OECD Taxing Wages 2026: Progressivity of Labour Taxation

 The OECD Taxing Wages 2026 report utilizes several core indicators to compare the tax and benefit positions of employees and the associated labor costs for employers across the 38 OECD member countries. These indicators are essential for understanding how personal income taxes, social security contributions (SSCs), and cash benefits affect household disposable income and work incentives.

1. The Tax Wedge (Average and Marginal)

The tax wedge is the report’s primary indicator for measuring the overall tax burden on labor.

• Average Tax Wedge: This measures the difference between the total labor costs to the employer and the corresponding net take-home pay of the employee. It is calculated by expressing the sum of personal income tax, employee and employer SSCs, and payroll taxes—minus any cash benefits—as a percentage of total labor costs.
• Marginal Tax Wedge: This measures the portion of an increase in total labor costs that is paid in taxes and SSCs, less cash benefits. It highlights the "tax bite" on an extra unit of income, which is a critical factor in labor supply decisions.

2. Personal Average Tax Rates

Unlike the tax wedge, these indicators focus solely on the burden faced by the employee, excluding employer-paid contributions.

• Gross Personal Average Tax Rate: This expresses personal income tax and employee SSCs as a percentage of gross wage earnings.
• Net Personal Average Tax Rate: This corresponds to the gross measure but subtracts cash benefits (such as child-related transfers) from the tax liability. This indicator is particularly useful for showing the actual disposable income available to families.

3. Net Personal Marginal Tax Rate

This indicator shows the part of an increase in gross wage earnings that is paid in personal income tax and employee SSCs, net of cash benefits. It is often higher than average rates in systems where income-tested benefits are phased out as earnings rise, as the loss of a benefit compounds the increase in tax payable.

4. Tax Elasticity

The report examines the elasticity of after-tax income, which measures the percentage increase in net income relative to the percentage increase in gross wages or labor costs.

• An elasticity of 1.0 indicates a proportional tax system.
• An elasticity below 1.0 indicates a progressive system (where tax rates rise faster than income).
• An elasticity above 1.0 indicates a regressive system.

5. Statutory Progressivity Indicator

A central feature of the 2026 report is the analysis of statutory progressivity, which builds on an indicator first introduced in 2013. It measures the change in the average tax wedge for each percentage point increase in income (expressed as a multiple of the average wage) over a specific range, such as 50% to 500% of the average wage.

Larger Context: 2025-2026 Trends

In the context of the 2026 report (which primarily analyzes data from 2025), these indicators reveal several key trends:

• Rising Tax Burdens: Average tax wedges for single workers earning the average wage rose in 24 OECD countries in 2025, driven largely by fiscal drag (where inflation pushes earners into higher brackets) and increases in social security contribution rates.
• Household Composition Matters: Tax systems remain most progressive for households with children and those at lower earnings levels due to the concentrated impact of fixed tax reliefs and means-tested cash transfers.
• Historical Highs: For most household types, the OECD average tax wedge in 2025 reached its highest level since before the COVID-19 pandemic.

The 2025 key findings, as detailed in the Taxing Wages 2026 report, center on a continued rise in the tax burden on labor across most OECD countries, with particularly notable impacts on households with children. These findings reflect the first time since the phase-out of COVID-19 support measures in 2022 that average effective tax rates increased for all eight household types analyzed.

1. Rising Tax Wedge for Single Workers

The average tax wedge—the total taxes on labor paid by both employees and employers, minus benefits, as a percentage of total labor costs—for a single worker earning the average wage rose to 35.1% in 2025.

• Widespread Increases: The tax wedge for this group increased in 24 OECD countries, fell in 11, and remained unchanged in three.
• Highest Levels: This average of 35.1% represents the highest level since 2016.
• Regional Variation: The largest tax wedges were observed in Belgium (52.5%), Germany (49.3%), France (47.2%), and Austria (47.1%), while the lowest were in Chile (7.5%) and Colombia (0.0%).

2. Concentration of Increases in Households with Children

A significant finding for 2025 is that tax burdens for households with children increased more sharply than for single workers, reducing the "fiscal advantage" typically enjoyed by families.

• One-Earner Couples: The average tax wedge for a one-earner couple with two children rose by 0.46 percentage points to 26.2%.
• Single Parents: The largest increase across all eight household types was for a single parent earning 67% of the average wage, whose tax wedge rose by 0.52 percentage points to 16.3%.
• Narrowing Gap: The difference between the tax wedge of a single worker and a one-earner couple with children narrowed by 0.31 percentage points in 2025, following a similar narrowing in 2024.

3. Post-Pandemic Context and Historical Trends

The report places these findings in a broader chronological context, noting that the OECD average tax wedge for most household types is now at its highest level since before the COVID-19 pandemic (specifically, since at least 2018). However, when looking at a 25-year horizon, the 2025 tax wedge remains below the levels seen in 2000.

4. Drivers of Change: Fiscal Drag and Policy

The findings identify several key drivers for the rising tax burdens:

• Fiscal Drag: This was a primary cause in many countries, where inflation pushes earners into higher tax brackets because tax thresholds or credits are not adjusted for inflation.
• Social Security Contributions (SSCs): Increases in SSC rates for both employers and employees (e.g., in the UK, Germany, and Israel) contributed significantly to the higher tax wedges.
• Policy Reforms: Specific reforms, such as Estonia's increase in the personal income tax rate from 20% to 22%, also drove the increases. Conversely, reforms in Australia reduced statutory rates, leading to a decrease in their tax wedge.

5. Wage and Real Income Growth

Despite the rising tax burden, there was positive movement in gross earnings:

• Nominal and Real Growth: Average wages increased in nominal terms across all 38 OECD countries and increased in real terms in 35 countries.
• Post-Tax Real Income: The post-tax income of a single worker earning the average wage increased in 28 countries in real terms during 2025.

The Special Feature in the Taxing Wages 2026 report provides a comprehensive analysis of the statutory progressivity of labor taxation across the 38 OECD member countries. It examines how the tax wedge—the total taxes on labor paid by both employees and employers, minus benefits, as a percentage of total labor costs—varies across different earnings levels and household compositions.

1. Defining and Measuring Progressivity

The OECD defines a labor tax system as progressive if the average tax rates increase as income rises. To quantify this, the report utilizes a statutory progressivity indicator that measures the change in the average tax wedge for every one percentage point increase in gross earnings, relative to the national average wage. This analysis spans an earnings range from 50% to 500% of the average wage, broken down into seven distinct intervals.

2. Key Drivers of Progressivity

The Special Feature explores how different policy instruments contribute to the overall progressivity of a country’s tax system:

• Tax Reliefs and Cash Transfers: These are identified as the strongest drivers of progressivity, particularly at the lower end of the income distribution. Because these benefits are often fixed amounts or means-tested, they represent a much larger share of income for low-earners than for high-earners.
• Personal Income Tax (PIT): Progressive PIT schedules—where higher brackets apply to higher levels of income—consistently contribute to labor tax progressivity. This is the primary factor driving progressivity for households without children.
• Social Security Contributions (SSCs): The impact of SSCs is mixed. While they can be progressive at lower earnings due to specific reliefs for low-wage workers, they often become regressive at higher earnings levels because many countries implement contribution ceilings.

3. Core Findings for 2025

• Concentration at the Bottom: Progressivity is highest in the lowest earnings intervals, specifically between 50% and 67% of the average wage. In 25 OECD countries, the progressivity in this interval is at least three times larger than the average for the entire 50%–500% range.
• Household Impact: Systems are significantly more progressive for households with children. On average, the progressivity indicator for a household with children (0.79) is double that of a single worker (0.39).
• Country Variation: Statutory progressivity varies widely; France displays the highest progressivity indicator, while Hungary (which uses a flat-tax system) shows no progressivity as its tax wedge remain constant across all earnings levels.

4. Long-Term Trends (2000–2025)

The Special Feature finds that labor taxation has generally become more progressive since 2000, especially for families with children.

• The 2014–2019 Peak: The largest increase in statutory progressivity occurred during this period.
• Post-Pandemic Reversal: Between 2019 and 2022, progressivity increased as countries enacted support measures during the COVID-19 pandemic. However, this trend slightly reversed between 2022 and 2025, as many of these temporary measures were phased out.
• Static Top End: On average, the progressivity of the tax wedge for earnings above the average wage has not changed significantly since 2000.

5. Economic Context and Trade-offs

The report notes that concentrated progressivity at lower income levels can create high marginal tax rates for workers whose earnings rise just enough to lose eligibility for means-tested benefits. While these progressive structures support the disposable income of low-earning households, they can also reduce work incentives and impact broader economic variables like job mobility and economic growth.

The Taxing Wages 2026 report centers its analysis on eight specific household types to provide a standardized, cross-country comparison of how tax and benefit systems affect different demographic groups. These types are differentiated by their marital status, the number of children, and their earnings levels, expressed as a percentage of the national average wage (AW).

The Eight Illustrative Household Types

The report utilizes the following eight models to represent a broad range of social and economic circumstances:

1. Single individual, no children, earning 67% of the average wage.
2. Single individual, no children, earning 100% of the average wage.
3. Single individual, no children, earning 167% of the average wage.
4. Single parent, two children, earning 67% of the average wage.
5. One-earner married couple, two children, with the principal earner at 100% of the average wage.
6. Two-earner married couple, two children, with the principal earner at 100% and the spouse at 67% of the average wage.
7. Two-earner married couple, two children, with both earners at 100% of the average wage.
8. Two-earner married couple, no children, with the principal earner at 100% and the spouse at 67% of the average wage.

Methodological Assumptions

To ensure the data is comparable across all 38 OECD countries, the report makes several key assumptions for these households:

• Children: Any children in these models are assumed to be between the ages of six and eleven inclusive.
• Income Source: The household is assumed to have no other source of income besides employment and relevant cash benefits.
• Employment: All individuals are assumed to be full-time adult employees working in industry sectors B-N (ISIC Rev. 4).

Significance in the 2026 Report

Analyzing these distinct types allows the OECD to highlight how policy changes and economic shifts impact various groups differently. Key findings from the 2026 report (which covers 2025 data) include:

• Universal Increases: For the first time since 2022, the average effective tax rate increased for all eight household types across the OECD.
• Narrowing Fiscal Advantage: The tax wedge for households with children increased more sharply than for single workers. For example, the difference between the tax wedge of a single worker and a one-earner couple with children narrowed by 0.31 percentage points in 2025.
• Single Parent Vulnerability: The largest increase in the average tax wedge across all eight types was for a single parent earning 67% of the average wage, whose burden rose by 0.52 percentage points to 16.3%.
• Historical Highs: For most of these households, the OECD average tax wedge in 2025 reached its highest level since before the COVID-19 pandemic.

The methodology of the Taxing Wages 2026 report is designed to provide a standardized, comparative framework for analyzing the impact of personal income taxes, social security contributions (SSCs), and cash benefits on the disposable incomes of households and the labor costs faced by employers across all 38 OECD member countries. The core objective is to illustrate how these levies are calculated and to allow for meaningful cross-country quantitative comparisons.

Core Framework and Household Modeling

The report utilizes a model-based approach centered on eight specific household types. These models are differentiated by marital status (single vs. married), the number of children (none vs. two), and income levels expressed as a percentage of the national average wage.

• Employment Assumptions: All individuals in the models are assumed to be full-time adult employees who work for the entire year without interruptions for sickness or unemployment.
• Income Source: Households are assumed to have no other source of income except for employment earnings and relevant universal cash benefits from the government.
• Children: Any children in the models are assumed to be between the ages of six and eleven inclusive.

Defining the Average Wage (AW)

A critical methodological component is the Average Wage, which serves as the benchmark for all income calculations.

• Industry Classification: The standard calculation is based on industry sectors B-N as defined by the International Standard Industrial Classification of All Economic Activities (ISIC Revision 4). This includes sectors such as mining, manufacturing, construction, and various service activities.
• 2025 Estimates: Because final wage data for 2025 was not available at the time of writing, the Secretariat derived estimates by applying the country-specific percentage change of wages from the OECD Economic Outlook Volume 2025 Issue 2 to the 2024 wage levels.

Tax and Benefit Components

The report focuses exclusively on taxes and benefits related to labor income.

• Included Taxes: The term "tax" encompasses central, state, and local personal income taxes (PIT), as well as social security contributions paid by both employees and employers. Payroll taxes are also included in the total tax wedge for countries that report them.
• Standard vs. Non-Standard Reliefs: The methodology prioritizes standard tax reliefs, which are fixed amounts or percentages available automatically to all eligible taxpayers (e.g., basic allowances or standard work expense deductions). Non-standard reliefs, which are determined by actual expenses like mortgage interest or charitable donations, are generally excluded to ensure comparability.
• Cash Transfers: Only universal cash transfers paid by the general government in respect of dependent children are included in the primary indicators.

Key Indicators and Indicators of Progressivity

The report derives several quantitative measures from these calculations:

• Tax Wedge: The primary measure, which represents the difference between the total labor costs to the employer and the net take-home pay of the employee, expressed as a percentage of labor costs.
• Personal Average Tax Rate: The sum of PIT and employee SSCs as a percentage of gross wage earnings.
• Statutory Progressivity Indicator: Featured in this edition's Special Feature, this indicator measures the change in the average tax wedge for every one percentage point increase in gross earnings (as a multiple of the average wage) over a specific range, such as 50% to 500% of the AW.

Methodological Limitations

While the report provides high comparability, the sources highlight several limitations:

• Formal vs. Economic Incidence: The results show only the formal incidence of taxes; they do not account for how the actual economic burden might shift between employers and employees due to market adjustments.
• Statutory vs. Actual Distributions: The analysis of progressivity is statutory, meaning it reflects the design of the tax system rather than the actual distribution of income within the working population, for which the report lacks demographic data.
• Excluded Taxes: The report does not take into account indirect taxes (like VAT), corporate taxes, or taxes on capital income, providing only a partial view of the total fiscal impact on households.

The Internal Logic of Japanese Corporate Diversification

 Why Japanese companies do so many different things The internal logic of the world’s strangest corporations David Oks, May 18, 2026

Consider Toto. While famous for its serif-font logo and dominating 80 percent of the Japanese bidet-toilet market, the company is currently experiencing a remarkably lucrative year in 2026 that has little to do with bathroom fixtures. While Toto was founded in the 1910s to provide affordable toilets, it now manufactures tiles, faucets, modular kitchens, and assistive equipment for the elderly. Most importantly, it has a lucrative sideline in the advanced ceramics division producing the electrostatic chuck (e-chuck). This ceramic plate uses electrostatic force to hold silicon wafers flat during memory chip etching—a process so difficult that only a few companies, mostly Japanese, can reliably manufacture them. Due to the exploding demand for AI, Toto’s ceramics division has become its largest business and primary profit driver.

This diversification is not unique to Toto; practically every major Japanese company operates across vast, seemingly unrelated industries. Kyocera, founded for ceramic insulators, now makes everything from smartphones to lab-grown gemstones. Sumitomo Osaka Cement produces both concrete and cosmetics. Yamaha manufactures pianos, motorcycles, and industrial robots, while Hitachi makes nuclear reactors, elevators, and IT consulting services. Even Oji, a paper company, operates hotels and an insurance agency.

Unlike the sprawling conglomerates in developing nations like India, Japanese firms are striking because they perform these diverse, high-precision tasks exceptionally well. This contrasts sharply with American firms that prioritize focus, or even German and South Korean models. The author suggests that Japanese companies excel in these different domains because it is inherent in their structure—they are a "different species" of corporation adapted to a specific environment.

Companies are bundles of practices

Economists Paul Milgrom and John Roberts argued in 1990 that modern manufacturing practices work as complementary bundles. Adopting one practice, such as shorter production runs, makes other practices, like reducing inventory or investing in flexible machinery, more valuable. These practices are worth more as a complete set than as isolated parts. This framework explains why it is so difficult for firms to change: changing one practice without the rest of the bundle often makes the firm worse off. Economist Masahiko Aoki used this to describe the "J-firm" bundle.

Japanese companies are nothing like American ones

The J-firm bundle is defined by several distinctive features:

• Lifetime Employment: Firms hire recruits straight from school and keep them until retirement; mass layoffs are unheard of.
• Seniority-Based Pay: Promotions and pay are based on tenure rather than individual performance.
• Horizontal Coordination: Unlike the vertical hierarchy of "H-firms" (American/European), Japanese firms use lateral information flows. A prime example is the andon cord in Toyota factories, which allows any worker to halt production to fix a defect.
• Insulation from Outsiders: Boards are dominated by internal managers, and equity is often cross-held by other Japanese firms and a "main bank".

This system requires generalist workers who rotate through different functions, which only makes sense if those workers are guaranteed long-term employment. Because J-firms are run by employees and are largely indifferent to shareholders, they exist simply to continue existing. This survival instinct drives their insistent diversification; if a current product line fails, the firm pivots to new markets to keep its lifetime employees busy. For example, Nintendo moved from playing cards to video games, and Fujifilm pivoted from film to cosmetics and pharmaceuticals.

Bundles are hard to make and hard to unmake

The Japanese bundle was established during the crisis of the Second World War. In the 1920s, the Japanese economy functioned much like the American one, with shareholder discipline and mobile labor. However, the "1940 system" reworked the economy for total war, prioritizing production and employees over shareholders and rerouting capital through banks. This system survived the war and proved exceptionally good at catch-up growth.

The J-mode has a comparative advantage in moderate volatility, where incremental refinements are necessary. However, it struggles with paradigm invention and sharp discontinuity. While Sony had all the components for a smartphone, it was the vision-led "H-firm" Apple that reimagined the product category.

Following the 1990 asset bubble collapse, Japanese "zombie" companies soldiered on, as mass layoffs would have undermined the social settlement. Attempts at reform, such as Fujitsu's failed experiment with performance-based pay in the 1990s, often fail because they do not cohere with the rest of the organizational bundle. Despite these challenges, the deep process knowledge within the Japanese system remains a critical, non-entrepreneurial partner to the American innovation-led system, particularly in the semiconductor supply chain.

Labor Market Impacts of Trump 2.0 Immigration Enforcement

 The provided paper, "Labor Market Impacts of ICE Activity in Trump 2.0," by Elizabeth Cox and Chloe N. East, offers the first national, causal empirical analysis of how heightened immigration enforcement during the second Trump administration has affected the U.S. labor market. The study evaluates both the direct impact on undocumented immigrants and the spillover effects on U.S.-born workers, testing the common policy justification that removing immigrants expands job opportunities for native-born citizens.

Methodological Approach

The researchers utilized a natural experiment framework to isolate the effects of enforcement surges.

• Identification Strategy: While enforcement increased nationwide, it did so unevenly across different regions. The authors classified "treated" areas as those experiencing a sudden, large increase in ICE arrests (roughly a doubling) between January and October 2025, while "control" areas did not see such surges.
• Data Sources: The study combined administrative arrest data from the Deportation Data Project with worker-level labor market data from the Current Population Survey (CPS).
• Target Population: The analysis focused on "likely undocumented immigrants" (foreign-born, aged 20-64, with a high school degree or less) and U.S.-born workers in sectors where undocumented labor is over-represented, such as agriculture, construction, manufacturing, and wholesale.

Impacts on Likely Undocumented Immigrants

The study identifies a significant "chilling effect" among immigrants who remain in the U.S..

• Reduction in Work: Even if not physically removed, immigrants in treated areas reduced their work activity out of fear that being at a workplace could lead to ICE interactions. This led to a 4% reduction in employment among the likely undocumented sample.
• Gender Concentration: These effects were primarily driven by males, who accounted for over 85-90% of ICE arrests. Male employment in these sectors dropped by 4.6 percentage points (5%), and their weekly hours worked also fell by 5%.
• Comparison to Past Eras: The chilling effect in Trump 2.0 is notably larger than in previous administrations. The authors calculate that for every one ICE arrest, six male likely undocumented workers stop working. This is more than double the chilling effect observed during the Obama administration, which the authors attribute to the more indiscriminate nature of enforcement in Trump 2.0.

Impacts on U.S.-Born Workers

A central finding of the research is the lack of evidence that U.S.-born workers benefit from these enforcement surges.

• No Substitution: The authors rule out any increase in the U.S.-born employment rate in impacted sectors of more than 0.1 percentage points.
• Complementarity and Harm: Instead of taking the jobs left behind, certain U.S.-born groups were actually harmed. Less-educated U.S.-born men in likely affected sectors saw a 1.3% reduction in employment.
• Economic Mechanism: This suggests that undocumented and U.S.-born workers are complements rather than substitutes. When the supply of undocumented labor is disrupted, it appears to contract overall labor demand in those sectors rather than reallocate it to native workers. Furthermore, there was no evidence that employers raised wages to attract U.S.-born workers to fill vacancies.

Broader Context and Contribution

The study contributes to a growing body of literature on Trump 2.0 by linking national enforcement intensity directly to worker-level outcomes. It concludes that the policy of mass deportation and heightened interior enforcement may have the unintended consequence of harming the very U.S.-born workers it is intended to help by shrinking the labor market in key industrial sectors.

The sources describe the impact on likely undocumented immigrants during the second Trump administration as a significant "chilling effect" that reduces labor supply even among those who are not physically deported. This research provides the first national, causal empirical analysis of these labor market shifts, utilizing a natural experiment framework that compares geographic areas with sudden surges in ICE arrests to those without.

The "Chilling Effect" Mechanism

The study distinguishes between two channels of impact: physical removals and chilling effects. The latter occurs when heightened ICE activity causes individuals to remain in the U.S. but reduce their participation in regular activities—including going to work—out of fear that the workplace could be a site for ICE interactions.

Quantitative Impacts on Employment

The sources highlight several key findings regarding the scale of this impact:

• Overall Employment Reduction: Among likely undocumented immigrants remaining in the U.S. who work in affected sectors, there was a 4% reduction in employment.
• Gender Concentration: These effects are almost entirely driven by males, who represent over 85-90% of those arrested by ICE during the study period. For likely undocumented men, employment dropped by 5% (4.6 percentage points), and their weekly hours worked also fell by 5% (2 hours per week).
• Sector-Specific Impact: The strongest negative effects were observed in the construction sector, which has a high concentration of undocumented labor (over 15%).
• Impact on Wages: The study found no evidence of a consistent effect on pay (hourly wages or weekly earnings) for likely undocumented immigrants in high-impact sectors.

Magnitude and Historical Comparison

The sources quantify the intensity of the Trump 2.0 enforcement regime by comparing it to previous eras:

• The 6:1 Ratio: The authors calculate that for every one ICE arrest, six male likely undocumented workers stop working.
• Trump 2.0 vs. Obama Era: This chilling effect is more than double what was observed during the Obama administration, where roughly 2.3 workers stopped working per detention. The authors attribute this increase to the more indiscriminate nature of enforcement in Trump 2.0 compared to previous administrations.

Broader Labor Market Context

In the larger context of "Trump 2.0," these impacts do not lead to the intended policy goal of creating opportunities for native workers. Instead of U.S.-born workers substituting for the lost immigrant labor, the sources find that undocumented and U.S.-born workers are complements. When the supply of undocumented labor is disrupted, it leads to a contraction of overall labor demand in affected sectors, which ultimately harms less-educated U.S.-born male workers as well.

The study finds no evidence that heightened immigration enforcement in the "Trump 2.0" era expands job opportunities for U.S.-born workers. While a central policy justification for mass deportation is that it creates vacancies for native-born citizens, the researchers found a null effect on the full sample of U.S.-born individuals. Specifically, they were able to rule out any increase in the U.S.-born employment rate of more than 0.1 percentage points in sectors where undocumented labor is prevalent.

Negative Spillovers for Vulnerable Workers

Instead of benefiting from enforcement surges, certain groups of native workers were actually harmed. The sources highlight several key impacts:

• Impact on Less-Educated Men: The most significant negative effect was observed among U.S.-born male workers with a high school degree or less who work in immigrant-heavy sectors. This group saw a 1.3% reduction in their employment rate.
• Sector-Level Correlation: A clear relationship exists across industries: sectors that experienced the largest reductions in undocumented male employment (such as construction) also saw the most significant negative spillover effects for U.S.-born male workers.
• Quantified Loss: The authors calculate that for every six male likely undocumented workers who stop working, one male U.S.-born worker also loses their job.

The Mechanism of "Complementarity"

The researchers explain these negative outcomes through the economic concept of complementarity.

• Jobs are Linked: Rather than competing for the same roles, undocumented and U.S.-born workers often perform different, mutually dependent tasks within the same sector. For example, in construction, while both groups may work as laborers, the overall composition and concentration of their roles differ.
• Contraction of Demand: When the supply of undocumented labor is disrupted by ICE activity, it appears to contract overall labor demand in affected industries rather than reallocating existing jobs to native workers.
• No Wage Growth: The study found no evidence that employers responded to the loss of immigrant labor by increasing wages to attract U.S.-born workers to fill vacancies.

Broader Policy Implications

The findings suggest that the immigration enforcement regime in Trump 2.0 is more indiscriminate than in previous administrations, which amplifies these negative labor market consequences. By documenting these harmful spillovers, the sources conclude that heightened enforcement may ultimately undermine the economic prospects of the very U.S.-born workers it is intended to help.

In the context of the second Trump administration ("Trump 2.0"), the sources characterize the magnitude of immigration enforcement as a historic surge that is significantly larger and more indiscriminate than in recent decades. This intensified activity is measured through sudden, localized spikes in ICE arrests, which the authors use to quantify both the scale of the enforcement itself and its disproportionate impact on the labor supply.

Quantifying the Enforcement Surge

The research identifies a massive national increase in enforcement activity, though the intensity varied geographically.

• Arrest Volume: Following the second inauguration, total daily arrests surged from a baseline of approximately 300 to peaks exceeding 1,100 per day by late 2025.
• Treated Area Growth: Areas classified as "treated" experienced a sudden increase of roughly 200 daily arrests per month relative to control areas. This represented a 114% increase in arrests compared to the pre-period mean.
• Normalized Intensity: Adjusted for population, treated areas saw an increase of 94 arrests per 100,000 non-citizens.
• Gender Concentration: The magnitude of this surge was heavily concentrated among men, with 85% of the increase in total ICE arrests being driven by the arrest of males.

Comparative Magnitudes: Trump 2.0 vs. Prior Eras

The sources emphasize that the current enforcement regime is "much larger and more indiscriminate" than those of the 1930s or the 2010s.

• The Chilling Effect Multiplier: The magnitude of the "chilling effect"—where workers stop working due to fear of ICE interactions—is significantly higher in Trump 2.0 than during the Obama administration.
• Efficiency of Disruption: During the first Obama term, researchers found that for every person detained, roughly 2.3 likely undocumented workers stopped working. In Trump 2.0, this ratio has more than doubled: for every one ICE arrest, six male likely undocumented workers stop working.

Magnitude of Labor Market Disruption

The sheer scale of enforcement has led to substantial shifts in the workforce within treated regions.

• Total Worker Loss: The authors calculate that in the average treated area, there are approximately 7,574 fewer male likely undocumented workers in high-impact sectors like construction and agriculture.
• Impact on U.S.-Born Workers: The magnitude of the enforcement surge also creates a negative spillover for native-born citizens. For every six undocumented male workers who leave the labor force due to enforcement activity, one less-educated U.S.-born male worker also loses their job.
• Underestimation: The authors note that these figures likely underestimate the total economic impact, as their study focuses only on the "chilling effect" among those who remain in the U.S. and does not include the direct labor loss from physical removals and deportations.

The research presented in the paper "Labor Market Impacts of ICE Activity in Trump 2.0" leads to several key conclusions that challenge common political justifications for heightened immigration enforcement. Broadly, the authors conclude that the intensified ICE activity under the second Trump administration has contracted the labor market rather than reallocating jobs to native-born citizens.

1. Heightened Enforcement Creates a Massive "Chilling Effect"

A primary conclusion is that enforcement impacts the labor market far beyond physical removals. The study identifies a meaningful chilling effect where likely undocumented immigrants who remain in the U.S. reduce their work participation out of fear.

• Scale of the Effect: Among the likely undocumented sample in affected sectors, there was a significant 4% reduction in employment.
• The 6:1 Multiplier: The authors conclude that for every one ICE arrest, six male likely undocumented workers stop working.
• Comparison to Past Eras: This chilling effect is more than double what was observed during the Obama administration, which the authors attribute to the indiscriminate nature of enforcement in Trump 2.0.

2. No Evidence of Benefits for U.S.-Born Workers

The study directly addresses the policy justification that removing immigrants creates jobs for native-born workers and finds no evidence to support this claim.

• Null Overall Effect: For the full sample of U.S.-born individuals, the researchers found a null effect, ruling out any employment increase of more than 0.1 percentage points.
• No Wage Growth: There is no evidence that employers responded to labor shortages by increasing wages to attract U.S.-born workers.

3. Negative Spillovers and Harm to Vulnerable Native Workers

The authors conclude that instead of helping, the enforcement surge actually harmed certain segments of the U.S.-born population.

• Impact on Less-Educated Men: U.S.-born male workers with a high school degree or less in affected sectors saw a 1.3% reduction in their employment rate.
• Linked Job Loss: The data suggests a correlation where for every six lost male likely undocumented workers, one male U.S.-born worker also loses their job.

4. Economic Mechanism: Complementarity over Substitution

A central conclusion regarding the "why" of these results is that undocumented and U.S.-born workers are complements rather than substitutes.

• Production Interdependence: Because these workers often perform different but mutually dependent tasks, the loss of undocumented labor contracts overall labor demand in a sector.
• Sector-Level Correlation: The harm to U.S.-born workers was most pronounced in sectors like construction, which saw the largest drops in undocumented labor supply, further supporting the complementarity model.

Summary of the Broader Context

In the larger context of Trump 2.0, the authors conclude that the current enforcement regime is uniquely disruptive due to its scale and indiscriminate nature. They argue that the policy is undermining the economic prospects of the very workers it was intended to protect by shrinking the industrial sectors—such as agriculture and construction—that rely on a stable, multi-tiered workforce.

The Gravity of Shai Gilgeous-Alexander’s Game

 

Flop or not: Does Shai Gilgeous-Alexander really fall more than his peers?

By Tom Haberstroh

Back in December, after defeating the Oklahoma City Thunder in the NBA Cup semifinal, Victor Wembanyama spoke about the growth of his team and their commitment to “pure and ethical basketball.” The clear implication of his comments was that their opponent, the Thunder, did not play the same way. As the teams meet again in the Western Conference finals, those words remain relevant for Shai Gilgeous-Alexander, who has won two consecutive MVPs but continues to face criticism for “foul-baiting” and hunting for calls. Fans in opposing arenas have even been known to chant “free-throw merchant” at him.

The debate intensified after a viral video on X, which garnered over 17 million views, claimed Gilgeous-Alexander “flopped on every single shot attempt” during a Wednesday night game. However, the 36-second clip only showed seven plays where he hit the floor, whereas he actually took 24 field-goal attempts that night, scoring 30 points and shooting six free throws—a number below his regular-season average.

To find an objective answer to whether Gilgeous-Alexander falls more than other stars, Tom Haberstroh watched over 1,300 shots from this postseason, comparing the Thunder star to Jalen Brunson, James Harden, Donovan Mitchell, and Victor Wembanyama.

SGA falls most often on non-whistle shots

On field-goal attempts where no foul was called, Gilgeous-Alexander hit the hardwood on 10.7% of his attempts (20 out of 187). For comparison:

• James Harden: 8.7%
• Jalen Brunson: 7.9%
• Donovan Mitchell: 7.6%
• Victor Wembanyama: 0.6% (falling only once on 164 non-fouled shots)

SGA also has the most falls on whistled shots

The disparity is even greater on shots where a whistle is blown. Gilgeous-Alexander has fallen on 51.4% of his shooting fouls this postseason. This is significantly higher than his peers, none of whom have a fall rate higher than 30% on fouled shots. In fact, Gilgeous-Alexander’s 19 falls on fouled shots are more than Brunson, Mitchell, and Wembanyama combined (17).

SGA falls twice as often as his peers

When looking at all shots (both fouled and non-fouled), Gilgeous-Alexander hits the deck on 17.4% of his overall attempts. This is nearly four times the rate of Wembanyama and roughly double the collective rate of the other high-scoring peers tracked. Interestingly, he also seems to hit the floor more frequently on midrange attempts; he has fallen five times in that area this postseason compared to only once for Jalen Brunson.

The Reason Behind the Falls

While critics may view this as flopping, the NBA has not fined Gilgeous-Alexander—or any other player—for flopping this season. The league defines a flop as a physical reaction to contact that is “inconsistent with what would have been expected given the force or direction of the contact.”

There are several theories for why he falls so often:

• He may be getting fouled harder than others.
• His unique shiftiness and footwork may cause defenders to shuffle into his landing zone, knocking him off balance.
• He may be protecting his joints by distributing the force of impact across his body, a technique similar to those used in martial arts and reportedly employed by players like Joel Embiid and Pascal Siakam.

Regardless of the cause, the frequency of his falls is increasing; he fell six times in Game 1 and nine times in Game 2. While his propensity to hit the floor remains a major talking point, Gilgeous-Alexander can rely on his championship ring and two MVP awards to answer his detractors.

Newspaper Summary 240526

 

Nifty 50’s long-term historical performance reassures FPIs ‘don’t write me off just yet’

By Dhuraivel Gunasekaran, bl. research bureau

When times are tough, it gets even tougher when compared with better-performing players. Indian markets are exactly in that spot today, as demanding valuations, impact on earnings growth from geopolitical turmoil, lack of good AI plays, and currency depreciation push them closer to the bottom of the pile in terms of FPI preference.

In dollar-denominated returns, South Korea’s Kospi is up a staggering 171 per cent in the last one year, Taiwan’s benchmark index TWSE is up 81 per cent, Brazil's Ibovespa is up 45 per cent and the S&P 500 is up 27 per cent. Against this backdrop, the Nifty 50’s negative 15.3 per cent dollar-denominated returns over the past year make it appear like a clear under-performer.

But what if investors move beyond the T20 timeframe and shift to a Test match horizon? The perspectives change a lot. A bl.portfolio analysis of five-year dollar-denominated returns across major global indices indicates that while current challenges are real — and there could be more pain ahead — the Nifty 50’s long-term consistency suggests that, after a valuation reset and a turn in the cycle, the timing of which remains uncertain, better days could return. That is why it is important not to throw the baby out with the bathwater.

CONSISTENCY INTACT

When measured through five-year rolling returns over the past decade, India remains among the stronger-performing markets globally. The Nifty 50 has delivered 10.3 per cent annualised returns (average) in dollar terms, positioning it favourably relative to most peers. Only the S&P 500 (12.3 per cent) and Taiwan (12.1 per cent) outperform India in dollar terms, while key markets such as China (1.1 per cent), Japan (3.4 per cent) and Brazil (2.3 per cent) lag significantly despite having outperformed India over the past year. The distribution analysis of five-year rolling returns in dollar terms, which captures both return potential and downside risk, further highlights India’s relative strength.

NO NEGATIVE RETURN

The data reveal that India has recorded no negative five-year rolling returns, placing it in a select group alongside the S&P 500 and Taiwan’s TWSE. A majority of observations fall within the 10-20 per cent annualised return band (53 per cent), with a further 43 per cent in the 5-10 per cent range. This points to a high degree of return stability and predictability, with limited exposure to extreme outcomes on either the upside or downside.

In contrast, several emerging markets exhibit significantly less favourable return distributions. Brazil, for instance, recorded negative returns in 38 per cent of the observations, while South Korea and China also displayed high frequencies of suboptimal outcomes. Even developed markets such as Germany and Japan showed a more dispersed return profile, particularly on the lower side of the return spectrum. These comparisons highlight a key attribute of Indian equities: consistent long-term compounding rather than sporadic bursts of high performance.

VOLATILITY ISSUE

Further, annualised standard deviation data highlights the volatility profile of major global markets. India’s volatility, at 19.1 per cent, was higher than that of the US and Japan, but lower than most emerging markets such as South Korea, Brazil and Taiwan. The takeaway is straightforward: while near-term volatility may persist amid evolving global macroeconomic conditions, the longer-term data reinforces India’s position as a relatively stable and consistent wealth creator.

This is perhaps something FPIs already understand, having entered, exited and re-entered India multiple times over the years. What domestic investors need to recognise is that while FII re-entry may be inevitable, the timing may not align with market expectations. Several prominent Indian fund managers have already made predictions on this front that have failed badly.

A number of other factors will need to fall into place before sustained foreign inflows return. While it is prudent to acknowledge current challenges and position investments accordingly, it would be equally unwise to write off the India story based solely on one-year performance headlines.

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Distribution of five-year rolling returns in USD terms (%)

India fares well in return stability and lower downside risk

Return range	India	US	China	Japan	South Africa	Brazil	Taiwan	South Korea	Germany
Negative returns	0	0	29	20	25	38	0	36	13
0% to 5%	3	0	70	43	42	33	3	42	23
5% to 10%	43	25	1	38	13	18	25	18	42
10% to 20%	53	75	0	0	20	10	72	4	21
Above 20%	1	0	0	0	0	0	0	0	0

Shopian comes out in strength against drugs

Huge turnout at LG-led rally underscores the district’s changing social landscape By Gulzar Bhat, Srinagar

On a balmy Saturday morning marked by intermittent sunshine and light showers, Lieutenant Governor Manoj Sinha walked through the streets of Shopian, around 50 km south of Srinagar, as thousands joined him on a padayatra under a 100-day anti-drug campaign. Until a few years ago, such a spectacle would have been unimaginable. Once seen as a militancy stronghold in south Kashmir, Shopian was a district where political leaders struggled to hold public meetings and election rallies meant heavy security and thin crowds.

Saturday’s 45,000-50,000 people participated in the rally, pledging support for a drug-free society. “The turnout was unprecedented. I haven’t seen such a large gathering here in years,” said 60-year-old Mohammad Ashraf, who joined the march along the rain-soaked streets.

The administration aims to combat narco-terrorism and curb substance abuse through enforcement, rehabilitation and public outreach. Official data showed agencies seized 19,345 kg of drugs in 2022, 10,307 kg in 2023, 5,219 kg in 2024 and 4,019 kg till November 2025.

Since April 11 this year, authorities have revoked 382 driving licences and cancelled registrations of 386 vehicles. Forty-nine immovable properties were seized and 45 demolished during the crackdown. Officials estimate nearly one million people in Jammu and Kashmir — about 8 per cent of the population — use drugs such as cannabis, opioids and sedatives.

“We will work with full commitment to uproot narco-terrorism and dismantle its ecosystem,” Sinha told the gathering, describing narco-terrorism as “a deliberate attack on the soul of Jammu and Kashmir”. He said drug proceeds were being used by militant groups to procure weapons and fund their operations.

Goldman Sachs, Societe Generale, others buy 1.3% stake in Paytm parent for ₹963 cr

Press Trust of India, New Delhi

Global financial institutions, including Goldman Sachs, Societe Generale, and Citigroup Global Markets, have collectively acquired a 1.34 per cent stake in One97 Communications, the parent company of Paytm, from SAIF Partners and Elevation Capital for ₹963 crore through open market transactions.

Other foreign investors participating in the transaction included Ghisallo Capital Management, BNP Paribas, Copthall Mauritius Investment, and Hong Kong-based Viridian Asset Management. Among domestic institutional investors, Sundaram Mutual Fund (MF), Nippon India MF, Edelweiss Mutual Fund and India Acorn ICAV also bought shares of the fintech firm, according to block deal data executed on the BSE on Friday.

These entities collectively purchased a total of 85.98 lakh shares on the exchange, representing a 1.34 per cent stake in Noida-based One97 Communications. The shares were bought at an average price of ₹1,120.65 a piece, taking the total transaction value to ₹963.60 crore.

Meanwhile, Hong Kong-based private equity firm SAIF Partners, through its affiliates — SAIF III Mauritius Company Ltd and SAIF Partners India IV Ltd — offloaded a combined 80.08 lakh shares of Paytm. Further, Gurugram-based venture capital firm Elevation Capital also disposed of 5.89 lakh shares in the fintech company. The shares were offloaded at the same price, as per the data on the BSE.

Following the transaction, SAIF Partners’ holding in One 97 Communications declined.

Covering interest coverage ratio

By Sai Prabhakar Yadavalli, bl. research bureau SIMPLYPUT

Two colleagues, Pragathi and Shefali, meet in the cafeteria for lunch. Their conversation turns to Indian equities and one of the few bright spots amid the current turmoil: strong corporate balance sheets. They also discuss the other side of the story — how being too conservative can sometimes limit growth.

Shefali: I have been sitting on funds without the confidence to invest in equities. The recent statement by the Prime Minister on the need for austerity has further shaken my confidence.

Pragathi: Same here friend. But I take my chances and always stay invested. Besides, there are few bright spots, which can reassure an investor. Balance sheet strength of companies has been strong, which is reassuring.

Shefali: Please elaborate. How would you quantify it?

Pragathi: One of the measures is to simply ask if the assets on the balance sheet are generating enough cash to service the debt and more. Interest coverage ratio can capture that information. Mathematically, it is the ratio of EBIT or earnings before interest and taxes over interest charges. A ratio well above 2x indicates that the company is delivering enough profits to cover interest and more.

Shefali: Okay. So, what does the ratio now indicate?

Pragathi: Well, according to my findings, after the Q4FY26 results, around 600 Indian companies that had reported results till the first week of May (excluding banks as banks have high leverage via deposits) have an interest service coverage of around 7.5 times.

For a rupee of interest, the companies have generated over ₹7 in EBIT. If one were to stress test Indian companies on financial leverage metrics, I think they will be in a strong position. We had seen this ratio closer to 3.4 times in March 2021: when we were amid a pandemic. But even this is considered a good ratio compared to the absolute zenith of 2010-2012 period. A Credit Suisse analyst had come out with a report – ‘House of Debt’ – in 2012. It was named so because, he said, close to 15 per cent Indian companies had an interest coverage ratio of less than 1. By 2017-18 Indian banks’ NPA ratio was in the 11-12 per cent range. Today, that ratio is less than 1 per cent.

Shefali: Okay. Seems like Indian companies have been extremely cautious. Is there a downside?

Pragathi: Yes. Ratios have risen over the last five years and not because EBIT margins have outperformed. They rose because debt has been underemployed by companies. At some point, investors and current valuations will force companies to pursue growth. It is better for companies to assume a certain degree of manageable risk (debt) before their hand is forced and they announce a Corus style acquisition that backfires. And to be fair, this appears to have thankfully started. Banks now cite commercial and corporate as the fast-growing segments in their loan books over home and retail.

New US rule mandates Green Card seekers to apply from their home country

Sindhu Hariharan, Chennai

The pathway to Green Card for immigrants in the US, including those on H-1B or L-1 visas, just got a bit more complicated as the US immigration authorities brought out a new policy note.

Migrants to the US seeking permanent residency or a Green Card will have to return to their home country to file their applications, per a new US Citizenship and Immigration Service (USCIS) policy note on Friday.

“From now on, an alien who is in the US temporarily and wants a Green Card must return to their home country to apply, except in extraordinary circumstances,” USCIS spokesman Zach Kahler said in a statement.

“Non-immigrants, like students, temporary workers, or people on tourist visas, come to the US for a short time and for a specific purpose. Our system is designed for them to leave when their visit is over. Their visit should not function as the first step in the Green Card process,” the statement said.

SOME EXCEPTIONS

USCIS noted that this was meant for the US to “return to the original intent of the law” and will also ensure that it frees up limited USCIS resources in the US. However, subsequently, in a clarification statement, USCIS spokesman Kahler suggested that Green Card applicants in the US who provide an “economic benefit” or serve “national interest” will be allowed to complete their processing here, without having to leave.

The policy has set off widespread confusion and apprehensions among H-1B and L-1 work visa holders in the US, many of whom are Indians and also in the STEM field. They may now have to rely on visa appointments in their home country consulates and this can lead to a disruption from their personal and professional lives for an indefinite period of time, they fear.

For H-1B and L-1 employees whose visas are “dual intent” the memo suggests they can now expect detailed reviews and not automatic approvals for Green Cards like earlier.

On a case-to-case basis, they may be asked to process it in home countries. Non-dual-intent categories such as student categories including F-1 OPT/STEM OPT, etc., will also face heightened scrutiny of intent and prior conduct, immigration attorneys said.

Immigration law firm Reddy Neumann Brown in a note said, “The message is clear: Meeting the eligibility requirements alone may no longer be enough. From tax compliance and lawful status history to community ties, family integration, and economic contributions, applicants should now be prepared to proactively document the positive equities supporting their I-485 case”.

NEW STANDARD

Immigration lawyer Poorvi Chothani of LawQuest said that what has changed is the standard of review, not the law. “The memorandum does not change any laws or regulations and does not eliminate adjustment of status (AOS) as a legal avenue to apply for a Green Card. Section 245 of the Immigration and Nationality Act continues to authorise AOS in the US for eligible applicants at USCIS’ discretion,” she said, noting that legal challenges are widely expected.

Andrew NG, co-founder of Coursera and a top AI entrepreneur in the US, said in a post on X that “The new White House policy requiring Green Card applicants to apply from outside the US is a capricious attack on legal immigration. It will hurt families, leave us with fewer doctors, teachers and scientists, and hurt American competitiveness in AI”.

H-1B APPLICANTS DIP

Separately, releasing its FY27 numbers for H-1B registrations, the USCIS said that the number dipped by 38.5 per cent, from 343,981 in fiscal year 2026 to just 211,600 in fiscal year 2027. “We’re approving more applicants with advanced degrees and higher salaries especially those who studied at US universities,” it added.

TAX QUERY

By SUDHAKAR SETHURAMAN

Question: Is withdrawal from NPS Tier II equity fund taxable as long-term capital gains (LTCG) at 12.5 per cent when held for more than one year or as income from other sources at slab rates? — Murli Krishnamurthy

Answer: Under the Income-Tax Act, 2025, units held in an NPS Tier II constitute capital assets, and gains arising on withdrawal from the same are classified as capital gains and taxed at the applicable income-tax slab rate. Although an NPS Tier II account may be fully invested in equities, units issued under the NPS are not treated as equity mutual fund units for tax purposes.

Hence, while classified as capital assets, NPS Tier II (equity scheme) units do not qualify for exemptions such as the shorter holding period for determining long-term or short-term status (12 months) or the ₹1.25 lakh exemption threshold limit, which are applicable specifically to equity shares or equity mutual fund units. Accordingly, withdrawal from an NPS Tier II equity fund is taxable as short-term capital gains if the units are held for more than one year but less than 24 months.

The sum of the parts exceeds the whole

INDEX WISE. We explain why a Nifty 50, Next 50, Midcap and Smallcap mix beats the Nifty 500 By Dhuraivel Gunasekaran, bl. research bureau

Passive investing is gathering momentum in India, with investors increasingly weighing index strategies to identify the most efficient route to long-term wealth creation. The Nifty 500, which covers about 92 per cent of listed market capitalisation on the NSE, serves as a broad proxy for the equity market. For many, a single index fund or exchange traded fund (ETF) tracking the Nifty 500 offers a simple, low-maintenance way to gain diversified exposure.

Yet, a bl.portfolio analysis shows that a structured mix of the Nifty 50, Nifty Next 50, Nifty Midcap 150 and Nifty Smallcap 250 can deliver superior long-term outcomes compared to the Nifty 500 alone. Based on 10-year rolling return data over the last 20 years, the Nifty 500 TRI generated an average CAGR of 12.7 per cent. An equal-weight allocation across the four indices, however, delivered about 14.3 per cent, indicating an outperformance of 1.60 percentage points that can meaningfully enhance long-term compounding. For investors starting early, a simple equal allocation across these indices offers exposure across the full market-cap spectrum of large-, mid- and small-caps.

LARGE-CAP BIAS

The limitation of the Nifty 500 lies in its construction. As of April 2026, nearly 57 per cent of the index weight is concentrated in the Nifty 50, with the Nifty Next 50 accounting for another 13 per cent. In effect, close to 70 per cent of the index is tilted towards the top 100 companies — large-caps. While this bias lends stability, it also skews the portfolio towards mature businesses where earnings growth may taper over time.

In an emerging market like India, mid-sized and emerging companies often contribute alpha, capturing incremental growth beyond large, mature firms. This skew is inherent to the free-float market-cap methodology, where larger companies automatically get a bigger share. For investors seeking true market-wide participation, such concentration can act as a structural drag. A multi-index allocation helps address this imbalance by distributing exposure more evenly across market segments.

WHY A COMBINATION WORKS

The advantage of this mix shows up in returns, sector spread, and risk management.

• Broader sector play: As of April 2026, banking accounts for 19.5 per cent of the Nifty 500, versus 12.3 per cent in the equal-weight combination. The combination allocates more to broader financials (11.4 per cent vs 8.8 per cent), capturing NBFCs, microfinance and fintech players. It also carries higher exposure to capital goods, healthcare, automobiles, and power — sectors closely aligned with India’s domestic growth narrative. Additionally, sectors like business services, education, and media barely exist in the Nifty 500 but are brought in by the combination strategy.
• Better risk management: Unlike the Nifty 500 where large-caps dominate by default, the combination approach allows investors to consciously set their exposure. An equal 25 per cent allocation balances stability with growth. Furthermore, it creates a disciplined rebalancing framework. Indian equities exhibit cyclical leadership: large-caps lead during global risk-off phases, mid-caps during steady domestic growth, and small-caps in liquidity-driven rallies. A multi-index strategy automatically captures this rotation.

TAKEAWAYS

Around 10 passive funds currently track the Nifty 500 and BSE 500, managing over ₹5,500 crore. While Nifty 500 is a convenient benchmark, its inherent large-cap bias may constrain long-term, market-wide participation. A combination approach offers a more nuanced alternative, reducing concentration risk and giving investors greater control over allocation. Historical data shows the combination strategy outperformed the Nifty 500 in 12 out of 20 periods over the last 20 years.

However, a multi-index combination is more complex, requiring monitoring, rebalancing, and awareness of overlapping exposures. Trading costs and liquidity constraints in smaller indices mean that disciplined rebalancing is essential.

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KEY INSIGHTS

• Index combination outperforms the Nifty 500 over long-term
• Nifty 500 basket is tilted towards large companies
• Combining multiple indices does require monitoring and rebalancing

Newspaper Summary 210526

 The article referenced as Against the Grain on the front page appears on page 10 of the source under the title "Global rice prices poised to gain on supply woes." Here is the full reproduction of the article:

Global rice prices poised to gain on supply woes

WEATHER, GEOPOLITICAL CONCERNS. Output projected to drop by 5 million tonnes, while offtake may rise by 3.8 mt By Subramani Ra Mancombu, Chennai

Rice prices in the global market will likely rise due to the balance swinging to a deficit after over a decade and increasing concerns over weather and fertilizer availability due to geopolitical crises, analysts said.

“We expect rice prices to maintain upward momentum over the coming quarters, with the 2026 annual average falling within a $11.7-12.5/cwt (45.36 kg) range, underpinned by rising concerns over weather risks and fertilizer affordability amid the ongoing US-Iran conflict,” said research agency BMI, a unit of Fitch Solutions.

The US Department of Agriculture (USDA), in its report last week, said global rice production is estimated to decline by 5 million tonnes (mt) in 2026-27 (September-August) from 537.8 mt in 2025-26. It projected the largest cuts for India (2 mt), Myanmar (1 mt), and the United States (1 mt).

World rice consumption is seen up 3.8 mt to 541.4 mt, driven by increases in South Asia, especially India, and sub-Saharan Africa as rice continues to be an important staple. Global stocks are projected to decline 3.6 mt to 192.7 mt with the largest reductions in India, Cambodia, Indonesia and the US. In contrast, China rice stocks are forecast to increase 3 mt to 108 mt, accounting for 56 per cent of global stocks.

The Agricultural Marketing Information System (AMIS), an arm of the UN’s Food and Agriculture Organization (FAO), said global rice prices were mostly steady currently, reflecting muted demand amid shipping disruptions. “India’s export rates are stagnant as market faces slow demand,” it said.

IRAQ STOPS THAI BUY

According to the Thailand Rice Exporters Association, the cereal’s prices increased by about $20 a tonne between May 6 and May 13. Vietnam has increased its rates by $60 since April 1, while India and Pakistan have increased them by less than $10 a tonne.

“We have revised up our 2026 annual average price forecast for CBOT-listed second month rice futures from $11.2/cwt to $11.9/cwt. In line with our view that optimism surrounding global supply prospects would ease from end-2025 levels, rice prices trended higher through early 2026, averaging $10.7/cwt in January, $11/cwt in February and $11.4/cwt in March,” said BMI.

Prices weakened briefly in April, slipping to $11.3/cwt as supply fundamentals, particularly expectations of robust global stocks, reasserted themselves. However, prices regained strength through early May, closing at $12.2/cwt on May 8, the research agency said.

AMIS said Iraq had dropped out of the Thai rice market due to the blockage in the Strait of Hormuz. “Thai rice exports are seen recovering in the second half of 2026 if tensions in West Asia ease,” it said. However, shipments from Burma and the US would decline.

HARVEST PROSPECTS

BMI said while bearish sentiment in the rice futures market remains evident, it has softened notably in Q1 2026. “According to the US CFTC Commitment of Traders report, speculative positioning remained net short at 3,712 contracts as of May 5. This is below the consistently heavier net short positions recorded throughout 2025, when positioning frequently exceeded 3,000 contracts,” it said.

Though there was optimism over global rice production in 2025, the scenario has changed in 2026. BMI said harvest prospects are weak in several major producers, including the US, Thailand, Vietnam, Pakistan and Brazil.

“We are cautiously optimistic regarding output for the first (monsoon) crop in India, Vietnam and Thailand, which together account for over 50 per cent of global rice exports, supported by stable near-term weather conditions and sufficient fertilizer availability,” it said. However, inventories, particularly in India, will provide buffer for any problem in the upcoming crop cycle. Governments’ policy support to overcome high fertilizer costs would help insulate yields, it said.

Here is the reproduction of the article as requested:

India’s April crude oil imports down on lower Russian purchases by RIL, Nayara

Rishi Ranjan Kala New Delhi

Overall crude oil imports declined on a monthly basis in April as Reliance Industries (RIL) and Nayara Energy limited their Russian purchases after the world’s third-largest consumer bought record volumes from Moscow a month earlier. According to the Finland-based Centre for Research on Energy and Clean Air (CREA), India was the second-largest buyer of Russian fossil fuels in April, importing a total of €5 billion (around $5.82 billion) of hydrocarbons.

Crude oil constituted 90 per cent of India’s purchases, totalling €4.5 billion ($5.24 billion). Coal ($346 million) and oil products ($243 million) made up the rest. “India’s total crude import volumes recorded a 3.7 per cent reduction in April. This is partially explained by a 19.4 per cent month-on-month (m-o-m) decrease in Russian imports,” CREA said.

There was a substantial change in unloading at refineries, with Vadinar and Jamnagar refineries’ Russian imports decreasing by almost 92 per cent and 38 per cent respectively, while the State-owned Indian Oil Vadinar refinery’s imports increased 87 per cent. The decline in Russian crude imports at the Vadinar refinery was driven by maintenance-related shutdowns beginning on April 9, as the refinery runs exclusively on Russian feedstock.

New Mangalore and Visakhapatnam refineries (MRPL) stopped Russian imports at the end of November 2025, but purchases resumed in March 2026 and continued into April, with Visakhapatnam’s Russian imports increasing 149 per cent m-o-m.

BIG SHIFT

In contrast, India’s imports of Russian crude oil doubled m-o-m in March 2026, even as cumulative crude imports recorded a 4 per cent reduction that month. The biggest shift was in State-owned refineries’ imports from Russia, which saw a massive 148 per cent increase in March 2026, presumably due to Russian barrels being more available in the spot market, which serve as their primary source of imports, CREA explained.

On Russian crude oil price dynamics during April 2026, CREA said the average price of Russia’s Urals crude rose further, up 19 per cent m-o-m to $112.3 per barrel, remaining more than double the updated EU and UK price cap of $44.1 per barrel, which took effect on February 1, 2026.

“In April, the price discount of Urals-grade crude oil relative to the global benchmark Brent plummeted,” CREA said.

Here is the reproduction of the article titled "Rupee at lifetime low of 96.86 against the dollar," which appears in its full version on page 9 of the source under the headline "Rupee slips 16 paise, hits lifetime low of 96.86 against dollar":

Rupee slips 16 paise, hits lifetime low of 96.86 against dollar

Press Trust of India | Mumbai

Declining for the ninth consecutive session, the rupee depreciated 16 paise to close at a fresh lifetime low of 96.86 against the US dollar on Wednesday as elevated global crude prices amid the West Asia crisis stoked inflation worries.

At the interbank foreign exchange market, the rupee opened at 96.89 against the US dollar, then lost further ground to touch a record low of 96.95. It went up to the day's high of 96.65 before settling at a fresh all-time low of 96.86 against the greenback, registering a fall of 16 paise over its previous close. In the previous session, the rupee tumbled 50 paise to settle at 96.70 against the dollar.

MARKET PRESSURES

“The Indian rupee hit fresh lows on a strong dollar and a surge in US treasury yields. US 30-year treasury yields rose to a two-decade high, while the 10-year yields rose to a 16-month high," said Anuj Choudhary, Research Analyst, Commodities Research at Mirae Asset Sharekhan. “This led to inflation worries and sell-off in global markets, making the markets risk-averse".

Choudhary added, “We expect the rupee to trade with a negative bias on risk aversion in the global markets amid inflation worries... USD/INR spot price is expected to trade in a range of ₹96.5 to ₹97.10".

ECONOMIC WARNING SIGNS

The rupee's sharp decline has emerged as one of the biggest economic warning signs for policymakers, investors and businesses. Once considered among Asia’s more stable currencies, the rupee has now become one of the worst-performing emerging market currencies this year, pressured by a toxic mix of expensive oil, capital outflows, widening trade deficits and a surging US dollar.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading at 99.42, higher by 0.09 per cent. Brent crude, the global oil benchmark, was trading down 2.77 per cent at $109.95 per barrel in futures trade.

GEOPOLITICAL & DOMESTIC CONTEXT

The US Senate advanced legislation on Tuesday that seeks to force President Donald Trump to withdraw from the Iran war, as a growing number of Republicans defied the President's wishes.

On the domestic equity market front, the Sensex rose by 117.54 points to settle at 75,318.39, and the Nifty was up 41 points to 23,659. Foreign Institutional Investors (FIIs) offloaded equities worth ₹1,597.35 crore on a net basis on Wednesday, according to exchange data.

Bombay House tightens grip around Jaguar Land Rover

PLAN OF ACTION. TaMo cuts JLR’s board from 13 to 3, eyes £1.7 b savings over 2 years By Amit Vijay Mohile, Mumbai

Jaguar Land Rover’s decision to cut its operating board from 13 members to just three marks the most significant shift in Tata Motors’ stewardship of the British luxury carmaker since its 2008 acquisition from Ford.

For nearly two decades, the unwritten compact was simple: Bombay House provided capital and strategic patience, while JLR’s UK management retained broad autonomy over products, engineering and operations. That arrangement is now giving way to a leaner, India-linked structure in which the JLR Ltd board comprises Chief Executive PB Balaji, Chief Financial Officer Richard Molyneux and Non-Executive Director Al-Noor Ramji.

A 13-member Executive Committee led by Balaji has been tasked with restoring profitability and cash generation. The committee includes Chief Strategy Officer Balaje Rajan, China and procurement head Qing Pan, Chief Growth Officer Lennard Hoornik, Chief Technology Officer Thomas Müller, Chief Programme Delivery Officer Steve Marsh, and Chief Information and Digital Officer Naveen Krishna, among others.

FY26 WAKE-UP CALL

The restructuring follows a difficult FY26 in which JLR swung to a net loss of about £244 million and burned roughly £2.2 billion in cash. The company was hit by a cyberattack, higher US tariffs, weaker demand in China and the transition costs of repositioning Jaguar as an all-electric brand.

“JLR remains the single most important driver of Tata Motors’ valuation, but it has also become the biggest source of earnings volatility,” said Kranthi Bathini, Equity Strategist at WealthMills Securities. “The governance overhaul suggests the Tata Group wants the same level of operational discipline at JLR that helped revive Tata Motors’ India passenger vehicle business,” Bathini added.

Balaji, the first Tata Motors executive to lead JLR, has been tasked with improving JLR’s cost base and financial consistency. The company is targeting £1.7 billion in savings over two years through “Enterprise Missions” focused on reducing delivered costs, cutting warranty expenses and improving digital productivity. The goal is to bring cash break-even volumes back toward 300,000 vehicles annually.

WHY JLR MATTERS

A JLR spokesperson said the Executive Committee, effective from April 2026, has been given “larger operational autonomy” and “stronger, simplified decision sub-groups” to enable faster decision-making.

Bathini noted that if Balaji succeeds in stabilizing JLR’s earnings, Tata Motors could benefit from stronger group cash flows, lower valuation uncertainty and improved investor confidence.

Why credit guarantees don’t help a range of MSMEs

Srinivas Ramanujam & Meera Siva

In March, the government launched CGSMFI-2.0 — a ₹20,000-crore credit guarantee scheme for microfinance institutions. The sector was in genuine distress: bank lending had contracted 8.5 per cent in the first half of FY2026, credit costs had surged to 15.5 per cent, and smaller MFIs were being frozen out. The scheme was necessary but not sufficient.

This pattern, repeated across sectors, reveals a structural problem. When banks are offered a sovereign guarantee, they do not suddenly lend to the most excluded. Credit flows to larger, better-rated institutions which are already closest to being fundable. A guarantee does not change a lender’s read of the borrower but only changes the cost of being wrong. And if the lender cannot read the borrower at all, the guarantee changes nothing.

LOST MSME DECADE

Similar dynamics have been at play in MSME lending at a larger scale. The MSME credit gap stands at ₹20-25 lakh crore and has not materially shifted in a decade, despite successive guarantee schemes starting with CGTMSE, established in 2000.

After a decade of voluntary participation and modest uptake, RBI made collateral-free lending mandatory for MSE loans up to ₹10 lakh in 2010. In the same breath, it urged that compliance be made a branch staff performance criterion — an early signal the mandate was already being ignored. Industry bodies later documented banks nudging borrowers to waive their CGTMSE cover so loans could be processed with collateral instead. In February, the RBI raised that ceiling to ₹20 lakh. Inflation-indexing a broken compass does not show you the true North.

The aggregate evidence is damning. Only 14 per cent of MSMEs access formal credit; nearly 80 per cent remain self-financed or rely on moneylenders. CGTMSE’s data show 93 per cent of its guarantees are for loans below ₹10 lakh — the segment banks were already mandated to serve. The enterprises that genuinely stall — too large for MUDRA, too unfamiliar for commercial banks, sitting between ₹20 lakh and ₹1 crore — remain unserved. And the lender’s reluctance cannot even be explained by default risk: gross NPAs in the MSE segment stood at under 4 per cent as of March 2024, down from over 9 per cent in 2022. Risk perception and risk reality are disconnected.

BUILDING CREDITWORTHINESS

What would change this is designing the system such that making borrowers creditworthy becomes someone’s explicit mandate and their measurable reward. The reason banks gravitate to better-rated borrowers, whether MFIs or MSMEs, is that weaker borrowers are simply unreadable: no financial records, no repayment history, no sector data. Guarantees cannot fix invisibility.

Three things are needed:

• Guarantee coverage that actually reaches the missed borrowers (the smallest MFIs and the missing-middle MSMEs).
• Technical assistance paired with those guarantees to build borrower capacity.
• Generate data that shifts the lender’s calculus from fear to evidence; and funded borrower financial literacy, so they can present themselves effectively.

Together, these build the track record that eventually makes the guarantee unnecessary — provided guarantee institutions, development finance bodies, and enterprise support organisations work in concert rather than in silos.

We have seen this work. An agri-tech enterprise serving smallholder farmers — the kind that commercial lenders routinely decline — received a guarantee-backed loan of ₹25 lakh paired with structured technical support. Within six months it graduated to a loan without a guarantee. Within four years of that first loan, it listed on the BSE SME Exchange. That listing represented over 50,000 smallholder farmers with higher incomes. It followed from the guarantee structure opening the door, technical assistance building the path, and an enterprise that learned to stand on its own.

The MFI guarantee scheme launched in March will provide necessary liquidity support to some institutions in the short term. The MSME amendments in February are steps in the right direction. But if the pattern holds, the credit gap will look much the same two years or even two decades from now.

Ramanujam is CEO, Villgro Innovation Foundation, and Siva is CEO, Inklude Impact Foundation. Both work on enterprise finance and innovation in India.

RBI revises loan recovery norms after feedback

Our Bureau Mumbai

The Reserve Bank of India (RBI) has proposed strict curbs on the use of mobile phone disabling tools by lenders, alongside a wider overhaul of loan recovery practices aimed at strengthening borrower protection and tightening oversight of recovery agents.

Under the revised draft amendment directions on “Conduct of Regulated Entities in Recovery of Loans and Engagement of Recovery Agents”, released on Wednesday, lenders will not be allowed to disable or restrict functions of a borrower’s mobile phone as a recovery tool, except in cases where the device itself was financed through a loan.

LOAN ACCOUNT

Even in such cases, lenders can deploy the mechanism only after the loan account becomes 90 days overdue and after issuing multiple notices to the borrower, including a 21-day cure period followed by an additional seven-day notice.

The draft norms also bar lenders from disabling essential features, such as internet access, incoming calls, emergency SOS services and public safety notifications.

Banks, small finance banks and other lenders will have to restore device functionalities within one hour once the borrower clears dues, failing which they will have to compensate the borrower at the rate of ₹250 per hour until the issue is rectified.

The central bank further said lenders cannot access, retain or use any data stored on a borrower’s mobile device for loan recovery or any other purpose under any circumstances.

REVISED FRAMEWORK

The revised framework introduces several additional borrower protection measures amid concerns over coercive recovery practices by lenders and outsourced recovery agencies.

Banks will not be allowed to assign recovery cases to agents if a borrower has lodged a grievance relating to loan dues or recovery proceedings until the complaint is resolved. Lenders will also be required to maintain records of calls made by recovery agents, including recordings of conversations with borrowers, for at least six months.

Recovery agents can contact borrowers only between 8 am and 7 pm unless specifically authorised otherwise by the borrower.

The RBI has also proposed tighter governance standards for recovery agencies, including mandatory due diligence, certification and training requirements for recovery agents, and public disclosure of empanelled recovery agencies on lenders’ websites and digital platforms.

The proposed directions will come into effect from October 1, 2026, from the earlier July 1 deadline.

India eyes S. Korea’s military industry to fuel defence aatmanirbharta

DEFENCE COLLABORATION. Defence Minister Rajnath Singh with South Korea’s Minister for Defence Acquisition Programme Administration Lee Yong-chul in Seoul By Dalip Singh, New Delhi

With South Korea emerging as the world’s 10th largest exporter of military products, displaying exceptional transformation in modern military history, Defence Minister Rajnath Singh on Wednesday urged the President Lee Jae-Myung regime to jointly develop and produce advanced technologies with India.

Singh, who landed in Seoul on Tuesday after finishing his Vietnam leg of the two-nation tour, held bilateral talks with Minister of National Defence Ahn Gyu-back on Wednesday. During the engagement, both leaders reviewed the entire spectrum of defence cooperation and discussed ways to further expand collaboration in areas such as industry, production, maritime security, emerging technologies, military exchanges, logistics and regional security.

Later, he met with Minister of Defence Acquisition Program Administration, Republic of Korea, Lee Yong-chul, and the two agreed to harness symbiotic efforts to create avenues for joint development, joint production and joint exports, according to a Ministry of Defence statement.

STRATEGIC ROADMAP

A roadmap to unlock the potential of the India-Korea Defence Innovation Accelerator Ecosystem (KIND-X) to synergise the innovation ecosystems of the two countries was discussed.

In 2017, the two countries successfully entered into defence industrial cooperation for the manufacturing of K9 Vajra — a 155mm, 52-calibre howitzer developed by South Korea’s Hanwha Aerospace — in India, with L&T partnering for the project.

Singh later chaired the India-Republic of Korea Defence Industry Business Roundtable, which brought together senior government officials and leading defence industry representatives. The interaction provided a platform for exploring new opportunities in defence manufacturing, co-development, co-production and supply chain partnerships.

INDIGENOUS PUSH

Addressing business leaders, the senior Union Minister highlighted India’s growing defence industrial ecosystem and opportunities under the government’s initiatives aimed at promoting indigenous defence manufacturing and global partnerships. He invited Korean defence companies to strengthen engagement with Indian industry for long-term mutually beneficial collaboration.

MoUs were inked in key areas of defence cooperation, including:

• Promoting cooperation in the field of Defence Cyber.
• Training between India’s National Defence College and Korea National Defence University.
• UN Peacekeeping Cooperation, aimed at making the partnership stronger and multidimensional.

Newspaper Summary 190526

 

Domestic, overseas airfares on the rise since March on higher costs, demand

By Rohit Vaid, New Delhi

Airfares across domestic as well as international routes in India have risen on a sequential basis since March, according to datasets analysed by businessline, with international sectors witnessing a sharper increase amid higher operational costs and strong summer travel demand.

ABV, KEY METRIC

Pricing trends shared by online travel agencies ixigo, Cleartrip and Wego showed that international average booking values (ABV) and route-level fares continued to rise through April and May. In simple terms, ABV is the total amount of money a traveller spends on a single transaction, serving as a key metric for how much revenue a platform or airline generates per confirmed reservation. Data is currently unavailable for North American routes as domestic airlines have curtailed operations.

According to data from Wego, international ABVs increased significantly from approximately ₹22,700 in February to over ₹32,600 in May. Domestic ABVs rose at a slower pace, moving from around ₹8,800 to ₹9,400 during the same period. Data from Cleartrip showed that the average international airfare for April/May stood at ₹74,500, compared with ₹52,000 in the corresponding period last year.

DOMESTIC FARES

Additionally, domestic airfares averaged ₹8,450 against ₹5,850 a year earlier. Bernard Corraya, General Manager at Wego, stated that the sharper rise in international ABV reflects growing traveller confidence, with users spending more on longer stays, premium experiences, and international journeys.

Sequential increases were visible across several international sectors tracked by ixigo:

• Mumbai-Kuala Lumpur: Rose from ₹10,778 in March to ₹22,650 in April, remaining elevated at ₹21,069 in May.
• New Delhi-Ho Chi Minh: Increased from ₹14,688 in March to ₹23,178 in April, before easing slightly to ₹21,256 in May.
• Bengaluru–Singapore: Climbed from ₹12,417 in March to ₹19,914 in May.
• Mumbai-Krabi: Increased from ₹15,186 in March to ₹21,500 in May.
• New Delhi-Phuket: Rose from ₹13,404 in March to ₹19,500 in May.

LONG-HAUL SECTORS

Long-haul sectors also recorded elevated levels. Fares between New Delhi and Paris increased from ₹33,442 in March to ₹39,242 in April. Mumbai-Singapore fares climbed from ₹15,680 in March to ₹22,617 in May.

Domestic fare increases remained comparatively moderate:

• Mumbai-New Delhi: Increased from ₹6,530 in March to ₹7,526 in April, easing slightly to ₹7,442 in May.
• Bengaluru-New Delhi: Rose from ₹7,931 in March to ₹8,969 in April, staying elevated at ₹8,799 in May.

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PRICEY TRAVEL SUMMARY

• Avg. International Fare (April/May 2026): ₹74,500 (vs. ₹52,000 last year).
• Mumbai-New Delhi: ₹6,530 (March) → ₹7,526 (April) → ₹7,442 (May).
• Mumbai-Kuala Lumpur: ₹10,778 (March) → ₹22,650 (April) → ₹21,069 (May).
• Bengaluru–Singapore: ₹12,417 (March) → ₹19,914 (May).
• Mumbai-Krabi: ₹15,186 (March) → ₹21,500 (May).

    

India develops world’s first AI gene editor for crops

Tool can tweak a plant’s DNA to develop traits such as higher yield, disease resistance By Prabhudatta Mishra, New Delhi

In a breakthrough that could redefine crop biotechnology, scientists at the Indian Council of Agricultural Research’s (ICAR) Central Rice Research Institute have developed and experimentally validated the world’s first AI-designed genome-editing tool for plants. This marks a major advance beyond existing CRISPR (clustered regularly interspaced short palindromic repeats) technology, which depends on naturally occurring microbial proteins.

Significance of Gene-Editing

Gene-editing is significant because it allows for the development of traits like higher yields, disease resistance, and improved nutrition without introducing foreign genes. In theory, grains can be re-engineered to lower starch or sugar content and boost protein levels.

Until now, gene-editing tools relied on proteins borrowed from microbes. However, artificial intelligence can design entirely new enzymes from scratch that work efficiently inside plants. This could open the door to tailor-made editing systems that are cheaper, more versatile, and less constrained by global CRISPR patents.

A Leading Breakthrough

Led by scientist Kutubuddin Ali Molla, the team showed that AI-designed enzymes can accurately edit plant DNA, enabling gene knockout, base editing, and prime editing in crops. While a US company had earlier developed a similar AI-designed system for human cells, this is the first successful demonstration in plants.

Molla stated, “The platform may open new avenues for building customised genome-editing systems for agriculture and could also help address some intellectual property limitations associated with existing CRISPR technologies”.

Rice as a Model

The new platform, named Plant-OpenCRISPR1 (POC1), builds on OpenCRISPR-1 (OC1), an AI-generated nuclease originally developed for human cells. The team developed and validated a suite of POC1-based tools using rice as a model, demonstrating the versatility of AI-designed systems in agricultural biotechnology.

Amazon Now to deploy 1,000 Eicher e-trucks

Mumbai

Amazon India announced on Monday its plans to deploy approximately 1,000 Volvo Eicher electric trucks to support the operations of its quick commerce service, Amazon Now, by 2028. Currently, 50 of these e-trucks are already operational.

In their daily operations, these trucks are expected to:

• Cover a range of 100-180 km.
• Support multiple trips between various facilities.
• Utilize a fast-charging time of approximately 50 minutes.

Future shock

Q4 results strong but momentum under question

India Inc has sprung a surprise by reporting good growth for the January to March quarter of 2026, even as markets have been correcting due to relentless selling by foreign investors. An analysis of Q4 results from 650 companies shows a sharp improvement in revenue growth to 13.7 per cent, with a healthy profit growth of 17.8 per cent compared to the same quarter last year.

Earnings Momentum

Revenue growth accelerated from 11.7 per cent in Q3, while profit growth gathered pace from 11.2 per cent in the same period. Operating profit margins improved to 30.3 per cent for Q4 FY26, up from 26.3 per cent in the preceding quarter, despite commodity inflation. However, these figures do not include results from oil majors, and it remains to be seen if this momentum can be sustained amid ongoing energy shocks and supply chain disruptions.

Key Macro Takeaways

There are four major takeaways from these results from a macro perspective:

1. Consumption: Both urban and rural consumption fired in tandem. FMCG and retail saw growth of 14 per cent and 12 per cent respectively, while discretionary spending surged in sectors like e-commerce (141 per cent), financial services (48 per cent), and jewellery (47 per cent). This suggests the stimulus from September 2025 GST cuts is still having an effect.
2. Investment Spending: Certain pockets performed well, including power equipment (131 per cent growth), electrical goods (43 per cent), and railways (28 per cent).
3. Margin Resilience: India Inc's margins remained resilient against spiraling energy and metal prices caused by the war. However, this was partly due to companies using up existing industrial input inventories and rupee depreciation helping service exporters.
4. Debt and Labor: Companies reported improved interest coverage of 7.5 times, suggesting they remained frugal on debt. Conversely, employee costs dropped to 13.8 per cent of revenues from 14.5 per cent a year ago, indicating that wages are growing more slowly than corporate profits.

Outlook

Overall, while FY26 closed on a positive note, FY27 is expected to be more challenging. The coming year will likely see inflation testing consumer spending while rising input costs may begin to squeeze corporate margins.

Benefits of beekeeping

Agriculture policy discourse overlooks pollination By Monika Shukla and PVS Suryakumar

Climate variability has become the new normal. Agriculture can, therefore, no longer be understood merely through the conventional lens of seed, fertilizer, irrigation, and markets — in other words, inputs and outputs. Farming is fundamentally an ecosystem in which soil biology, insects, trees, water cycles, and pollinators together shape productivity and resilience.

Among them, bees remain one of the least recognised contributors to agricultural output. California’s almond industry deploys nearly 1.6 million honeybee colonies every February; without them, there is virtually no crop. The global economic value of pollination services, according to IPBES (2016), is estimated at $235–577 billion annually.

Many crops central to India’s food systems and rural economy — including mustard, sunflower, fruits such as mango and litchi, vegetables, seed spices, and coffee — rely significantly on insect pollination. Even self-pollinated crops often record measurable gains in yield and quality in the presence of active pollinators.

Yet pollination rarely figures in mainstream agricultural policy discourse. In India, beekeeping is still often treated as a rural enterprise activity rather than as part of the ecological infrastructure underpinning agriculture itself. On the occasion of World Bee Day on May 20, this approach should be revisited.

ECOLOGICAL IMPACT

Across India and much of the world, pollinator populations are under growing stress from habitat loss, mono-cropping, indiscriminate pesticide use, and climate variability. Agricultural intensification has progressively homogenised farm landscapes, reducing the hedgerows, flowering vegetation, mixed cropping systems, and shade trees that once sustained pollinators.

Coffee offers an instructive example. In the biodiversity-rich coffee landscapes of the Western Ghats, pollination is not merely an ecological concern but a measurable contributor to farm productivity. Managed bee pollination trials undertaken by Humble Bee across coffee estates in Coorg have demonstrated yield improvements of at least 5.3 per cent without additional expenditure on fertilizers, irrigation, or other farm inputs. Research shows that yield improvements in mustard and sunflower range between 15-45 per cent when pollinator presence increases.

India, therefore, sits on a largely untapped reservoir of ecological productivity — one that does not require expensive technologies or major new infrastructure, but the restoration of pollinator systems embedded within nature.

The National Mission on Natural Farming (NMNF), approved with an outlay of ₹2,400 crore, reflects an important policy recognition that Indian agriculture must gradually reduce chemical dependence and move towards natural, climate-resilient practices. Yet, every agricultural transition carries anxieties for farmers, particularly around temporary yield uncertainty.

Managed bee pollination can help bridge that gap. As farms rebuild soil biology and reduce chemical intensity, pollinators help restore the ecological processes that sustain productivity and resilience. Natural farming cannot succeed through input reduction alone; it must also rebuild the ecosystem relationships.

POLICY IMPLICATIONS

The policy implications are straightforward:

1. Managed pollination services should be integrated into agricultural support frameworks, FPO initiatives, and natural farming programmes, with support for pollination as a service.
2. Bee health and pollinator presence can become measurable ecological indicators alongside soil carbon and soil biology restoration under NMNF.

Pollinator-friendly cultivation can also strengthen India’s positioning in coffee, spices, and horticulture, where sustainability standards are tightening.

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Monika is CEO & Co-founder of Humble Bee. Suryakumar is former Deputy Managing Director, Nabard. Views are personal.

New regulatory body to manage Strait of Hormuz operations

Asian News International, Tehran

Iran on Monday announced the launch of a new regulatory body aimed at managing and monitoring operations related to the strategically important waterway, the Strait of Hormuz.

The top security establishment of the Islamic Republic, the Supreme National Security Council, reposted a post on X where it stated that the official X account of the ‘Persian Gulf Strait Authority’ (PGSA) is now operational. The PGSA, introduced at the start of this month, has been characterised as a new mechanism for governing maritime traffic through the Strait of Hormuz.

The announcement signals the formal establishment of a dedicated body overseeing developments and operations linked to the Strait of Hormuz, one of the world’s most critical maritime trade routes for global oil and energy shipments.

India to continue purchasing Russian crude, notwithstanding US sanctions

ENERGY SECURITY. There is no shortage of crude, says Sujata Sharma, Joint Secretary at the Oil Ministry By Rishi Ranjan Kala, New Delhi

India will continue to buy Russian crude oil regardless of the status of the US sanctions waiver, based on commercial viability, after Washington let the waiver on Moscow’s seaborne crude oil expire over the last weekend.

Asked about India’s position on the expiration of the US sanctions waiver, Sujata Sharma, Joint Secretary at the Oil Ministry, said: “Regarding the American waiver on Russia, I would like to emphasise that we have been purchasing from Russia earlier... I mean before the waiver also, during the waiver also, and now also".

REITERATING POSITION

The statement also reiterates India’s position vis-a-vis its energy security, particularly at a time when crude oil and refined product prices are hitting north, adversely impacting the profits and margins of the PSU oil marketing companies (OMCs).

“It is basically the commercial sense which should be there for us to purchase. There is no shortage of crude. Enough crude has been tied up repeatedly... and this, whatever waiver or no waiver, it (availability) will not affect,” Sharma emphasised.

Kpler noted that even with the waiver uncertainty, it remains difficult to see India materially stepping back from Russian barrels. The issue is no longer purely about sanctions optics, but increasingly about supply security and economics in a much more fragile global crude system.

“With continued geopolitical uncertainty and the Strait of Hormuz (SoH) situation still far from normal, including restricted transits, higher freight risk, and slower flows, Middle Eastern barrels are no longer as straightforward or secure as they were previously. In that environment, Russian crude continues to offer a clear advantage through both pricing and relatively stable logistics via non-Strait routes,” emphasised the global real-time data and analytics provider.

Sumit Ritolia, Kpler’s Lead Research Analyst for Refining & Modeling, explained that even if the waiver lapses, flows are likely to remain broadly stable, although they could ease modestly from March levels. A key distinction often missed is that Russian oil itself is not sanctioned, but certain entities, vessels, and financial channels are. Russia will continue to be a core supplier, but procurement must ensure no involvement of sanctioned sellers or intermediaries.

THE BACKBONE

“Russian crude has remained the backbone of India’s import slate, with flows recovering back toward around 1.9-2 million barrels per day (mb/d) in March (2026) after easing earlier in the year. May import is around 1.9 mb/d till date with overall expected to be around 1.8-1.9 mb/d,” Ritolia said. India’s procurement of almost 2 mb/d of crude oil from Russia is the highest since June 2025.

The shift has been a broader re-optimisation of the crude slate based on availability, refinery compatibility, freight economics, and sanctions exposure. Refiners have remained aggressive buyers of Russian and opportunistic Atlantic Basin barrels, while Venezuelan crude has also made a notable return to India, partially offsetting the decline in Gulf-linked supply.

Sharma noted that the May 15 hike in retail prices of diesel, petrol, and CNG has helped OMCs cut their daily losses from ₹1,000 crore to ₹750 crore. She added that a bailout package for OMCs is “still not on the table”. Prashant Vasisht of ICRA commented that the modest ₹3 per litre hike provides only limited relief to these companies.

Rajnath begins Vietnam, South Korea tour; BrahMos deal talks to progress in Hanoi

Our Bureau, New Delhi

Defence Minister Rajnath Singh on Monday left for a tour of Vietnam and South Korea. Prior to his departure, he said he was looking forward to visiting the nations to further expand the scope of bilateral engagement. “The focus will be on deepening strategic military cooperation, strengthening defence industrial partnerships and boosting maritime collaboration, promoting peace and stability in the Indo-Pacific region”.

BRAHMOS DEAL

In Vietnam, he will hold bilateral talks with his counterpart Phan Van Giang on deepening strategic military cooperation, likely including the BrahMos supersonic cruise missile deal which is at an advanced stage of negotiations. He will depart for South Korea on Tuesday and return to Delhi on May 21.

His visit to Hanoi follows Vietnamese President To Lam’s tour of India last week, when he met Prime Minister Narendra Modi and others. The Defence Minister’s visit to Vietnam marks 10 years of the Comprehensive Strategic Partnership between the nations, which was upgraded to an Enhanced Comprehensive Strategic Partnership during the two-day visit of the President of Vietnam from May 5.

SOUTH KOREA VISIT

During his visit to South Korea, Singh will hold bilateral talks with the Minister of National Defence Ahn Gyu-back to review defence cooperation between both sides and explore initiatives to further strengthen bilateral engagements. Singh will also meet Minister of Defence Acquisition Program Administration Lee Yong-cheol and chair the India-Korea business roundtable.

Both countries are said to be working towards a third phase of cooperation for joint development of next-generation defence systems, including anti-aircraft guns, missile systems, autonomous platforms, and AI. The joint manufacturing of the K9 Vajra-T tracked self-propelled howitzers by Larsen & Toubro and South Korea’s Hanwha Aerospace is one of the examples of smooth defence industrial engagement between the two sides.