cocktail of proteins, as is haemoglobin.
  • Both peptides and proteins are chains of amino acids. An amino acid is a molecule that has carbon, hydrogen, nitrogen, oxygen and a ‘side chain’ of molecules with other elements like sulphur. Since there are about 20 ‘side chains’, there are as many amino acids.
  • Stapled peptides are two peptides linked by a chemical. They are, therefore, engineered molecules.

‘Over 600 State bills passed in 2025 with limited scrutiny’ Our Bureau New Delhi

The latest PRS report on Annual Review of State Laws 2025 reveals a disturbing trend of State Assemblies rushing through over 600 bills in 365 days of 2025, displaying a lack of severe legislative oversight over issues critical to democracy and government functioning. Instead of threadbare debates and discussions on legislation, many Assemblies have turned into rubber stamps, data compiled by the report in May 2026 suggested.

As many as 30 per cent of the bills were passed on the day they were introduced, with the Andhra Pradesh, Bihar, Gujarat, Jharkhand, Mizoram, Puducherry and Punjab Assemblies passing all legislation either on the day of introduction or the next. States that passed a higher number of bills often did so in a single sitting. Karnataka passed 17 bills in one sitting and 12 in another, while Assam passed 14 bills in a single sitting, flagged the PRS report.

Even though State legislatures passing over 600 bills in 2025 is worrisome, the number of legislation being cleared is on the rise. Notably, in 2024, the Assemblies had cleared a total of about 500 bills. Karnataka had passed the highest number of bills at 84 in 34 sitting days, followed by Assam at 60 bills in 21 sitting days.

NUMBER OF SESSIONS The number of legislative sessions held in Vidhan Sabhas and Vidhan Parishads have also seen a sharp decline. State Assemblies met for an average of just 24 days in 2025, pointed out the report. It, however, marked a marginal increase from 21 days in 2024 and 23 days in 2023. Of the average 24 days of Assemblies conducting businesses, in Nagaland, it met only for seven days. This stood at 43 days for Odisha.

Some States have set minimum targets for annual sitting days, either through legislation or the rules governing their procedures. Barring Himachal Pradesh, no State has met its prescribed target.

The Constitution requires no more than passage of six months between two sittings of a State Assembly. The report also stated that all States met this requirement in 2025. In several cases, this was achieved with the States meeting just enough to meet the requirement.

For example, Assam convened a one-day session in June, between March and November sessions. Gujarat, after adjourning in March, met for three days in September. In Rajasthan, the gap between two sessions was five months and eight days, while in Meghalaya, the interval was five months and 26 days.

Most sittings occur in the first quarter of the year when the States meet to discuss and pass their budget.



The New American Diaspora: A Record Exodus Overseas

 

Americans Are Leaving the U.S. in Record Numbers

More citizens are replanting overseas, drawn by a quality of life made easily affordable by the U.S.’s enviable salaries. “I wasn’t expecting to be surrounded by this many Americans.”

By Drew Hinshaw and Joe Parkinson Feb. 25, 2026 7:00 pm ET

In its 250th year, is America, land of immigration, becoming a country of emigration? Last year the U.S. experienced something that hasn’t definitively occurred since the Great Depression: More people moved out than moved in. The Trump administration has hailed the exodus—negative net migration—as the fulfillment of its promise to ramp up deportations and restrict new visas. Beneath the stormy optics of that immigration crackdown, however, lies a less-noticed reversal: America’s own citizens are leaving in record numbers, replanting themselves and their families in lands they find more affordable and safe.

Since the Eisenhower administration, the U.S. hasn’t collected comprehensive statistics on the number of citizens leaving. Yet data on residence permits, foreign home purchases, student enrollments and other metrics from more than 50 countries show that Americans are voting with their feet to an unprecedented degree. A millions-strong diaspora is studying, telecommuting and retiring overseas. The new American dream, for some of its citizens, is to no longer live there.

In the cobblestoned streets of Lisbon, so many Americans are snapping up apartments that the newest arrivals complain they mostly hear their own language—not Portuguese. One of every 15 residents in Dublin’s trendy Grand Canal Dock district was born in the U.S., according to realtors, higher than the percentage of Americans born in Ireland during the 19th-century influx following the Potato Famine. In Bali, Colombia and Thailand, the strains of housing American remote workers paid in dollars have inspired locals to mount protests against a wave of gentrification.

More than 100,000 young students are enrolled abroad for a more affordable university degree. In nursing homes mushrooming across the Mexican border, elderly Americans are turning up for low-cost care. On a conference call last month hosted by Expatsi, a relocation company, almost 400 Americans signed up to learn how to move to Albania. The former Stalinist state offers a special visa allowing U.S. citizens to live and work there, with no tax on foreign income for a year, no questions asked.

“Previously, the Americans leaving were super-adventurous and well-credentialed,” said Expatsi founder Jen Barnett, a 54-year-old Alabama native who moved to Yucatán, Mexico, in 2024. “Now they’re ordinary people, like me,” she said as she ticked through growth numbers. In 2024 the company organized three group scouting trips for clients; this year it will be 57, she said: “Our goal is to move one million Americans”.

Some commentators have labeled this wave of American emigrants the “Donald Dash” since numbers have spiked under President Trump’s second term. But the phenomenon has been building for years—fed by the rise of remote work, mounting living costs and an appetite for foreign lifestyles that feel within reach, especially in Europe.

A White House spokesman said the U.S. economy is far outpacing other developed nations and the Trump administration policies were deporting hundreds of thousands of illegal immigrants and attracting “countless ultra-high net worth foreigners,” who are “shelling out $1 million for a Gold Card to come settle in the United States”. The U.S. experienced net negative migration—an estimated loss of some 150,000 people—in 2025, and the outflow will likely increase in 2026, according to calculations by the Brookings Institution, a public-policy think tank. The number could be larger or smaller because official U.S. data doesn’t yet fully capture the number of people leaving, Brookings analysts noted. The total in-migration was between around 2.6 and 2.7 million in 2025, down from a peak of almost 6 million in 2023.

The U.S. saw 675,000 deportations and 2.2 million “self-deportations” last year, according to data from the Department of Homeland Security. A Wall Street Journal analysis of 15 countries providing full or partial 2025 data showed that at least 180,000 Americans joined them—a number likely to be far higher when other countries report full statistics.

There is no single data set that precisely registers the estimated 4 to 9 million Americans already living outside the U.S. The State Department estimated 1.6 million lived in Mexico in 2022, a number that has likely grown in the postpandemic years—although recent cartel violence has unnerved some expats. Canada’s count, at more than 250,000, doesn’t fully capture dual citizenship, or the flow of Americans whose daily lives straddle the border. The U.K. hosts more than 325,000—part of the more than 1.5 million now living in Europe, per the Association of Americans Resident Overseas, a Paris-based nonprofit.

The figures that exist likely undercount, overlooking locals born to an American parent, students on long-term visas or others exploiting a common loophole: arriving on 90-day tourist visas, leaving for a day to reset and returning for another three months. But a vast and fragmented pile of immigration statistics, stitched together by the Journal, depicts a historic pattern. In nearly all of the European Union’s 27 member states, the number of Americans arriving to live and work is at a record and rising. The total living in Portugal has jumped more than 500% since the Covid pandemic and grew by 36% in 2024 alone, official data there showed. In the past 10 years, the number of American residents has nearly doubled in Spain and the Netherlands, and more than doubled in the Czech Republic.

Last year, more Americans moved to Germany than Germans moved to America. The same was true in Ireland, which welcomed 10,000 people from the U.S. in 2025, about double those who came in 2024. If there was any thought that this was a fleeting pandemic-era experiment of laptop nomads logging in from distant shores, data hints at its longevity. The U.S. government has a monthslong backlog of Americans asking to renounce their citizenship, either to secure a foreign passport or to avoid taxation of their earnings abroad. In 2024, requests jumped 48% and likely outpaced that in 2025, immigration firms say.

Americans are applying for British citizenship at the highest rate since records began in 2004: some 6,600 in the year to March 2025. They are securing Irish passports at a record pace: 31,825 in 2024, and an estimated 40,000 last year. Meanwhile, some 50,000 U.S.-born Mexican-Americans moved across the border to work last year, according to a Mexican government survey cited by the U.S. Census Bureau.

The booming number of new relocation companies say they’re struggling to keep up with demand. They include LuxNomads for the well-to-do; GTFO Tours, attracting Trump critics; Blaxit Global, for Black Americans, and SheHitRefresh, for the biggest boom market of all, women. A Gallup poll last year found 40% of American women, ages 15-44, would like to permanently move overseas, if possible. By comparison, in 2023, the same pollster found that a slightly smaller proportion of sub-Saharan Africans—37%—wished to do the same.

Relocation agencies say their new clients go far beyond young adventurers on European sojourns or their retiring parents. They include Midwestern small-business owners—architects, financial advisers and engineers—saving on healthcare costs by living seven time zones east of their clients. Middle-aged divorcées are looking for a fresh start and Americans on disability or social security are trying to stretch their benefits. Strikingly, the new American migrant is more likely than ever to bring children in tow, relocation companies and realtors say, laying down roots and raising a set of Americans feeding into foreign colleges.

“You don’t face the prospect of your 5-year-old going into a kindergarten and doing an active shooter drill,” said Chris Ford, 41, who works for a Dallas real-estate investment firm while helping run a kids’ baseball league in Berlin, whose roster has doubled in size for each of the past three years. “The wages are higher in the U.S. but the quality of life is higher in Europe”.

The exodus poses elemental questions for a country that has always prided itself as a destination. Are the new American emigrants a credit to the strength of their homeland’s economy? After all, it is America’s enviable salaries that allow a new class of students, remote workers and retirees to finance a second chapter abroad, their wages and stock gains powered by the Silicon Valley juggernauts dominating the global economy. Or do these émigrés personify a loss of faith in America’s future and way of life?

Across dozens of interviews, U.S. expats described their motivations as a tangle of economic incentives, lifestyle preferences and disenchantment with the trajectory of America, citing violent crime, cost of living and turbulent politics. Trump’s re-election was a factor for many—although others voted for him. But the structural and societal shift runs much deeper. When Gallup asked Americans during the 2008 recession how many wanted to leave the U.S., the answer was one in 10. Last year: One in five.

“It undercuts this American exceptionalism, ‘we have the best quality of life, we’re the best country in the world, everyone wants to move here,’” said Caitlin Joyce, one of two researchers at Temple University who have spent years studying the trend. “Well, Americans move abroad and find they like life better abroad. They like the social democratic policies”. At the end of the interview, she posed a question to a Journal reporter, based in Europe: What was it like, living over there? She too was thinking about moving.

An American tale

The last time more people left the U.S. than moved in, according to Census historical statistics, it was 1935 and the destination of choice was the Soviet Union. More than 100,000 Americans applied to work the tractor plants, steel mills and factories of a communist dictatorship. The newcomers played baseball in Moscow’s Gorky Park—others were later imprisoned in gulags. So many unskilled Americans descended on the U.S.S.R. that by 1938 the Soviets started requiring U.S. visitors to show proof of return travel.

These days, the social democracies of Europe are luring Americans. Their governments have eased visa rules and passed tax codes that let U.S. citizens experience Europe on American-style tax rates. The bargain: The U.S. has larger salaries, mobile talent and millions of citizens craving a better life. Europe needs such workers—and their income—to prop up a pension system so top-heavy that French retirees now outearn working age adults, according to the Luxembourg Income Study, a research agency. European salaries are constrained by high taxes and low growth. Retailers, restaurants and real-estate agents want foreign clientele.

In return, Europe offers inexpensive healthcare, walkable cities dotted with sidewalk bistros and co-working spaces where English has displaced the local tongue. Housing in many cities remains comparatively cheap and plentiful. Schools are affordable, safe and, excluding universities, generally higher-rated than America’s.

The arrivals are a counterpoint to the looming Euro-American geopolitical divorce, as the Trump administration and its richest backers sour on the trans-Atlantic alliance. To many conservatives, Europe is a stagnant economy of suffocating taxes and repressive regulation that is pushing its most successful citizens away: More than 18,000 millionaires left Europe last year, while the U.S. attracted 7,500, according to a report by Henley & Partners, a relocation consulting firm. And yet a growing subset of the U.S. top tech and finance talent is dialing in from Southern Europe.

One Texan fintech specialist, watching his son play on a Madrid square some locals have nicknamed “Plaza U.S.A.,” expressed elation that, by simply buying European private health insurance and canceling his American plan, he saved enough to afford tuition at one of the capital’s elite schools. “Many Americans come and there are many love stories,” said Spanish government spokeswoman Elma Saiz Delgado, whose hometown of Pamplona brings in Americans who know it from the annual bullrunning festival chronicled by Ernest Hemingway. “After four glasses of wine, they stay”.

In his rallies, Trump has mused about attracting Norwegian immigrants. But the number of Norwegians living in the U.S. has fallen over the past 10 years, and in 2024, it crossed a symbolic milestone: There are now more natural-born Americans living in Norway than Norwegian-born residents in the U.S. Evidence is mounting that the draw of expatriate life extends beyond the cost of living. Last year the dollar weakened 12% against the euro, yet the influx of new U.S. residents accelerated in all of the large euro countries—France, Italy, Spain, Germany—and continued in smaller nations like Slovenia and Portugal.

“I wasn’t expecting to be surrounded by this many Americans,” said Michael Le Blanc, a 56-year-old former creative producer at Adobe and Paramount now freelancing from Lisbon, as he bought a hefty plastic bottle of Hidden Valley ranch dressing and Pillsbury Funfetti cake mix at one of the city’s American stores. “I’m trying to learn the language but it’s a real challenge”. He moved with his two children after the second active shooter scare at his 8-year-old son’s Los Angeles school. In the six months since, his wife, Stephanie, a 42-year-old academic adviser in the U.S., has found work selling Lisbon real estate to incoming Americans. Some 58% of foreign buyers in Portugal are from the U.S., and house prices have doubled in five years in some of the upmarket historical districts.

Politicians on prime-time shows in Portugal and Spain earnestly debate how to ensure that locals aren’t disadvantaged by the new wave of foreign residents. In Barcelona, a black graffiti scrawl has appeared on a long gray wall: “Digital Nomads go home!” On one of the city’s tree-lined plazas, Lia Mashaka runs a business helping Americans move to the Mediterranean city, from navigating visas to finding a pediatrician. Many arrive telling themselves they’ll only spend a year, she said—but “I’ve never had a client that has chosen to go back to the U.S”.

In 2024, her husband, Akida, opened the Barcelona High School, an American school, thinking it would help their son move to the U.S. after graduation. Instead, he chose Madrid’s IE University, which now has as many American students as Spaniards. On a recent morning at Barcelona High, 30 new families were on a lower floor for an orientation. Workers were preparing three upper floors to accommodate a student body set to reach 600 in September, up from 300 two years ago. “We used to have most families coming from New York state or California,” said Amanda Slefo, the school director. “Now we have Alaska, Utah, Texas, Colorado, Kentucky”.

The pipeline

Social media is feeding into the emigration economy, with dozens of influencers demystifying the process. Kacie Rose, a former professional dancer, shares vignettes of her new life in Italy that she compiled into a bestselling memoir, “You Deserve Good Gelato”. On Instagram, Kelis—the R&B star known for singing “my milkshake brings all the boys to the yard”—regales 3 million followers with quick videos on the opportunities she says await Black Americans ready to follow her by moving to Kenya.

The number of U.S.-based academics seeking jobs overseas rose by more than a fifth last year, according to Times Higher Education, a U.K.-based provider of global education data. Most of them landed in Europe, where the EU has set aside 500 million euros to lure top scientists to the continent. Professors teaching abroad blamed the American right for slashing research funding, and the left for policing university speech.

International students coming to America fell by 17% last fall and is expected to decline more quickly in years to come—while the cohort of Americans obtaining a degree in Europe has doubled from 2011, rising 14% last year alone in the U.K., according to UCAS, the British university admissions service. Prince William’s alma mater, Scotland’s elite University of St. Andrews, receives so many Americans it is now sometimes referred to as “mini-Nantucket”.

Of the 12 American students the Journal spoke to for this story, studying across Spain, Scotland and England, only one planned to return to the U.S. “I’m of the perspective where I don’t really mind if I’m busing tables in London or something if I’m jetting off to Oslo or Berlin or Copenhagen on the weekend,” said Brody Wilkes, a second-year St. Andrews student from Santa Monica, Calif. “I think that’s a way of life that I would much prefer over trying to grind a corporate job in the U.S. or working in L.A. and dealing with crazy home prices and things like that”.

Buffalo, N.Y., native Kelly McCoy had been struggling to make ends meet on her $80,000 salary as an insurance analyst until she moved to Albania in the summer of 2024 to take advantage of its American visa. (When she arrived, she hung her home team’s flag, reading “Bills Mafia,” on her balcony, drawing confused looks from neighbors in a country battling organized crime.) She likes to tell the story of how, after she was treated for a concussion and a broken arm at a local hospital, she wandered the halls confused why nobody was trying to charge her.

McCoy, 45, has since relocated to Romania and works as a consultant helping other Americans with more limited means join the emigrant wave. “You’ll still find people saying only rich people can do this. I have had 15 American clients move to Albania that have been on social security or disability or both,” she said. “In Albania, you can very easily right now survive on $1,000 a month,” she added. “I have another consultation with someone tonight”.

Appeared in the February 27, 2026, print edition as 'Americans Are Leaving the U.S. In Record Numbers'.

Cheapflation Cycles: How Upstream Costs Drive Inflation Inequality

 The core mechanism behind cheapflation cycles is a phenomenon known as pass-through in levels. This concept posits that when firms face upstream cost shocks, they tend to adjust their retail prices on a "dollars-and-cents" basis rather than a percentage basis. Consequently, when the cost of raw materials or manufacturing rises, both premium and budget varieties within a specific product category experience similar absolute price increases.

The Logistics of the Mechanism

While the absolute price increase might be identical across varieties, the percentage impact differs significantly:

  • Lower-priced products: A fixed absolute increase (e.g., a few cents per ounce of coffee) constitutes a larger percentage change for cheaper varieties.
  • Higher-priced products: The same absolute increase results in a smaller percentage change for premium varieties.

Because low-income households disproportionately purchase lower-priced varieties, they face higher inflation rates than high-income households during periods of rising upstream costs.

Cheapflation in the Context of Cycles

This mechanism generates predictable cycles in inflation inequality that fluctuate alongside upstream cost movements:

  • Rising Upstream Costs: When commodity or manufacturing prices spike—as seen during the Great Recession (2008–2011) and the post-pandemic period (2021–2023)—the gap in inflation between low- and high-income households widens significantly.
  • Falling Upstream Costs: Conversely, when input costs decrease relative to the aggregate price level, the inflation gap narrows or can even become negative.

The sources indicate that this mechanism is highly effective at accounting for observed fluctuations, explaining nearly 60 percent of the variation in the inflation gap between top and bottom income quintiles for food-at-home purchases.

Theoretical Foundation: Shift-Invariance

The sources reconcile this behavior with models of imperfect competition through a property called shift invariance in demand systems. Under shift-invariant demand, firms maintain positive markups but pass through common cost shocks (like commodity price changes) one-for-one in levels to their retail prices. This explains why firms don't simply maintain fixed percentage markups, which would lead to proportional price increases across all varieties.

Limitations of Official Statistics

A critical consequence of this within-category mechanism is that it is largely invisible in official inflation data. Standard statistics, like those from the Bureau of Labor Statistics (BLS), aggregate prices at a category level (e.g., "roasted coffee"), which masks the internal price divergence between cheap and expensive varieties. Research shows that official data can understate differences in inflation experienced by low- and high-income households by 70–90 percent.

Beyond food, there is evidence that this mechanism applies to other consumption categories, including automobiles, apparel, and services, suggesting that cheapflation cycles are a broad feature of the economy.


Inflation inequality refers to the differences in inflation rates faced by households across the income distribution, a phenomenon that is systematically driven by Cheapflation Cycles. These cycles are characterized by fluctuations in the inflation gap between low- and high-income households, primarily triggered by upstream input cost shocks.

The Mechanism of Inequality

The sources identify pass-through in levels as the fundamental driver of this inequality. When upstream costs (like commodity prices) rise, firms tend to increase retail prices by similar absolute amounts (e.g., cents-per-ounce) across all product varieties in a category.

Because low-income households disproportionately purchase lower-priced varieties, these fixed absolute increases result in a larger percentage price change for their typical consumption basket. For example, in 2011, when coffee commodity prices spiked, the lowest unit price products saw a 40% inflation rate, while the highest price varieties rose by only 12%—even though both had nearly identical absolute price increases in cents-per-ounce.

Cyclical Nature of the Inequality Gap

Inflation inequality is not static but fluctuates in a predictable cycle tied to input costs:

  • Rising Input Costs: During periods of high food-at-home inflation (e.g., 2008, 2011, and 2021–2023), the inflation gap between the bottom and top income quintiles widens significantly.
  • Falling Input Costs: When input costs decrease, the gap narrows and can even become negative, meaning low-income households temporarily face lower inflation than high-income households.

In food-at-home purchases, this "within-category" mechanism accounts for nearly 60% of the variation in the inflation gap between the top and bottom income quintiles over time. When combined with different expenditure shares across product categories, it explains approximately 70% of the variance.

Understatement by Official Statistics

A major finding in the sources is that official statistics largely mask this inequality. The Bureau of Labor Statistics (BLS) aggregates price data at the category level (such as "roasted coffee"), which hides the internal price divergence between budget and premium varieties. Consequently, official data may understate the difference in inflation experienced by low- and high-income groups by 70–90% during periods of rising costs. For the 2021–2023 period, aggregation understated the growth in food prices for the lowest-income quintile relative to the highest by a factor of seven.

Broader Context Beyond Food

This pattern of inflation inequality extends to various other sectors and units:

  • Automobiles: Lower-priced car models and those with lower-income buyer bases exhibit higher inflation sensitivity to overall price changes.
  • Geography: Low-income cities experience higher and more volatile inflation because they consume lower-priced varieties that are more sensitive to national cost shocks.
  • International Trade: Countries that import lower-priced varieties face greater import price inflation when global commodity prices rise.

Ultimately, the sources suggest that these cycles in inequality are a parsimonious explanation for the disproportionate burden of inflation on the poor during economic shocks, often leaving little room for alternative theories like price-gouging or changes in demand elasticity.


Official statistics produced by agencies like the Bureau of Labor Statistics (BLS) significantly mask the inflation inequality generated by cheapflation cycles because they aggregate price data at a level that is too broad to capture within-category shifts,.

The Core Problem: Aggregation Bias

The primary issue with official statistics is that they report inflation rates pooled across various products within a single category, such as "entry-level items" (ELIs),. Because the mechanism of "cheapflation" operates through pass-through in levels—where absolute price increases hit cheaper varieties harder in percentage terms—the resulting price divergence occurs within these categories,.

The sources highlight several critical ways this aggregation fails to represent the economic reality of low-income households:

  • Understating Inequality: Official statistics can understate the difference in inflation experienced by low- and high-income households by 70% to 90%,.
  • Invisible Fluctuations: Large swings in the inflation gap are often completely invisible in public data. For example, when coffee commodity prices spiked in 2011, disaggregated scanner data showed an 8 percentage point inflation gap between low- and high-income households within the coffee category alone; however, because the BLS tracks "roasted and instant coffee" as a single item, this gap was lost in the official average,.
  • Sensitivity to Upstream Costs: Aggregation masks the fact that food-at-home inflation for low-income households is much more sensitive to upstream producer prices. Official data masks nearly 90% of this disproportionate sensitivity for food manufacturing costs and 72% for farm product costs,.

Case Study: 2021–2023 Post-Pandemic Inflation

The discrepancy between official statistics and actual experiences was particularly "dramatic" during the 2021–2023 period of rising input costs,.

  • Official View: Price indices built on ELI-aggregated data showed a negligible difference in food price growth (only 0.3 percentage points) between the bottom and top income quintiles.
  • Actual View: Disaggregated data revealed that low-income households experienced 2.4 percentage points higher growth in food prices than high-income households.
  • Factor of Seven: In this instance, official aggregation understated the differential growth in food prices for the lowest-income quintile relative to the highest by a factor of seven,.

Generalization Beyond Food

This issue is not limited to groceries; the sources provide evidence that official statistics similarly obscure inequality in other major spending categories:

  • Automobiles: The BLS tracks new and used vehicles under broad ELI codes (TA011 and TA021), but does not disaggregate by specific makes and models. Consequently, they miss the fact that lower-priced car models are more sensitive to overall vehicle inflation,.
  • Geographic and Import Data: Similar aggregation issues lead to a failure to capture how low-income cities or countries importing cheaper varieties are more exposed to national or global cost shocks,.

The sources conclude that official statistics are especially biased precisely when input costs rise sharply—which is when policymakers are most likely to be concerned about the distributional burden of a rising cost of living.


The sources provide evidence that the mechanism of pass-through in levels and the resulting cheapflation cycles are a broad feature of the economy, extending well beyond the primary data on food-at-home.

Evidence in the Automobile Sector

One of the most detailed areas of evidence outside of groceries is the automobile market. Using microdata on household vehicle purchases and manufacturer-suggested retail prices (MSRPs), the research finds:

  • Price Sensitivity: Within a specific vehicle make, a model with a 10% lower initial price exhibits year-over-year growth that is 3.9% to 7.0% more sensitive to average price growth.
  • Income Base Sensitivity: Models with a 10% lower-income customer base have inflation rates that are 8.6% to 9.1% more sensitive to overall vehicle inflation.
  • Economic Impact: This is significant because vehicle purchases constitute a major share of consumer expenditures—roughly 6.8% of spending between 2021 and 2023, nearly as much as food-at-home.

Evidence Across Other Goods and Services

Using the C2ER Cost of Living Index (COLI), which tracks standardized products across roughly 300 urban areas, the sources identify cheapflation patterns in several other sectors:

  • Apparel: Patterns of higher inflation for cheaper items were observed in products like boys' and men's denim jeans.
  • Services: Cheapflation was detected in service costs, such as barbershop haircuts and washing machine repair calls.
  • Housing and Utilities: The data also showed evidence of these cycles in apartment rents and utility bills.
  • General Merchandise: Other goods, including generic medicines (aspirin), newspaper subscriptions, and tennis balls, follow the same pricing logic.

Geographic and Metropolitan Evidence

Beyond specific product categories, the sources use Bureau of Labor Statistics (BLS) metropolitan area price indices to show that this mechanism affects entire cities based on their income levels.

  • City-Level Volatility: Consumer price inflation in lower-income cities is higher and more volatile than in high-income cities because they consume lower-priced varieties that are more sensitive to national cost shocks.
  • Sector Aggregates: This reduced inflation sensitivity in high-income cities holds true across broad aggregates, including food away from home, goods excluding food, and services excluding shelter.

Implications for Generalization

The consistency of these findings across food, automobiles, apparel, and services suggests that cheapflation cycles are not an isolated phenomenon of the grocery aisle. Instead, they represent a systematic cross-sectional variation in how different income groups experience inflation based on the varieties they consume. The sources conclude that because official statistics aggregate data at the category level (e.g., "new cars and trucks" or "apparel"), they likely miss quantitatively important differences in the cost of living for households across the income distribution in all these sectors.


The theoretical framework of cheapflation cycles is centered on the principle of pass-through in levels, which posits that firms respond to upstream cost shocks by adjusting retail prices on a fixed absolute basis (cents-per-ounce) rather than a fixed percentage basis. The sources provide a rigorous theoretical foundation for this behavior and subject it to extensive robustness testing to ensure its validity across various economic conditions.

Theoretical Foundation: Shift-Invariance

To reconcile the observed "dollars-and-cents" price adjustments with economic theory, the sources highlight a property of demand systems called shift invariance.

  • Contrast with Standard Models: In many standard models of imperfect competition, such as those using Constant Elasticity of Substitution (CES) demand, firms maintain fixed percentage markups. This would imply that pass-through in levels is strictly greater than one, as a cost increase would be multiplied by a gross markup.
  • Unitary Pass-Through: Shift-invariant demand systems allow for positive markups and downward-sloping demand curves while predicting that common cost shocks are passed through one-for-one in levels. This theoretical property is essential for explaining why premium and budget brands raise prices by the same absolute amount despite having different initial price points.

Robustness of the Mechanism

The sources conduct several tests to confirm that the pass-through in levels is a robust phenomenon and not an artifact of specific data or time periods:

  • Exogenous Cost Shocks: To address concerns about reverse causality (e.g., demand shocks affecting commodity prices), the author uses instrumental variables (IV). Specifically, they use exchange rates for major exporters (Brazil and Colombia) and weather shocks to coffee-growing regions to isolate exogenous changes in input costs. The results consistently show uniform pass-through in levels across all price groups.
  • Time Horizons: The baseline results use a 6-quarter horizon to measure long-run pass-through. Robustness checks show that changing this horizon to 4 or 8 quarters does not meaningfully alter the finding of uniform pass-through.
  • Substitution Effects: A common critique of inflation measurement is the failure to account for consumers switching to cheaper products. The sources test this by comparing the baseline Laspeyres index to a Törnqvist price index, which accounts for substitution. They find that while the absolute level of inflation changes, the inflation gap between high- and low-income groups remains remarkably similar.

Nonhomotheticities and Trading Down

The research further explores how nonhomothetic preferences—where consumption patterns change as real income changes—affect cheapflation.

  • Amplification of Inequality: During periods where food prices rise faster than income, households tend to "trade down" to lower-priced varieties.
  • Theoretical Irony: Because lower-priced varieties are precisely the products experiencing the highest inflation due to pass-through in levels, the act of trading down actually amplifies the rise in the cost of living for low-income households. Accounting for these nonhomotheticities shows that low-income households face even higher inflation volatility than standard measures suggest.

Quantitative Accuracy

The sources propose a specific mathematical formula (Proposition 1) to predict inflation differences based on the "price gap" between varieties and the "excess inflation" of a category relative to wages. When tested against 18 years of food-at-home data, this theoretical prediction accounts for 70 percent of the observed variance in inflation inequality. Notably, the sources find that the "cheapflation" observed during the 2021–2023 surge was actually slightly less than expected given the massive rise in input costs, suggesting that pass-through in levels is a highly conservative and powerful explanation for inflation inequality.



Newspaper Summary - 310526

 

FPIs turn net sellers for 3rd straight month in May

Per NSDL data, foreign investors sold equities worth ₹60,847 crore in April and ₹1,17,775 crore in March.

INVESTMENT FOCUS Foreign Portfolio Investors (FPIs) remained net sellers in Indian equities for the third consecutive month in 2026, with net outflows of ₹32,963 crore in May, according to National Securities Depository Limited (NSDL) data. The pace of selling, however, showed signs of moderating in the final week of May. NSDL data for the four trading sessions ended May 29 presented a mixed picture.

On May 25, FPIs recorded a net outflow of ₹6,176.80 crore across segments. The trend reversed the next day, with net inflows of ₹2,564.20 crore. Selling resumed on May 27, when FPIs pulled out ₹1,330.07 crore, before the month closed with equity investment standing at ₹1,505.22 crore on May 29. These gains partially offset outflows of ₹5,259.31 crore on May 25, which was the steepest single-day equity withdrawal of the week.

DEBT: MIXED TREND The debt market continued to reflect caution. In the Debt-VRR segment, FPIs were net sellers through the week, with the sharpest outflow of ₹976.41 crore on May 25.

For context, FPIs sold equities worth ₹60,847 crore in April and ₹1,17,775 crore in March, the latter being the largest monthly outflow so far this year. February briefly bucked the trend with net inflows of ₹22,615 crore, while January saw outflows of ₹35,962 crore. Total net FPI outflows from Indian equities in 2026 have now reached ₹2,24,932 crore. This was partly offset by ₹15,497 crore of inflows through the primary market route.

According to Prashant Shah, Co-founder and CEO of Definedge Securities, “Between January and April, FPIs pulled out nearly ₹2-lakh crore from Indian equities, already exceeding the total outflows recorded during the whole of 2025". Analysts attributed the sustained selling to a combination of geopolitical and global uncertainty and risk aversion. This has been compounded by macroeconomic pressures such as a weakening rupee and elevated crude oil prices.

DIIs CUSHION VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that poor earnings growth in India compared to much stronger growth in countries like the US, Japan, South Korea, and Taiwan—along with strong AI-related trade in those markets—contributed significantly to FPI selling in India. Meanwhile, Domestic Institutional Investors (DIIs) continued to provide a strong counterbalance to foreign selling, with DIIs infusing ₹82,668 crore during the period.

Anupama Ghosh, Mumbai


When bits and bytes take a large bite

Nishanth Gopalakrishnan bl. research bureau

DEJA VU. While current semiconductor cycle appears rock solid, history indicates it can end in tears

If you are an investor and you have not heard the word ‘semiconductors’ recently, you have been living under a rock! The world is in the grip of an AI gold rush and at the heart of it all? Semiconductors. These are computer chips that form the muscle behind AI and the building blocks responsible for every lightning-fast response from your favourite AI model.

Companies that design or manufacture these chips are seen as shovel sellers of this gold rush, and investors have been going hammer and tongs at lapping up stocks of these companies like there is no tomorrow!

Ten Trillion dollars! That’s the wealth these stocks have generated for investors over the past year. For perspective, that’s about twice of India’s total market cap.

Chip stocks have given unreal returns in the past 12 months, and every other stock is at its all-time high or thereabouts. Key among them include SK hynix’s (South Korea) 1,008 per cent rise, Micron Technology’s (the US) 903 per cent and Samsung’s (South Korea) 468 per cent. Samsung, Micron and SK hynix even joined the ‘$1-trillion market-cap club’ only in the past few weeks. Wealth-creation wise, Nvidia tops the list, having added $1.7 trillion to its market-cap, followed by TSMC (Taiwan Semiconductor Manufacturing Company) at $1.1 trillion.

The US-listed SOXX ETF (iShares Semiconductor ETF), which tracks the performance of a basket of 30 semiconductor stocks, is up 172 per cent in one year, dwarfing the S&P 500’s rather healthy 28 per cent.

UNDERSTANDING 0s AND 1s

AI is supposed to be the next-generational leap in technology such as personal computers, Internet and cell phones of the past. Whether AI reaches the extreme view of replacing human labour or remains an effective tool for search and code, AI models need bleeding-edge semiconductors working non-stop in data centres—both for training (feeding massive amounts of data for the model to learn) and inference (getting a response from a prompt).

While ‘semiconductor’ is a broad term, specific chips are relevant for AI/data centre applications:

  • GPU: Graphics Processing Units are the kings of parallel processing, ideal for training AI models.
  • CPU: Central Processing Units handle logistics, fetching datasets to and from storage for GPUs.
  • NAND flash memory: Acts as the non-volatile data warehouse.
  • DRAM: Dynamic Random-Access Memory holds active systems and apps in memory for the CPU to process without latency.
  • HBM: High-bandwidth memory is for GPUs; it consists of vertically stacked DRAMs placed close to the GPU to ensure faster speeds.

THE MARKET OPPORTUNITY

A McKinsey report reveals that if a data centre costs $100 to build, about $60 goes towards compute hardware. Applying this, the semiconductor industry is poised to take advantage of close to a trillion-dollar opportunity ($1.6 trillion x 60 per cent). Analog Devices projects the semiconductor industry will grow from $750 billion currently to $1.6 trillion by 2030, at a 16 per cent CAGR.

On the supply side, these levels of demand are unprecedented and almost impossible to meet immediately, leading to staggered order-book fulfillment.

ECOSYSTEM PLAYERS

The story looks at eight large players: Nvidia, Micron, Broadcom, and AMD (the US); Samsung Electronics and SK hynix (South Korea); Taiwan’s TSMC and ASML from the Netherlands.

WHY THE CRAZE?

Revenue and earnings are projected to grow multi-fold over CY26-27. For instance, Nvidia is expected to treble its earnings to about $300 billion in CY25-27. Memory chip players (Micron, Samsung, SK hynix) show profit growth rankings at the top between 7.5x and 8.6x.

However, these earnings are largely led by price spikes because demand is larger than supply by a country mile. Micron’s DRAM sales rose 74 per cent sequentially in February 2026, primarily due to a ‘mid-60 per cent’ growth in average selling price and only a ‘mid-single-digit’ increase in bit shipments.

CYCLICALITY AND COUNTER-VIEWS

Market veterans Michael Burry and Peter Berezin call this the ‘bull-whip effect’ or the ‘toilet paper effect’. This occurs when panic-driven demand leads to hoarding and a drastic production ramp-up. By the time supply hits, panic ends, leading to flooding of inventory and price correction.

Unlike defensive software, semiconductors are typically a cyclical industry. For example, while Microsoft’s revenue grew consistently between 10-16 per cent post-2000, Micron’s was volatile and uneven. In March 2000, Micron posted 7x profit increases, but missed expectations due to a 20-per cent sequential drop in average selling price. The stock peak of $97.5 in July 2000 was not breached again until April 2021.

DOT-COM LESSONS

Today's semiconductor position is reminiscent of the dot-com crash era. Then, the Internet was the defining technology; today, it is AI. Today’s cohort is expected to post earnings growth CAGR between 45 per cent and 164 per cent over CY23-26E. Similar robust CAGR was witnessed in FY97-00 before earnings jumped off a cliff. In FY01, some dot-com cohort companies slipped into losses, and it took years—sometimes decades—to recover to FY00 profit levels.

CONCLUSION

While chip stocks could remain bullish as they digest earnings, the ‘bull-whip effect’ is a possibility. With the true extent of AI-driven disruption still under cloud cover, long-term investors would be better served prioritising caution over the pursuit of quick gains.


Investing to beat higher inflation

Aarati Krishnan
Contributing Editor

REAL RETURNS. Here’s a look at where investors could invest when inflation is spiking

Since 2024, Indian investors have enjoyed a pleasant honeymoon with inflation. Good monsoons and low crude oil prices have meant that CPI (Consumer Price Index) inflation has stayed well below the 4 per cent mark in this period.

Thanks to the Iran conflict, this situation is now set to change. Irrespective of whether the Trump ‘deal’ is struck or not, a portion of the global oil and gas capacity has been damaged by the war. The closure of Hormuz has disrupted shipping routes and supply chains, which may take months to normalise. Global prices of petroleum, gas, and their derivative products are not fully reflecting these disruptions yet, as floating inventories have helped alleviate shortages.

But now, with oil companies beginning to announce successive price hikes, the impact of supply chain breaks showing up, and a looming El Niño set to fire up food prices, India’s inflation rates look likely to spike again. History has shown that spikes in inflation, driven by multiple triggers, do not fade away quickly and last a while. We should also be open to the possibility of mean reversion, as India’s long-term CPI inflation rate has averaged 6 per cent.

Therefore, how should you as an investor prepare for this reversal? Let’s take stock.

GOLD: LESS OF A HEDGE IN SHORT TERM

Theoretically, gold is supposed to be a good hedge against inflation because it preserves its value against paper money. While true in the long run, gold has proved an ineffectual hedge in the short term. Since the Iran war began, global gold prices are down 14 per cent in dollar terms. In India, rupee depreciation has cushioned this fall, but prices are still down about 2 per cent since the war began.

This strange behaviour is underpinned by two factors:

  1. Central Bank Selling: The conflict has prompted some central banks (like Russia and Turkiye) to sell gold to tide over tight finances.
  2. Spiking Treasury Yields: Rising inflation expectations have caused global treasury yields to spike. Treasuries compete directly with gold as safe-haven options; when yields improve, global investors often sell gold.

As an investor, you should still hold gold as a portfolio hedge against geopolitical risks and equity volatility, but do not look to it to protect against short spells of high inflation.

DEBT: SHORTER THE BETTER

Investors locked into fixed interest on bonds or deposits are clear losers from rising inflation, as it eats into real returns. Additionally, a spike in inflation increases the possibility of rate hikes, leading to capital losses on bonds.

If you are a debt investor, consider these options:

  • Floating Rate Bonds: The Government of India’s Floating Rate Savings Bond (currently at 8.05 per cent) is pegged to a spread over the National Savings Certificate and can improve if inflation leads to higher rates.
  • Debt Mutual Funds: Categories like floating rate debt funds (using swaps), money market mutual funds (investing in instruments with under one-year maturity), and ultra-short duration funds (three to six-month maturity) help piggyback on rising rates.

In this scenario, bonds, deposits, and mutual funds with more than one-year maturity are best avoided.

EQUITIES: SELECTIVE GAINS

Theory suggests equities can beat inflation in the long run because nominal economic growth lifts revenues, and rising wages stoke spending. However, the reality is more nuanced. Input inflation creates immediate margin pressures, so a company’s ability to grow profits depends on its pricing power — the extent to which it can pass on inflated costs to consumers.

When choosing stocks today, look for:

  • Companies in duopolistic or oligopolistic sectors.
  • Firms with wide brand or distribution moats.
  • Sector leaders with dominant market share.
  • Companies with a services component in their revenue mix.

Another hedge is to bet directly on companies churning out commodities. This can be done via commodity ETFs or international funds like the DSP World Mining Overseas Equity Fund or ICICI Pru Strategic Metal and Energy Equity.

FULL MENU

  • Debt options: Floating rate bonds and debt funds, money market funds, ultra-short duration funds.
  • Equities: Choose firms with pricing power.
  • Gold: Good portfolio hedge against geopolitical risks and equity volatility.

Third-party payment in MFs: Good or bad?

Kumar Shankar Roy bl. research bureau

BL EXPLAINER. SEBI considers salary-linked investing, unit-based distributor commissions & donations via schemes

Your mutual fund (MF) investments currently have to be paid for from your own bank account. Regulator SEBI is now considering a relaxation to this rule. In a consultation paper issued on May 20, it has proposed allowing third-party payments in specific situations, including investments made through salary deductions, commission paid to MF distributors in units and donations routed via MFs.

What is SEBI trying to do through its consultation paper on enabling third-party payments in MFs?

Currently, MF investments have to be paid for from the investor’s own bank account. SEBI is now considering whether this rule can be relaxed in a few limited situations where another party makes the payment, but the investment still belongs to, or benefits, an identified investor or beneficiary.

The consultation paper proposes allowing third-party payments in three cases:

  • An employer deducts money from an employee’s salary and invests it in MF schemes chosen by that employee.
  • An AMC pays trail commissions to a MF distributor in the form of MF units instead of cash.
  • Contributions or donations are channelled towards social causes through MFs.

SEBI is thus not proposing a free-for-all in third-party payments. It is examining whether specific, traceable relationships...

What do the existing rules specify regarding this?

Under the present framework, the money used to buy MF units must come directly from the investor’s own bank account. Payments must also move through permitted channels, such as RBI-authorised payment aggregators or SEBI-recognised clearing corporations.

In regulatory terms, this creates a closed loop — the investor, the source of the investment money and the recipient of the redemption proceeds are linked through verified bank accounts. A third-party payment breaks this link at the investment stage, which is why the present framework takes a conservative approach.

The rule helps the MF system establish whose money is being invested, trace the payment route and ensure that redemption proceeds are paid only into verified bank accounts. These safeguards are intended to reduce fraud and money-laundering risks and support compliance with the Prevention of Money Laundering Act. Competing products such as insurance already allow third-party payments.

How will paying for MF units through employer help investors?

Under the proposal, an eligible employer could deduct an amount from an employee’s salary and make a consolidated payment to an AMC for investment in MF schemes selected by the employee.

The facility would be voluntary. Only employees who opt for it would participate, and they would choose their preferred schemes. For employees, the proposed advantage is mainly convenience rather than access to a new investment product. They can already invest in MFs on their own. What changes is that regular investing could be embedded in the salary process, rather than requiring the employee to separately initiate payments from his or her bank account.

A key investor-interest question is whether such payroll-routed investments would be made in Direct Plans or Regular Plans. If the employee is choosing the scheme and the employer is merely facilitating the salary deduction, routing such investments through Regular Plans could mean the employee bears distribution-related costs despite not receiving distributor-led advice.

Another point to consider is the feasibility of having another salary-linked investment. EPF contributions already take up a portion of the employees’ salaries. In other cases, there is the NPS. It can be argued that not many employees can find room for another automated saving option, unless they create space by organising existing monthly investments.

What are the challenges likely to be?

Allowing a third party to pay for an investor’s MF units creates a key regulatory concern. The person funding the investment is different from the person who owns the units. This raises risks around tracing the source of funds, preventing money laundering and fraud, and avoiding conflicts of interest or mis-selling.

For instance, an employer facilitating salary-linked investments could favour schemes of an affiliated AMC. Similarly, SEBI explicitly flags that allowing an AMC to pay trail commissions to distributors in MF units could create a conflict of interest.

Practical operational risks include the payroll route exposing employees to situations where money is withheld from pay without timely allotment of the intended MF units. Since MFs are market-linked, delayed or incorrect allotment could also result in an adverse NAV impact, unless the final framework clearly fixes responsibility and compensation.

Some are calling it India’s 401(k) moment. Is this right?

Not quite, at least not yet. SEBI’s proposal could make MF investing more convenient by allowing employees to route investments through salary deductions. In that limited sense, it introduces a workplace-linked investing channel.

But salary deduction alone does not make an investment facility a retirement system. It only changes how the investment is funded. A 401(k)-type framework is about the broader architecture of retirement savings, including its retirement purpose, incentives, the employer’s role and the rules governing accumulation and withdrawal. The consultation paper does not propose a dedicated retirement product.

BROADER GOAL The proposal is aimed at making genuine transactions easier while retaining checks against fraud and money laundering.


Retirement Income Scheme

Dhuraivel Gunasekaran
bl. research bureau

SIMPLYPUT

Two friends, Nirmal and Rahul, are chatting over tea.

Nirmal: Rahul, I read that the pension fund regulator PFRDA has launched a Retirement Income Scheme (RIS) under NPS. What’s new about it?

Rahul: Until now, NPS (National Pension System) was mainly about building a retirement corpus. Once you retire, a part of that corpus had to be used to buy an annuity (a product that provides regular pension income) and the rest could be withdrawn as a lump sum.

The new Retirement Income Scheme addresses a different question: how can retirees convert the portion of their NPS corpus that is not used to purchase an annuity into a steady income stream without withdrawing it all at once? Under the scheme, retirees can keep this balance invested within the NPS and draw it down gradually through monthly, quarterly, or annual payouts until the age of 85.

Nirmal: How is this different from the existing annuity option?

Rahul: The annuity requirement remains unchanged. Government employees must still use at least 40 per cent of their corpus to buy an annuity, while for others, instead of taking the remaining portion and having to find a way to invest it, you can keep it within NPS and withdraw it systematically over time.

Nirmal: Where is this money invested while I’m drawing income from it?

Rahul: It is invested in a new fund called RIS Steady. It follows a glide-path strategy. At age 60, the fund allocates 35 per cent to equities/shares, 10 per cent to corporate bonds and 55 per cent to government securities. As you age, the equity exposure is gradually reduced and the allocation to safer assets increases.

The idea is simple. Retirement can easily last 20 to 30 years. A retiree still needs some equity exposure to beat inflation, but risk should reduce with age. RIS Steady tries to strike that balance automatically.

Nirmal: How do the withdrawals work?

Rahul: There are two methods. One is Systematic Payout Rate (SPR). Here, the annual withdrawal rate depends on your age. At age 60, the payout rate works out to about 4 per cent. So if your drawdown corpus (the amount kept aside for phased withdrawals) is ₹1 crore, you would receive roughly ₹4 lakh a year, or around ₹33,000 a month. The amount remains fixed for one year and is recalculated annually. SPR rate increases with age.

The other method allows you to specify a period. It is like the SWP (Systematic Withdrawal Plan) of mutual funds. For example, a ₹1-crore corpus with an NAV (net asset value) of ₹10 translates into 10 lakh units. If these are spread over 25 years of monthly payouts, about 3,333 units are redeemed every month. Since the fund’s NAV changes, the rupee amount you receive can vary.

Nirmal: What are the advantages of this new RIS scheme?

Rahul: The biggest benefit is that it tackles longevity risk, i.e. the risk of outliving your savings. Many retirees struggle to manage a large lump-sum corpus after retirement.

Another advantage is that SPR discourages excessively high withdrawal rates. That reduces the risk of depleting the corpus too quickly, especially during the initial periods of poor market returns.

Nirmal: Is there a catch?

Rahul: Yes. Unlike an annuity, RIS does not guarantee income. The corpus remains invested in market-linked assets, so returns and payouts can fluctuate. Also, the preset asset allocation may not suit everyone. Some retirees may find the 35 per cent equity exposure too aggressive, while others may consider it too conservative.

Retirees shouldn’t assume RIS is the perfect answer for everyone. Each person’s financial situation is different. The right choice will depend on income needs, risk appetite, tax considerations and how comfortably the payouts can sustain their lifestyle through retirement.


Hang in there!

Gurumurthy K bl. research bureau

INDEX OUTLOOK. Nifty 50, Sensex and Nifty Bank index look vulnerable to fall more

Nifty 50, Sensex and Nifty Bank index opened the week on a positive note with a wide gap-up on Monday. However, they failed to get a strong follow-through rise after that. Sensex and Nifty fell sharply on Friday, giving away all the gains. The indices closed the week lower by 0.8 and 0.7 per cent, respectively. Nifty Bank index also witnessed a strong sell-off on Friday. However, it managed to close the week marginally higher by 0.3 per cent. The Sensex, Nifty 50 and the Nifty Bank indices look vulnerable to fall more from here. To avoid the fall, the indices have to bounce back immediately and breach their near-term resistance decisively.

FPIs SELL

The Foreign Portfolio Investors (FPIs) continue to sell Indian equities. However, the quantum of selling has come down in the last two weeks. The equity segment saw a net outflow of about $268 million last week. The FPIs have sold about $3.45 billion in the month of May. There has been a net outflow of about $22.64 billion in the last three months.

NIFTY 50 (23,547.75)

Short-term view: Failure to get a strong follow-through rise and a sharp fall on Friday has turned the short-term picture weak. Nifty looks vulnerable for a fall to 23,000. A break below 23,000 can drag the index further down to 22,400 in the coming weeks. A fall beyond 22,400 is less likely. We can expect the index to reverse higher from around 22,400 again.

Key resistances are at 23,700, 23,850 and 23,900. Nifty has to breach these hurdles and then get a sustained rise above 24,000. Only then the chances of a rise to 24,300 and 24,700 will come back into the picture.

Medium-term view: The broader 22,000-26,500 range remains intact for now. Earlier, we had expected the index to move up within this range, but now it looks like Nifty can fall back again towards the lower end of the range.

However, the big picture remains positive. We retain our bullish view of seeing a break above 26,500 eventually. Such a break can take the Nifty higher to 28,000 and 30,000 in the long term. A fall below 22,000 is needed to turn the outlook bearish, which looks less likely in the absence of any new and strong negative trigger.

NIFTY BANK (54,239.20)

Short-term view: Nifty Bank index broke the resistance at 55,100 initially last week but did not sustain. Immediate support is at 53,700 which can be tested in the near term. A bounce from this support and a subsequent rise above 54,500 can be bullish for a rise to 56,000-56,500. But if the index breaks below 53,700, it can come under more selling pressure, potentially leading to a fall to 51,000-50,500.

Medium-term view: The broader bullish view will remain intact as long as the index stays above 50,000. Intermediate resistances are at 58,500 and 60,500. A decisive rise above 60,500 can boost the momentum for a rise to 64,000-65,000 in the medium term. That in turn will keep the doors open for a rally to 68,000-69,000 in the long term. The bullish view will get negated only if the Nifty Bank index declines below 50,000, which looks less likely as seen from the charts.

SENSEX (74,775.74)

Short-term view: The rise to 76,500 happened last week but did not sustain. Sensex touched a high of 76,627 and then fell sharply, giving back all the gains. The index can test 74,100 initially this week. A break below it can drag it down to 73,000 in the short term. The region between 76,500 and 77,100 is a crucial resistance zone. Sensex has to rise past 77,100 to get some breather.

Medium-term view: The index is now coming down within its broad 71,000-86,000 range. In case the fall extends beyond 73,000, the downside can be limited to 71,000. We retain our positive bias to see a bullish breakout above 86,000 eventually, targeting 90,000 initially and 94,000 over the long term. This view will go wrong only if the Sensex declines below 71,000, leading to a possible fall to 69,000.

NIFTY MIDCAP 150 (22,571.40)

The index has come down sharply after making a high of 23,007 last week. Immediate support is at 22,400. A break below it can drag the Nifty Midcap 150 index down to 21,900-21,800 in the short term. The broader picture remains positive with crucial resistance at 23,100. A break above this can take the index to 26,000-26,500 and even 28,000-28,500 in the long term. The outlook turns bearish only below 20,800.

NIFTY SMALLCAP 250 (16,992.10)

The rise above 16,900 keeps the broader bullish view intact. Immediate support is in the 16,900-16,800 region. The short-term picture turns negative only below 16,800. If it sustains above that, a rise to 17,500 and then 18,000 is likely. Surpassing resistance at 18,300 could take the index to 22,500-23,000 and even 24,000 in the long term. The bullish view is negated only below 14,000.

SUPPORTS TO WATCH OUT FOR

  • Nifty 50: 23,000, 22,400
  • Sensex: 74,100, 73,000
  • Nifty Bank: 53,700, 50,500

No going back

Gurumurthy K bl. research bureau

US MARKET OUTLOOK. NASDAQ coming close to a key resistance

The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite index continue to move up. The US benchmark indices are retaining their strength and are keeping intact their broader uptrend. The Dow Jones and the S&P 500 have more room to rise from current levels, but the NASDAQ Composite index is coming close to a crucial resistance. The price action in the next couple of weeks will be vital in determining if the NASDAQ reverses its trend.

DOW JONES (51,037.09)

The rise to 51,300-51,500 mentioned previously is occurring as expected. From a medium-term perspective, the index has the potential to target 52,000-52,500.

Immediate support is at 50,800, followed by 50,300 and 50,000. The short-term outlook turns negative only below 50,000, which could lead to a fall toward 49,300-49,000. Broadly, the 52,500 region is a strong resistance that could halt the current rally, requiring caution as the index approaches this level.

S&P 500 (7,580.05)

The break above 7,500 has boosted bullish momentum and opened the door for further gains, with 7,500 now acting as a near-term support. The current rally is expected to find a top in the 7,800-7,850 region before reversing lower.

NASDAQ COMPOSITE (26,972.62)

The rise above 26,800 keeps the bullish view of seeing 27,500 intact. However, the 27,500 region is a strong trendline resistance where the rally is likely to halt. A downward reversal from there, followed by a fall below 26,900, could trigger a corrective leg dragging the index to 26,000 or lower. Investors are advised to remain cautious as the index reaches this crucial juncture.

DOLLAR INDEX (99.15)

The immediate outlook is mixed. Near-term support is at 98.70; a break below this could lead to 98.55-98.50, with further pressure potentially dragging it to 97.80. Conversely, the index must decisively breach resistance at 99.45-99.55 to strengthen the case for a rise toward 100.50-101.

TREASURY YIELD

Crude oil prices tumbling below $100 per barrel dragged yields lower, with the US 10 Year Treasury Yield (4.44 per cent) breaking below 4.5 per cent support. This move was contrary to expectations of a bounce. While there is support at current levels that could lead to a relief bounce back to 4.6 per cent, a failure to rise above 4.48 per cent could continue the downward pressure.



Monday, May 25, 2026

Newspaper Summary 250426

 

US has emerged as strong energy partner: Jaishankar

Amiti Sen New Delhi

In a strong signal that India will maintain its energy sovereignty, External Affairs Minister S Jaishankar stated that while the US, along with some other nations, has emerged as a reliable energy partner, India will continue to source energy from multiple suppliers to navigate current vulnerabilities in the Strait of Hormuz and secure its future needs.

Speaking at a joint media briefing on Sunday, US Secretary of State Marco Rubio said the US and India are likely to conclude a bilateral trade agreement that will be enduring and mutually beneficial, adding that the US Trade Representative is expected to visit India soon to advance the negotiations.

“This is an era of de-risking, and probably energy more than anything else requires de-risking. So, a big country, if you are to do de-risking, looks at multiple sourcing and for us, the US has emerged as a very significant and reliable source of energy, as indeed have some other countries," Jaishankar said. He further explained that diversifying energy sources is the way India will deal with the current situation in Hormuz and keep energy prices down for global growth. These comments are particularly significant given the ongoing pressure from the US for India to stop oil purchases from Russia.

WAR IMPACT

Rubio and Jaishankar discussed the economic repercussions of the West Asia crisis triggered by the US and Israel’s war with Iran. Their discussions also covered a wide range of bilateral issues, including:

  • Trade and energy security
  • Defence cooperation
  • Critical mineral supplies
  • Civil nuclear partnership
  • Visa processing challenges for Indian travellers

The US Secretary of State, currently on a four-day visit to India, also held discussions with the Prime Minister on Saturday and is scheduled to attend the Quad Foreign Ministers’ meeting on Tuesday.


Strong heatwave drives up sales of ice cream, beverages and ACs

Meenakshi Verma Ambwani New Delhi

As a searing heatwave grips large parts of the country, makers of ice creams, air-conditioners, and beverages are witnessing a sharp rebound in demand. This surge is fuelling hopes for a stronger-than-expected summer season following an initially sluggish start caused by unseasonal rains and cooler temperatures.

Quick Commerce Driving Growth

Companies across various categories report that consumption trends accelerated significantly in May, with quick commerce emerging as a major driver for impulse and immediate consumption purchases. Jayatheertha Chary, Managing Director of Mother Dairy, stated that demand growth is now expected to surpass earlier estimates of 30 per cent for the season. On quick commerce platforms specifically, ice cream volumes have more than doubled over the last 10 days, while fresh dairy products recorded strong double-digit growth.

Debabrata Mukherjee, MD of Lotte Ice Creams, noted broad-based growth across both impulse and take-home formats, such as cones, sticks, and single-serve cups.

Rebound in AC Sales

For the air-conditioner industry, this summer is critical after weak sales last year due to erratic weather. Despite taking price hikes in April to offset higher raw material costs and rupee depreciation, demand has strengthened across all regions.

NS Satish, CEO of Haier Appliances India, reported a growth of about 35 per cent this month, with demand picking up in northern and western regions while remaining strong in the south. Sanjay Chitkara, Director at LG Electronics India, also expressed expectations for strong growth in the ongoing quarter based on these robust May trends.

Beverage Uptick

Beverage makers are similarly reporting a sharp uptick in sales. Ravi Jaipuria, Chairman of Varun Beverages, highlighted highly favourable trends:

  • Dairy is growing at 60–70 per cent.
  • Nimbooz is growing at a great pace.
  • Tropicana PET is growing at more than 100 per cent.
  • The newly launched mid-priced energy drink, ‘Adrenaline Rush’ (₹60), is performing extremely well.

Rubio reminds India of intent to buy US goods worth $500 b

NULL & VOID. But with US SC declaring reciprocal tariffs illegal, deal irrelevant: Experts Amiti Sen New Delhi

US Secretary of State Marco Rubio on Sunday gave a fresh reminder of India’s commitment to purchasing $500 billion of US goods over the next five years by posting a thank you message to American diplomats who facilitated this pledge. However, some experts argue that because the reciprocal tariff framework collapsed following an unfavourable US Supreme Court verdict, the economic logic of the India-US bilateral trade agreement (BTA) has disappeared, rendering the $500-billion commitment irrelevant.

“The Indian government must clarify its position on Rubio’s tweet. Large-scale imports of US energy, defence equipment, aircraft and agricultural products could further widen India’s trade deficit and intensify pressure on the rupee,” stated Ajay Srivastava from the research body GTRI.

Rubio, currently on a four-day official visit to India, discussed prioritising BTA negotiations during meetings with Prime Minister Narendra Modi and Foreign Minister S Jaishankar. Taking to ‘X’ on Sunday, Rubio posted: “Huge thanks to @USAmbIndia Sergio Gor and our American diplomats for their efforts. Because of their great work, India has committed to purchasing $500 billion in US goods over the next five years focusing on energy, technology, and agriculture".

NOT FORMALISED

India’s pledge was part of a framework interim trade agreement that was never formalised.

Srivastava explained that the foundation of this bargain collapsed on February 20, 2026, when the US Supreme Court ruled that the legal basis for the Trump administration’s reciprocal tariffs was invalid. This ruling dismantled the tariff-based framework used for a new generation of US trade deals. Consequently, every country now faces a 10 per cent tariff for entry into the US market on top of normal Most Favoured Nation (MFN) tariffs.

This change erased the advantages countries expected in exchange for offering major concessions to the US. Experts add that the matter is particularly sensitive for India given the mounting pressure on the external sector and the rupee.


Electrifying energy consumption

M Ramesh

POWER DILEMMA POLICY SHOCK. What prevents India from reducing power supply losses by raising the share of electricity in the overall energy mix?

In 2024-25, India’s total primary energy supply stood at 9,32,816 kilo-tonnes of oil equivalent (KToe), but only 6,08,578 KToe was actually consumed. This indicates that 35 per cent of the supply was lost through conversion and system losses. The primary driver of this loss is thermal power, where 60-65 per cent of the energy contained in coal is lost during its conversion into electricity.

Boosting Efficiency and Non-Fossil Fuels

While there is scope for reduction through higher-efficiency boiler-turbine systems, the country is also reducing its dependence on coal-based electricity. Currently, 28 per cent of the electricity in India’s grid comes from non-fossil fuels. However, the share of thermal power is expected to fall even as India builds approximately 80 GW of new coal power plants.

The gap between primary supply and final consumption will only significantly narrow if the share of electricity in total final consumption (TFC) increases. At present, electricity accounts for just 23 per cent of TFC, meaning 77 per cent of energy is still consumed as molecules rather than electrons. Vinay Pabba, CEO of Vibrant Energy, notes that energy security cannot be bought by solar and renewable capacity alone until this balance changes,.

Industrial and Transport Electrification

Industrial energy demand is largely met through the direct combustion of coal, furnace oil, and diesel for process heat. Shifting to electricity for industrial heating is significantly more efficient; for example, while a coal boiler converts 100 units of energy into 80 units of heat, using that same coal to generate electricity for a heat pump can deliver 120 units of heat due to a high coefficient of performance.

Experts suggest that policy should explicitly focus on:

  • Mandating electric boilers for low-temperature industrial heating (below 150 degrees C).
  • Implementing phased replacement schedules for diesel and fuel-oil boilers.
  • Restricting new coal-fired industrial boilers in metropolitan areas.
  • Redesigning the ‘Perform, Achieve and Trade’ (PAT) scheme to encourage fuel switching over incremental efficiency.

The transport sector also offers a major pathway, as oil products currently account for 49 per cent of final energy consumption. Rapidly building charging infrastructure could shift a substantial share of vehicles from oil to electricity. Pabba argues that direct bans and mandates may be more effective than subsidies in catalyzing this process.

Political Hurdles

Increasing the share of electricity requires keeping its cost low, which faces "political headwinds". In India, industry is often required to pay higher tariffs to cross-subsidize free or low-cost supply for underprivileged communities. There is some hope in the draft New Electricity Policy 2026, which speaks against "relentless cross-subsidy".


Karnataka notifies 60% hike in minimum wages

Our Bureau Bengaluru

Karnataka has notified a 60 per cent increase in minimum wages, aimed at significantly boosting earnings for workers in the unorganised sector.

Revised Wage Rates

Under the new rates, labourers in Bengaluru will receive a minimum monthly wage of ₹23,376, while skilled workers are now entitled to ₹31,114. For the first time, the state government has brought all 81 scheduled employments under a single wage notification, replacing the previous system of four separate sectors.

Key Details and Compliance

  • Implementation: The final notification was issued on Friday, following a draft published on April 11, 2025.
  • VDA: A variable dearness allowance for two years, totalling ₹1,030, has been incorporated into the revised wages.
  • National Context: Karnataka is the third state to notify revised minimum wages in recent months, following Uttar Pradesh and Haryana.

Labour Minister Santhosh Lad stated that this revision fulfils a long-pending demand from workers and aligns with Supreme Court directives. In a post on X, he noted that the revised wage is intended to "infuse new hope into the lives of lakhs of labourers" across the state, providing them with greater financial security.