INDIA IPPON DESU
Wednesday, October 14, 2026
Tuesday, October 13, 2026
Newspaper Summary 141026
Based on the Hindu BusinessLine article dated October 14, 2026 (Page 1) titled "FM's remarks on LTCG Tax and STT lift markets", here is a reproduction of Finance Minister Nirmala Sitharaman's remarks regarding Long-Term Capital Gains (LTCG) tax, Securities Transaction Tax (STT), and related market conditions:
Openness to Market Stakeholder Dialogue: Finance Minister Nirmala Sitharaman expressed a willingness to hear the debate on the Long-Term Capital Gains (LTCG) Tax and the Securities Transaction Tax (STT), which contributed to boosting investor sentiment.
Timing Ahead of the Budget: Addressing a question on equalizing taxation across asset classes during the Bloomberg New Economy Forum in New Delhi on Saturday, she noted:
"We are very close to the Budget, and the preparation for the Budget has started. It may not be the best time for me to say what I will or what I will not consider."
Debate on Asset Class Parity: Acknowledging the ongoing discussion around rationalization across investment avenues, she added:
"Rationalisation of LTCG tax on equities and Securities Transaction Tax (STT) on the market, debate on the debate, debate on the various asset classes, security, and the question of treating all asset classes, similarly, has been a very well-discussed topic."
Objectives of Tax Structure: She explained the core considerations guiding tax policy decisions:
"The objective was to ensure that investors did not choose one asset class over another merely because of differences in tax treatment. It's healthy to listen to all sides... I am keenly hearing them." She further noted that the issue was about ensuring different asset classes are brought onto a more equal footing, which remains a key consideration for the ministry.
BR Shetty files $15 billion suit against Bank of Baroda
SERIOUS CHARGES. Alleges fraud, says bank ignored anti-money laundering/KYC flags
Our Bureau
Mumbai
NMC Healthcare founder BR Shetty has filed a multi-billion-dollar civil suit in the Bombay High Court against Bank of Baroda and 25 other defendants, seeking $15 billion in damages from the state-run lender of failing to stop non-transparent transactions linked to the collapse of the NMC and UAE Exchange groups.
THE ALLEGATION
In the suit, valued at $15 billion (approximately ₹1.31 lakh crore), Shetty, acting through his attorney-power attorney Shirish Shetty, has alleged that Bank of Baroda served as an "instrument of fraud" through which former senior executives, including brothers Prasanth Manghat and Promoth Manghat, along with other associates, siphoned funds from group entities, concealed debt, and exposed him to liabilities through allegedly forged documentation.
The 84-year-old businessman, once among the most influential Indian-origin entrepreneurs in the Gulf, alleged that Bank of Baroda permitted anti-money laundering alerts, permitted suspicious round-tripping transactions, opened and operated unauthorized account shun suppliers, and failed to prevent large-scale diversion of funds between NMC, UAE Exchange, Finablr, and related entities.
According to the plaint reviewed by BusinessLine, Bank of Baroda's internal teams and regulators had flagged complex and unusual transactions years before NMC's collapse in 2020. The suit alleges that despite these warnings, the lender continued extending credit, rolled over facilities without adequate security, and concealed its true exposure from auditors.
Shetty has further contended that several loan guarantees relied upon by the bank bore forged signatures and that certain accounts were operated without his authorization. He has cited forensic reviews, a graphologist's reports, and ongoing investigations by enforcement agencies to support allegations that signatures and instructions were fabricated.
"WEAKENS EFFORTS"
The suit was filed shortly after Bank of Baroda reached a settlement of about $600 million with NMC's joint administrators in Abu Dhabi to resolve outstanding claims and alleged AML failures. Shetty contends that the settlement was reached without any admission of liability, and he argues that it weakens the recovery process for creditors like him who faced personal guarantees arising from the collapse.
Apart from direct and consequential damages, Shetty is also seeking an additional $500 million by way of damage for the alleged loss of reputation and goodwill.
Bank of Baroda did not respond to BusinessLine's email on the matter.
A BIRD'S EYE VIEW
The issue: Relates to a large-scale diversion of funds between the NMC and UAE Exchange groups.
NMC Healthcare: Founded by Shetty, collapsed in 2020 after a short-seller report on its debts and accounting fraud.
Shetty: Was once among the most prominent Indian entrepreneurs in the Gulf.
The suit: Comes after the bank and NMC administrators arrived at a $600-million settlement in July 2026.
India isn't a zero in AI
SHAPING UP. Domestic firms are making progress in sovereign, voice, semiconductor and specialised AI models
AJAI CHOWDHRY
There has been talk that India is zero in AI. Chairman of Rockefeller International and global investor Ruchir Sharma’s observation that foreign investors view India as a “loser in the AI race” triggered a lively debate, with critics arguing that this underplays India’s strengths in AI talent, data, adoption and digital infrastructure. The comments captured an anxiety already playing out in the markets: foreign capital was flowing to US tech everywhere, while Indian IT stocks faced heavy sell-offs on AI concerns.
But India is not zero in AI. Former Google CEO Eric Schmidt has described it as the world’s third-largest AI power, a view supported by India’s third-place ranking in Stanford University’s Global AI Vibrancy Index. Yes, we have some gaps in compute, frontier models and AI consumption. But there are standard areas where considerable work is happening.
One is sovereign AI. In February this year, the Government announced 12 organisations and consortia to develop indigenous LLMs across 10 languages, including large and small language models. A PIB report mentions government support worth about ₹2,194 crore for these 12 projects. Sarvam AI, Krutrim, BharatGPT, Swecha, Bhashini and others are making steady progress in developing models using Indian datasets.
The benefit of having our own sovereign AI models is huge. It allows us to access these technologies tomorrow. There is a huge strategic advantage, as relying on global LLMs could become increasingly expensive, geopolitical or national-security risks could arise when models are updated or altered. Also, the Indian dataset is so rich that AI trained on it is uniquely capable of serving our diverse population.
EXPANDING IN INDIA
Look at global LLM companies expanding in India. ChatGPT has attracted a huge user base, and both OpenAI and Anthropic are pushing their products through advertising and promotion. The strategy is to get users hooked with free or low-cost offerings and as they see value, sell them premium subscriptions, like a land-grab strategy.
Does it mean foreign models cannot be beaten? Not necessarily. Look at cloud infrastructure. Global hyper-scalers are investing heavily in India — over $60 billion in setting up data centres in India! We need to see what India gets in return. These facilities use our land, power and water, while the data generated here becomes valuable to the companies operating them. Also, data centres are highly automated and will not create jobs on a scale commensurate with the resources and investment involved. The white space is clear: we need to focus on local AI infrastructure. But Indian companies like Yotta, Adani, CtrlS, Sify and Nextra are stepping up.
There is another area in India that is developing beautifully: voice AI. CoRover, one of the early players in conversational AI, pioneered conversational ticketing in IRCTC with AskDISHA, in 2018. It enabled passengers to book railway tickets conversationally using voice or text. Today, companies such as Gnani.ai, Corover, Sarvam AI, Bhashini AI and Skit.ai are building speech and conversational AI solutions for Indian and global markets.
The opportunity is significant. Rajan Anandan, managing director at Peak XV Partners, estimates that the addressable market for voice AI in India’s BFSI sector alone is at least ₹50,000 crore. “Voice AI will be the first $1 billion revenue Enterprise AI category (outside coding) in India,” he recently posted on X (formerly Twitter). India’s AI opportunity lies in affordable, localised AI, with voice AI and India-specific applications driving mass adoption. The next wave is moving beyond generic AI ‘wrappers’ towards deep domain-specific applications that solve local problems.
For example, SaaS startup ToT, an AI-powered recruitment platform based in Bengaluru, that lets hiring teams search resumes and candidate pools using plain, everyday language, Tail.ai, a conversational WhatsApp agent, automating recruitment and candidate engagement, and Health AI which adds AI to healthcare by combining medical knowledge with physical infrastructure to make care more affordable and accessible.
SEMICONDUCTOR AI LAYER
Significant work is also underway at India’s semiconductor AI layer. The Ministry of Electronics and Information Technology (MeitY), through CDAC, is funding the development of an indigenous Indian GPU, with SD Sadasivan, Executive Director of CDAC Bengaluru, leading the effort, targeting GPU specification by 2029 and a fully indigenous HPC system by 2030. C-DAC’s AI inference chip has already entered trial production in partnership with HCL. Alongside this, tech firms like Mindtree, Tata Elxsi and Wipro are working on AI accelerators, including Agran, Morphing Machines, SandLogic, and Netra Semi, many founded by experienced semiconductor veterans returning from global chip companies.
At the Indian Institute of Science (IISc), Bengaluru, the AI Research Organization (AIRO) has developed SAMVIT, a platform that enables companies to build specialized small AI models faster. For specific domain applications, small AI models can be fast and efficient. Small AI could give India an opportunity to carve out a distinct position in the global AI ecosystem. We can be world leaders here.
This becomes particularly important as enterprises worry about sensitive data leaving their systems. Small models run on-premise on custom or standard systems, including machines based on AMD’s Strix Halo platform and NVIDIA’s DGX Spark, reducing dependence on external cloud infrastructure and expensive, power-hungry mega-GPUs. Inference can be run on low-cost AI notebooks.
LLMs will continue to serve general-purpose needs, but enterprise applications can address many specific needs through smaller AI models at significantly lower costs. India does not need to build its own ChatGPT; it needs to focus on small models. It can build an AI ecosystem based on its own strengths — sovereign models, voice, applications and Indian languages and smaller, affordable AI. So, is India zero in AI? Certainly not.
(The author is Co-founder of HCL, Chairman of the Steering Committee of the National Quantum Mission, Chairman of the IIDT (Indian AI Research Organisation) and author of the bestselling book 'Just Aspire')
South Korea's Kospi crashes 5.5% in chip sell-off
Reuters
Seoul
South Korea’s benchmark Kospi tumbled on Tuesday, triggering a temporary trading curb as concerns over rising US technology competition and interest rates triggered a sell-off in AI-linked stocks, particularly heavyweights.
The benchmark index fell as much as 5.46 per cent after falling as much as 7.4 per cent earlier in the day and setting a losing streak to a fifth straight day in its longest run of declines since September 2024.
TRADE HALT
Earlier, the Korea Exchange halted programme-backed sell orders for five minutes at 11:47 am local time after the Kospi 200 futures index fell 1.08 per cent, or 5.12 points, to 955.02.
The sell-off came after US memory-chip maker Micron Technology fell on low-guidance reports of rapid technological advances by Chinese rival ChangXin Memory Technologies.
“Selling of a billion of two concerns growing Chinese competition threatening memory pricing power and investors unwinding crowded AI trades,” said Sung-Zin, an analyst at BNP Paribas Asset Management. “The sell-off reflects a sharp reset in expectations rather than a sudden deterioration in underlying fundamentals.”
Investor sentiment was further dampened after President Yoon Suk Yeol said higher interest rates were likely unavoidable.
Chipmaker Samsung Electronics fell 7.39 per cent, while peer SK Hynix lost 10.29 per cent. Among other index heavyweights, battery maker LG Energy Solution climbed 2.06 per cent, while Hyundai Motor fell 1.56 per cent and Kia Corporation rose 0.19 per cent.
Indonesia's supply warning casts shadow on palm oil prices next year
Amit Vijay Mohile
Mumbai
A potential palm oil supply squeeze in Indonesia is casting a shadow over the high input costs for FMCG majors. Major edible oil business, including AWL Agrotech, Patanjali Foods, Bunge and ADM Agro Industries, face a downstream challenge as the world's largest producer warned of a possible 4-5 million-tonne production decline in 2027.
Mohamad Fadhil Hasan of the Indonesian Palm Oil Association (GAPKI) projected the decline if El Niño-related disruptions materialise, following a broadly stable output in 2026. Additionally, domestic consumption could increase by another 2 million tonnes if its B50 biodiesel blending programme is fully implemented, prompting export constraints and pushing average palm oil prices above 2026 levels.
However, Dorab Mistry, Director, Godrej International, cautioned against expectations of a runaway price rally. "The outlook for 2027 is bullish, but not super bullish," he said at the recent Globoil India 2026 conference in Mumbai, arguing that elevate prices could weaken consumption while a strong dollar might restrain commodity markets.
Sanjeev Asthana, Chief Executive Officer, Patanjali Foods, told businessline higher edible oil prices remained a concern because of their potential impact on FMCG companies' margins. The broader outlook remains worrying and requires close monitoring. The convergence of constraints leaves Indian manufacturers with a difficult choice: secure supplies ahead of a possible shortage or wait for weaker demand to compress prices.
FUTURE COSTS
The projected shortage coincides 2027, not the current festive season. But procurement managers need to start coming months could influence the price expectations pay for future supplies.
Mistry welcomed India's reduction in import duties on crude and refined edible oils while cautioning domestic refining margins.
Indonesia's evolving trade relationship with the European Union adds more uncertainty, GAPKI outlined an initial annual preferential quota of 1.9 million tonnes of Indonesian crude and processed palm oil for Europe, increasing 3 per cent annually for three years, subject to implementation and sustainability requirements.
The arrangement could strengthen European buyers' access to supplies, although any resulting diversion from India remains unclear.
The Council of Palm Oil Producing Countries (CPOPC) has called for closer cooperation with India as producing nations balance edible oil exports against domestic energy requirements.
"India is much more than an export destination for palm oil producing countries," CPOPC Secretary-General Izhana Salleh said, emphasising food security and resilient supply chains.
Tackling School Attendance Problems in Ireland: Key Takeaways from the OECD Report
School attendance problems (SAP) have increasingly become a critical concern for educators, policymakers, and families worldwide. The OECD’s Education Policy Perspectives report, "Tackling school attendance problems in Ireland" (No. 140), offers a detailed examination of Ireland’s current landscape regarding student absence, comparing it with international benchmarks, identifying institutional bottlenecks, and outlining core policy enablers to drive meaningful reform.
1. The Scale of the Problem: Attendance and Truancy Trends
While long-term absences in Ireland remain relatively low compared to the OECD average, short-term non-attendance and truancy rates present a stark challenge:
Truancy Rates (PISA 2022): Over 40% of 15-year-old students in Ireland reported skipping a full day of school at least once in the two weeks prior to the test—double the OECD average of 20%.
Disparity by Socio-Economic Status: Truancy is significantly higher among socio-economically disadvantaged students (46%) compared to their more advantaged peers (37%).
Post-Pandemic Surge: Prior to COVID-19 (between 2003/04 and 2017/18), the proportion of students missing 20 or more school days held steady at ~12% in primary schools and ~16% in secondary schools. Following school reopenings, these numbers spiked dramatically (reaching 40% in primary and 27% in secondary in 2021). Although rates fell in 2022/23 (22% primary, 21% secondary), chronic absenteeism remains elevated.
Educational Disadvantage & Special Educational Needs (SEN): Absences are heavily concentrated in DEIS (Delivering Equality of Opportunity In Schools) schools and special education settings:
In 2023/24, 28% of students in DEIS secondary schools missed 20+ days (vs. 19% in non-DEIS schools).
42% of students in special schools missed 20+ days (vs. 19% in mainstream primary schools).
2. Institutional Framework and Existing Key Challenges
In Ireland, responsibility for school attendance is shared:
Department of Education and Youth (DEY): Sets national policy, legislative frameworks, and funding.
Tusla Education Support Services (TESS): Oversees statutory educational welfare services, including the Educational Welfare Service (EWS), Home School Community Liaison (HSCL) Scheme, and the School Completion Programme (SCP).
Schools & Boards of Management: Manage local attendance strategies and reporting.
Core Systemic Bottlenecks Identified:
Fragmented and Aggregated Data: Schools currently report data bi-annually on students missing 20+ days. However, TESS lacks access to individual-level, disaggregated data linked to demographic factors (gender identity, SEN, Traveller/Roma status) or academic outcomes, severely hindering long-term tracking and impact measurement.
Lack of Enforcement Powers: TESS does not have the statutory authority or penalties to enforce school reporting. Consequently, reporting rates fluctuate—only 78% of primary and 71% of secondary schools submitted Annual Attendance Reports in 2022/23.
Capacity Constraints: Educational Welfare Officers face large caseloads and long waiting lists, leaving schools to manage acute attendance issues locally with limited immediate external support.
Cultural Shifts Post-Pandemic: A rise in "casual non-attendance," school avoidance, increased term-time family holidays, and shifting parental perceptions regarding daily attendance have added layers of complexity.
3. Four Core Enablers for Change: Lessons and International Examples
The OECD highlights four key levers essential to strengthening governance, legal, and operational frameworks for school attendance:
I. Multi-Agency Collaboration & Capacity Building
Current State: Ireland’s integrated TESS model combines EWS, HSCL, and SCP to deliver targeted interventions. However, cross-agency data sharing remains restricted due to privacy boundaries and decentralized school governance.
Teacher Training Gap: Tackling SAP is not currently an explicit part of initial teacher education (ITE) or continuing professional learning (CPL) in Ireland.
International Example (Norway): Norway utilizes a cross-sectoral approach linking education, health, and social services, incorporating a dedicated "child co-ordinator" for learners under 18 experiencing SAP.
II. Stakeholder Engagement & Public Awareness
Current Initiatives: Ireland launched a national multimedia campaign in 2025 alongside a 5-year strategic plan (2023–2028).
Misinterpretations: The mandatory "20-day missing threshold" often causes confusion—some parents view it as a penalizing threat, while others treat it as a permissible "absence allowance."
International Example (New South Wales, Australia): The "Every Day Matters" campaign uses clear, supportive communications to dispel common myths and show parents how even missing one day every two weeks equates to a full year of lost education over a child's school lifespan.
III. Dynamic Attendance Monitoring & Inspection
Central Data Upgrades: Ireland is currently piloting the Anseo Framework across 60 schools to analyze attendance data and exploring a scoping project for real-time reporting.
International Example (New Zealand): Utilizes an automated daily attendance dashboard integrated into a secure Integrated Data Infrastructure (IDI). This links attendance to long-term health, social service, and economic outcomes, revealing that chronically absent students incur triple the per-capita government expenditure by age 23.
IV. Strong Leadership at System and School Levels
Fostering Whole-School Culture: While central government leadership in Ireland has prioritized attendance funding, school leaders need direct support to embed attendance into daily school culture.
International Example (England, UK): Statutory guidance requires all schools to designate a senior team member as a Senior Attendance Champion and publish clear attendance policies, backed by regional "RISE Attendance and Behaviour Hubs."
4. OECD Policy Recommendations for Ireland
To translate existing efforts into sustainable improvement, the OECD outlines four core policy actions:
Strengthen Inter-Agency Collaboration & Professional Learning:
Formally establish attendance and engagement modules within Initial Teacher Education (ITE) and Continuing Professional Learning (CPL).
Align education, health, child welfare, and housing services under a whole-government attendance priority.
Elevate Parent and Student Voices:
Systematically capture student and parent perspectives (e.g., through surveys conducted by Educational Welfare Officers) to understand shifting post-pandemic attitudes.
Provide clear, non-punitive messaging to eliminate confusion surrounding the 20-day reporting threshold.
Modernize Attendance Monitoring and Infrastructure:
Transition from bi-annual aggregated reporting toward real-time, student-level attendance monitoring.
Establish data infrastructure linkages between attendance records, socio-economic backgrounds, special needs profiles, and educational outcomes to deliver timely, targeted support.
Empower School Leadership:
Equip school principals and boards of management with actionable data tools (such as scaling the Anseo framework nationwide by 2028).
Cultivate whole-school cultures centered on belonging, early warning systems, and positive reinforcement rather than sanction-heavy mechanisms.
Conclusion
Overcoming school attendance challenges in Ireland requires moving beyond administrative tracking to an integrated, proactive approach. By combining real-time data infrastructure, early intervention support, multi-agency collaboration, and comprehensive teacher training, Ireland can build an educational environment where every student is supported to attend, engage, and succeed every day.
Iran Update, October 13, 2026
Data Cutoff: 2:00 PM ET
The Institute for the Study of War (ISW) and The Critical Threats Project (CTP) at the American Enterprise Institute are publishing updates Monday through Friday to provide analysis on the war with Iran and the broader Middle East. Weekday updates cover events from the past 24-hour period, whereas weekend updates are abbreviated and cover the Houthi-Saudi conflict and major breaking developments related to the war with Iran.
Key Takeaways
Iran is attempting to deter renewed US military operations against Iran through back-channel threats against US forces and regional allies while simultaneously conducting drone, missile, and anti-aircraft system tests in preparation for future conflict.
Saudi Arabia struck Houthi oil and fuel storage and transport infrastructure in Yemen on October 13, which could exacerbate the Houthis’ economic crisis and constrain Houthi military forces.
The Houthis have continued to threaten and attack Saudi civilian infrastructure following the Saudi strikes on fuel facilities.
Toplines
Iran is attempting to deter renewed US military operations against Iran by threatening attacks against US forces and regional allies while simultaneously testing drone, missile, and air defense systems in preparation for future conflict. Iranian officials warned Arab officials and mediators that it would “more aggressively” target US forces and naval vessels in the event of renewed conflict, according to people familiar with the warnings speaking to the Wall Street Journal on October 12.[1] Iranian officials also reportedly warned that Iran would target regional energy infrastructure, and some of the sources noted that Iran specified that Saudi oil facilities would be targets.[2] Iran repeatedly attacked energy and other critical infrastructure in the Gulf states during the war, citing the presence of US bases in these countries as justification for its attacks.[3] Iran targeted these facilities in order to drive up global energy prices as part of their broader effort to coerce the Gulf states to pressure the United States and Israel to halt their campaign against Iran.[4] Iranian threats against Gulf energy infrastructure at this time likely similarly aim to coerce Gulf states to pressure the United States to refrain from renewing major operations against Iran. The reported specific Iranian threat against Saudi oil facilities likely aims to increase pressure on Saudi Arabia at a time when the kingdom’s oil industry is already under significant strain from persistent Houthi missile and drone attacks. The Journal also reported that some Iranian officials ”hinted” that Iranian forces could conduct “land incursions into neighboring countries,” citing people familiar with the matter.[5] The Journal described Iranian officials’ threats of possible ground incursions as ”an attempt to deter a potential attack.“[6] Iranian threats against US forces and partners come amid Western media reporting that US President Donald Trump is considering renewed airstrikes on Iran in an effort to reach a new diplomatic settlement with Iran.[7]
Iran has reportedly tested its drone, missile, and air defense systems in recent days, almost certainly in preparation for a possible renewed conflict with the United States. An independent Iran-based outlet reported that the Islamic Revolutionary Guards Corps (IRGC) conducted more than 30 medium-range solid-fuel Emad and Kheibar Sheikan ballistic missile tests in the vicinity of multiple unspecified Iranian cities on October 11.[8] An Iran-based researcher also shared footage from the reported October 11 exercise.[9] The researcher claimed that Iran had launched approximately 30 ballistic missiles, including Emad and Khorramshahr variants, from Tehran Province, Alborz Province, and other sites in central Iran.[10] An open-source intelligence (OSINT) account similarly shared footage on October 11 that showed launches of Shahed-136 one-way attack drones and unspecified missiles.[11] An Israeli OSINT analyst separately reported that Iran launched several one-way attack drones from Kashan, Esfahan Province, and ballistic and surface-to-air missiles from Esfahan and Yazd provinces and Damanvand, Alborz Province.[12] ISW-CTP is unable to verify these reports of drone and missile tests, but it is notable that Iran is reportedly testing systems that it would presumably use to attack US forces and regional partners in the event of a renewed conflict. Iran is also reportedly testing air defense systems, likely in preparation for a possible future US attack. An Iranian regime outlet separately reported on October 11 that Iran tested its Jaljaleh anti-aircraft mine system.[13] The IRGC introduced the Jaljaleh system to target low-altitude targets such as drones and helicopters in November 2025.[14]
Saudi Arabia struck Houthi oil and fuel storage and transport infrastructure in Yemen on October 13, which could exacerbate the Houthis’ economic crisis and constrain Houthi military capabilities. The Saudi Joint Forces Command (JFC) announced that Saudi forces conducted airstrikes targeting several Houthi oil and fuel facilities in Sanaa, Dhamar, and Hudaydah governorates on October 13.[15] The JFC issued a warning to Yemeni civilians on October 13 before attacking the al Sabahah fuel depot outside of Sanaa City, which a Yemen-based journalist described as one of the Houthis’ most significant oil storage facilities.[16] Yemeni media and independent researchers also published reports and footage of fires and smoke plumes at several fuel depots in Houthi-controlled Yemeni territory on October 13.[17]
Saudi attacks on Houthi oil and fuel facilities likely intend to both maximize economic pressure on the Houthi political organization and constrain the Houthis’ ability to sustain their military forces.[18] The Houthis currently lack access to Yemen’s oil and gas resources and acquire a significant amount of annual revenue from the sale and distribution of imported oil products.[19] The JFC said that it struck fuel unloading berths as part of the strikes.[20] Attacks on Houthi oil storage facilities and transport infrastructure likely aim to reduce the Houthis’ ability to fund their military operations, particularly given the worsening economic conditions in Houthi-controlled territory.[21] ISW-CTP has assessed that the Houthis resumed their war with Saudi Arabia in July 2026 to secure concessions that would alleviate the dire economic situation in Houthi-controlled areas, which poses a threat to Houthi rule over northern and western Yemen.[22] Saudi attacks on fuel facilities could also exacerbate ongoing fuel shortages in Houthi-controlled territory and may force the Houthis to raise fuel prices, which imposes constraints on the group’s military and political efforts.[23] Fuel shortages further hinder the Houthis’ combat capabilities and logistics because supply convoys, reinforcements, and frontline forces rely on vehicles that require fuel. The Houthis may increasingly requisition fuel from civilians to avoid logistical disruptions that could jeopardize the group’s offensives, although this could heighten civilians’ discontent with Houthi rule.[24] Saudi media reported on September 21 that the Houthis are already requisitioning fuel to sustain military operations in southwestern Yemen.[25]
Saudi Arabia almost certainly conducted these attacks in retaliation for Houthi strikes on Saudi territory in recent days and seeks to compel the Houthis to cease their attacks on Saudi military and civilian targets. The JFC demanded that the Houthis immediately stop targeting Saudi airports, ports, oil facilities, and other civilian infrastructure when it announced Saudi forces’ strikes on Houthi fuel facilities on October 13.[26] The Houthis have frequently launched missile and drone attacks targeting Saudi airports, oil infrastructure, and military bases in recent days, including an attack on King Khalid International Airport on October 10 that killed at least 13 people.[27]
The Houthis have continued to threaten and attack Saudi civilian infrastructure following the Saudi strikes on fuel facilities, however. Unspecified sources told Reuters on October 13 that a missile or missile debris impacted and started a fire at the Saudi Aramco headquarters in Dhahran, Eastern Province, more than 1,100 kilometers from Houthi-controlled areas in Yemen.[28] Houthi military spokesperson Yahya Saree issued a warning for civilians to evacuate the Dhahran headquarters on October 13, at about the same time that Yemeni media reported Saudi airstrikes on Houthi fuel facilities.[29] The Houthis claimed responsibility for a ballistic missile attack on King Khalid International Airport and a drone attack on King Khalid Air Base in Khamis Mushait, Asir Province, on October 12 but have not claimed responsibility for the attack in Dhahran at the time of this writing.[30]
The Houthis are attempting to capture Taiz City by securing a key roadway into the city. Houthi fighters engaged Yemeni government-aligned forces in heavy combat in the vicinity of al Dhabab, on the southwestern outskirts of Taiz City, on October 12 and 13.[31] The Houthis have attempted to capture the Hangar Checkpoint, on the main road leading into Taiz City from the southwest, although multiple videos of Houthi and Yemeni government-aligned forces at the site on October 12 and 13 suggest that control over the checkpoint remains contested.[32] The Houthis also launched several rounds of heavy artillery fire on Yemeni government-controlled areas within Taiz City on October 12 and 13, according to Yemeni media and a DC-based Yemen analyst.[33] These combined military efforts are consistent with the Houthis’ efforts to geographically isolate Taiz City in recent weeks and are likely intended in part to compel Yemeni government-aligned forces to surrender the city.[34]
The main concentration of Houthi and Yemeni government combat in the immediate vicinity of Taiz City comes amid continued engagements in other areas of central Taiz Governorate and a lack of reports of kinetic activity on the Red Sea coastal plain.[35] ISW-CTP has not observed reports indicating major combat developments or territorial changes on the coastal plain since ISW-CTP’s last data cutoff on October 12. Local Yemeni sources purportedly told Iranian media on October 13 that the Houthis are launching an offensive south into Madaribah wa al Arah District in Lahij Governorate, immediately south of Taiz Governorate’s Waziyah District.[36] The Southern Giants Brigades, which are a Yemeni government-aligned military faction, announced on October 12 that their forces have begun to reinforce tribal areas in Madaribah wa al Arah District to prevent Houthi attacks in the vicinity.[37]
US and Partner Military Operations
Nothing significant to report.
Iranian Strike Campaign
Assessed Iranian War Aims:
Secure international recognition of Iranian control over the Strait of Hormuz
Degrade the US ability and willingness to continue the war
Restore deterrence vis-à-vis the United States and its regional partners
Divide the United States and Israel from the Arab states
See topline section.
US-Iran Negotiations
Nothing significant to report.
Iranian Domestic Affairs
See topline section.
Lebanon
Israeli media reported on October 12 that Hezbollah is attempting to improve its first-person view (FPV) drone capabilities.[38] Israel Public Broadcasting (Kann) reported that Hezbollah is working to increase the explosive payload of its FPV drones from 2.5 kilograms (kg) to between four and six kg. The broadcaster also reported that Hezbollah is attempting to extend the range of its drones from 20 kilometers (km) to 30 km.[39] Hezbollah increasingly deployed FPV systems in its asymmetric campaign against Israel between March and June 2026, likely as part of an early effort to integrate more precise FPV strike capabilities into its operations.[40] ISW previously assessed in late July that Hezbollah’s early battlefield successes with tactical FPV systems against Israeli forces will almost certainly lead Hezbollah to invest further in its development of FPV systems.[41] ISW also assessed that Hezbollah would likely use the ceasefire in Lebanon to reconstitute its military forces and prepare for renewed fighting with Israel.[42] Israeli forces have only launched limited strikes against Hezbollah drone targets or launch positions in response to Hezbollah attacks against Israeli forces.[43]
Hezbollah announced a financial support program for displaced Lebanese civilians on October 13 that is almost certainly intended to compete with Lebanese government reconstruction efforts and recoup popular support.[44] Hezbollah Executive Council Head Ali Damoush announced that Hezbollah will initiate the “Promise and Commitment” housing allowance and reconstruction payment program for displaced families across Lebanon, which will offer both rent support payments and funds to replace damaged property.[45] Damoush said that families in Beirut and the southern suburbs could receive up to $14,000 USD based on the level of need. Families outside of Beirut and the suburbs could receive up to $12,000 USD, which would be divided into four installments paid over one year.[46] Hezbollah has offered multiple reconstruction and rent support payments to Lebanese citizens since 2024, but Hezbollah has also repeatedly been forced to halt these payments due to the group’s liquidity challenges.[47]
Hezbollah’s ability to provide financial support to Lebanese citizens is essential in order to rehabilitate the group’s image among the Lebanese population, particularly its Shia support base, as the group has grown increasingly unpopular after initiating two costly wars against Israel in the past two years.[48] Hezbollah relies upon public support to both justify its existence and resist Lebanese government disarmament efforts. Hezbollah has long framed itself as the primary and legitimate representative of Lebanese civilians and popular interests.[49] Hezbollah must also encourage civilians to not cooperate with Lebanese government and LAF efforts to disarm the group in order for the group to survive.
Hezbollah is likely simultaneously attempting to undermine recent Lebanese government efforts to initiate reconstruction projects in Lebanon. The Lebanese government announced 23 reconstruction programs to rebuild Nabatieh City and other areas in southern Lebanon on October 2.[50] Hezbollah officials have repeatedly attempted to portray the Lebanese government as unwilling and unable to provide reconstruction aid to Lebanese civilians.[51] Hezbollah’s announcement of the program likely attempts to demonstrate to the Lebanese population that Hezbollah is more capable than the Lebanese government in providing reconstruction aid to further discredit and distract the government’s recent reconstruction efforts.
The announcement of Hezbollah’s new round of reconstruction payments comes amid reports that Iran transferred $200 million USD to Hezbollah in September 2026, according to two unspecified sources speaking to Reuters on October 7.[52] The sources did not specify how Iran allegedly transferred the funds to Hezbollah but claimed that Hezbollah planned to use $150 million USD of the total sum to provide $3,000 USD payments to 50,000 Lebanese families impacted by the Israel-Hezbollah war.[53] The US State Department denied Reuters’ reporting and accused Hezbollah of “trying to save face with fake stories,” however.[54]
Iraq
Shia Coordination Framework parties are resisting Iraqi Prime Minister Ali al Zaydi’s ongoing efforts to frame himself as an independent decisionmaker. Unspecified government sources told Iraqi media on October 13 that framework actors are attempting to constrain Zaydi’s actions by exploiting certain conditions that Zaydi must consult the framework on all matters. The Shia Coordination Framework instituted these preconditions, which include forbidding the prime minister from running in elections or establishing his own party, due to the framework’s experience with former Prime Minister Mohammad Shia al Sudani.[55] Zaydi agreed to these conditions before becoming prime minister.[56] Framework actors are reportedly trying to limit Zaydi’s independent decision-making due to some of his recent decisions, including his revival of the Office of the Commander-in-Chief of the Armed Forces.[57] Zaydi merged several offices, including the Interior and Defense ministries and the Iranian-backed Popular Mobilization Forces (PMF), into the Office of the Commander-in-Chief in July 2026.[58] CTP-ISW has previously assessed that Zaydi revived this office, last used under former Prime Minister Nouri al Maliki, as part of an effort to consolidate his personal power as prime minister, which framework actors expressed concern over in September 2026.[59] The unspecified governmental sources told Iraqi media on October 13 that framework actors also raised concerns over former Interior Minister Abdul Amir al Shammari running the office and the additional expenses that such an office would require.[60]
Zaydi has demonstrated his willingness to at least attempt to stand up to pressure from Iranian-backed Iraqi actors, including those in the framework, in recent months. Zaydi has continued to lead a government crackdown on the Iraqi militias, despite the relative strength of the militias and the Iranian infiltration of Iraqi institutions blunting the force of this effort, for example.[61] Zaydi has also pursued individual disarmament negotiations with the militias outside of the framework’s negotiations and has considered avenues for PMF reform that would attempt to meet US demands regarding the militias.[62]
The Iraqi Parliament scheduled a session on October 13, 2026, to complete Iraq’s government formation.[63] The parliamentary session will include a vote to choose deputy prime minister candidates and to fill Iraqi ministries that have remained empty since Zaydi took office in May 2026 due to disputes between the framework and other Iraqi politicians.[64] Zaydi sent a letter to Parliament on October 13 requesting the session but did not specify which government ministries the session will seek to fill.[65] Parliament scheduling this session follows reports that the framework is planning to allocate deputy prime minister positions and control over new ministries to Iranian-backed Iraqi militia members.[66] The United States has firmly rejected any Iraqi militia member, even from disarmed militias, serving in any senior capacity in the Iraqi federal government.[67]
Arabian Peninsula
See topline section.
Sunday, October 11, 2026
Iran Update, October 11, 2026
OCTOBER 11, 2026
Data Cutoff: 2:00 PM ET
Authors: Bailey Pasternak, Ben Rezaei, Carolyn Moorman, Annika Ganzeveld
Key Takeaways
The Houthis have continued to attack Saudi airports as part of the group's campaign to impose increasing pressure on Saudi Arabia via attacks on Saudi critical infrastructure. Saudi Arabia announced on October 10 and 11 that unidentified projectiles struck near King Fahd International Airport in Dammam and a terminal at King Khalid International Airport in Riyadh, respectively.
The Houthi-Yemeni government frontlines have remained relatively stable since ISW-CTP's last data cutoff. The Southern Giants Brigades destroyed five Houthi armored vehicles that were traveling toward Yemeni government-held territory near Dhubab Airport on the Red Sea coastal plain on October 11.
Saudi Arabia continued to target Houthi positions and communications infrastructure across Yemen to support Yemeni government-aligned ground forces and degrade the Houthis' ability to attack Saudi Arabia. Saudi Arabia struck Houthi positions near Jabal Sabr on October 11. Houthi and local Yemeni media reported that Saudi Arabia conducted additional airstrikes on Houthi-controlled territory in Taiz Governorate on October 10 and 11.
Toplines
The Houthis have continued to attack Saudi airports as part of the group's campaign to impose increasing pressure on Saudi Arabia via attacks on Saudi critical infrastructure.
Yemen & Saudi Frontline Updates
The Houthi-Yemeni government frontlines have remained relatively stable since ISW-CTP's last data cutoff.
Saudi Arabia continued to target Houthi positions and communications infrastructure across Yemen to support Yemeni government-aligned ground forces and degrade the Houthis' ability to attack Saudi Arabia.
US and Partner Military Operations
(See topline section)
Iranian Strike Campaign
Assessed Iranian War Aims:
Secure international recognition of Iranian control over the Strait of Hormuz
Degrade the US ability and willingness to continue the war
Restore deterrence vis-à-vis the United States and its regional partners
Divide the United States and Israel from the Arab states
Iran continues to attack commercial ships using "unauthorized" routes through the Strait of Hormuz as part of its effort to enforce its control over the strategic waterway.[15]
US Central Command (CENTCOM) stated on October 10 that a US fighter jet struck the stern of the Ocean Molica, also known as the Arika SUN, after its crew ignored warnings and attempted to violate the US naval blockade on Iranian ports.[21]
Regional Status & Developments
US-Iran Negotiations: Nothing significant to report.
Iranian Domestic Affairs: Nothing significant to report.
Lebanon: Nothing significant to report.
Iraq: Nothing significant to report.
Arabian Peninsula: (See topline section)
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