International Relations and Trade Issues - Newspaper Summary

 The sources reveal that International Relations and Defence matters are highly intertwined with the Global and Indian Economic and Business News environment in October 2025, manifesting primarily through significant trade tensions, bilateral negotiations leveraging economic tools (especially energy and agriculture), and robust defense modernization efforts in India.

I. Geopolitical Conflicts and Economic Leverage

US-China Trade and Rare Earths Weaponization

The overarching global economic context is defined by escalating US-China trade tensions.

• Trade Conflict: The "game of mutually assured disruption" between the US and China is highlighted. Tensions have flared up, with the US threatening an additional 100% tariff rate on Chinese goods starting November 1.
• Rare Earths Monopoly: China continues to leverage its near-monopoly over rare-earth minerals (producing around 90% of global refined supply) as a key geopolitical and economic tool. China recently tightened restrictions, requiring companies making magnets abroad using Chinese rare-earth materials to seek permission before exporting. This dominance was achieved through decades of strategic tactics, including government financial support, encouraging the acquisition of foreign rare-earth assets, and preventing foreign companies from buying Chinese deposits.
• US Response: Washington views China's control as a threat and is aggressively seeking reliable partners, including India, to build alternative supply chains. The US is investing in domestic rare-earth production and purchasing output to withstand low-priced Chinese mineral influx. This tension is accelerating US readiness to finalize trade deals with allies like India.
• Supply Chain Disruption Risk: Moody’s Ratings cautioned that new US tariffs on transshipped goods could disrupt Asia-Pacific supply chains, including India’s, due to deep links with China, worsening export compliance challenges for Southeast Asian nations.

India's Bilateral Negotiations and Energy Politics

India’s foreign and trade policies are highly focused on managing relations with the US and Russia, primarily concerning energy and tariffs.

• India-US Trade Deal (BTA): India and the US are "closing in on a much-awaited trade deal" aimed at slashing the punitive US tariff on Indian exports from 50% down to 15-16%. This proposed tariff reduction is contingent upon political clearance in sensitive areas like agriculture and energy.

  • Russian Oil as a Sticking Point: The US demands that India gradually reduce its imports of Russian oil. State-run oil marketing companies may be informally advised to diversify crude sourcing toward the US. This US pressure appears to be influencing procurement patterns, as Reliance Industries Ltd (RIL) bought Middle Eastern crudes last week and may place more orders, suggesting Western pressure against Russian flows may be starting to impact its procurement. India saved a modest $3.8 billion in FY25 due to narrowing discounts on Russian crude.
  • Agricultural Concessions: India may agree to allow higher imports of non-genetically modified (GM) American corn and soymeal into its markets to meet rising domestic demand from poultry, dairy, and ethanol industries. However, domestic experts caution that allowing soymeal imports would not benefit the domestic sector and could push down domestic prices. Furthermore, a Rajasthan High Court order prohibiting the import and sale of GM food until specific regulations are framed could complicate Indo-US trade talks.
  • Trade Timing: The finalization of the BTA is aimed for announcement at the ASEAN Summit later in October between President Trump and Prime Minister Modi, though official confirmation of their participation is pending.

• Russia and Ukraine Conflict: The war remains a major point of tension.

  • US Military Aid (Tomahawks): US President Donald Trump has repeatedly said he wants to end the Ukraine war. Washington is "mulling over a possibility of arming Kyiv with Tomahawk missiles," seen as a potential military game changer and a lever on Moscow. However, Trump seems to have had second thoughts, citing concerns about depleting American stockpiles and fearing the measure "could mean a big escalation". The Kremlin stated it is unclear when a summit between Trump and Russian President Vladimir Putin would take place.
  • Russian Oil Exports: Russia's seaborne crude shipments climbed to the highest in 29 months in the past four weeks, although they may be close to a peak due to seasonal downturns, increased refinery runs, and damage repair from drone strikes.

• China’s WTO Complaint against India: China formally filed a complaint at the WTO against three key Indian Production Linked Incentive (PLI) schemes related to batteries, automobiles, and EVs. China argues these schemes are conditional on the use of domestic goods over imported goods and discriminate against Chinese products, violating WTO agreements (SCM, GATT 1994, TRIMs). India’s internal view is that these schemes are intended to develop domestic manufacturing in new technology areas, allowing developing countries policy space to support infant industries.

India's Regional and Global Diplomatic Engagement

• EU Strategic Agenda: All 27 European Union (EU) member nations unanimously backed a new strategic agenda with India, aiming to significantly ramp up ties in key areas including defence, trade, technology, connectivity, and sustainability. They aim to finalize a balanced and ambitious free trade agreement (FTA) by the end of the year.
• Afghanistan Mission Upgrade: India announced the upgrading of its technical mission in Kabul to the status of a full-fledged embassy, underscoring its resolve to deepen bilateral engagement with Afghanistan in areas of mutual interest, development, humanitarian assistance, and capacity-building initiatives.
• Sri Lanka FDI: The Adani International Port Holdings Pte Ltd (India) investment in the Colombo West International Terminal (CWIT) was cited as the largest contributor to Sri Lanka’s FDI inflows in the first nine months of 2025, demonstrating renewed investor confidence in the region.

II. Domestic Defence and Aerospace Sector

Naval Modernization and Strategy

The sources highlight the Indian Navy’s focus on operational readiness, indigenization, and embracing advanced technologies.

• Navy Commanders’ Conference: The biannual conference is scheduled to address critical topics including naval operations, training, resource availability, and operational readiness against contemporary threats.
• Technology Integration: A key focus is the integration of Artificial Intelligence (AI), big data, and machine learning (ML) into combat strategies to enhance sustained and seamless operations.
• Maritime Dominance: The central objective is to sharpen the Navy's capability to counter emerging threats and reinforce maritime dominance across the Indian Ocean Region (IOR) and the Indo-Pacific.
• Indigenization Push: The Navy leadership will review the push for indigenization and innovation through the Make in India initiative, committing to reducing reliance on foreign military hardware for shipbuilding and weapon systems.
• Cochin Shipyard Expansion: Public sector Cochin Shipyard Ltd (CSL) is planning further investments, including a large Block Fabrication Facility (BFF) at Vallarpadam, requiring an investment of around ₹3,000 crore, to expedite ship construction by producing steel blocks.

Air Force Procurement and Indigenous Production

• S-400 Missile Procurement: The Ministry of Defence is expected to consider the Indian Air Force’s (IAF) plan to procure missiles worth approximately ₹10,000 crore for its S-400 ‘Sudarshan Chakra’ air defence systems. India had a deal with Russia for five S-400 squadrons, three of which are operational, with two delayed due to the Russia-Ukraine conflict.
• Indigenous Trainer Aircraft (HTT-40): Hindustan Aeronautics Ltd (HAL) will start delivery of the indigenous Hindustan Turbo Trainer-40 (HTT-40) aircraft from February 2026, following a six-month delay due to supply disruptions of engines from US-based Honeywell. The HTT-40 project is a key indigenous effort aimed at replacing the Swiss-origin Pilatus PC-7 MkII. HAL is boosting the domestic aerospace ecosystem by outsourcing nearly 38% of the components to private vendors (MSMEs). The company is also seeking military and US FAA certifications to enhance the aircraft's export potential.

Policy , Regulation and Trade Issues - Newspaper Summary

 The sources highlight an intense period of activity in policy, regulation, and trade issues in October 2025, marked by critical trade disputes, regulatory overhauls in finance and technology, and significant geopolitical maneuvers influencing market dynamics.

I. Global Trade Disputes and Geopolitical Maneuvers

India's WTO Dispute with China

A major development is China formally filing a complaint at the World Trade Organization (WTO) against certain Indian incentive schemes.

• China's Complaint: Beijing requested consultations with India through the WTO’s Dispute Settlement Body, alleging that three key Indian schemes violate global trade rules:
  • The Production Linked Incentive (PLI) National Programme on Advanced Chemistry Cell (ACC) Battery Storage Scheme.
  • The PLI Scheme for the Automobile and Auto Component Industry.
  • The Scheme to Promote Manufacturing of Electric Passenger Cars in India (EV passenger cars scheme).
• Alleged Violations: China argues these schemes are contingent upon the use of domestic over imported goods or otherwise discriminate against goods of Chinese origin. These measures allegedly violate India’s obligations under the SCM (Subsidies and Countervailing Measures) Agreement, the GATT 1994, and the TRIMs (Trade-Related Investment Measures) Agreement.
• India's Stance and Defense: Experts in India believe the goal of these schemes is not to discriminate, but rather to develop domestic manufacturing in new technology areas. Developing countries, particularly India, should maintain policy space to support their infant industries, although satisfying the conditions for defending production subsidies at the WTO would be necessary.
• WTO Appeals Process: The functionality of the WTO Appellate Body is currently compromised due to the US blocking the appointment of new judges, meaning China may struggle to secure a resolution through standard legal channels if the verdict is unfavorable to India.

India-US Bilateral Trade and Energy Negotiations

India and the US are nearing completion of a bilateral trade agreement (BTA) intended to slash current US tariffs on Indian exports to 15-16% from a punitive 50%.

• Tariff Reduction and Preconditions: The BTA aims to reduce the punitive levy of 25% imposed due to India's Russian oil purchases, along with the reciprocal 25% tariffs announced in April. However, the US has conditioned the deal on India stopping Russian oil imports.
• Energy Trade Concessions: India is considering gradually reducing purchases of Russian oil and is likely to allow higher imports of non-genetically modified (GM) American corn and soymeal into its markets, meeting key US demands. State-run oil marketing companies may be informally advised to diversify crude sourcing toward the US. Reliance Industries Ltd (RIL) has already increased buying of Middle Eastern crudes, signaling a potential shift away from Russian flows possibly due to Western pressure.
• GM Food Barrier: The Rajasthan High Court ruling prohibiting the sale, manufacture, distribution, or import of genetically modified (GM) food until FSSAI frames specific regulations poses a potential obstacle to the Indo-US trade talks, as Washington seeks market access for its GM corn and soybeans.
• Trade Timing: The finalization of the BTA is reportedly aimed for the ASEAN Summit later in October, although participation by both President Trump and Prime Minister Modi was unconfirmed at the time.

Other Global Trade and Geopolitical Factors

• US-China Tensions and Rare Earths: The US-China trade tensions are flaring again, partly due to China's clampdown on rare-earth exports, which are critical for high-tech manufacturing. The US is aggressively seeking alternative supply chain partners, including India, suggesting a global geopolitical shift influencing trade alliances. The US has committed to investing in domestic rare-earth production and purchasing output to withstand low-priced Chinese mineral influx.
• EU-India Strategic Agenda: The European Union (EU) member nations unanimously backed a new strategic agenda with India, focusing on significantly ramping up two-way ties in areas like defence, trade, technology, connectivity, and sustainability. Both sides are aiming to finalize a balanced, ambitious, and economically meaningful free trade agreement (FTA) by the end of the year.
• Global Fertilizer Suspension: China suspended exports of key fertilizers, likely for six months, which could trigger global shortages and lead to a 10-15% price increase due to tight global supplies. India is heavily dependent on China for these specialty fertilizers and is exploring alternative sources.

II. Domestic Policy and Financial Regulation

Financial Sector Regulatory Changes

• Expected Credit Loss (ECL) Model: The RBI has floated a draft circular proposing a transition from the "incurred loss" provisioning rule to a forward-looking Expected Credit Loss (ECL) framework for scheduled commercial banks, starting April 2027. Banks must classify assets into three stages and make forward-looking provisions based on potential credit losses, recognizing stress much earlier. Large private lenders are optimistic about managing the transition smoothly, supported by strong profitability, though public sector banks may face greater provisioning pressures.
• Corporate Debt and Insolvency: The effectiveness of the Bankruptcy and Insolvency Code of 2016 is noted to have been "watered down over the years" due to weak enforcement and frequent breaches of its strict time limits.
• Auditing and Corporate Law Reform: The government is likely to move a bill in the winter session to amend the Companies Act 2013, with amendments in Sections 141 and 144 being critical. The aim is to create an "enabling environment" for Indian Multi-Disciplinary Partnership (MDP) firms to compete with the Big Four audit companies, addressing issues like advertising bans, restrictions on MDPs, and fragmented licensing.
• Market Regulation (Sebi & NSE): SEBI is tightening its grip on insider trading due to a surge in illicit financial gains, expanding the definition of Unpublished Price Sensitive Information (UPSI) and ramping up investigations. The NSE CEO suggested that people trading in derivatives should have minimum net worth and expertise qualifications, aligning with SEBI's considerations for regulating this volatile market segment.
• GIFT City Tax Exemption Request: The GIFT City regulator (IFSCA) relayed a demand to the Finance Ministry that the Tax Collected at Source (TCS) be exempted on investments made by resident Indians into GIFT City funds. Fund managers argue this would simplify compliance, reduce friction, and channel more funds into the IFSC instead of foreign jurisdictions.

Technology and Infrastructure Regulation

• Cloud Computing Risk: The global 15-hour outage suffered by Amazon Web Services (AWS) highlighted the extreme interconnectedness of the internet, emphasizing the risk for firms, especially AI companies, that rely heavily on a few dominant cloud providers. This event serves as a warning for firms rapidly scaling for the AI era.
• Electric Vehicle (EV) Charging Restrictions: Draft provisions in the National Building Code (NBC) which restrict EV charging, specifically prohibiting it below the ground floor in residential and commercial buildings, are feared to hinder EV adoption. Industry players advocate for a more balanced approach focusing on robust safety designs like smart chargers and certified equipment, noting that internal combustion engine (ICE) fires are statistically more likely than EV fires.
• Digital Sovereignty and AI Governance: The Ministry of Electronics and Information Technology (MeitY) is pushing for India to become a "product nation" and encourages home-grown cyber security and digital products due to global geopolitics and the risk of foreign services being denied for strategic issues. The government is working on an AI governance policy and a data center policy, but currently does not wish to legislate on AI.

Policy Issues in Consumer, Welfare, and Migration

• GST Implementation Challenge: Nearly a month after GST rate cuts came into effect (September 22), small, unorganized retailers (many outside the GST system) remain a weak link in ensuring consumers receive the tax benefits, sometimes selling old inventory at printed prices rather than reduced rates.
• Toxic Cough Syrup Regulatory Gap: India has made strides in requiring medicines to be tested for contaminants before export, but the WHO official noted a "regulatory gap" as no such rule exists for syrups sold locally, following deaths linked to toxic cough syrups.
• US H-1B Visa Fee Clarification: New clarification from the USCIS indicates that the proposed $100,000 H-1B visa fee will not apply to Indian students already in the US who apply for a change of status, offering a "definite breather" for F-1 visa holders seeking employment.
• Right to Information (RTI) Erosion: The efficacy of the RTI Act is endangered by the Data Privacy and Protection (DPDP) amendment, which removed the public-interest overrider, potentially allowing privacy claims to trump public accountability. This shift risks citizens struggling to enforce transparency.

Festive Sales Surge - Newspaper Summary

 The sources uniformly report a robust surge in Festival Season Sales (Diwali/Dhanteras) in October 2025, painting a picture of strong Indian domestic consumption that provides a crucial counterbalance to ongoing global and domestic economic uncertainties.

I. Festival Season Sales Surge (Diwali/Dhanteras)

Record Sales and Consumer Sentiment

The Dhanteras-Diwali weekend capped off a "big-bang festival season" for the consumer products industry, particularly in the automobile and durables segments.

• Overall Sales Record: According to estimates from the Confederation of All India Traders (CAIT), Diwali sales peaked at a record ₹6.05 lakh crore. This total comprised ₹5.4 lakh crore in goods and ₹65,000 crore in services.
• Growth: This figure marked a double-digit increase over the previous year's sales of ₹4.25 lakh crore.
• Retail Segments: The surge was observed not only at major corporate retailers but also in traditional markets and among non-corporate retailers. Sales momentum is anticipated to continue into the upcoming wedding season.

Key Drivers of the Sales Momentum

The extraordinary growth in sales was fundamentally attributed to buoyant consumer sentiment coupled with specific governmental and financial reliefs.

• Policy Support: Demand was explicitly supported by GST 2.0 reforms, as well as tax and repo rate reliefs. The recent GST rate reductions, effective from September 22, allowed enterprises to recalibrate pricing, catalyzing heightened consumer demand and amplifying purchasing power.
• Consumer Confidence: The buoyant consumer sentiment was a major driver.
• Economic Impact: The sales spike demonstrated that popular festivals in India, with its high average propensity to consume, significantly boost aggregate consumption demand in the economy, creating a "win-win" situation, provided aggregate supply and prices remain stable.

Performance in Key Sectors

1. Automobile Sector: The automobile industry experienced blockbuster sales.

• Tata Motors: The company achieved a landmark milestone of over one lakh vehicle deliveries during the 30-day period from Navratri to Diwali, representing a 33% growth compared to the same period last year. SUVs were the primary growth driver, with the Nexon registering over 38,000 retails (73% growth) and the Punch clocking 32,000 units (29% growth year-on-year).
• Hyundai Motor India: Demand accelerated from Navratri through Dhanteras. Hyundai clocked over 11,000 dealer billings on Day 1 of Navratri, marking its highest single-day tally in the last five years. During Dhanteras alone, Hyundai delivered 14,000 cars, a 20% increase from the previous year.

2. Consumer Durables: This sector also had a "sparkling festival season," with sales exceeding expectations.

• Premiumization: The growth was heavily fuelled by premiumization.
• Product Focus: Haier Appliances India reported a growth of more than 50% during the festival period, led by premium products such as large-screen TVs, side-by-side refrigerators, and front-load washing machines.
• Retailer Feedback: Vijay Sales reported that overall sales rose over 20%, beating expectations.

3. Specific Commodities (Fireworks): While consumer demand was strong, manufacturing faced challenges.

• Demand/Sales: The Sivakasi fireworks industry noted that demand for crackers had not dropped, and whatever was produced was sold in the retail market, confirming a good Diwali season. Production ranged between ₹6,000 crore and ₹7,000 crore, a figure stagnant over the last four to five years.
• Supply Constraints: Production could not be increased due to perennial issues like the inadequate availability of labor (forcing units to look for workers in northern States), frequent safety inspections, and a reduction in the number of Stock Keeping Units (SKUs) due to the green push on crackers.

4. Beverages: An exception to the general surge was the volume decline reported by Coca-Cola in India in Q3 CY2025. This decline was attributed to "inclement weather" (monsoon). Despite this, the company emphasized India's huge long-term potential for volume growth.

II. Festival Sales in the Larger Economic Context (Oct 2025)

The festival sales surge confirms the resilience of Indian domestic demand in the face of broader external and internal headwinds.

Domestic Economic Strength and Constraints

• Manufacturing and Core Sector: High-frequency indicators, including robust retail passenger vehicle sales and retail automobile sales, suggest resilient domestic economic activity and robust manufacturing activity. However, overall Core Sector growth slowed to a three-month low of 3% in September (before the Diwali weekend), dragged down by contractions in coal, crude oil, natural gas, and refinery products. Steel output remained strong, preventing a further weakening of core industries.
• Capex Caution: In contrast to robust consumption, private capital expenditure remains hesitant, primarily constrained by soft domestic demand and geopolitical uncertainty. Sectors like IT, FMCG, and consumer durables were part of the majority of firms committing less than 5% of revenue to expansion (FY23–FY25 median). The major exceptions turning on the investment taps were real estate and power, consistently committing around 10–11% of their revenue.
• Inflation/Monetary Policy: Analysts suggested that the GST rate cuts contributing to the festive surge could turn the inflation forecast more benign, potentially opening space for the RBI to ease monetary policy if GDP growth faced threats.

Market Performance and Investment Flows

• Equity Market: Despite the positive consumption signal, the benchmark indices (Sensex and Nifty) ended only marginally higher during the special one-hour Muhurat trading session on Tuesday, October 22, 2025. The preceding Samvat 2081 was marked by significant under-performance compared to global peers due to a sharp slowdown in India Inc’s earnings growth.
• Outward Investment: Conversely, outward remittances for education abroad fell nearly 24% year-on-year in August (an eight-year low for August) and travel-related remittances dipped 19%. This signals a localized constraint on, or shift in, discretionary outward spending, possibly due to stricter global immigration checks.

Global Context and Geopolitical Influence

While domestic sales soared, the overall economic context remains influenced by global geopolitical tensions.

• US-China Tensions: The surge occurred amid escalating US-China trade tensions, with the US threatening an additional 100% tariff on Chinese goods, and China leveraging its control over rare-earth minerals. Easing of these tensions was cited as a reason for the recent slide in gold and silver prices, as haven demand cooled.
• Trade Deals: India is negotiating a bilateral trade agreement with the US that could slash tariffs on Indian exports. This deal involves India allowing more imports of non-GM American corn and possibly reducing Russian crude imports, which is being monitored by refiners like Reliance Industries Ltd (RIL), which is seen increasing West Asian crude purchases.
• Policy Imperative: The Finance Minister stressed that for India to achieve its aspirational 8% GDP growth, it must accelerate beyond episodic prosperity provided by consumption spikes, focusing on consistent export competitiveness, technological innovation, and addressing structural issues like job creation.

Market and Financial Performance - Newspaper Summary

 The sources provide a detailed snapshot of Market and Financial Performance in October 2025, framed within significant Global and Indian Economic and Business developments, highlighting robust domestic consumption juxtaposed with cautious capital investment and persistent geopolitical uncertainties.

I. Indian Market and Financial Performance (Oct 2025)

Equity Market Performance and Outlook

The benchmark indices, Sensex and Nifty, started the new Samvat Year 2082 marginally higher in the special one-hour Muhurat trading session on Tuesday, October 22, 2025. The BSE Sensex rose 62.97 points (0.07%) to close at 84,426.34, while the Nifty 50 gained 25.45 points (0.10%) to settle at 25,868.60. Despite this modest start, experts expressed cautious optimism about a potential revival.

Samvat 2081 Review (Prior Year Performance): The preceding Samvat 2081 was characterized by significant under-performance, particularly relative to global peers. The primary factor cited was a sharp slowdown in India Inc.’s earnings growth, which dropped to 5% in FY25 from an average of 24% over the prior three years. The Nifty returned 6.5% during Samvat 2081, which was better than fixed deposit (FD) returns but considerably worse than returns from gold or silver. Analysts, however, believe that the market is at "reasonable valuations at the headline level" for Samvat 2082.

Commodity and Investment Performance

Precious Metals: Gold and silver experienced slides due to traders taking profits after record-breaking rallies and easing US-China tensions. Spot gold fell as much as 4.1%, after hitting a fresh peak of $4,381.52 per ounce earlier in the week. This rally was driven by ongoing global geopolitical turmoil and economic downturns. Global holdings in gold exchange-traded funds (ETFs) stood at 3,838 tonnes as of September 30, 2025, a 20% year-on-year increase.

IPO Market: The National Stock Exchange (NSE) is anticipating its Initial Public Offering (IPO) in Samvat 2082, pending regulatory approval from SEBI. Separately, studies cautioned that investing in Small and Medium Enterprise (SME) IPOs carries high volatility and risk during downturns, despite offering impressive listing gains during bullish phases. Between FY24 and October 15, 2024, 224 out of 255 SME IPOs on the NSE listed at a premium.

Financial Sector Strength and Activity

Banking Performance (Q2 FY26): In Q2FY26, ICICI Bank demonstrated superior core operational performance compared to HDFC Bank.

• ICICI Bank's Net Interest Margin (NIM) rose 3 basis points (bps) sequentially to 4.3%.
• HDFC Bank's NIM fell 8 bps sequentially to 3.27%.
• HDFC Bank faces pressure to lower its Loan-Deposit Ratio (LDR), which stood at 98% in Q2FY26, while ICICI Bank's LDR was stable at 87%.
• ICICI Bank's Return on Average Assets (RoAA) for FY26 is estimated at 2.3%, significantly higher than HDFC Bank's 1.8%.

Regulatory Changes in Banking: Banks are preparing for a required transition to the Expected Credit Loss (ECL) model starting April 2027, which necessitates recognizing potential stress earlier. Large private lenders are optimistic they can manage the transition smoothly, backed by strong profitability.

Insurance Sector: The life insurance industry is projected to grow at 14-15% over the next four to five years. Edelweiss Life Insurance is targeting a higher growth rate of 17-18% and expects to reach breakeven next year. Industry margins currently hover around 22-23%, down from 27-29% a couple of years prior.

II. Indian Economic and Business News Context

Robust Domestic Consumption and Sales

The festival season, culminating in the Dhanteras-Diwali weekend, saw blockbuster sales across consumer products, especially automobiles and durables.

• Sales Figures: Diwali sales reached a record ₹6.05 lakh crore (₹5.4 lakh crore in goods and ₹65,000 crore in services), marking a double-digit rise over the previous year.
• Automobile Sector: Robust demand was driven by buoyant consumer sentiment and recent GST 2.0 reforms, tax, and repo rate reliefs. Tata Motors reported over one lakh vehicle deliveries from Navratri to Diwali, representing 33% growth year-on-year.
• Beverages: Despite the strong consumer sentiment, Coca-Cola reported that its volume in India declined in Q3 CY2025 due to "inclement weather" (monsoon).

Core Sector and Manufacturing Activity

Core sector growth slowed to a three-month low of 3% in September, down significantly from 6.5% in August.

• Contractions: Output growth contracted in four of the eight key sectors: coal, crude oil, natural gas, and refinery products.
• Positive Growth: Steel was the standout performer, with production increasing 14.1% in September (up from 13.6% in August), preventing a further overall weakening of core industries. Production of steel, cement, electricity, and fertilizer recorded positive growth in September.
• Steel Sector Headwinds: Despite strong domestic demand, the industry faces pressure from the indiscriminate import and dumping of cheap steel, leading to concerns about domestic market share and depressed domestic prices.

Corporate Investment and Capital Expenditure (Capex)

Private capital expenditure generally remains constrained by soft domestic demand and geopolitical uncertainty. The median capex-to-revenue ratio for listed firms (excluding financial services) was subdued at 5.2% in FY25.

• Investment Bright Spots: Real estate and power were notable exceptions, consistently committing 10–11% of revenue to expansion over the last three years. The power sector accounted for about 40% of overall loan sanctions in FY25.
• Semiconductor Ecosystem: The semiconductor start-up ecosystem is seeing growing investor interest, largely attributed to government support through initiatives like the India Semiconductor Mission (ISM) and the Design Linked Incentive (DLI) scheme. However, Indian firms must operate with much greater capital efficiency compared to global peers.

IT and Technology Sector Shifts

IT Services: Profit margins for large Indian IT companies showed a sequential uptick in Q2FY26 (20-100 bps), driven by better pricing, cost discipline, and deal conversions. However, visibility remains cautious, especially regarding discretionary client spending and slow monetization of deals. A key strategy shift is the increasing focus on securing public sector contracts (both domestic and abroad) to ensure stable growth amidst private sector slowdown.

Telecom: Reliance Jio has postponed expected tariff hikes, choosing instead to grow Average Revenue Per User (ARPU) by encouraging higher data consumption. Jio’s monthly ARPU increased by 1.2% to ₹211.4 in the September quarter.

III. Global Economic and Geopolitical Context

Global Financial Stability and Investment Risks (AI Bubble)

An intellectual debate suggests that a financial bubble focused on AI investment is forming. This boom is characterized by:

• High Valuations: Conventional valuation metrics like P/E ratios are high (S&P 500 at 25x vs. historical 16x). Eye-popping valuations are being seen for pre-revenue start-ups, like Nano Nuclear Energy ($2.3 billion) and Fermi ($14.8 billion).
• Hidden Leverage: Growing margin debt and the explosion of zero-day options indicate increasing hidden leverage in the system.
• Centralized Risk: The AI boom is largely centered around global technology leaders (Nvidia, Alphabet, OpenAI) who are locked in massive, costly infrastructure deals, effectively tying the fortunes of these giants to a single startup that is far from profitable, potentially making it "too big to fail".

Geopolitical Tensions and Trade

US-China Trade Conflict: Tensions are escalating, with the US threatening an additional 100% tariff on Chinese goods. China is leveraging its effective global monopoly over rare-earth minerals as a geopolitical tool.

India-US Trade Relations: India is nearing a bilateral trade agreement with the US that could slash tariffs on Indian exports. India is considering increasing imports of non-genetically modified (GM) American corn and reducing Russian crude imports, a key demand from the US. RIL’s increased buying of West Asian crude suggests that Western pressure against Russian flows may be starting to impact its procurement patterns.

Global Infrastructure Risk: The 15-hour outage suffered by Amazon Web Services (AWS) highlighted the extreme interconnectedness of the internet, with thousands of sites relying on just three major cloud providers (AWS, Microsoft, Google). This event serves as a warning for firms moving large workloads to the cloud, especially AI companies that require uninterrupted service.

Outward Remittances: India's outward remittances for education abroad fell nearly 24% in August, hitting an eight-year low. This decline is attributed partly to tighter immigration checks globally, prompting Indian students to look toward destinations in Europe, Australia, and the Middle East where fees may be lower than in the US.

Social and Political Developments - Newspaper Summary

 The sources highlight several critical Social and Political Developments in India during the period of October 20-21, 2025, primarily focusing on domestic political realignments, the efficacy of major social schemes, rising concerns over social violence, and geopolitical tension related to trade and defense.

I. Political Developments: Elections and Geopolitics

Bihar Assembly Polls and Alliance Friction

The sources detail the complexities and fractures within the INDIA bloc regarding seat allocation for the Bihar assembly elections.

• The Rashtriya Janata Dal (RJD) announced its list of 143 candidates for the Bihar assembly polls.
• However, at least five of these RJD nominees are set to contest against candidates fielded by other constituents of the INDIA bloc. Specifically, the RJD will clash with the Congress party in constituencies like Vaishali, Lalganj, and Kahalgaon.
• The Jharkhand Mukti Morcha (JMM) publicly stated it would not contest the Bihar elections, alleging a "political conspiracy" orchestrated by its allies, the RJD and Congress, which deprived the JMM of seats within the Mahagathbandhan (grand alliance).
• Notable RJD candidates defending their sitting seats include Tejashwi Yadav (Raghopur), Alok Mehta (Ujiyarpur), Mukesh Raushan (Mahua), and Akhtarul Islam Shahin (Samastipur). The Congress party released seven more names, bringing its total number of announced candidates to 61.

Geopolitical Stance and Defense Symbolism

Prime Minister Narendra Modi’s public activities reinforced themes of national defense and self-reliance (Aatmanirbhar Bharat).

• PM Modi celebrated Diwali onboard the aircraft carrier INS Vikrant. He described the domestically built vessel, constructed at the Cochin Shipyard, as a "towering symbol of 'Aatmanirbhar Bharat'" and a testament to 21st-century India's "hard work, talent, impact and commitment".
• Modi remarked that INS Vikrant previously caused Pakistan "some sleepless nights" and claimed its very name "puts an end to the courage of the enemy".

II. Social Issues, Financial Inclusion, and Employment

Challenges in Financial Inclusion (PMJDY)

The government's flagship financial inclusion scheme, the Pradhan Mantri Jan-Dhan Yojana (PMJDY), is facing challenges related to account activity.

• The share of inoperative PMJDY accounts in public-sector banks (PSBs) increased to 26 per cent at the end of September 2025, up from 21 per cent a year ago. This suggests a slowdown in account activity.
• An account is considered inoperative or dormant if there are no transactions for over two years.
• Among large PSBs, Bank of India (33 per cent) and Union Bank of India (32 per cent) reported the highest shares of inactive PMJDY accounts. The inoperative ratio for the State Bank of India rose from 19 per cent in September 2024 to 25 per cent in September 2025.
• A previous World Bank study (Global Findex Report 2025, July release) noted that 35 per cent of Indian bank account holders were no longer using their accounts by 2021, citing Jan-Dhan accounts as a likely reason for the high share of dormant accounts. Reasons cited by respondents for inactivity included distance from financial institutions, lack of trust, and no perceived need for an account.
• The gap between PMJDY accounts and RuPay card issuance under PSBs stood at 31 per cent as of September 2025, meaning 170.2 million accounts still need to receive a RuPay card.

Rising Incidents of Violence Against Scheduled Castes (SCs)

A concerning social development highlighted is the rise in violence, particularly sexual violence, against Scheduled Caste (SC) women.

• The total number of rape cases against SC women has shown a "worrying upward trend" from 2,541 cases in 2016 to 4,214 cases in 2023.
• The share of rape incidents against SC women in total rape cases in India has more than doubled between 2016 and 2023.
• In 2023, the share of rape incidents against SC women in overall incidents of rape was over 14 per cent.
• Overall, 57,766 cases of atrocities against SCs were reported in 2023, marking the highest total in the last three decades.
• Cases of sexual violence—including rape, assault with intent to outrage modesty, and cases under the POCSO Act—accounted for over 95 per cent of the crimes committed against SC women in 2023.

Labor Dynamics and Employment

Data suggests a potential structural shift in industrial hiring trends, impacting employment opportunities.

• Sectors accounting for approximately 70 per cent of total factory employment showed a double-digit rise in additional fixed capital investment (median 12.6 per cent increase in FY24) but only single-digit hiring growth (median 7.8 per cent increase in persons engaged).
• Nine out of ten analyzed sectors showed higher growth in fixed capital than in persons engaged in factory work. This trend, observed for the second consecutive year, suggests firms may be choosing to invest more in machines than hiring people, possibly due to strict labor laws or the need to upgrade technology for global competitiveness.

III. Institutional Governance and Ethics

Debate over Private Sector Leadership in PSBs

The sources discuss the government's contemplation of enabling lateral entry from the private sector for senior leadership positions in Public Sector Banks (PSBs).

• This strategy is intended to inject management dynamism and competitiveness into a sector that handles over half of India's bank loans.
• However, the effectiveness of this move is questioned due to core differences in institutional values between private and public-sector banking.
• State-owned banks prioritize social objectives and public welfare (e.g., operating in loss-making financially underserved areas) alongside mandatory social obligations, unlike private sector banks driven largely by the instincts of risk-taking and profit maximization.
• These fundamental differences, coupled with the pressure of dealing with entrenched unions (who have opposed the move as an "attack on the national character" of PSBs), are unlikely to attract many top private-sector bankers.
• A proposed alternative is for PSBs to focus on grooming dynamic internal employees for leadership roles, ensuring familiarity with the institutional culture and operational constraints.

Corporate Governance and Harassment Allegations

A serious governance issue arose within a high-profile technology company.

• Bengaluru police registered a case (FIR) against Ola Electric founder Bhavish Aggarwal and other senior company officials following the death by suicide of a 38-year-old employee, K. Aravind.
• The deceased engineer reportedly left a note accusing members of the management of workplace harassment.
• The FIR reportedly invokes Section 108 of the Bharatiya Nyaya Sanhita, which pertains to abetment of suicide.
• Ola Electric stated they have challenged the registration of the FIR before the Karnataka High Court and protective orders have been passed in favor of the company and its officials. The company spokesperson also claimed that Aravind never raised any complaint or grievance regarding his employment or harassment during his three-and-a-half years of association with Ola Electric.

Indian Economy and International Status - Newspaper Summary

 The sources present a nuanced view of the Indian Economy and its International Status during October 20-21, 2025, highlighting both its inherent resilience and structural strengths, and the increasing pressures stemming from global geopolitical tensions, trade disputes, and currency volatility. Key aspects include efforts toward rupee internationalization, persistent trade challenges (especially concerning the US and Russia), robust domestic economic fundamentals, and India’s rising global role in the services sector.

1. Macroeconomic Resilience and Growth Drivers

The Reserve Bank of India's (RBI) "State of the Economy" report indicates that the Indian economy has exhibited resilience so far, driven by a focus on strong and durable macroeconomic fundamentals.

• Strong Fundamentals: India's economic health is underpinned by low inflation, robust balance sheets of banks and companies, adequate foreign-exchange reserves, and a credible monetary and fiscal framework.
• Growth Outlook: The Monetary Policy Committee resolution of October suggests that the growth outlook remains resilient, supported primarily by domestic drivers. Domestic structural reforms, including GST reforms, are helping to offset the drag caused by weakening external demand conditions.
• High-Frequency Indicators: High-frequency indicators point to resilient domestic economic activities, with a revival in urban demand and robust rural demand.
• Corporate Performance: Early corporate earnings for the July-September quarter (Q2FY26) were encouraging, with signs of improvement in revenues and profit growth. A common sample of 234 companies showed a 9.2% rise in sales and a 9.0% rise in net profit for the quarter ended September 30, 2025.

2. Global Headwinds and Vulnerabilities

Despite domestic strength, the sources caution that the Indian economy is not immune to global headwinds.

• Currency Pressure: The rupee remained under pressure during Samvat 2081 (the Hindu financial year), depreciating by 4.38 per cent against the dollar. This depreciation was primarily attributed to the rise in global trade tension.
• RBI Intervention: Amid the pressure, the RBI actively intervened, selling $7.6 billion worth of dollars in August 2025 (compared to $2.5 billion sold in July) and did not purchase dollars for the second consecutive month. This intervention was noted to have "contained the rupee from breaching [the] 89 per dollar mark". The outstanding net short dollar position in the rupee forward market fell further to $53.35 billion by the end of August.
• Foreign Investment Decline: Net foreign direct investment (FDI) turned negative in August 2025, due to moderation in inflows and an increase in repatriation. Outward FDI also declined in August, concentrated mainly in the financial, insurance, business services, and manufacturing sectors, with Singapore, the UAE, and the US being the major destinations.

3. International Trade and Geopolitical Tensions

Geopolitics, particularly involving the US and Russia, exerts significant pressure on India's international trade status.

US Trade Tensions and Russian Oil Purchases

US President Donald Trump reiterated that Prime Minister Narendra Modi told him India would stop buying Russian oil, warning that New Delhi would continue paying "massive" tariffs if it failed to do so.

• Tariff Threat: Trump claimed that half of the US's 50 per cent tariffs on Indian goods are in retaliation for Russian oil purchases, which the US government views as funding Russia's war in Ukraine.
• India's Stance: India's foreign ministry previously stated it was unaware of any conversation confirming a stop to purchases but emphasized that its main concern is to "safeguard the interests of the Indian consumer".
• Continuing Purchases: Indian sources indicated that refiners had already placed orders for November loading, suggesting any cut would likely only start appearing in December or January import numbers. Estimates suggest India's imports of Russian oil were set to rise about 20 per cent in October 2025.
• Trade Talks: Trade talks between India and the US are ongoing in a "congenial" manner.

India's Global Standing and Trade Agreements

• UK FTA: India's international status is enhanced by successful trade agreements. A majority of UK firms (72 per cent) now identify India as a key market for international growth, up from 61 per cent last year. This shift is attributed to the India-UK Comprehensive Economic and Trade Agreement, which is expected to be a "game-changer" by reducing entry barriers. Consequently, 73 per cent of UK firms without a current presence plan to enter the Indian market, reflecting India's "shift to the centre of global strategy conversations".
• Global Economy Comparison: The International Monetary Fund (IMF) expects India to surpass Japan as the world’s fourth-largest economy this year and overtake Germany to rank third by 2027–28. Globally, the IMF’s October World Economic Outlook talks about "a new global economic landscape slowly takes shape" amid rising protectionism and rising fiscal risks in advanced economies.

4. Internationalization of the Rupee

The RBI is taking deliberate steps toward gradually internationalizing the rupee.

• Objective: Internationalizing the rupee is vital for India's goal of becoming a "developed nation by 2047". Greater local currency use lowers risks and costs for companies, reduces the need for higher foreign exchange reserves, and makes the economy less vulnerable to external shocks.
• Policy Measures: Initial steps include establishing direct rupee reference rates that do not rely on a third currency like the US dollar for cross-reference. Reference rates are being established for the UAE dirham and the Indonesia rupiah, adding to existing links with the US dollar, Japanese yen, euro, and British pound.
• Conditions for Success: True currency power requires scale (which India is building, aiming for 7-8% sustained growth), stability (macroeconomic, financial, and political credibility), and liquidity.
• Different Path from China: Experts recommend India avoid China's approach of seeking internationalization while maintaining capital controls and a tightly managed exchange rate. India's currency lacks China's scale advantage (India accounts for about 3% of global trade versus China's over 12%). India’s best path forward involves gradually easing capital controls and embracing a genuinely flexible exchange rate, perhaps using GIFT City as a controlled experiment for an open capital account.

5. Services Export Leadership

India is solidifying its global position as a major services hub.

• Services Exports Growth: India is rapidly emerging as a global hub for services exports, growing at a Compound Annual Growth Rate (CAGR) of 14.8 per cent over the past three decades, outpacing goods exports (9.8 per cent CAGR).
• Global Rank and Contribution: India currently ranks 7th globally in services exports, holding a 4.3 per cent share. Telecom, IT, and business services contribute nearly three-fourths of India's total service exports.
• Technology Exports: Technology exports alone crossed $200 billion in FY25.
• Global Capability Centres (GCCs): India has emerged as the world's largest hub for GCCs. The number of GCCs is projected to increase from 1,700 in FY24 to 2,200 by FY30, employing up to 2.6 million professionals, with the market size expanding from $40 billion in FY19 to $100 billion by FY30.

Real Estate Sector and Infrastructure - Newspaper Summary

 The sources indicate that the Real Estate and Infrastructure sectors experienced a notable surge in demand, particularly in housing, during the October 20–21, 2025 period, counteracting broader economic concerns. Simultaneously, the sources detail significant progress and challenges related to large-scale infrastructure and industrial investment, especially concerning emerging technologies and environmental impact.

I. Real Estate Sector Performance (Residential)

The Indian housing market demonstrated resilience and robust performance during the festival season (Dussehra-Diwali period).

Festival Season Surge and Market Trends

• Sales Growth: Realty developers reported a 10–25 per cent year-on-year (Y-o-Y) rise in home sales across major cities during the festival season. This performance bucks the trend of falling demand that characterized earlier parts of the year.
• Segment Preference: Sales were primarily driven by the mid-premium and luxury segments, as buyers sought larger homes, superior amenities, and properties from reputed developers.
  • Demand concentrated specifically on the ₹2–5 crore mid-premium and luxury homes, particularly 2BHK–3BHK ready units.
  • Buyers showed a marked preference for ready-to-move-in homes.
  • There is increased demand for branded, amenity-rich, and environmentally sustainable homes.
• Regional Performance:
  • Mumbai: Property registrations in Mumbai saw a 23% Y-o-Y jump during the Navratri-Ganesh Chaturthi period. This surge reflects deep structural confidence in the housing market.
  • National Capital Region (NCR): This festive quarter was described as one of the most positive in recent years, with strong momentum in the mid- and premium segments. The Delhi-NCR region accounted for the largest share of sales (45%) for the Prestige group in H1FY26, surpassing Bengaluru and Mumbai.
  • Southern Markets: Momentum remained steady, supported partly by the expansion of Global Capability Centres (GCCs) in India. Hyderabad, Bengaluru, and Chennai collectively saw a significant 47% increase in sales of residential properties in the July-September (Q2) period compared to the previous year. However, overall demand across India's top eight primary housing markets saw a 1% decline during Q3 (July-September), mainly due to lower demand in Mumbai, Pune, and Delhi-NCR in that specific quarter.

Factors Driving Demand

Key elements supporting the housing market momentum include:

• Economic Policies: Stable loan rates, Goods and Services Tax (GST) rate relaxations, and GST reforms have encouraged purchases.
• Investment Appeal: Tangible assets like real estate continue to attract investors.
• Infrastructure Projects: Large infrastructure projects, such as the Mumbai Trans Harbour Link, Navi Mumbai International Airport, and metro expansions, are seen as decisive factors influencing buying decisions due to improved connectivity.
• Developer Quality and Consolidation: Buyers increasingly favour trusted, branded, and listed developers, leading to a structural shift toward market consolidation. Listed developers, in particular, outperformed smaller peers.

Developer Strategies and Outlook

• Prestige Group Expansion: Bengaluru-based Prestige group saw sales worth ₹18,143 crore in H1FY26, surpassing its full-year sales for FY25. The group is planning rapid expansion in Delhi-NCR and intends to create a long-term presence there. They are capitalizing on demand for plotted developments by offering them as developed communities with premium infrastructure. The company expects the entire third quarter (October–December) to be the strongest for the residential segment, predicting a 20–25% increase in sales compared to the preceding quarter.
• Affordable Housing & Loans: Within the financial sector, upcoming RBI guidance suggests that if a parent bank focuses on traditional housing loans, its subsidiary could specialize in areas like affordable housing or loans against property, aiming to prevent duplication of work while expanding market coverage.

II. Infrastructure Development and Challenges

The sources highlight major industrial and public infrastructure trends, focusing primarily on manufacturing investment and the environmental costs of the booming AI sector.

Industrial Investment and Employment

• Capital Investment Outpaces Hiring: In the industrial sector, fixed capital addition (investment in plant, machinery, and land) was at its fastest rate in seven years in FY24.
• Sectors accounting for about 70% of total factory employment showed a double-digit rise in investments, but only single-digit growth in hiring (a median fixed capital increase of 12.6% vs. a median employment growth of 7.8%).
• This discrepancy suggests a movement toward greater automation or capital-intensive production, potentially driven by the need to upgrade technology, meet global competitive standards, and manage strict labor laws.

Infrastructure Planning and Projects

• Defence and Self-Reliance: Prime Minister Narendra Modi celebrated Diwali on board the aircraft carrier INS Vikrant, emphasizing it as a towering symbol of 'Aatmanirbhar Bharat' (self-reliant India). The carrier, built at the Cochin Shipyard, signifies a major domestic infrastructure and manufacturing achievement in defense.
• Green Hydrogen Hubs: India is prioritizing maritime transport decarbonization and aims to become Asia’s central green shipping hub. Three major ports owned by the central government—Deendayal Port Authority (Gujarat), V.O. Chidambaranar Port Authority (Tamil Nadu), and Paradip Port Authority (Odisha)—have been recognized as green hydrogen hubs under the National Green Hydrogen Mission.

Environmental Impact of Tech Infrastructure (Data Centers)

The global AI building boom, which relies heavily on data centers, is severely straining local infrastructure worldwide, including in India.

• Resource Strain: Data centers require vast amounts of electricity for computing and water for cooling. Similar concerns regarding resource strain have surfaced in India, alongside countries like Ireland, Chile, and South Africa.
• Local Disruptions: In communities near data centers in central Mexico, power cuts and prolonged water outages have increased, leading to school cancellations and health issues.
• Lack of Transparency: Tech giants like Google, Amazon, and Microsoft often use subsidiaries or service providers, masking their presence and revealing little about the resources consumed by these facilities.
• Government Policy: Many governments, eager for an AI foothold, offer welcoming policies, cheap land, tax breaks, and access to resources, often taking a hands-off approach to regulation. In Mexico's Querétaro, officials described power and water interruptions as "happy problems" associated with development, and stated that non-disclosure agreements (NDAs) with tech companies require keeping resource consumption information secret from the public and utility companies.
• Global Backlash: International opposition to data center construction is mounting, leading authorities in places like Ireland and the Netherlands to restrict new developments due to risks to power supplies and environmental concerns.

Banking and Finance Sector - Newspaper Summary

 The sources highlight significant shifts within the Banking & Finance Sector during the October 20-21, 2025 period, characterized by regulatory streamlining, major M&A activity, institutional challenges in public sector banking, and technological advances in financial services. These changes are set against a backdrop of efforts to internationalize the rupee and manage global economic headwinds.

Regulatory and Policy Changes to Enhance Ease of Business

A key development centers on the Reserve Bank of India's (RBI) potential relaxation of rules regarding commercial banks establishing subsidiaries.

• Subsidiary Approvals: The requirement for commercial banks to obtain RBI approval for floating subsidiaries may no longer be mandatory, according to highly placed sources. This streamlining effort is part of the regulator's broader push to enhance the ease of doing business within the financial sector.
• Non-Duplication Mandate: However, the RBI plans to issue draft norms emphasizing non-duplication of business. The intention is that a bank's subsidiary should focus on segments where the parent is not present. For instance, if a parent bank specializes in housing loans, its subsidiary could focus on affordable housing or loans against property.
• Operational Freedom: This potential move is considered a marked departure from current practice, as the RBI has not approved any bank setting up subsidiaries in almost two decades, despite past requests from large private banks for lending and infrastructure finance arms. The final norms aim to provide more operational freedom to banks and Non-Operative Financial Holding Companies (NOFHCs). RBI Governor Sanjay Malhotra affirmed the regulator's stance against micro-managing banks' decision-making. This impending policy shift is already leading some large private banks, such as Axis Bank (via its subsidiary Axis Finance), to consider listing their arms.
• SEBI Regulations: In market regulation, the Securities and Exchange Board of India (Sebi) has proposed amendments to ease norms for the transfer and dematerialization of physical securities executed before April 1, 2019, granting investors another opportunity to regularize these holdings. Additionally, Sebi gave approval for the Initial Public Offerings (IPOs) of several firms, including Asset Reconstruction Company India (ARCIL), which is poised to become the country's first publicly traded Asset Reconstruction Company.

Institutional Changes and Bank Performance

Mergers, Acquisitions, and Capital Adequacy

• RBL Bank Acquisition: RBL Bank experienced a significant surge in its shares (nearly 9%) following the announcement that Dubai-based Emirates NBD plans to acquire a 60% stake through a preferential issue for approximately $3 billion. Analysts view this transaction as highly positive, signaling a "prolonged growth phase" for RBL Bank and mitigating key "tail risk" related to capital adequacy, especially concerning the upcoming expected credit loss (ECL) framework transition.
• ECL Framework Impact: The transition to the RBI-mandated Expected Credit Loss (ECL) framework is anticipated to impact banks' balance sheets. Punjab National Bank (PNB) expects a hit of approximately $1.03 billion (~9,000 crore) by 2031, which corresponds to roughly a 0.85 percentage point impact on its Capital to Risk Assets Ratio. Indian Overseas Bank (IOB) estimates the incremental provisioning impact due to the ECL transition to be around ~2,500 crore to ~2,800 crore.
• M&A Financing Focus: IOB is shifting its focus toward Merger and Acquisition (M&A) financing, a new area opened up by the RBI.

Performance and Strategy

• IDFC First Bank's Improving NIM: The Net Interest Margin (NIM) for IDFC First Bank, which experienced compression after fully passing on the repo rate cut, is expected to improve sequentially starting in Q3 (October–December). The bank reported Q2FY26 NIM at 5.59%. The bank's core profitability improved due to reduced provisions, stable asset quality, and a falling cost of funds. The cost of funds decreased due to a rise in the Current Account Savings Account (CASA) ratio to 50.1%. The bank is expanding into segments like cash management, start-up banking, NRI services, and trade finance, aiming to reduce its credit-deposit ratio (currently 94.2%) to the mid-80s.
• ICICI Bank's Results: ICICI Bank reported satisfactory results for Q2FY26, with net profit rising 5.2% year-on-year to ~12,360 crore, supported by strong margins and lower provisions. Its Gross Non-Performing Assets (GNPA) ratio dropped to 1.58%.

Public Sector Challenges and Financial Inclusion

The efficacy of the government's flagship financial inclusion scheme, the Pradhan Mantri Jan-Dhan Yojana (PMJDY), shows challenges in account utilization.

• Inoperative Accounts: The share of inoperative PMJDY accounts in public-sector banks (PSBs) increased to 26 per cent at the end of September 2025, up from 21 per cent a year ago. This suggests a slowdown in activity within the scheme.
• Specific PSB Inactivity: Bank of India (33 per cent) and Union Bank of India (32 per cent) reported the highest percentages of inactive PMJDY accounts as of September 2025. An account is deemed inoperative or dormant if there are no transactions for over two years.
• Leadership Debate: The government's plan to allow lateral entry from the private sector for senior positions in PSBs aims to inject management dynamism. However, this strategy faces uncertainty due to core differences in institutional values, as state-owned banks prioritize social objectives and public welfare, unlike the profit-maximization instinct often found in the private sector.

Advancements in Financial Technology and Risk

Digital Payments and Products

• Revolut's India Strategy: UK-based Revolut India is prioritizing prepaid cards on the Visa network for both domestic and forex transactions, linking India to global markets like the US, UK, and Singapore. Revolut India plans to acquire 20 million customers in the next five years. By operating as a direct issuer with Prepaid Payments Instruments (PPI) authorization from the RBI, Revolut expects to achieve a higher interchange income compared to co-branded bank cards.
• Credit Growth Engines: Co-branded credit cards (CBCCs) are emerging as a strong credit growth engine in India, with revenues projected to triple by FY28 from the current $17,000–$19,000 crore.

Combating Fraud with Alternative Data

• New Risk Assessment Tools: Risk assessment platforms are increasingly relying on diverse alternative data sources to identify groups attempting credit fraud and to improve underwriting for new-to-credit (NTC) users.
• Data Sources: This alternative data includes location details, third-party app usage, SMS data, payment transaction behavior, and metadata. This approach is vital because comprehensive credit bureau information is often lacking for NTC customers.
• Fraud Detection: Analysis of alternative data patterns can reveal large fraud networks; for example, tracing multiple government IDs linked to several phone numbers and PAN cards. The strategic outcomes expected from using this data include reducing fraud risks and Non-Performing Assets (NPAs), alongside increasing loan approval rates.

Banking & Finance Sector in Macro Context

The financial changes are unfolding alongside significant macro trends:

• Rupee Internationalization: The RBI is actively working toward internationalizing the rupee by facilitating easier settlement for free-trade partners. Steps include establishing direct rupee reference rates that circumvent reliance on a third currency like the US dollar, with initial additions covering the UAE dirham and Indonesia rupiah. This aligns with India’s long-term objective of achieving "developed nation" status by 2047, bolstering the currency's stability, and mitigating vulnerability to external shocks.
• Currency Performance: Despite resilience in the broader Indian economy, the rupee remained under pressure, weakening by 4.38 per cent against the dollar during Samvat 2081. This was primarily attributed to rising global trade tensions and the imposition of reciprocal US tariffs on Indian goods. Amid pressure, the RBI did not buy dollars for the second straight month in August 2025, instead selling $7.6 billion of the greenback.
• Global Headwinds: The RBI's monthly report, "State of the Economy," noted that while India has shown resilience, it is not immune to global headwinds. This caution is reinforced by the fact that net foreign direct investment (FDI) turned negative in August due to increased repatriation and moderating inflows. However, the report highlights that India's strong economic fundamentals include robust balance sheets for banks and companies.

The Great Feminization Thesis - Compact Mag

 The source outlines the "Great Feminization" thesis, asserting that demographic shifts resulting in women achieving majority status in key institutions are responsible for contemporary cultural phenomena, often referred to as "wokeness". The highlights can be summarized by separating the observations made on facts and data from the conclusions and theoretical arguments derived from them.

Key Highlights: Observations Made on Facts and Data

The source draws upon historical events, professional demographic shifts, documented group behaviors, and legal precedents to support its argument:

1. Demographic Tipping Points (Feminization)

The source provides specific timelines showing institutions shifting from majority male to majority female status:

• Law schools became majority female in 2016, and law firm associates became majority female in 2023. By 2024, law schools were 56 percent female.
• Women currently comprise 33 percent of judges in America, a significant increase from 5 percent when Sandra Day O’Connor was appointed.
• The New York Times staff became majority female in 2018, now standing at 55 percent female (up from 10 percent in 1974).
• Medical schools became majority female in 2019.
• Women became a majority of the college-educated workforce nationwide in 2019 and a majority of college instructors in 2023.
• The field of psychology is now overwhelmingly female, with 75 percent of doctorates going to women.

2. The Larry Summers Case

The resignation of Larry Summers as president of Harvard University in 2005 is cited as a cultural turning point that precedes the "woke" era.

• Summers gave a talk, intended to be off the record, suggesting female underrepresentation in hard sciences was partly due to differences in "availability of aptitude at the high end" and taste.
• Female professors, offended by the remarks, sent them to a reporter in defiance of the off-the-record rule.
• One female biologist, Nancy Hopkins, stated that the bias discussed made her "physically ill," framing the response as emotional rather than logical.
• Experts who chimed in declared that Summers' statements on sex differences were within the scientific mainstream, but these rational appeals had no effect on the subsequent "mob hysteria".

3. Differences in Group Dynamics and Conflict Styles

Observations regarding sex differences are noted, emphasizing that while individuals may defy stereotypes, groups display consistent statistical differences:

• Conflict Resolution: Experiments cited by Professor Joyce Benenson show groups of men given a task will "jockey for talking time, disagree loudly," and then "cheerfully relay a solution". In contrast, groups of women will "politely inquire about one another’s personal backgrounds and relationships," pay "little attention to the task," and engage in much eye contact, smiling, and turn-taking.
• Political Values: Survey data shows sex differences in political values; for instance, 71 percent of men prioritized protecting free speech, while 59 percent of women prioritized preserving a cohesive society.
• Covert Conflict: Bari Weiss's resignation letter from The New York Times described colleagues referring to her in internal messages as a racist/bigot and "badger[ing]" colleagues perceived to be friendly with her, which the author labels as "very feminine".

4. The Role of Law and Institutional Rules

Legal mechanisms are observed to artificially enforce feminization:

• Anti-discrimination law makes it illegal to employ too few women, particularly in higher management, creating a fear of lawsuits. Companies like Texaco, Goldman Sachs, and Coca-Cola have paid nine-figure settlements alleging bias against women.
• Lawsuits targeting "frat boy culture" or "toxic bro culture" compel employers to make the office "softer".
• The Title IX sexual assault courts established in 2011 are cited as an example of a feminized legal system that abolished safeguards like the right to confront one's accuser, substituting objective guilt for how one party feels about an act in retrospect.

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Key Highlights: Conclusions and Theoretical Arguments

The conclusions presented propose the "Great Feminization" as the overarching explanation for contemporary cultural trends and institutional decline.

1. The Great Feminization Thesis

• The thesis posits that everything perceived as "wokeness" is an epiphenomenon of demographic feminization. Wokeness is not a new ideology (like Marxism) but rather feminine patterns of behavior applied to institutions where women were recently few in number.
• Cancellations are inherently feminine because they rely on emotional appeals and mob hysteria rather than rational or logical arguments.

2. Feminine vs. Masculine Institutional Priorities

Wokeness involves prioritizing traits associated with the feminine over the masculine:

• Empathy over rationality.
• Safety over risk.
• Cohesion over competition.
• Conflict Avoidance: Men wage conflict openly, while women engage in covert undermining or ostracization, aiming for consensus rather than open disagreement.
• Failure to Compartmentalize: The rise of feminization has led to a society-wide failure to separate professional duty from personal political opinions, seen in doctors wearing political pins in the examination room.

3. Benenson’s Evolutionary Theory

The theory suggests that group dynamics were optimized for survival: men developed dynamics optimized for war, which requires methods for reconciliation after conflict. Women developed dynamics optimized for protecting offspring, leading to conflicts within the tribe that are resolved by covert competition and have no clear terminus.

4. The Artificiality of Feminization

The author concludes that feminization is not an organic result of women outcompeting men. Instead, it is an artificial result of social engineering.

• The system is "nominally meritocratic" but made it illegal for women to lose due to anti-discrimination laws.
• The increasing feminization beyond parity (e.g., psychology reaching 75 percent female) suggests that women are driving men away by imposing feminine norms on previously male institutions.

5. Predictions of Institutional Decline

If feminization continues, the quality and function of major institutions are expected to deteriorate:

• The Rule of Law: The source asserts that "the rule of law will not survive the legal profession becoming majority female". A feminized legal system will prioritize sympathy and emotional responses, leading judges to "bend the rules for favored groups and enforce them rigorously on disfavored groups".
• Academia: A majority-female academia will be oriented toward goals other than open debate and the unfettered pursuit of truth.
• Journalism and Business: If journalists lose their "prickly individualists" spirit or business loses its "swashbuckling spirit" and becomes a "feminized, inward-focused bureaucracy," these institutions will stagnate or cease to perform their designed tasks.

6. Proposed Solution

To address the feminization, the author concludes that doors do not need to be shut on women, but fair rules must be restored. This includes making hiring meritocratic in substance, making it legal to have a masculine office culture again, and removing the "HR lady’s veto power," which are institutional changes brought about by legal mandates that can be reversed.

Public Health and Regulation - Newspaper Summary

 The sources highlight a critical juncture in India's Public Health and Regulatory landscape in October 2025, marked by recurring pharmaceutical tragedies, intensified regulatory reform efforts, and the emergence of new, technologically driven healthcare solutions. These developments have significant implications for public trust, market accountability, and the future economic structure of the healthcare sector.

I. Public Health Crises and Regulatory Failures

The dominant theme in public health is the recurring tragedy of contaminated cough syrups and the resulting scrutiny on India's drug regulatory system.

The Killer Cough Syrup Crisis

• India is once again reeling from a "preventable tragedy": the death of 25 children in Madhya Pradesh and Rajasthan due to contaminated cough syrup.
• This tragedy follows a grim pattern of recurring negligence traced back to 1986, with multiple incidents resulting in child deaths due to contamination by diethylene glycol (DEG), a toxic industrial solvent.
• Investigations into the latest incident involving Sresan Pharmaceuticals' Coldrif syrup (batch SR-13) found it contained 48.6 per cent DEG, which is nearly 480 times the permissible limit of 0.1 per cent.
• Regulators inspecting Sresan's shuttered manufacturing plant found 39 critical and 325 major observations, including unhygienic storage, rusted equipment, and the use of non-pharmaceutical grade raw materials. Experts allege this is "clearly adulteration," not contamination.
• The crisis highlights weak drug regulation and poor enforcement. For example, the regulatory goal of appointing one drug inspector per 50 factories remains unfulfilled.

Systemic Accountability and Regulatory Gaps

• The crisis underscores broader accountability gaps involving pharmaceutical companies, the Central Drugs Standard Control Organisation (CDSCO), and State regulators.
• Regulatory Blind Spots: The law mandates annual inspections of pharmaceutical facilities, but this "never happens in India".
• Lack of Transparency: Unlike the USFDA, Indian regulators generally do not share inspection reports with the public, making it difficult to assess public health risks.
• Outdated Laws and Dilution: India’s drug laws are considered outdated. Furthermore, revised Schedule M rules (defining good manufacturing practices) only applied to large manufacturers starting in June 2024, with micro, small, and medium-sized enterprises (MSMEs) receiving an extension until December 31, 2025. Early implementation of requirements like vendor qualification could have avoided the crisis.
• Pharmacovigilance is Poor: India lacks robust pharmacovigilance (PV) systems, meaning adverse reactions to medicines often go unreported, especially in remote areas.
• Trust Erosion: Trust in the regulatory system is further eroded by findings that over 30 pharmaceutical firms bought electoral bonds worth over ₹900 crore, raising serious concerns about conflict of interest.

II. Regulatory Overhaul and Technological Intervention

In response to these lapses and India's growing global role as a generic drug supplier (projected to reach a market value of $130 billion by 2030), the government is introducing stringent traceability and quality control measures.

Mandatory QR Codes for Critical Drugs

• India is set to tighten rules on the sale and distribution of four crucial life-saving medicine categories:
  1. Vaccines
  2. Antimicrobials
  3. Narcotic and Psychotropic Drugs
  4. Anti-Cancer Drugs
• The government has proposed an overhaul to secure the pharmaceutical supply chain by inserting a new section under Schedule H2 of the Drugs and Cosmetics Rules, 1945, to make product-level traceability mandatory.
• This involves mandating unique Quick Response (QR) codes on each pack to enable tracking and tracing from the manufacturer to the consumer.
• The measure is crucial to combat spurious products and treatment failure, particularly in high-stakes, expensive categories like vaccines and anti-cancer drugs.

Broader Regulatory and Public Health Reforms

• The proposed way forward includes decisively banning irrational drug formulations (like paediatric cough syrups, which the WHO advises against), filling vacant regulatory posts, strengthening drug testing facilities, and enforcing modern quality management systems.
• It is suggested that India should establish a unified legal and enforcement body, such as an all-India drugs control services cadre, to address the lack of uniformity and low staff strength across State FDAs.
• Simplified School Bag Norms: In a non-pharmaceutical but public health-related regulatory move, the government has commissioned a study by the Bureau of Indian Standards (BIS) to update the decades-old schoolbag standard (IS 10228:1982). The goal is to make bags lighter, more durable, and ergonomically designed to reduce musculoskeletal and postural problems among schoolchildren. The revised norms, benchmarking against international standards, will be mandatory and aim to end the practice of selling heavy, fancy school bags.

III. Intersection with Economic and Market Dynamics

These health and regulatory developments intersect with broader economic and market dynamics, creating opportunities for certain sectors while increasing regulatory risk for others.

The Rise of HealthTech and Neurotech

The massive treatment gap in mental health (only 10-15% of the estimated 200 million Indians needing care receive it) has created an opportunity for technology-led solutions.

• Market Potential: India’s mental health market was valued at about $20 billion in 2024 and is projected to reach $27 billion by 2033.
• Neurostimulation Devices: Startups like Mave Health and Marbles Health are developing wearable neurostimulation devices (using Transcranial Direct Current Stimulation, or tDCS) to address conditions like anxiety, depression, and ADHD.
• Regulatory Distinction: Marbles Health's EASE device has taken a clinical route, becoming India's first portable neuromodulation device approved by the CDSCO. However, other devices market themselves as "wellness" products, leveraging regulatory loopholes to avoid strict medical device licensing.
• Economic Opportunity: Despite current low adoption and high costs, investors see a significant long-term serviceable market (estimated at ₹11,000 crore). Policy support, including the Medical Device Regulation (MDR 2017) and a dedicated Production-Linked Incentive (PLI) scheme, is driving domestic manufacturing and export potential for these devices.

Investment and Policy Confidence

• The government's continued focus on sectors like healthcare is viewed positively by market observers, with Salesforce identifying healthcare as a sector showing "pretty steady and good growth".
• However, the ongoing controversies regarding quality and regulation in the domestic pharmaceutical market may raise concerns for foreign investors, even as India seeks to strengthen trade relations and market openings for sectors including pharmaceuticals. The mandatory traceability of drugs, therefore, becomes a critical measure to uphold the quality and reputation of India's generic drug exports globally.

Banking and Financial Sector Developments - Newspaper summary

 The sources highlight several critical developments in the Indian Banking and Financial Sector in October 2025, situating these changes within the context of domestic economic acceleration, strategic foreign investment, regulatory shifts, and technological modernization.

I. Strategic Inflows and Banking Sector Transformation

The most significant development is the massive influx of foreign capital into India's mid-sized private banking sector, signaling a shift in global confidence and potential for strategic transformation.

RBL Bank and Emirates NBD Deal

• Emirates NBD Bank (ENBD) proposed acquiring a 60% stake in RBL Bank through a primary infusion of ₹26,850 crore ($3 billion).
• This deal is described as the largest foreign direct investment (FDI) and equity fundraise in India’s banking sector to date.
• The deal is seen as signaling the second coming of foreign banks in India and is expected to open a floodgate of more such transactions, potentially targeting other mid-sized private sector banks.
• RBL Bank's Ambition: MD & CEO R Subramaniakumar stated the bank aims to "exit the mid-, small-size bank league and enter the big bank league" using this capital boost.
• Strategic Synergies: Key synergies are anticipated in export-import and international business, leveraging ENBD’s strong presence in corridors with a large pool of Indian remittances. The second major area of synergy is wealth management, using ENBD's international product portfolio to tap into Indian High-Net-Worth Individuals (HNIs) and Ultra HNIs.
• Regulatory Comfort: Bankers and consultants believe the Reserve Bank of India (RBI) is now "more comfortable with the idea of more foreign capital in banking," signaling greater flexibility to enable strategic capital to play a larger role in local banks that need to bolster their balance sheets. The RBI seeks strategic investors who will remain invested for at least a decade or two.
• Inorganic Growth: RBL Bank's management stated the option for inorganic growth is available following the investment completion, although it is too early to decide on its exercise.
• Timeline: The bank is working to secure approvals from shareholders (scheduled for November 12) and the RBI, anticipating the transaction could take 6–9 months to complete, due to the lack of precedent.

Other Foreign Inflows

• The ENBD-RBL deal follows other major recent investments, such as Sumitomo Mitsui Banking Corp. (SMBC) completing the acquisition of a 20% stake in Yes Bank (with approval to potentially reach 24.2%) in September.
• Abu Dhabi-based Avenir Investment RSC agreed to acquire a 43.46% stake in Sammaan Capital for $1 billion.
• Japan’s MUFG is reportedly in talks to acquire a controlling stake in Avendus Capital, valuing it at around $800–900 million.

II. Credit Growth Driven by Policy Triad and Consumption

The banking sector is actively responding to macroeconomic policies aimed at accelerating consumer demand, resulting in accelerated credit growth projections.

Retail and MSME Credit Boost

• The combination of tax benefits, GST rate cuts (GST 2.0 reforms), and interest rate cuts is referred to as a "triad" that is visibly improving economic activity.
• Bankers expect retail credit growth to rise over 20% in H2FY26, a significant jump from the 14–15% growth seen in H1.
• The GST rate reduction is specifically expected to boost advances (credit growth) in the retail and MSME sectors by an estimated 1 to 2 per cent across the system.
• HDFC Bank's MD & CEO stated that this visible improvement provides an opportunity to accelerate loan growth, which is expected to sustain.

Corporate Loan Reversal

• In a reversal of the trend seen over the past year, large-sized banks have reported robust growth in their corporate loan portfolios in Q2FY26.
• Axis Bank's corporate loans grew 20% year-on-year in Q2, significantly higher than the 8–9% seen in the previous two quarters, driven by specific lending opportunities.
• Bank of India reported corporate loan book growth of 12% year-on-year in Q2 and has a corporate loan pipeline of over ₹50,000 crore slated for disbursement in Q3 and Q4.
• Growth Opportunities: Loan proposals and disbursements are linked to growth opportunities in key sectors, including data centers, warehousing, solar PV modules, batteries, EVs, natural gas, lease rental discounting, copper refineries, and oxygen plants. This indicates a potential pickup in private capital expenditure.
• PNB's Project Financing: Punjab National Bank (PNB) is seeing strong sanctions in its corporate book (₹1.78 lakh crore), anticipating growth in corporate loans to reach 8-9% in Q3 and double-digits in Q4 of FY26. PNB is focusing on good quality project loans, particularly in renewable energy (where exposure surged to ₹20,000 crore), steel, food processing, telecom, road, power, and data centers.

III. Festive Lending Push and Operational Dynamics

Banks are aggressively driving credit during the Diwali festive season, demonstrating favorable pricing and promotional strategies.

Aggressive Festive Offers

• Banks have rolled out a host of lucrative offers to maximize business during Diwali 2025, including cashbacks, discounts, sharply discounted processing fees, and lower interest rates.
• HDFC Bank is offering personal loans at 9.99% interest rate with zero foreclosure fees (for certain credit scores/loan amounts) and home loans starting at 7.4%.
• ICICI Bank is offering special processing fees for home and auto loans, along with significant cashbacks on electronics (e.g., up to ₹6,000 instant cashback on iPhone 17 purchases).
• Bank of Baroda is offering home loan rates starting at 7.45% with nil processing fees.
• IndusInd Bank is offering up to 50% off on processing fees across various loan products, with personal loan rates starting at 10.49%.

Interest Rate Outlook and Margins

• PNB expects the impact of policy interest rate reductions to be felt with a lag in the cost of deposits, as older, higher-rate deposits (like the 400-day special deposit scheme at 7.25%) mature and renew at lower rates (currently around 6.4%).
• PNB anticipates improvement in its net interest margin (NIM), expecting a 5–7 basis points improvement in Q3 and 10–12 basis points improvement in Q4 of FY26, as the entire deposit base gets repriced.

IV. Digital and Infrastructure Developments

Developments in digital finance and public infrastructure continue to reshape the delivery of financial services.

Open Network for Digital Commerce (ONDC) in Finance

• ONDC is expanding into financial services, aiming to create an "actual financial internet" where discovery, verification, and delivery of products like loans, insurance, and mutual funds are interoperable.
• It operates on the same digital public infrastructure rails as UPI.
• The network eliminates the reliance on walled gardens, reducing intermediaries and potentially lowering costs, which enables smaller ticket size SIPs and helps small distributors.
• ONDC is currently active in loans and mutual funds, with 19 Asset Management Companies (AMCs) already live. This allows any customer on an ONDC-integrated app to access funds from any partnered AMC.
• ONDC is actively laying pipelines for future insurance offerings, gold loans, credit cards, and loans against mutual funds.

EPF Withdrawal Reforms

The government has proposed major reforms to the Employees’ Provident Fund (EPF) withdrawal rules, impacting liquidity management for employees:

• Easier Partial Withdrawal: Rules for partial withdrawals are being materially simplified, consolidating 13 grounds into three categories (essentials, housing, special circumstances). The required minimum service period for all withdrawals is standardized to just one year (down from five to seven years).
• Access in Unemployment: Under new rules, employees facing unemployment can immediately access up to 75% of their account balance (including the employer’s share) under the 'special circumstances' category, with minimal documentation.
• Final Withdrawal Restriction: The waiting period for final, complete withdrawal post job loss is proposed to increase from two months to 12 months (for the remaining 25% of the corpus). This measure aims to prevent frequent account closures and ensure continuity of EPF accounts/UANs, which is necessary for pension benefits.

Investment and Wealth Management - Newspaper Summary

 The available sources paint a comprehensive picture of Investment and Wealth Management in India in October 2025, characterized by robust capital market activity, shifting investor strategies driven by market volatility, a strong push toward financial digitalization, and significant capital inflows into the banking and financial services sectors.

I. Investment and Capital Market Dynamics

In the broader context of India's economic and market dynamics, the sources highlight a mixed environment where market sentiment is cautiously optimistic, and capital raising activity remains strong.

Equity Market Performance and Outlook (Oct 2025)

The benchmark indices, the 30-scrip Sensex and the 50-stock Nifty, have remained below their all-time highs set in September 2024, maintaining this depressed level for 13 months. The financial performance of India Inc. has been described as lacklustre, discouraging fresh buying in the face of inflated stock prices.

Market Volatility and Returns:

• Equity markets overall experienced low single-digit returns in the past Samvat year (FY26), while debt instruments fared worse due to unexpectedly rising interest rates.
• Despite this, market experts expect the volatility to persist for at least the next six months.
• The Nifty 50 is projected to reach the 27,000–28,000 range by the next Samvat (October 2026), driven by expected rate cuts, tax benefits (like GST 2.0 reforms), liquidity support, and higher government spending.
• Large-cap stocks outperformed in 2025 due to sound fundamentals, better valuations, and institutional investor preference, navigating global volatility with resilience. Conversely, mid-cap, small-cap, and micro-cap segments faced heightened volatility and investor caution due to sluggish global demand and stretched valuations.

Investment Trends and Sentiment:

• Foreign vs. Domestic Flows: Foreign Portfolio Investors (FPIs) have sold a record ₹2 trillion in the cash market so far this calendar year, seeking exit due to stretched valuations and decelerating earnings growth. Domestic institutional investors, however, are leveraging mutual fund inflows to buy up dips, betting on India’s long-term growth story.
• Corporate Earnings: India Inc.’s top executives expect earnings to pick up only in the second half of FY26 (H2FY26). The earnings downgrade cycle, which cut Nifty 50 EPS significantly over the past 12 months, is believed to be nearing its end.
• Contrarian Picks: Select sectors are identified as potential contrarian bets for long-term investors, including the IT sector (due to priced-in pessimism and reasonable large-cap valuations) and Oil Marketing Companies (OMCs) (benefiting from lower crude prices and higher capex).

Capital Raising and IPO Momentum

The primary market remains robust, signaling strong confidence from issuers and institutional investors:

• IPO Activity: Equity capital market volumes are expected to increase, with Indian companies potentially raising over $20 billion through IPOs by the end of 2025. India is among the top four countries globally for IPO volume in 2025.
• Key IPOs: Meesho, a Softbank-backed e-commerce marketplace, filed an updated DRHP to raise up to ₹4,250 crore via a fresh equity issue, targeting a listing in December. Avaada Electro also sought to raise ₹10,000 crore via an IPO.
• Market Sentiment on IPOs: Nearly 53% of surveyed respondents believe that IPO momentum will remain strong through FY26, buoyed by liquidity and retail participation.

II. Gold and Alternative Assets

Precious metals and alternative investment avenues have gained prominence amid global uncertainty.

Gold and Silver Rally

Gold and silver prices have witnessed a massive surge, significantly outperforming equity markets in 2025.

• Record Prices: On October 18, 2025, 24-carat gold in the Delhi market was trading at a record high of ₹1,31,800 per 10 gram, and silver was at ₹1,70,000 per kg.
• Driving Factors: The rally is attributed to global geopolitical tension, US-China tariff uncertainties, expectations of US Federal Reserve interest rate cuts, robust buying by central banks, and the metals' appeal as safe-haven assets.
• Outlook: Bullish momentum is projected to continue, with some analysts predicting gold prices could reach ₹2 lakh per 10g within the next 2-3 years. However, 64% of experts surveyed remain doubtful about gold hitting ₹1.5 lakh per 10g by FY26-end due to global policy volatility.
• Impact on Businesses: The high prices have led to a boom for gold-centric NBFCs (like Muthoot Finance and Manappuram Finance), significantly boosting their AUM and profitability. Conversely, jewellery companies face headwinds due to waning retail demand, as middle-class consumers scale back purchases.

Specialized and Alternative Investments

The market is maturing, leading to the development of sophisticated investment products:

• Alternative Investment Funds (AIFs): AIFs are expected to become more mainstream. Franklin Templeton has shifted its private credit business into the AIF framework, focusing its first private credit AIF on the NBFC sector.
• Specialized Investment Funds (SIFs): Franklin Templeton is exploring SIFs, particularly the long-short strategy, which is relatively new in India. SEBI is noted for allowing larger and specialized investors to access these products.
• REITs and InvITs: The sources mention that Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) provide inflation-linked income streams from commercial properties and toll roads, blending equity-like growth with debt stability. SEBI classified REITs under the equity category for mutual fund investment purposes in October 2025.

III. Wealth Management and Financial Planning

The focus is shifting towards financial discipline, long-term systematic investing, and utilizing digital infrastructure for enhanced access.

Emphasis on Discipline and Compounding

Financial planners stress the importance of balancing consumption (especially during the Diwali festive season) with disciplined investing.

• SIPs and Long-term View: Consistent investment via Systematic Investment Plans (SIPs) is highlighted as the core method for sustainable wealth creation, overriding short-term volatility.
• The Cost of Splurging: Examples illustrate how money spent on short-lived items (like sweets or new sofas) could yield substantially higher returns if invested consistently (e.g., a ₹1,000 monthly SIP growing to ₹2.4 lakh over 10 years in a Nifty 50 Index Fund).
• Portfolio Cleanup: The festive season is recommended for financial "spring cleaning," urging investors to consolidate holdings, identify overlapping investments, close redundant accounts, and reaffirm asset allocation based on long-term goals rather than chasing past winners (TrendMap).

Digitalization and Accessibility (ONDC)

A significant development democratizing financial access is the expansion of the government-backed Open Network for Digital Commerce (ONDC) into financial services.

• Financial Internet: ONDC aims to create an "actual financial internet" by making discovery, verification, and delivery of financial products (loans, insurance, mutual funds) interoperable. It works on the same rails as UPI.
• Mutual Funds on ONDC: ONDC is gaining traction in the mutual fund space, with 19 AMCs already live. This system allows investors to access funds from multiple AMCs through any integrated app, regardless of which platform the AMC is partnered with.
• Increased Access: This technology reduces the number of intermediaries, lowering costs and enabling smaller ticket size SIPs, creating a level playing field, particularly for the unserved masses in B30 (Beyond Top 30) towns, which are considered the "real growth market".

Growth in Banking and Financial Services

The financial sector is undergoing significant recapitalization and strategic realignment, particularly in mid-sized private banks.

• Foreign Capital Inflow: Emirates NBD Bank agreed to acquire a 60% stake in RBL Bank for ₹26,850 crore ($3 billion), marking the largest foreign direct investment and equity fundraise in India’s banking sector to date. This deal signals a potential resurgence of foreign banks in India and is expected to spur more global interest.
• Strategic Focus: RBL Bank aims to use this capital injection to exit the mid/small-sized bank league and enter the "big bank league". Major synergies are expected in export-import, international business, and crucially, wealth management, leveraging Emirates NBD’s international private banking product portfolio to tap into Indian HNIs and Ultra HNIs.
• Corporate Credit Growth: In a reversal of a previous trend, large-sized banks reported robust growth in their corporate loan portfolios in Q2FY26, with Axis Bank's corporate loans growing 20% year-on-year. This growth is tied to opportunities in sectors like data centers, warehousing, solar PV modules, and EVs, indicating a potential pickup in private capital expenditure.