Newspaper Summary 030226

India, US sync on trade, tariffs

US reciprocal tariff to fall to 18%; punitive tariffs on Russian oil purchases may go; deal to benefit India, says Modi

US President Donald Trump announced on Monday that he and Prime Minister Narendra Modi have agreed to a comprehensive trade deal between India and the US. This agreement comes nearly a year after both sides initially agreed to work toward a bilateral trade pact. Under the deal, Washington will lower its reciprocal tariff on Indian goods from 25% to 18%, while India has agreed to reduce its tariffs and non-tariff barriers against the US to zero.

Additionally, the US is removing an extra 25% duty on Indian goods that had been applied in response to India’s purchases of crude oil from Russia. Trump stated that he spoke to Modi earlier in the day and that the agreement was reached “effective immediately”. The two leaders discussed various issues, including trade and efforts to end the war between Russia and Ukraine.

Trump further claimed that Prime Minister Modi agreed to stop India's Russian oil purchases and instead buy more energy from the United States and potentially Venezuela. According to the US President, India will buy more than $500 billion worth of US energy, technology, agricultural products, coal, and other goods, committing to "Buy American" at a significantly higher level.

Prime Minister Modi shared his reaction in a post on X, stating, “Wonderful to speak with my dear friend President Donald Trump today. Delighted that Made in India products will now have a reduced tariff of 18%”. Modi expressed his gratitude to President Trump on behalf of the 1.4 billion people of India and noted that the cooperation between the world’s two largest democracies would unlock immense opportunities. He also stated that President Trump’s leadership is vital for global peace and that India fully supports his efforts toward that goal. Following the announcement, the Gift Nifty (formerly SGX Nifty) rose by 2.6%.

16th Finance Commission: Just a course correction, not a paradigm shift

By Sindhu Hariharan

The 16th Finance Commission has submitted its report to the President, and it was tabled in Parliament on the Budget day. While the Commission has stuck to its core principle of equitable redistribution of resources among the poorer States, it has introduced some changes in the criteria for horizontal distribution of the divisible pool of taxes.

Some Tweaks

The Commission has retained the vertical devolution share at 41 per cent, the same level as the 15th Finance Commission. However, it has tweaked the criteria it uses to share the funds among various states to address the concerns of progressive states. The most significant change in the formula is the introduction of "contribution to the GDP" as a new norm, which looks at a state's contribution to the nation's GDP growth and gives it a weightage of 10 per cent.

Additionally, the Commission has used the 2011 census figures for population and tweaked other weightages, such as demographic performance and per capita distance. Despite these refinements, the net result shows that there is not much difference in the devolution between the 15th and 16th Commissions.

Revenue Deficit Grants Shelved

A notable departure is that the 16th Finance Commission has ended the revenue deficit grant previously given to select states to help them eliminate the excess of revenue expenditure over revenue receipts. The Commission argued in its report that this grant created perverse incentives for the persistence of revenue deficits rather than encouraging policies for their elimination.

Urban Local Grants

In a bid to accelerate the development of the government’s "third tier," the 16th Finance Commission announced a 45% jump in allocation to urban local bodies, totaling ₹3.56 trillion. Experts noted that this allocation equals the outlay of centrally sponsored schemes during the entire 13-year period from 2014-15 to 2026-27, potentially marking a pivotal transition in first-mile infrastructure and services.

Mixed Reaction

States have given mixed reactions to these proposals:

• Kerala welcomed the report as its share rose from 1.9% to 2.4%.
• Tamil Nadu expressed disappointment that the vertical devolution was not increased to 50% and noted it has the lowest share among developed states.
• Himachal Pradesh estimated that withdrawing the revenue deficit grant would lead to a ₹40,000 crore shortfall.
• Karnataka pointed out that despite contributing 8.7% to India's GDP, the state continues to receive low allocations.

At 4.5 lakh units, PV dispatches grow 11% on-year in January

IN FAST LANE. Maruti Suzuki, Hyundai Motor record highest-ever monthly sales

By S Ronendra Singh New Delhi

Passenger vehicle (PV) wholesales (dispatches to dealers) grew by over 11 per cent year-on-year (y-o-y) to around 4.5 lakh units in January, compared with 4,03,093 units in the same month last year, according to industry estimates.

Market leader Maruti Suzuki India (MSIL) reported its highest-ever dispatches in a single month, a figure that includes exports and sales to Toyota. MSIL's exports also reached an all-time monthly high of 51,020 units in January. In domestic dispatches, MSIL saw marginal growth of 0.5 per cent, reaching 1,74,529 units. Partho Banerjee, Senior Executive Officer (Marketing & Sales) at MSIL, noted that the company recorded total sales of over 2.78 lakh units and currently has nearly 1.75 lakh pending orders in the domestic market.

Banerjee stated that MSIL introduced a price protection scheme for first-time buyers in January to encourage upgrades, noting that there would be no price increase despite pressure from commodity prices.

Other major manufacturers also reported strong growth:

• Tata Motors Passenger Vehicles: Dispatches rose 46 per cent y-o-y to 70,222 units.
• Mahindra & Mahindra (M&M): Domestic dispatches grew 25 per cent to 63,510 units. M&M recorded 93,689 bookings (worth ₹20,500 crore) for the XUV700 and XUV 3XO in just four hours.
• Hyundai Motor India: Recorded its highest-ever monthly domestic sales of 59,107 units, a 9.5 per cent increase.

2-Wheeler Segment

The two-wheeler segment saw Hero MotoCorp grow 26 per cent to 5,20,208 units, driven by demand for scooters and the newly launched Glamour X motorcycle. Royal Enfield reported a 16 per cent jump in domestic sales to 93,781 units and is targeting one million total sales this financial year.

Shifting Preferences

Despite the overall growth, the contribution of hatchback cars (such as the Alto) remained steady at about 20 per cent of total PV sales. Tarun Garg, MD and CEO of Hyundai Motor India, attributed this to a structural shift as customers increasingly prefer compact SUVs, which now offer more choices and healthy stock levels.

Outlook Ahead

“As we move ahead, the robust booking numbers for January give us great momentum as we enter the early 2026,” Garg added.

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Starting with a Bang

Auto domestic dispatches for the month of January 2026

Category / Company	Jan-26	Jan-25	% Change
Passenger Vehicles
Maruti Suzuki India	1,74,529	1,73,599	0.5
Tata Motors	70,222	48,076	46
M&M	63,510	50,659	25
Hyundai Motor India	59,107	54,003	9.5
Kia India	27,603	25,025	10.3
Toyota Kirloskar Motor	30,630	26,178	17
2-Wheeler Segment
Hero MotoCorp	5,20,208	4,12,378	26
Honda Motorcycle & Scooter	5,19,579	4,02,977	29
TVS Motor	3,83,862	2,93,860	30.7
Royal Enfield	93,781	81,052	16
Commercial Vehicles
Volvo Eicher	10,601	8,449	25
Tata Motors	38,844	30,083	29
Ashok Leyland	17,222	16,202	21.2
Tractors
Escorts Kubota	9,137	6,058	51
M&M	38,434	26,105	46

(Source: Industry estimates/Company data)

‘Govt may consider raising PSB FDI limit’

By Subhash Narayan New Delhi

The government may consider hiking the foreign direct investment (FDI) limit in public sector banks (PSBs) from 20% to as high as 49% following a review of foreign direct holdings in these banks. Department of Financial Services secretary M. Nagaraju stated on Monday that the primary goal of this move is to attract foreign investors to Indian banks, raise their capital base, and create larger banking institutions.

Speaking after the Union Budget presentation, Nagaraju confirmed that the finance ministry is currently conducting inter-ministerial consultations on the proposal. While the exact level is still under consideration, he clarified that any decision taken would have to be less than 49%, as the government is legally required to maintain at least a 51% stake in these banks.

In contrast, the FDI limit for private banks currently stands at 74%, with up to 49% allowed through the automatic route without requiring prior permission from the government or the Reserve Bank of India. For private banks, government permission is only required for FDI exceeding the 49% threshold.

Better options ahead

Budget rightly checks speculation in derivatives

The stock market reacted rather violently to the Union Budget on Sunday, with the benchmark Nifty 50 index losing around 2 per cent. A primary driver of this reaction was the increase in the Securities Transaction Tax (STT) on derivative contracts. Specifically, the STT on the sale of future contracts was raised from 0.02 per cent to 0.05 per cent, while the tax on the sale or exercise of equity option contracts increased from 0.1 per cent to 0.15 per cent.

Market experts suggest that while this move caused a sharp temporary reversal, it is likely to benefit the stock market in the long run. The regulator has been increasingly worried about the surge in speculative activity within the equity derivative segment since the pandemic, led largely by individual investors. Retail participation in derivatives recently reached an all-time high, with 31 per cent of the trading pie coming from this group.

The STT increase announced in the Budget is designed to act as a disincentive for retail traders, effectively making leverage investments to be less attractive. For those trading in equity futures, the outgo on STT has increased by 150 per cent, whereas for options, the increase is a more moderate 50 per cent. The editorial notes that pushing traders toward options is a positive step, as the capital outlay and risk associated with futures are significantly higher.

Beyond derivatives, the Budget introduced another significant change by taxing share buybacks at the hands of shareholders instead of taxing the company. This moves the tax burden to the investor's individual income tax slab rate, which is often higher than the previous company-level tax. This proposal is expected to curb the frequency of buyback announcements and bring the tax incidence on dividends and buybacks closer together.

While these measures created immediate market friction, the sources suggest they align with a broader goal of ensuring market stability and discouraging excessive retail speculation in high-risk instruments.

Apple’s value share hits 28% in India

Tech giant Apple has recorded its highest-ever value share of 28% in the Indian smartphone market, driven by a surging “premiumization” trend where consumers are increasingly opting for high-end devices, according to a report by Counterpoint Research.

The report highlighted a significant shift in the world’s second-largest smartphone market, noting that while volume growth remains steady, the total market value is expanding at a much faster clip as Indian buyers trade up to more expensive models,.

According to Counterpoint’s latest insights, Apple had a 23% value share in India in 2024. Overall, India’s smartphone market grew 1% y-o-y in volume and 8% y-o-y in value in 2025.

Budget will foster competitiveness

GROWTH THRUST. A holistic approach, with liquidity measures for MSMEs and policies for textiles, will surely work.

By S Mahendra Dev and RK Tripathi

India’s ambition to attain a trillion-dollar economy status places renewed focus on long-term sustainable growth drivers, structural reforms, and growing institutional capacity. Against this backdrop, Budget 2026 places competitiveness at the center of the economic framework to ensure India remains a bedrock of a resilient global economy.

Strategic Alignment

The Budget is placed against a landscape of global uncertainties and the newly concluded Free Trade Agreement (FTA) with the European Union. Key measures to enhance competitiveness include modernizing agricultural infrastructure, enhancing capital investment in machinery, and creating common service and certification facilities for weavers and artisans. By addressing long-standing gaps in skills and technology, the Budget aims to help the Indian industry emerge as a global powerhouse, particularly if it adopts Industry 4.0 practices through collaboration with academia and research institutions.

Sectoral Support

• MSMEs and Artisans: The Budget introduces the Ghar Ghar Swaraj Initiative to strengthen traditional handlooms and handicrafts, which represent a significant segment of the rural economy. This involves focusing on global market linkages, branding, and training to benefit millions of artisans.
• University Townships: A major proposal involves setting up five university townships along major industrial corridors. These centers are intended to act as hubs for specialized skills, bridging the gap between industry requirements and laboratory readiness.
• Textiles: The Budget recognizes that village industries are steadily losing ground to mechanization. In response, it offers targeted support for the textile sector through the Khadi and Village Industries Commission (KVIC), providing infrastructure, credit, and market exploration.

Liquidity and Innovation

To address the "capital scarcity" of MSMEs, the Budget proposes several innovative liquidity measures:

• Mandating the use of TReDS (Trade Receivables Discounting System) for central public sector enterprises (CPSEs) to ensure timely payments.
• Expanding the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to provide credit guarantees for invoice discounting.
• Integrating the Government e-Marketplace (GeM) with TReDS to ease working capital constraints.

Vision for 2047

The Budget reinforces the "Make-in-India" vision and the long-term goal of Viksit Bharat 2047. By focusing on "cooperative mitras," the government aims to modernize the cooperative sector through tax easing and diversification into value-added segments like food processing and energy. Ultimately, this holistic approach seeks to convert the "engineering state" mindset into a sustainable, self-inclusive economy where the benefits of growth are widely and equitably shared.

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S Mahendra Dev is Chairman and RK Tripathi is Joint Secretary in the Economic Council to the Prime Minister. Views are personal.

Deepening India’s role in global supply chains

The thrust on new age sectors further enhances India’s competitiveness

By R DINESH

The Budget sends a signal of stability and credibility at a time when global uncertainty continues to test economic resilience. The Finance Minister’s commitment to a fiscal deficit of 4.3 per cent reinforces the government’s growth priorities with macroeconomic discipline.

A substantial focus on capital expenditure, with an allocation of ₹12.2 trillion, reinforces that the government is looking at a sustained, multi-year measure. As this investment is geared towards sectors like electronics, semiconductors, green energy, and infrastructure, it will foster long-term growth, integration and efficiency.

Manufacturing Push

The Budget places special emphasis on strengthening manufacturing and investment into India by attracting foreign investment through a predictable window for customs and corporate tax on technology. These measures, along with better visibility of policy, send a strong signal of intent to global investors. The thrust on new-age sectors will increase India’s manufacturing integration and tech ecosystem, as well as manufacturing and supply chains, improving India’s competitiveness and global standing.

For MSMEs, mandating TReDS (Trade Receivables Discounting System) as the settlement platform for all public procurement and central public sector enterprises (CPSEs) creates a centralised Government e-Marketplace (GeM) template for wider adoption across supply chains. The proposed ₹10,000 crore SME Growth Fund and ₹20,000 crore for the Corporate Mitras scheme for MSMEs in Tier-2 and Tier-3 towns can help create scale and efficiency, enabling these enterprises to integrate into corporate and global value chains over time.

Logistics Thrust

Proposals such as new dedicated freight corridors (DFCs), high-speed rail, and national waterways linking industrial centres and ports will significantly enhance logistics. At the same time, the cargo promotion scheme aims to increase the share of coastal and inland waterways from 6 per cent to 12 per cent by 2047, clearly highlighting the focus on supply chain resilience. Additionally, the creation of regional university townships to address skill gaps is a welcome focus on building relevant talent for these sectors.

The Budget reinforces India’s ambition by enabling a larger role in global supply chains while building the domestic capability of the logistics and manufacturing sectors.

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The writer is Chairman, TVS Supply Chain Solutions Ltd.

High-value crop status a turning point for cashew

By AJ Vinayak Mangaluru

With India’s raw cashew nut (RCN) production remaining stagnant at around 0.7 million tonnes (mt) per annum despite having a processing capacity of nearly 2 mt, the Union Budget’s proposal to support high-value agriculture in coastal areas brings a ray of hope for a paradigm shift in the sector.

For the first time, Finance Minister Nirmala Sitharaman mentioned cashew in her Budget speech, stating the government will launch schemes to enhance productivity, increase farmers’ incomes, and create climate-resilient opportunities in coastal areas. The high-value crop status was also extended to other crops such as coconut, sandalwood, cocoa, and coffee.

Positive Signal

The industry has welcomed the announcement as a long-awaited recognition of cashew’s potential. Gunjan Vijay Jain, president of the Nuts and Dry Fruits Council of India, noted that the Budget sends a strong and positive signal for the nuts and dry fruits sector by recognizing high-value agriculture as a key driver for farm income growth and export competitiveness.

Kalbavi Prakash Rao, managing partner of Kalbavi Cashews in Mangaluru, highlighted the current imbalance in the industry, stating that while India has the capacity to process 3 mt of RCN, it is only producing roughly 0.7 mt. He remarked that with domestic consumption growing at 7 per cent plus and the ingredient segment consumption at 10 per cent, the industry must become self-reliant in raw material to avoid excessive exposure to global market volatility.

A New Chapter

R Jaganmohan Pillai, chairman of the Nuts and Dry Fruits Council of India’s Nutking brand, described the move as a "turning point for self-reliance and global leadership". He believes the focus on high-value agriculture will encourage domestic production and reduce the industry’s dependence on imported raw nuts, which often carry a high price premium.

Industry experts suggest that this shift toward supporting manufacturing-linked infrastructure and productivity will enable the Indian cashew industry to reclaim its top position in the global export market.

The provided sources do not contain an article titled "jet fuel consumption hit record high in january" or any specific information regarding aviation turbine fuel (ATF) consumption levels for that period.

While the sources cover various economic indicators and record-breaking figures for January 2026, they focus on other sectors:

• Passenger Vehicles: Dispatches grew by 11% year-on-year to approximately 4.5 lakh units, with Maruti Suzuki and Hyundai recording their highest-ever monthly sales,,.
• Power Consumption: India's power consumption rose 3.8% to 142.74 billion units in January 2026, driven by increased heating requirements during intense cold in North India.
• Manufacturing Activity: The HSBC India Manufacturing PMI rebounded to 55.4 in January, signaling a stronger improvement in operating conditions after a two-year low the previous month,.
• Smartphone Market: Apple reached its highest-ever value share of 28% in the Indian market during this period,.
• Aviation Sector News: The sources mention that Air India grounded a Boeing Dreamliner in early February due to a potential defect with the aircraft's fuel control switch, and that the budget proposed scrapping basic customs duty on imported civilian aircraft components,,.

If you are interested in details regarding the aviation industry or energy-related policies from the sources, I can provide information on the duty relief for aircraft components or the $500 billion energy and technology deal discussed between President Trump and Prime Minister Modi,.

CHINA’S TRADE ARC: LESSONS FOR INDIA

By Puneet Kumar Arora & Jaydeep Mukherjee

China’s economic resilience, even in the face of significant global pressure, offers a distinct lens through which to view its success as an “engineering state.” As argued in Dan Wang's Breakneck: China’s Quest to Engineer the Future, Chinese leaders prioritize large-scale building, rapid industrial expansion, and centralized problem-solving, which helped the nation post a record trade surplus of $1.2 trillion in 2025 despite multiple rounds of US tariffs.

Credit and Scale

Exporting is capital-intensive, requiring firms to finance large-scale production, manage long working-capital cycles, and invest in global marketing networks. China’s domestic credit to the private sector stands at approximately 194% of its GDP, providing a level of financial depth similar to Japan (197%) and the US (201%). This access to finance allows Chinese firms to dominate exports and withstand tariff shocks. In stark contrast, India’s domestic finance to the private sector is at a meagre 50% of GDP, which limits the ability of Indian exporters to scale, diversify, and sustain competitiveness.

The Role of Imports

A crucial part of China’s strategy since joining the WTO in 2001 has been its integration into global value chains. Rather than discouraging imports, China ships in capital goods, advanced machinery, and critical technologies to embed them into export-oriented manufacturing. This allows firms to upgrade technologically over time. For India, the lesson is that high-quality imports are essential for export competitiveness; recent rollbacks of quality control orders and easier access to imported inputs are noted as steps in the right direction, particularly for MSMEs.

Redirecting Exports

While US tariffs on Chinese goods peaked at about 45% (later easing to 30%), causing exports to the US to fall by 20%, China’s export engine did not stall. Instead, shipments were redirected, with exports rising sharply to Africa (26%), Asean (13.4%), India (12.8%), and the EU (8.4%). This was further aided by trans-shipments through markets like Thailand and Vietnam. India has shown resilience by negotiating free trade agreements (FTAs) with Oman, the UK, and the European Free Trade Association (EFTA), though a trade pact with the US remains elusive.

Strategic Agility

China has shifted its export composition toward technology-intensive sectors where it has established global dominance:

• High-Tech: Smartphones, consumer electronics, and telecom equipment.
• Clean-Tech: Batteries, electric vehicles (EVs), and renewables.
• Strategic Leverage: In 2025, China’s rare-earth exports reached their highest levels since 2014, signaling strategic leverage over global supply chains.

These are the segments where global demand is expanding fastest, driven by digitalization and climate commitments.

Consumption vs. Exports

Despite its trade success, concerns remain about the sustainability of China’s growth model, which is overtly reliant on the external sector. Household consumption in China makes up only 39–40% of GDP, well below the global average of 65%. India, by comparison, has a consumption-led model, with private spending contributing about 60% to its GDP. The sources suggest that while exports are crucial, India must avoid pursuing export growth at the cost of domestic consumption, as economies overly reliant on exports are more vulnerable when global conditions turn adverse.

India looks to harden drug law to curb opioid abuse

The regulator plans an overhaul of the Drugs and Cosmetics Act to sharply raise punishments

By Priyanka Sharma New Delhi

In a bid to stem the alarming opioid crisis, India's apex drug regulator is planning a comprehensive overhaul of the Drugs and Cosmetics Act. The proposed changes aim to sharply raise punishments and fines to deter the illegal diversion of habit-forming pharmaceutical opioids. According to government documents and officials, this move could materially tighten oversight across India's $50-billion pharmaceuticals market.

Stricter Penalties and Legal Alignment

The proposal by the Drugs Controller General of India (DCGI) involves increasing imprisonment for violations by three-and-a-half times—from two years to a minimum of seven years. Additionally, financial penalties could see a 28-fold increase, rising from the current ₹20,000 to at least ₹5 lakh. These changes are intended to align the Drugs and Cosmetics Act with the much stricter Narcotic Drugs and Psychotropic Substances (NDPS) Act.

Under the current law, many offences are often bailable and inadequately enforced. The new framework seeks to make these offences cognizable and non-bailable. This development is significant given that a 2019 government report estimated India has approximately 2.5 million "dependent users" of pharmaceutical opioids.

Drugs Under Scrutiny

The regulatory focus is on formulations under Schedules H, H1, and X, which account for 30% of high-value prescription antibiotics, psychotropics, and analgesics in India. Specific drugs identified for their high potential for misuse as intoxicants include:

• Codeine-based syrups
• Alprazolam and Zolpidem (prescribed for anxiety and insomnia)
• Tramadol (a potent opioid analgesic)
• Diazepam (prescribed for muscle spasms and alcohol withdrawal)

New Tracking and Enforcement Measures

To secure the supply chain, the government plans to create a separate schedule for these specific drug formulations. A mandatory real-time digital tracking system for purchase orders will be implemented to create a digital trail.

Under this new playbook, manufacturers will be required to furnish formal purchase orders and immediately notify authorities—including drug inspectors at both source and destination and the Superintendent of Police in relevant jurisdictions—upon the dispatch of these medicine batches.

These proposals were discussed during the 67th Drugs Consultative Committee (DCC) meeting held in November 2025 and are currently under review by the DCGI.

LIQUIDITY IS NOW RBI’S REAL CHALLENGE

By Dhiraj Nim

All eyes are now on India’s Monetary Policy Committee (MPC) ahead of its final rate decision for fiscal year 2026. After repo rate cuts totaling 125 basis points (bps), the rate-cutting cycle is expected to conclude, and policymakers may shift focus from the cost of funds to the quantum of liquidity. While India's growth-inflation outlook remains comfortable, the greater challenge for the Reserve Bank of India (RBI) is that transmission remains weak due to tight banking liquidity.

This tightness is evidenced by the weighted average call rate averaging above the repo rate and a rise in certificate-of-deposit rates. The liquidity issue does not stem from inadequate base-money creation but rather from three specific factors within the banking system.

First, currency in circulation has surged 10.7% year-on-year, the highest since early 2022. This rise in currency leakage, which began in mid-2024, is consistent with improving rural demand and a wave of state elections in 2025. Second, the RBI’s forex interventions have tightened domestic onshore liquidity. As the rupee declined, the central bank sold US dollars, sometimes heavily, to deter speculative positioning. Third, the banking system’s incremental credit-deposit ratio is likely to rise. While credit growth has improved, deposit growth has not strictly kept pace, creating persistent upward pressure on interest rates.

The RBI has already embarked upon durable and temporary liquidity infusions, but more may be needed. The most urgent task is to ensure that past rate cuts are transmitted effectively, which requires the RBI to provide additional liquidity and anchor rates in line with the policy rate and stance.

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Dhiraj Nim is an economist at ANZ Research. Views are personal.

Iran’s Gen Z helped propel the protests. They paid with their lives.

A generation who grew up in a more connected world rebelled against a failing economy and strict social rules

By Feliz Solomon

On Jan. 7, Parviz Afshari received the last messages his son, Sam, would ever send him: “I’m planning to join the protest tomorrow/ But don’t tell Mom”. Relatives found the 17-year-old boy’s body four days later among rows of corpses in a morgue in the Iranian city of Karaj. Sam is part of an expanding list of teenagers and young people emerging as victims of a brutal crackdown in a country where almost half the population is under 30.

A Digital Memorial

As an internet blockade restricts information, a digital memorial has emerged on social media, filled with photographs and biographies of dead athletes, artists, and students. While youth have often formed the front lines of mass protests globally—from China in 1989 to the Arab Spring—the movement in Iran took on a unique tenor. Initially spearheaded by conservative bazaar workers disgruntled over the collapse of Iran's currency, the protests morphed into an antiregime uprising when young people joined, presenting the greatest challenge to Shiite cleric rulers in nearly five decades.

The Cost of Rebellion

The scale of the violence is still coming into view due to a near-total communications blackout that began on Jan. 8. Human-rights researchers suggest the death toll may surpass 10,000, potentially making it the deadliest episode of political suppression in modern history. While Iranian authorities claim roughly 3,100 deaths were linked to terrorism, the U.S.-based nonprofit Human Rights Activists in Iran has confirmed over 6,000 deaths, including at least 137 people under the age of 18.

This generation, the first in Iran to grow up with widespread internet access, witnessed a brief window of optimism during the 2016 easing of sanctions before the nuclear deal collapsed, plunging the nation back into isolation. With youth unemployment above 20%, many feel the ultraconservative regime is entirely out of touch.

Lives Snuffed Out

The stories of the victims highlight the personal toll of the crackdown:

• Sam Afshari (17): A student of English and German who loved computers and swimming, Sam was planning to join his father in Bavaria to study IT. He was killed by a gunshot wound to the back of his head; when his family found him, a second wound had torn through half of his face.
• Rebin Moradi (17): A soccer player who called his family while leaving a game to say he was joining a demonstration; he was found four days later in a Tehran morgue.
• Amirali Heidari (17): Just days away from his 18th birthday, witnesses say security forces shot him in the chest and then beat him to death with a rifle butt as he lay bleeding.

A Fight for Dignity

Experts note that these young Iranians take to the streets fully aware of the risks. “Iranian Gen Z wants to be part of the world and, in very basic terms, be able to express themselves freely, have economic opportunities, and live with dignity,” said Holly Dagres, a senior fellow at the Washington Institute.

For many, the struggle is a continuation of the “Woman, Life, Freedom” movement sparked in 2022 by the death of a young woman in the custody of the “morality police”. As one exiled artist put it, despite the deadly consequences, for this generation, “This was their time”.

Trump launches $12 billion minerals stockpile

US President Donald Trump is set to launch a strategic critical minerals stockpile with $12 billion in seed money. This initiative is a bid to insulate manufacturers from supply shocks as the United States works to slash its reliance on Chinese rare earths and other metals.

Project Vault

The venture, dubbed Project Vault, is designed to marry $1.67 billion in private capital with a $10 billion loan from the US Export-Import Bank. These funds will be used to procure and store minerals for automakers, technology firms, and other manufacturers. Senior administration officials, who requested anonymity to discuss the unannounced plan, described it as a first-of-its-kind stockpile for the US private sector.

Strategic Focus

The effort is modeled after the nation’s existing emergency oil stockpile. However, instead of crude oil, this project focuses on minerals such as gallium and cobalt, which are essential components in iPhones, batteries, and jet engines. The stockpile is expected to include:

• Rare earths and critical minerals.
• Strategically important elements subject to volatile prices.

Weaning from China

The launch represents a major commitment to accumulate minerals deemed critical to the industrial economy, specifically the automotive, aerospace, and energy sectors. It highlights President Trump’s ongoing effort to wean US supply chains away from China, which currently serves as the world’s dominant provider and processor of critical minerals.

INSIDE THE 16TH FC’S 41% TIGHTROPE WALK

A Mint explainer on the Finance Commission’s latest report and why many states remain upset.

By N Madhavan

The 16th Finance Commission (FC) has released its recommendations for the period 2026-2031, which will decide the allocation of resources between the Centre and the states. In a delicate balancing act, the Commission has retained vertical devolution at 41% while tweaking the criteria for horizontal devolution to reward contribution to economic growth and ending the revenue deficit grant.

The Context of Devolution

In India’s federal setup, Article 280 of the Constitution mandates the President to appoint a Finance Commission every five years to recommend how to divide the net tax proceeds (the divisible pool) of the Union. The current report, headed by economist Arvind Panagariya, arrives as relationships between the Centre and many states are frayed over the devolution process. Progressive states, particularly in the south, feel they are being punished for pursuing development and reducing population growth.

Past Trends

The first Finance Commission in 1951 recommended that 16% of the gross tax revenue (GTR) be shared with states. By the 15th Commission, this devolution (excluding grants) had doubled to 32.1% of GTR. While the 15th Commission recommended an overall vertical transfer of 41%, data suggests that when all transfers are considered, states currently receive roughly 69% of total revenue receipts, excluding capital receipts.

State Grievances

Many states remain angry for two primary reasons. First, they claim they are not receiving their full recommended share of the divisible pool. Second, they argue the Centre is offsetting their share by levying higher cess and surcharges, which are not shared with states. During consultations, 18 of the 28 states sought an increase in devolution to 50%. The Centre refuted these claims, arguing it needs more revenue for defence and macroeconomic management.

The "Good Bargain"

The 16th FC denied the states' claim for 50% devolution, maintaining the limit at 41%. It also refused to cap cess and surcharges, citing their constitutional role in raising resources for emergencies. However, the Commission suggested a "good bargain": folding revenues from cess and surcharges into regular taxes, which would allow states to agree to lower devolution percentages with no actual loss of revenue.

Horizontal Devolution Tweaks

To address the concerns of progressive states, the Commission introduced a new norm—"contribution to the GDP"—which rewards a state’s contribution to national growth with a 10% weightage. It also used 2011 census figures and adjusted other weightages, such as demographic performance and per capita distance. Despite these refinements, the net result shows little difference in devolution levels compared to the 15th Commission.

Grants and Local Bodies

• Revenue Deficit Grants Shelved: The Commission has ended these grants, arguing they created "perverse incentives" for states to persist with deficits rather than adopting policies to eliminate them.
• Urban Local Grants: In a major shift to empower the "third tier" of government, the Commission announced a 45% jump in allocation to urban local bodies, totaling ₹3.56 trillion. Experts noted this allocation equals the entire outlay of centrally sponsored schemes over the 13-year period from 2014 to 2027.

Mixed Reactions

The proposals have drawn varying responses from state leadership:

• Kerala welcomed the report as its share rose from 1.9% to 2.4%.
• Tamil Nadu expressed disappointment that vertical devolution remained at 41% instead of 50%, noting it has the lowest share among developed states.
• Himachal Pradesh estimated a ₹40,000 crore shortfall due to the withdrawal of the revenue deficit grant.
• Karnataka criticized the low allocation, noting that despite contributing 8.7% to India's GDP, its share remains inadequate.

How to make good small talk and why that’s important

By Manu Joseph

Speaking to a stranger can be a rich experience, even if they are ordinary individuals. When seeking good small talk, one should not have material ambitions or seek out only the beautiful and the famous; instead, the focus should be on the value of a transient conversation.

The Challenge of Silence

The biggest problem with small talk is often the sudden awkward silence. While silences are frequently defamed as signs of boredom, they are actually necessary pauses that allow the mind to recoup. The author suggests that the more we know someone, the quieter we naturally become, and silences do not necessarily mean you have run out of things to say.

Why We Speak to Strangers

Strangers are the “background extras” in the engrossing stories of our lives, which typically have very few central characters. Despite being extras, it is important to speak to them. Many people who are considered naturally good at small talk often lead "dreary" conversations characterized by obvious observations or common ice-breakers like bad-mouthing the food or the host.

A Different Approach

In an ideal world, small talk would move away from standard questions like “So what do you do?” and toward more interesting, albeit unusual, inquiries such as “What’s your uric acid level?”. While some people take pride in being "bad at small talk" as if it were a sign of intelligence, the author argues that one should actually strive to be better at it.

How to Master Small Talk

The secret to effective small talk is not to be interesting yourself, but to make the other person genuinely interesting. This is best achieved by:

• Treating strangers as though they are not strangers: This removes the numbing boredom of standard pleasantries.
• Asking probing but decent questions: Using "uric acid" as a metaphor, the author suggests asking questions that prompt people to share their "numbers" or personal details, as people are generally content and entertained when asked about themselves.
• Taking risks: Small talk becomes meaningful when you take the risk of appearing somewhat unsophisticated.

Ultimately, small talk is a way to find interest in others and can lead to rich, unexpected conversations if approached with genuine curiosity rather than material ambition.