Coal, aluminium & gold likely to gain from Iran war
Subramani Ra Mancombu Chennai
Coal prices have increased by 18 per cent and aluminium by 6 per cent while gold stands to gain significantly due to the hostilities in the Persian Gulf with the US and Israel pitted against Iran.
“Following the US-Israeli strikes on Iran over the weekend of February 28-March 1, we think gold could reach a new all-time-high above $5,600/oz this week if no signs of de-escalation materialise,” said research agency BMI, a unit of Fitch Solutions.
Gold, which soared to over $5,350 an ounce at the beginning of the week, pared its gains on a strong dollar and fears of a hike in interest rates to below $5,200 by Wednesday evening.
CASH FOR LIQUIDITY
However, analysts said that the selling in gold seen recently, leading to prices see-sawing, is because investors needed cash for liquidity.
Last week, just before the hostilities broke out, ING Think, the financial and economic analysis arm of Dutch multinational financial firm ING, said that though the momentum in gold may moderate, structural drivers underpinning the market are firmly in place and, in some cases, are strengthening.
“...We think gold can still trade higher this week, potentially reclaiming $5,600/oz and posting a fresh all-time-high,” said BMI.
TWO REASONS
It attributed two reasons to this. The first was the lack of certainty surrounding the duration of the current geopolitical risk premium in oil prices.
The second factor for gold being bullish stems from physical disruption to the bullion market if flights are unable to transit through Dubai, which is one of the world’s largest gold refiners.
ING Think said the escalation in the conflict in the Persian Gulf increased upside risks to physical aluminium premiums, rather than materially tightening global supply.
“The Middle East accounts for around 8 per cent of global aluminium capacity and is heavily reliant on the Strait of Hormuz for both metal exports and alumina imports, with key producers being Saudi Arabia, the UAE and Bahrain,” it said.
BMI expects aluminium to see the largest gains from disruption in the Middle East, with prices ruling near $3,350/tonne currently.
“Heightened risks of disruption in the Strait of Hormuz, a critical export corridor for Middle East aluminium producers, have compounded existing supply-side concerns. Collectively, the UAE and Bahrain accounted for an estimated 6 per cent of global aluminium output in 2025 (around 4.3 million tonnes),” it said.
FUEL SWITCH
Reports said aluminium also surged in view of Qatar halting production due to the tensions in the Persian Gulf region. It will take at least six months for production to resume at Qatalum, a joint venture between Qatar and Norsk Hydro ASA.
BMI said aluminium prices will likely remain near $3,300/tonne in the coming weeks. Any further material escalation would amplify supply-side pressures and present significant upside risk.
BMI said it sees upside risk for seaborne prices of thermal coal if the Strait of Hormuz disruption affects the availability of Qatari liquefied natural gas (LNG). Qatar has shut down its LNG facilities, a rate event, in view of the crisis after Iranian drones attacked the country’s LNG hub.
“Gas prices have already spiked, with benchmark Henry Hub prices up almost 4 per cent and approaching $3/MMBtu. If the availability of Qatari LNG is constrained for more than a week, a potential winner would be seaborne thermal coal,” said the research agency.
This would be a temporary and significantly more limited repeat of the situation when the Ukraine war broke out in 2022. On Wednesday, Newcastle thermal coal futures (May) ruled at $138 a tonne, a 16-month high.
Qatar accounts for 80 per cent of LNG supply in Asia and 15 per cent globally. Though coal trade is not carried through the Strait of Hormuz, expectations of Japan and South Korea switching to coal have raised prices of Australian and Indonesian coal by 15 per cent since the beginning of this week.
India showing renewed interest in buying Russian crude: Deputy PM
Press Trust of India Moscow
Moscow on Tuesday claimed that India has signalled “renewed interest” in importing larger volumes of Russian crude oil amid disruptions in energy supplies following the closure of the Strait of Hormuz after the US-Israeli strikes on Iran.
“Yes, we are getting signals of renewed interest from India,” Deputy Prime Minister Alexander Novak told the state-run TV Rossiya 1 on the sidelines of an event in Moscow.
HORMUZ STRAIT CHOKE
Nearly a fifth of the world’s oil supplies and a significant share of liquefied natural gas exports pass through the narrow Hormuz Strait linking the Persian Gulf with global markets.
Any prolonged restriction on the traffic through Hormuz threatens to disrupt energy supplies to major importers, including India, China and Japan. This in turn will potentially drive up global crude prices.
Iran war: India’s smartphone exports may take a blow on disruption to air route, key transfer hubs
Sindhu Hariharan Chennai
With the US/Israel-Iran war turning more complex and prolonged, India’s export momentum in smartphones is likely to come under strain.
India exports smartphones through the air route, with shipments routed to key markets via connecting flights. Dubai International Airport and Hamad International Airport in Qatar serve as major transshipment hubs for onward shipments to Europe, the US and Africa. The security situation in the Gulf countries and the resulting closure of air routes are set to impact this well-oiled export chain.
COST PRESSURE
Surging oil prices triggered by the conflict are also likely to drive up the cost of dollar-denominated import of components such as chipsets and camera modules. These factors, combined with rising freight costs, make exploring alternative export modes more expensive.
If the war prolongs beyond a week or 10 days, exporters might consider chartering flights, but industry sources noted that would come at a stiff cost, especially in the current environment.
Pankaj Mohindroo, Chairman of the India Cellular and Electronics Association (ICEA), said that any disruption in Middle East airspace or key trade corridors could create short-term logistical challenges. If instability persists for a longer period, exports may face temporary delays.
‘TRADE WILL STABILISE’
“However, India’s growing role in global electronics manufacturing and its expanding presence in Middle East markets provide structural strength," Mohindroo said. He added that even in a prolonged scenario, trade flows are expected to eventually stabilise.
The UAE is a vital market for India, serving as a major destination that accounts for approximately 10–13 per cent of India’s overall smartphone exports. In the first nine months of FY26 (April-December), the UAE imported $4.1 billion worth of electronics items from India.
Red flags in corporate tax revenue
Lokeshwarri SK
The new corporate tax regime, launched in 2019, had delivered a massive cut in corporate tax with effective tax rate lowered from the highest rate of 35 per cent to 25 per cent. Companies in the new corporate tax regime, however, had to forego all tax exemptions, incentives or deductions, including MAT credit.
If we take stock of the situation six years later, Indian companies have certainly benefitted from the tax cut. Effective tax rate of all companies has moved down from 29.5 per cent in FY18 to 22.5 per cent by FY24. But the expectations that private capex cycle will take off or job creation will improve have not been met. It can be argued that the demand contraction seen during the pandemic had impeded capital investment or that new capacities are being added in a few sectors such as chemicals, renewables and semiconductors, where demand is good.
Be that as it may, another interesting aspect is that many companies have not yet moved to the new corporate tax regime. Of the total taxable income in 2023-24, around 38 per cent continued to be under the old tax regime, paying tax at the rate of 30 per cent plus surcharge and cess.
This indicates that companies, especially the larger ones, have carried forward tax credits which they are using to reduce their tax liability. The effective tax liability of companies with taxable income exceeding ₹500 crore was just 18.8 per cent, as per latest available data.
With the decline in effective tax rate, corporate tax collections have also been decelerating. The Centre’s move to clamp down on credits given for Minimum Alternate Tax and nudging companies to move to the new tax regime, need to be seen against this background.
LARGE COMPANIES, LOWER TAX
Larger companies, which account for a lion’s share of taxable income, always paid lower tax, thanks to the battery of tax consultants employed by them to advise them on innovative means to reduce tax liability. But the gap between the tax rate of small and big companies appears to have widened of late.
The effective tax rate of companies with profit before tax between 0 to 1 crore was 23.68 per cent in 2023-24. The tax rate moves lower as the size of the company increases with those with profit over ₹500 crore paying tax at the rate of 18.8 per cent only.
Further, the effective tax rate of larger companies has moved down 7.5 percentage points since FY18. The current rate of 18.8 per cent is below the effective tax rate of 22 per cent in the new corporate tax regime. With losses mounting during Covid, companies seem to have accumulated MAT credit which has helped them reduce their tax liability in the years following the pandemic. Other incentives which companies have been using as of FY24 are tax holidays provided to exporters located in Special Economic Zones, accelerated depreciation provided to manufacturing, power generation and transmission businesses, deduction of profits of infrastructure companies and deduction of profits in generation, transmission and distribution of power.
WHAT THE BUDGET DID
In an ideal situation, it is good to lower tax incidence of companies so that they can improve their output and contribute to economic growth. But in the face of sluggish private capex and stagnating pay scales of private sector employees, the Centre cannot be faulted for plugging the gap that is allowing larger companies to lower their tax liability inordinately. With the gross tax revenue getting hit due to income tax and GST rationalisation, the Centre appears to be turning its attention towards corporate tax revenue now.
The Union Budget 2026 laid down that the companies in the old regime will no longer be allowed to use credit brought forward for MAT, to bring down their corporate tax liability. Such set off was being allowed only for companies in the new tax regime, and that too only partially. The rate of MAT was lowered from 15 to 14 per cent.
MAT was introduced in 1987 to check companies from claiming various deductions and exemptions to avoid paying tax. Therefore, if the tax liability of a company was lower than 15 per cent of its book profit, the company was required to pay MAT at the rate of 15 per cent to the exchequer.
However, companies were given a leeway that when the company paid MAT, the difference between tax liability and MAT paid could be carried forward for 15 years and used to reduce tax liability in future.
The Centre has now done away with the practice of allowing the excess tax paid under MAT to be carried forward. Any MAT credit brought forward from earlier years can be set off only up to 25 per cent of the tax liability for the year, and only in the new tax regime.
COLLECTIONS SLOWING
The move to restrict MAT credit and nudge companies to move to the new tax regime appears to be a result of slowing corporate tax collections in recent times.
While the compounded annual growth in income tax collections was 15 per cent between FY18 and FY27 (BE), the growth in corporate tax is a much lower 8.9 per cent. In FY18, corporate tax yielded ₹5.7 lakh crore, amounting to 58 per cent of direct tax collections. But by FY27 (BE), corporate tax is expected to raise ₹12.3 lakh crore, accounting for only 46 per cent of total direct tax collections.
The slowing corporate tax collections are not due to decline in profitability, since profit growth of companies has picked up since FY24 with net profit growing in high double digits in many years. With companies becoming increasingly reluctant to pay tax, it will not be surprising if the Centre now turns its attention towards more measures to improve corporate tax collections.
SEBI revamps AIF reporting norms
Mumbai: SEBI has overhauled the regulatory reporting framework for Alternative Investment Funds (AIFs), replacing the existing quarterly activity report regime with a combination of annual and limited quarterly filings, aimed at easing compliance burdens.
In a circular issued on Wednesday, it said that AIFs will now be required to submit a comprehensive Annual Activity Report within 30 calendar days from the end of each financial year. The first such report, for the year ending March 2026, must be filed by May 31, 2026, through the SEBI Intermediary Portal.
AIFs will also file a limited Quarterly Activity Report in a revised format within 15 days of the end of each quarter, starting with the quarter ending June 2026. No separate quarterly report will be required for the March quarter, as the annual filing will subsume those data points.
The revised reporting formats will be hosted by the Indian Venture and Alternate Capital Association, which will also assist AIFs in implementation.
OUR BUREAU
‘Speed is not always a virtue in finance’
Speed is not always a virtue in finance as it sometimes hides weakness, according to Swaminathan J, Deputy Governor, RBI. “A product can reach ten million people within months. A credit model can approve loans in seconds. A payments platform can process massive volumes,” he said. “This scale is powerful, but it also means that harm can scale quickly if design is poor, controls are weak, or incentives are misaligned,” Swaminathan stated in a recent speech at the 3rd International Finance and Accounting Conference at the Indian Institute of Management (IIM), Jammu. He noted that technology is a force multiplier, amplifying both good and bad design.
NO SHORTCUTS
“Eventually, the future will reward institutions that can combine efficiency and innovation with prudence, and growth with resilience,” the Deputy Governor said. He cautioned that while the “easy path”—such as shortcuts in due diligence, compromises on disclosure, or aggressive sales targets—might be tempting, these compromises compound over time.
“In the age of dashboards and AI, it is easy to forget that accounting is a discipline of clarity,” he added. It forces the recognition of losses, the admission of uncertainty, and the prudent valuation of assets. He observed that the true difference between a good institution and a weak one is not growth speed, but how truthfully it measures itself. Many financial problems start small, often literally in the “small print”.
Finance professionals should therefore endeavor to design and sell products that are suitable, transparent, and fair. The best leaders prevent harm before it occurs rather than waiting for problems to become headlines.
Our Bureau Mumbai
Can Iran sustain a blockade of the Strait of Hormuz?
By N. Madhavan
Iran has ‘closed’ the Strait of Hormuz, causing oil and gas prices to spike. But how long can Iran realistically block this critical passageway, which connects the Persian Gulf to the Arabian Sea and carries a fifth of global oil, gas and fertilizer shipments? Mint explores:
Has Iran shut the Strait of Hormuz?
On Monday, the Islamic Revolutionary Guard Corps (IRGC), a branch of Iran’s armed forces, announced that the Strait of Hormuz was closed and attacked a few ships passing through the maritime choke point. The announcement quickly caused panic, and most shipping lines have since suspended crude oil, fuel and liquefied natural gas (LNG) shipments through the passageway. On Monday, only 28 vessels transited the shipping lane, against the daily average of 138. Oil prices jumped sharply, crossing $80 per barrel, and are likely to soar further if the US-Israel-Iran war drags on.
Has Iran ever closed the strait before?
Iran has never shut the strait for an extended period, though it has threatened to do so several times since the Islamic Revolution in 1979. However, experts suggest this time is different. The Islamic republic is considerably weaker, and closing the shipping route is seen as its best way to inflict pain on the US, its Arab neighbours, and the rest of the world via sky-high oil prices. While the Iranian regime may not be able to implement a total physical blockade due to a strong US naval presence, it can certainly scare ships away with targeted missile attacks.
Can Iran effect a long-term blockade?
Sustainability will depend on Iran's residual military capabilities, what the new leadership wants, and whether there is a change of regime. However, the strait is a double-edged sword for Iran. While it is a powerful strategic lever, a total shutdown would also paralyze the Iranian economy, as nearly 95% of its oil exports—about 1.6 million barrels per day, destined primarily for China—pass through these waters. China gets the bulk of its crude needs from West Asia and will certainly pressure Iran, its ally, to reopen the strait.
How would this affect India?
India is highly vulnerable to any long-term disruption of crude oil supply from West Asia. In January, 55% of its oil purchases (roughly 2.74 million barrels a day) came from this region. India is also scaling back its reliance on Russian crude, with market share plummeting from 33% in 2025 to just 19.3% in January—a 44-month low. Major suppliers include Iraq, Saudi Arabia, and the UAE. Higher oil prices will increase India's import bill and fuel inflation.
What happens if the blockade sustains?
West Asian countries such as Saudi Arabia, Iraq, Qatar, Kuwait, and the UAE depend on the Strait of Hormuz to ship their oil and gas. Experts fear an extended disruption could send crude oil prices above $100 per barrel. Gas prices in Europe have already shot up significantly as a result.
Sebi overlap rules likely to push MFs to passive funds
By Apoorva Ajith
Asset management companies (AMCs) may double down and innovate more on passive products following the revision of mutual fund categorization norms, offering investors a wider choice of investment options. Passive funds typically track indexes and do not require active management. While they have been growing steadily in India, a new cap on portfolio overlap may catalyze greater innovation and growth in such products.
The New Mandate
The Securities and Exchange Board of India (Sebi) mandated fund houses on 26 February to ensure that schemes offered within a single category are meaningfully differentiated. The regulator has capped the portfolio overlap between thematic and sectoral funds and other equity schemes at 50%, excluding large-cap funds.
While Sebi generally permits only one scheme per category in most equity segments, there was previously no limit on the number of sectoral and thematic funds an AMC could launch. This led to a surge in offerings built around similar stocks but packaged under different narratives.
Constraints on Active Strategies
With the 50% cap now in place, maintaining multiple differentiated active strategies within a constrained universe of stocks may prove difficult for fund houses. Passive funds, by contrast, offer a clearer template for expansion. They can be launched across three primary categories: index funds, exchange-traded funds (ETFs), and Fund of Funds (FoFs).
Swarup Mohanty, vice chairman and CEO at Mirae Asset Investment Managers, noted that while categorization has restricted active fund launches, "mutual funds can innovate in passives," adding that real innovation happens in passives across the globe.
A Trigger for Passive Growth
Experts believe these regulatory restrictions will serve as a significant catalyst. Archit Doshi, senior vice president at Prabhudas Lilladher Capital Group, stated, "The restrictions on portfolio overlap can be a trigger for passive investments."
The shift is already visible in the data:
- Passive assets under management (AUM) in India have risen from 7.3% of total mutual fund assets to 19.02% over the past five years (as of January).
- Industry leaders expect India to follow developed markets like the US, where passives form 54% of total mutual fund assets.
The Next Phase: Factor-Based Funds
Innovation in the passive space is expected to move toward factor-based passive funds. These are sub-categories that track indices constructed on specific parameters such as:
- Higher returns on equity (ROE)
- Stronger dividend yields
- Lower volatility or quality metrics
AMCs may also look at creating more sector-specific, structured products within ETFs and index funds, such as those focused on electric vehicles (EVs). While some experts, like Anil Ghelani of DSP Mutual Fund, suggest the shift may not happen "exponentially" overnight, the new guidelines provide clear flexibility for passives that active funds now lack.
Japan in talks with India for Rajasthan rare earth mining
Reuters NEW DELHI
Japan is in talks with India to jointly explore rare earth deposits in the desert state of Rajasthan, two people familiar with the discussions said, as Tokyo seeks to reduce reliance on China for supplies critical to magnet manufacturing.
Exploring New Deposits
Last month, India’s mines minister G. Kishan Reddy announced that three hard rock rare earth deposits containing 1.29 million tonnes (mt) of rare earth oxides had been identified in Rajasthan and Gujarat. Building on a preliminary agreement regarding critical minerals signed between Japan and India last year, Tokyo has expressed interest in the Rajasthan sites and plans to send experts to conduct evaluations.
In Rajasthan, the Japanese government would likely provide extraction technology and funding in exchange for a stable offtake of rare earths. Hard rock deposits require specific extraction techniques that India currently does not possess.
Strategic Diversification
Naoki Kobayashi, deputy director at Japan’s ministry of economy, trade and industry (METI), confirmed that Japan is examining mining projects globally to diversify mineral supplies, though he denied discussions on specific corporate partnerships or technology provision in Rajasthan at this stage.
Both nations share the goal of cutting dependence on Chinese imports. Rare earths are essential for the production of permanent magnets used in:
- Electric vehicle (EV) motors
- Wind turbines
- Fighter jets and drones
Geopolitical Tensions
The talks come amid escalating disputes between Beijing and Tokyo. Last week, China prohibited the export of dual-use items—materials used for both civilian and military purposes—to 20 Japanese entities that Beijing claims supply Japan’s military.
India’s ministry of mines and the Japanese embassy did not respond to requests for comment.
Bank liquidity may come under stress
By Subhana Shaikh
Liquidity buffers of banks are expected to come under stress in the March quarter as large volumes of short-term certificates of deposit (CDs) raised in recent months mature in March, according to analysts.
Heavy Reliance on CDs
Market participants noted that banks leaned heavily on CDs in December and even more so in January to shore up liquidity amid tight funding conditions and sluggish retail deposit growth. CDs are short-term borrowing instruments with maturities ranging from seven days to one year, allowing banks to raise funds from institutions by offering higher interest rates than those paid to retail depositors.
As these instruments fall due, repayments will cause a dip in current liquidity ratios. Anil Gupta, senior vice-president at Icra, stated that CDs outstanding for banks have increased to an all-time high during the last decade, driven by record issuances in December, January, and February.
Regulatory Pressure: The LCR Challenge
The Reserve Bank of India’s liquidity coverage ratio (LCR) norms require banks to hold sufficient high-quality liquid assets to protect against short-term liquidity stress. As CDs near maturity, they are reflected as outflows in the next 30 days, which drags down the LCR.
Specific impacts on major banks during the December quarter (Q3) include:
- State Bank of India (SBI): LCR fell to 125% from 144% in the prior quarter.
- HDFC Bank: LCR dropped to 116% from 120%.
- ICICI Bank: Liquidity buffer dipped to 125%.
A senior treasury official at a private sector bank remarked that the heavy raising of CDs is itself a sign that LCR is under stress because banks are failing to secure sufficient retail deposits.
Maturity Bulge Data
The spurt in CD issuances reflects a widening gap where credit growth (13.4% as of February 15) continues to outpace deposit accretion (11.2%). Issuance totals were as follows:
- December 2025: ₹1.56 trillion.
- January 2026: ₹1.48 trillion.
- February 2026: ₹2.67 trillion.
Systemic Risk or Regular Pattern?
While some expect a sharp decline in LCR for Q4FY2026, others believe the situation is manageable. Rajeev Pawar, treasury head at Ujjivan Small Finance Bank, dismissed fears of a systemic crisis, stating that there is no liquidity crisis in the system right now. He argued that banks should be able to roll over these instruments as part of a regular market pattern. However, analysts at Icra expect the decline to only be partially recouped by revised LCR norms effective April 1, which will feature lower outflow rates on certain other deposits.
Toyota founding family is biggest winner in unit takeover battle
Bloomberg
For Akio Toyoda, the all-but-certain mega buyout of Toyota Industries Corp. is the ultimate legacy play. It will reshape Japan’s biggest business group, tighten his family’s grip over the Toyota group and end a protracted standoff with an American shareholder activist that tested Japan Inc.’s embrace of corporate governance reform.
The Buyout Deal
In what may be the largest-ever Japanese buyout deal, the century-old maker of textile looms that spawned the world’s largest carmaker is poised to become part of a new power centre after an unprecedented battle with Elliott Investment Management, one of the world’s most aggressive activist funds. After forcing Toyota to up the ante twice with higher bids, Elliott agreed on Monday to tender its shares for ¥20,600 apiece, valuing the company at ¥6.7 trillion ($43 billion).
The privatization of Toyota Industries is intended to reinvigorate the affiliate, remaking it as the vanguard of the group’s evolution into next-generation mobility and streamlining its equity holdings. However, critics view it as a power grab. Nicholas Benes, founder of the Board Director Training Institute of Japan, noted it appears to be a "consolidation of influence" to keep the Toyoda family in control of certain assets. A Toyota spokesperson pushed back, stating Akio Toyoda's investment is intended to support the framework as a "capitalist" rather than to lead to control over the group.
A Shield Against Activism
The drama unfolds as Japan’s government pushes companies to undo decades-old cross-shareholdings. Toyota Motor Corp. stock held by affiliates and financial partners has declined to roughly half the levels of five years ago. This unwinding of equity ties has unnerved Japanese industry leaders who worry that activists and short-term investors will pressure them to reduce long-term capital investments.
For the Toyoda family, which owns less than 0.2% of Toyota Motor directly, the loosening of these bonds threatens their role as safekeepers of the founding philosophy. Akio Toyoda saw shareholder backing for his board appointment steadily erode leading up to 2024, signaling that founding family heirs can no longer take their board seats for granted.
The Holding Company Strategy
Behind the scenes, exploratory discussions occurred regarding adopting a holding company structure for the entire group to exert influence with little need for public disclosure. Instead, the group settled on privatizing Toyota Industries, the group’s "progenitor" which owns small stakes in many other Toyota companies worth almost as much as its own market capitalization.
To handle the transaction, Toyota used an obscure subsidiary, Toyota Fudosan Co., an unlisted property manager chaired by Akio Toyoda. Toyoda himself pledged ¥1 billion of his own money to the bid, further aligning his family's interests with the group. Independent analyst Travis Lundy suggested this structure gives Toyoda immense control and could make the family "immensely wealthy".
Posterity and Legacy
Akio Toyoda has spent his tenure transforming Toyota into a global powerhouse, maintaining the title of the world’s largest carmaker for six years. Despite his success, his leadership has faced challenges from non-family executives in the past, such as Hiroshi Okuda, who famously stated that "nepotism just doesn’t belong in our future".
Toyoda appears focused on posterity. His son, Daisuke Toyoda (37), is a senior vice president at Woven by Toyota, the subsidiary developing self-driving software. Daisuke is seen as a potential future CEO contender, and the family is keen to maintain a voice in Toyota Motor’s future regardless.
Future Outlook
While Toyota denies plans to transition to a formal holding company structure, the privatization of Toyota Industries serves as a significant test case for other blue-chip Japanese firms. One potential scenario is for Toyota Industries to eventually relinquish its holdings in Toyota Motor and become a holding-like entity itself. As Toyoda stated in a June 2025 video, "If you don’t take action, you can’t create the future".
The ‘orange economy’ offers a path to inclusive growth
By Tulsi Jayakumar
A new term that entered the lexicon after India’s budget for 2026-27 was the ‘orange economy.’ Synonymous with the creative economy, it is emerging as a formidable engine of growth that transcends traditional industrial boundaries. Once viewed as niche, the intersection of culture, technology and intellectual property now accounts for roughly 3.1% of global GDP and 6.2% of all employment. For a country like India, where recent budgetary initiatives recognize the strategic value of creative assets, the growth of this sector offers more than just economic expansion; it presents a data-driven pathway to greater gender parity and social inclusion.
The Creative Advantage for Women
The creative economy is inherently decentralized and knowledge-based, offering a significant ‘creative advantage’: women make up almost half the workforce in cultural and creative industries worldwide, ranking the sector fourth globally in terms of female employment. In many developing countries, the gender gap is not only narrowing within the creative sector but also reversing in some sub-sectors.
This trend is being helped along by targeted interventions in regions with demographic profiles similar to India’s. For instance:
- The ‘Drone Divas’ initiative in South Africa trained women in drone operation for creative fields like cinematography and architecture, bridging digital and gender gaps in a male-dominated technical space.
- In Kenya, a ‘Wana Wake’ music performance series and all-women sound-engineering programmes demonstrated that when structural barriers—such as a lack of female mentors—are addressed, women thrive in technical-cultural roles previously closed to them.
Social Inclusion and Identity
Creative expressions often serve as a medium for social commentary and advocacy, allowing communities that have historically been sidelined to reclaim their identity and economic agency. In post-apartheid South Africa, the creative sector has been instrumental in providing opportunities for non-Caucasian Africans, who now make up over 70% of the cultural workforce. The emancipatory potential of the arts is particularly relevant for India’s diverse and youthful population. With nearly 50 million people employed in the creative sector globally—more than three times the number in the automotive industry—the scale of job opportunities is immense.
Bridging the Digital Divide
The shift toward creative services is crucial for social inclusion as it allows a digital artist in a Tier-2 Indian city to compete in a global marketplace. However, with much of rural India lacking high-speed internet, the budgetary push must be paired with aggressive rural connectivity to ensure that the orange economy does not accentuate the digital divide or remain an exclusively urban phenomenon.
Another required policy intervention is a focus on ‘formalization’ to help creators register their businesses and gain access to growth resources and finance. Women in the crafts and fashion sectors often perceive their work as a side activity rather than a formal enterprise; transitioning from a hobby to a sustainable creative business is a significant step toward empowerment.
Resilience and Sustainable Goals
While world trade in goods has seen steep declines, trade in creative services has remained remarkably resilient. This stability provides a vital safety net for informal workers who are most vulnerable to economic shocks. Ultimately, the orange economy is not a zero-sum game; it is a feasible development option that aligns with several Sustainable Development Goals, including SDG 8 (decent work) and SDG 5 (gender equality).
For India to harness this, the policy focus must shift to a holistic ecosystem approach. This includes training in both creative and business skills, ensuring that ‘stage-ready’ artists are supported by ‘market-ready’ teams of managers and technical experts. By investing in creative industries, India can turn its vast cultural heritage into a modern economic engine that rewards originality while helping dismantle social and gender-based hierarchies.
War meets peak OMC earnings
By Ananya Roy
The market’s reaction to the joint US-Israel strikes on Iran wasn't exactly subtle. The war is choking the Strait of Hormuz, hurting tanker flows and causing oil markets to react. Brent is now over $80 a barrel.
Back home, the Nifty 50 index fell 1.2% on Monday, while shares of state-run oil marketing companies (OMCs)—Bharat Petroleum Corp. (BPCL), Hindustan Petroleum Corp. (HPCL) and Indian Oil Corp. (IOCL)—declined around 4%. Even before the latest escalation in Iran, stock prices remained stagnant despite a blockbuster December quarter (Q3FY26) in which OMCs doubled their combined profits year-on-year. The geopolitical developments since then have pushed Brent crude up from $60 a barrel in early January to over $80 a barrel.
The Hormuz Dependency
In light of Trump’s penal tariffs on Russian crude, India now relies more on oil from the Gulf. More than half of India’s imported crude makes its way through the Strait of Hormuz.
OMC margins are composed of two parts:
- Refining margins: Earned from refining crude into petroleum products.
- Marketing margins: Earned from selling refined products at retail pumps.
While refining margins are driven by international spreads, typically larger marketing margins are constrained domestically by indirectly capped prices.
Margins Under Pressure
Marketing margins will bear the brunt of the recent escalation. When crude touched $70 a barrel, diesel marketing margins were estimated at ₹1 a litre (down from ₹3 in Q3). With oil over $80 a barrel, diesel margins are likely to have turned negative.
Petrol had held up better until last week, with margins at ₹7 a litre, but rising crude means petrol cracks are swinging violently. According to JM Financial, every $1 per barrel rise in crude above $70 could compress marketing margins by ₹0.55 a litre.
Varying Impact by Company
- IOCL: The largest domestic OMC by capacity. It has some petrochemical exposure to offset marketing margin hits. Its marketing-to-refining ratio for FY27 is estimated at 1.2, the lowest among OMCs. Its stock has held up better, rallying almost 8% in 2026.
- HPCL: Stock is down 15% after Q3 earnings disappointed. Its marketing-to-refining ratio is the highest at 2.1, making it more vulnerable to marketing margin shocks.
- BPCL: Sits in the middle with a ratio of 1.4. It has seen some investor optimism regarding greenfield expansion plans, with the stock down less than 2% this year.
Outlook
Rising geopolitical tensions have made investors less tolerant of expensive multiples. With stocks trading at an EV/Ebitda of around 6, the risk-reward profile appears skewed against investors. While India can manage short disruptions with its strategic petroleum reserves and floating Russian inventories, a prolonged war raises the probability of repeated margin shocks.
Allu Arjun row: going viral comes at a cost for celebrities
By Lata Jha NEW DELHI
The controversy involving actor Allu Arjun taking legal action against a brand strategist over remarks made on a podcast has highlighted a growing challenge for celebrities: reputational risk in the age of short-form videos and AI-generated content. This recent episode underlines how informal digital formats—often driven by virality and algorithmic amplification—have widened the exposure of public figures to allegations that can spiral into legal and commercial consequences.
The Podcast Dispute
Last month, a brand strategist on a podcast claimed that Arjun’s team had issued a list of 42 "dos and don’ts" for conducting interviews with him, including instructions not to look into his eyes or shake hands. The actor’s team refuted the claims and initiated legal action, after which the strategist retracted her statement and issued a public apology. However, despite the retraction, the damage to his reputation was significant.
A Growing Digital Threat
Experts say such incidents illustrate how podcasts, product reviews, and "expose-style" YouTube and Instagram Reels content increasingly frame celebrities as difficult or even unethical. The risks are compounded by AI-led deepfakes that create false scenarios involving public figures. Other stars, including Aishwarya Rai Bachchan, Ranveer Singh, and Vivek Oberoi, have also had to approach the courts to stop AI-generated videos or fake accounts from tarnishing their images.
The Loss of Traditional Filters
Rajnish Rawat, co-founder and CEO at Social Pill, notes that the digital space has removed the traditional filters, such as editors or publicists, who used to fact-check stories. Now, with the explosion of long-form podcasts, anyone with a microphone can share a rumor that reaches millions in minutes. Aishwarya Kaushiq, partner at BTG Advaya, adds that platform designs often reward engagement-maximizing content, meaning sensational or provocative claims are more likely to be boosted and circulated out of context.
Aggressive Management Strategies
As a celebrity’s image becomes more valuable in the digital economy, unverified claims can lead to suspended endorsements and contract disputes. Consequently, management and legal teams are becoming far more aggressive. According to Rawat, teams are now using digital listening tools to catch viral clips in their first few hours, allowing them to counter the narrative or issue a legal notice before the content becomes mainstream news. Experts emphasize that any statement framed as an "insider disclosure" of misconduct can have direct and quantifiable consequences on a celebrity’s commercial value.
