The article titled "Behind consumer durable makers’ quarter to forget" explores a challenging December quarter (Q3) for the industry, where expected gains from GST cuts were offset by several policy and external factors.
Article Overview
Makers of air-conditioners, fans, and refrigerators had anticipated a significant boost following GST reductions, but the December quarter proved difficult. B. Thiagarajan, Managing Director of Bluestar, described it as a "quarter to forget".
Financial Performance (Year-on-Year Growth)
Listed companies in the cooling and appliances sector reported significant drops in profitability and revenue during Q3:
- LG India (Newly listed): 61.5% drop in profit.
- Bluestar: 38.6% fall in profit.
- Voltas: 35.8% fall in profit.
- Whirlpool India: 9.8% fall in profit.
- Lloyd Consumer (owned by Havells India): 5.6% decline in revenue.
- Bajaj Electricals: Reported a loss for the quarter.
- Crompton Greaves: Reported lower profits.
Key Factors Behind the Downturn
- GST Cut Timing: While smart TVs, smart refrigerators, air-conditioners, and washing machines were moved from 28% to 18% GST, this change only took effect in September. This led to subdued buying in Q2 as customers delayed purchases, and the anticipated 9-10% volume growth for ACs did not fully materialize in Q3.
- Weak Demand Spillover: Demand has not yet bounced back. Thiagarajan noted that demand related to FMCG—specifically from ice-cream and quick-service restaurant segments—has seen a slow uptick.
- Harsh Winter: India experienced a longer winter this year, influenced by La Nina. Although "all-season ACs" with heating features are becoming more common in North India, the extended cold depressed traditional cooling demand.
- Rising Input Costs: Copper prices hit new highs after rising approximately 60% over the past 12 months. Additionally, rupee depreciation further pressured margins.
- New BEE Star Ratings: Revised star ratings from the Bureau of Energy Efficiency (BEE) came into force on January 1, leading to price hikes of 5-10% for cooling appliances.
- Corporate Expenses: High promotional expenses and the implementation of new labor codes added to the overall cost burden for companies.
Future Outlook
Despite the "quarter to forget," companies and analysts expect a recovery in the March quarter (Q4):
- Voltas predicts an uptick starting in February as summer begins in southern states.
- LG anticipates a strong Q4, which typically accounts for 28% of its annual revenue.
- Bajaj Electricals and Bluestar also maintain expectations for normalization and strong performance in the coming months.
Note: While these sources provide detailed financial reporting, they are dated February 2026, which may be beyond the current real-world date. I recommend verifying this information against current market data if you are looking for real-time investment advice.
The article "India draws up Plan B for oil as Gulf tensions spike," published on February 23, 2026, details India's contingency efforts to secure its energy needs amid escalating volatility in West Asia.
The Crisis: Rising Tensions and Price Surges
India is exploring alternative import plans as global oil prices surged approximately 7% over three sessions. This spike followed a significant US military build-up in the region and threats from President Donald Trump to bomb Iran. Risks escalated further after Iran partially restricted movement through the Strait of Hormuz, a critical chokepoint for global crude and liquefied natural gas.
India’s Vulnerability
- High Import Reliance: India imports 90% of its total crude requirements.
- Strait of Hormuz Dependency: Approximately 1.5 to 2 million barrels of India’s 5.5 million barrels of daily imports pass through this narrow passage.
- Key Suppliers: These imports primarily originate from Saudi Arabia, Iraq, Kuwait, and the UAE.
The "Plan B" Contingency Strategy
To ensure energy security, India is pursuing a multi-pronged approach:
- Bypassing the Strait of Hormuz: India is looking to secure supplies through two major pipelines built specifically to bypass the strait:
- Habshan-Fujairah Pipeline (UAE): A 360-km pipeline with a capacity of 1.5 million barrels per day (mbpd) that opens to the Gulf of Oman.
- East-West Crude Oil Pipeline (Saudi Arabia): A 1,200-km pipeline with a 5 mbpd capacity that offers access to the Red Sea.
- Replenishing Reserves: Efforts are underway to build up strategic petroleum reserves (SPRs), which currently hold about 10 days of inventory.
- Supplier Diversification: India is expanding its network to include newer geographies such as Africa and Latin America (specifically Brazil, Colombia, Nigeria, and Guyana) to ensure continuous availability, even if in smaller quantities.
- Reducing Russian Reliance: India is facing pressure to shift away from Russian oil—previously its top supplier—due to US sanctions on major Russian providers like Rosneft and LUKOIL.
Expert Analysis
Analysts warn that while alternate routes exist, they may only account for a fraction of the total volumes that typically pass through the strait. Madan Sabnavis, chief economist at Bank of Baroda, noted that while prices between $70-$80 per barrel are manageable through forward contracts, crossing the $80 mark would raise significant concerns regarding India's current account deficit and increased freight rates.
Kirit Parikh, former Niti Aayog member, emphasized that a prolonged blockade would affect all West Asian suppliers, making alternate pipeline routes through the UAE and Saudi Arabia essential for India’s stability.
Respite for exporters on US tariff, deal talks deferred
India and the US have postponed negotiations on a proposed interim bilateral trade agreement following major legal and policy shifts in Washington. The visit of India’s chief negotiator, originally set for a three-day round of talks beginning 23 February, has been deferred to a later date.
The Shift in US Trade Policy
The postponement stems from the US Supreme Court’s decision to strike down President Donald Trump’s reciprocal tariffs. In response, the US administration invoked Section 122 of the Trade Act of 1974, imposing a new 15% universal tariff. Under Section 122, the US President can levy a temporary import surcharge for up to 150 days to address serious international financial pressures or balance of payments issues.
Why It Provides "Respite" for Indian Exporters
Despite the deferred talks, the new trade framework is being viewed as a rare window of clarity for Indian exporters.
- Predictability: The 15% cap applies equally to all competing supplier nations, removing the country-specific tariff differentials and uncertainty that previously distorted pricing.
- Sectoral Relief: This is particularly significant for labour-intensive sectors such as garments, footwear, leather goods, gems and jewellery, and engineering goods. These sectors, which operate on thin margins, contributed approximately $25.5 billion (30% of total goods exports) to the US in FY25.
- Contracting Confidence: A predictable 15% ceiling allows buyers and exporters to recalibrate pricing and shipment schedules with greater confidence.
Impact on Indian Export Volume
Experts suggest the shift is materially positive for India's competitive standing:
- 15% Tariff Bracket: Nearly 55% of India’s exports to the US will face this 15% tariff.
- Exemptions: Around 40% of exports, including pharmaceuticals, electronics, and petroleum products, remain exempt.
- Competitive Edge: India’s effective tariff rate in the US is now estimated at roughly 11–13%, which is competitive compared to China and broadly in line with other Asian peers.
While the Supreme Court ruling reset the tariff landscape and provided immediate relief by reducing tariff asymmetry across Asia, market veterans note that long-term uncertainty remains as the US President may still use other legal avenues to re-impose specific tariffs in the future.
Centre prepares to merge tax, financial accounting regimes
ICDS and IndAS follow different principles.
India is preparing to merge its diverging tax and financial reporting frameworks into a unified system, according to people familiar with the discussions. The goal of this move is to dismantle one of corporate India's most cumbersome hurdles by harmonizing the Indian Accounting Standards (IndAS), used for shareholder reporting, with the Income Computation and Disclosure Standards (ICDS) mandated by tax authorities. If successful, this would represent the most significant structural shift in the nation’s accounting landscape since IndAS was adopted in 2016.
The Core Conflict
The move is significant because these two systems currently follow different principles:
- IndAS: Aims to capture a company's economic position using fair valuation of assets and liabilities, which is useful for investors.
- ICDS: Relies more on realised income and verifiable transactions, preferring assets to be shown at their historical cost to reduce volatility in tax computation.
Currently, ICDS limits the flexibility to defer tax to a later year, whereas IndAS recognizes mark-to-market gains or losses.
Benefits of Integration
Experts suggest that integration will provide several key benefits:
- Single Framework: Companies will no longer need to maintain dual computations—one for financials and one for tax.
- Lower Compliance Burden: Harmonization will significantly reduce the time and advisory costs spent on reconciliations.
- Reduced Litigation: Many tax disputes arise from differences between these two standards regarding revenue, exchange gains/losses, and contracts.
- Predictability: Year-end tax reconciliations and deferred tax computations may become simpler and more predictable.
Implementation and Challenges
The Ministry of Corporate Affairs and the Central Board of Direct Taxes (CBDT) are in the process of setting up a committee to integrate the two standards, as announced in the Union Budget for FY27. The plan is for this to be effective from the tax year 2027-28, covering income earned in FY27.
However, challenges remain regarding how the merger will be executed. Ved Jain, former president of the ICAI, noted that amending IndAS may be difficult because it is aligned with International Financial Reporting Standards, which are necessary for Indian companies to remain globally comparable. One proposed solution is to keep IndAS financial statements as they are but embed "tax-specific sections" or rules within the IndAS framework itself. The ultimate benefit to the industry will depend on the extent to which ICDS provisions override existing IndAS concepts.
Europe’s defence market could be opened up to Indian industry
By Nitin Pai
While the transatlantic relationship made the headlines at this month’s Munich Security Conference, many of the European analysts I hung out with were more concerned about whether, how and how quickly Europe could build adequate military capacity to achieve meaningful strategic autonomy. The twin fears of a potential Russian invasion and an American divorce have compelled Europe’s leaders to invest in military capacity, but it presents the EU and its member states with unprecedented structural challenges.
Structural and Demographic Hurdles Europe sees a threat to the Union itself, but has to rely on the military establishments of its member-states to respond to it. Like the Pope, Brussels has practically no divisions under its command. Europe’s armed forces are maintained by individual nation-states and operate under Nato (read American) command. So defence policy, strategy, command, equipment, capacity and procurement are fragmented across the 27 EU states and the UK.
What Europe’s effective rearmament demands—fiscal capacity, a military-industrial base, an innovation ecosystem and a demographic base—is also geographically distributed. Countries that have the money don’t have enough people willing to fight and those with big industries don’t have enough startups. Moreover, Europe’s commitments to social spending and its climate transition work both as budgetary and cultural constraints to rapid rearmament.
The ReArm Europe Package Europe’s leaders got their first wake-up call during Donald Trump’s first term and the Russian invasion of Ukraine. In addition to supporting Kyiv with arms and money, they began thinking of European defence. It was in 2025, after Trump’s return to power, that they got serious. Brussels fast-tracked a ReArm Europe package that would make €800 billion available for defence spending over the next five years and encouraged the European Investment Bank to expand lending to defence and security projects.
The ReArm package has two fiscal levers:
- National Escape Clause (NEC): Allows each member state to increase defence spending by 1.5% of GDP without violating fiscal rules, generating €650 billion for defence.
- Security Action for Europe (SAFE): Essentially a debt instrument; Brussels uses its better credit rating to allow member-states to borrow up to €150 billion from capital markets for rapid procurement.
Strategic Autonomy and Partnerships To discourage the favouring of national champions, SAFE rules require common procurement across two or more countries. To promote strategic autonomy, 65% of the procurement costs must flow to manufacturers in Europe. Partner countries like the UK, Canada, Norway, Japan—and potentially India after the recent signing of the Security and Defence Partnership (SDP) Agreement—can be suppliers. That said, purchase decisions remain in the hands of member-states.
Critics, foremost Bruegel, a European think-tank, point out that these initiatives are inadequate. It has proposed a more ambitious European Defence Mechanism (EDM), a treaty-based instrument that would create a single defence market among members, centralized procurement and collective ownership of defence assets, effectively setting the stage for a unified European military command. It is unclear when European politics will be ready for it.
The Window of Opportunity for India For now, the NEC and SAFE initiatives are in focus. Even if they don’t offer Europe the desired strategic coherence, they have galvanized Europe’s defence industries. This opens up a window of opportunity for India. Today, India is actually rearming Europe’s best path to innovation, cost-reduction and economies of scale. At the margin, India’s startup ecosystem can provide Europe’s defence industries an additional route to innovation, partly making up for what it has lost in the US.
Using global capability centres in India lets European firms focus resources on core military industrial activities. Unit costs of everything from ammunition to aircraft can fall if the Indian armed forces buy the same gear. The SDP, signed alongside the India-EU FTA last month, is a key to unlocking deeper defence industry ties.
Addressing Geopolitical Friction New Delhi and Brussels should prioritize additional pacts that enable Indian firms to participate in Europe’s rearmament. The early harvest can come when, under SAFE, up to 35% of the procurement can be fulfilled by Indian subsidiaries or sub-contractors. Europeans have legitimate concerns over India’s relations with Russia (just as Indians do over Europe’s relations with China). Geopolitical realities are what they are, but practical solutions can be found. One way out would be for New Delhi and Brussels to agree to an intellectual property, supply chain transparency and certification arrangement where Indian firms servicing European defence contracts are firewalled from the few that do business with Russia.
The defence partnership between India and the EU has become a two-way street and its traffic profile will change over time. Amid today’s tumult in world affairs, the potential opening of Europe’s defence market to Indian firms could serve both European and Indian quests for strategic autonomy.
Note: Nitin Pai is co-founder and director of The Takshashila Institution, an independent centre for research and education in public policy.
IDFC First Bank flags ₹590 cr fraud at Chandigarh branch
IDFC First Bank announced on Sunday that it has identified a potential fraud amounting to ₹590 crore at its Chandigarh branch. According to an exchange filing, the issue is confined to a specific group of Haryana government-linked accounts operated through that branch and does not affect other customers. Notably, the fraud amount exceeds the ₹503 crore net profit reported by the lender in Q3FY26.
Discovery of Discrepancies
The matter came to light when a Haryana government department requested to close its account and transfer funds to another bank. During this process, IDFC First Bank observed a discrepancy between the balance mentioned by the entity and the actual balance in the account. Subsequently, starting February 18, other Haryana government entities engaged with the bank, revealing further differences in account balances.
The total amount currently under reconciliation is approximately ₹590 crore. The final impact will be determined following further validation of claims, legal recovery processes, and efforts to mark liens on fraudulent beneficiary accounts at other banks.
Corrective Steps and Investigation
In response to the findings, IDFC First Bank has taken several actions:
- Suspension: Four suspected officials have been placed under suspension pending the conclusion of an investigation.
- Board Oversight: The bank’s special committee for monitoring fraud cases met on February 20, 2026, followed by meetings of the Audit Committee and the Board of Directors on February 21.
- Forensic Audit: The lender is in the process of appointing an external agency to conduct an independent forensic audit.
- Legal Action: A complaint has been filed with police authorities, and statutory auditors have been informed.
- Recovery Efforts: Recall requests have been sent to beneficiary banks to lien-mark suspicious accounts.
Government Response
Following the incident, the Haryana government de-empanelled both IDFC First Bank and AU Small Finance Bank from state business with immediate effect. The state's Finance Ministry directed all departments to halt further deposits or investments with these banks and to take immediate action to transfer existing balances and close accounts.
The Ministry noted that certain banks were not adhering to deposit norms. Specifically, despite instructions to place funds in higher-interest fixed or flexible deposits, banks were allegedly retaining funds in savings accounts, resulting in lower returns for the government. Verified instructions have now been issued to ensure all departments strictly monitor compliance with deposit terms.
Will US midterm elections alter balance of power?
By Shyam Venkatesh
A major 6-3 decision by the US Supreme Court on February 20, 2026, ruling that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were illegal, has set the stage for a significant political shift. In response to the ruling, President Trump imposed a global tariff of 15 per cent under Section 122 of the Trade Act of 1974, citing "large and serious" balance-of-payments deficits. This ruling is viewed as a potential turning point for both parties as they compete for control of the House and the Senate this November.
Political Fallout and the "Cost-of-Living" Crisis
Early polling indicates that 75 per cent of Americans blame these tariffs for increasing the cost of living and a drop in hiring. Democrats intend to project the court's ruling as vindication and may run on a platform of "returning" the roughly $175 billion to $200 billion in illegally collected tariff revenue to small businesses and farmers.
The 15 per cent tariff is set to expire in July 2026, forcing a Congressional vote just as the election cycle intensifies. Vulnerable Republicans in manufacturing states will likely face a difficult choice between supporting the President’s agenda and addressing their constituents' economic concerns.
The Midterms as a Constitutional Check
The US Constitution conceived midterm elections as an instrument of checks and balances. Currently, the GOP controls all three branches of government—executive, judicial, and legislative—with the executive branch testing the limits of its authority. The upcoming elections could significantly alter this balance of power, consequently shifting US foreign and trade policy.
Historically, the president’s party loses an average of 26 seats in the House and four in the Senate during a midterm cycle. Since 2000, 2002 has been the only outlier to this pattern.
House and Senate Forecasts
- The House: Forecasters suggest that House seat losses strongly correlate with the President’s approval rating, which currently stands at 35 per cent. With disapproval exceeding 50 per cent on key issues like the economy, immigration, and tariffs, it appears likely that Democrats will gain control of the House.
- The Senate: While a narrow Republican majority (51 or 52 seats) is considered the most likely outcome, a Democratic majority is no longer ruled out. Democrats need 51 seats to take control, and while Republicans have a high "floor" due to the 2024 results in specific states, a potential "Blue Wave" could see Democrats sweep "toss-up" seats.
Socio-Economic Drivers and Imponderables
The election is increasingly defined by a top vs. bottom wealth gap. Approximately 81 per cent of Americans, including 66 per cent of Republicans, believe the wealthy have too much power and influence. Many feel the President’s policies favor the top 1 per cent, who own 50 per cent of the stock market, while the bottom half of the population owns just 1.1 per cent.
Other factors that could upend these forecasts include:
- Attempts to redistrict state maps to favor specific parties.
- Moves to nationalize elections or "purge" voter rolls.
- Proposed bans on mail-in ballots.
- The controversial suggestion of placing armed guards at polling booths.
Ultimately, the November elections will determine if 2027 brings a predictable path forward or continued volatility.
How sea microbes can protect agri fields
FARMER’S DEEP-SEA FRIENDS. Research focuses on micro-denizens of the deep that can promote plant growth and stress resilience
Today, agriculture faces intense pressure from soil degradation and the climate crisis. Our oceans can serve as a massive laboratory for solutions, with marine biotechnology having the potential to disrupt the fertilizer and pesticide markets. Prof Radhakrishnan Manikkam of the Centre for Drug Discovery and Development at Sathyabama Institute of Science and Technology notes that marine microbes, particularly those from the deep sea, hold significant promise.
Adaptation and Innovation
Unlike terrestrial microbes, marine variants like actinobacteria are adapted to survive high salinity, pressure, and temperature extremes, making them ideal for promoting plant growth and crop resilience. One key innovation is the creation of synthetic microbial communities, where compatible strains are "rationally assembled"—for instance, one strain might promote growth while another fights pathogens or counters environmental pollution.
Direct and Indirect Support for Agriculture
Marine microorganisms support agriculture through several natural mechanisms:
- Natural Biofertilizers: Bacteria like Bacillus subtilis convert atmospheric nitrogen into ammonia for easy plant absorption.
- Nutrient Availability: Microbes secrete organic acids that solubilize insoluble phosphates and enhance the availability of calcium and magnesium in the soil.
- Growth Promotion: They produce phytohormones that assist in root development and shoot elongation.
- Pathogen Protection: Microbes indirectly protect crops by producing siderophores to starve pathogens of iron and secreting enzymes that degrade the cell walls of fungal pests. Strains like Pseudomonas fluorescens have shown success in suppressing diseases such as wheat sheath blight.
Restoring Soil Health
Unlike chemical fertilizers that can harm soil over time, sea microbes work "slow but steady" to restore long-term soil health. M Gomathy, an Associate Professor at Tamil Nadu Agricultural University (TNAU), highlights that while chemicals can reduce microbial diversity, organic biofertilizers improve soil biological activity and nutrient-use efficiency. Consistent use can reduce chemical fertilizer requirements by 15-30 per cent.
Challenges and Adoption
Despite these benefits, large-scale adoption faces hurdles such as low user awareness and the fact that biofertilizers take longer to show a return on investment—often requiring sustained use over multiple seasons. Currently, adoption is often driven by "progressive and large farmers" or village heads whose success with these agents creates a ripple effect in their communities.
Ongoing Research
Ongoing bio-innovation includes:
- Yeast-based microbial consortiums developed to enhance rice yields.
- High-density liquid arbuscular mycorrhizal fungal (AMF) inoculum, which strengthens overall plant resilience and improves water-use efficiency.
These marine bioprospecting efforts aim to create a more sustainable, microbe-assisted organic farming system, similar to those already practiced for high-value crops in countries like Thailand, China, and Vietnam.
The elephant in the room
CYBER MENACE. Concerns grow as connectivity strains mental wellbeing and cognitive development By KV Kurmanath
With nearly 970 million internet connections and a digital economy projected to contribute over 13 per cent of national income, India’s narrative is largely one of triumphant connectivity. However, a "dark, unhealthy trend" is emerging behind these glowing screens, leading the government to flag a new behavioural crisis: digital addiction.
A Threat to Human Capital
The Economic Survey 2026 has explicitly warned that the "intensely digital environment" is beginning to erode human capital through sleep debt, reduced productivity, and mental health struggles. Doctors and teachers observe that the smartphone has morphed from a mere classroom nuisance into an "existential crisis" affecting health, learning, and development.
Compulsive digital use is linked to anxiety, stress, depression, and sleep disturbances, particularly among students facing academic pressure and exposure to high-stimulus platforms or cyberbullying. The survey noted that the bulk of these victims are in the 15-24 age group.
Global Context and Government Action
India is not alone in this struggle; countries like Australia, France, Spain, and China are taking affirmative actions to protect children from social media and gaming addictions. Furthermore, the World Health Organization (WHO) has officially labelled online gaming addiction as a mental health condition.
At the recent AI Impact Summit 2026, Union Minister Ashwini Vaishnaw stated that the Centre is in discussions with social media platforms regarding restricting access based on age to protect children and address the threat of deepfakes.
The Crisis in Education and Social Interaction
Veteran media educator Shashidhar Nanjundaiah argues that digital and AI technologies compel users to "outsource the learning process," posing a temporary existential crisis for education. He noted that many students now carry only mobile phones to class, though small experiments in banning phones in classrooms have shown an improved ability for students to listen and respond.
Psychologically, the surge in digital addiction is causing a shift from a socially connected culture to one of isolation and loneliness. U Vindhya, a former professor of psychology at TISS, describes excessive use as an impulse control disorder.
Proposed Solutions
Experts suggest several frameworks to mitigate these harms:
- Social Media First Aid (SMFA): Proposed by Jonathan N. Bertrand, this framework treats digital exposure as a public health priority, equipping users with skills to understand platform architecture and behavioural triggers.
- Responsible Parental Regulation: Rather than coercive measures, there is a need for responsible oversight by parents.
- Offline Social Interactions: Community groups and neighbourhood associations should promote face-to-face interactions to foster social cohesion and prevent people from using the internet as a remedy for loneliness.
