South Korea GDP growth path

 Here’s a comprehensive summary of South Korea’s GDP per capita growth over the past ~60 years, based on historical economic data from international sources such as the World Bank, IMF, and long-term datasets: (Georank)

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📈 1. Long-Term Trend (1960 – Present)

Starting Point (1960s)

• In 1960, South Korea’s nominal GDP per capita was extremely low—only around ~$150–$160 (current USD) as a war-torn, agrarian economy. (Georank)

• Throughout the 1960s and 1970s, export-led industrialization under state-directed development plans began raising incomes significantly with sustained double-digit per capita growth rates in many years. (Georank)

Rapid Catch-Up (1970s–1990s)

• Between the early 1970s and late 1980s, GDP per capita increased steadily from the low hundreds to several thousand dollars as manufacturing and heavy industry expanded. (Georank)

• By 1990, per capita income exceeded ~$6,800 — a nearly 40× increase in ~30 years from the 1960 base. (Georank)

Asian Financial Crisis and Recovery (1997–2000s)

• During the 1997–98 Asian financial crisis, per capita GDP fell sharply (e.g., ~ $13,000 in 1996 → ~ $8,500 in 1998) but rebounded as the economy restructured. (Georank)

• Throughout the 2000s, incomes resumed robust growth, crossing $20,000+ by the mid-2000s. (Georank)

Recent Decades (2010s–2020s)

• By 2010, GDP per capita had risen to around ~$24,000–$26,000. (Georank)

• Throughout the 2010s, growth continued, albeit at a slower pace than in earlier decades, surpassing $30,000 around 2014–2015. (Georank)

• 2021 represented a peak year in many international nominal metrics, with income of about $37,500 before post-pandemic volatility. (Georank)

2020s & Recent Performance

• Recent years have shown slower per capita growth with some year-to-year volatility (COVID impacts, exchange rate effects), but per capita GDP still remains high by global standards — around $35,000–$36,000 in the early 2020s. (Macrotrends)

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📊 2. Growth Dynamics

Decadal Growth Characteristics

• 1960–1980: Exceptionally rapid growth; industrialization drove repeated double-digit gains in GDP per person.

• 1980–2000: Continued solid growth with intermittent downturns (notably the 1997 crisis).

• 2000–2010: Strong, more steady expansion as Korea became a globally integrated, advanced economy.

• 2010–2020: Growth moderates as Korea approaches high-income levels; structural factors (aging demographics, slower productivity growth) dampen per-capita gains.

• 2020–2025: Growth resumes after pandemic dip but remains modest relative to earlier decades, with occasional contractions in dollar terms due to currency fluctuations and slower global demand. (YCharts)

Annual Growth Rate Trends

• Annual real per capita growth often exceeded 5–10% in early decades.

• In the 1990s–2000s, growth rates typically slowed into 2–8% range year-to-year.

• In recent years (2010s–2020s), year-over-year growth rates narrowed further — often ~1–4% outside major global disruptions. (YCharts)

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📌 Summary Numbers (Illustrative Milestones)

Year	Approx. Nominal GDP per Capita (USD)
1960	~$158 – ~$160
1970	~$280 – ~$300
1980	~$1,700 – ~$1,800
1990	~$6,800
2000	~$12,700
2010	~$24,000
2015	~$30,000
2020	~$31,700
2021	~$37,500 (peak)
2023	~$35,600
2025 (proj.)	~$36,000

(Values approximate current USD terms and reflect large long-term growth.)

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📌 Key Takeaways

• Massive long-run catch-up: From a very low base in 1960, South Korea’s GDP per capita increased by two orders of magnitude over ~60+ years. (Georank)

• Structural change: Transition from a poor, agrarian economy to a diversified industrial and high-technology economy under export-oriented development plans. (vox.com)

• Growth moderation: As incomes rose to high-income levels, annual per-capita growth slowed relative to earlier decades — typical of mature economies. (YCharts)

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Babies born outside of marriage

 

Newspaper Summary 220226

 

Trump ups tariff to 15%, a day after levying 10% post SC ruling

TARIFF RESET. Commerce Dept studying implications; no change in trade deal with India: Trump Amiti Sen New Delhi

KEY TAKEAWAYS

• US reciprocal tariffs of 18/25% on Indian textiles, leather, etc., invalidated by US Supreme Court
• A 15% temporary surcharge levied by Trump regime on most imports from Feb 24 for 150 days
• Certain items exempted such as minerals, some fertilisers and agri, pharma, automobiles
• Section 232 tariffs of 50% on steel and aluminium remain unchanged
• Exporters welcome lower tariff but flag uncertainty over Trump’s next steps
• Trade experts say India must leverage the development to negotiate a better trade deal

The US reciprocal tariffs of 18 per cent on Indian goods, established under the framework India-US interim trade deal, have been invalidated following a Friday ruling by the US Supreme Court striking down President Donald Trump’s “illegal” tariffs. In their place, goods will now be subject to a 15 per cent “world-wide tariff,” Trump posted on his social media platform TruthSocial on Saturday. He raised the tariffs from 10 per cent, which had been imposed as a “temporary” levy on Friday on all imports for a period of 150 days.

Official Reactions

“We have noted the US Supreme Court judgment on tariffs yesterday. President Trump has also addressed a press conference in that regard. Some steps have been announced by the US administration. We are studying all these developments for their implications,” according to a statement from the Commerce Department.

While Indian exporters are relieved by the drop in additional tariffs to 15 per cent, the uncertainty on the steps the Trump administration may take is a point of concern. Ajay Sahai from the exporters’ body FIEO noted that February export numbers have been encouraging following earlier reductions, adding, “A further reduction now should be good for exports. But it is still uncertain how Trump will actually react to the judgment.”

Specific Impacts

Trump announced on TruthSocial that he was raising the 10 per cent rate to 15 per cent—the maximum level permitted under Section 122—stating that trading partners had been “ripping off” the US for decades. Effectively, reciprocal tariffs of 25 per cent on Indian labour-intensive goods such as textiles, leather and shrimp, which were to be reduced to 18 per cent under the deal, now face a levy of 15 per cent. However, the Section 232 tariff of 50 per cent on steel and aluminium remain unchanged, as they were not covered by the top court’s ruling.

Improved Leverage

Despite Trump’s assertion that “nothing changes,” trade experts say the ruling strengthens Delhi’s negotiating position in ongoing bilateral talks. Sensitive areas include agriculture market access, digital trade rules, and India’s policy autonomy in dealing with non-market economies.

“There are a lot of issues in the India-US trade agreement that are delicate and have not been agreed to yet. These include market access for cereals and dairy, digital trade, the country’s position on Russian oil and its relationship with China. India must now stay firm on not giving concessions on its sensitivities,” said trade expert Biswajit Dhar.

Future Outlook

Ajay Srivastava of GTRI suggested the ruling should prompt India to re-examine its trade deal with the US. While Trump has indicated he will seek to re-impose similar tariffs under other sections like Section 301 and Section 232, Srivastava noted this would take time due to required new investigations and public justifications. Dhar added that any replacement tariffs Trump works on will likely be product-specific rather than sweeping.

RARE ELEMENTS THAT POWER THE FUTURE

MINE TO MAGNET. With rare earth materials, the real leverage is strategic, not size. Here is a lowdown on the entire ecosystem and what makes them so critical to today’s industrial landscape and for India Kumar Shankar Roy

At the recently-concluded India AI Impact Summit in New Delhi, the spotlight was on the machinery behind AI models like ChatGPT and Gemini, typically powered by Nvidia GPUs. However, AI requires physical systems to store data, move parts with precision, and cool power-hungry servers. Rare earth elements (REEs) are critical to these systems, primarily through permanent magnets like neodymium magnets, which power high-efficiency motors for data centre fans, pumps, and compressors. As AI is increasingly embedded in robots and automation, this dependence grows; these same magnets are also essential for EV motors, wind turbines, industrial robots, and defence systems like radar.

Strategic Leverage

While REEs are embedded deep inside modern machinery, global rare earth output is relatively small in tonnage (390,000 tonnes) and market value (less than $7 billion). The real leverage is strategic, driven by heavy concentration. While China dominates mining, its true power lies in processing and separation, where it controls approximately 90 per cent of global capacity, creating a choke point between ore and magnets. Tightened export controls last year demonstrated how quickly supply chains can be disrupted, forcing industries to scramble for supplies.

What They Are

REEs are a group of 17 chemical elements, including 15 closely-related metals called lanthanides (such as neodymium and dysprosium) plus scandium and yttrium. The name "rare" is actually a misnomer; US Energy Secretary Chris Wright notes they are found everywhere, with cerium being as abundant as copper in the Earth's crust. They are considered economically rare because they occur in low concentrations, often just a few grams per tonne of rock, and are chemically difficult and capital-intensive to separate.

Historical Context

REEs were first discovered in Sweden in the late 18th century. For much of the 20th century, the US led production, particularly from the Mountain Pass mine in California, which supplied 70 per cent of global demand until the early 1980s. From the 1980s, under Deng Xiaoping, China invested heavily in both mining and complex chemical processing. Lower costs and state support eventually allowed China to build dominance across the entire supply chain as US production declined.

Decoding the Value Chain

In the rare earth industry, mining gets headlines, but separation is the moat and magnets are the prize. The chain moves from extracting ores to processing them into oxides (REOs), then refining those into metals or alloys to manufacture high-strength permanent magnets. Value increases dramatically at each stage; a tonne of separated neodymium oxide can be worth roughly 3,500 times the value of a tonne of ore. Magnets represent the largest global end-use for rare earths, followed by catalysts and polishing.

Geopolitical Landscape

China currently controls the supply bottleneck, producing 270,000 tonnes compared to the US (51,000 tonnes), Australia (29,000 tonnes), and India (2,900 tonnes). In response, other nations are building alternative supply chains:

• USA: The Department of Defense has invested hundreds of millions in MP Materials and USA Rare Earth to scale magnet capacity.
• Japan: Uses state-backed financing to lock in non-China supplies, such as supporting Australia’s Lynas.
• Europe: Operationalising the EU Critical Raw Materials Act to accelerate permitting and finance for strategic projects.
• Brazil: Emerging as a key heavy rare-earth source with commercial production starting at Serra Verde in 2024.

India’s Position and Policy

India sits in a paradoxical spot: it holds about 6 per cent of global rare earth reserves (the third-largest at 6.9 million tonnes), yet contributes less than 1 per cent of global mining. India's import dependence for magnets is sharp, bringing in 80 to 90 per cent of materials from China.

Policy response has accelerated with the National Critical Mineral Mission (NCMM) and a ₹7,300-crore Rare Earth Permanent Magnets (REPM) scheme approved in November 2025. India aims to start producing REPM by the end of 2026 in partnership with the private sector. Plans also include establishing "Rare Earth Corridors" in mineral-rich states like Odisha, Kerala, Andhra Pradesh, and Tamil Nadu. Government-owned Indian Rare Earths Ltd remains the primary producer and is building facilities for samarium-cobalt magnets.

Market Action

India currently has no pure-play, listed rare-earth miner or refiner. Globally, investing in rare earths is a supply-chain bet rather than just a mining bet.

• Producers: MP Materials (US) and Lynas (Australia) are direct pathways for production outside China.
• Developers: Names like Arafura and American Rare Earths sit earlier on the curve with higher execution risk.
• Downstream: Australian Strategic Materials and JL MAG offer exposure to value-added materials and magnets.
• Incumbents: China-listed names like China Northern Rare Earth and Shenghe represent the existing scale and domestic backbone.

Investors are advised to assess REE stocks by their position in the chain (mine, separation, metals, magnets) and track execution milestones like commissioning progress and unit costs.

AI crushed software’s 23-year outperformance

MARKET WISE. The rout in global software stocks has been a bottomless pit so far while semiconductor stocks have been on a high

Nishanth Gopalakrishnan

As deals around AI and data centres continued to stack up at the AI Impact Summit, the mood elsewhere wasn’t as cheerful. It’s the software sector we are talking about. The rout in global software stocks has been a bottomless pit so far. Software companies apparently face an existential threat from AI. The debate rages on whether the sell-off is overdone or the disruption is serious, an outcome that no one can predict at this point in time.

The Big AI Threat

Though the threat has existed for around two years now and stocks have been on a slump since last year, the recent rout signals the market’s acknowledgement that the threat is real. Stocks of global software bellwethers have fallen anywhere between 15 per cent and 35 per cent over the past 30 days. Accenture and EPAM Systems are among the biggest losers with losses of 25 per cent and 35 per cent respectively. Back home, the Nifty IT index has declined 16 per cent over the same period.

Gauging the Carnage

Ratio charts are used to better gauge the extent of this carnage. Chart 1 represents the price of the iShares Expanded Tech-Software Sector ETF (IGV) to the Nasdaq Composite index’s value. IGV, which includes frontline firms like Microsoft, Palantir, Oracle, Salesforce, and Adobe, serves as a proxy for the software sector.

The ratio chart has been re-based to 100 with the base set at the market’s bottom in October 2002, after the dot-com bust. While the ratio stayed above 100 for almost the entire period, it has now returned to 100. This implies that the entire 23-year outperformance of software stocks from the start of the technology bull market in 2002 has been completely undone in a few months. The current drawdown of 37 per cent in this ratio surpasses all other drawdowns over this period, including the 2022 reaction to interest rate tightening.

Making Merry

If there is a sector that is making merry while software stocks are trounced, it is the semiconductor sector. In the ensuing AI gold rush, chip designers (Nvidia), memory chip companies (Micron), foundries (TSMC), and equipment suppliers (ASML, Applied Material) are seen as the "shovel sellers". The iShares Semiconductor ETF (SOXX) serves as a proxy for this sector.

The SOXX to Nasdaq Composite ratio is now at an all-time high in the post-dotcom period, resembling an exact mirror image of the IGV ratio chart over the last six months. Meanwhile, the ratio of IGV to SOXX has snowballed into a 70 per cent drawdown, the worst in the post-dotcom period.

Value Trap or Value Buy?

Valuations of all major chip stocks, except Nvidia and AMD, are well above their five-year average multiples. Conversely, valuations of all software stocks are currently below their five-year averages. Given the current exponential disruption, it is not as clear as day and night whether these represent value buys.

Indian Context

In India, the ratio of the Nifty IT index to the Nifty 50 stands at 111 (based on a September 2001 bottom), down from a peak of nearly 200 in late 2021. While multiples are lower than five-year averages, they remain higher than pre-Covid levels in December 2019, when growth was better and there was no threat of AI disruption.

Furthermore, some mid-caps like Tata Elxsi, Tata Technologies, and KPIT Technologies are trading at multiples that are among the highest in the software space globally. Their earnings growth rates do not justify these valuations when global investors remain clueless about the extent of disruption to IT business models.

The AI game is evolving daily, and uncertainty will persist. In this context, caution over aggression would be a better investing approach.

Early retirement plan hits corpus roadblock

FINANCIAL PLANNING. How a middle-aged couple, when their dual income didn’t ensure early retirement, planned for their goals Sridevi V

Deepak and Mrinalini wanted to plan their finances. Deepak, aged 45, wanted to check if he could retire in the next five years due to health reasons. Mrinalini is career-oriented and will continue to work, likely until she is 60—for the next 18 years. They have two children: a daughter, aged 13, and a son, aged 6.

Their Goals

The couple outlined several financial objectives based on current costs:

• Children’s Education: ₹25 lakh for when they turn 18.
• Marriage: ₹40 lakh for their daughter and ₹10 lakh for their son, both at age 25.
• Home Purchase: ₹1.4 crore before retirement.
• Retirement: Monthly expenses of ₹75,000.
• School Expenses: ₹4.5 lakh per year for both kids until their son completes schooling, should Deepak retire early.

Financial Status and Lifestyle

Both partners have considerable exposure to market-related investments and have accumulated a balanced portfolio. They do not want to opt for any loans and are comfortable with an upper middle-class lifestyle, which they do not wish to compromise. Deepak also inquired about moving to an aggressive investing style to reach his goals sooner.

Recommendations

• Emergency Needs: The couple has enough liquidity for emergencies through their fixed income investments.
• Education and Marriage: It was suggested to allocate ₹64 lakh in MF equity for education and ₹23 lakh (from Sukanya Samriddhi and MFs) for marriage.
• Early Retirement Roadblock: Because high-priority goals are funded first, it is highly unlikely Deepak can retire at 50 and purchase a house, as the surplus is insufficient for both goals.
• Revised Strategy: The family needs a ₹4.13 crore corpus by the time Deepak turns 55. They should focus on their home goal by investing ₹1.5 lakh per month for the next five years.
• Long-term Outlook: This strategy allows Deepak to have his own home and retire at 50, provided Mrinalini continues her career until 60. As long as she works, her income will cover family expenses, allowing the retirement corpus to compound and be available when she eventually retires.

TAKE NOTE It is best to start planning for one’s retirement as early as possible; else, the retirement age may have to be postponed.

Signs of a trend reversal

US MARKET OUTLOOK. Charts indicate absence of fresh buyers Gurumurthy K bl. research bureau

Dow Jones, S&P 500 and the Nasdaq Composite indices recovered last week and closed in green. The Dow Jones seems to be struggling to get a strong follow-through rise after making a bullish breakout a couple of weeks ago. The S&P 500 seems to be turning down gradually, and the price action in the coming weeks will need a very close watch. The NASDAQ Composite looks much weaker among the lot.

The US Supreme Court striking down the tariffs levied by President Donald Trump has given a push for the equities on Friday, but it remains to be seen if this can sustain.

DOW JONES (49,625.97)

Support is in the 49,200-49,000 region. The Dow has to sustain above this support in order to go up towards 50,700-50,800 in the short term. In case the index breaks below 49,000, a fall to 48,000 is possible. Broadly, 48,000-51,000 can be the wide trading range, and a break below 48,000 will turn the outlook bearish for a fall to 45,000. Conversely, a decisive break above 51,000 is needed to clear the way for a rise to 55,000 and higher.

Considering the lack of strength in the S&P 500 and NASDAQ Composite, it is better to remain cautious on the Dow Jones rather than being bullish, viewing the market from the sell side rather than making fresh buys.

S&P 500 (6,909.51)

The index has been broadly range-bound between 6,700 and 7,000 since December last year. However, charts indicate that the index is gradually turning down. A fall below 6,770 could be an initial bearish signal, and a subsequent break below 6,700 will confirm the bearish trend reversal. This would increase the danger of seeing 6,600-6,500 and even lower levels. A break above 7,000 and a subsequent rise past 7,100 is needed to negate this fall and open the upside for a rise to 7,400-7,500.

NASDAQ COMPOSITE (22,886.07)

The bounce last week provided some relief, but the view remains negative. The region between 23,000 and 23,300 will be a strong resistance zone that can cap the upside. The index could fall to 21,900 or even 21,600 from here. A strong break above 23,300 is needed to avoid this scenario.

DOLLAR INDEX OUTLOOK

The dollar index (97.79) has been hovering around 97 since the beginning of this month. The trading range so far has been 96.50-98.10. A breakout on either side of this range will determine the next move:

• Above 98.10: Could take the index higher to 99.50.
• Below 96.50: Could drag it down to 95.

TREASURY YIELD

The US 10Yr Treasury Yield (4.09 per cent) is holding well above 4 per cent. Cluster supports are in the 4-3.9 per cent region, suggesting the downside could be limited even if the yield falls below 4 per cent. Immediate resistance is around 4.13 per cent; a break above it could take the yield higher.

 

Ireland and the Global Economic Trilemma

 The best way to understand the Irish economy Three paths for Ireland if globalisation fractures STEPHEN KINSELLA JAN 29, 2026

100% written by a human.

Why it matters: Dani Rodrik’s trilemma says you can’t fully have democracy, nation‑state sovereignty and deep globalisation all at once. It is the cleanest model for understanding Ireland’s biggest choices right now. We’ve chosen democracy and globalisation, which has worked brilliantly in a stable world but becomes a bind if the world fractures. Kinsella proposes three ideas for what can be done, noting that policy makers can only "pick two".

A model to fit the moment After a previous suggestion that the book Vandalising Ireland lacked a real model to understand the Irish economy, a commenter asked what model would be suggested. While there are several candidates, the model that fits the moment best is Dani Rodrik’s policy trilemma.

Rodrik’s framework has three constraints: democracy, national sovereignty, and deep economic globalisation cannot be fully achieved simultaneously. Rodrik’s idea includes the "impossible trinity" from macroeconomics: if a government chooses fixed exchange rates and capital mobility, it must give up monetary autonomy. If it wants monetary autonomy and capital mobility, it must use floating exchange rates. If it wants to combine fixed exchange rates with monetary autonomy, it must restrict capital mobility.

In the political trilemma, states can choose only two elements: democracy (mass politics), sovereignty (the nation state), and globalisation (integrated national economies). Ireland has clearly chosen democracy and globalisation, a combination Rodrik calls the "golden straightjacket". Once the rules are set by the requirements of the global economy, the ability of popular groups to influence national economic policy is restricted. To stay integrated, governments must pursue tighter money, smaller government, lower taxes, more flexible labour legislation, and deregulation, making individual ideology subservient to global integration.

This "golden straightjacket" has clear problematic aspects. For example, Donald Trump’s critique of the "Davos set" highlighted how capital offshoring to Asia cost US workers their jobs. Mark Carney also noted in Davos that extreme global integration carries risks, particularly when great powers use economic integration as a weapon, using supply chains and financial infrastructure for coercion. This concept is known as "Weaponised Interdependence". Carney argues states must diversify from their dependence on the US hegemon, a consideration Ireland should take seriously on its own and within the EU.

Highlights of the Model:

• The Trilemma: You cannot fully achieve democracy, nation‑state sovereignty, and deep globalisation at the same time.
• Ireland’s Choice: Ireland is in the "golden straightjacket," prioritizing democracy and globalisation. This forces regulatory predictability and legal alignment with supranational regimes like the EU and WTO.
• Limited Sovereignty: Ireland’s sovereignty over industrial policy, labour markets, and macro stabilisation is limited, though this occurred with the consent of the governed via referendums.

The Fracturing of Globalisation If globalisation falters due to balkanization by great powers, Ireland faces a forced trade-off between preserving democracy and preserving sovereignty. This would result in three stages of effects:

1. Fiscal and Employment: These are the most obvious first-stage effects.
2. Institutional: Ireland derives exchange rate credibility from the euro and industrial policy discipline from EU state-aid rules. If globalisation weakens, internalizing these constraints will be hugely costly.
3. Political Economy: Growth via openness has been the standard since the 1990s. Without it, politics becomes zero-sum, and issues like housing, migration, and regional inequality could harden into identity-linked conflicts, eroding democratic legitimacy.

Three Paths for Policy Makers (Pick Two):

1. France in the 1970s (Re-sovereignisation): Managed democracy with stronger industrial policy, strategic protection, and tighter migration control. Democracy remains but is constrained by elite coordination.
2. Australia in the 1990s: Continued openness with democratic strain. Ireland tries to stay integrated by competing harder on tax and regulation, which hollows out democratic choice and is likely unstable.
3. Economic Diversification (Taking Carney Seriously): Reducing exposure to footloose capital by building indigenous scale firms, deepening EU fiscal capacity, and embedding multinationals locally. This is slow and technically demanding but likely stable if the public buys into it.

Ultimately, if globalisation fragments, the EU becomes the decisive arena. Ireland’s real choice will shift from sovereignty versus democracy to national democracy versus pooled European sovereignty.

Speed can reindustrialize United States

 Speed Can Reindustrialize America Reviving manufacturing doesn't require a planned economy, just a better business model.

Manufacturing and the US Economy

The US manufacturing sector represents approximately 10% of GDP (~$3 trillion), positioning the US as the second-largest manufacturing country in the world. Despite this scale, the sector is often misperceived as a failure, leading to calls for blunt government-directed policies. The core issue is that while the US excels at high-volume manufacturing, it performs poorly in low-volume manufacturing, specifically in producing custom parts with short lead times.

The root cause of this malaise is the high cost of "white collar" labor in the US; these high wages create substantial soft costs that are difficult to spread across few units in low-volume production. Paradoxically, these same high wages generate massive demand for short lead time parts. New end-to-end digitized manufacturers are emerging to solve this by eliminating soft costs and shortening lead times through instant quoting and production-integrated software. This superior value structure will likely lead to industry consolidation into larger, highly productive firms, with AI serving as a major accelerant.

Understanding the Manufacturing Industry Today

Manufacturing existence is driven by three main forces:

1. Specialization: The complexity of human desires and the infinite knowledge required means no single region can dominate all production.
2. Economies/Diseconomies of Scale: Most manufacturing eventually hits diseconomies of scale, making it more rational to distribute facilities to minimize transportation and other costs. Only products with very low shipping costs and diminishing returns to scale, like computer chips or phones, move toward global production.
3. The Gravity Model: Economic transactions decrease rapidly with distance. Consequently, most products are produced near buyers, with richer countries substituting capital for labor due to higher labor costs.

US Manufacturing's Hollowness

US manufacturing is currently tilted toward high-volume, static, and bulky products. Domestic production is strongest in items characterized by:

• High Transportation Costs: Such as sand, cement, cars, and dishwashers.
• Need for Speed to Market: Time-sensitive or perishable items.
• High Volume for Fixed Cost Absorption: Allowing setup and tooling costs to be spread over many units.
• Long Product Lifecycles: Where static designs allow for long-term automation investment.
• Technological Complexity: Leading-edge products like stealth fighters, commercial aircraft, and gas turbines.
• Amenability to Automation: Processes like chemical processing that are easier to mechanize.

The Structure of the US Manufacturing Industry

The industry is organized into layers:

• Commodities: Raw materials like steel or plastic produced in gargantuan, capital-intensive facilities; the US is largely self-sufficient in these high-volume basics.
• Intermediates: The "missing middle" consisting of diverse parts like sheet metal, hoses, and clips. This sector contains most of the value-added but is characterized by small, often analog firms with long lead times.
• Final Products: Integrators who design and organize production; while many parts are imported, most final products by value are assembled in the US.

Case Study: Robot Density in China vs. the US

The rising density of robots in China compared to the US is often misunderstood. Robot arms are labor-shifting, not labor-replacing. They reduce hourly labor but increase the demand for high-cost skilled labor for programming and maintenance. Because the US has a surplus of low-paid hourly workers and a shortage of high-skill workers, this trade-off is often uneconomical. In contrast, China has a surplus of underemployed STEM graduates and faces labor restrictions ("Hukou") for hourly workers, making robots a more attractive investment.

Finding Dynamism in Low-Volume Manufacturing

Modern US firms face increasing fixed costs due to scale, specialization, and high-end labor. To remain productive, firms must either increase volume or reduce time. For startups and firms on the technological frontier, ultra-short lead times are critical because the fixed costs accrued during waiting periods often dwarf the actual price of a part.

Speed Sells and Eliminating Soft Costs

Traditional US manufacturing is often slower than Chinese competitors who mass human resources to create speed. End-to-end digitization can eliminate "dead time" (quoting, emails, queues) by removing humans from the procurement loop, reducing lead times from months to days.

In low-volume orders, the "idiot index" is often enormous—the material cost might be only a few percent, while human labor for quoting and billing accounts for the rest. Software can solve this by autogenerating CAM instructions, billing, and shipping labels. Companies like SendCutSend have proven this model, reaching over $100 million in sales by offering instant quotes and delivery in days.

Factors for Competitive US Manufacturing

• End-to-End Digitization: Eliminates soft costs and increases equipment utilization from a typical 10-20% to nearly 100%.
• Lightning Logistics: Modern parcel delivery and future autonomous carriers expand the sales footprint of digitized shops.
• Collapsing Tooling Lead Time: New processes like laser cutting, 3D printing, and roboforming replace expensive, slow "hard tooling" (molds/dies), allowing for faster prototyping and shorter product cycles.

Competition and Strategy

Digitized firms follow a pattern of gaining competitive advantages through low marginal costs and high fixed cost absorption. This forces consolidation, as manual shops cannot coordinate tightly enough to offer the instant quotes customers now expect. While general SaaS solutions often fail in manufacturing due to the high precision and non-generalizable nature of the work, building proprietary software for a single firm that scales is highly valuable.

Policy and National Security

Policy should prioritize minimizing high-end labor misallocation. Tariffs can hurt demand for intermediates and end-manufacturers, while industrial policies like the CHIPS Act often consume massive amounts of technical talent for potentially obsolete methods. For raw materials with small markets like rare earths, stockpiles are more efficient than forced domestic production. Regulatory speed bumps, such as long approval times for drones or aircraft, also stifle productivity and must be addressed.

National security requires technological supremacy and cycle time rather than just mass production. Historical lessons from the Korean War show that having a massive manufacturing base is a net negative without the technological edge. The US already has the raw capacity for mass production (e.g., steel for thousands of ships), but the true constraint is the talent needed to equip and operate a modern force.

The Future of US Manufacturing

By reducing soft costs and lead times, hardware entrepreneurs can iterate faster, similar to how AWS enabled software startups. This shift toward speed and flexibility will allow the US to remain at the center of the global innovation network and effectively address competition from China.

Appendix: Notable Digitized Firms The author lists several companies embodying these principles, including:

• SendCutSend / Osh Cut (Sheet metal)
• Forge Automation (CNC machining)
• Blitz Panel (Electrical panels)
• Digital Metal (Cast metal with 3D printed molds)
• Machina (Roboforming)
• Hadrian (Digitized defense machining)

Newspaper Summary 210226

 

In 6-3 Ruling, US Supreme Court Strikes Down Trump’s Global Tariffs

The US Supreme Court on Friday struck down President Donald Trump’s sweeping tariffs that he pursued under the International Emergency Economic Powers Act (IEEPA), a 1977 law meant for use in national emergencies. In a 6-3 ruling authored by conservative Chief Justice John Roberts, the court upheld a lower court’s decision that the Republican President’s use of the law exceeded his authority.

Treads on Congressional Power

The court ruled that the administration’s interpretation of the law would intrude on the powers of Congress and violate a legal principle known as the “major questions” doctrine. This doctrine requires executive actions of “vast economic and political significance” to be clearly authorized by Congress. Justice Roberts wrote that “the President must ‘point to clear congressional authorisation’ to justify his extraordinary assertion of the power to impose taris,” adding, “He cannot”.

Joining Justice Roberts in the majority were conservative Justices Neil Gorsuch and Amy Coney Barrett, both of whom Trump appointed during his first term, along with the court's three liberal judges. The three dissenters were conservatives Clarence Thomas, Samuel Alito, and Brett Kavanaugh.

Economic and Legal Fallout

Trump leveraged these tariffs as a central economic and foreign policy tool in a global trade war that has alienated partners and caused significant economic uncertainty. The conclusion reached by the court followed a legal challenge by affected businesses and 12 US States, most of them Democratic-governed, against the unilateral imposition of these taxes.

While the tariffs were forecast to generate trillions of dollars over the next decade, economists from the Penn-Wharton Budget Model estimated on Friday that the amount already collected stood at more than $175 billion. Legal experts indicate that this massive sum likely would now need to be refunded.

Administration Response and "Game Two"

Trump called the ruling a “disgrace” and told reporters that his team would have to develop a “game two” plan. Treasury Secretary Scott Bessent and other administration officials stated the US would seek other legal justifications to retain as many tariffs as possible. These include:

• Statutory provisions for goods that threaten US national security.
• Retaliatory actions against partners using unfair trade practices.

However, officials noted that none of these alternatives offers the "blunt-force dynamics" or flexibility of IEEPA and may not be able to replicate the full scope of the original tariffs in a timely fashion.

The decision marks a major rejection of one of Trump's most contentious assertions of authority, reaffirming that the US Constitution grants Congress, not the President, the primary authority to levy taxes and tariffs.

Novartis to sell entire 71% stake in listed India arm to ChrysCapital group for ₹1,446 crore

Swiss drugmaker Novartis AG is set to sell its entire 70.68 per cent stake in Novartis India Ltd (NIL) to the ChrysCapital group for ₹1,446 crore. The drug major has entered into an agreement with WaveRise Investments Ltd, ChrysCapital Fund X and Two Infinity Partners to sell the India-listed entity. The transaction is expected to be completed by the third quarter of 2026, subject to certain conditions.

Transaction Details

Novartis has agreed to sell 1,74,50,680 fully paid-up equity shares in Novartis India. The acquisition breakdown is as follows:

• WaveRise Investments will acquire 1,39,38,382 equity shares (56.45 per cent) at ₹860.64 per share.
• The second acquirer will buy 25,47,189 equity shares (10.32 per cent) at ₹701.25 per share.
• The third acquirer will buy 9,65,109 equity shares (3.91 per cent) at ₹701.25 per share.

As mandated by regulations, the acquiring companies have also announced an open offer to pick up the remaining shares in the company.

Strategic Transformation

Upon completion of this share transfer, Novartis will finish its transformation into a pure-play innovative medicines company aligned with its global strategy. This strategy focuses on cardio-renal-metabolic, immunology, neuroscience, and oncology products, with growth identified in the US, China, Germany, and Japan.

Novartis reiterated that this transfer of shareholding in NIL will not impact Novartis Healthcare Private Ltd (NHPL). Novartis will continue its presence in India through NHPL, a wholly owned subsidiary used to bring high-value innovative products into the country.

Historical Context

Novartis was formed in 1996 through the merger of Swiss majors Ciba-Geigy AG and Sandoz AG. While Ciba’s history in India dates back to 1947, NHPL was formed later in 1997. Its current innovative drugs portfolio includes cancer, immunotherapy, and gene therapy products. Details regarding the future of the 40 employees with NIL and the associated branded products currently remain unclear.

India joins US-led Pax Silica to secure chips, critical minerals

India and the US signed the Pax Silica declaration on Tuesday at the India AI Impact Summit, formally marking New Delhi’s entry into a strategic partnership to secure resilient supply chains for semiconductors, artificial intelligence (AI), and critical minerals. Both nations projected the initiative as a move to curtail over-dependence on “one country,” an oblique reference widely presumed to be China.

Securing Supplies

The pact, literally meaning “Peace through Silicon,” was signed by Indian IT Secretary S Krishnan and US Under Secretary of State for Economic Affairs Jacob Helberg, in the presence of Union Minister Ashwini Vaishnaw and US Ambassador Sergio Gor. Pax Silica was originally launched in December and its current members include:

• India (latest entrant)
• United States
• Australia, Japan, South Korea, and Singapore
• United Kingdom, Greece, Qatar, and the United Arab Emirates

Geopolitical Context

The broader geopolitical subtext of the coalition is aimed at counteracting China’s predominant role in rare earth processing, advanced manufacturing inputs, and the global semiconductor value chain. US Under Secretary Helberg described the commitment as a rejection of “weaponised dependency” in global networks and warned against the threats of “economic coercion and blackmail.” He further underscored concerns regarding infrastructure vulnerabilities, noting that foundations of economic security had been allowed to “drift” for too long.

Strategic Alignment

For India, the move signals a calibrated deepening of technological alignment with the US and its democratic partners. Minister Vaishnaw highlighted India’s expanding capabilities in chip design and its growing pool of skilled technology professionals as major assets for collaborative global value chains under the Pax Silica framework.

US Ambassador Sergio Gor stated that India brings strength to the coalition, remarking, “Peace doesn’t come from hoping adversaries will play fair... Peace comes through strength. India understands this.” Industry leaders, including Google CEO Sundar Pichai, noted that this agreement, alongside recent trade progress, will lay the foundation for a robust and enduring US-India tech partnership.

‘Sovereign AI means building trusted partnerships, not isolation’

Evan Solomon, Canada’s Minister for AI and Digital Innovation, has been a leading advocate for the concept of Sovereign AI. Speaking at the India AI Impact Summit, Solomon outlined a vision for Indo-Canadian cooperation that balances rapid technological adoption with risk mitigation and the preservation of national digital autonomy.

Defining Sovereign AI

Solomon emphasized that sovereignty does not mean isolation; instead, it means having trusted partnerships and options. He defined it as controlling one’s digital destiny, which involves everything from building efficient data centers to owning the intellectual property (IP) of applications.

Canada provides a global alternative to US or Chinese technology through Cohere, one of the world's major large language models. Solomon argued that international alliances are essential to the process of ensuring sovereignty, including collaborative research, education, and creating IP that remains within a nation’s borders.

Strengthening Indo-Canadian Ties

Discussions between Solomon and Indian IT Minister Ashwini Vaishnaw have resulted in the development of a series of MoUs to map out technological cooperation. Solomon noted that both nations share a common goal: building Sovereign AI stacks to ensure they are not dependent on a single provider or country. He cited Tata Consultancy Services (TCS), which employs nearly 10,000 people in Canada, as a prime example of the deep partnerships required to build these shared technology stacks.

AI Safety and "LawZero"

Safety is a fundamental pillar of sovereignty. To address growing concerns, Solomon highlighted LawZero, an AI system designed specifically to "police" other AI models. Canada has issued a letter of intent to be a primary financial backer of this technology, which was presented at the summit by world-renowned scientist Yoshua Bengio.

While LawZero can identify if an AI is about to perform harmful actions, Solomon clarified that protecting data security and personal privacy remains the responsibility of the government through updated legislation and transparency requirements.

Navigating the Workforce Transition

Addressing the threat of AI-driven job losses, Solomon observed that while history shows technological revolutions eventually create more jobs than they destroy, the current anxiety is real. He stressed that governments must prioritize skills training and education, as those who can effectively use AI will have a significant advantage in a rapidly evolving labor market.

AI is no magic; IT services will be the last mile in agentification: Cognizant

Enterprises are beginning to realise that artificial intelligence is not a magical “pixie dust,” according to Cognizant’s Chief AI Officer Babak Hodjat. Speaking at the India AI Impact Summit, Hodjat emphasized that customization with business processes is the essential key to reaping the actual benefits of AI agents.

Owning the Last Mile

Hodjat argued that IT services companies are uniquely positioned because they “own the last mile” and possess an inside-out understanding of their clients' specific domains. He noted that this contextual knowledge is often the missing piece in the broader ‘agentification’ journey.

To be effective, agents must be designed and defined to model the specific organizations and processes of clients in a trustworthy manner. This requires a rigorous process of tailoring, engineering, and safeguarding. Hodjat stated that Cognizant is "ahead of everyone else" in this regard, supported by significant investments in its AI labs.

Infrastructure and Strategic Partnerships

Cognizant has expanded its research capabilities by opening an India AI Lab in Bengaluru, which complements its existing lab in San Francisco. The company’s research efforts have already yielded results, with its San Francisco facility recently receiving its 61st US patent.

The company is also pursuing win-win partnerships with AI-native startups like Anthropic. While Cognizant empowers its associates to use these models for clients, it also helps these startups become reliable players in the enterprise sector.

Preparing the Workforce

With a majority of its employees based in India, Cognizant is actively preparing its workforce for this technological transition. The company is implementing several initiatives:

• Specialized Training: Running boot camps, hackathons, and specialized courses in context engineering.
• Measuring Impact: Internally tracking how AI affects project delivery and its impact on acquiring new clients and increasing productivity.
• Hiring Freshers: Bringing in large numbers of new graduates who understand and use AI much more naturally.

Hodjat observed a pyramid of attitudes toward AI: skepticism and conservatism at the top, and ‘naivety’ at the lower levels, both of which the company is addressing through targeted training and innovation.

Advancements in Core AI Research

The India AI Lab, which consists of about 30 PhDs, researchers, and engineers, focuses on cutting-edge research grounded in client needs. A major recent breakthrough involves a new way to fine-tune large language models (LLMs) using Evolutionary Strategies instead of Reinforcement Learning. This method is notably less compute-hungry than traditional approaches.

In India, the team is also researching multi-objective reasoning systems—which allow AI to reason for more than one outcome simultaneously—and is collaborating on research with institutions like the IITs.

The Transition Mantra

Hodjat concluded that the primary hurdle in moving from IT services to AI services is managing expectations. He stressed that AI is not magic but rather an engineered design principle. He believes once the industry tapers down the "magic" expectation, the transition will be complete.

Think before scaling up AI data centres

WEIGH THE COSTS. Countries that moved early now see the full cost of those choices. What began as a digital bet has steadily changed grids, water systems, and land use.

By Nishant Sahdev

New Delhi’s invitation to global companies to build AI data centres in India is being read as a confident move, based on the logic that India has the scale and space to host the computational power AI needs. However, countries that jumped early into building large numbers of data centres have learned wallet-bruising lessons. Unlike roads or bridges, AI infrastructure changes and becomes outdated fast, consumes enormous energy, and depends heavily on the changing priorities of private firms. The real constraints are not talent or ideas, but rather steady power, cooling, water, stable grids, and available land.

Lessons from Abroad

A single modern facility can use as much electricity as a small city and requires that supply without pause. In the US, data centres used about 176 terawatt-hours of electricity in 2023, and that share is expected to climb to 10-12 per cent of total demand within a few years. In Northern Virginia, home to the world’s largest cluster, these facilities already consume more than a quarter of the region’s electricity. This has resulted in household electricity bills rising faster than the national average, as grid planning now revolves around the demands of large computing facilities rather than homes or small businesses.

Ireland offers a similar lesson, where data centres accounted for over 20 per cent of the country’s electricity demand by 2022. Water scarcity is another sharp concern; in Oregon, Google’s facilities used nearly 30 per cent of a city’s water during a drought. The overarching lesson is that data centre costs accumulate over time and spread widely, while the early benefits are captured by only a few.

The Dynamics in India

In India, electricity is not a simple commodity but a social bargain where power supply is deeply political, balancing households, farmers, and small businesses. Adding large, always-on data centres reshapes who gets priority. Once facilities are labeled “strategic infrastructure,” their access to power is rarely questioned during heatwaves or grid stress, often shifting adjustment costs—like outages or higher tariffs—to ordinary users.

Furthermore, while India supplies the resources, it does not automatically gain control over the proprietary models and intelligence produced. There is a risk of repeating a pattern from the telecom revolution: India became essential to global platforms without owning them. AI infrastructure risks a deeper level of this mistake, where the "subsidy" provided is not just market access, but India's power, water, and land.

Set the Terms

India still has an advantage: time. It must price its ambitions honestly and treat large data centres as strategic infrastructure rather than routine real estate. Safeguards should include:

• Transparent and capped power and water costs.
• Time-bound incentives.
• Public subsidies tied to domestic capability and ownership of skills, systems, and models.

Setting these terms early will ensure infrastructure builds national strength; delaying them means the costs will still arrive, but without any remaining leverage.

The writer is a Physicist at the University of North Carolina at Chapel Hill, US

The stray community

Delhi has its share of people who rally against strays, but streeties also have a way of bringing people together.

Across Delhi, like elsewhere in the country, people care for stray dogs in their own little ways.

By Pooja Singh

Raghu is refusing to eat his lunch—a bowl of rice mixed with boiled vegetables. He sniffs it and returns to his spot in a corner of Delhi’s Khan Market. “Chicken nahi hai na aaj (there’s no chicken today),” says Meenakshi Yadav, giving Raghu, a visibly overweight nine-year-old street dog, a gentle slap. A few minutes later, he’s emptied the bowl.

Yadav, who works as a cleaning lady in a shop in Khan Market, travels 30km every day from the outskirts of Delhi to reach her workplace. Alongside her own lunch, she carries food for five stray dogs, including Raghu—all brothers who have lived outside the shop for several years. Mishra, another worker, noted that while he was initially scared of dogs, he and other guards now sit with them at 4pm to share tea and biscuits.

For some street dogs, Delhi can be a welcoming place. Wealthy individuals sometimes provide extensive care, such as Yadav’s boss, who bathes the dogs once a month and pays for regular check-ups. Similarly, those with very little, including people living on the streets, often share what they have to feed strays.

It is a common sight to see packs of dogs hanging around restaurants for scraps or sprawling outside shops as passersby react with affection. Recently, a street dog even sauntered into an India Design Fair preview party and was welcomed with head scratches from the guests.

However, Delhi can also be harsh. Recent Supreme Court discussions have focused on the danger of deadly rabies cases, and some residents have called for the removal of strays from the streets.

Despite the debate, these dogs often bring communities together. In one locality, a woman who feeds strays from her scooter at dawn was recently joined by two neighbours to cover more ground. In Janakpuri, a group of youngsters has organized a care network across 14 residential colonies, washing winter sweaters for the dogs, taking them to the vet, and even setting up resting spots with fans for the summer.

Scattered across the city are these stubborn pockets of care where dogs that belong to no one are still looked after. They provide a reason for people to pause and talk, creating social bonds in the places they are most needed.

The Rift Between Saudi Arabia and the U.A.E.

 

The Growing Rift Between Saudi Arabia and the U.A.E.

What this shocking split might mean for the future of the Middle East.

By Isaac Chotiner February 17, 2026

In the years following his appointment as deputy crown prince in 2015, Mohammed bin Salman (M.B.S.) has gathered significant power within Saudi Arabia. Under his de-facto leadership, the kingdom launched a military campaign against the Houthis in Yemen, blockaded Qatar, and even temporarily kidnapped Lebanon’s Prime Minister. These aggressive foreign policy moves were largely aimed at isolating Iran. Throughout this period, M.B.S. maintained a close alliance with Mohamed bin Zayed (M.B.Z.), the President of the United Arab Emirates, who reportedly viewed the younger M.B.S. as a reflection of himself: energetic and eager to confront regional enemies.

However, this alliance has recently collapsed into acrimony. Saudi Arabia and the U.A.E. now find themselves on opposing sides of violent conflicts in both Sudan and Yemen. Furthermore, the two nations are increasingly competing for regional economic opportunities. While the U.A.E. appears resentful of Saudi power, Saudi Arabia views the U.A.E. as being too willing to align itself with Israel.

Kristian Ulrichsen, a fellow for the Middle East at Rice University’s Baker Institute for Public Policy and author of “The United Arab Emirates: Power, Politics and Policy-Making,” discussed the roots of this rift and its implications in a recent phone conversation.

Why has a falling out occurred over the past several months?

The primary trigger occurred in early December when forces backed by the U.A.E., specifically the separatist Southern Transitional Council (S.T.C.), moved into two eastern Yemeni provinces. This action upended the fragile balance of power in Yemen and was viewed by Riyadh as a major provocation. The Saudis saw this move as antithetical to their interests, unhelpful to the anti-Houthi coalition, and a potential threat to Saudi security due to the proximity of the Yemeni-Saudi border. Notably, the U.A.E.-green-lit advance began on the same day that Gulf leaders were meeting in Bahrain.

Initially, both countries were aligned in Yemen, entering the conflict together in March 2015 to counter the Houthis, whom they viewed as an Iranian proxy. While there was early coordination between M.B.S. and M.B.Z., their paths began to diverge as Saudi forces became stuck fighting the Houthis, while the U.A.E. successfully pushed them back and reclaimed territory from Al Qaeda in the Arabian Peninsula. Feeling its mission was accomplished and facing international pressure over its tactics, the U.A.E. announced a redeployment of its forces in July 2019. It shifted its strategy to supporting local militias in southern Yemen to ensure its own access to Red Sea ports and maritime networks.

Following a 2022 truce that had largely frozen the conflict for years, the S.T.C.’s sudden November advance caught many by surprise. There are reports that the U.A.E. may have been reacting to M.B.S. raising the issue of the Sudanese civil war with President Trump during a mid-November visit to the White House. In Sudan, the U.A.E. has been backing the Rapid Support Forces (R.S.F.), a non-state militia group.

In Yemen and across the region, Saudi Arabia has acted incredibly aggressively over the past decade. Now something seems to have switched, and the U.A.E. seems more aggressive. What changed?

From 2015 to 2019, M.B.S. and M.B.Z. were closely aligned in their assertive and interventionist regional policies, seeking to limit the radical changes brought about by the Arab Spring. They worked together on the Yemen intervention and the blockade of Qatar, and Saudi Arabia intervened in Lebanese politics by holding their Prime Minister hostage in 2017.

The turning point for Saudi Arabia was the September 2019 missile and drone attacks on its oil infrastructure, which were widely attributed to Iran. The lack of a response from President Trump, who stated the attack was on Saudi Arabia and not the U.S., sent shockwaves through Riyadh and Abu Dhabi. Realizing they might be on their own, the Saudis began to pull back, de-escalating tensions with Iran and improving ties with Turkey to focus on internal economic growth.

Conversely, the U.A.E. remained more willing to take risks, continuing to back sub-state networks in countries with weak state institutions to support its own security and governance goals. This fundamental divergence in risk calculation and regional strategy grew throughout the 2020s.

I get that the two countries have different visions for the region, but does it seem like, given the speed with which this has spiralled out of control, there’s a deeper anger here?

The current animosity involves each side attempting to ensure its own narrative prevails, particularly with the Trump Administration. There is fierce debate regarding what M.B.S. actually said to Trump in November concerning the U.A.E. and the R.S.F., with perceptions on both sides driving their respective responses. These long-simmering splits, particularly in Yemen, have become too significant to ignore.

Economically, the two countries are also increasingly in competition. Saudi Arabia is struggling to attract foreign investment and is attempting to move into sectors like tourism, travel, and entertainment—areas where the U.A.E. has a decades-long head start. While this hasn't yet reached the level of a full political rupture like the 2017 Qatar blockade, the economic and security-focused rivalry is intensifying.

How do you think competing for the favor of the Trump Administration changes the rivalry?

Trump’s transactional approach to policy has created opportunities that both countries have sought to exploit. Since his 2025 inauguration, both nations have separately reached out with promises of investments in the U.S. economy and Trump-aligned companies. They are essentially competing for the ear of the White House. This competitive edge extends to technology as well; for instance, the U.A.E. has taken a lead in A.I. over the last several years, leaving the Saudis to play catch-up.

Have you been surprised by the U.A.E.’s enduring support for the R.S.F. in Sudan, despite the bloodshed?

It is surprising that international condemnation of the R.S.F. and its documented links to the U.A.E.—including weapon transfers disguised as humanitarian aid—has not forced Abu Dhabi to compromise its support. Instead, the U.A.E. has doubled down, possibly because it feels defensive or isolated in the region.

Is the U.A.E.’s increasingly aggressive actions driven by ideology or practical ends like projecting power?

It is a combination of both. For example, the U.A.E.'s heavy intervention in Libya was partly aimed at pushing back against Islamist groups supported by Qatar. They have built networks across Libya, Chad, and Sudan to support authoritarian strongmen who will limit Islamist influence. In the U.A.E., security and investment are explicitly linked, as seen in the roles held by Sheikh Tahnoon bin Zayed al-Nahyan, who serves as both national-security adviser and head of major investment groups.

Saudi Arabia has historically been more pragmatic. In Yemen, for instance, the Saudis were willing to work with an offshoot of the Muslim Brotherhood, whereas the U.A.E. maintains a zero-tolerance policy toward any Islamist movements, viewing them as the most likely source of political dissent.

What do you make of the Saudis accusing the U.A.E. of becoming too close to Israel?

Saudi propaganda is currently emphasizing the depth of ties between Israel and the U.A.E., labeling them as regional disruptors. This is ironic because M.B.S. himself was close to a normalization deal with Israel just before October 7, 2023. While the Saudis likely still want to normalize relations eventually, the domestic "price" for such a deal has risen due to the situation in Gaza.

Saudi Arabia faces more domestic political pressure than the U.A.E. because it is a much larger country and serves as the guarantor of Islam's two holiest sites. Consequently, Saudi policymaking is generally more cautious and sensitive to public opinion, which remains unenthusiastic about diplomatic ties with Israel.

Do you think the worldwide condemnation of Jamal Khashoggi’s murder in 2018 influenced M.B.S.'s shift toward being less aggressive?

Yes, the 2018 murder brought M.B.S.'s "Vision 2030" plans to a temporary halt and made him persona non grata in the West. He was only rehabilitated in 2022 following the Russian invasion of Ukraine, as Western leaders realized they needed to deal with him to manage rising oil prices. President Biden's subsequent visit and fist-bump with M.B.S. signaled this shift.

I’m curious if you think their falling out has anything to do with their personal dynamic.

While M.B.Z. is twenty-four years older and initially played a crucial role in establishing M.B.S.'s credibility in Western capitals, the relationship was always likely to face a clash of characters. Both are headstrong leaders; M.B.Z. saw a younger version of himself in M.B.S., but M.B.S. is now the crown prince of a regional leader. Currently, neither leader seems willing to back down in their struggle for the upper hand in the relationship.

Newspaper Summary - 200226

 On Thursday, February 19, 2026, Reliance Industries and its digital arm, Jio Platforms, announced a massive $110 billion (₹10 trillion) investment over seven years to build a "sovereign artificial intelligence (AI) backbone" for India. This announcement was made by Reliance chairman Mukesh Ambani during the fourth day of the India AI Impact Summit 2026 in New Delhi.

The key highlights of Reliance's AI initiative include:

• Sovereign Infrastructure: Ambani stated the goal is to build India's own compute infrastructure to ensure the country does not have to "rent intelligence".
• Data Centres: The plan involves constructing multi-gigawatt (GW) AI-ready data centres, starting with a 120MW facility in Jamnagar expected to come online in the second half of 2026.
• Nationwide Edge Network: Reliance aims to deploy a nationwide edge network integrated with Jio’s 5G infrastructure to make AI "responsive, low-latency and affordable" for all Indians.
• Green Energy: The infrastructure will be supported by green energy-backed capacity.

Simultaneously, Tata Consultancy Services (TCS) announced a major strategic partnership with OpenAI. Under this deal:

• Anchor Client: OpenAI will serve as the anchor client for a new data centre TCS has been building since October 2024.
• Infrastructure Collaboration: The two companies will collaborate to develop secure, India-based AI infrastructure, specifically a project referred to as "HyperVault".
• Employee Access: Thousands of Tata Group employees will gain access to Enterprise ChatGPT tools to enhance productivity.

Ambani emphasized that this push aims to dramatically reduce the "cost of intelligence" in India, similar to how Reliance previously lowered the cost of data. This massive private investment is seen as a move to position India as a global AI hub while maintaining data sovereignty.

Don 3 drama rejigs Bollywood contracts By Lata Jha New Delhi

Bollywood, despite the steady influx of corporate studios and institutional capital, continues to run largely on personal relationships; however, that long-standing informality is currently under significant strain. In response to recent industry friction, producers are revisiting contract drafting standards and insisting on stronger exit clauses, structured payment schedules linked to performance obligations, and clearer commitment periods once projects are publicly announced.

The catalyst for this shift is a high-profile public dispute between actor Ranveer Singh and Farhan Akhtar’s production banner, Excel Entertainment. Excel has reportedly demanded ₹40 crore in compensation for losses incurred after Singh allegedly exited the upcoming film Don 3. While the actor has countered the demand by stating he took no advance payment, experts suggest the episode reflects a widening gap in formal documentation within the industry.

Industry professionals and legal experts highlight several key changes occurring in the wake of this drama:

• Institutionalized Contracting: As film budgets soar—with big-budget movies now costing ₹300-500 crore to produce—investors are beginning to expect binding commitments similar to project finance structures. This includes stronger lock-in clauses and insurance-linked obligations.
• Performance-Linked Payments: Contracts are moving toward more rigorous, performance-based milestones rather than trust-based arrangements.
• Defining Exit Triggers: Legal practitioners like Rahul Hingmire of Vis Legis Law Practice note that we may soon see clearer "exit triggers" to manage the risk of a sudden talent departure, which can otherwise destabilize an entire project.
• Proof of Loss: Attorney Rishabh Gandhi notes that while courts rarely force an actor to perform due to the nature of personal service contracts, producers are now ensuring they have the legal standing to claim quantifiable damages if a breach is established.

Producers are also navigating the "defensible grey area" of artistic dissatisfaction, a common plea used to justify exits that remains difficult for courts to adjudicate in speculative ventures like filmmaking. Conversely, tighter contracts also protect actors; if a project stalls due to a producer's failure, defined clauses may allow talent to retain signing amounts or claim compensation for blocked dates.

Ultimately, experts like Yatharth Rohila of Aeddhaas Legal LLP believe these disputes highlight an essential evolution for Bollywood: the transition from "trust-based arrangements to legally risk-allocated agreements".

RBI asks NPCI to review UPI Autopay on debit concerns

By Mansi Verma & Anshika Kayastha Mumbai

The banking regulator, the Reserve Bank of India (RBI), has asked the National Payments Corporation of India (NPCI) to investigate a rising number of complaints regarding erroneous and involuntary UPI Autopay debits.

Users of the Unified Payments Interface (UPI) began reporting a surge in involuntary autopay mandates and significant difficulty in cancelling recurring payments toward the end of 2025. These concerns, often reported to cybercrime departments, prompted the NPCI to convene meetings in December with third-party application providers (TPAPs), payment gateways, and select merchants to assess whether interface designs or existing payment flows were to blame.

Rapid Growth and User Risks

UPI Autopay, launched in 2020 for subscriptions, bills, and EMIs, has become one of the fastest-growing use cases in the ecosystem. According to the sources:

• Transaction Volume: Recurring UPI payments have doubled over the past year, with the top 10 banks processing approximately 926 million transactions in November alone.
• Market Share: Autopay now accounts for roughly 5% of all UPI transactions by volume, processing nearly 1 billion transactions monthly.

Despite this growth, experts note that issues such as unexplained debits and interface friction are similar to historical problems seen with card-based mandates. Users have reported being unaware that one-time payments were triggering recurring mandates, and many incorrectly assumed that deleting a mobile app would automatically stop further deductions. There have also been claims that users are not receiving clear pre-debit or post-debit notifications directly from the apps.

New Regulatory Mandates

Even before the RBI's recent nudge, the NPCI had begun tightening its framework. In a significant move toward transparency and user control, the NPCI has directed banks and UPI apps to enable interoperability for Autopay mandates by December 31, 2025.

Under these new rules:

• Centralized Visibility: Users must be able to view all active mandates on any UPI app of their choice, regardless of where the mandate was originally created.
• Mandate Portability: Users will gain the ability to "port" or shift mandates from one application to another.
• Nudge Restrictions: Applications are strictly barred from using cashbacks, pop-ups, or other intrusive nudges to pressure users into migrating their mandates.

These measures aim to ensure that mandate management is entirely user-driven and accessible via a dedicated "manage accounts" section within UPI apps.

As demerger nears, Vedanta shores up oil output

By Dipali Banka & Nehal Chaliawala Mumbai

Ahead of its upcoming demerger into five separately listed companies, Vedanta Ltd is in a race against time to shore up production levels at its oil and gas business, which have declined in each of the past 10 years. Higher production levels are seen as critical to bolster the financials of the business before it begins operating as an independent entity named Vedanta Oil & Gas Ltd.

Declining Production Trends

Over the last decade, ageing oil blocks have caused production at Vedanta’s oil and gas vertical to more than halve, dropping from 211 thousand barrels of oil equivalent per day (kboepd) in FY15 to 103.2 kboepd in FY25. For the first nine months of FY26, average output stood at 89.1 kboepd, which is below the company's initial guidance of 95–100 kboepd.

While other industry players like Reliance Industries and ONGC also face declines in ageing blocks, the situation is more pressing for Vedanta. Once the demerger is finalized on April 1, the oil and gas unit will no longer have the financial cushion provided by the conglomerate’s cash-rich aluminium and zinc businesses.

Shrinking Financial Contribution

The vertical’s contribution to the group's overall financials has diminished significantly:

• Revenue: In the first three quarters of 2025-26, it reported ₹6,999 crore, accounting for 6% of the top line, down from approximately 20% a decade ago.
• Ebitda: It contributed ₹3,285 crore, or 9% of consolidated Ebitda, also down from a fifth a decade ago.
• Historical Growth: Between FY15 and FY25, the revenue of the oil and gas business shrunk by a quarter.

Recovery Strategies and Delays

To reverse these trends, Vedanta is focusing on Enhanced Oil Recovery (EOR) through a process known as alkaline-surfactant-polymer (ASP) flooding at its key Mangala fields in Rajasthan. However, this project—one of the largest and most expensive of its kind—is months behind schedule. Originally planned for a July start, commissioning is now expected within the next three months.

Jasmin Sahurity, COO of the oil and gas business, noted that the delay in ASP commissioning is the primary reason volumes haven't met expectations. Additionally, the company is targeting "tight oil" (reserves embedded in rocks) by drilling new wells to push production toward 90 kboepd in FY27, with a long-term goal of 150 kboepd.

Financial Outlook Post-Demerger

Despite production challenges, CFO Ajay Goel stated that the oil and gas business will be practically debt-free following the demerger. The bulk of Vedanta’s ₹60,624-crore net debt has been apportioned to the aluminium and base metal businesses based on asset value and cash generation abilities. Analysts at JP Morgan remain cautious, pricing in production levels of only 95 kboepd through FY28, while experts emphasize that reversing declines in mature assets requires strategic patience and disciplined execution.

U.S. gathers the most air power in the Mideast since the 2003 Iraq invasion By Lara Seligman, Michael R. Gordon, Alexander Ward & Shelby Holliday WASHINGTON

The United States is sending significant numbers of jet fighters and support aircraft to the Middle East, assembling the greatest amount of air power in the region since the 2003 invasion of Iraq. While the U.S. is prepared to take action against Iran, President Trump has not yet decided whether to order strikes or what their primary objective would be—ranging from halting the nuclear program to attempting to topple the regime.

Over the past few days, the U.S. has moved cutting-edge F-35 and F-22 fighters toward the region, supported by command-and-control aircraft and critical air defenses. A second aircraft carrier, the USS Gerald R. Ford, and its strike group are currently inbound to join the USS Abraham Lincoln and its nine destroyers already supporting potential operations. This amassed firepower gives the U.S. the option of a sustained, weekslong air war rather than a single limited strike like the "Midnight Hammer" operation conducted in June.

While military options are prepared, representatives from the U.S. and Iran met in Geneva this week to negotiate a deal regarding uranium enrichment. White House press secretary Karoline Leavitt noted "a little bit of progress," but stated that the two sides remain "very far apart" on several issues. Trump has indicated he would prefer a diplomatic agreement that eliminates Iran's nuclear programs, disbands proxy forces, and dismantles ballistic missiles, though he has told reporters he mainly cares about the nuclear issue.

Today's military circumstances differ from 1991; the U.S. Air Force is smaller now, and there are currently no allied ground forces or a broad international coalition. Notably, Saudi Arabia and the United Arab Emirates have restricted their airspace for potential U.S. strikes, leading to a concentration of warplanes at the Muwaffaq Salti Air Base in Jordan. Despite a smaller overall force than in the 2003 invasion, military technology has improved significantly, particularly in stealth and precision strike capabilities.

Iran is also preparing for a potential conflict by hardening its nuclear sites and dispersing decision-making authority. Satellite imagery shows Tehran has been strengthening tunnel entrances at its Isfahan site and a deep underground complex at Pickaxe Mountain to protect enriched uranium from airstrikes. Additionally, the Islamic Revolutionary Guard Corps is reviving a "mosaic defense" strategy to make the regime more resilient if the chain of command is disrupted. Domestically, security forces have established roughly 100 monitoring points around Tehran to stifle dissent and block potential insurgents.

As formidable as the current buildup appears, it remains a fraction of the assets used in 1991 or 2003. Some former officers suggest the dramatic increase in force is a signal that "Trump is not messing around," which could prompt Iranian leaders to agree to a deal. However, U.S. and foreign officials are increasingly pessimistic that Tehran will agree to all demands, fearing the gap between the two nations may be unbridgeable.

Why India’s Soil is Gasping for Air

By Sayantan Bera New Delhi

Cheap urea was meant to help farmers. Instead, it is hollowing out farms and damaging soils.

A few years ago, an internal survey of Indian farmers in the 40+ age group revealed a heartbreaking sentiment: most felt they would not be able to bequeath a worthy asset—their land—to the next generation. This is the result of a vicious cycle where low profitability leaves farmers with no surplus to invest in soil health, while recurring climate shocks like droughts and heatwaves further degrade the land.

The Subsidy Paradox

The scale of the crisis is reflected in the federal budget. In 2025-26, the fertilizer subsidy bill is estimated at ₹1.9 trillion, significantly higher than the entire agriculture budget of ₹1.5 trillion. Of this, the government spends ₹1.3 trillion specifically on urea. This massive spending drains funds that could otherwise be used for irrigation, research, or direct price support for farmers.

India’s dependence on imports remains a critical vulnerability, with the country importing roughly 75% of its urea, 90% of its DAP, and 100% of its potash. Consequently, global shocks, such as the 2022-23 energy spike following the invasion of Ukraine, can send the subsidy bill soaring (reaching a record ₹2.5 trillion that year).

Environmental and Health Costs

Because the domestic price of urea has remained largely unchanged for nearly two decades, it is ridiculously cheap, leading farmers to chronically over-apply it while neglecting more expensive nutrients.

• Low Efficiency: Plants absorb only about 40% of applied urea.
• Toxic Emissions: The excess nitrogen is released as nitrous oxide, a greenhouse gas with a global warming potential 272 times that of CO2. These emissions account for over a fifth of all agricultural greenhouse gas emissions in India.
• Soil Degradation: Decades of intensive cropping and heavy urea reliance have led to a nutrient imbalance and a deficiency in micronutrients like sulphur, iron, zinc, and boron.

The Failed "Nano" Hope

A liquid "nano urea" product launched in 2021 by Iffco was hailed as the "innovation of the century," with claims that a 500-ml bottle could replace a 45-kg bag of granular urea. However, it has failed to convince farmers. A 2024 field study by Punjab Agricultural University even reported a significant drop in rice and wheat yields when using the product.

The Road to Reform

Experts argue that the "addiction" to cheap urea is structurally embedded because the retail price does not reflect the true cost. The Economic Survey recently recommended a modest hike in urea prices, with an equivalent amount transferred directly to farmers' accounts on a per-acre basis. This would incentivize farmers to use the cash to buy a more balanced mix of nutrients.

The challenge is also linked to a perverse incentive to grow water-intensive cereals (rice, wheat, and maize for ethanol) due to assured government procurement. As Suresh Kumar Chaudhari, director general of the Fertilizer Association of India (FAI), notes, the moment farmers gain access to irrigation, they often switch from pulses to these fertilizer-heavy crops.

As 2020 World Food Prize Laureate Rattan Lal warns, the health of soil, plants, and humans is indivisible: "If soils are not restored, crops will fail, and people will suffer."

Freebies, and their many hazards

By A Narayanamoorthy Tamil Nadu Example: Freebies showered across a large swathe of voters squeeze out quality welfare for the really needy, and impact capex spending.

The recent announcement by the Tamil Nadu government to credit ₹5,000 into the bank accounts of 1.31 crore women under the "Kalaignar Magalir Urimai Thogai" scheme—marketed as a "Summer Special" allowance—marks a significant escalation in what economists call "competitive populism." While the Chief Minister framed this as an entitlement to fulfill a poll promise of providing ₹2,000 per month, the move has triggered a "bidding war" where opposition parties counter with even higher promises, reflecting a national trend where fiscal prudence is sacrificed for electoral gains.

The Volume and Cost of Freebies

While Tamil Nadu has a long history of successful welfare programs like the mid-day meal scheme, the current shift toward massive direct cash transfers represents a departure from productive welfare toward consumption-led populism.

• The Math: Providing ₹1,000 a month to 1.31 crore households already costs approximately ₹15,720 crore annually. With the increase to ₹1,351 per month, the annual burden will surge to over ₹21,100 crore, consuming nearly 9% of the state’s total revenue.
• Low Poverty Paradox: NITI Aayog data shows multidimensional poverty in Tamil Nadu is just 2.25%. In such a setting, a universal scheme covering 70% of all households is seen as a drain on resources that could otherwise be used to lift the remaining people out of poverty.

Fiscal Arithmetic and Hidden Costs

The expansion of these "gifts" comes at a time when Tamil Nadu’s total debt is projected to reach ₹9.29 trillion by March 2026, with a revenue deficit of ₹41,635 crore for the 2025-26 fiscal year. To fund these distributions, the state has reportedly:

• Increased property taxes and electricity tariffs.
• Hiked registration fees on land and essential utility bills. This creates a regressive cycle where the state extracts money from the middle class through utilities to redistribute it as political populism.

Impact on Development and Infrastructure

The "hidden cost" of these freebies is the inevitable hit to capital expenditure. In Tamil Nadu, the capital outlay for 2025-26 is budgeted at ₹33,724 crore, while the total expenditure on various "freebie" schemes is nearly ₹57,251 crore. When committed expenditures like salaries, pensions, and interest payments already consume 62% of revenue receipts, the fiscal space for new development is rapidly vanishing.

The Moral Hazard

Beyond the balance sheet, there is a mounting concern regarding the dependency syndrome these schemes foster, which critics argue undermines the dignity of labour. The franchise of the vulnerable is increasingly treated as a commodity in an "election marketplace" where parties are judged on their "bidding price" rather than their long-term vision.

Conclusion: A Fiscal Cliff

With interest payments alone now accounting for 21% of revenue receipts, the state is approaching a "fiscal cliff." Experts suggest that the Supreme Court and institutional safeguards must intervene to force political parties to disclose exactly how they intend to fund the freebies they promise. Without such restraint, the primary function of the state risks becoming a cycle of debt servicing and subsidy distribution, leaving the future of infrastructure and genuine welfare in jeopardy.

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The writer is an economist and former full-time Member (Official), Commission for Agricultural Costs and Prices, New Delhi. Views are personal.