Architecting a Leaner Reserve Framework: A Federal Reserve Catalog

 The provided sources outline a framework for reducing the Federal Reserve's balance sheet by explicitly targeting a reduction in equilibrium reserve demand. This approach challenges the traditional view that the Fed is limited by a fixed, steepening demand curve for reserves, suggesting instead that the Fed can use regulatory and implementation tools to shift that demand curve downward.

The Context of Balance Sheet Reduction

As of early 2026, the Federal Reserve's balance sheet stood at approximately $6.6 trillion (21% of GDP). The sources argue for shrinking this footprint to increase future "policy space," mitigate concerns regarding central bank independence, and reduce market distortions caused by the Fed's large-scale presence in securities markets.

While previous attempts to shrink the balance sheet were often halted when reserves became "scarce" and interest rates spiked, the sources propose that the Fed can maintain an "ample reserves" framework while operating at a much smaller scale by reducing the structural demand for those reserves.

Strategies for Reducing Equilibrium Reserve Demand

The sources categorize the options for lowering reserve demand into several key areas:

• Regulatory Reform ("Regulatory Dominance"): The demand for reserves is heavily driven by post-crisis liquidity regulations. A primary proposal is to recognize Discount Window borrowing capacity in the Liquidity Coverage Ratio (LCR) and Internal Liquidity Stress Tests (ILST). Currently, banks must pre-fund projected outflows with High-Quality Liquid Assets (HQLA) like reserves; allowing them to count pre-positioned collateral at the Discount Window could reduce reserve demand by an estimated $50 billion to $450 billion.
• Supervisory Changes: Banks often hold excess reserves due to an informal supervisory preference, where examiners are perceived to favor reserves over other liquid assets like Treasury bills. Explicitly instructing supervisors to treat T-bills and reserves as equals in stress exercises could reduce demand by $25 billion to $50 billion.
• Pricing and Profitability: Currently, the Effective Federal Funds Rate (EFFR) often trades below the Interest on Reserve Balances (IORB), encouraging banks to hoard reserves and engage in arbitrage. Conducting policy so that EFFR trades above IORB (e.g., by 2 basis points) would discourage this hoarding and could reduce demand by $150 billion to $550 billion.
• Operational and Technical Upgrades: Upgrading the payment system with a Liquidity Savings Mechanism (LSM) for Fedwire would allow banks to queue and net non-urgent payments. This would enable the settlement of large volumes using only a fraction of current reserve levels, potentially reducing demand by $100 billion to $125 billion.
• Reducing Precautionary Demand: Tools like the Standing Repo Operations (SRP) can act as a backstop, reducing the need for banks to "self-insure" with massive reserve buffers. Additionally, sterilizing fluctuations in the Treasury General Account (TGA) with T-bills would prevent sudden drains on reserves, further lowering precautionary demand by an estimated $50 billion to $200 billion.

Estimated Impact

Collectively, the sources estimate that these reserve-demand-focused policies could reduce the equilibrium demand for reserves by a midpoint of $1.3 trillion. When combined with policies to reduce non-reserve liabilities (such as the TGA and Foreign Repo Pool), the total potential balance sheet reduction is estimated to be between $1.2 trillion and $2.1 trillion.

This reduction would bring the balance sheet closer to historical levels of 15% to 17.5% of GDP, all while remaining within a range characterized as "ample" rather than "scarce".

The sources identify non-reserve liabilities—which include currency in circulation, the Treasury General Account (TGA), and the foreign reverse repo pool—as a major component of the Federal Reserve’s balance sheet, currently comparable in size to bank reserves. Reducing these liabilities is a critical strategy for shrinking the Fed's total footprint because every dollar reduced on the liability side allows for a corresponding reduction in assets.

The primary options for reducing non-reserve liabilities include the following:

1. Reforming Treasury General Account (TGA) Management

The TGA currently accounts for approximately $800 billion, or about 15% of the Fed’s total liabilities.

• The Proposal: The Treasury Department could shift a portion of its cash balances away from the Federal Reserve and back into the private banking system. This would involve reviving a modernized version of the Treasury Tax and Loan (TT&L) program.
• Implementation: One specific approach involves reducing the Treasury’s current five-day operating buffer at the Fed to a two-day buffer, placing the remaining funds in commercial banks.
• Impact: This shift would allow the Fed to shrink its total asset footprint and reduce reserve volatility. However, because these new deposits at commercial banks might increase those banks' own demand for reserves, the reduction in the Fed's balance sheet is estimated to be less than one-for-one.
• Estimated Reduction: This policy is estimated to reduce the balance sheet by $200 billion to $400 billion.

2. Discouraging the Foreign Reverse Repo Pool

The foreign reverse repo pool has remained stable at roughly $300 billion to $400 billion over the last several years as a store of dollar liquidity for foreign central banks.

• The Proposal: The Fed could make this pool less attractive relative to alternative investments like Treasury bills.
• Methods: Strategies include lowering the interest rate paid on the pool, capping usage, or implementing other constraints to encourage foreign authorities to hold securities directly rather than parking cash at the Fed.
• Estimated Reduction: This is projected to provide a reduction of $0 to $100 billion.

The Larger Context of Balance Sheet Reduction

In the broader effort to downsize the Fed's $6.6 trillion (21% of GDP) balance sheet, these non-reserve liability reforms are essential complements to policies aimed at reducing equilibrium reserve demand.

• Combined Impact: Together, these two non-reserve liability options contribute an estimated $350 billion toward the total reduction goal.
• Analytical Goal: When combined with the $1.3 trillion in estimated reductions from reserve demand, the total potential balance sheet reduction reaches $1.2 to $2.1 trillion.
• Target Footprint: Reaching the midpoint of this range would bring the Fed’s balance sheet to approximately 16% of GDP, aligning it with historical levels seen in 2009 and 2012/2019.

The sources emphasize that these shifts allow for a "leaner" framework while still maintaining an ample reserves regime, as they focus on structural changes to the Fed's obligations rather than simply forcing reserves into scarcity.

The sources identify several key motivations for reducing the Federal Reserve's balance sheet, which stood at $6.6 trillion (21% of GDP) as of early 2026. These motivations center on long-term institutional health, market efficiency, and the preservation of central bank independence.

1. Reducing the Fed's Economic Footprint

A primary motivation is to minimize market distortions caused by the Fed's large-scale presence in securities markets. By holding a significant portion of outstanding securities, the Fed modifies market pricing and can lead to disintermediation in money markets, including the near-disappearance of interbank trading. The sources argue that markets are generally better than central planners at allocating resources, and a smaller footprint reduces welfare-reducing distortions.

2. Creating Future "Policy Space"

Shrinking the balance sheet provides the Fed with "dry powder" to expand it again in future crises. If interest rates hit the effective lower bound again, the Fed will have more room to conduct asset purchases, which are considered more effective and politically easier to implement when starting from lower levels of holdings.

3. Maintaining the Monetary-Fiscal Boundary

A smaller balance sheet helps preserve the independence of the Federal Reserve by firming up the boundary between monetary and fiscal policy. Since managing the maturity structure and provision of public debt is typically the responsibility of the Treasury, extensive Fed intervention in these areas can lead to a "corrosion" of independence through necessitated cooperation with fiscal authorities.

4. Preserving Sector Neutrality

The sources highlight that holding agency mortgage-backed securities (MBS) involves the Fed in credit allocation by subsidizing one sector (housing) over others. Unless required for financial stability, such "central planning" decisions are viewed as the domain of elected officials rather than an independent central bank. Reducing these holdings helps the Fed remain nonpolitical and neutral.

5. Limiting Financial Risk and Protecting Credibility

Large balance sheets expose the Fed to unrealized losses if the interest paid on reserves (IORB) exceeds the interest earned on its securities. While a central bank can technically operate with negative capital, such losses can impugn the Fed's credibility and competence in the public eye. Furthermore, these losses induce volatility in the remittance of profits to the Treasury, which in turn causes volatility in fiscal deficits.

6. Addressing Perceived Subsidies

A smaller balance sheet leads to smaller IORB payments to banks. Some members of Congress perceive these payments as a subsidy to the banking system; reducing the balance sheet—or returning to a scarce reserves regime—could eliminate or mitigate this concern.

Context: The Target Footprint

The goal of addressing these motivations is to move the balance sheet toward historical benchmarks, such as 15% of GDP (the 2009 level) or 17.5% of GDP (the 2012/2019 level). The sources argue that this can be achieved without returning to a "scarce" reserves regime by instead using regulatory and operational tools to shift the boundaries of the "ample reserves" framework downward.

The sources emphasize that materially shrinking the Federal Reserve's balance sheet—potentially by $1.2 to $2.1 trillion—is a complex undertaking that requires significant preparatory work and a cautious, deliberate approach. Implementation considerations center on the need for extensive rulemaking, market absorption strategies, and the careful management of monetary policy offsets.

1. Timeframes and Preparatory Work

The sources explicitly state that reducing the balance sheet is not an immediate process. It would require "a great deal of implementation and rulemaking work in advance".

• Planning Period: It is estimated to take at least a year, and quite possibly several, of research, planning, and structuring before the Federal Reserve could even begin the shrinking process.
• Gradual Execution: Even after the process commences, the Fed is advised to move "slowly and gingerly" to ensure financial markets remain stable.

2. Ensuring Market Absorption

A critical implementation challenge is ensuring that the private sector can absorb the massive volume of securities (Treasuries and MBS) that would roll off the Fed’s balance sheet.

• Runoff vs. Sales: To avoid overwhelming the market, the sources suggest avoiding active asset sales, instead allowing securities to mature and roll off the balance sheet naturally.
• Expanding Private Capacity: To help the public absorb these securities, the sources suggest easing regulatory constraints. This includes removing Treasury securities from the Supplementary Leverage Ratio (SLR) calculations and modifying the G-SIB surcharge to accommodate higher Treasury and repo holdings by large banks.
• Technical Upgrades: Finalizing the central clearing of Treasury repo is highlighted as a way to allow banks to net exposures, effectively expanding their capacity to intermediate in these markets.

3. Regulatory and Institutional Coordination

Many of the proposed reductions rely on shifting the demand for reserves through rulemaking and supervision, which involves various stakeholders:

• Regulatory Alignment: Proposals like recognizing Discount Window capacity in the Liquidity Coverage Ratio (LCR) or reforming Internal Liquidity Stress Tests (ILST) require formal changes to banking regulations.
• Treasury Coordination: Reforms to the Treasury General Account (TGA), such as shifting balances back to commercial banks via a modernized Treasury Tax and Loan (TT&L) program, are decisions that must be made by the Treasury Department, not the Fed.
• International Coordination: Addressing the reserve demand of Foreign Banking Organizations (FBOs) may require coordination with foreign regulators to align supervisory expectations.

4. Interactions with Monetary Policy

The sources note that implementation choices will have direct consequences for the stance of monetary policy, requiring careful calibration of interest rates:

• Offsetting Tightening: Because shrinking the balance sheet inherently tightens monetary policy, the Fed might need to maintain lower policy rates than otherwise necessary to offset this effect.
• Deregulation Impacts: Conversely, if bank deregulation (intended to lower reserve demand) significantly eases the supply of credit and boosts economic activity, it might create a positive output gap requiring tighter monetary policy to offset.
• Neutral Rate Shifts: Steps that permanently ease the credit supply or attract international flows into Treasuries (like expanding the FIMA repo facility) could reduce the neutral rate of interest, meaning the Fed would appropriately offset this with lower policy rates in the long run.

5. Managing Risks and Backstops

Finally, the sources acknowledge a trade-off: many policy options reduce the balance sheet by relying more heavily on central bank backstops (like the Standing Repo Operations or the Discount Window) during tail events. This increases the Fed's potential exposure during crises, necessitating a deep analysis of trade-offs before any specific mix of policies is implemented.

Quantile Selection in the Gender Pay Gap

 The provided sources outline a novel semiparametric methodology designed to estimate the selection-corrected gender wage gap across the entire wage distribution. This approach addresses the issue of non-random selection into employment, where individuals with higher earning potential are more likely to work full-time, potentially biasing observed wage gap measurements.

Core Methodological Framework

The methodology builds upon the Roy model of labor supply, where individuals choose to work if their potential wage exceeds their reservation wage. The identification of the selection-corrected wage distribution relies on three primary components:

• Instrumental Variables (IV): The method uses instruments ($W$) that explain variation in the latent outcome (potential wages) but do not directly affect the selection mechanism once those latent wages and other observed characteristics are held fixed.
• Rank Invariance: In the context of the Roy model, this is interpreted as a condition where the instrument provides no additional information about an individual's position (rank) in the reservation wage distribution, conditional on their potential wage.
• Semiparametric Flexibility: Unlike the classical Heckman correction or other parametric models, this approach does not impose specific functional forms on the selection probability or the distribution of unobserved factors.

The Three-Step Estimation Procedure

The sources detail a specific algorithm (Algorithm 1) to implement this methodology:

1. Estimation of Inverse Selection Probabilities: The inverse selection probability function, $g(Y,X)$, is estimated via a flexible B-spline estimator using a conditional moment restriction. This step uses the instrument ($W$) to help identify the selection mechanism without a parametric model.
2. Imposing Shape Restrictions: To ensure the stability of the weights, the unconstrained estimates are projected onto a cone of functions bounded below by 1. This ensures that the estimated probability of selection remains valid (between 0 and 1).
3. Weighted Quantile Regression: Finally, the conditional quantile function of the latent outcome is estimated using inverse probability weighting (IPW). The weights ($D \hat{g}(Y,X)$) account for the non-random selection, allowing for the recovery of the wage distribution as if the entire population were employed full-time.

The "Initial Wage" as an Instrument

In the empirical application to German administrative data, the authors use an individual’s initial wage (their earliest recorded wage) as the primary instrument. The methodological justification is that early-career wages capture persistent individual heterogeneity—such as ability, motivation, and social skills—that shapes long-run earning potential but does not directly dictate the current employment decision once current potential wages are accounted for. To satisfy the exclusion restriction and avoid issues with recent economic shocks or state dependence, the authors require this initial wage to be from the distant past (at least two years prior to the observation period).

Methodology in the Context of Existing Literature

This approach distinguishes itself from other common methods in the field:

• Versus MAR (Missing at Random): Traditional MAR methods assume selection depends only on observed characteristics. The authors demonstrate that MAR can lead to over-adjustment or bias when unobserved selection (selection on unobservables) is present, which their IV-based method accounts for.
• Versus Parametric Heckman/JEE Models: While models like those by Arellano and Bonhomme or Yu et al. also address quantile selection, they often rely on specific parametric assumptions about the selection process or different exclusion restrictions (like out-of-work benefit income). The proposed semiparametric IV method is more robust to model misspecification because it avoids these restrictions.

The empirical application described in the sources utilizes a massive dataset of German administrative social security records (SIAB) to analyze the gender wage gap. This application is significant because it moves beyond simple mean comparisons, using a new semiparametric IV methodology to account for non-random selection into the labor force across the entire wage distribution.

Data and Methodology Overview

The study focuses on a 2017 cross-section of German nationals aged 25–50. The researchers analyze gross daily wages in full-time employment, accounting for the fact that a large portion of the population (especially 52% of women) works part-time or is non-employed.

The core of the empirical strategy is the use of the "initial wage" (the earliest recorded wage in an individual's history) as an instrumental variable. The authors argue that this instrument captures persistent individual heterogeneity—such as ability and motivation—that affects long-term earnings potential without directly influencing current labor supply decisions once current potential wages are controlled for.

Key Findings on Selection Patterns

The application reveals that both men and women are positively selected into full-time employment, meaning those who work full-time generally have higher potential wages than those who do not. However, the intensity of this selection varies dramatically by gender and education:

• Women and the "Bottom" of the Distribution: For women, positive selection is most pronounced at the lower and median quantiles, particularly among those with low education (no vocational training). When correcting for this, estimated wages for the broader female population are significantly lower than observed wages, causing the gender pay gap at the 25th percentile to widen.
• Men and the "Top" of the Distribution: For men, the strongest selection effects are found among the highly educated at the upper quantiles. This suggests that highly productive men are disproportionately represented in top full-time roles. Because this male selection is so strong at the top, correcting for it actually narrows the gender pay gap at higher quantiles.

Contextual Significance

The sources highlight that this empirical application helps reconcile conflicting findings in existing literature.

• Widening vs. Narrowing Gaps: By showing that selection varies by quantile, the authors explain why some studies (like Maasoumi and Wang) find widening selection-corrected gaps, while others (like Arellano and Bonhomme) find them narrowing.
• Critique of MAR: The application demonstrates that traditional Missing at Random (MAR) assumptions—which assume selection only depends on observed traits—can lead to over-adjustment or biased estimates. Their IV-based method provides a more representative picture of the potential wage distribution by accounting for unobserved attributes like ambition and productivity.

Ultimately, the empirical application proves that gender wage gaps persist across all education levels and quantiles, but their magnitude is heavily influenced by complex, gender-specific selection patterns that vary across the economic spectrum.

The key findings in the sources highlight that non-random selection into employment significantly distorts observed gender wage gaps, but the nature of this distortion varies dramatically across the wage distribution and between genders.

General Selection Patterns

The research establishes that both men and women are positively selected into full-time employment. This means individuals with higher potential earnings are more likely to work full-time, while those with lower potential wages are more often part-time or non-employed. Consequently, simply looking at the wages of full-time workers overstates the overall wage levels for the entire population.

Heterogeneous Selection by Gender and Quantile

The study uncovers two distinctive, gender-specific patterns of selection:

• Women at the Lower Tail: Selection effects are strongest for women at the lower end and median of the wage distribution. For this group, correcting for selection reveals that potential wages are much lower than observed wages, as those with the lowest earning potential are the most likely to be absent from the full-time workforce.
• Men at the Upper Tail: For men, the strongest positive selection occurs among the highly educated at the top of the distribution. This suggests that highly productive men are disproportionately represented in top-tier full-time roles, driven by factors like career-oriented incentives and ambition.

Impact on the Gender Wage Gap

Accounting for these selection patterns leads to significant revisions of the gender pay gap at different points in the distribution:

• Widening at the Bottom: Because positive selection is so pronounced for women at lower quantiles, correcting for it causes the gender wage gap to increase in the lower half of the distribution. For example, the gap at the 25th percentile increases by roughly 2 percentage points after correction.
• Narrowing at the Top: Conversely, the strong positive selection among highly productive men at the upper end means that correcting for their selection narrows the gender wage gap at higher quantiles.

Findings by Education Level

The sources emphasize that the role of selection differs by educational attainment:

• Low Education: The gender wage gap at the median for those with no vocational training increases from 3.6% to 10.7% once selection is corrected.
• High Education: For university graduates, the selection-corrected gap is slightly lower than the uncorrected gap (dropping by about 2 percentage points at the median) because the correction for high-earning men is more substantial than for women in the same group.

Persistence of the Gap

A central finding is that while selection correction changes the magnitude of the disparity, the gender wage gap persists across all education levels and every quantile. Men consistently out-earn women regardless of whether selection is accounted for or which estimation method is used.

The provided sources position their research within a rich history of labor economics and statistical modeling, specifically addressing the challenge of non-random selection into employment when measuring the gender pay gap.

Foundations and the Selection Problem

The literature on the gender pay gap traditionally acknowledges that employment is not random; individuals with higher earning potential are more likely to work full-time. Early foundational work by **Gronau ** and **Heckman ** applied the **Roy model ** to labor supply decisions, suggesting that individuals choose to work only if their potential wage exceeds their reservation wage.

Classical Mean-Based Corrections

Historically, most studies focused on average wages and addressed selection using the **classical Heckman correction **. These models typically relied on specific exclusion restrictions to identify the selection equation—variables that affect the decision to work but not the wage itself. Common instruments included:

• Family characteristics: Number and age of children (e.g., Mulligan and Rubinstein ).
• Policy variation: Differences in the tax and transfer system (e.g., Blundell et al. ).

However, the sources note that these classical restrictions are often difficult to justify, particularly for men.

Evolution to Quantile Selection Models

As the literature evolved, researchers recognized that selection patterns and their effects could vary across the wage distribution, leading to the development of quantile selection models.

• Arellano and Bonhomme : Proposed a framework for selection correction across the entire wage distribution using out-of-work benefit income as an instrument. They found positive selection for both genders and reported that the selection-corrected gender wage gap was actually smaller than the uncorrected one in the UK.
• Maasoumi and Wang : Found the opposite in the US, showing that selection-corrected gaps had increased over time across various quantiles.
• Alternative Approaches: Some researchers developed bounds to address non-random selection without requiring point identification (Blundell et al. , Honoré and Hu ). Others used imputation-based methods relying on the Missing at Random (MAR) assumption, which assumes selection depends only on observed characteristics (Olivetti and Petrongolo , Blau et al. ).

Limitations of Existing Methodologies

The sources identify several gaps in the existing literature that their methodology aims to fill:

• Parametric Restrictions: Recent contributions to quantile selection (Zhang and Wang , Yu et al. ) rely on parametric assumptions about the selection mechanism, which can lead to model misspecification.
• MAR Assumption Biases: The sources argue that MAR-based imputation methods often over-adjust or produce biased estimates because they ignore unobserved factors like ambition and productivity that influence both wages and the decision to work.
• Reconciling Conflict: The current study’s findings help rationalize the conflicting results between Maasoumi and Wang (widening gaps) and Arellano and Bonhomme (narrowing gaps) by showing that selection patterns vary significantly by education level and quantile.

Newspaper Summary 150426

 The article titled “India may go slow on trade deal till US mid-term polls” from the April 15, 2026, edition of The Hindu BusinessLine is reproduced below:

---

India may go slow on trade deal till US mid-term polls

ON HOLD. Any change in the composition of Congress could restrain the President on tariffs

Amiti Sen New Delhi

India is likely to play for time in its trade talks with the US and wait for the dust to settle in Washington soon, as it looks to the upcoming US mid-term elections to provide clarity on the American legislative landscape, sources said.

Following the US Supreme Court prevailing over President Donald Trump’s recent 10 per cent tariff on Indian steel and aluminium, the Trump administration for a 90-day period has been on a temporary floor that India does not want to negotiate until the “end game” numbers are settled.

KEY MID-TERMS India would want to continue to talk, but obviously it would want to see where it stands before it gives any concession. Any negotiation before the mid-term elections without some clarity of tariffs is tied to how the Trump regime fares, a source explained.

The mid-term elections, held at the midpoint of a President’s term, are crucial as they could lead to a significant shift in the composition of Congress. Currently, all 435 seats in the US House of Representatives and about a third of the 100 seats in the US Senate are up for vote on November 3.

If Democrats take the House, the President’s ability to pass major legislation, including free trade deal agreements or tariff reforms, would largely come to a halt.

The US, however, wants India back at the negotiating table. US Ambassador to India Sergio Gor recently underlined in a social media post that a trade deal between the two had been previously agreed to, noting that an Indian delegation is expected in Washington later this month.

Gor was referring to the preliminary India-US interim bilateral trade deal framework announced on February 2, 2026. Under the framework, India agreed to eliminate or lower tariffs on most industrial goods and agricultural products, while the US agreed to lower reciprocal duties on about 80 per cent of items from 25 per cent.

The country's stand is no longer settle on those specific terms as the landscape shifted dramatically following the Supreme Court’s ruling, which struck down the legal foundation for the broad reciprocal tariffs.

Commerce Minister Piyush Goyal recently emphasized that India must secure preferential access over its exports, as was agreed to in the initial framework.

Since India only signed a framework and not a final legal treaty, it has no obligation to proceed under the old terms. “If the Trump administration returns weaker after mid-terms, its negotiating power will weaken, allowing New Delhi to push for greater concessions,” the source said.

PLAN B As a “Plan B”, the Trump region has initiated Section 301 investigations against several countries, including India. While this allows the executive to impose penalties without Congressional approval, it requires the US Trade Representative to prove a foreign government is engaging in unfair acts, which is difficult for country to country.

The article titled “63 moons’ cybersecurity arm pilots GPS-spoofing solution at Indian airports” from the April 15, 2026, edition of The Hindu BusinessLine is reproduced below:

---

63 moons’ cybersecurity arm pilots GPS-spoofing solution at Indian airports

Our Bureau Mumbai

63SATS Cybertech, the cybersecurity business unit of 63 moons Technologies, is collaborating with two airports to deploy a proprietary combat GPS-spoofing solution, addressing a major threat to the aviation industry, a top official in the cybersecurity firm said.

“We have a solution from Israel that we are actively piloting with two airports in India,” Srinivas L, Joint MD & CEO of 63SATS Cybertech, told BusinessLine, adding that Indira Gandhi International Airport is among its customers.

SIGNAL SPOOFING Srinivas explained that GPS spoofing works by transmitting a fake navigational GPS signal that is stronger than the genuine satellite signal. Aircraft normally rely on weak signals from satellites thousands of kilometres away, but when a stronger, false signal is broadcast, the system cannot distinguish between the two.

As a result, the aircraft may interpret its position incorrectly, believing that it is in a different location than its actual one. This could also mislead air traffic control, which may see the aircraft positioned somewhere it is not. Last December, GPS spoofing was detected at major airports, including Delhi, Mumbai and Bengaluru.

The proliferation of connected devices, particularly in homes, and increasing threats because of war has prompted 63SATS to develop solutions under its CYBOX arm, Srinivas said. “It is about convenience versus security. That’s the toughest piece to solve,” said Srinivas. “In the next two to three years, you will see a lot of IPs coming out of our stable,” he added.

The company has rolled out its upgraded version of CYBOX, positioning it as an all-in-one solution. The new version integrates multiple security layers, ranging from encrypted calling and Wi-Fi protection to defence against over 100 attack vectors. Srinivas said the app was seeing good traction, clocking 750,000 downloads and blocking nearly 1.4 million cyberattacks within a month of its launch in August 2025.

Headquartered in Mumbai, 63SATS operates across Europe and West Asia and segments through its Cyber Tower and Cyber-on-Device platforms. The company is also working with several State government bodies for securing the energy infrastructure network and providing AI cybersecurity solutions, he said, adding that talks were on with the governments of Gujarat, Uttar Pradesh, Haryana and Tamil Nadu.

“Initially, we focused on the energy sector and the telecom sector, specialising in operational technology security,” he added. In its enterprise business vertical, the firm partners with global brands such as Palo Alto, Check Point and Fortinet for providing cybersecurity solutions to sectors such as BFSI, manufacturing, automotive and critical infrastructure.

The article titled “How India is funding Silicon Valleys” from the April 15, 2026, edition of The Hindu BusinessLine is reproduced below:

---

How India is funding Silicon Valleys

THE GREAT DRAIN. Every time we use AI, we add to a hidden “Token Tax” that drains value from India’s economy

NISHANT SAHDEV

Silicon Valley’s earnings calls are already answering the most important question about artificial intelligence: where the money ends up. There’s an undeniable sense of triumph in India’s tech ecosystem right now, but we might be celebrating a digital victory we haven’t actually won.

If you look across the country, the physical transformation is staggering. We are investing massive capital in hyper-scale data centre parks in Navi Mumbai, and optic-fibre cables are weaving AI into enterprise networks and digital public infrastructure. The government has stepped in to subsidise tens of thousands of GPUs (graphics processing units) for start-ups. We are doing everything right on the hardware front.

But beneath the ribbon-cutting and the applause lies an uncomfortable economic reality: India’s much-hyped AI boom is directly funding Silicon Valley. Every time an Indian company calls a model through an API, it pays what I call a “Token Tax.” Every single time a developer in Bengaluru uses an AI coding assistant, or an e-commerce app generates a shopping feed, or a local bank automates a customer query in Hindi, a micro-payment flows out of the country. We are pouring concrete, laying the fibre-optic cables, and buying the capacity and long-term contracts. But the cognitive engine running on top of that infrastructure is almost entirely foreign-owned.

We are building the toll roads, but someone else is collecting the toll.

You can already see this imbalance playing out on global balance sheets. While we celebrate our domestic infrastructure, the royalties that flow to the world’s leading tech giants will pull trillions out of the Indian economy. The rapidly growing share of that wealth is being extracted from countries exactly like ours — markets that are adopting AI at breakneck speed, but failing to own the underlying models. The global cloud monopolies aren’t threatened by our large-scale hardware investments; they are banking on them.

THE PERPETUAL UTILITY BILL

To understand how we got trapped, you have to look at how the fundamental business model of software has shifted. Back in the 2000s, Indian IT firms operated in a world of ownership. You bought a database or software, put it on your servers, and built an empire of services around it. It was a predictable, one-time capital expense. You owned the car. Today, you don't own it; you rented it. You rent it by the token.

Indian companies now do the hardest, most unglamorous work in the digital economy: acquiring customers, cleaning data, navigating complex local regulations, and concentrating on sales. Yet, the cream — the highest-margin layer of the entire value chain — the API for the core intelligence itself — flows immediately outward. India is no longer just exporting software services. We are importing intelligence, one API call at a time.

MATH DOESN’T WORK AT SCALE

The usual pushback I hear from tech leaders is predictable: Why not just rent? Renting a frontier model from a US tech giant is cheaper than building a model from scratch. It’s faster to focus on building great local apps and let California handle the heavy lifting? The answer is simple: that model mathematically cannot survive Indian economics.

Our market is defined by enormous volume but incredibly tight margins. The average revenue per user (ARPU) here is a fraction of what companies earn in the West. You simply cannot serve hundreds of millions of users while paying a dollar-denominated, per-token tax to Silicon Valley for every interaction.

Consider an agri-tech startup offering AI-driven crop advice to farmers in Marathwada for a ₹50 monthly subscription. If every complex question that farmer asks requires a round-trip to a foreign AI model costing a few cents, the math collapses. The more successful your product becomes, the more money it bleeds.

This is why so many brilliant Indian AI startups are currently stuck in “pilot purgatory.” The product works, the local demand is real, but scaling it destroys their balance sheet. That isn't a healthy tech ecosystem. It's a dependency loop.

A UPI-STYLE PLAYBOOK FOR AI

The solution isn't some idealistic push to build everything domestically at once. It’s recognizing that India’s ‘National AI Reserve’ will eventually be as critical as the railway system that the private sector ignores. But we have navigated this exact kind of bottleneck once before. A decade ago, India flat-out refused to outsource its payment infrastructure to global incumbents like Visa and Mastercard. We built the Unified Payments Interface (UPI). India built the democratic, shared ownership of the core system, and let private companies innovate on top of it. We desperately need a similar playbook for AI.

The government’s role shouldn’t be to build the models, but to underwrite the immense compute required for a consortium of private Indian firms, researchers, and startups to develop competitive, sovereign models. Simultaneously, corporate India needs to move beyond providing just workflow or document-processing task layers on top of a foreign trillion-parameter global model. Enterprises need to pivot towards Small Language Models (SLMs) that can be trained on their own proprietary data and run safely on local servers. This keeps costs down, protects privacy, and entirely cuts the external gatekeepers out of the transaction. In this new era, data gravity — keeping your data and computation local — is the only real defence against algorithmic rent.

THE INVISIBLE DEFICIT

We obsessively track our trade deficit in oil and our dependence on foreign electronics. We know exactly what physical imports cost our economy. But we are completely blind to our “Compute Deficit.”

India spends roughly $130 billion a year on oil imports. If our current adoption continues on this path, the cost of relying on foreign AI APIs could dwarf that within a decade. Millions of daily API calls are already draining liquidity just as AI infra and massive outflow is practically invisible in our national accounting.

For three decades, India exported human talent to power the global digital economy. But in the generative AI era, selling human effort is a depreciating asset. Intelligence itself is becoming the commodity, and right now, we don't own it.

Globally, other nations are waking up. France is heavily backing Mistral AI to ensure European sovereignty. The UAE is pouring billions into the Falcon models. China has insulated its entire ecosystem from external reliance. India is the only major digital economy that defaults to pure import for its cognitive engine.

Innovation is no longer a choice. We can continue subsidising hardware and exporting talent for a century, but without ownership, Or, we can do the harder work of shifting from adoption to control. Because the arithmetic is unforgiving. If nothing changes, by 2030, India’s most expensive import won’t be Arabian oil or Chinese electronics. It will be intelligence. And we won’t just be buying it — we will be renting our own future.

---

The writer is a philosopher at University of North Carolina at Chapel Hill and a columnist on AI, infrastructure and global systems.

The article titled “Prime Minister opens ₹12,000-crore Delhi-Dehradun economic corridor” from the April 15, 2026, edition of The Hindu BusinessLine is reproduced below:

---

Prime Minister opens ₹12,000-crore Delhi-Dehradun economic corridor

KEY INFRASTRUCTURE. Expressway to cut travel time, reduce logistics costs and support tourism and jobs

Rohit Vaid New Delhi

Prime Minister Narendra Modi on Tuesday inaugurated the Delhi-Dehradun Economic Corridor, describing it as a key infrastructure milestone for Uttarakhand and the north Indian region. Speaking at the inauguration, he said the corridor will improve connectivity, reduce travel time and lower fuel consumption and freight costs, while facilitating employment generation.

FOR CONNECTIVITY The project forms part of the Centre’s broader push to expand infrastructure across road, rail and air networks. The Prime Minister stated that India’s annual infrastructure spending had increased more than four-fold since 2014, with over ₹12 lakh crore in projects worth more than ₹2.25 lakh crore currently underway in Uttarakhand.

LOGISTICS PUSH Besides, the corridor is expected to support regional economic activity by improving access to key cities including Ghaziabad, Baghpat, Baraut, Shamli and Saharanpur. Further, the Prime Minister added that the project will open opportunities in trade, logistics, warehousing and industry, while also benefiting farmers and livestock owners through faster market access. In terms of operations, the project has seen an investment of about ₹12,000 crore and has generated employment for thousands of labourers and transport workers.

Additionally, tourism connectivity to Dehradun, Haridwar, Rishikesh, Mussoorie and the Char Dham circuit is set to improve. Modi said that rising tourist inflows, including winter pilgrims, will provide a boost to local economic activity across sectors, such as hospitality and transport. In addition, the project incorporates environmental safeguards, including a nearly 12 km elevated wildlife corridor to minimise disruption to animal movement. According to the Prime Minister, the government expects the corridor to provide sustained momentum to Uttarakhand’s development while balancing infrastructure expansion with environmental conservation.

KEY FEATURES The key features of the corridor include a six-lane access-controlled highway which will reduce the travel time between Delhi and Dehradun from about six hours to nearly 2.5 hours. The project includes 25 interchanges, three railway overbridges, four major bridges and multiple wayside amenities to enable smoother and safer movement of passengers and goods. It also connects with major expressways such as the Delhi-Meerut, while also linking upcoming corridors.

The article titled “Footfalls at Asia’s largest tulip garden decline amid West Asia conflict, security concerns” from the April 15, 2026, edition of The Hindu BusinessLine is reproduced below:

---

Footfalls at Asia’s largest tulip garden decline amid West Asia conflict, security concerns

Gulzar Bhat Srinagar

Asia’s largest tulip garden in Srinagar will close to the public from the evening of April 16 as the season comes to an end with bloom numbers this year significantly lower than last season.

The decision to shut the Indira Gandhi Memorial Tulip Garden was taken following recommendations by the Tulip Committee and a team of experts, according to a senior official in the Directorate of Floriculture, Gardens and Parks, Kashmir.

Stakeholders attributed the decline in footfalls to the ongoing conflict in West Asia and the lingering impact of last year’s militant attack in Pahalgam, which they said had dampened tourist inflows.

Just about 3.4 lakh tourists visited the garden between March 16 and April 13 this year, against 4.55 lakh during the same period last year. “Despite the lower turnover, the garden remained a key attraction during the spring season,” the official said.

MORALE HIT Spread over an area of 30 hectares at the foothills of the Zabarwan range overlooking Dal Lake, the garden features around 70 varieties of tulips and was established in 2008 to extend Kashmir’s tourism season beyond the summer months and has since become a major draw for visitors during spring.

Qazi Tauseef, spokesperson for the Kashmir Economic Alliance, a coalition representing more than a dozen trade bodies, said geopolitical tensions were weighing on the tourism sector.

“The Iran conflict has led to a reduced inflow of tourists from overseas, with airlines having to adjust flight paths. Also, high ticket prices to Srinagar have made Kashmir less accessible at a time when affordability plays a crucial role in travel planning,” he said.

The article titled “‘AP is building deep-tech ecosystem’” from the April 15, 2026, edition of The Hindu BusinessLine is reproduced below:

---

‘AP is building deep-tech ecosystem’

G Naga Sridhar Hyderabad

Andhra Pradesh is building a deep-tech ecosystem, Chief Minister N Chandrababu Naidu said.

He was speaking after inaugurating India’s first open access Quantum Reference Facilities (Amaravati 1 & 2) has been set up at SRM University, Amaravati, while QBiT Tech’s facility (Amaravati 1Q) is at Media Towers, Visakhapatnam. “The SRM facilities in Amaravati was a successful case study for technological convergence,” Naidu said. A strong national technological consortium, including different institutions with different capabilities, provides an indigenous supply chain to set up a network of quantum.

INDUSTRY LINK The Chief Minister inaugurated the facility on the SRM University campus, and the Gannavaram facility was opened virtually.

“The two systems will strengthen the academic ecosystem for quantum skills and the industry interface,” he added.

Venkat Subramaniam, Founder of QBiT Force, said QBiT is working on indigenous computing testing facilities, and they had the support of the State government and academic institutions which supplied all Made-in-India components, the facilities could be delivered in record time of four months.

Governor Justice Abdul Nazeer said Amaravati Quantum Valley was reflecting the vision of the State to develop technologies for the future. It had all the potential to become a hub for quantum tech and skill training. The Centre has supported 300 startups with ₹450 crore for creating a quantum ecosystem, he said.

Newspaper Summary 130426

 

TVS Motor bikes into global third spot

PLAYBOOK UPGRADE. With premiumisation, TVS is gaining on Hero and Honda on home turf. But Japanese rivals continue to dominate.

The global two-wheeler hierarchy has undergone a rare shift in CY2025, with TVS Motor Company overtaking Yamaha to become the third-largest manufacturer by volume, marking a milestone for India’s auto industry. But the achievement also underscores a deeper structural gap: Collectively, Indian manufacturers continue to trail their Japanese rivals by over 10 million units annually.

Honda alone sells more than 20 million units globally, while Yamaha and Suzuki together outpace the combined volumes of India’s ‘Big Three’ — Hero MotoCorp, TVS Motor, and Bajaj Auto. For TVS, the more immediate challenge lies closer home, where it trails Hero and Honda in the domestic market.

CLOSING THE GAP

The gap, however, is narrowing. TVS Motor’s rise has been driven by a strategy anchored in outpacing industry growth. “We are confident that we will do better than the industry growth, both in domestic and international markets,” Managing Director KN Radhakrishnan said during a recent earnings call.

This outperformance is already visible in retail trends. According to Federation of Automobile Dealers Associations (FADA) data for FY26, TVS grew its retail volumes by 22.49 per cent, way beyond the industry’s 13.4 per cent growth.

Its market share rose to 18.89 per cent from 17.49 per cent a year earlier, while Hero MotoCorp’s share edged down to 28.4 per cent. The shift is even more visible against Honda — the gap between Honda Motorcycle and Scooter India and TVS narrowed to 6.14 percentage points in FY26 from 7.88 percentage points a year earlier.

PREMIUMISATION

At the core of this momentum is a calibrated shift toward premiumisation. The company has leaned into feature-rich motorcycles and scooters such as the Raider, Apache range, Jupiter, and Ntorq.

“Premium and super-premium are growing faster,” Radhakrishnan said. This shift is being validated — and increasingly seen as structural, rather than cyclical.

“Growth is being driven by a richer domestic vehicle mix and higher export volumes,” Axis Securities said in a recent sector note, pointing to improving realisations and stronger product positioning. Kotak Institutional Equities, in its March quarter earnings preview, endorsed this view and expects this shifting mix to continue driving earnings improvement.

Together, these assessments suggest that TVS Motor’s growth is not merely volume-led but increasingly also quality-led — better pricing, stronger mix, and a widening presence in higher-margin segments. The strategy is also portfolio-led. “We always look at the total portfolio contribution… we don’t look segment-wise,” Radhakrishnan said.

A CHANGING DEMAND CYCLE

This positioning is reshaping the domestic market. TVS is capturing urban demand through premium products while riding a rural recovery. FADA data shows rural growth at 13.05 per cent and urban growth at 13.62 per cent in FY26, pointing to a convergence that increasingly favours higher-spec models.

The traditional divide between rural and urban consumption is narrowing, expanding the addressable market for premium offerings. “With the kind of infrastructure getting built in India… mobility needs… and affordability, I’m a firm believer that 8–9 per cent CAGR is sustainable,” Radhakrishnan said.

EXPORTS POWER GROWTH

International markets are emerging as a key growth engine. TVS has expanded across Africa and Latin America. “The demand in Africa continues to grow… LatAm also has grown,” Radhakrishnan said.

Analysts see exports as both a volume and margin lever. “A higher export mix is supporting margins across auto companies,” Kotak noted, linking international expansion to improved earnings quality. Yet Southeast Asia remains the toughest market. Indonesia and Vietnam continue to favour Japanese incumbents, making ASEAN the last frontier for Indian OEMs.

THE EV WILD-CARD

Electric mobility could reset the competitive order, but also determine whether TVS can translate momentum into leadership. TVS emerged as the market leader in India’s electric two-wheeler segment in FY26, retailing about 341,513 units and capturing a 24 per cent market share, according to FADA data. The 43.5 per cent year-on-year growth helped it overtake early mover Ola Electric.

Unlike several competitors, TVS has taken a calibrated approach — scaling up through its iQube platform while leveraging its distribution network and brand strength. This has helped it expand beyond early adopters to more mainstream buyers — a shift that has proved challenging for both start-ups and legacy players.

EV penetration is also rising. FADA data shows electric two-wheelers accounted for 6.54 per cent of total volumes in FY26, with monthly penetration nearing double digits. This positions EVs not just as a new segment but also a structural shift that could reshape market share over time, potentially accelerating TVS Motor’s climb in the domestic hierarchy.

LEGACY STRENGTHS

However, the transition comes with trade-offs. “Margins could be impacted by the margin-dilutive mix of EV scooters,” Axis Securities said, highlighting near-term profitability pressures. At the same time, Kotak noted that “operating leverage and improved product mix” continue to support margins, suggesting that legacy strengths remain relevant even as EV investments rise.

For TVS, the EV strategy mirrors its broader approach. “Continue to grow the top line… improve the product mix,” Radhakrishnan said. The challenge will be in converting early leadership into durable scale as the market shifts from subsidy-driven adoption to demand-led growth.

THE ROAD AHEAD

At the premium end, TVS is sharpening its global ambitions through Norton Motorcycles. “We will have a differentiated strategy for Norton,” Radhakrishnan said.

The rise to the global top three marks a coming-of-age moment, but not the endgame. Closing the gap with Hero at home will test its ability to scale up. Cracking ASEAN will test its global ambition. And making EVs profitable will test its execution discipline.

The climb to third was about momentum. The climb to second will be about execution.

The chatter-bots speaking up for India

SOUNDS OF DIVERSITY. Voice AI startups are building agentic solutions that can converse in a multitude of regional languages.

In India, the next wave of AI may largely be a chatty affair. As businesses race to replace call centres with intelligent voice agents, startups are building for a uniquely complex market, where scale, language, and latency (the delay between input and output) collide.

According to Tracxn data, Indian voice AI startups raised $160.58 million across 37 funding rounds between 2019 and 2026. Funding peaked in 2023 at $41.6 million across five rounds, while this year it has reached $30.2 million across three rounds so far.

SCALING INDIC LANGUAGES

Bengaluru-based Gnani.ai, co-founded in 2016 by Ganesh Gopalan and Ananth Nagaraj, processes over 30 million spoken interactions daily in over 12 languages. Serving more than 200 enterprises across BFSI, telecom, automotive, and government sectors, it is one of four ventures selected for a government mission for sovereign foundational AI development.

“Our agentic AI platform is designed to handle India-specific nuances like multilingual conversations and turn-taking,” says CEO Ganesh Gopalan. The company recently launched Inya VoiceOS, a voice-to-voice model that eliminates intermediate speech-to-text and text-to-speech layers. Its Vachana models offer human-like speech and zero-shot voice cloning in 12 Indic languages. Gnani.ai, which recently secured $10 million in Series B investment, reports that its recurring revenue is growing 2–3x annually.

DOWN TO DIALECTS

India has over 700 dialects, yet most global AI models work well only for English and Hindi. Navana.ai addresses this gap by building models from scratch and collecting proprietary data nationwide.

“We don’t just deliver voice agents but also build the underlying models that power them,” says Raoul Nanavati, co-founder and CEO. Navana.ai collaborated with IISc, Bangalore, on RESPIN, one of India’s largest open-source speech datasets, producing over 10,000 hours of audio across nine languages and 38 dialects. The company currently deploys voice agents across 22 languages and is looking at similar non-English sovereign markets in Southeast Asia, the Middle East, and Africa.

VOICE-FIRST CULTURE

“India is voice-first culturally. But for the last decade, digital India has been forced to click, type, and tap,” explains Sneha Roy, co-founder and COO at Murf.AI. Founded by IIT-Kharagpur alumni, Murf.AI focuses on India’s linguistic diversity and the engineering problem of "code-switching" (switching between languages mid-conversation).

Murf.AI offers two core models: Falcon, a real-time TTS engine supporting 35-plus languages, and Speech Gen 2 for content creation. Their models are built on ethically sourced speech, with voice actors earning royalties for their recordings. The company has grown 13x in four years, with an ARR of ₹85–90 crore, and has scaled to over 195 countries with 10 million users.

THE PATH TO MATURITY

Himani Agrawal, COO of Microsoft India and South Asia, observes a trend where organisations are choosing to build in-house AI systems for regulated environments and sensitive data. “As AI moves into mission-critical use, it must be governed, observable, and tightly integrated with existing frameworks,” she notes.

The opportunity remains vast. “India is a voice-first country. Talking is just more natural here than typing or texting,” says Vardhan Dharnidharka of Stellaris Venture Partners. He points out that the staggering quantum of B2B business conducted over the phone—from insurance sales to FMCG distribution—is still largely unscaled and manual.

Oil-starved industry looks to reignite heat pumps

How clusters producing similar goods are well suited to tap steam energy viably, backed by solar power

The two-week truce between the US and Iran, along with the promise to reopen the Strait of Hormuz, seemingly offered a measure of relief. Yet, oil and gas supplies appear unlikely to return to pre-war levels anytime soon. In India, while the plight of households struggling to afford cooking gas has drawn attention, the distress in industry — especially micro, small and medium enterprises (MSMEs) — has gone largely under-reported. Many units have been forced to cut production by half or more.

A SHIFTING EQUATION

While India has a long-term commitment to clean energy, the West Asia conflict has underscored the urgency of interim solutions, particularly in MSME clusters. Heat pumps are based on well-established technology but have historically seen limited adoption in industry due to higher costs compared to oil or gas.

That equation is now shifting. Concerns over fuel availability and price volatility are making heat pumps increasingly competitive, especially when deployed at the scale of industrial clusters. Industrial heat requirements vary widely depending on the product, process, and scale, ruling out a one-size-fits-all solution. However, experts from industry bodies, venture capital groups, and philanthropies suggest that heat pumps are well-suited for clusters producing similar goods — such as glass units in Firozabad or leather units.

ENABLING CONDITIONS

Three enabling conditions have been identified for scaling up heat pumps.

1. Financing: While capital availability is not seen as a major constraint — thanks in part to philanthropic guarantees that can de-risk investments — there is a need for viable models. One proposed approach is “heat-as-a-service”.
2. Power source: If the grid remains fossil fuel-heavy, the benefits are limited. To address this, solar power can generate ample electricity for heat pumps during the day, with the grid acting as backup.
3. Regulatory framework: While industry acknowledges the push towards electrification, it seeks greater clarity and stability. Tariff structures, open access to power, and alignment of incentives between fossil fuels and clean energy will be critical. A white paper outlining these issues is expected to be submitted to policymakers.

GRID READINESS

The third factor is grid readiness. Although capacity may appear adequate at a macro level, plant-level constraints and connection readiness could pose challenges. This calls for closer coordination with power system planning.

The immediate opportunity lies in identifying priority sectors and clusters, supporting early deployments, and building credible pathways to scale. These efforts must also align with a broader national roadmap for clean industrial heating.

INVESTMENT FACTORS

Rising oil prices have pushed owners to consider alternatives, as heat pumps provide low-cost energy. However, investment decisions will hinge on three factors:

• Lifecycle cost-competitiveness rather than just upfront investment.
• Reliability and compatibility with continuous industrial processes.
• Proven performance.

Pilot projects play a crucial role, and MSME operators stress the importance of minimal disruption to ongoing operations. The immediate focus remains on scaling up heat pump adoption.

FOCUS ON INDIA’S INTERESTS, NOT PAKISTAN’S MOVES

By Shashi Shekhar

The inevitable finally happened, bursting the bubble of the Islamabad talks. What more could have been expected from an arrogant US President’s painful diatribes, a resilient Iran successfully resisting a superpower, the absence of Israel, the interference of Gulf nations, and a spineless host’s faux hospitality? Now, prepare for an inevitable rough ride.

I pity US Vice President J.D. Vance, who wanted to stop the war but will now be forced to take a hard line. Iran was secretly supported by China and Russia, but now they too will have to come out in the open. Energy supply for countries such as India, Japan, and South Korea is in danger, and the global economy is heading for tough times.

Some of my Indian friends are unhappy that Islamabad is playing the role of a “mediator,” unaware that Pakistan is doing exactly what it was created for. Pakistan is a recent idea, floated by a student, Chaudhary Rehmat Ali, in Cambridge in 1933. Later, the poet Allama Iqbal gave it emotional support and Mohammad Ali Jinnah added political weight. It is said the British encouraged Jinnah to realize the dream of Pakistan.

Ishtiaq Ahmed, a Pakistan-born professor in Sweden, wrote in his book Pakistan: A Garrison State that the British wanted to control India for some more time, but their grip was loosening quickly. On 8 May 1947, then British Prime Minister Clement Richard Attlee met former generals and diplomats who advocated that India was naturally inclined toward socialism. They believed that if the British didn’t create Pakistan, Soviet Union influence would be felt in the Indian Ocean within a few years. The meeting was decisive, and Lord Mountbatten announced on 3 June 1947 that Pakistan would be created by partitioning India. Thus, Pakistan became a Western ally even before its creation. The same logic made it a garrison state; even today, Islamabad’s political class dances to the tune of GHQ in Rawalpindi.

In contrast, India pursued a policy of non-alignment and has stuck to it until now. During the journey, we were sometimes seen as taking sides. During the 1965 war, the US and China openly sided with Pakistan, while the Soviet Union stood with us and initiated peace talks in Tashkent. Similarly, in 1971, when the US sent its seventh fleet to the Bay of Bengal, the Soviet Union came to our help, yet we did not become part of the Soviet camp.

As a result, India continued to receive aid from the West, and the Green Revolution was made possible with support from US institutions. While New Delhi maintained its non-aligned edge, Pakistan remained a Western ally and even brought the US and China closer when Henry Kissinger flew from Pakistan on his secret mission to China. Pakistan supported US military operations in Afghanistan—a nation created in the name of Islam acting treacherously against another Islamic nation.

We shouldn’t be surprised if ceasefire talks between Iran and the US are held in Islamabad. Everyone knows Pakistani Prime Minister Shahbaz Sharif or Field Marshal Asim Munir are not the facilitators. China pressured Iran while Trump, eager to end a useless war, lapped up the opportunity. Both parties needed to talk where they could arm-twist a pliable host. Pakistan was the obvious choice, making it a medium, not a mediator. Doubters should look at Sharif’s post on X, which initially began with "Draft: Pakistan message on X," suggesting the text was sent by someone else and released without editing.

Even the edited version raised questions about the original writer—was it from Washington, Beijing, or Rawalpindi? They mentioned a ceasefire between Israel and Lebanon, yet Israel hasn’t ceased its military offensive, and Iran cannot abandon Hezbollah, dimming any chances of a deal. Despite all this, our doomsayers think Pakistan will use its hyperactivity to raise the Kashmir issue internationally. I would ask: when have they not done it? Since Independence, we have been countering their political and strategic moves and will continue to do so.

I would urge my friends to realize that the crisis is deepening. Instead of worrying about the world, they should focus more on securing our own national interests.

---

Shashi Shekhar is the editor-in-chief of Hindustan. Views are personal.

Nice countries come last

India has nothing to offer but love and fresh air, which too is scarce

By TCA Srinivasa Raghavan LINE & LENGTH

There has been a lot of angst in India that America chose Pakistan to ‘mediate’ between it and Iran. This disappointment comes after the Modi government, for the last few years, has been claiming how important India is in the world.

As always the truth is neither this nor that. It is something we don’t like to be told but India is, and always has been, quite irrelevant to the interactions between the big powers. And there is a reason for this.

We don’t spend our money in a way that would make us powerful, in any globally relevant way. In the last 25 years India has been spending around a quarter of its annual budgets on welfare. That’s a lot of money which yields a lot of social and political returns but not economic or military returns.

It is, if you like, a part of the price we pay for our genuinely competitive politics. It’s the money that is spent on notions of fairness in governance, an emphasis on equity, a hankering for social justice, insistence on political stability and, above all, an innate sense of decency that humans have. Some of this money also goes to purchase votes.

What’s the cost to the national power of this expenditure? Apart from high taxation, it is that much less money for military and economic muscle. Imagine if that money had been spent on weapons and subsidies to private industries à la China.

MUCH LIKE EUROPE

In a very real sense therefore we are like Europe subsidising people rather than capital. We are willing to pay the price for social equity in terms of foregone machoness. And so like Western Europe, we don’t matter much in world affairs even though Europe’s GDP is more than four times ours at $22 trillion. And don’t forget that Western Europe got here after 500 years of greed.

In sum, we don’t have the money. we don’t have the muscle. We don’t have enough tradeable energy or raw materials. We don’t have enough industrial output that feeds into global supply chains. What we have are lots of people whom no one wants.

India also doesn’t really constitute a very large market, 100-120 million at best, though the actual number is perhaps 30 per cent less. In other words, economically we are small. We are the nice guys who come last.

From a different perspective, global GDP in 2025 was around $115 trillion. The US GDP was $30 trillion, EU around $22 trillion and Chinese around $20 trillion. India wasn’t even $5 trillion. Is it any wonder that we don’t count for anything?

You may well ask why. Well, it’s a choice we made in 1950 when we adopted a soft state approach of governance. As countless others have pointed out in the last 75 years it is the only way of keeping a vast and diverse country as a unified constitutional entity.

This is not to say that we aren’t a great country. We are, but in ways that don’t matter in world affairs which are almost entirely tuned to the needs of capital. Marxists call it imperialism.

Whereas the others are fully focused, we almost wholly aren’t. When we do focus it’s on local politics.

The absence of enough capital to make its pursuit and protection an absolute goal and the absence of a non-divisive political goal merely makes us what Ravi Shastri called bits and pieces players. That is, dispensable and replaceable.

Or if you want to be polite, we are a middle power. Neither here, nor there. Pakistan which raises so many hackles here is not in this situation. It’s a glow gopher and enjoys the advantages of that status.

Our 2,500-year-old cultural and religious history, a great liberal constitution, a genuine democracy, rule of law, regardless of what the nitpickers in Western media say, social peace, political stability, an excellent judiciary even if not a very good judicial system, a gentle people, etc., are very important to us — but no one else. These are not the things the world wants from us.

So one must ask what the point is of pretending to be otherwise as the Modi government has been so strenuously doing, or, conversely, lamenting, as the Opposition has been doing, that no one really bothers about what we think or why the world has such a poor opinion of our ability to influence events.

We are what we are, a decent country by and large which is content to actually believe in vasudhaiva kutumbakam. It’s not a bad thing to be because the alternative is to be beastly to everyone.

When signals diverge: Reading the Nifty-Gold ratio

By Harsimran Sandhu and Prateek Gupta

Gold has surged over 55 per cent in a year. Equities have corrected roughly 8 per cent from their highs. Oil has spiked above $100 a barrel for the first time since 2022. The instinct is to ask which signal is right. That may be the wrong question; the more useful exercise is to read them as layers of the same story.

The US-Israel strikes on Iran on February 28, 2026, and Iran’s retaliatory closure of the Strait of Hormuz—through which roughly 20 per cent of global seaborne oil transits—have sent WTI crude from pre-war levels of $64 to $90-100, with a 52-week high of $119.48. These levels directly feed inflation, with petrol rising above ₹103/litre and LPG at ₹912, and compress corporate margins.

Gold has responded with a generational move. Over the past 12 months, gold has surged from ₹90,000-95,000 to ₹1,55,390 per 10 grams, representing a 55-65 per cent appreciation in a single year. International spot gold has breached $4,700 per ounce. This is not mere speculation; gold at these levels is pricing in an active military conflict, record central bank accumulation, and institutional hedging against tail risks that are no longer hypothetical.

Equities tell a different story. The Nifty 50 has corrected from its January 2026 all-time high of 26,370 to approximately 23,997.35, delivering a roughly flat return year-on-year. However, valuations have compressed to a trailing PE of 20x, near the post-2021 consolidated-earnings average of 22-23x, indicating there is no exuberance in the market.

THE GOLD-NIFTY RATIO

A useful way to reconcile these signals is through the Gold-Nifty Ratio (GNR), obtained by dividing the price of 10 grams of gold by the Nifty level. At current levels (₹1,55,390/23,997.35), the ratio stands near 6.47, which is close to the upper extreme of its historical range.

Since the Nifty’s inception in 1996, the ratio has ranged from 1.8 in 2007 (equity euphoria, gold ignored) to elevated levels during periods of economic stress. Over this three-decade horizon, both asset classes have compounded powerfully:

• The Nifty has returned 22-23x on price alone from its 1995 base, but when dividends are reinvested, its total return rises to 30-35x.
• Gold has returned approximately 29-32x at current elevated prices.

The key point is that the ratio between them oscillates rather than trends, and current levels sit near the top of that range. The Nifty-Gold ratio behaves as a mean-reverting series over multi-year horizons. Extremes reflect relative movements that have already occurred, rather than stable equilibria. Because its volatility tracks equity movements more closely than gold, sharp drawdowns, like the 14 per cent correction in Q1 2026, amplify the ratio disproportionately, making it an active barometer of relative stress.

WHEN EXTREMES MATTER

While the ratio is not a forecasting tool, historical patterns suggest that extreme levels carry informational value. Historically, when the Gold-Nifty ratio rises above 5.5, it has often coincided with periods of heightened macro stress where gold has significantly outperformed equities in the preceding phase. This has been followed, in several instances, by a reversal in relative performance. Conversely, lower ratio regimes (below 3.5) have exhibited less consistent outcomes.

Oil signals an active energy crisis, gold signals the highest level of geopolitical stress in decades, and equities signal a domestic economy that has absorbed the shock without breaking. The ratio captures the full distance between fear and fundamentals. The temptation is to interpret an extreme ratio as a prediction—that gold must fall or equities must rally.

TIMING AND DIRECTION

The data does not support such certainty. Extreme ratios have historically been followed by adjustment, but the timing and direction depend on variables no model can forecast: whether Iran ceasefire talks succeed, when Hormuz reopens, and how deeply the energy shock feeds into global growth.

This framework does not tell you what to buy or sell. It offers a structured way to interpret where markets stand right now without the false comfort of a forecast. The ratio of 6.47 simply records the distance between narratives of energy crisis, geopolitical stress, and domestic resilience. Understanding that distance is the real utility of the Gold–Nifty ratio.

---

Sandhu is Professor of Finance, and Gupta is Executive MBA student, at IMT Ghaziabad.

Can non-salaried professionals declare 50% income as profit under presumptive tax?

MINT MONEY | ASK MINT | TAXATION

Question: I earn income through a contractual job, and the firm has suggested I opt for Section 44ADA and declare 50% of my income as profits. However, I read that under this section, one is required to declare either 50% or a higher amount if one’s actual profits exceed that. If I declare 50% of my income without detailed expense records, could this trigger scrutiny or raise compliance concerns? — Name withheld on request

Answer by Archit Gupta: Under Section 44ADA of the Income Tax Act, 1961, an assessee opting for presumptive taxation is not required to maintain books of account, provided income is declared at 50% or more of gross receipts from the specified profession. This relaxation is a key feature of the presumptive taxation scheme, designed to simplify compliance for small professionals. Declaring exactly 50% of your gross receipts as profit is a common practice among taxpayers opting for this scheme and, in itself, should not trigger scrutiny or raise compliance concerns.

If you declare income below 50% of gross receipts under Section 44ADA, you should maintain prescribed books of account as per Section 44AA of the I-T Act. These include a cash book, journal, ledger, copies of bills issued (for transactions exceeding ₹250), and original bills for expenses, so that your lower profit margin can be substantiated if questioned. In addition, in such cases, your income will also be subject to a tax audit if your total income crosses the basic exemption limit applicable to you for that financial year.

This requirement for a tax audit results in higher compliance obligations, including certification by a chartered accountant and the submission of an audit report along with detailed financial information. Such additional steps can increase both the time and cost of tax compliance.

However, simply opting for the 50% profit approach may lead to a higher tax outgo if your actual income after expenses is significantly lower than the presumptive rate prescribed under the scheme. Therefore, it is important to carefully evaluate both approaches in light of your income pattern, expense levels, and long-term tax planning objectives before making a decision.

To be sure, the aforementioned provisions hold good for the income earned during FY 2025–26 (AY 2026–27) under the existing framework of the Income Tax Act, 1961. For income earned from 1 April 2026 onwards (FY 2026–27), the provisions of Section 58 of the Income Tax Act, 2025, will apply once the new law becomes operational. Taxpayers should therefore stay updated on any changes in the rules that may affect presumptive taxation.

---

Archit Gupta is the founder and CEO of ClearTax.

How Lionel Messi became Miami’s billion-dollar economic engine

By Arian Campo-Flores

MIAMI — Nearly three years after arriving to play for this city’s Major League Soccer club, Lionel Messi has delivered on the field, leading Inter Miami to its first league championship last year and making it the MLS’s most valuable team.

Yet his impact reaches far beyond the pitch: He has been a one-man economic stimulus engine for the Miami area, boosting its international profile, drawing hordes of tourists and powering sectors including real estate, hospitality and retail.

THE STADIUM CATALYST

The latest example of Messi’s economic pull: last week’s inauguration of the club’s new stadium, which Inter Miami raced to complete after his arrival. The 26,700-seat Nu Stadium, near Miami International Airport, is the centerpiece of the $1 billion, 131-acre Miami Freedom Park project that will eventually include more than one million square feet of retail, entertainment venues and office and hotel space.

While putting a precise dollar figure on his impact is tricky due to a simultaneous influx of wealthy newcomers, local observers calculate it in the billions of dollars, pointing to effects far beyond the stadium development.

A RECORD-BREAKING CONTRACT

Messi, considered by many the greatest soccer player of all time, signed with Inter Miami in July 2023. His contract, running through 2025, is worth an estimated $50 million to $60 million annually in salary and bonuses. However, the total value is significantly higher as it includes an equity stake in the club upon retirement. Last year, he signed an extension through the 2028 season.

The investment has proven justified. His presence fills stadiums both in Miami and in away cities; for instance, a March game against D.C. United in Baltimore drew over 72,000 fans, setting an attendance record for that team.

CEMENTING A SOCCER HUB

Messi has bolstered Miami’s standing as the premier U.S. soccer hub.

• FIFA opened a new legal-and-compliance division in Miami in 2024 and moved its commercial operations there from New York in 2023.
• The Argentine Football Association (AFA) is unveiling a new office and training complex in the area this year to promote its brand. Leandro Petersen, AFA’s chief commercial officer, noted that Messi’s signing hastened these plans.

REAL ESTATE AND TOURISM BOOM

The "Messi effect" has been a boon for South Florida real estate. Messi’s own purchases—a $10.8 million waterfront mansion in Fort Lauderdale and a unit at Cipriani Residences Miami—have stimulated intense interest in those areas. Agents now routinely feature Messi and the upcoming World Cup in promotional materials to attract international buyers, who are often die-hard fans.

Tourism has also surged. Miami-Dade County’s hotel occupancy rate hit 74% last year, the fourth-highest in the U.S.. Beyond local games, Miami is hosting major international events:

• The 2024 Copa América final (won by Argentina).
• Eight matches for the FIFA Club World Cup.
• Seven matches for the FIFA World Cup this summer.

These events, combined with the Formula One Miami Grand Prix and the Miami Open, generate billions in activity. "With Messi, we really pivoted to an international fan and client," said Suzanne Amaducci of Bilzin Sumberg.

VALUATION AND LOCAL BUSINESS

Inter Miami’s valuation has skyrocketed to an estimated $1.45 billion in 2026—the highest in the MLS—up from $585 million in 2022. Revenue reached approximately $200 million last year.

Local businesses are thriving on the buzz. At Grails Miami, a sports bar in Wynwood, watch parties for Inter Miami games fill the 400-capacity venue. The bar offers a "Messi Mule" cocktail and doubles its staff on match days to handle the demand. Vacation rental demand has also spiked, with stronger pricing and a "new type of traveler entering the market almost overnight".

New labour codes may raise film, OTT production costs

Firms to see 15-20% cost surge as the codes give formal protection to gig, freelance workers

By Lata Jha

NEW DELHI — Film and OTT production companies are bracing for a likely rise in crew costs and overall production budgets as the new labour codes aim to bring gig and freelance workers under formal protections.

Stricter regulation of working hours and the requirement for overtime pay could materially raise per-day crew costs, particularly in film production, where shoots often run 12 to 16 hours, experts said. These expenses come at a time when studios are struggling to curb budgets amid the unpredictable, largely volatile box office and cautious commissioning by streaming platforms.

Foreseeable Cost Increases

While the actual increase could vary depending on the scale and size of projects, industry experts estimate a 15-20% rise in costs for production houses. For media and entertainment businesses, given long shoot schedules, irregular working hours, and heavy reliance on project-based crew, cost increases are quite foreseeable.

“The new labour codes are likely to introduce a more structured and compliance-driven framework for a historically flexible, project-based industry," said Pranav Bhaskar, senior partner, SKV Law Offices.

"Expanded definition of worker brings contract and gig-based talent within regulatory net, which is a material shift for production houses that rely heavily on short-term engagements. At the same time, working hour limits and mandatory overtime create both compliance exposure and immediate cost implications, especially for formats where extended shoot days or night shoots are the norm,” Bhaskar said. Large film productions, OTT originals and high-intensity formats like live events could see the most impact, he added.

Administrative and Benefit Burdens

Rajat Agrawal, chief operating officer at Ultra Media and Entertainment Group, said the change may affect several areas of production. For instance, capping allowances at 50% of total remuneration could bump up provident fund and gratuity contributions. Working on a tight deadline that needs extended shoots, overtime pay at twice the ordinary wage rate might just push up production costs.

“Plus, social security benefits for gig workers and contractors could add a significant chunk to the production house's expenses. You'll also need to factor in restrictions on working hours, which might throw off the scheduling and location planning, and potentially increase logistics costs,” Agrawal said.

The Shift to Formalisation

Then come additional administrative costs for compliance, such as HR and payroll updates. “So, if the 8-12 hour rule is enforced in a way that causes significant wage changes, it can definitely have an impact,” said Ujjwal Mahajan, co-founder of Chaupal.

New labour codes are reshaping a media and entertainment sector that is built on flexible, project-based work, said Hardeep Sachdeva, senior partner, AZB & Partners. “Biggest challenge is in transitioning from an informal, contract-heavy ecosystem to a formalised employment framework. This would come with mandatory appointment letters, defined wage structures, regulated working hours, and expanded social security obligations,” he noted.

---

LABOUR CODE IMPACT

• LIMIT on working hours may disrupt shoot schedules, increasing logistics and location costs.
• OVERTIME wages at twice the ordinary rates could inflate budgets for projects with tight timelines.
• CAP in allowances at 50% of total wages may raise gratuity and PF contributions for production firms.
• SOCIAL security benefits for contract and gig workers to add another layer of costs for producers.

Newspaper Summary 120426

 

Markets’ dilemma: Trust the bark or wag of oil prices

SPLIT SIGNALS. Surge in physical oil prices alongside a steep fall in futures underscores a stark divergence, with the gap between the two widening to historic highs. By Akhil Nallamuthu bl. research bureau

The spot oil market is barking loudly. Last week, it rallied to an all-time high of $144.46/barrel — levels not seen even during the frenzied rally of 2007-08 or the spike during the Russia-Ukraine war. Ideally, that should scare stock market investors, as too high an oil price, even if only over medium-term durations, can eventually lead to demand destruction and slow economic growth.

However, at the same time, the tail in the form of the oil futures market is wagging strong, signaling an optimistic picture. Decoding this tale of contrasts holds the key to the direction of stock markets from hereon. Last week, market sentiment improved after the announcement of a ceasefire in the US-Israel and Iran conflict. Consequently, the benchmark Nifty 50 rallied 6 per cent — its biggest weekly gain since February 2021 — while the S&P 500 and Dow Jones in the US rose over 3 per cent each.

This market rally was a direct response to oil futures correcting sharply. Front-month Brent crude futures fell nearly 13 per cent last week to $95.20/barrel, down about 20 per cent from the March 9 peak of $119.50. This decline reflects hopes of easing supply disruptions, particularly around the Strait of Hormuz. For now, markets seem to be trusting "the wag," but they may be risking ignoring ground realities.

Optimism vs. Operational Reality

Dated Brent, the primary benchmark for physical crude, hit a lifetime high of $144.46/barrel on April 7 before moderating to around $125.88. The divergence between Dated Brent and Brent futures has widened significantly since March 20, with the spread hitting a record high of $35.87 on April 9. This signals a disconnect between future expectations and current conditions.

At the core of this divergence is a mismatch: futures prices reflect expectations and hope, while Dated Brent reflects immediate supply realities. Disruption around the Strait of Hormuz has created severe tightness in prompt supply, with buyers scrambling for immediately deliverable "prompt barrels". While ceasefire optimism has compressed the geopolitical risk premium in futures, the physical reality remains far more complex.

Supply Constraints

About 20 million barrels per day (bpd), nearly 20 per cent of global crude supply, passes through the Strait of Hormuz. Even with alternate routes like Saudi Arabia’s East-West pipeline, a shortfall of over 10 million bpd could persist. Additionally, Middle East producers shut in 7.5 million bpd in March due to storage constraints, with outages projected to rise to 9.1 million bpd in April.

As oil piles up at storage hubs unable to move out of the Persian Gulf, it reaches what is known as “tank top,” raising the risk of further production shut-ins and tightening prompt supply. Even if the Strait reopens fully, supply cannot normalize instantly due to infrastructure damage, spiked insurance costs, and logistical bottlenecks. Stabilization could be delayed by 2-4 weeks, and bringing idled facilities back on stream can take four weeks or longer.

Furthermore, war-risk insurance premiums have reportedly surged up to 1,000 per cent, and tanker freight rates have spiked. These factors suggest spot prices could remain higher for longer than futures markets currently expect. Futures do not fully reflect this stress partly because of timing: Dated Brent reflects cargoes deliverable within 10 to 30 days, while front-month futures represent June delivery. Both markets do agree on one signal: the structure remains in backwardation, indicating tight near-term supply.

Stock vs. Flow

This dynamic involves what is termed the “stock versus flow” problem. The “flow” issue involves residual supplies still arriving from shipments sent before disruptions. The “stock” issue emerges if disruptions persist, causing flows to decline and inventories to deplete.

The transition from flow to stock stress will be critical over the coming weeks. That is when investors may begin to fear the "bark" of spot prices more than they take comfort in the "wagging tail" of the futures market.

Centre hikes windfall gains tax on diesel, ATF for exports

Our Bureau New Delhi

With global crude prices still elevated, the Finance Ministry on Saturday hiked the windfall gain tax on export bound diesel and aviation turbine fuel (ATF) by 158 per cent and 42 per cent, respectively, with immediate effect. This marks the first revision since the levy was re-imposed on March 26.

According to a set of notifications, the windfall levy on diesel will be ₹55.5 a litre, up from ₹21.5. The levy on ATF will rise to ₹14.5 a litre from the previous ₹10.2. Government officials clarified that the revision is not intended to boost revenue but is "more about not allowing exporters to take undue advantage due to price differences".

Finance Minister Nirmala Sitharaman previously stated on March 26 that these levies were raised to ensure that fuel is prioritised for domestic use. These adjustments occur as crude prices have slipped to the $95-96 per barrel range after recently exceeding $120; however, refined product prices remain high.

Invisible engines: Decoding the data centre ecosystem – business, economics and opportunities

Kumar Shankar Roy bl. research bureau

Every digital activity leaves a physical trail. When you make a UPI payment, stream Netflix, back up WhatsApp, place a stock market trade or ask ChatGPT a question, that request travels to a data centre, where servers process it and send a response back in milliseconds. Once seen as the Internet’s invisible plumbing, data centres are now at the centre of a global infra boom driven by AI, cloud computing & surging digital traffic.

Digital Landlords and IT Load

The data centre industry uses an unusual convention: although operators are effectively digital landlords renting out space and computing capacity, facilities are sized and marketed by the electrical power available to IT equipment, expressed in MW or GW of “IT load”, rather than by floor area. Global live IT capacity is estimated at about 60 GW in 2025, with projections reaching 100 GW by 2030.

The AI Shift

The global rush is being transformed by AI. AI facilities need far more power and cooling than older ones, as large language models can require 10-100 times the computing power of traditional applications. By 2030, AI could account for half of all global computing activity.

India’s Growing Market

Despite generating an estimated 20 per cent of the world’s digital data, India's data centre market remains smaller than the US or China, but it is among the fastest-growing. Capacity is rising from 0.375 GW in 2020 to an estimated 1.5 GW by 2025 across roughly 130-150 active centres. Mumbai and Chennai hold the majority of co-location capacity due to proximity to sub-sea cable landing stations. National capacity is projected to reach 4.5-10 GW by 2030.

Anatomy of a Data Centre

A modern data centre is five things rolled into one:

1. Secure Building: Housing servers and storage.
2. Private Electricity System: With multiple layers of backup.
3. Cooling System: Designed to remove massive heat.
4. Network Hub: Connected to fibre-optic cables and the Internet.
5. Computing Power: From CPUs, GPUs, and specialised chips.

Cost Breakdown: According to BofA Global Research, IT equipment accounts for 79 per cent of the cost, followed by E&C (11%), electrical equipment (5%), thermal/cooling equipment (4%), and backup generators (1-2%).

Different Models

• Captive/Enterprise: Owned and run by a company for its own workloads.
• Co-location (colo): Shared facilities where multiple customers rent space and power. In India, average colo capex is ₹46.5 crore per MW.
• Hyperscale: Giant campuses for providers like AWS, Microsoft, and Google.
• Edge: Smaller, decentralised facilities (often below 10 MW) placed closer to users to cut latency.

Business Economics

Revenue is generated through pricing based on rack units, full racks, or cages, with rates increasingly linked to allocated power.

• Lease Model: The operator rents space/power/cooling while the customer manages IT.
• Managed Services: The operator also provides cloud/IT infrastructure. In India, lease rentals are around ₹10-11 crore per MW per year, and colo occupancy has surged to 97 per cent in FY25.

The Power Resource

Power is the most vital resource. GPU-based racks (like NVIDIA H100) draw about 10-30 kW each, while AI training racks can require 80-120 kW, a sharp jump from traditional 12 kW racks. A single 100 kW AI rack in India can cost ₹6-7 lakh per month just in electricity.

Investment Landscape

India’s data centre market has attracted nearly $94 billion in investments since 2019.

• Airtel (Nxtra): $1-billion investment from Alpha Wave, Carlyle, and Anchorage Capital.
• TCS/TPG: Partnering for HyperVault to scale 1 GW of AI-ready capacity.
• Adani Group: Plans to invest $100 billion by 2035 in renewable-powered AI data centres.
• RIL: Outlined a $110-billion, seven-year AI infra plan.

The Value Chain

The ecosystem includes server makers (Dell, HP), networking (Cisco, Juniper), electrical (Schneider, ABB), and cooling (Voltas, Blue Star). In India, names like Hitachi Energy, Polycab, L&T, and real estate players like Brookfield and Blackstone are active.

Regulatory and Risks

Regulatory tailwinds include the Budget 2026 proposed 20-year tax holiday for eligible foreign cloud companies and the DPDP Act 2023. However, challenges remain: a new centre requires close to 30 approvals, and cash flows are typically back-ended. Currently, no pure-play data centres are listed in India, though Sify Infinit Spaces may be the first.

Reliance seeks govt nod to buy Iranian oil

Bloomberg

Reliance Industries Ltd. has sought the Centre’s approval to import Iranian crude via four vessels, according to a person familiar with the matter, as the US sanctions waiver nears its April 19 expiry. The operator of the world’s largest single-site refinery is looking to ensure any purchases remain compliant with US restrictions on Tehran and do not violate Indian laws.

Indian refiners previously stepped up purchases of Russian oil after the Trump administration granted waivers that expire this month. Import figures showed about 1.9 million barrels a day of Moscow’s crude arrived in India last month, up from 1.1 million in February.

Limited Imports

Despite recent movements, buying from Iran has seen limited traction due to concerns over suppliers, intermediaries, and payment mechanisms tied to sanctions. India has not imported crude from Iran since 2019. However, the Oil Ministry noted in a social media post earlier this month that India is buying oil and liquefied petroleum gas from Iran.

Supply constraints have deepened following disruptions in the Strait of Hormuz, which curtailed shipments to India—the world’s third-largest crude importer. This has forced refiners, including Reliance, to seek alternative sources. Reliance has a history of turning to sanctioned producers and has already secured a US general licence to import Venezuelan crude.

Reliance’s imports from Russia, which accounted for nearly a third of India’s 1.7 million barrels a day last year, have plunged after the EU imposed restrictions on fuels made from Russian crude.

The Shipping Ministry has reportedly granted special clearance to four tankers — the Comoros-flagged Kaviz, Curacao-flagged Lenore, and Iran-flagged Felicity and Hedy — to facilitate potential cargoes. All four vessels are currently sanctioned by the US.

Orbicular gets ‘tentative USFDA nod’ for generic Semaglutide

Our Bureau Hyderabad

Orbicular Pharmaceutical Technologies has received ‘tentative approval’ from the USFDA for a generic version of Ozempic (semaglutide injection), developed in partnership with Apotex.

The product will be marketed and commercialised in the US by Apotex Corp., which is the ANDA applicant.

“We are proud to have supported Apotex in this important programme. Their regulatory leadership, combined with Orbicular’s development and execution capabilities, has been central to securing the FDA Tentative Approval,’’ stated MS Mohan, Managing Director, Orbicular Pharmaceutical Technologies, in a release on Saturday.

Barry Fishman, Chief Corporate Development Officer, Apotex, noted, “Orbicular’s scientific depth and...". (Note: The source text ends here.)

Gaining strength

US MARKET OUTLOOK. Rise last week has reduced the danger of further fall. Gurumurthy K bl. research bureau

The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite index rose sharply for the second consecutive week. The Dow Jones and S&P 500 was up 3 per cent and 3.56 per cent respectively. The NASDAQ Composite index was up 4.68 per cent.

The rise last week has taken the benchmark indices well above their key resistances. This has reduced the danger of the fall that we have been expecting earlier. Will the momentum sustain and negate the danger of a fall completely? Here is our analysis:

DOW JONES (47,916.57)

Immediate resistance is around 48,300. The index has to breach this hurdle to extend the upmove. If it does, then 48,900 can be seen first and will also keep the doors open to revisit 50,000 levels.

On the other hand, if the Dow turns down from around 48,300, a fall back to 47,200-47,000 is a possibility this week. The level of 46,500 will be a crucial support to watch. The index will come under danger for a fall to [omitted text] 6,750-6,700 is the next key support zone.

A rise to 6,900-6,930 is possible in the near term. The price action thereafter will need a watch. A strong break above 6,930 can take the S&P 500 index further up to 7,000. On the other hand, a downward reversal from around 6,930 can drag it down to 6,800-6,750.

NASDAQ COMPOSITE (22,902.89)

The strong rise and close above 22,500 last week have eased the downside pressure. This has reduced the danger of the fall to 20,500 mentioned last week.

The region between 22,500 and 22,400 will now be a very good support which can limit any intermediate dips. As long as the index stays above 22,400, the bias will remain bullish. As such, the NASDAQ [omitted text] fall back to 22,000-21,500 again.

DOLLAR OUTLOOK

The dollar index (98.70) has come down sharply last week. The close below 99 leaves our bullish view under threat.

A crucial support for this week will be at 98.60. The dollar index has to sustain above this support and rise past 99 again. If that happens, the index can get a breather and go up again to 100-100.50. That in turn will keep alive our broader bullish view.

But if the index breaks below 98.60, it can come under more selling pressure. In that case, a fall to 97.50 is possible. So, the price action around 98.60 will need a very close watch.

TREASURY YIELD

The support at 4.25 per cent mentioned last week is holding very well. The US 10Yr Treasury Yield (4.32 per cent) touched a low of 4.23 per cent and then has risen back very well from there.

A strong follow-through rise above 4.35 per cent from here can boost the momentum. Such a rise can take the yield higher to 4.45-4.5 per cent. It will also keep our broader bullish view intact to see [omitted text].

---

CRUCIAL SUPPORT: The dollar index has to sustain above 98.60 and rise past 99 again in order avoid a fall to 97.50.

Up from dire straits

INDEX OUTLOOK. The US-Iran war ceasefire triggered a sharp rise in the Indian benchmark indices. Gurumurthy K bl. research bureau

Nifty 50, Sensex and the Nifty Bank index surged last week. The US-Iran war ceasefire announcement triggered the sharp rise in the Indian benchmark indices. Sensex and Nifty were up 5.8 per cent and 5.9 per cent respectively. Nifty Bank index on the other hand surged about 8.5 per cent.

Two key observations on the recent market movement strengthens the bullish case. Firstly, before the ceasefire announcement for three consecutive trading days, every dip was bought. After the ceasefire announcement, the benchmark indices opened with a huge gap-up and was able to sustain higher for the rest of the week. These two factors indicate that fresh buyers are beginning to come into the market. That keeps the bias positive and leaves the door open for the indices to rise more in the coming weeks.

FPIs SELL

The Foreign Portfolio Investors (FPIs) continued to sell the Indian equities for the sixth consecutive week. They pulled out about $3.05 billion from the equity segment last week. The net outflow for the month of April now stands at $5.14 billion.

NIFTY 50 (24,050.60)

Short-term view: The outlook is positive. But an intermediate dip is a possibility before a further rise is seen. Nifty has supports at 23,700 and 23,500 which can limit the downside in the short term. Resistance is around 24,500 which can be tested in the near term. A break above it can take the Nifty higher to 24,900-25,000 and even 25,500 in the coming weeks. A fall below 23,500 is needed to drag the index down to 23,000 or lower. But that looks less likely.

Medium-term view: The rise to 24,000 has happened much faster than expected. That keeps the door open for the Nifty to see 26,500 in the medium term. A decisive break above 26,500 will boost the bullish momentum. Such a break will then strengthen the case for a rally to 28,000 and 30,000 in the long term. In case the index turns down from around 26,500, then the broader range will remain intact. In that case, a fall back to 24,000 and 22,000 again cannot be ruled out.

NIFTY BANK (55,912.75)

Short-term view: Immediate resistance is around 56,500. Failure to breach this hurdle can drag the index down to 53,900 or 53,600 in the near term. But a fall beyond 53,600 is less likely for now. So, eventually, the Nifty Bank index can break above 56,500 and rise to 58,000 and 60,000 going forward. The index will come under pressure for a fall to 52,000 and lower only if it breaks below 53,600.

Medium-term view: The rise above 54,000 has given some relief. The region between 60,000 and 60,500 will be a crucial resistance. A strong weekly close above 60,500 can take the Nifty Bank index higher to 64,000-65,000 in the medium term. It will also keep the upside open to see 68,000-69,000 in the long term.

SENSEX (77,550.25)

Short-term view: Immediate resistance is around 77,700. A break above it can take the Sensex up to 78,800 in the near term. That will keep the bias positive for the index to see 80,000 and even 82,000 in the short term. Key support for the week will be at 76,000. A fall to 75,000 will come into the picture only if the Sensex breaks below 76,000. However, a fall beyond 75,000 is less likely as fresh buyers can come into the market and limit the downside.

Medium-term view: The bias broadly remains positive. The region around 83,000 will be a key resistance. A break above it can take the Sensex up to 86,000 in the medium term. A further break above 86,000 will see the upside extending to 90,000 as well. That in turn will also clear the way for the Sensex to rally towards 98,000 in the long term. Failure to breach 86,000 and a reversal thereafter can drag the index down to 84,000-83,000 and even lower again.

NIFTY MIDCAP 150 (21,300.30)

The strong rise and close above 21,000 strengthens the bullish case. Support will now be in the 20,800-20,750 region. Resistance is in the 21,600-21,650 region which can be tested in the near term. Failure to breach 21,650 on its first test can trigger a corrective dip to 21,200-21,100. But this will be short-lived and the index can rise back again. An eventual break above 21,650 can then take the Nifty Midcap 150 index up to 22,700-23,000 over the medium term. A sustained break above 23,000 will be bullish from a long-term perspective. That will then trigger a fresh rally to 26,000-26,500 initially, and then, to 28,000-28,500 eventually.

NIFTY SMALLCAP 250 (15,753.05)

The rise to 16,000 is happening in line with our expectation. That keeps intact our broader bullish view. Cluster of resistances are there in the 16,000-16,500 region. Failure to break 16,500 can trigger a short-lived corrective fall to 15,500 or even 15,000. However, the bias will continue to remain positive.

As such we can expect the Nifty Smallcap 250 index to breach 16,500 eventually. Such a break can take the index higher to 17,700-18,000 in the medium term. A decisive break above 18,000 will then boost the bullish momentum. Such a break will see the Nifty Smallcap 250 index rallying to 22,500-23,000 in the long term. This will be a very good time to enter the smallcap segment. Investors with a time frame of two years can buy now and also accumulate on dips. They may have to have a stop-loss below 14,000.

---

SHORT-TERM TARGETS:

• Nifty 50: 24,500, 25,000
• Sensex: 80,000, 82,000
• Nifty Bank: 58,000, 60,000

RBI proposes payment curbs

The RBI has proposed a one-hour delay for digital transfers above ₹10,000 involving individuals, sole proprietors and partnership firms. This lag period is intended to allow customers to cancel or reconfirm suspicious transactions.

The discussion paper also includes the following proposals:

• Mandatory approval from a “trusted person” for transfers exceeding ₹50,000 made by individuals aged 70 and above or persons with disabilities.
• A requirement for banks to cap annual credits at ₹25 lakh for accounts that are not supported by additional proof of income or business activity.
• Any amounts exceeding this ₹25-lakh limit could be held as “shadow credits” for a period of up to 30 days.

Tweaks in NPS health scheme

PFRDA has allowed a modified proof of concept for the NPS Swasthya Pension. The health insurance benefit will now be mandatory, with premiums deducted through partial withdrawal from the subscriber’s NPS Swasthya account.

Key details of the scheme include:

• Minimum initial contribution: Set at ₹25,000 for joining the scheme.
• Medical expense provision: A new provision permits full withdrawal, subject to specific rules, following large medical expenses.