Artificial Intelligence and Personal Finance

 The use of artificial intelligence in personal finance has seen a rapid expansion since generative AI tools became widely accessible in late 2022. Across OECD countries, over one-third of individuals reported using AI tools in 2025, marking a significant shift in how consumers manage their money.

According to the sources, the following current trends define the larger context of AI and personal finance:

1. Rapid Consumer Adoption Across Financial Domains

Consumers are increasingly moving beyond general-purpose AI use to specific financial management tasks. Evidence from various jurisdictions shows high adoption rates:

• Widespread Use: In Korea, nearly 68% of adults have used publicly available AI for financial tasks, including stock investment advice (50%), savings planning (48%), and budget management (48%).
• Demographic Shifts: Adoption is particularly high among younger generations; for instance, 55% of Generation Z in Canada already use AI to manage their finances.
• Diversification of Tasks: Consumers now turn to AI for complex areas such as tax planning, insurance comparison, and retirement planning. In the United States, roughly 60% of adults report being comfortable using AI specifically for budgeting.

2. Increasing Trust and Reliance on AI Advice

A significant trend is the growing level of trust consumers place in AI-generated financial information.

• Perceived Neutrality: Many consumers trust AI to provide fair and unbiased advice, with 51% of US consumers believing AI can help them make better financial decisions.
• Targeted Trust: Trust varies by topic; for example, 57% of US consumers trust AI for home ownership information, though trust levels for stock and bond performance (34%) are currently similar to those for human professionals.
• Confidentiality: Consumers often use AI to ask sensitive questions about money problems that they might feel uncomfortable discussing with a human advisor, viewing the interaction as more anonymous.

3. The Shift from "Read-Only" to "Agentic AI"

The sources highlight an evolution from AI tools that merely analyze data to those that can execute actions.

• Open Finance Integration: AI is increasingly integrated with personal finance apps that have direct access to consumers' bank records through APIs.
• Autonomous Action: The industry is moving toward agentic AI, which has the potential to autonomously execute financial decisions—such as making payments or adjusting investments—on a consumer’s behalf.

4. Adaptation of Public Authorities (AEO and Digital Delivery)

Public institutions are changing how they deliver financial education to stay relevant in an AI-driven information ecosystem.

• Answer Engine Optimisation (AEO): Authorities in Ireland and Mexico have shifted from traditional Search Engine Optimisation (SEO) to AEO, restructuring their websites into Q&A formats to ensure AI chatbots accurately reference their vetted, official content.
• Interactive Education: Central banks are experimenting with AI-powered delivery, such as AI-generated podcasts in Lithuania or multilingual voice-to-voice chatbots in Morocco designed to assist users with low literacy.

5. Blurring Boundaries and Emerging Risks

As AI becomes more conversational and personalized, a critical trend is the blurring of boundaries between general education and regulated financial advice. This creates a "digital choice environment" where AI can steer consumers toward specific products through commercial influence that may not be fully visible to the user. Consequently, a major policy trend is the push for AI literacy, emphasizing that AI should be a supplement to, rather than a substitute for, individual financial literacy.

In the larger context of artificial intelligence (AI) and personal finance, the sources highlight transformative opportunities to improve how consumers access information, make decisions, and learn about money management. These opportunities span from immediate consumer support to the long-term design of financial education programs.

1. Enhancing Accessibility and Financial Inclusion

AI tools can break down traditional barriers that prevent consumers from engaging with the formal financial system:

• Simplification and Translation: Consumers with language barriers or low digital literacy can use AI to summarize, simplify, or translate complex financial documents, making them easier to digest.
• Voice and Conversational Modalities: AI-enabled voice interaction is particularly beneficial for seniors and individuals who struggle with complex digital interfaces. For instance, an experimental study in Korea found that mobile banking apps with conversational AI agents improved the experience and uptake for seniors through voice interaction and simulated lip movements.
• Conversational Payments: In India, AI-powered conversational systems allow users to initiate and complete transactions through spoken language, which is encouraged by the National Strategy for Financial Inclusion.

2. Personalised Financial Information and Planning

AI provides accessible, tailored advice across a wide range of financial domains:

• Saving and Investing: AI tools can suggest wealth-building strategies based on individual income and risk appetite. Research suggests that following AI advice can move consumers closer to diversified equity funds and better saving buffers than traditional robo-advisors.
• Budgeting and Debt Management: Apps integrated with bank records (Open Finance) can automatically categorize expenses, forecast future spending, and suggest debt repayment strategies to improve credit scores.
• Tax and Retirement: Consumers use AI to explain tax terminology, identify deductions, and calculate the implications of withdrawing pension funds.

3. Reducing Information Asymmetries

AI empowers consumers to interact with financial service providers on more equal footing:

• Product Comparison: AI helps consumers address "choice overload" by comparing different insurance or investment products independently. In a cross-country study, 68% of customers reported using AI to prepare before engaging with insurance providers.
• Redress and Rights: AI can assist consumers in exercising their rights by assessing if they have valid grounds for a complaint and helping them draft claims.

4. Transforming Financial Education

AI offers new ways for policymakers and educators to design and deliver financial literacy content:

• Adaptive Learning and Tutoring: AI can engage learners in dialogue, tailoring the difficulty and pace of content to individual needs in real-time.
• Just-in-Time Learning: AI offers "teachable moments" by providing information exactly when a consumer is making a financial decision. For example, the Central Bank of Portugal uses a chatbot to give clear guidance at the moment users seek information on banking products.
• Immersive Simulations: AI-enabled gamification allows learners to test financial concepts in safe, simulated environments without the risk of real financial loss.
• Support for Teachers: In Bulgaria, an experiment in primary schools showed that AI-assisted teaching—using simulations and recognized fictional characters—led to a statistically significant improvement in financial literacy compared to traditional classes.

5. The Potential of Agentic AI

Looking ahead, the shift toward agentic AI (systems that can autonomously execute decisions) could further reduce the "cognitive effort" associated with money management. These systems could potentially manage payments or adjust investment portfolios on a consumer’s behalf, provided they are governed by robust consumer protection frameworks.

In the larger context of artificial intelligence and personal finance, the sources highlight that while AI offers significant benefits, it also introduces substantial risks and potential harms. These risks stem from both the inherent limitations of the technology and the ways in which consumers interact with it.

The primary risks and harms identified in the sources include:

1. Inherent Technological Risks

• Hallucinations: AI can produce "hallucinations"—responses that appear plausible but are factually false or unsupported by data. Consumers acting on this false information face direct financial detriment.
• Presence of Bias: AI-generated advice may reflect or amplify biases. This includes home bias in investments, gender bias (e.g., recommending specific actions to men but not women), and cultural bias.
• Complexity and Lack of Explainability: The extreme complexity of advanced AI models makes it difficult for consumers to understand how a specific financial recommendation was produced.

2. Commercial and Behavioral Influence

• Commercial Bias: AI tools, especially those provided by financial institutions, may include undisclosed commercial influence. Chatbots may steer consumers toward specific products to prioritize provider profitability over the consumer's financial well-being.
• Blurring Boundaries: AI can blur the line between neutral information and regulated financial advice, making consumers more susceptible to commercial manipulation.
• Cognitive Off-loading: Consumers may use AI to reduce "cognitive effort," leading to an over-reliance where they excessively trust AI outputs without verifying them or applying critical assessment.

3. Privacy and Data Security Concerns

• Misuse of Personal Data: Consumers may share sensitive financial records (bank statements, tax forms) with AI tools. There is a significant risk that this data could be mishandled or used for unintended purposes, such as training models or targeting consumers with commercial offers.
• Normalisation of Sharing: The conversational nature of AI can make users more comfortable sharing sensitive information than they would be with a human, increasing the risk of over-sharing personal data.

4. Systemic and Individual Harms

• Poor Financial Outcomes: Acting on biased or inaccurate AI advice can lead to financial decisions that are inconsistent with an individual's actual needs, risk profile, and preferences.
• New Forms of Digital Exclusion: AI may accelerate the shift to fully digital services, potentially deepening the digital divide. This particularly harms those with low digital literacy, limited access to technology, or low financial literacy.
• Increased Vulnerability to Scams: The use of AI can normalise automated interactions, making it easier for fraudsters to use AI-powered scams, deepfakes, and impersonation attacks to target consumers.

The Compounding Effect of Low Literacy

The sources emphasize that AI is not a substitute for financial literacy. Individuals with low financial, digital, or AI literacy are at a much higher risk of harm because they may not understand the nature of the advice they receive, fail to recognize commercial bias, or be unable to supply the necessary context for the AI to provide relevant answers.

In the context of artificial intelligence (AI) and personal finance, the sources emphasize that AI is not a substitute for financial literacy. Instead, the safe and effective use of these tools requires a new set of specific competencies that combine traditional financial literacy with AI literacy—the ability to understand, use, and monitor AI applications with critical reflection.

According to the sources, the required competencies for consumers are categorized into awareness, skills, and attitudes across several domains:

1. Critical Evaluation and Verification

Consumers must possess the skills to treat AI as a starting point rather than a final authority.

• Verifying Accuracy: Users need the awareness that AI-generated information can be incorrect, unreliable, or subject to "hallucinations". They should be able to cross-check AI responses against other reliable, official sources before making decisions.
• Detecting Bias: A key competency is the ability to recognize that AI may reflect cultural, gender, or investment biases (such as "home bias").
• Commercial Awareness: Consumers must be able to identify commercial bias and check if AI-generated advice is linked to affiliate incentives or product distribution before acting on it.

2. Data Privacy and Security Skills

The conversational nature of AI often leads to "over-sharing," requiring consumers to manage their digital footprint actively.

• Anonymizing Interactions: A critical skill is the ability to anonymize prompts by removing personal identifiers and sensitive financial data before submitting them to an AI tool.
• Understanding Data Usage: Consumers need to understand that the data they share is often harvested to train models, generate answers for other users, or target them with future commercial offers.
• Evaluating Data Requests: Users should be able to critically evaluate why an AI tool is requesting specific personal data and decide if it is truly relevant to the financial task.

3. Operational Competency (Prompting and Context)

Effective use of AI requires the ability to interact with the technology in a way that produces high-quality results.

• Supplying Context: Users must be able to supply the necessary context and ask pertinent, well-structured questions to ensure the AI's financial advice is relevant to their specific situation.
• Technical Awareness: Consumers should be aware of the existence of various digital tools and keep abreast of how AI is being integrated into personal financial management.

4. Understanding Algorithmic Influence

Required competencies extend to understanding how AI functions "behind the scenes" to influence financial choices.

• Pricing and Advertising: Consumers should understand how AI-driven advertisements and algorithmic pricing can influence their purchasing decisions.
• Credit Scoring: There is a need for awareness that AI and big data analytics are increasingly used to determine credit scores, interest rates, and overall access to credit.
• Right to Contest: Where applicable, consumers should know they have a legal right to contest decisions taken by an algorithm and possess the skills to navigate a complaint process if they face an unfair outcome.

5. Distinguishing Between Education and Regulated Advice

A vital competency is understanding the legal nature of AI advice.

• Regulation Awareness: Consumers must be aware that advice from publicly available AI tools is not regulated financial advice.
• Duty of Care: They should recognize that unlike human advisors, these tools do not have the same suitability requirements or legal obligations to act in the consumer’s best interest.

Ultimately, the goal of these competencies is to ensure that individuals retain autonomy and agency. By possessing adequate AI and financial literacy, consumers can critically assess the "digital choice environments" created by AI and decide whether to act on automated recommendations or seek professional human intervention.In the context of artificial intelligence (AI) and personal finance, the sources emphasize that AI is not a substitute for financial literacy. Instead, the safe and effective use of these tools requires a new set of specific competencies that combine traditional financial literacy with AI literacy—the ability to understand, use, and monitor AI applications with critical reflection.

According to the sources, the required competencies for consumers are categorized into awareness, skills, and attitudes across several domains:

1. Critical Evaluation and Verification

Consumers must possess the skills to treat AI as a starting point rather than a final authority.

• Verifying Accuracy: Users need the awareness that AI-generated information can be incorrect, unreliable, or subject to "hallucinations". They should be able to cross-check AI responses against other reliable, official sources before making decisions.
• Detecting Bias: A key competency is the ability to recognize that AI may reflect cultural, gender, or investment biases (such as "home bias").
• Commercial Awareness: Consumers must be able to identify commercial bias and check if AI-generated advice is linked to affiliate incentives or product distribution before acting on it.

2. Data Privacy and Security Skills

The conversational nature of AI often leads to "over-sharing," requiring consumers to manage their digital footprint actively.

• Anonymizing Interactions: A critical skill is the ability to anonymize prompts by removing personal identifiers and sensitive financial data before submitting them to an AI tool.
• Understanding Data Usage: Consumers need to understand that the data they share is often harvested to train models, generate answers for other users, or target them with future commercial offers.
• Evaluating Data Requests: Users should be able to critically evaluate why an AI tool is requesting specific personal data and decide if it is truly relevant to the financial task.

3. Operational Competency (Prompting and Context)

Effective use of AI requires the ability to interact with the technology in a way that produces high-quality results.

• Supplying Context: Users must be able to supply the necessary context and ask pertinent, well-structured questions to ensure the AI's financial advice is relevant to their specific situation.
• Technical Awareness: Consumers should be aware of the existence of various digital tools and keep abreast of how AI is being integrated into personal financial management.

4. Understanding Algorithmic Influence

Required competencies extend to understanding how AI functions "behind the scenes" to influence financial choices.

• Pricing and Advertising: Consumers should understand how AI-driven advertisements and algorithmic pricing can influence their purchasing decisions.
• Credit Scoring: There is a need for awareness that AI and big data analytics are increasingly used to determine credit scores, interest rates, and overall access to credit.
• Right to Contest: Where applicable, consumers should know they have a legal right to contest decisions taken by an algorithm and possess the skills to navigate a complaint process if they face an unfair outcome.

5. Distinguishing Between Education and Regulated Advice

A vital competency is understanding the legal nature of AI advice.

• Regulation Awareness: Consumers must be aware that advice from publicly available AI tools is not regulated financial advice.
• Duty of Care: They should recognize that unlike human advisors, these tools do not have the same suitability requirements or legal obligations to act in the consumer’s best interest.

Ultimately, the goal of these competencies is to ensure that individuals retain autonomy and agency. By possessing adequate AI and financial literacy, consumers can critically assess the "digital choice environments" created by AI and decide whether to act on automated recommendations or seek professional human intervention.

The central takeaway from the sources is that while artificial intelligence (AI) is transforming personal finance by making information more accessible and personalized, it is not a substitute for financial literacy. As AI tools move from providing information to "agentic" systems that can autonomously execute financial decisions, the need for human agency and critical evaluation becomes even more vital.

The following key takeaways define the larger context of AI and personal finance:

1. AI as a Supplement, Not a Replacement

Financial literacy remains essential for individuals to retain autonomy and agency. Consumers must possess "AI literacy"—the ability to understand and critically monitor AI applications—to avoid acting on inaccurate or biased information. AI should be viewed as a tool to support, rather than replace, an individual's own financial knowledge and professional advice.

2. The Shift to "Agentic AI"

While current tools often act in a "read-only" capacity (e.g., categorizing expenses), the future involves agentic AI that can initiate payments and adjust investments on a consumer's behalf. This shift necessitates robust consumer protection frameworks, as automated decisions could be made with limited or insufficiently informed consent.

3. The Dual Nature of Personalization

AI offers unprecedented personalization, tailoring investment strategies and savings plans to an individual's specific income and risk appetite. However, this same personalization creates risks of steering and bias. Algorithms may reflect cultural or gender biases, or they may be commercially influenced to prioritize a provider's profit over the consumer’s well-being.

4. Verification is Mandatory

Because AI can "hallucinate"—producing factually false information that sounds plausible—consumers must verify all outputs against reliable, official sources. Trust in AI for financial tasks is growing, but this trust must be balanced with the awareness that these tools do not have a legal "duty of care" or suitability requirements like regulated human advisors.

5. Adaptation of Public Authorities

To ensure consumers receive accurate information, public institutions are moving from Search Engine Optimisation (SEO) to Answer Engine Optimisation (AEO). By structuring content in Q&A formats, authorities in countries like Ireland and Mexico ensure that AI chatbots accurately reference vetted, official financial education materials rather than unverified sources.

6. Risks to Vulnerable Populations

While AI can improve inclusion through voice-activated services for seniors or translation tools for those with language barriers, it also risks creating new forms of digital exclusion. Those with low digital or financial literacy may be more susceptible to AI-powered scams or find themselves excluded as services move to fully digital, automated platforms.

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Government Engagement in Sustainability Initiatives: A Policy Brief

 The sources outline several key takeaways regarding the increasing role of governments in sustainability initiatives, emphasizing that while engagement is rising, it remains complex and varied in its application.

Landscape of Government Involvement

• Growing but Minority Structural Involvement: Although governments are increasingly engaging with sustainability initiatives, an analysis of 1,078 initiatives found that only 30% involve government participation in their governance, funding, or operations. The remaining 70% operate independently of direct government involvement.
• Predominance of Non-Binding Policy: The most common form of engagement is through non-legally binding policy instruments, such as guidance or recommendations. Approximately 71% of initiatives are referenced in this manner to support or clarify their use for businesses.
• Limited Legislative Recognition: Formal recognition in legislation—where an initiative is used to demonstrate legal compliance—is much less widespread, applying to just over 15% of the initiatives studied.

Mechanisms of Engagement

Governments utilize a "smart mix" of approaches to involve themselves in the sustainability ecosystem:

• Direct Roles: This includes government ownership or creation (e.g., Germany’s "Green Button"), commissioning initiatives (e.g., Electronics Watch), or holding formal seats on boards (e.g., the Extractive Industries Transparency Initiative).
• Operational Decision-Making: Governments increasingly use initiatives to inform their own commercial activities, such as public procurement, trade, and investment. For example, U.S. federal law mandates the procurement of ENERGY STAR-certified products in many categories.
• Regulatory Support: Initiatives like the Responsible Minerals Initiative (RMI) have been formally recognized by the European Commission to help companies comply with Conflict Minerals Regulations.

Challenges and Risks

• Credibility and Reliability: A significant challenge for policymakers is the uncertainty regarding the scope and quality of the many available schemes. Initiatives differ significantly in how effectively they integrate international due diligence standards.
• The "Safe Harbor" Risk: There is a concern that formal recognition in legislation might create "safe harbors," potentially reducing company liability. Sources emphasize that participation in an initiative does not replace a company's own responsibilities for responsible business conduct (RBC).

Strategic Recommendations for Policymakers

To maximize the effectiveness of these initiatives, the sources suggest that governments should:

• Assess Credibility First: Before endorsing or relying on an initiative, governments must assess its scope, effectiveness, and fitness for purpose.
• Reinforce Company Responsibility: Policy engagement should be designed to reinforce, rather than replace, the due diligence responsibilities of individual companies.
• Select Aligned Modes of Engagement: Governments should choose engagement methods that best align with their specific national legal obligations and policy objectives.
• Monitor Impact: Governments involved in the funding or operations of initiatives are encouraged to analyze how their involvement influences the quality and uptake of those programs.

The sources categorize government interaction with sustainability initiatives into two primary spheres: direct structural involvement and engagement through the wider policy ecosystem. While government involvement is increasing over time, the majority of initiatives (70%) still operate independently of direct government structural support.

1. Direct Structural Involvement

This category involves governments taking a role in the governance, funding, or operations of an initiative. Approximately 30% of initiatives studied fall into this category.

• Government Ownership or Creation: The government acts as the legal owner, founder, or mandating authority. An example is Germany’s Green Button certification for sustainable textiles.
• Government Commissioned or Convened: The government initiates or structures an initiative without retaining formal ownership, often sharing day-to-day operations. Electronics Watch, which promotes workers' rights in global supply chains, emerged from an EU-funded initiative.
• Participation in Governance: Government entities hold formal seats as board members, observers, or advisors. The Extractive Industries Transparency Initiative (EITI) includes governments on its board alongside industry and civil society representatives.

2. Interaction through the Policy Ecosystem

Governments also interact with initiatives by integrating them into broader regulatory and policy frameworks.

• Reference in Non-Legally Binding Policy: This is the most common form of interaction, applied to 71% of initiatives. Governments use guidance, voluntary tools, or recommendations to endorse specific schemes. For example, Canada provides guidance on how the Forest Stewardship Council (FSC) aligns with national forestry standards.
• Formal Legislative or Regulatory Recognition: A government formally recognizes an initiative as a tool for demonstrating legal compliance. This is less widespread (15% of initiatives) due to the stringent assessment processes required. A key example is the European Commission’s recognition of the Responsible Minerals Initiative (RMI) for compliance with Conflict Minerals Regulations.
• Informing Government Decision-Making: Governments use initiatives to guide their own economic activities:
  • Public Procurement: Mandating specific certifications in government contracts, such as the US requirement for ENERGY STAR products.
  • Trade Policy: Incorporating sustainability criteria into free trade agreements, such as Switzerland’s use of specific standards for palm oil imports from Indonesia.
  • Investment and Finance: Considering certifications in financing decisions or using them to strengthen development co-operation programs.

The "Smart Mix" Context

Policymakers view these interactions as part of a "smart mix" of policy approaches. The sources emphasize that because initiatives vary significantly in quality and effectiveness, governments should assess an initiative's credibility and scope before endorsing it. Furthermore, these interactions are intended to reinforce, rather than replace, the individual due diligence responsibilities of companies.

Governments increasingly act as market participants, leveraging sustainability initiatives to inform their own economic and commercial activities. This use of initiatives is a key component of the "wider policy ecosystem" through which governments promote responsible business conduct (RBC).

According to the sources, the primary use cases for government decision-making include:

1. Public Procurement

Public procurement is a significant area where governments use certifications to set standards for the goods and services they purchase.

• Integrating Tender Criteria: Governments include certifications as specific criteria in tender processes, allowing them to utilize established sustainability criteria and assessment methods.
• Mandatory Purchasing Laws: Some nations mandate the purchase of sustainable products. For example, Korea’s Act on the Promotion of Purchase of Green Products requires state agencies to buy products with ecolabels across 158 categories.
• Federal Mandates (ENERGY STAR): In the United States, federal law requires agencies to procure ENERGY STAR-certified products in many categories to ensure energy efficiency and lower lifecycle costs.
• Reference Tools: A UN Environment Programme review found that 45% of surveyed organizations use ecolabels as reference tools to create purchasing criteria, while 39% use them for third-party verification.

2. Trade Policy

Governments utilize sustainability initiatives to ensure that international trade aligns with environmental and social standards.

• Free Trade Agreements (FTAs): Initiatives are used to satisfy sustainability criteria within trade agreements. A notable example is the Switzerland-Indonesia free trade agreement, where Swiss concessions on palm oil exports were made contingent on compliance with specific sustainability standards.
• Fair Trade Integration: In Italy, contracting authorities have integrated Fair Trade criteria as core requirements for certain trade-related activities.

3. Investment and Finance

Governmental financing and investment decisions are increasingly informed by a company's participation in recognized schemes.

• Sustainable Finance Labels: Governments and capital providers use labels and certifications to identify businesses that meet rigorous impact and sustainability assessments.
• Development Co-operation: Governments support sustainability initiatives in developing countries to strengthen the effectiveness of local certifications. For instance, the Swiss-funded Transparency and Innovation of Sustainability Standards (TISS) program aims to improve voluntary standards in these regions.

Strategic Considerations for Decision-Makers

While these use cases are expanding, the sources emphasize that governments must approach them with diligence:

• Pre-Assessment of Credibility: Before relying on an initiative for decision-making, governments must evaluate its scope, effectiveness, and fitness for purpose using tools like the OECD-ITC Typology.
• Reinforcing Responsibility: Use of these initiatives should reinforce, rather than replace, the due diligence responsibilities of the companies involved. Participation in a recognized scheme should not be viewed as automatic compliance with legal obligations.
• Data Gaps: Currently, there is no systematic data on the full prevalence of these practices across all government levels, suggesting that the current mapping is a preliminary overview rather than a comprehensive total.

As governments increasingly integrate sustainability initiatives into their policy toolkits, they face several challenges regarding the complexity of the landscape and critical considerations for ensuring these initiatives effectively support responsible business conduct (RBC).

Key Challenges for Governments

• Complex and Expanding Landscape: Policymakers must navigate a rapidly growing and complex environment where individual companies may reference nearly 100 different initiatives in their disclosures.
• Uncertainty Regarding Credibility: There is significant uncertainty concerning the scope, quality, and reliability of many schemes. This lack of clarity makes it difficult for governments to identify which initiatives are truly credible and which can effectively support compliance with legal requirements.
• Variability in Standards: Research indicates that sustainability initiatives differ significantly in their focus and how well they integrate international due diligence standards.
• The Risk of Safe Harbors: A major concern is that formal legislative recognition of an initiative might inadvertently create "safe harbors" from liability. The sources emphasize that participation in an initiative, even a highly aligned one, is not a guarantee of a company's responsible conduct.
• Systematic Data Gaps: There is currently no systematic data to quantify the full prevalence of government engagement across the wider policy ecosystem, specifically in areas like trade, investment, and public procurement.

Strategic Considerations for Policymakers

To address these challenges, the sources provide several recommendations for effective government involvement:

• Mandatory Credibility Assessments: Before endorsing, recognizing, or relying on an initiative for decision-making, governments must assess its scope, effectiveness, and fitness for purpose. They should utilize established tools like the OECD alignment assessments and the OECD-ITC Typology to evaluate these schemes.
• Preserving Individual Responsibility: Government engagement must be designed to reinforce, rather than replace, the individual due diligence responsibilities of companies.
• Clear Legal Communication: Policymakers should clearly communicate to the private sector how these initiatives interact with national legal obligations. It must be made explicit that participation in an initiative does not, in itself, constitute full legal compliance.
• Context-Specific Engagement: Governments should select the mode of interaction (e.g., direct involvement vs. policy referencing) that best aligns with their specific national context and policy objectives.
• Monitoring and Impact Analysis: Governments involved in the structural side of initiatives (funding or operations) are encouraged to analyze the impact of their involvement on the quality and uptake of those programs to inform future policy decisions.

The sources provide specific recommendations for policymakers to effectively navigate the complex landscape of sustainability initiatives. These recommendations are designed to ensure that government involvement enhances, rather than undermines, responsible business conduct (RBC).

1. Adopt a "Smart Mix" Approach

Sustainability initiatives should not be viewed as standalone solutions. Instead, policymakers are encouraged to treat them as one element of a broader "smart mix" of policy approaches. This mix should also include other government measures such as:

• Capacity building to help companies understand sustainability requirements.
• Detailed guidance on how to implement due diligence.
• Regulatory enforcement to ensure compliance with legal standards.

2. Strategic Alignment and Clear Communication

Governments should avoid a "one-size-fits-all" approach to engagement.

• Select Appropriate Modes of Engagement: Policymakers should choose the type of interaction—whether direct structural involvement or policy referencing—that best aligns with their specific national context and policy objectives.
• Clarify Legal Obligations: It is critical for governments to clearly communicate to companies how these initiatives interact with national legal obligations. Companies must understand that participation in an initiative does not automatically satisfy all legal requirements.

3. Prioritize Rigorous Credibility Assessments

Before a government endorses, recognizes, or relies on a sustainability initiative for decision-making (such as in public procurement or trade), it must assess the initiative's credibility and scope.

• Fitness for Purpose: Policymakers should determine if an initiative is truly "fit for purpose" for the specific regulatory or policy goal intended.
• Utilize Established Tools: The sources recommend using the OECD's suite of tools, such as alignment assessments and the OECD-ITC Typology, to evaluate whether an initiative can credibly support due diligence.

4. Reinforce (Do Not Replace) Corporate Responsibility

A central recommendation is that government engagement must reinforce, rather than replace, the individual due diligence responsibilities of companies.

• Avoiding Safe Harbors: To prevent the creation of "safe harbors" from liability, governments should explicitly state in legislation or policy that participation in an initiative does not in itself constitute compliance with due diligence obligations.

5. Commitment to Evidence-Based Policy

Governments that are directly involved in the governance, funding, or operations of initiatives are in a unique position to drive improvement.

• Analyze Impact: These governments should assess the impacts of their own involvement, specifically looking at how their participation influences the quality, effectiveness, and market uptake of the initiative.
• Inform Future Decisions: This evidence should be used to inform future policy decisions on when and how government engagement is most effective.

El Nino impact on Crop growth

 

The latest forecasts from the World Meteorological Organization and the National Oceanic and Atmospheric Administration indicate that El Niño is expected to strengthen through the second half of 2026, peak around November 2026–January 2027, and gradually weaken during spring 2027, although the exact strength and timing remain uncertain. NOAA currently assigns a high probability that El Niño persists into early 2027, with a meaningful chance of becoming a very strong event. (Climate Prediction Center)

Expected evolution (2026–2027)

Period	Expected ENSO stage	Likely agricultural impact
Q2 2026	El Niño develops	Initial changes in rainfall over the Pacific
Q3 2026	Moderate to strong	Indian monsoon risk increases; Australia becomes drier
Q4 2026	Peak intensity	Maximum impact on global agriculture
Q1 2027	Strong but weakening	Crop stress continues in many tropical regions
Q2 2027	Transition toward neutral	Weather impacts gradually diminish

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El Niño does not physically travel

One common misconception is that El Niño moves around the globe.

Instead:

• The warm ocean water develops in the central and eastern equatorial Pacific.

• This shifts tropical rainfall eastward.

• The atmospheric circulation (Walker Circulation) changes.

• Those atmospheric changes alter rainfall and temperatures across much of the world.

The warm-water anomaly remains largely confined to the tropical Pacific, while the weather impacts spread globally through atmospheric teleconnections. (Climate.gov)

Approximate timeline

Apr-Jun 2026
Western Pacific → Central Pacific warming

Jul-Sep 2026
Warm pool expands eastward

Oct-Dec 2026
Maximum warming reaches Eastern Pacific
(Global impacts strongest)

Jan-Mar 2027
Warm anomaly slowly weakens

Apr-Jun 2027
Return toward ENSO-neutral

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Regional crop impacts

Region	Rainfall	Main crops	Expected impact
India	↓	Rice, pulses, sugarcane	Lower yields if monsoon weakens
Southeast Asia	↓	Palm oil, rice	Production declines
Australia	↓↓↓	Wheat, barley, canola	Significant drought risk
Indonesia	↓↓↓	Palm oil, rubber	Lower output and wildfire risk
Brazil (South)	↑	Soybeans, corn	Better yields locally
Brazil (North)	↓	Coffee	Moisture stress
Argentina	↑	Soybeans, maize	Improved growing conditions
United States (Midwest)	Mixed	Corn, soybeans	Variable impacts depending on season
Southern Africa	↓	Maize	Elevated drought risk
East Africa	↑	Maize	Increased flood risk in some areas
Peru & Ecuador	↑↑	Bananas, cocoa	Flood damage risk

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Commodities most exposed

Potential winners

• Wheat (North America, Black Sea)

• Soybeans (Argentina)

• Brazilian southern corn

Potential losers

• Rice (India, Thailand)

• Palm oil (Indonesia, Malaysia)

• Sugar (India, Thailand)

• Coffee (Brazil, Vietnam)

• Cocoa (parts of West Africa and Ecuador)

• Cotton (India, Australia)

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India

The greatest concern for India is the Southwest Monsoon (June–September).

Expected impacts include:

• Reduced rainfall over central and northwestern India

• Lower reservoir inflows

• Higher irrigation demand

• Heat stress during flowering for many crops

• Reduced rice, pulses, sugarcane, cotton and soybean yields if rainfall deficits persist

Not every El Niño produces a weak monsoon, but it increases the probability of below-normal rainfall rather than guaranteeing it. (ResearchGate)

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Global risk ranking (2026–2027)

Commodity	Risk
Palm oil	🔴 Very High
Rice	🔴 Very High
Sugar	🔴 Very High
Coffee	🔴 Very High
Cocoa	🔴 Very High
Cotton	🟠 High
Corn	🟡 Moderate
Soybeans	🟡 Moderate
Wheat	🟡 Moderate

The combination of a potentially strong El Niño and an already warmer global climate means that weather extremes—including droughts, heatwaves, and intense rainfall—could be amplified compared with many historical El Niño events. (reuters.com)

Does Indian Techies own more than 150bn$ in ESOPs

 A bottom-up estimate suggests that US$150 billion is plausible, but only if you include:

1. Employees of U.S. multinational companies in India holding RSUs.

2. Employees of Indian startups holding valuable ESOPs.

3. Former employees who have retained vested shares over many years.

A figure based only on current U.S. multinational employees is likely lower.

Step 1: Estimate the number of employees receiving meaningful equity

Approximate India headcount at major U.S. technology companies:

Company	India employees	Estimated % receiving meaningful RSUs	RSU holders
Microsoft	25,000	95%	24,000
Amazon	110,000 (corporate + tech)	35%	38,000
Google	12,000	95%	11,000
NVIDIA	6,000	100%	6,000
Intel	15,000	95%	14,000
Cisco	15,000	95%	14,000
Adobe	8,000	100%	8,000
Salesforce	13,000	100%	13,000
Apple	5,000	100%	5,000
Oracle	40,000	60%	24,000
Others (AMD, Qualcomm, ServiceNow, Uber, Atlassian, etc.)	—	—	~70,000

Estimated RSU holders: ~227,000 employees

This is broadly consistent with the concentration of equity compensation among multinational technology firms in Bengaluru, Hyderabad, Pune, and Gurgaon. (NDTV Profit)

Step 2: Estimate average vested equity

A representative distribution might look like this:

Level	Share of employees	Average vested stock
Early career	40%	US$80,000
Mid-level	35%	US$250,000
Senior	20%	US$700,000
Director/VP	5%	US$3,000,000

Weighted average:

• 0.40 × 80k = 32k

• 0.35 × 250k = 87.5k

• 0.20 × 700k = 140k

• 0.05 × 3m = 150k

Average per employee ≈ US$410,000

Step 3: Total U.S. multinational equity

227,000 employees × US$410,000

≈ US$93 billion

Step 4: Add Indian startup ESOP wealth

India has produced dozens of unicorns and listed technology companies. Founders, early engineers, and senior executives have accumulated substantial ESOP wealth, although much of it remains illiquid. Public reporting shows ongoing ESOP buybacks and liquidity events, but annual realized values are only a fraction of total paper wealth. (Inc42)

A reasonable estimate:

• Startup ESOP wealth:

  • Conservative: US$20 billion

  • Base case: US$35 billion

  • Optimistic: US$50 billion

Step 5: Former employees

One important category is often overlooked.

Many employees who left companies such as Microsoft, Google, Amazon, NVIDIA, Adobe, or Salesforce still own vested shares accumulated over 10–20 years. They no longer appear in employee counts but continue to own U.S.-listed stock.

Estimated value:

• US$20–40 billion

Putting it together

Category	Conservative	Base	Optimistic
Current U.S. MNC RSUs	80	93	110
Indian startup ESOPs	20	35	50
Former employees	20	30	40
Total (US$ bn)	120	158	200

Conclusion

The base-case estimate of approximately US$158 billion aligns remarkably well with Saurabh Mukherjea's US$150 billion figure. (NDTV Profit)

The estimate is credible if it includes:

• vested RSUs held by current employees of U.S. multinationals,

• retained holdings of former employees,

• and valuable ESOPs from Indian startups.

If it referred only to current employees of U.S. technology companies, the figure would likely be closer to US$90–110 billion.

The largest contributors to this wealth are likely employees of Microsoft, Amazon, Google, NVIDIA, Adobe, Salesforce, Intel, Cisco, Oracle, and other global technology firms with significant engineering operations in India.

India Russian Oil Imports

 Below is an estimate of India's imports of Russian crude oil over the past 12 months, converted into million barrels per month. These figures are derived from Kpler/LSEG ship-tracking data reported by Reuters and other industry sources. Where only barrels-per-day (bpd) data were available, I multiplied by the number of days in the month.

Month	Avg. Imports (million bpd)	Approx. Monthly Imports (million barrels)
Aug 2025	1.43	44.3
Sep 2025	1.44	43.2
Oct 2025	1.48	45.9 (Reuters)
Nov 2025	1.86	55.7 (provisional) (Reuters)
Dec 2025	1.14	35.3 (Sputnik News)
Jan 2026	~1.10	34.1 (Kpler)
Feb 2026	~1.20	33.6 (CREA)
Mar 2026	~1.25	38.8 (Kpler)
Apr 2026	~1.75	52.5
May 2026	2.13	66.0 (Reuters)
Jun 2026	2.64–2.70	79–81 (Reuters)
Jul 2026*	~2.6–2.8 (estimated)	~81–87 (Reuters)

*July 2026 is an estimate based on vessel-tracking and provisional shipping data because the month has only just ended.

Key observations

• Late 2025: Imports weakened significantly after new U.S. sanctions and logistical disruptions, falling to roughly 35 million barrels in December, the lowest level in several months. (The Times of India)

• Early 2026: Imports remained subdued at around 1.1–1.3 million bpd as refiners adjusted procurement strategies. (Kpler)

• Q2 2026: Imports surged sharply as geopolitical tensions in the Middle East, including disruptions around the Strait of Hormuz, prompted Indian refiners to increase purchases of Russian crude. June reached a record of approximately 2.6–2.7 million bpd, or about 80 million barrels for the month. (Reuters)

This represents an increase of well over 100% from the lows seen in late 2025, making Russia once again India's dominant crude supplier.

Newspaper Summary 010826

 The article titled "Capex surges over 23% in Q1" from the August 1, 2026, edition is reproduced below:

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Capex surges over 23% in Q1

SPENDING SPURT. Fiscal deficit stands at over 18.2 per cent of the annual budget target

Shishir Sinha New Delhi

Capital expenditure showed a strong growth of over 23 per cent during the April-June quarter of the current fiscal, data released by the Controller General of Accounts (CGA) showed. Also, revenue receipt growth was nearly 11 per cent, which helped the fiscal deficit to stay around 18 per cent.

The deficit, as a percentage of the annual estimate prescribed in the Budget, reached 18.2 per cent in the first quarter, slightly higher than 17.9 per cent in the last fiscal. The Centre has set a fiscal deficit target of 4.3 per cent of the GDP or ₹16.96 lakh crore in the current fiscal.

In absolute terms, the fiscal deficit, which is the difference between total expenditure and revenue, was ₹3.08 lakh crore in the April-June period of FY27.

According to the CGA, the Centre’s net tax revenue was ₹6.36 lakh crore, or 22.2 per cent of the corresponding BE 2026-27 of total receipts, up to June 2026. In the corresponding period of the previous fiscal, the net tax revenue was at 19 per cent of that year’s BE. The data on the monthly accounts showed that the total expenditure during the first quarter was at ₹13.57 lakh crore, or 25.4 per cent of BE. In the year-ago period, it was at 24.1 per cent of BE.

According to DK Srivastava, Chief Policy Advisor, EY India, CGA’s fiscal data for the first quarter of 2026-27 show relatively buoyant performance of direct taxes, especially the corporate income tax which shows a growth of 19.7 per cent. In contrast, GST revenues continue to show contraction at (-) 1.1 per cent as a result of which indirect taxes contracted by 3.7 per cent. Total net tax revenues show a growth of 20.8 per cent.

“This implies a contraction in the assignment of Central taxes to the States to the extent of (-) 19.5 per cent in 1Q 2026-27," Srivastava said. "Centre’s net tax revenues supplemented by non-tax revenues which contributed 37 per cent of Centre’s net revenue receipts enabled the Centre to maintain a strong growth in expenditure in the first quarter showing a growth of 25.7 per cent while limiting the first quarter fiscal deficit to 18.2 per cent of the annual budgeted target”.

WAR IMPACT

Madan Sabnavis, Chief Economist at Bank of Baroda, feels that the balances are under control. This is significant because Q1 was the time when there was major disruption on account of the war where there was additional pressure on both the fertilizer subsidy front as well as tax revenues as the excise duty was lowered on fuel.

“Depending on how the war pans out and crude oil prices, it does look like that the expenditure on revenue account could be higher and in case capex is maintained, there can be pressure on the fiscal deficit ratio," Sabnavis said. "In the Union Budget, there can be a slippage of 0.3-0.4 per cent of GDP. Higher growth in GDP will provide statistical cushion, however”.

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The article titled "India left out of Bloomberg Global Aggregate Index" from the August 1, 2026, edition is reproduced below:

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India left out of Bloomberg Global Aggregate Index

STEEP DROP. Meanwhile, FPI flows via FAR fell 85% to $322 m in July vs $2.27 b in June

Our Bureau Mumbai

India’s much-anticipated entry into the Bloomberg Global Aggregate Index has been put on hold, with Bloomberg Index Services Ltd (BISL) deciding not to include Indian government bonds at this stage and continuing its review process.

This decision means India will have to wait longer for credible inclusion in one of the world's most widely tracked bond benchmarks, despite the initial optimism that the inclusion of the world’s fifth largest economy’s bond market is moving closer to meeting market expectations. Bloomberg acknowledged that there has been meaningful progress in recent years in improving accessibility for investors but adding that the country’s bond market is still evolving.

The exclusion is a disappointment as markets were expecting the inclusion to come after the government’s efforts to solve issues regarding holding tax and capital gains tax, which addressed an important part of the tax-compliance burden for foreign investors.

“Bloomberg’s decision is a disappointment, especially given the government’s efforts,” said Gaura Sen Gupta, chief economist, IDFC First Bank. “Bloomberg appears to believe that some operational and market-access challenges remain and wants to see recent reforms become more firmly established before taking a final call,” she added, stating that the inclusion in the Bloomberg Index would have seen passive inflows of around $25 billion in FY28.

Meanwhile, foreign portfolio investment (FPI) via fully accessible route (FAR) has shown a sharp upside in July after a bumper flow in June following the lower spread between US and Indian yield.

FPI SLOWDOWN

In July, FPI flows via FAR slipped 85 per cent to $322 million, compared to $2.27 billion in June 2026. However, for the seven months from January to July, the FPI inflow recorded a 6.2 per cent jump to $4.2 billion compared to $3.96 billion in the same period last year.

“Bloomberg announcement is likely to trigger a profit-taking sentiment. We could see some outflows from the FAR and bond yields may open higher on Monday as part of the optimism around index inclusion gets unwound,” added Sengupta.

While Bloomberg recognition remains elusive, India’s progress through expanded electronic bond trading and the removal of key taxes for foreign investors has improved market accessibility and efficiency. It also pointed out that global investors want these reforms to be more firmly established in practice before index inclusion.

ONGOING REVIEW

Concerns remain around the full rollout of automated trading across key regions and the need for smoother account-opening and on-boarding processes for foreign investors.

That said, Bloomberg has not closed the door on India. The review remains ongoing, and if operational bottlenecks are addressed and recent reforms deliver smoother market functioning for foreign investors, India’s inclusion prospects remain intact.

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The article titled “Banks raise interest rates on fresh term deposits and loans” from page 7 of the sources is reproduced below:

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Banks raise interest rates on fresh term deposits and loans

FUNDING PRESSURE. Also hikes median MCLR to 8.6% in July

Our Bureau Mumbai

Scheduled commercial banks (SCBs) are gradually raising interest rates on fresh term deposits and loans amid a wide gap between credit and deposit growth.

The weighted average domestic term deposit rate (WADTDR) on SCBs’ fresh rupee term deposits rose 16 basis points (bps) from 5.63 per cent in June 2025 to 5.79 per cent in June 2026. The WADTDR on fresh rupee term deposits in June 2026 is up from 4.29 per cent in April 2026. The WADTDR on outstanding rupee term deposits increased marginally to 5.69 per cent in June 2026 from 5.57 per cent in May 2026.

The weighted average lending rate (WALR) on fresh rupee loans of SCBs nudged up to 8.53 per cent in June 2026 from 8.51 per cent in May 2026. The WALR on outstanding rupee loans of SCBs declined to 8.95 per cent in June 2026 from 8.97 per cent in May 2026.

GROWTH GAP

In May 2026, the gap between year-on-year (y-o-y) credit growth (18.38 per cent) and deposit growth (13.22 per cent) as at June 30, 2026 stood at 516 basis points. However, the situation was worse in April 2026, with credit growth (20.24 per cent) and deposit growth (8.84 per cent) lagging behind; the gap stood at 1,140 basis points.

To deal with the asymmetry between credit and deposit growth, banks have also raised their benchmark rates. The median marginal cost of funds based lending rate (MCLR) rose to 8.60 per cent in July from 8.50 per cent in June.

Rama Chandra Reddy, Chief Treasury, Karur Vysya Bank, said: “Banks raised their short-term and medium-term term deposit rates of various buckets in June, reflecting aggressive liability mobilization in the first (April–June 2026) quarter balance sheet build up. He said the increase was more pronounced among private sector banks, where fresh deposit rates climbed to 6.21 per cent from 5.94 per cent, driven by intense competition for bulk deposits in June”.

REPRICING BENEFIT

Reddy opined that the cost of outstanding term deposits has largely bottomed out at around 6.58 per cent for SCBs (6.7 per cent for private banks) signalling that the repricing benefit is nearing its end.

“Looking ahead, Q2 (July–September 2026 quarter) is likely to witness renewed upward pressure on deposit costs. Strong mobilisation efforts by banks facing a continued reliance on term deposits are likely to keep CASA growth and sustained credit demand at bay. They are expected to increase the share of higher cost incremental term deposits,” he said.

Consequently, the repricing gains enjoyed over recent quarters are likely to fade with banks facing a gradual firming in their overall cost of deposits. This is also reflected in the initial hardening of banks' 1-year MCLR rate.

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The article titled "Israel must approve Trump agreement before we implement it, says Hamas official" from page 12 of the sources is reproduced below:

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Israel must approve Trump agreement before we implement it, says Hamas official

Reuters
Dubai/Jerusalem

Implementation of the deal to bring peace to Gaza announced by US President Donald Trump will depend on Israel first meeting its terms, under the ceasefire agreement reached last year, a senior Hamas official told Reuters on Friday.

In a post on his Truth Social platform on Thursday, Trump announced a "major milestone" towards ending the war in Gaza, saying his administration had finally reached an agreement for the complete disarmament of Hamas and other armed groups. The announcement followed months of faltering efforts to keep the ceasefire.

NEGOTIATIONS

Ghazi Hamad, a Hamas official involved in the negotiations, said the group was ready to accept an agreement he said was "difficult and painful." But he avoided using the term disarmament and said the agreement was a "comprehensive framework" that would depend on Israel implementing the first phase of the Sharm el-Sheikh agreement. On the disarmament agreement, he said Israel was required to end its attacks in Gaza and withdraw its forces to where they stood in October 2023, before the free flow of goods and aid coming into the Gaza Strip is resumed.

Only then would Hamas consider handing over its weapons for storage by the Palestinian Authority and the administration of Gaza (NCAG), the technocratic body set up to run the enclave. "We insisted to the mediators that Israel must abide by the agreement," he said.

On Tuesday, Trump met with Israeli Prime Minister Benjamin Netanyahu, who faces an election in October, with right-wing parties that have opposed previous deals in Gaza. Reports of a potential political source said Israel would not agree to withdraw forces from the Netzarim Corridor or the Philadelphi Line before Hamas is disarmed and the Gaza Strip is demilitarised.

Previous attempts to reach an agreement have foundered amid mutual suspicion and each side's insistence that each other must move first. The planned oversight body for Gaza, NCAG, issued a statement welcoming "the progress announced yesterday regarding the roadmap and the opening of a new chapter towards beginning its implementation."

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The article titled "Digital democracy" from page 6 of the sources is reproduced below:

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Digital democracy

Social media platforms need to assume responsibility

The recent student protests have underscored a reality that democracies across the world are grappling with: technology has become both an enabler of legitimate democratic expression and a powerful instrument for manipulation and control. The protests have exposed vulnerabilities on two fronts: the potential misuse of technology by the state in the name of maintaining public order, and its exploitation by sections of protesters and anti-social elements to spread misinformation and inflame public sentiment.

Governments have a legitimate responsibility to maintain law and order. If there is credible intelligence of attempts to incite violence or coordinate criminal activity, temporary restrictions on communications or targeted surveillance of those involved in unlawful acts may be warranted. Yet such powers must remain an exception, be transparent and be exercised within the confines of the law. The blocking of internet services around protest sites or the deployment of surveillance technologies to identify protesters and silence legitimate critical posts of the government have raised concerns over excessive state intervention.

A balance must be struck. There must be clear legal standards, independent oversight and avenues for judicial review to ensure that extraordinary powers are used sparingly and with transparency. There must be no room for these powers to be used to settle political scores or suppress legitimate dissent. The other lesson from the protests is the ease with which social media platforms were misused by some participants and vested interests to spread misinformation. Misleading videos and inflammatory content designed to provoke outrage rather than informed debate gained traction with alarming speed, demonstrating how easily misinformation can shape public narratives during moments of public tension.

This is not merely an Indian phenomenon. Across the globe, platforms have repeatedly been exploited to amplify propaganda, spread rumours and mobilise mobs. In recent years, developments in artificial intelligence have lowered the cost and increased the sophistication of such campaigns, making deepfakes and bots harder to detect and easier to disseminate. Social media companies can no longer afford a hands-off approach. While they correctly argue for the protection of free speech, they also have a responsibility to act swiftly against demonstrably false information and coordinated disinformation campaigns and content that incites violence or hatred. Transparency in moderation decisions, stronger detection of AI-generated content and accountability for repeat offenders are essential if digital platforms are to remain spaces for democratic discourse. Technology itself is neither friend nor foe; it is the framework for using it that strengthens democracy, or weakens it.

The article titled "IT sector's productivity engine gathers steam" from page 13 of the sources is reproduced below:

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IT sector's productivity engine gathers steam

REWRITING PLAYBOOK. Revenue per employee improves across tier-I firms as AI, better utilisation and tighter hiring boost efficiency

Sanjana B Bengaluru

The June quarter highlighted a structural shift in India’s IT services industry: a move from volume-led to productivity-led one, with Tier-I firms reporting increasing revenue per employee (RPE) despite a slowdown in headcount.

The trend across Tier-I companies points to improving efficiency rather than workforce expansion, according to Gaurav Vasu, Founder and CEO of UnearthInsight. TCS reduced its headcount by 3.1 per cent year-on-year while increasing revenue by 4.4 per cent. Tech Mahindra’s workforce fell by 5.4 per cent, but its revenue rose 7.4 per cent. This reflects a combination of higher utilisation and the initial impact of AI-driven productivity improvements.

Infosys and HCLTech, meanwhile, managed to increase both headcount and productivity. Infosys expanded its workforce by 2.2 per cent and improved RPE by 1.1 per cent, while HCLTech added 0.3 per cent to its headcount as RPE rose 2.6 per cent. “These companies are growing workforce without compromising productivity, reflecting stronger resource planning and AI-driven efficiencies,” Vasu added.

During Infosys' Q1FY27 earnings call, CEO and MD Salil Parekh attributed the company's improving revenue per employee to sustained efficiency gains. “We recruited 20,000 college graduates in FY26 and plan to recruit another 15,000-20,000 this year and 4,000 joined in the first quarter. As our efficiency and improvements continue,” he said.

TIER II: MIXED PICTURE

The trend is less consistent among tier-II firms. LTIMindtree’s RPE reduced by 3.3 per cent while adding 4.1 per cent to its headcount, indicating strong investment in talent development. In contrast, Wipro and LTPS expanded their workforce but saw RPE decline by 3.9 per cent and 8.4 per cent, respectively, suggesting higher-than-expected headcount growth as they invest ahead of an anticipated recovery.

According to Sanketh Chengapha, Director-Professional Staffing at Business Head Adecco India, “The industry is pivoting from a scale-driven metric to a productivity-driven one”. He noted that the June quarter reflects an uptick in results particularly among tier-1 firms that have focused on more efficiency while maintaining discipline on headcount expansion.

Higher RPE was driven by improved utilisation, tighter bench management, selective hiring, moderated fresher intake, and expansion into high-value services such as AI-driven automation and digital transformation.

EFFICIENCY OVER VOLUME

“In many cases, RPE improved because workforce expansion slowed, talent deployment became more efficient and companies focused on higher-margin services," Gaurav Vasu noted. He also stated that selective hiring, attrition management, and operational restructuring supported this growth despite modest revenue increases.

Analysts stressed that companies with stronger demand visibility continue to recruit, particularly in AI, cloud, and engineering, while maintaining productivity through automation. “AI adoption is also gradually improving developer productivity and streamlining delivery, but its financial impact is still evolving. For now, AI is acting more as a productivity multiplier than a full-scale growth driver,” Vasu said. He concluded that the relationship between revenue growth and headcount growth is weakening as the industry transitions to a productivity-driven model where AI-assisted tools and operational efficiency become as important as workforce expansion.

Leaner & stronger

Company	Q1 FY26 headcount	Q1 FY27 headcount	y-o-y growth (%)	RPE Q1 FY27 y-o-y growth (%)
TCS	6,15,318	5,96,222	-3.1	4.4
Infosys	3,36,298	3,43,838	2.2	1.1
Wipro	2,43,000	2,51,000	3.3	-3.9
HCLTech	2,23,000	2,23,800	0.3	2.6
Tech Mahindra	1,48,000	1,40,000	-5.4	7.4
LTIMindtree	81,000	84,334	4.1	-3.3

Source: UnearthInsight

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The article titled “Artificial intelligence lifts Q1 global trade despite West Asia conflict” from page 12 of the sources is reproduced below:

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Artificial intelligence lifts Q1 global trade despite West Asia conflict

THE OUTLOOK. WTO economists expect to see larger contractions in Middle East trade flows by the end of the year, together with stronger growth in Asia and North America

Our Bureau New Delhi

Global trade in goods grew faster than expected in the Q1 of 2026 despite the outlook for the West Asia conflict as booming trade in artificial intelligence (AI)-related electronic components offset the negative effects of the disruptions in the Red Sea, which began in the final month of 2024, the World Trade Organization (WTO) said.

The WTO, however, cautioned that escalation of the conflict, including the risk of trade disruptions through the Strait of Hormuz, would only become visible in the Q2 data and warned of much steeper contractions in global trade volumes involving the Middle East/West Asia.

“The effects of the Strait of Hormuz disruptions in global trade is expected to be more visible in Q2 2026 data when compared to the 1.9 per cent growth in 1Q 2024,” the report said.

According to the latest WORLDTRADE data, the seasonally adjusted volume of world merchandise trade rose 1.9 per cent in the Q1 of 2026 compared with the fourth quarter and 3.2 per cent (exceeding the earlier forecast of 1.9 per cent). “Strong trade in electronic components related to AI outweighed the negative effects of the outbreak of war in the Middle East, including disrupted shipments through the Strait of Hormuz and North America. “The net fuel-importing countries in East Africa and South East Asia reported that the conflict had negatively impacted their trade,” the report noted.

WTO economists expect Middle East trade flows by the end of the year, together with stronger growth in Asia and North America. “The global impact, meanwhile, will depend on whether it will remain confined to the West Asia conflict that predominates,” the report says, adding that the conflict has already taken a heavy toll on Middle East-West Asia trade, it noted.

REGIONAL IMPACT

The region’s merchandise export volumes fell 9.7 per cent y-o-y in Q1, while imports declined 11.9 per cent. The WTO estimates, based on available reporting country data, also showed world crude oil imports from the Middle East/West Asia falling 21.6 per cent y-o-y in January-March, with imports of liquefied natural gas (LNG) and fertilisers declining 52 per cent and 26 per cent, respectively.

The WTO expects even sharper contractions in the region’s trade during Q2 as the disruptions to shipping and energy supplies is more fully reflected in official statistics.

Asia emerged as the main engine of global trade growth, with exports rising 12.9 per cent and imports 14.8 per cent y-o-y. The expansion was led by strong intra-regional trade in AI-related goods, with South Korea, China, Thailand and Chinese Taipei recording particularly strong export growth.

North America’s Q1 exports also grew strongly at 9.1 per cent. North American imports rose by 2.6 per cent y-o-y from Q1 of 2025, which saw a surge of imports due to front-loading ahead of expected tariff increases.

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The article titled “Spain, Morocco crackdown on migrant rush after 49,000 cross into Spanish enclave” from page 12 of the sources is reproduced below:

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Spain, Morocco crackdown on migrant rush after 49,000 cross into Spanish enclave

THE FALLOUT. Spanish officials move to expel illegal entrants; Italy threatens to suspend EU's internal open-borders scheme

Reuters
Ceuta, Spain / Rabat, Morocco / Madrid

Spain and Morocco reinforced the border fence of a Spanish enclave on Friday and appeared to have halted a surge of migrants, after around 49,000 people arrived by sea and land in a single day, with at least 19 dead bodies found in the water.

The mass crossing into Ceuta, a Spanish-held spit jutting into the Mediterranean from Morocco, sparked a diplomatic row, with Italy threatening to suspend its participation in the EU borderless scheme. In the early hours on Friday, Moroccan authorities deployed more than 3,000 and pushed people back. The charred remains of a bus and a car could be seen on a road nearby from clashes with the police.

Spanish authorities said they would try to expel those who had entered illegally as quickly as possible, despite a court ruling that has put restrictions on special “border rejection” rules that allow immediate deportation.

‘BIGGEST CRISIS’

Prime Minister Pedro Sanchez is due to visit Ceuta on Friday with Interior Minister Fernando Grande-Marlaska. Ceuta and Melilla, another Spanish autonomous city in northern Morocco, have the European Union’s only land borders with Africa. The two cities are each home to around 80,000 people.

Both cities periodically experience surges in attempted crossings by migrants seeking to reach Europe, but nearly 50,000 crossings in a single day appears to be unprecedented. Spain described it as the biggest crisis since at least 2021. Territorial Policy Minister Angel Victor Torres said on Friday that among factors contributing to the surge may have been a ruling by Spain's Supreme Court earlier this month that migrants intercepted at sea while attempting to reach Ceuta or Melilla cannot be summarily returned.

Torres told a local radio station that the Spanish government had reacted immediately to the surge and would proceed to return the migrants, while respecting court rulings and migrants' human rights. On the Moroccan side of the border, thousands of migrants remained in the town of Fnideq overnight despite a reinforced deployment of security that foiled most attempts to cross. Although the crossing appeared blocked, groups moved along the coast seeking routes around the fence; some prepared to swim.

“I was here,” said Brahim, 32, who gave only one name. He said he had travelled from Tangier hoping to cross through the gate but found it effectively shut. Among those hoping to cross were women and children, from both Morocco and Sub-Saharan African countries further south.

SECURITY LAPSE

In a post on X, Spain's Guardia Civil police association AUGC said there had been too few police in place to monitor the fence during the surge on Thursday, making them unable to stop it.

“Migratory policies reflect the reality of the 21st century and must always respect the dignity and the human rights of the migrants and refugees who arrive in Ceuta,” said a joint statement by several local migrant groups, saying reports of about 50-100 student deaths in Ceuta were false. Migration is a sensitive issue across Europe, where right-wing parties have surged in the decade since a 2015 crisis when more than a million people crossed the continent mainly on foot and sought asylum, most fleeing war in Syria.

ITALY’S WARNING

Italy’s Prime Minister Giorgia Meloni said her country was prepared to “intervene in a massive way if necessary” to defend the borders and the security of citizens, including the suspension of the EU’s internal border-free zone.

The city of citizens, including its government, said it had been “abandoned” by the EU, and that immigrants might have offered a mass amnesty or work permits to tens of thousands of people seeking citizenship over the past year.

In Spain, official data from the Interior Ministry for Ceuta show how the Madrid government's decision to grant Spanish, and therefore EU, citizenship to more than 500,000 irregular immigrants has encouraged and encourages human trafficking,” Italy’s Foreign Ministry said in a note written on Wednesday. Spanish Foreign Minister Jose Manuel Albares replied that Meloni’s remarks were “inappropriate”, and said Italy and Spain should show solidarity and not “partisan demagoguery” from its partner.

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The article titled “Apple logs record June quarter in India despite headwinds” from page 10 of the sources is reproduced below:

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Apple logs record June quarter in India despite headwinds

KEY FACTORS. Underlying consumer demand remains resilient, Mac products drive growth notwithstanding price hike

Vallari Sanigari
Mumbai

Apple Inc announced a record June quarter in India and other emerging markets in the third quarter of FY26, despite “very significant headwinds” from both supply chain and foreign exchange.

“We see less flexibility in supply chain than we had in the supply from the company’s impact on the supply from the supply to increase significantly sequentially. The progress we have made since the September quarter will be very seeing some very significant headwinds that we’re really,” said Tim Cook, CEO of Apple, during the earnings call on Thursday. Apple records its US, Latin America, Europe, Greater India, China Mainland, Japan and Southeast Asia.

IPHONE REVENUE

The company posted quarterly revenue of $94.9 billion, up 16 per cent y-o-y, led by products and services revenue growth. iPhone revenue was down 1.6 per cent sequentially. iPhone revenue grew 21.6 per cent on year-on-year basis to $54 billion, with every geographic segment and a June quarter record for up and down.

The company gained share globally during the quarter, Cook said, citing IDC data. “India is the most popular iPhone line-up we’ve ever had. More than 10 per cent of buyers are day for AI, powered by a new generation of Apple chips including an array of A19 and A19 Pro,” Cook added.

RISING PRICE

Meanwhile, India is feeling the effect of rising average selling prices (ASP) on board, per IDC data. The country’s average price for iPhones is “close to $1,000” according to industry estimates.

“iPhone shipments held roughly flat to just 1 per cent y-o-y growth — an improvement from the 5 per cent decline seen in Q1 2026. These softer numbers are being driven by supply constraints for certain popular iPhone models. However, consumer interest in iPhones remains very strong. iPhones are still moving at full price and demand remains healthy,” said Prabhu Ram, VP-Industry Research Group, CMR.

Despite this, the brand holds strong appeal in India, leading to confidence that the slowdown will be temporary. Over the next two quarters, IDC does not expect Apple offering festive discounts as interest along with the new series being even higher.

Asked about memory costs, the company said it expects prices to continue rising higher even beyond the September quarter, which could drive an increasing impact on business. “We expected to pay significantly more for memory in the June quarter than the March quarter, and what it happened was, it was partially offset by the benefit of carry-in inventory.”

MACBOOK DEMAND

Mac delivered its best June quarter with a revenue of $10.4 billion, up 28.6 per cent from a year ago, despite supply constraints driven by demand for MacBook Pro and MacBook Neo. These are among the products that received significant updates like in India in June.

“While temporary supply constraints and channel inventory adjustments weighed on June quarter iPhone sell-in, underlying demand for iPhones remains resilient. Apple also delivered its best-ever June quarter in India, with revenue growing 21.6 per cent, supported by strong MacBook Neo adoption. Apple’s aspirational brand positioning continues to attract new consumers and strengthen its ecosystem,” said Shubham Singh, Research Analyst at Counterpoint Research.

BEST PERFORMERS

“The research firm expects single-digit shipment growth and double-digit revenue growth in India this year, supported by premiumisation and a richer product mix. Apple’s overall region, excluding Greater China and Japan, revenue grew by 12.6 per cent annually to $8.8 billion.

Regionally, China, Europe and emerging markets were the standout performers, as Apple’s relative value proposition amid widespread Android price increases. Every market hit his highest-ever second quarter revenue share of 49 per cent in Q2 2026. Revenue rose 22 per cent annually to a second-quarter record, supported by a 13 per cent rise in iPhone sales and 8 per cent growth per unit.

“Unlike peers that pushed through steep price increases, Apple kept pricing largely stable, reflecting its focus on volume growth,” Singh added. “Moving forward, however, Apple will likely increase prices in the coming quarters. This discipline strengthened Apple’s competitive position, enabling growth in both value and volume even as much of the market contracted,” said Singh of Counterpoint Research.

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