The Elusive Quest to End Congo’s War

 Not all Donald Trump’s peacemaking boasts are empty But to end Congo’s terrible war, America must remain neutral

When Donald Trump boasts about all the wars he has supposedly ended, he often mentions one in central Africa. In December he brought together the leaders of Rwanda and the Democratic Republic of Congo, whose on-again, off-again conflict has been one of the continent’s bloodiest, and persuaded them to sign a peace deal called the Washington Accords. “They’ve spent a lot of time killing each other and they’re going to spend a lot of time hugging,” he said.

But there is still a lot more killing than hugging. Most of the 8m or so Congolese who have fled from their homes are too scared to return. Over the past year the battlefield has expanded in the eastern Congolese provinces of South and North Kivu, leading to hundreds more civilian deaths. As we report, m23, a Rwandan-backed rebel group that controls most of the region, is building a statelet there and is eager to cut its own deals with America.

To its credit, the Trump administration has tried to enforce the Washington Accords. In March it put sanctions on Rwanda’s armed forces to try to persuade Paul Kagame, Rwanda’s president, to reduce support for m23. Yet it seems unwilling to exert similar pressure on his Congolese counterpart, Félix Tshisekedi. Many locals fear that Mr Trump cares more about getting his hands on Congo’s abundant minerals than he does about peace.

Eastern Congo is as bewildering as it is blighted. The state’s authority barely exists. More than a hundred armed groups thrive in its absence. m23 is the strongest of them. It is led by Congolese Tutsis who say they want to topple the government in Kinshasa, Congo’s capital 1,500km away. It is also a tool used by Rwanda to create a buffer zone in Congo. Rwanda denies this, but also claims that any “defensive measures” it undertakes are justified because it is threatened by Congo—and by a militia known as fdlr whose origins go back to the ethnic Hutus who carried out the Rwandan genocide in 1994. The region’s minerals give everyone a lucrative extra reason to fight.

So it is too soon to celebrate the Washington Accords. But they are a good foundation to build on. They reaffirm previous commitments by Rwanda to stop supporting m23 and to respect Congo’s territory, and by Congo to end any support for fdlr and other armed groups that threaten Rwanda. Both sides have said they will make it easier for aid agencies to deliver humanitarian supplies in eastern Congo, which are desperately needed.

American sanctions on the Rwanda Defence Force (rdf) will influence Mr Kagame, who was once seen by Western governments as an enlightened autocrat with whom it was easy to do business. Having the rdf subject to similar restrictions as the armed forces of Iran and North Korea is not good for “Brand Rwanda”. And since Rwanda’s Ministry of Defence has huge interests in construction, agriculture and other sectors, the sanctions will also force foreign investors to rethink whether it is legally safe to do business in the country.

Pressing Rwanda is necessary to stop the war. But it is not sufficient, since m23 has a degree of autonomy. Talks between Congo and m23, brokered by Qatar with American support, have stalled. All parties to the discussions, including African governments, need to do more to persuade the sides to return to the table and agree on a ceasefire.

There is a risk that America is emboldening Mr Tshisekedi. When Mr Trump brokered the Washington Accords he also struck a “strategic partnership” with Congo. The upshot was that America would bolster Congo’s president in exchange for preferential access to minerals. America has intervened in Congolese politics in ways that benefit Mr Tshisekedi; last month it put sanctions on Joseph Kabila, a rival and former president, ostensibly for backing m23.

To some in the Trump administration, backing Mr Tshisekedi is sensible realpolitik. But, like miners digging without a plan, they risk the edifice crashing down on them eventually. America’s new deals with Congo are shockingly non-transparent—a criticism America once made of Congo’s dealings with China. Mr Tshisekedi became president with America’s endorsement in 2019 after a fraudulent election. So long as he cuts mining deals with Americans, he may think he can shirk his obligations under the accords.

America should disabuse him of that idea. The Trump administration has done more than any other foreign government to try to bring a measure of peace to this war-scorched part of Africa. It is right to be tough on Rwanda, whose support for m23 is the proximate cause of the conflict. But America now needs to ensure that it acts as an impartial mediator, rather than as a cheerleader for one side.

The Credit Consequences of Banking Consolidation

 The primary research question addressed by the sources is whether banking consolidation harms households, specifically within the mortgage market,,. Over the last few decades, the number of active banks has dropped by nearly 70%, while asset concentration has risen significantly, leading to regulatory concerns that such consolidation might erode competition and harm consumers,. However, the sources conclude that bank mergers do not systematically harm household borrowers,.

The following sections detail the findings within the broader context of banking consolidation and its impact on household credit:

Impact on Borrowing Costs and Mortgage Rates

The sources find no evidence of persistent, post-merger increases in mortgage rates. While a simple pre-post comparison might suggest rates rise after a merger, the study identifies this as a "mechanical composition effect" rather than a strategic exercise of market power,.

• Mechanical Averaging: If a large bank offering low rates acquires a community bank that charged higher rates, the combined entity’s average rate will mechanically rise even if the bank's underlying pricing strategy remains unchanged,.
• Pricing Stability: When examining rate distributions and using a difference-in-differences (DiD) design, the researchers found that acquiring banks generally maintain their pre-merger pricing strategies,.

Credit Access and Loan Performance

The research indicates that mergers do not lead to tighter credit conditions for households in terms of access or quality.

• Approval Rates: There are no statistically significant changes in mortgage approval rates following bank mergers once compositional factors and local economic conditions are taken into account.
• Delinquency Rates: Post-merger loan performance remains stable, with no evidence that mergers alter risk-taking behavior or underwriting quality in a way that leads to higher delinquency.

The Competitive Landscape of Local Markets

A key reason households are not harmed is that local mortgage markets remain remarkably competitive despite national-level consolidation,,.

• Lender Density: The typical U.S. county hosts over 130 active lenders in any given quarter.
• Market Concentration: Most local markets are "unconcentrated" by regulatory standards, with the median lender holding just 0.4% of the market,.
• Dynamic Competition: Surprisingly, competition often intensifies around mergers; in "Large-Community" mergers, the count of active lenders in affected counties typically rises while market concentration (HHI) declines,. Non-bank mortgage companies also provide substantial competitive discipline.

Strategic Motives and Merger Selection

The sources reveal that merger types are driven by different strategic goals, which often relate to efficiency rather than market power,.

• Community–Community Mergers: These often involve "weaker and less efficient" target banks merging to gain scale and compete,.
• Large–Community Mergers: Large banks tend to target "profitable, relationship-intensive" community banks to gain access to established customer bases while providing the scale needed for securitization and funding,.

Overall, the study challenges the prevailing view that banking consolidation inevitably leads to market power that harms the welfare of household borrowers,.

The key findings of the provided source indicate that banking consolidation does not systematically harm household borrowers within the mortgage market,,. Despite a 70% reduction in the number of active banks since 1985 and a massive increase in national asset concentration, the researchers find no evidence that these mergers lead to the exercise of market power at the expense of consumers,,.

The following are the specific key findings within the context of banking consolidation and household credit:

1. Stability of Mortgage Rates and "Mechanical" Effects

The sources demonstrate that mortgage rates do not increase following bank mergers once compositional factors are controlled for,.

• The Composition Illusion: Simple pre-post merger comparisons may show a rise in average rates, but this is identified as a "mechanical composition effect" rather than a strategic price hike,. For instance, if a large bank offering low rates acquires a community bank that previously charged higher rates, the combined entity’s average rate will mechanically appear higher even if the bank's underlying pricing strategy remains unchanged,.
• Pricing Strategy: Using a difference-in-differences (DiD) design, the study finds that acquiring banks generally maintain their pre-merger pricing distributions,,.

2. Continued Access to Credit and Loan Performance

The research finds that mergers do not lead to tighter credit standards or worse outcomes for borrowers:

• Approval Rates: There are no significant changes in mortgage approval rates after mergers,. Any observed fluctuations are generally attributed to time-varying local economic conditions rather than merger-induced policy changes,.
• Delinquency Rates: Post-merger loan performance remains stable,. There is no evidence of systematic shifts in risk-taking behavior or underwriting quality that would result in higher delinquency or foreclosure rates,.

3. The Competitive Reality of Local Markets

A major finding is that local mortgage markets remain highly competitive despite national consolidation,.

• Lender Density: The typical U.S. county is served by over 130 active lenders in any given quarter,,.
• Market Fragmentation: Market shares are highly fragmented, with the median lender holding only 0.4% of the local market,.
• Decline in Concentration: Surprisingly, in many cases, competition actually intensifies around mergers. For large-bank acquisitions of community banks, the number of active lenders in the affected counties typically rises, while the Herfindahl-Hirschman Index (HHI)—a standard measure of concentration—actually declines,.

4. Efficiency-Driven Strategic Motives

The sources suggest that mergers are driven by efficiency considerations rather than motives to gain market power,.

• Community–Community Mergers: These often involve "weaker and less efficient" target banks merging to gain the scale necessary to compete in an evolving landscape,,.
• Large–Community Mergers: Large banks tend to target highly profitable, relationship-intensive community lenders,. This allows the large bank to access established customer bases while providing the operational scale needed for securitization and funding,.

In conclusion, the source challenges the prevailing regulatory concern that bank mergers erode competition, finding instead that the presence of numerous competitors—including non-bank lenders—disciplines bank pricing and maintains borrower welfare,,.

The sources argue that while national banking consolidation has been significant, local mortgage markets remain remarkably competitive, which serves as a primary reason why consolidation does not systematically harm household borrowers,,. The research suggests that the competitive reality at the local level is often overlooked in broader discussions about national asset concentration,.

The following key aspects of local market structure are highlighted in the sources:

High Lender Density and Fragmented Market Shares

Contrary to the perception that a few dominant lenders control local access to credit, the typical U.S. county is characterized by a high number of active mortgage providers.

• Lender Counts: The typical county hosts over 130 active lenders (median 132) in any given quarter,,. Even in rural counties, which are the least competitive, there are typically dozens of active lenders.
• Market Share Fragmentation: Market shares are extremely fragmented; the median lender captures just 0.4% of its local market,. Even at the 90th percentile, individual lenders control only about 3.6% of their county markets.
• Concentration Metrics: Local markets are generally "unconcentrated" by regulatory standards. The median Herfindahl-Hirschman Index (HHI) is approximately 400, which is significantly below the 1,000 threshold the Department of Justice uses to classify a market as unconcentrated,.

Dynamic Competition and Entry Post-Merger

A surprising finding in the sources is that competition often intensifies following a merger, rather than eroding,.

• Increasing Lender Counts: In "Large–Community" mergers, the number of active lenders in affected counties typically rises from approximately 150 to 185,.
• Declining Concentration: Market concentration (HHI) often declines after a merger—for example, dropping from about 560 to 470–510 in Large–Community events,. This occurs because the entry of new competitors frequently dominates the "mechanical" consolidation effect of the merger.

The Role of Non-Bank Lenders

The sources emphasize that the competitive landscape includes a significant presence of non-bank mortgage companies, which provide substantial discipline on bank pricing,. Non-banks account for approximately 28% to 30% of the local market share,. These lenders ensure that even if traditional banks consolidate, borrowers still have numerous alternative sources for mortgage financing.

Geographic Variation

While there is substantial "spatial heterogeneity," the research notes that even the areas with the least competition still maintain a healthy number of providers.

• Metropolitan Areas: These regions often have 150 to 200+ active lenders.
• Rural Areas: While less densely populated with lenders, these areas still host 25 to 75 providers, ensuring that they are not monopolized by a single institution.

Conclusion on Household Welfare

Because the local market structure is so robust and fragmented, the sources conclude that individual bank mergers are unlikely to generate substantial market power. This intense competition acts as a "discipline" on pricing behavior, preventing merged institutions from raising mortgage rates or restricting credit access for households,.

Banking consolidation in the mortgage market is driven by distinct strategic motives that vary significantly based on the size of the institutions involved. The sources emphasize that these merger selection motives are rooted in efficiency and survival rather than a pursuit of market power intended to harm household borrowers.

The research categorizes these motives into two primary patterns:

1. Community–Community Mergers: Scale and Survival

Mergers between two community banks are the most common, representing 55% of all cases studied.

• Target Profile: Target banks in these mergers are characterized as "weak and operationally inefficient". They typically exhibit near-zero profitability, with an average return on assets (ROA) of just 0.001, and very high expense ratios, where non-interest expenses account for approximately 90% of their total income.
• Motive: These institutions appear to merge primarily to gain scale and remain competitive in a landscape increasingly dominated by larger banks with superior technology and funding advantages. These mergers are a mechanism for survival rather than an attempt to consolidate market power.

2. Large–Community Mergers: Relationship Synergies

When large banks acquire community banks, the selection process is highly strategic and targets a fundamentally different type of institution.

• Target Profile: Large banks target "profitable, relationship-intensive" community lenders. These targets are significantly more efficient and productive per employee than those in community–community mergers.
• Motive: The primary goal is to access established customer bases and specialized relationship-banking models. Notably, these targets keep about 41% of their mortgages in their own portfolios—more than ten times the rate of community–community targets (4%). The large acquirer then provides the operational scale and infrastructure necessary for securitization and funding.

Implications for Household Borrowers

The sources argue that these selection patterns help explain why consolidation does not systematically harm households.

• No Exercise of Market Power: Because mergers are driven by efficiency (targeting inefficient peers) or synergy (targeting specialized relationship lenders), they do not typically lead to strategic price hikes.
• Portfolio Composition Effects: The researchers note that while post-merger mortgage rates might appear to rise in simple comparisons, this is often a "mechanical" result of a large bank acquiring a community bank that already charged higher rates due to its relationship-heavy business model.
• Stable Welfare: After accounting for these selection motives and the competitive local market structure, the study finds that mortgage rates, approval rates, and delinquency rates remain stable following mergers.

Ultimately, the evidence suggests that bank mergers occur because institutions are seeking to rationalize costs or create operational synergies, and the intense competition from numerous other lenders ensures these strategic shifts do not result in higher costs or reduced credit access for household borrowers.

The researchers employ a highly granular, large-scale empirical approach to determine whether decades of national banking consolidation have resulted in the exercise of market power that harms household borrowers. The methodology is designed specifically to separate strategic bank behavior from compositional shifts that occur when two institutions merge.

The following sections detail the core components of the study's methodology:

1. Unique Integrated Dataset

The study constructs a comprehensive dataset by merging several confidential and public sources to track 44 million mortgages across nearly 5,000 merger events from 1994 to 2023.

• HMDA Data: Provides the universe of mortgage applications and originations, including applicant demographics and loan outcomes.
• McDash Analytics: Adds loan-level contract terms (interest rates, LTV) and dynamic performance records (delinquency, foreclosure) throughout the loan lifecycle.
• Call Reports (TINY Database): Provides merger-adjusted financial ratios (ROA, expense ratios) for the involved banks.
• Institutional Linking: Uses specialized files (Robert Avery’s linking file) to map individual bank charters to their parent holding companies, ensuring that mergers reflect genuine changes in ownership rather than internal restructuring.

2. Residualized Interest Rate Measure

To ensure that changes in mortgage rates are not simply due to differences in borrower risk or market conditions, the researchers calculate a residual interest rate ($r^*$).

• Controls for Risk: They regress raw mortgage rates against comprehensive loan characteristics, including FICO scores, LTV ratios, loan amounts, and occupancy status.
• Market Fixed Effects: They include county $\times$ year-quarter fixed effects to absorb all time-varying local market factors. This isolates the specific pricing variation attributable to the bank's strategy rather than the economic environment.

3. Stacked Panel Event Study (DiD)

The primary analytical framework is a stacked panel event study difference-in-differences (DiD) design.

• Counterfactual Comparison: For each merger, the researchers compare the merging banks (acquirer and target) to control banks operating in the same local market during the same time period.
• Event Window: They track these institutions over a 17-quarter window (eight quarters before the merger, the merger quarter, and eight quarters after).
• Addressing Negative Weighting: The "stacked" nature of the design prevents technical issues common in staggered DiD studies where early-treated units might serve as controls for late-treated units, which can bias results.

4. Isolating the "Mechanical Composition Effect"

A key methodological innovation is the use of bank-county-merger fixed effects to solve the "mechanical averaging" problem.

• The Problem: If a low-rate large bank acquires a high-rate community bank, the combined entity's average rate will appear higher post-merger even if neither bank changed its pricing strategy.
• The Solution: By using fixed effects that absorb the pre-merger level of the "pro-forma" combined entity, the researchers can detect whether the merger caused a strategic shift in pricing behavior relative to that baseline.

5. Multi-Dimensional Welfare Indicators

The methodology evaluates household harm through three distinct lenses:

• Pricing: Using the residualized mortgage rates to identify market power.
• Credit Access: Examining approval rates to see if mergers lead to tighter underwriting standards.
• Loan Quality: Analyzing delinquency rates (loans 90+ days overdue) to determine if mergers alter the risk-taking or performance profile of newly originated credit.

6. Local Market Structure Analysis

Finally, the researchers construct a county-quarter panel to measure local competition. They calculate the Herfindahl-Hirschman Index (HHI) and lender counts by aggregating the universe of loan originations from both bank and non-bank lenders. This allows them to verify if local markets actually become more concentrated following a merger, or if the entry of other competitors offsets the consolidation.

The Great Forgetting: Lessons from Economic History

 

The Great Forgetting

How motivated reasoning frames economic debates SCOTT SUMNER MAY 14, 2026

Noah Smith has a very good post on development economics, which contains the following list: The field of economics doesn’t lack for big ideas about why countries go from poverty to riches. These include:

1. Institutions: The idea that property rights, legal frameworks, and other systems of human organization are long-lasting (“sticky”) and are crucial for development.
2. Geography: The idea that countries’ natural endowments — navigable waterways, farmland, proximity to other regions, etc. — determine which place gets rich.
3. Human capital: The idea that skills — reading, math, etc. — and population health determine national income.
4. Industrialism: Various theories about how promotion of manufacturing, export-led growth, the “development state”, industrial policy, and so on are the key to rapid development.
5. Culture: The idea that countries grow because of a culture of progress, innovation, and openness to technology.
6. Coordination failure: The theory that countries naturally grow rich as long as they don’t have any significant roadblocks to growth, so that development happens when you remove all of the roadblocks at once.
7. Flying geese theory: The idea that growth naturally happens in a sequential pattern as some countries luckily get rich first and then invest in poor countries until those countries catch up.
8. Economic liberalism: The notion that all you really need to grow is free markets and openness to trade.
9. State capacity: The theory that strong, efficient states are crucial for growth.
10. National cohesion: The idea that a populace who see themselves as one unified people will support the public goods and other policies necessary for growth.

That’s just a small sample of the huge diversity of big ideas out there. That seems like a good list, and I suspect many of those factors play an important role. But I’m a lot older than Smith and I have a slightly different perspective on the issue. I see a sort of “Great Forgetting”, a tendency to ignore the lessons of history.

In particular, a number of the cases cited in Smith’s, including South Korea and Poland, were once highly controversial. Now both countries are viewed as major success stories. Along with thinking about why they might have been successful, it seems worth thinking about the following questions:

1. Why were people once so pessimistic about these two economies?
2. Why do the people who were pessimistic often not admit they were wrong?
3. What can we learn from the fact that these countries did far better than expected?

Back in the 1960s, South Korea was poorer than much of sub-Saharan Africa, with a per capita income lower than Haiti, Ethiopia, and Yemen. Experts widely assumed Korea would stay poor due to overpopulation and a lack of natural resources. South Korea was also criticized for adopting export-led growth in the 1960s instead of focusing on import substitution like Argentina, which was much richer at the time. Fortunately, Korea did not follow that advice.

Back in 1989, Poland was severely criticized for what was derisively called “shock therapy” or “neoliberalism”. In the end, Poland was far more successful than former Soviet bloc nations that pursued gradual reform, yet its critics rarely admit they were wrong.

While Smith’s post is fine, I worry younger readers may not be aware of this history. For example, Smith compares South Korea and Bolivia, noting that South Korea was much more highly educated in the 60s, focused on manufacturing exports, had a special relationship with the U.S., was ethnically homogeneous, had sea access, and had a strong bureaucracy. Smith argues that depending on which theory you believe, you could attribute Korea's success to many different factors, making it a "story" rather than a scientific explanation.

Smith is correct that the situation is complex, but I feel we know more than his discussion implies. For instance, a better comparison for South Korea might be North Korea (to rule out culture and geography) or Taiwan (which achieved similar success). South Korea’s economy specifically took off after the foreign trade sector was partially liberalized in the 1960s.

I hate the term “export-led growth” because Korea actually ran almost nonstop trade deficits during its three and a half decades of rapid growth. I prefer the terms “trade-led growth” or an “open economy model”. Even if Korea maintained some high tariffs, its imports rose from 10% of GDP to over 30% in just a few years, moving toward a more open economy.

Beyond South Korea, Poland and Malaysia are also impressive success stories. By 2026, Poland’s GDP per capita is expected to exceed that of Japan and Spain. Unlike Korea, Poland and Malaysia relied heavily on foreign direct investment (FDI).

In Malaysia, the average Chinese household has 1.9 times as much wealth as the majority Bumiputera. Throughout Southeast Asia, economic power is often concentrated in "market-dominant" ethnic minorities, particularly those from a “Confucian” culture (Chinese, Korean, Japanese, and Vietnamese). Today, a Confucian culture combined with a non-communist economic system is highly correlated with economic success.

So, we know two important things about South Korea:

1. It has a Confucian culture that is relatively rich in any country not ruled by communists.
2. It grew rapidly after adopting a trade-oriented growth policy.

While other reasons like land reform and U.S. alliance exist, they aren't as powerful as these two. Some industrial policy fans, like Ha-Joon Chang, argue that rich countries succeeded by restricting FDI, but they could have succeeded in spite of those policies.

When considering countries like Maoist China or modern North Korea, it’s clear they became richer after removing restrictions on the private sector and opening to trade. It is unlikely that China achieved success because of its remaining restrictions, as growth was fastest when reforms allowed a bigger role for the private sector.

Poland’s shock therapy, urged by Jeffrey Sachs, is also winning the test of time as Poland outperformed other Eastern European countries. Unfortunately, even Sachs seems to have forgotten these lessons, now suggesting massive foreign aid is the key to ending poverty. William Easterly has countered this, noting that when controlling for bad government and corruption, initial poverty doesn't explain slower growth; rather, bad government does.

By the late 1990s, the debate seemed over: trade-oriented growth and shock therapy were successes. But after 2008, a “Great Forgetting” took hold. We’ve forgotten the critique of activist fiscal policy, why nationalism is an evil ideology, and the lessons of Orwell’s 1984. We’ve forgotten that statist economic policymaking is counterproductive.

As a final note, for those who think Argentina failed because of culture rather than its closed economy, it's worth remembering that between 1880 and 1914, Argentina was one of the world's ten wealthiest nations by following Adam Smith’s recipes for free trade and property rights. This "Golden Age" proved that national wealth is the result of an institutional framework that protects the right to create and trade.

Newspaper Summary 170526

 The article titled "Where to fish for higher yields" was written by Aarati Krishnan and appears on page 2 of the May 17, 2026, edition of Business Line Portfolio. Here is the full reproduction of the article:

Where to fish for higher yields

With the oil shock beginning to make itself felt, returning inflation looks set to take the shine out of both gold and equities. The recent spike in India's Wholesale Price Index to 8 per cent plus suggests that corporate earnings, after a robust Q4 FY26, can take a breather over the next few months as companies try to pass on pinching input costs to consumers.

Global gold prices tend to be inversely correlated to treasury yields in the US. As US inflation rears its head and developed market bonds see a rise in yields, investors may make a beeline for treasuries instead of gold. However, in investing, whenever opportunities in some asset classes recede, they crop up in others. Today, bonds are turning more attractive for investors, with rising inflation expectations and the renewed possibility of policy rate hikes.

India’s Monetary Policy Committee (MPC) has slashed repo rates by 125 basis points through 2025 and is now sitting on the pause button. But with bond markets responding to the recent oil shock, bond yields in many sections of the market are already ruling at levels that prevailed before these rate cuts. If low-key tensions in West Asia continue, crude oil remains at $85 plus and the looming El Nino disrupts food production, analysts are now betting that inflation can shoot past 5 per cent. Should this happen, the MPC can take its finger off the pause button to restart a rate hike cycle.

BOND YIELDS RISING

Bond markets always run well ahead of policy actions. Therefore, market yields on bonds have already been rising sharply on expectations of the next rate hike cycle. The yield on the 10-year government security (G-Sec), the benchmark for the bond market, bottomed out at 5.9 per cent in May 2025 and has since climbed to 7.1 per cent now. These are levels that prevailed in 2025 before repo rate cuts began.

Yields on other bonds have climbed in tandem too. This throws up blooming opportunities for investors looking to improve the returns on the debt component of their portfolios. On the flip side, though, rising rates hurt bond prices. Therefore, while shooting for higher yields, it is also important to limit the losses on your bond holdings from any further rise in rates.

We analysed the entire gamut of bond options, to come up with three sets of high-yielding opportunities that investors can tap today, to balance risk with reward. Do note that we have looked at bonds more from a wealth-creation perspective than the need to park surplus.

SDLS: SAFETY PLUS YIELD

Historically, the best times to invest in Central G-Secs in India was when the yield on the 10-year G-Sec hovered between 7.5 per cent and 8 per cent. Yields today are well below these at 7.1 per cent. However, State Development Loans or SDLs present a high-yield opportunity.

If you look at historical data, SDLs have usually traded at a 30-40 basis point spread over G-Secs of similar tenure. Since the beginning of 2026, however, SDLs are offering attractive yields because the SDL spread has widened to 70-80 basis points. State governments in India have become more prodigious borrowers than the Centre, leading to the market demanding higher yields from them. Effectively, investors can earn yields as high as 7.6-7.8 per cent by investing in State government bonds, against around 7 per cent from comparable Central G-Secs.

Theoretically, State governments are slightly riskier entities than the Central government, because they are reliant on the Centre for funds. However, SDLs still offer near-sovereign safety because the servicing of these loans is managed by the RBI (Reserve Bank of India) through an escrow mechanism. There is no past case of a State government in India defaulting on, or delaying a SDL payout. SDLs are also offering higher yields than many PSU and AAA-rated private sector bonds, presenting a sound investment opportunity.

A caveat here: SDLs are a very different instrument from bonds floated by State government entities such as State-promoted power corporations, transport corporations, and infrastructure development corporations which offer yields of 9-10 per cent. These bonds are risky bets — not explicitly guaranteed by States and known to suffer from delayed payments in the past.

What to buy: Retail investors looking to buy individual SDLs can open an account with the RBI Retail Direct platform. This allows retail investors to invest sums starting from ₹10,000 in Central G-Secs and SDLs. Weekly auction calendars are emailed to you in advance. You need to wait for the SDL of the desired tenure to be auctioned, so you can participate. The latest SDL auction on May 8, for instance, offered bonds with maturity dates ranging from 2032 to 2056 and yields ranging from 7.5 per cent to 7.9 per cent. Do note that SDLs bought in auctions need to be held to maturity, as they carry limited secondary market liquidity.

If you want to participate in the SDL opportunity without liquidity issues, debt funds investing in indices made up of SDLs offer a good alternative. Mutual fund houses manage a large menu of SDL-only funds, SDL plus G-Sec funds, and SDL plus PSU bond funds that mature on specific target dates. Today, if looking to park two-year money, Kotak SDL plus AAA PSU Bond July 2028 Index Fund offers a 7.05 per cent yield to maturity (YTM). For five- to six-year tenures, Kotak SDL April 2032 Top 12 Index Fund and ABSL Crisil June 2032 Fund are the highest yield options with YTMs of 7.6 per cent and 7.5 per cent respectively.

FRBS: CAPITALISE ON THE RISE

Usually, debt investors shy away from floating rate bonds because of variable returns. But when the economic outlook tells you that rates can only flat-line or go up, floating rate bonds make plenty of sense. There are three ways for Indian investors to participate in floating rate bonds: floating rate debt mutual funds, government bonds pegged to floating rates, or the retail GOI floating rate savings bonds. Of the three, the last is the most viable option.

What to buy: The Government of India’s Floating Rate Savings Bonds (FRSBs) meant for retail investors are the only practical option for investors looking to ride the rate cycle through floating rates. These bonds pay their interest rate at a 35-basis point spread over the prevailing interest rate on the NSC. The current floating rate on FRSBs is 8.05 per cent per annum. These bonds can be bought from banks or the RBI’s Retail Direct. However, they have a seven-year lock-in period and carry no cumulative option for interest.

CORPORATE BONDS

Apart from SDLs, corporate bonds have also seen their spreads over G-Secs widen sharply in the past year. While yields on short-term corporate bonds (one-year maturity) are still well below 2025 levels, yields on bonds with three-year-plus maturity are back to levels that prevailed before the rate cuts started. Currently, AAA-rated corporate bonds offer yields of about 7.7-7.8 per cent for three-year tenures. Those rated at AA offer 8 per cent for the same tenure.

What to buy: Investors can earn higher yields from this space in three ways:

1. Individual Bonds: You can buy individual AAA- or AA-rated bonds from online bond platforms. It is important to keep off bonds with only an 'A' rating. For instance, the Indiabonds.com platform has a CARE AA-plus rated bond from Cholamandalam Finance maturing in June 2029 at an 8 per cent yield.
2. Passive Index Funds: Buy funds that focus on highly-rated NBFC bonds. Options for 2-year money include the Edelweiss CRISIL IBX AAA Financial Services Bond January 2028 Index Fund (7.7 per cent YTM). For five-year money, Bharat Bond ETF 2031 (7.5 per cent YTM) is a good bet.
3. Active Corporate Bond Funds: Filter for healthy YTMs and low costs. Franklin India Corporate Bond Fund (7.8 per cent YTM) and ICICI Pru Corporate Bond Fund (7.75 per cent YTM) currently fit the bill.

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Three high-yield opportunities (Summary Table)

Why buy	How to buy
State development loans
Trading at 7.6-7.8% yield, 70-80 bps spread over G-secs	SDL auctions in RBI Retail Direct or SDL index funds
Floating rate bonds
Will deliver better returns with rising rates. Protect capital in rate rise	GOI's Floating Rate Savings Bonds (Retail) from banks or RBI Retail Direct
Highly rated NBFC bonds
Trading at 7.5-9% yield	Online bond platforms or passive debt MFs investing in NBFC bonds

The article titled "Buying what markets ignore" was written by Dhuraivel Gunasekaran of the BL Research Bureau and is found on page 4 of the Business Line Portfolio edition dated May 17, 2026. Below is the reproduction of the article:

Buying what markets ignore

FUND TRACKER. Contra funds invest in stocks or sectors that are currently out of favour and ignored by the market, betting on a turnaround in sentiment and business performance.

Motilal Oswal Mutual Fund has entered the contra fund category with an NFO in May, adding to a relatively under-populated segment that currently houses only three schemes: SBI Contra, Invesco India Contra and Kotak Contra Fund. The launch comes at a time when the category, though small, has quietly built a track record that merits closer scrutiny. The big question is whether these funds have consistently outperformed broader market indices like the Nifty 500 and how their stock-picking philosophy differs.

Contra funds invest in stocks or sectors that are currently out of favour and ignored by the market, betting on a turnaround in sentiment and business performance. While value funds focus on stocks trading below their intrinsic or fundamental value, contra funds target market popularity. While value and contra styles can overlap if companies' valuations are attractive, contra funds specifically avoid crowded trades and look for opportunities in stocks linked to market inefficiencies.

The category’s limited size could be linked to tighter SEBI classification norms, which required that a house could offer either a value fund or a contra fund but not both. Consequently, AMCs largely gravitated towards the value category, leading to over 40 such schemes across active and passive categories. However, a regulatory shift in February 2026 now permits AMCs to offer both categories, subject to portfolio overlap remaining below 30 per cent.

PERFORMANCE TRACK RECORD

Despite its small universe, the contra category has delivered impressive returns. Over the last 10 years, five-year rolling returns for the category was 19.5 per cent CAGR, outperforming the Nifty 500 TRI (17 per cent). Over a 3-year period, it has delivered a comparable diversified category performance.

Within the segment, SBI Contra fund is the consistent performer, generating 22 per cent on a 10-year basis, followed by Kotak Contra and Invesco India Contra at 18 per cent and 17 per cent, respectively. On a three-year rolling basis too, contra funds maintained an edge, delivering about 19 per cent return against about 15 per cent for the Nifty 500 TRI.

DIVERGENT FRAMEWORKS

Each fund house deploys a distinct framework to identify contrarian opportunities:

• SBI Contra uses a three-bucket approach: turnaround, cyclical and value. Turnaround ideas focus on companies facing short-term operational or financial stress but with identifiable triggers such as management change or restructuring. The cyclical bucket targets stocks nearing the bottom of their cycles, using indicators such as capacity utilization and pricing power. The value segment targets overlooked businesses trading at significant discounts to long-term potential.
• Kotak Contra builds a contrarian universe from its research coverage of over 350 stocks. Eligibility is based on five predefined filters: underperformance versus the Nifty 500 index, trading below long-term average valuations, lower valuation multiples relative to sector peers, sectoral underperformance versus the benchmark, or trading below the 200-day moving average. From this universe, the fund applies its BMV framework (business, management and valuation) to identify fundamentally-strong companies with re-rating potential. The final portfolio usually consists of 50-60 stocks.
• Invesco India Contra is a steer on four categories of opportunities: companies in a turnaround phase, stocks trading below fundamental value, businesses benefiting from cyclical upswings and growth companies available at attractive valuations. It actively takes overweight positions in deadweight sector stocks against the benchmark based on valuations, opportunities and sector rotation. The portfolio is mandated to maintain about 50-60 per cent exposure to value-oriented ideas.
• Motilal Oswal Contra Fund plans to follow a “contra growth” strategy, differentiating itself from existing contra schemes that largely adopt a value-oriented approach. The fund aims to identify opportunities arising from sectoral dislocations, low investor interest, weak analyst coverage and valuation gaps relative to sector averages. The strategy categorises ideas into three portfolios: momentum opportunities, primarily using the PEG (price/earnings-to-growth) framework targeting a portfolio PEG ratio of around 1.2, and focusing on companies with strong profit-growth visibility over the next two-three years. Key quality filters include operating cash flow-to-net worth, strong profit-to-cash-flow conversion and low debt-to-equity ratios. The portfolio will remain concentrated, with 25-30 high-conviction stocks and is unlikely to exceed 35 holdings.

CURRENT OPPORTUNITIES

Across funds, current positioning reflects a mix of cyclical and value themes. SBI Contra has identified oil and gas as a promising opportunity, citing temporary earnings pressure in the OMCs and sectoral developments. It also sees selective turnaround opportunities in pharma, while remaining cautious on IT from a sectoral perspective. Over the last three months, the fund has newly added UPL and significantly increased exposure to E.I.D. Parry (India), ICICI Bank and Prism Johnson.

Kotak Contra remains overweight on financials, citing valuations are below long-term averages even as credit growth and asset-quality trends improve. Pharma remains another preferred segment, particularly domestic manufacturing. Recent additions to the portfolio include Tata Steel, IndusInd Bank and M&M.

Invesco India Contra sees short-term contrarian opportunities in auto, tyres and chemicals, where profitability has been temporarily impacted by elevated crude oil prices. The fund expects earnings recovery across these sectors as input prices normalise over the coming quarters. Medium-term opportunities are being identified in PSUs. Within financials, the fund expects credit costs to remain stable, and provisioning under the RBI’s expected credit loss (ECL) norms to favor large-cap players. For long-term contrarian opportunities, the fund manager identified IT as a key area.

INVESTMENT TAKEAWAYS

Contra investing is inherently risky, because these well-founded ideas may remain out of favour for extended periods, leading to interim underperformance and testing investor patience. Another major risk is “value traps”, where beaten-down stocks fail to recover due to structural issues. Further, contra funds can lag during momentum-driven bull markets.

Therefore, including a contra fund in a portfolio necessarily represents a satellite strategy, not a core strategy. By targeting out-of-favour stocks, the contrarian approach takes time to deliver. Contra funds suit patient, risk-tolerant investors with an investment horizon of more than five years.

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MIND IT

• Contra investing is inherently risky and timing-sensitive.
• Some beaten-down stocks may remain weak due to structural issues.
• Contra funds can lag during momentum-driven bull markets.

The article titled "On the road to recovery" was written by Sai Prabhakar Yadlapalli of the BL Research Bureau and is found on page 5 of the Business Line Portfolio edition dated May 17, 2026. Below is the reproduction of the article:

On the road to recovery

CHEMICALS. SRF has navigated recent challenges well, as reflected in its latest Q4FY26 results

SRF reported its Q4FY26 results in early May and provided a strong outlook. We had recommended a hold on the stock in January 2025 as valuations were elevated at 44 times one-year forward earnings even when factoring for expectations of strong growth. Since that call, the stock has declined 4 per cent, even though the company has delivered a respectable full-year revenue growth to ₹15,787 crore (up 6.5 per cent) and net profit growth to ₹1,835 crore (up 4.1 per cent) in FY26. The stock now trades at 36 times one-year forward earnings, broadly in line with historical averages, and we recommend that investors accumulate the stock on its strong projections linked to the US-Iran situation.

Two of SRF’s three large segments—technical textiles and performance films—are expected to recover over the next few quarters, having navigated recent challenges well, including margin volatility. However, volatility in energy prices and global demand remains an overhang for both the company and the broader economy.

As seen in the segment chart, the largest segment of chemicals delivered strong revenue and EBIT growth in FY26. Technical textiles and performance films segment reported better performance, with a revival in margins aided by strong performance in FY26. Management expected to see similar trends in the next fiscal too.

CHEMICALS BUSINESS

The division includes specialty chemicals and refrigerant gas segments. Management expects demand to drive 15-20 per cent revenue growth in FY27 for the Chemicals segment, which makes up more than 50 per cent of EBIT by the RG [ref-gas] sub-segment. This is on the base of a 16 per cent revenue growth in FY26.

The year gone by witnessed strong volume and price growth for RG. Internationally, RG sales are now under a quota regime to limit the impact of greenhouse gases. This appears to have benefited existing companies in the business with elevated volumes and better price realization. The company should gain further, as it debottlenecks its capacity at Dahej, Gujarat and continues to be supported by improved prices. It expects to add 10-15 per cent volume by debottlenecking for a total volume of 45,000 tonnes per annum in capacity.

SRF is building a facility for RG, developed from in-house research, which is a fourth-generation RG and is likely to be environmentally sustainable. The plant is expected to be commissioned by February 2028. The project includes annual RG capacity of 20,000 tonnes and a 30,000-tonne hydrofluoric acid (a raw material) facility to support production, while also offering potential to explore electronic-grade sales.

The company has entered into a long-term supply contract with Chemours (the US-based chemicals major that was spun off from Dupont) for the manufacture, supply and distribution of fourth-generation HFO-1234yf fluoro-olefins. The multi-year arrangement caters to global markets across diverse industries such as semiconductor, automotive, aerospace, chemical processing, and oil and gas. The company has planned capital outlay of ₹745 crore for the project that will be completed by December 2026 and should contribute to revenues towards Q4FY27.

It has also started trial production of higher grades of fluorinated polymers—PTFE—which should also contribute to sales this fiscal.

On the other hand, the specialty chemicals sub-segment under the Chemicals segment has been facing lower volume in demand and pricing pressure on account of Chinese competition in the last two-three years. This is similar to performance seen in agricultural and technical textiles division as well.

To counter the same, SRF has developed a pipeline of advanced intermediates and agro chemicals division, which are under client evaluation. It will unleash new launches even as the old portfolio is expected to face increasing competition. The recent quarter indicates an easing in inventory levels, and specialty chemicals cycle may be improving, but the timing of recovery is yet unknown. SRF is also building two new multi-purpose plants at Indore, under which seven new agro-chemical products are under sales, and the company aims to develop a larger, more advanced portfolio, supporting sales in the sector.

It expects a capital expenditure of ₹2,000 crore in FY27, which includes facilities supporting chemicals division. SRF has explored land in Dahej where a greenfield plant will be developed, supporting its pharma intermediates and agro chemicals business. In specialty chemicals, fourth-generation fluorinated polymers (PTFE) and PTFE advanced grade launches, SRF expects to drive 15-20 per cent revenue growth for chemicals in FY27.

PF DIVISION

In recent, performance films and technical textiles divisions are showing a turnaround in margins. But the performance films (manufactures packaging films) division is showing improved margins, as pricing pressure eases. The division reported 220-bp improved EBIT margins in FY26, which is likely to continue. SRF is conducting trial runs for a higher-grade performance film plant and adding a new production line for a higher-grade film in FY27. This should further support margin recovery and support sales from pressure cases.

The company has a comfortable net debt to EBITDA of 1.29 as of March 2026, which supports the strong capital expansion plans of ₹2,000 crore taken for FY27. SRF has reported only a minor impact from the US-Iran-Israel conflict; disruption in RG sales to the US was observed, as the US has redirected through other countries. However, despite energy volatility, raw material volatility and other potential disruption, we recommend investors accumulate the stock on its strong eye on longer term recovery.

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Box: ACCUMULATE - SRF

• CMP: ₹2,581.65
• SRF Ltd Target: ₹2,688.65
• WHY:
• Valuations have normalised
• Strong capital expansion plans
• Margin recovery underway

The article titled "Flipkart tops e-commerce user growth: CLSA" is found on page 12 of the Business Line edition dated May 17, 2026. Here is the full reproduction of the article:

Flipkart tops e-commerce user growth: CLSA

Our Bureau New Delhi

Flipkart is pulling ahead of rivals in India's e-commerce market, adding significantly more users than Amazon and Meesho in the past year, according to a report by brokerage CLSA.

The Walmart-owned e-commerce platform added 8.5 million weekly active users (WAUs) for the week ended May 4, compared with 6.6 million additions for Amazon, while Meesho lost 3.9 million during the same period, CLSA said in its latest India consumer sector outlook.

Year-to-date, Flipkart added 26.8 million WAUs, while all its peers together added 10.6 million, the brokerage noted.

CLSA’s analysis, based on Sensor Tower data, said Flipkart now leads across key e-commerce metrics, including WAUs and user engagement levels.

The article titled "Bears take to control" was written by Akhil Nallamuthu of the BL Research Bureau and appears on page 6 of the Business Line Portfolio edition dated May 17, 2026. Below is the reproduction of the article:

Bears take to control

BULLION CUES. Traders can go for fresh shorts

Prices of precious metals dropped last week. Spot gold ($2,327.3/oz) and spot silver ($28.3/oz) were down 3.7 per cent and 5.4 per cent, respectively.

However, in the domestic market, the decline was relatively lower due to the rise in import customs duty. Gold futures (₹71,130/10 grams) and silver futures (₹83,720/kg) fell 1.6 per cent and 2.7 per cent. Below is our analysis:

MCX-GOLD (₹71,130)

Last week, the gold futures hit a resistance at ₹73,500 and marked a two-month high of ₹73,853. Since then, the price moderated to end at ₹71,130 on Friday.

The breakout is unlikely to sustain as long as bears hold the gold in the global market. We expect MCX gold to drop further to ₹68,500. A break below ₹70,800 can lead to a fall to ₹68,500.

Trade strategy: Short gold futures (June) at ₹71,130. Place stop-loss at ₹73,500. When the price drops to ₹69,500, revise the stop-loss to ₹71,530. Book profits at ₹68,500.

MCX-SILVER (₹83,720)

Silver futures (July) broke out of the resistance at ₹85,500 early last week. It touched a two-month high of ₹88,409 on Wednesday, before seeing a correction in the subsequent sessions.

The breakout in silver futures, unlike gold, looks real. From the current level, we expect it to fall to ₹80,000 to find support. The next support is at ₹74,000.

Trade strategy: Short silver futures (July) at ₹83,720 and on rallies to ₹85,000. Place stop-loss at ₹88,000. When the contract falls to ₹81,500, move the stop-loss to ₹84,000. Book profits at ₹80,000.

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Singapore Airlines’ investment in Air India is a long game: says CEO

FLYING HIGH. We are committed to supporting the Indian airline’s transformation, says Goh Choon Phong.

MOVING ON. Goh Choon Phong said Air India’s loss in FY26 was due to closure of Pakistan airspace and depreciation of rupee.

Singapore Airlines’ investment in Air India is a long game, said CEO Goh Choon Phong in a post-results conference call on Friday. He stated that Singapore Airlines backs Air India management’s transformation efforts and noted that the Indian carrier’s $2.6 billion loss (₹26,000 crore) in FY26 was due to external factors such as the closure of Pakistan airspace and the depreciation of the rupee against the dollar.

Singapore Airlines’ own net profit declined 56 per cent in FY26, weighed down by Air India’s weak performance. Singapore Airlines currently holds a 25.1 per cent stake in Air India and invested an additional ₹1,080 crore in the carrier last March.

CAPITAL INJECTION

When asked about further capital injection, Goh replied that this would need to be discussed with Tata Sons. He reiterated that Air India’s challenges are largely external but insisted the airline continues to make tangible progress. “It is going to be a long game. There will be no short cuts,” he added regarding the transformation.

Goh, who serves as Singapore Airline’s nominee on the Air India board, highlighted significant transformations in training, in-flight services, and lounges. He cited that Air India’s net promoter score has improved by 50 points, which he credited to these transformative efforts for customers. To support the transformation, Singapore Airlines has seconded two senior executives to Air India: Captain Basil Kwauk as Chief Operations Officer and Jeremy Yew Jin Kit as Head of Engineering.

MULTI-HUB STRATEGY

The investment in Air India is part of Singapore Airlines' multi-hub strategy, driven by its limited home market and lack of domestic operations in Singapore. The airline aims to capitalize on India’s long-term growth opportunities. Despite facing questions over Air India’s current performance, Goh remains optimistic. “This is a market that holds tremendous potential and is even more obvious today,” he asserted.

Monsoon to hit Kerala coast on May 26

DESPITE EL NINO. IMD says the South-West monsoon is expected to arrive 6 days before the normal onset date.

Prabhudatta Mishra New Delhi

RAIN ARRIVAL. Pre-monsoon clouds blanket the skyline in Thiruvananthapuram. The monsoon is keenly awaited this year amid the IMD’s forecast of below-normal rainfall.

The India Meteorological Department (IMD) on Friday said that the monsoon will hit the Kerala coast on May 26, which is six days earlier than its normal schedule of June 1 in the mainland. The IMD also said that the South-West monsoon is very likely to advance into the South Andaman Sea, some parts of the south-east Bay of Bengal and the Nicobar Islands on May 16, against the normal May 20.

“This year, the South-West monsoon is likely to set in over Kerala on May 24, with a model error of plus or minus 4 days,” the IMD said in a statement. This year’s monsoon is keenly awaited amid forecasts by the IMD of below-normal rainfall during the June-September season and predictions of a super El Nino.

‘CORRECT’ FORECASTS

The weather bureau said its “operational forecasts” (inclusive of error margin) of the date of monsoon onset over Kerala during the past 21 years (2005-25) were proved correct, except in 2015. “Advance of the monsoon over the Indian mainland is marked by monsoon onset over Kerala and is an important indicator characterising the transition from hot and dry season to a rainy season,” IMD said. As the monsoon progresses northward, relief from the scorching summer temperatures is experienced over the areas.

The IMD has been issuing operational forecasts for the date of monsoon onset over Kerala from 2005 onwards, based on a statistical model. The six predictors that are used are:

• Minimum temperatures over North-West India.
• Pre-monsoon rainfall peak over the South Peninsula.
• Outgoing long wave radiation (OLR) over the South China Sea.
• Lower tropospheric zonal wind over the equatorial south-east Indian Ocean.
• Outgoing OLR over the south-west Pacific Ocean.
• Upper tropospheric zonal wind over the equatorial north-east Indian Ocean.

Last month, the IMD predicted the monsoon to be 92 per cent of the long-period average. This is in view of the drought-bearing El Nino likely to emerge by July.

India’s goods exports rise 14% in April despite W. Asia disruptions; deficit up on import surge

Amiti Sen
New Delhi

Despite continued trade disruptions in West Asia, India’s merchandise exports started the new fiscal year on a strong note, rising 13.79 per cent year-on-year to $43.56 billion in April. This growth was propelled by strong performances in engineering goods, electronics, and pharmaceuticals.

According to the Commerce Department’s quick estimates, imports grew 10 per cent to $71.94 billion, driven by a massive 81.69 per cent surge in gold arrivals to $5.62 billion. Consequently, the merchandise trade deficit widened to $28.38 billion, up from $20.67 billion in March and $27.1 billion in April 2025.

NEW MARKETS

Commerce Secretary Rajesh Agrawal stated that higher global prices and market diversification, including expansion into African nations like Tanzania, buoyed exports despite the ongoing Gulf turmoil.

However, significant challenges remain. Pankaj Chadha, Chairman of EEPC India, pointed out that the engineering sector is facing a sharp increase in input costs and skyrocketing logistics expenses. Furthermore, steel and its related products continue to face high tariffs in the US, which is India’s largest export market.

India’s exports to West Asia saw a sharp decline of 28 per cent, falling to $4.16 billion in April from $5.78 billion a year earlier. Agrawal noted that the Gulf war and the Strait of Hormuz blockade have continued to restrict trade in the region. Imports from West Asia, including petroleum, also declined by 31.64 per cent to $10.47 billion during the month.

The US maintained its position as India’s top export market, with shipments totaling $8.48 billion. Exports to Singapore saw a dramatic increase to $3.2 billion (from $1.14 billion), while shipments to the UAE fell to $2.19 billion. China ranked as the fourth-largest export market, with shipments valued at $1.77 billion.

IMPORTS RISE

Goods imports from China, India's largest source, rose to $11.97 billion in April from $9.91 billion last year. Imports from Russia also increased to $7.36 billion. Conversely, imports from the US saw a marginal decline to $5.27 billion, and those from the UAE dropped to $4.07 billion. Imports from Saudi Arabia grew to $3.85 billion.

US TEAM COMING

A US team is expected to visit India in June for further talks on an interim trade agreement, though specific dates are not yet finalized. This follows a visit by the Indian side to Washington in April to discuss details of the interim pact and broader bilateral trade negotiations.

Delegation from BRICS nations visits GIFT City

Our Bureau Ahmedabad

The GIFT City on Friday hosted a delegation comprising representatives from BRICS nations, providing them with an overview of India’s evolving International Financial Services Centre (IFSC) ecosystem and the growing opportunities in cross-border finance, fintech, trade and global business services. The visit assumes significance as India holds the BRICS Chair for 2026 under the theme “Building for Resilience, Innovation, Cooperation and Sustainability”. India is also set to host the 18th BRICS Summit and related ministerial engagements during the year, according to an official release.

As part of the visit, the delegation was apprised of GIFT City’s development as India’s maiden IFSC and its emergence as a gateway for international financial services, global capital flows and foreign currency transactions from within India. Senior officials from GIFT City and the International Financial Services Centres Authority made a detailed presentation covering the city’s regulatory ecosystem, globally benchmarked infrastructure, business environment and sectoral opportunities across banking, capital markets, fund management, insurance and reinsurance, aircraft leasing, fintech and global capability centres.

Commenting on the visit, Sanjay Kaul, Managing Director and Group CEO, GIFT City, stated, “GIFT City is steadily emerging as a globally competitive financial and innovation hub, enabling international financial services and cross-border business from India. The visit by the BRICS delegation provided an important opportunity to showcase GIFT City’s integrated financial and urban ecosystem, and to exchange perspectives on areas such as cross-border investments, sustainable finance, fintech innovation and economic cooperation”.

India-Korea partnership needs deeper engagement

Reji K Joseph

The CEPA has not met the expectations of either side. India faces market access barriers, and Korean investments are falling.

During South Korean President Lee Jae Myung’s visit to India in April, he announced, with Prime Minister Narendra Modi, a Joint Strategic Vision for the India-Korea Special Strategic Partnership. The vision calls for expanding bilateral trade to $50 billion by 2030, speedy conclusion of the upgrade of the Comprehensive Economic Partnership Agreement (CEPA), in force since 2010, and cooperation in critical areas such as supply-chain resilience, green hydrogen and nuclear power.

This is an opportune time for the two economies to tap their complementarities. Korea is a manufacturing powerhouse, and India is determined to transform its manufacturing base. India offers an attractive alternative location for Korean firms looking to diversify their supply chains. India’s deep human-resource pool and software ecosystem also complement Korea’s hardware strengths — a natural fit for collaboration in semiconductors, electronics and artificial intelligence.

The key question, however, is why the existing CEPA has not met the expectations of either side. Three issues stand out:

MARKET ACCESS BARRIERS

One, Indian exporters face major market access barriers in Korea. Despite India’s rising share in global merchandise trade, Korea’s share in India’s exports has declined from 2 per cent in 2009 to 1 per cent in 2024, while India’s merchandise trade deficit with Korea has quadrupled from $4 billion to $16 billion.

A study at ISID has identified 26 product groups — including pharmaceuticals, textiles and apparel, marine products and leather — where India has a global comparative advantage but only a marginal presence in the Korean market. In pharmaceuticals, complicated import procedures make market access effectively impossible for Indian exporters: though India accounted for 3 per cent of global imports in 2024, its share in Korea’s imports was barely 1 per cent.

INVESTMENT SLOWDOWN

Two, the missing second wave of Korean investment is a serious concern. The first wave came in the 1990s, when Samsung, LG and Hyundai established their operations in India. Korean FDI accounted for close to 4 per cent of India’s inflows in that decade, peaking at 13 per cent in 1999.

The post-CEPA period was expected to bring a second wave, with expectations rising further in the wake of Make in India initiatives and the Production Linked Incentive (PLI) scheme. Yet Korea’s share in India’s FDI inflows over the last five years has been only about 0.7 per cent. Korea has been diversifying its outward investment as part of a broader restructuring of its supply chains: its manufacturing OFDI (Outward FDI) in the last two years is more than double pre-pandemic levels.

The Fast Track Mechanism set up by DPIIT and Invest India in March 2024 to address the grievances of Korean investors is a useful start, but much more needs to be done to end this elusiveness.

CEPA COMMITMENTS AND RULES OF ORIGIN

Three, Korea has long maintained that India’s commitments under CEPA have not been substantial — pointing to the deeper concessions in India’s other FTAs, for example CEPA with Japan. Korea has also flagged that India’s rules-of-origin requirements are unusually stringent and have deterred Korean firms.

On the first count, India is now better placed to make deeper commitments in the upgraded CEPA. The second is harder. India is seriously concerned about third-country routing through FTAs and has tightened its rules of origin accordingly. The notification of April 2025 has shifted the regulatory burden from compliance certificates issued by the partner country to a verification-based regime imposed on the importer. Korean conglomerates, whose procurement, pricing and supplier management are generally centralised at headquarters rather than at local subsidiaries, will find the new rules harder to navigate.

CONCLUSION

The Joint Strategic Vision has identified the right priorities and laid down a credible framework for transforming the India-Korea economic partnership. However, market access barriers facing Indian exporters, the missing second wave of Korean investment, and rules-of-origin compliance need immediate attention from policymakers in both countries.

The writer is faculty member, Institute for Studies in Industrial Development, New Delhi

Regulators as board leaders?

SN ANANTHASUBRAMANIAN & MS SAHOO

Moving from certainty of legal frameworks to ambiguity of markets requires a different approach.

In India’s evolving governance landscape, a quiet but significant trend has taken root: retired secretaries to the Government of India and former heads of statutory regulatory agencies are increasingly stepping into boardrooms as non-executive chairpersons, shaping the strategic trajectory of listed companies. The appeal is intuitive: who better to steer governance than those who have helped define and enforce it?. In an era of heightened scrutiny, their presence lends gravitas and reassures investors and stakeholders alike.

The transition from regulator to board leader is, however, not always seamless. Public office is typically defined by hierarchy, guided by precedent, and oriented towards risk minimisation. The boardroom, in contrast, demands strategic judgment, commercial foresight, and the ability to guide rather than direct. The chairperson’s role extends beyond compliance to shaping the firm’s long-term direction, mentoring management, and balancing prudence with enterprise. The issue, therefore, is not one of intent or integrity, but of institutional fit and role adaptation.

UNDERSTANDING THE SHIFT

This shift is best understood as a change in institutional logic rather than capability. Moving from the certainty of legal frameworks to the ambiguity of markets requires a different orientation: from enforcing rules to enabling outcomes, and from formal authority to influence exercised through engagement. Governance in this setting depends not on past designation, but on the capacity to interrogate assumptions, contribute to strategy, and exercise independent judgment. Absent these attributes, even the most distinguished appointments risk becoming symbolic rather than substantive.

Moving from regulator to board leader involves a shift from adjudication and enforcement to strategy and performance. The point is not about competence, but about context: expertise is domain-specific, and institutional roles require recalibration when carried across settings. This gap is not universal, but where it exists, it tends to be specific. It often lies in areas such as capital allocation, industry structure, and competitive positioning, as well as in the softer skills of boardroom engagement: questioning, dissent, and consensus-building.

These distinctions become most visible in decision-making styles. Public officials are accustomed to operating within clearly defined authority structures, where decisions are backed by ministerial responsibility. Boards, however, are deliberative bodies that rely on collective reasoning, where accountability is direct and cannot be externalised. Effectiveness depends less on authority and more on persuasion, listening, and constructive challenge. Without conscious adaptation, hierarchical instincts may sit uneasily within a collaborative governance environment.

REGULATORY OVERHANG

A related concern is the risk of a regulatory overhang. Boards led by individuals steeped in regulatory culture may exhibit excessive caution. While this strengthens compliance and reduces downside risk, it may also constrain strategic flexibility in sectors where innovation, speed, and calculated risk are essential. The result is not governance failure, but a potential imbalance between prudence and enterprise that may affect competitiveness, at the margin.

It is equally important to recognise that past performance in public office is not a reliable predictor of effectiveness in competitive markets. Unlike regulatory roles, where outcomes are often episodic and compliance-driven, corporate leadership is continuously tested by market performance, capital allocation decisions, and quarterly expectations. The metrics, rhythm, and accountability structures differ in material ways.

That said, it would be reductive to view such appointments sceptically. Former public officials bring valuable strengths in governance discipline, crisis management, and public accountability. These attributes can significantly enrich board deliberations, particularly in regulated sectors. The question is not whether they add value, but how that value can be fully realised.

IMPROVING OUTCOMES

The answer lies in calibration. One way to improve outcomes is through structured sequencing. Former regulators could first serve as independent directors, gaining exposure to business models, competitive dynamics, and boardroom processes, before assuming chair positions. This, in turn, raises a broader institutional issue: the effectiveness of independent directors themselves. While views may differ on how well the institution has delivered on its promise, one principle remains uncontroversial: no role of consequence can be performed effectively without preparation.

If independent directors are expected to exercise judgment, oversee complex management structures, and challenge corporate strategy constructively, they must be equipped accordingly. This requires more than familiarity with law or finance; it calls for capabilities in strategic thinking, risk assessment, communication, scepticism, and ethical reasoning, regardless of whether they come from public service or private sector, as each brings distinct strengths but also potential blind spots. The recent regulatory emphasis on structured training and capacity-building is a positive step, but it may not be sufficient to meet the demands of increasingly complex corporate structures.

It is time to reconceptualise independent directorship, and, by extension, board leadership, as a profession in its own right. This would entail structured induction, continuous professional development, and certification through rigorous assessment, without grandfathering. Crucially, it must be anchored in a stringent conflict-of-interest framework, including cooling-off periods and robust fit and proper evaluations. It would also require clearer standards of accountability for contribution, not just conduct. Without such professionalisation, expectations will continue to outpace outcomes.

Within such a framework, the role of former regulators as Chairmen becomes easier to situate. Their experience remains valuable, but the effectiveness depends on preparation, sectoral understanding, and integration into a board culture that balances regulatory wisdom with commercial acumen. The journey from a full-time regulator to a part-time chairman is not merely a change in position; it is a shift in mindset and mode of engagement. Those who navigate this transition successfully can strengthen boards and contribute meaningfully to corporate India; those who do not may remain distinguished, but not decisive.

As India’s governance architecture matures, the focus must move beyond credentials to competence, and beyond optics to outcomes. The objective is not merely to populate boardrooms with experience, but to ensure that such experience translates into effective oversight, strategic insight, and sustained value creation.

The writers are former President and former Secretary, respectively, of the Institute of Company Secretaries of India.

Newspaper Summary 150526

 

WPI inflation hits 42-month high of 8.3% in April as fuel prices surge

By Shishir Sinha, New Delhi

Driven by a surge in fuel prices, wholesale inflation, measured by the Wholesale Price Index (WPI), reached a 42-month high of 8.3 per cent in April. This is a significant jump from the 3.88 per cent recorded in March.

The Ministry of Commerce and Industry stated that this positive rate of inflation is primarily due to rising prices for mineral oils, crude petroleum and natural gas, basic metals, non-food articles, and other manufactured products. Specifically, inflation in the fuel and power segment skyrocketed to 24.71 per cent in April, up from just 1.05 per cent in March. Crude petroleum inflation reached 88.06 per cent, largely reflecting the impact of the West Asia crisis and the effective blockade of the Strait of Hormuz.

Further details from the fuel and power basket include:

• Petrol: Increased to 32.40 per cent (from 2.50 per cent in March).
• High-speed diesel: Rose to 25.19 per cent (from 3.26 per cent).
• LPG: Reached 10.92 per cent (from -1.54 per cent).

Despite a 50 per cent spike in global crude oil prices, the government has maintained stable rates for fuel pumps and household LPG to protect consumers, though prices for commercial LPG cylinders have been raised.

In other categories, inflation for non-food articles rose to 12.18 per cent (from 11.5 per cent), while food articles saw a slight increase to 1.98 per cent (from 1.90 per cent).

Outlook and Economic Impact Rahul Agrawal, Senior Economist at ICRA, noted that the significant jump between March and April suggests that March's figures may be revised upward in June. He expects the WPI print for May to exceed 9 per cent due to hardening food prices, continued pass-through of elevated energy costs, and the depreciation of the rupee.

Additionally, the gap between CPI and WPI prints widened to a 44-month high of 482 basis points in April. Agrawal anticipates that CPI inflation will cross 4 per cent in May, but expects the Monetary Policy Committee (MPC) to remain on hold during the June review due to uncertainty surrounding the duration of the West Asia conflict.

Air India losses drag SIA Group’s FY26 net profit down 57 per cent

By Rohit Vaid, New Delhi

The Tata Group-led Air India’s losses have significantly weighed on the net profit of its other major stakeholder, the Singapore Airlines (SIA) Group, which holds a 25.1 per cent stake in the carrier.

Accordingly, Singapore Airlines Group’s net profit declined 57 per cent to SGD 1.184 billion in FY25-26, down from SGD 2.778 billion in the previous fiscal year. In its annual report, the SIA Group noted that Air India posted a loss of SGD 3.56 billion (equivalent to over ₹26,000 crore) during FY25-26.

Difficult Conditions and Accounting Factors

The group’s auditors have flagged the Air India investment as an area of financial risk due to difficult operating conditions and geopolitical uncertainty. However, following a review, the SIA Group did not write down the value of its investment.

SIA stated that the decline in net profit was primarily due to the absence of a SGD 1.098 billion non-cash accounting gain that had been recognised in November 2024 after the completion of the Air India-Vistara merger. Additionally, the swing from profits to losses for associated companies in FY25-26 resulted from SIA accounting for its share of Air India’s full-year losses, compared with only four months in the previous fiscal year. This resulted in a negative earnings impact of SGD 846 million during the year.

Commitment to India Operations

Despite the financial strain, the SIA Group reiterated its commitment to the Air India investment, describing it as a “core component” of its long-term multi-hub strategy. The group noted that the investment provides critical exposure to one of the world’s largest and fastest-growing aviation markets while complementing its Singapore hub. SIA is working closely with Tata Sons to support Air India’s multi-year transformation programme.

Air India’s Headwinds

According to the SIA Group, Air India faces several challenges, including:

• Industry-wide supply chain constraints.
• Air space restrictions and constraints on operations to key West Asia markets.
• Elevated jet fuel prices.

Amidst this growing pressure, senior executives from Singapore Airlines recently travelled to India to discuss the carrier’s operational and financial situation with Tata Sons.

Impact on Workforce and Operations

During an internal interaction with employees, Air India management indicated that no workforce reduction is currently planned. However, the airline has deferred annual salary hikes for at least one quarter.

Chief Executive Officer and Managing Director Campbell Wilson informed employees that external developments continue to exert pressure on profitability. Consequently, Air India has temporarily suspended flights on multiple international routes and reduced frequencies across several overseas operations between June and August 2026.

‘India ready for global headwinds, revenue loss will not affect stability’

STABILISATION PUSH. Measures taken over past 2 months will protect economy, say FinMin officials
FISCAL CUSHION. The Centre said it can comfortably manage an estimated ₹1 lakh crore revenue loss from recent excise duty cuts on petrol and diesel, citing strong fiscal buffers and reforms

By Shishir Sinha, New Delhi

The Centre on Thursday said it had sufficient fiscal headroom to manage the impact of global economic turbulence despite an estimated revenue loss of nearly ₹1 lakh crore from the recent cut in excise duty on petrol and diesel. While outlining a series of measures taken over the past two months to shield the economy from external shocks, Finance Ministry officials stated the government’s ability to absorb this impact stemmed from “prudent fiscal management and sustained reforms over the last decade”.

“The ability to act proactively, allocate resources and provide relief where needed is the result of prudent fiscal management and sustained reforms over the last decade,” an official said, adding that the government remained committed to protecting economic stability amid global uncertainty. Officials noted that the ₹10 per litre reduction in central excise duty on petrol and diesel, announced on March 26 in response to sharp rises in global crude oil prices, could result in a revenue loss of approximately ₹1 lakh crore this financial year.

Fuel Tax Cuts

According to the government, the fuel tax cut was intended to:

• Cushion consumers from rising fuel prices.
• Contain inflationary pressures.
• Support the transport and logistics sectors.
• Ease pressure on oil marketing companies.

Simultaneously, the Centre imposed export duties and cesses on petrol, diesel, and aviation turbine fuel to discourage overseas shipments and ensure domestic availability amid volatile energy markets. Officials revealed that 16 measures have been introduced over the past 72 days to mitigate the economic impact of the global crisis, particularly disruptions stemming from tensions in West Asia. One key step was the creation of an Economic Stabilisation Fund with a corpus of ₹1 lakh crore to serve as a fiscal buffer against supply-chain disruptions and other external shocks.

Industry Relief

The government also announced targeted relief for domestic industries:

• SEZ Relief Window: Notified on March 31, this allows eligible manufacturing units in Special Economic Zones to sell goods in the domestic tariff area at concessional customs duty, helping companies utilize idle capacity.
• Petrochemical Inputs: Customs duty exemptions were granted from April 2 to June 30 to support sectors like textiles and pharmaceuticals that rely heavily on imported raw materials.
• ECLGS 5.0: The Cabinet recently approved the Emergency Credit Line Guarantee Scheme 5.0 to ease working capital stress for MSMEs, traders, and airlines affected by the West Asia crisis. This scheme is expected to facilitate an additional credit flow of ₹2.55 lakh crore, with 100 per cent government guarantee coverage for MSME loans.

Import Duty Tweaks

On Wednesday, the government further raised import duties on gold, silver, and platinum to curb non-essential imports, aiming to reduce pressure on foreign exchange reserves and stabilize the rupee.

‘Nifty may hit 42K by 2029 if FII flow reverses’

By Our Bureau, Bengaluru

The Nifty 50 could potentially scale 42,000 by 2029 if historical flow patterns and domestic growth momentum sustain, according to a report by CNI InfoXchange that analysed past trends, particularly following periods of heavy selling by foreign portfolio investors.

Market Resurgence

The report, titled Nifty’s Resurgence With the Return of FII, suggests that equities have increasingly become flow-driven rather than purely earnings-led over the last several years. The study highlighted two significant periods:

• Nearly $54 billion in FII inflows between 2019 and September 2021 powered a 63 per cent rally in the Nifty.
• An additional $45 billion in inflows between July 2022 and September 2024 resulted in a 68 per cent surge in the benchmark index.

The report notes that India's market structure has fundamentally strengthened due to expanding domestic institutional investor (DII) participation, systematic investment plan (SIP) inflows, and growing alternative investment fund activity. These factors have collectively reduced the market’s vulnerability to foreign selling, keeping market corrections relatively contained even during periods of heavy FII outflows.

Projections for 2029

If the country attracts another $50 billion in FII inflows over the next two years, historical dynamics could push the Nifty toward 40,000-42,000 by 2028-29. Key factors supporting this rally include:

• Sustained GDP growth above 7 per cent.
• Supportive RBI policy and large-scale infrastructure and manufacturing reforms.
• Strong domestic liquidity and a continued capex cycle backed by government spending.

Furthermore, the report expects India’s weight in the MSCI Emerging Markets Index to rise to 23.5-25 per cent by FY28, potentially overtaking China. It projects a total FPI and FDI inflow potential of $160-180 billion over FY27 and FY28.

The report concludes that while the bull case requires strong earnings growth, stable inflation, and supportive global liquidity, the path to 42,000 remains heavily dependent on global macro stability.

Puttaparthi to host major defence infra hub

By Our Bureau, Hyderabad

The laying of the foundation stone for the advanced medium combat aircraft (AMCA) programme infrastructure and the launch of multiple defence, aerospace and drone manufacturing projects will be held in Andhra Pradesh’s Puttaparthi on May 15. The event is a major milestone for the State to emerge as a hub for defence manufacturing, aerospace innovation and unmanned systems development.

Tesla opens experience centre in Bengaluru

Bengaluru: Tesla has opened its fourth experience centre in Bengaluru’s Whitefield. Since entering India in July 2025, Tesla has opened experience centres in Mumbai, Delhi, and Gurugram, with Bengaluru emerging as its fourth key market. It has sold over 340 vehicles in India so far, largely driven by the Model Y lineup, while also expanding charging and service infrastructure across major metros.

— OUR BUREAU

‘Air connectivity between India, Singapore adequate’

Our Bureau, Mumbai

Air connectivity between India and Singapore remains adequate with more than 250 weekly services, Singapore’s Changi Airport Group (CAG) has said.

The airport operator issued a statement after Air India announced a cut in its overseas flights, including to Singapore. While Air India has temporarily suspended its Chennai-Singapore flight till August, frequencies from Mumbai and Delhi have been reduced.

Adequately Served

“We understand that the current environment can be challenging for some of our airline partners. Even with the reduction of services by Air India, passengers who wish to travel between India and Singapore remain adequately served, with more than 250 weekly services across 15 Indian cities scheduled for June,” the CAG said.

Singapore Airlines is the largest carrier on India-Singapore routes, followed by IndiGo, Scoot, Air India and Air India Express. Bhutan’s Druk Air also connects Guwahati with Singapore.

“When the macro environment improves, CAG is committed to working closely with Air India to reinstate the suspended flights,” the group added.

India is the fifth largest source market for Singapore Tourism, with over 2.46 lakh visitors in the first three months of CY 2026. In 2025, the island state received over 1.2 million Indian tourists.

While outbound travel, especially to Gulf and long-haul markets, has been impacted by the West Asia conflict, travel companies are banking on short-haul segments to drive business growth. Corporate travel demand is also expected to hold steady.

Newspaper Summary 140526

 The article titled "Govt raises import duty on gold, silver, platinum to conserve forex" is reproduced below from the sources:

Days after Prime Minister Narendra Modi urged citizens to defer gold purchases for a year as part of a broader national effort to conserve foreign exchange, the government on Wednesday sharply increased the import duty on precious metals amid concerns over the external sector and the impact of the West Asia crisis on India’s import bill.

A Finance Ministry notification said the import duty on gold and silver had been increased to 15 per cent from 6 per cent, while the levy on platinum had been raised to 15.4 per cent from 6.4 per cent. Consequential changes had also been made to gold and silver dore, coins and related items, with the revised rates coming into effect from Wednesday.

“This has been done as a policy measure aimed at safeguarding macroeconomic stability, conserving foreign exchange and moderating non-essential imports during a period of heightened global uncertainty arising from the ongoing West Asia crisis,” an official said. Officials added that the import duty on precious metals had historically been adjusted in line with prevailing macroeconomic and external sector conditions. In the Union Budget 2024-25, import duties on gold and silver were cut from 15 per cent to 6 per cent and on platinum from 15.4 per cent to 6.4 per cent, reflecting what officials described as a more comfortable external sector position at the time.

UAE ROUTE

The government simultaneously tightened the concessional import route available under the India-UAE Comprehensive Economic Partnership Agreement (CEPA), raising the duty on gold imported under the tariff rate quota to 14 per cent from 5 per cent. The move preserves only the existing 1 percentage point preferential margin over the standard duty rate and is aimed at plugging a possible arbitrage route after the sharp increase in headline Customs duty.

The tightening comes amid growing concern over rising gold imports routed through Dubai. According to an analysis by the Global Trade Research Initiative (GTRI), gold bar imports from the UAE surged to $16.5 billion in 2025 from $2.9 billion in 2022, while the UAE’s share in India’s gold imports rose to 28 per cent from 7.9 per cent during the same period.

Officials said the latest duty hike is part of a broader strategy to conserve foreign exchange and prioritise essential imports such as crude oil, fertilizers, industrial raw materials, defence equipment and capital goods, amid global uncertainties and the risk of a widening current account deficit (CAD).

DEMAND IMPACT

Economists said the higher tariff could moderate gold demand and offer some relief to the CAD, though part of the gains may be offset by smuggling.

• Rajani Sinha, Chief Economist at CareEdge, said a cumulative 9 percentage point increase in duty could reduce gold demand by 50-60 tonnes annually, lowering imports worth $6-9 billion at current international prices.
• Debopam Chaudhuri, Chief Economist, Piramal Group, estimated that the move could save $2.5 billion, or about ₹23,750 crore, in FY27 if the tariff hike is fully passed on to consumers.

The article titled "Uber to set up first India data centre with Adani Group" is reproduced below from the sources:

Uber will set up its first data centre in India in partnership with the Adani Group, marking a significant expansion of its technology infrastructure in the country. Uber CEO Dara Khosrowshahi announced the move in a post on X.

“Great to meet @gautam_adani in Ahmedabad this morning and build on our existing partnership with the Adani group. As India fast emerges as a leading innovation hub for @Uber, we are setting up our first data center in the [country],” Khosrowshahi wrote.

In January 2026, Adani Enterprises Ltd stated that the company will invest over ₹5,000 crore in a 100 MW data centre powered by renewable energy, over the coming 5-7 years.

Adani will work closely with local MSMEs and start-ups to develop a globally competent supplier base and generate 600 jobs directly and indirectly.

The article titled "India, Chile review progress of free trade pact talks" is reproduced below as it appears in the source material:

India and Chile, a South American nation, on Wednesday reviewed the progress of negotiations for the proposed free trade agreement and discussed and Commerce Secretary Rajesh Agrawal here.

“Apart from discussing the modalities for early conclusion of Comprehensive Economic Partnership Agreement, the interactions also covered a broad range of issues relating to trade facilitation, market ac-

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Note: The text for this article in the provided source appears to be incomplete and ends abruptly.

The article titled "Banks’ credit offtake, deposit growth surged in second fortnight of April" is reproduced below from the sources:

After a substantial decline in the first fortnight of the current financial year (FY27), banks’ credit offtake and deposit accretion gathered pace in the second fortnight of April.

Credit growth of all scheduled banks jumped by ₹2,95,164 crore in the reporting fortnight ended April 30, compared to a decline of ₹4,56,208 crore in the preceding fortnight. Further, deposit accumulation was robust at ₹2,12,302 crore against a decline of ₹5,95,607 crore, according to RBI data.

Outstanding bank credit and deposits in the first fortnight typically tend to decline as short-term business contracted in the run-up to the financial year-end winds down. In fact, credit offtake and deposit accretion in the reporting quarter is higher than the year-ago fortnight’s ₹96,509 crore and ₹1,68,845 crore, respectively.

In a recent report, ICRA noted that with India’s real GDP growth expected to grow at a slower clip of 6.5 per cent in FY27 (against an estimated 7.5 per cent for FY26), it expects bank credit to moderate and the slippage rate to rise in the current financial year amid heightened geopolitical uncertainties and evolving interest rate dynamics.

The rating agency expects credit growth to moderate to sub-12 per cent in FY27 (at 11.0-11.7 per cent, surpassing the growth rate of 10.9 per cent in FY25) from the significantly high level of 15.9 per cent in FY26.

The article titled "AERA defers 15% revenue recovery to moderate Noida airport charges" is reproduced below from the sources:

The Airports Economic Regulatory Authority (AERA) has deferred 15.02 per cent of the aggregate revenue requirement (ARR) in the final tariff order for the first control period between 2026 and 2031 for Noida International Airport. On Monday, businessline, in a conversation with AERA Chairperson SKG Rahate, had reported that the authority had significantly rationalised the ARR proposed by the airport operator. Accordingly, the ARR has been deferred to the next tariff cycle to moderate airport charges during the initial years of operation.

The regulator said the move was aimed at reducing the tariff burden on passengers and airlines at the upcoming greenfield airport, which is scheduled to commence commercial operations from June 15.

TARIFF PROPOSAL

Notably, AERA said Yamuna International Airport Private Ltd (YIAPL), the airport operator, had submitted an ARR of around ₹6,847 crore for the first control period under its multi-year tariff proposal. However, after carrying out analysis, prudence checks and stakeholder consultations, AERA said it rationalised the proposed revenue requirement and allowed around ₹5,308 crore.

“Keeping in mind the fact that Noida Airport is a greenfield airport with significant upfront capital investment and a comparatively lower initial traffic base resulting in higher airport charges, AERA has deferred (carried forward) a substantial portion (15.02 per cent) of the ARR to the next tariff cycle (2nd control period) so as to moderate the airport charges in the interests of passengers and airlines,” the regulator said.

USER DEVELOPMENT FEE

Consequently, AERA fixed the user development fee (UDF) for departing domestic passengers at ₹490 per passenger for 2026-27 against ₹653 proposed by the airport operator. For departing international passengers, the regulator fixed a UDF rate of ₹980 against the proposed ₹1,200. These charges are unchanged from the ad hoc tariff order issued by the regulator in August 2025.

Besides, the domestic landing charge was fixed at ₹725 per tonne compared to the ₹760 proposed by the airport operator. Furthermore, AERA said the UDF approved for the airport remains comparable with the national average at major airports and within the range currently levied at non-major airports.

Similarly, the regulator pointed out that UDF has been determined for both embarking and disembarking passengers as airport infrastructure such as aero bridges, travelators, conveyor belts, and terminal facilities are utilised by both categories of passengers. Meanwhile, AERA said distributing the tariff burden between departing and arriving passengers would ensure a more equitable recovery of airport infrastructure costs.

VARIABLE TARIFF PLAN

The regulator further approved a Variable Tariff Plan for the airport in order to encourage airlines to start new routes, increase flight frequencies, and expand network operations during the initial years of traffic ramp-up. According to AERA, the variable tariff plan will primarily apply to landing and parking charges and is expected to support airlines in gradually building passenger traffic from the airport.

In addition, AERA reiterated that airport charges at Noida International Airport cannot be directly compared with those at Delhi airport due to structural differences between greenfield and brownfield airports. Speaking to businessline a day earlier, AERA Chairperson Rahate said Delhi airport is an established brownfield airport with depreciated assets and high passenger traffic, whereas Noida International Airport is a newly-operational greenfield airport built with substantial upfront investments and lower initial traffic volumes.

IDENTICAL FARES

Presently, Noida International Airport’s fares are nearly identical to those from Delhi airport on several domestic routes despite Uttar Pradesh levying only 1 per cent value added tax on ATF compared to nearly 25 per cent in Delhi. These fares have led some industry executives to state that higher aeronautical charges and UDF at the airport are offsetting gains arising from lower fuel taxation. Nonetheless, sectoral experts aware of the tariff structure said these charges account for only a small portion of airline operating costs, while airlines continue to derive significant benefits from lower ATF taxation in Uttar Pradesh.

By Rohit Vaid, New Delhi.

The article titled "Yellow metal holdings of gold ETFs soared 79% over the past year" is reproduced below from the sources:

While a large part of gold imports is led by jewellery consumers, demand from exchange-traded funds (ETFs) has also seen a surge over the past year. Data from the World Gold Council (WGC) show that assets under management of gold ETFs listed in India increased from $7.2 billion in April 2025 to $18.4 billion in May 2026. Given the mandate to back their investments with physical gold, ETFs have increased their holdings from 65.3 tonnes to 116.7 tonnes in the same period, registering an increase of 79 per cent.

WHY THE INCREASE

Gold prices have had a stellar run over the last two years, more than doubling from around $2,100 per ounce in April 2024. Heightened uncertainty caused by Trump’s reciprocal tariffs and the ongoing Iran war are the prime reasons cited for the increase in prices.

In times of sharp price increases, demand from jewellery buyers typically comes down while investment demand surges. According to the WGC, demand for jewellery dropped from 563 tonnes in 2024 to 440 tonnes in 2025. But in the same period, holdings of Indian gold ETFs recorded a sharp increase. Total demand from global gold exchange-traded funds amounted to 794 tonnes in 2025, driving prices higher.

Interestingly, WGC data show that investments in gold could be in the form of gold bars and coins, besides gold ETFs. Gold ETFs account for only 40 per cent of the gold investment demand.

INFLOWS CONTINUE

Inflows have continued into India’s top gold ETFs, resulting in continued demand.

• Nippon India Gold BeES, which holds 36.5 tonnes of gold, has witnessed inflows of $1.1 billion so far in 2026.
• ICICI Prudential Gold iWIN ETF (holding 17.3 tonnes) received $673 million this year.
• SBI ETF Gold (holding 16.1 tonnes) received $522 million.

By Lokeshwarri SK, Chennai.

The article titled "SEBI eases FPI tax liability concerns" is reproduced below from the sources:

The Securities and Exchange Board of India (SEBI) has clarified to banks, custodians and brokers that they will not be held liable for the tax dues of offshore funds in India, easing concerns that had delayed fresh foreign portfolio investor (FPI) registrations and PAN issuance since last month, according to people familiar with the matter.

A public clarification note on the issue is expected to be issued soon by depositories or the Income Tax Department, sources said. “This will be very helpful for foreign investors to find appropriate domestic representatives to complete the new RA or AR entry in the CAF form,” one person aware of the discussions said.

The issue arose after changes were introduced to the common application form (CAF) framework and PAN application process for FPIs from April 1. Under the revised framework, representatives of offshore funds, including custodians and intermediaries acting on behalf of FPIs, were required to furnish additional details while applying for PAN allotment for clients.

LIABILITY CONCERNS

This requirement raised concerns among banks, brokers and other intermediaries over whether they could face potential tax liability for the offshore funds they represented. As a result, FPIs found it difficult to identify domestic representative assessees willing to take up the role, which slowed onboarding and delayed fresh fund launches.

PAN issuance for new FPIs had been impacted over the past month, with at least 20 newly registered FPIs currently awaiting PAN allotment despite completing registration formalities, according to sources.

Following consultations with the Income Tax Department, SEBI is understood to have clarified via email on Wednesday that banks and brokers acting as representatives for offshore funds would not be exposed to tax liability on behalf of their clients. This clarification is expected to help ease the current bottleneck in FPI onboarding and PAN issuance, market participants said.

By Akshata Gorde, Mumbai.