Newspaper Summary 040226

 The provided sources contain several reports regarding Union commerce minister Piyush Goyal's statements on the landmark India-US trade deal. Here is the information reproduced from the various articles detailing why he considers the deal superior to competitors and neighbors:

Deal Guards Sensitive Sectors: Goyal

Union commerce minister Piyush Goyal stated that India has secured the "best deal in comparison to the countries in the neighborhood," asserting that the bilateral relationship with the US will only strengthen further from here. He emphasized that the agreement specifically safeguards sensitive sectors for New Delhi, particularly agriculture and dairy, signaling the government’s firm commitment to the welfare of farmers and fishermen.

Key benefits and competitive advantages highlighted include:

• Tariff Reduction: Once the agreement takes effect, US tariffs on Indian goods will fall from a steep 50% to 18%. This new rate is noted to be better than that of key rivals; for instance, Vietnam faces a 20% tariff, and other major Asian trading partners also have higher rates.
• Export Opportunities: The deal is expected to revive the competitiveness of Indian exports and open large-scale opportunities in sectors such as textiles, apparel, leather and footwear, gems and jewellery, plastics, machinery, and aircraft components.
• Strategic Access: Goyal noted that the agreement provides India with access to "best-in-class technologies" and critical inputs at competitive costs. This includes support for India’s growing demand for information and communication technology, data center equipment, and raw materials.
• Efficiency in Negotiation: Goyal pointed out that the Prime Minister accomplished in a single day what commerce ministry officials had been unable to achieve over several months.

The trade pact is currently in its final stages of technical detailing between the negotiating teams of both nations. A joint statement is expected to be issued shortly once the final understanding is inked and technical processes are completed. Goyal assured the public that the deal is one that will "make every Indian proud" by protecting national interests while providing significant opportunities for all sections of society.

In light of the recent volatility in gold prices, which saw a correction of over 12% from record highs followed by a sharp recovery, the sources provide the following guidance for investors:

Recommended Actions Based on Current Exposure

• For Hedged Investors: If you currently maintain a 10-12% exposure to gold as a hedge for your portfolio, you do not need to take any action to change your mix.
• For Overexposed Investors: If you find yourself overexposed to gold because you chased high returns during the recent rally, you should consider re-balancing your portfolio.
• For New Investors: Those who have not yet started investing in gold should begin building their exposure in a staggered manner. Analysts suggest this approach because the possibility of a deeper short-term correction or consolidation cannot be ruled out.

Investment Strategy and Philosophy

• View Gold as a Hedge: You should view gold as a protection tool during periods of uncertainty when other asset classes might underperform, rather than as a primary return-generating asset.
• Utilize Efficient Investment Modes: For those looking at gold as an investment, gold ETFs, gold fund of funds, or multi-asset funds are considered more efficient than physical gold. Physical gold presents storage and safety concerns, and investing through jewellery involves additional costs such as making charges.
• Access without Demat: If you do not have a demat account, you can still gain exposure to gold ETFs via gold fund of funds or multi-asset funds.

Market Factors to Watch

• US Dollar Strength: Historically, a stronger US dollar weighs on gold prices. The recent nomination of Kevin Warsh to lead the US Federal Reserve is viewed as hawkish, which supports a stronger dollar and could put continued pressure on gold.
• Central Bank Activity: Many experts remain bullish on gold's long-term prospects, but they note that further gains will depend on continued physical buying by central banks as they seek to diversify their reserves away from the dollar.
• Technical Correction vs. Fundamentals: Some analysts believe the recent "violent drop" was a technical correction rather than a shift in core fundamentals, as geopolitical tensions and global macro uncertainty remain intact. Following this correction, bargain hunting has emerged as investors look to accumulate the metal at lower price points.

Based on the reports from the provided sources, here is the reproduced information regarding the upcoming GST Council meeting:

‘Next GST Council meeting likely to focus on registration, audit, refunds’

THE AGENDA: Finance Ministry signals trust-based compliance reforms; GST meet expected in March or April

By Shishir Sinha | New Delhi

The GST Council, in its next meeting, is expected to focus on further easing the processes of registration, refund, and audit, according to a top Finance Ministry official.

Key details regarding the meeting include:

• Timeline: The meeting is likely to take place once the Union Budget is passed, which points to either the last week of March or early April.
• Preparation: Officials have already conducted two rounds of extensive meetings to prepare a basic agenda. The final agenda will be settled once more concrete suggestions are received.
• Context: The previous GST Council meeting, held on September 3, was primarily focused on recommending a revamp of the rate structure.

Issues and Expert Recommendations:

• Liquidity Concerns: Tax experts have highlighted that the artificial distinction between goods and services for the purpose of refunds has resulted in significant working capital blockages for various industries.
• Input Tax Credit (ITC): Experts are urging the Council to allow refunds of accumulated ITC on services, which would ensure a more seamless flow of credit and improve liquidity for businesses.

Broader Tax Philosophy: The official noted that the overarching message behind new tax proposals is to "let the taxpayers be in control of things," with an emphasis on facilitating those who maintain a better compliance record. This approach aims to honor trust and simplify implementation now that detailed rules and regulations are largely in place.

Based on the reports in the sources, here is the reproduced article regarding the funding for nuclear research:

Budget doubles nuclear research funding to ₹2,410 cr

Budget allocation to the Bhabha Atomic Research Centre (BARC) has been increased by ₹830 crore for its research projects

By M Ramesh | Chennai

The Union Budget has nearly doubled its support for nuclear research, allocating ₹2,410.48 crore to R&D projects across various institutions under the Department of Atomic Energy (DAE). This represents an 88 per cent increase compared with the ₹1,284.77 crore allocated in the revised estimate for the previous year.

Shift Towards Capital Expenditure A significant portion of this increased support is directed toward capital expenditure, which has seen a 113 per cent jump to ₹1,977.20 crore, up from ₹928.95 crore in the 2025-26 revised estimate. In contrast, support under the ‘revenue’ head increased more modestly, rising from ₹355.82 crore to ₹433.38 crore.

Bulk Allocation for BARC The Bhabha Atomic Research Centre (BARC) received a substantial boost, with its budget for research projects increasing by ₹830 crore. Specifically, the Finance Ministry raised capital support for BARC’s R&D to ₹1,609.16 crore, more than double the revised estimate of ₹778.37 crore from last year. This follows a period where BARC appeared to have underspent, as the previous budget had earmarked ₹880.54 crore for these projects.

These allocations are particularly noteworthy as BARC is currently tasked with developing three small modular reactors:

• The 200 MW Bharat small modular reactor (BSMR-200).
• The 55 MW small modular reactor (SMR-55).
• A 5 MW (thermal) high-temperature gas-cooled reactor designed for hydrogen production.

Increased Support for IGCAR The Indira Gandhi Centre for Atomic Research (IGCAR) also saw a major funding spike, with its R&D budget jumping to ₹226 crore from ₹67.86 crore. Much like the broader trend, the majority of this—₹183.82 crore—is designated for capital expenditure.

Overall DAE Funding Trends Despite the increased focus on research and development, total budgetary support to the Department of Atomic Energy remained relatively flat, decreasing slightly to ₹24,123.92 crore from ₹24,411.47 crore. This overall stability, despite the R&D surge, is attributed to a sharp ₹5,500 crore decline in the capital expenditure of the Nuclear Power Corporation of India (NPCIL).

Based on the reports in the sources, here is the reproduced article regarding the impact of the India-US trade deal on India's GDP growth:

‘Deal to boost FY27 GDP rate to 7.20%’

CareEdge Ratings has revised its FY27 GDP growth estimate upwards by 20 basis points to 7.20 per cent from 7 per cent in the wake of the US-India trade deal.

Analysis of the Economic Boost Rajani Sinha, Chief Economist at CareEdge Ratings, stated that a quick estimate based on limited available information suggests the tariff deal could provide a significant boost to India’s GDP. According to the firm's analysis, if the tariff is cut, it could contribute approximately 0.2 percentage points to growth, leading to an estimated 7.2 per cent growth in FY27.

Sinha further noted that while the lower 18% tariff may not apply to all of India’s $90 billion in exports to the US due to potential sector-specific variations, if approximately $65 billion of exports are assumed to benefit from the 18% rate, the resulting increase in GDP would be 20 basis points.

Context of the Agreement The upward revision follows a social media announcement by US President Donald Trump regarding his discussions with Prime Minister Narendra Modi. The two leaders reached an agreement whereby the US will charge a reduced reciprocal tariff, lowering it from 25% to 18%. In turn, India has committed to moving forward with reducing its own tariffs and non-tariff barriers against the US to zero.

Trump also indicated that Prime Minister Modi agreed to stop purchasing Russian oil and instead buy significantly more from the United States and potentially Venezuela. This shift is viewed as part of a broader effort to end the war in Ukraine.

Wider Economic Sentiment The Department of Economic Affairs (DEA) secretary Anuradha Thakur also expressed optimism, noting that India's nominal GDP growth for FY27—initially pegged at 10% in the Union Budget—could turn out higher if the proposed trade deal goes through. She added that the agreement is expected to provide a "meaningful push" to manufacturing, which accounts for over 16% of India's GDP, and help revive investor confidence.

Address mental health issues early

By Sadaf Choudhary & Prasu Jain

Across cities and towns, many in the younger generation are quietly battling loneliness, anxiety, and emotional fatigue, often while appearing perfectly functional. Rapid urbanization and migration have brought opportunities but also fragmentation, resulting in fewer relationships that feel safe enough to hold one's worst days. Social media provides constant contact without guaranteeing genuine connection, leaving individuals perennially online but hardly connected.

Research findings corroborate this loneliness epidemic in India. A global survey by Ipsos reported that 43 per cent of urban Indians feel lonely most of the time, placing India among the top three loneliest countries. The National Mental Health Survey (NMHS) estimates that 10.6 per cent of adults live with a diagnosable mental disorder, noting a large treatment gap and a prevalence nearly twice as high in urban metros compared to rural areas.

The urgency of this issue is reinforced by suicide data; NCRB analyses show that young adults aged 18-30 form the single largest share of suicides in India. Beyond psychological well-being, loneliness puts individuals at risk for physical diseases such as diabetes, hypertension, and obesity, eventually leading to shortened life spans.

In response to this distress, young people are inventing understated ways of reaching out known as “code reds”. These gestures—such as deactivating Instagram for a day, removing a WhatsApp profile picture, or asking for "five minutes"—allow someone to signal a hard day without feeling exposed. This aligns with the “eight-minute” idea, where a short, focused conversation helps someone feel heard and valued, potentially interrupting a mental "spiral".

However, peer support should not be romanticized as a replacement for clinical care, medication, or therapy, which remains a privilege in many parts of India due to high costs and confusing navigation. To move beyond just telling people to “reach out,” the following steps are proposed:

• Community as Public Infrastructure: Social connection deserves deliberate spaces like accessible local libraries, safe public parks, and community centers.
• Institutionalized Early Support: Schools and colleges should integrate counseling into the core curriculum, employing trained counselors to teach life skills for handling stress and rejection.
• Workplace Reform: High-pressure workplaces must move beyond one-off “wellness sessions” toward real support, such as employee assistance programmes and managers trained to respond without stigma.
• Accessible Help: Seeking help must be easier and cheaper through a stronger network of community services, district hospitals, and tele-consultations.

This conversation is beginning to find reflection in public policy. The Economic Survey has highlighted concerns regarding digital addiction and loneliness, while the national Tele-MANAS helpline has already handled over 32 lakh calls. Furthermore, the Union Budget reaffirmed a commitment to trauma care, announcing a new national mental health institute and the upgradation of existing centers in Ranchi and Tezpur. Ultimately, it is a collective societal responsibility to take “code reds” seriously.

Economy: Reading the fineprint

By CP Chandrashekhar & Jayati Ghosh

While it is expected that the official account in the Economic Survey 2025-26 would be generally upbeat and present a positive outlook through cherry-picked data, a closer look at the more detailed information reveals serious problems facing the economy and an urgent need for a policy reset.

One of the most pressing questions is why private investment is not increasing more significantly if the economy is performing so dynamically, and why investors continue to look abroad rather than investing domestically. The Survey highlights a strengthening investment cycle, but long-term data shows that investment rates have declined from a peak of nearly 36 per cent of GDP in 2007-08. During the UPA government (2004-05 to 2013-14), the investment rate averaged 34.3 per cent, whereas it fell to 24.2 per cent for the subsequent NDA government (up to 2023-24).

Sluggishness in Industrial Growth and Consumption Further analysis using "High Frequency Indicators" provided in the Survey suggests that GDP may be a problematic indicator of progress. While electricity consumption and rail freight volumes have generally tracked GDP growth, the Index of Industrial Production (IIP) has grown much less than real GDP, indicating a process of stalled industrialization or even deindustrialization.

There are also signs of a "K-shaped" economic growth pattern:

• GST collections have increased much more rapidly than nominal GDP, suggesting that fiscal policy is placing a regressive tax burden on less well-off sections of society.
• Vehicle sales have lagged behind nominal GDP growth; tractor sales are weak, and the growth in domestic passenger vehicles is concentrated in the higher-end and luxury segments.
• The sluggish sales of two- and three-wheelers provide a critical indication that lower-income groups lack the capacity for these essential purchases.

The Loneliness of the Wage Earner The most comprehensive evidence of growing inequality comes from wage income data, which shows that wage and self-employed incomes have not kept pace with aggregate GDP growth.

• Female casual workers in rural areas are the only category whose real wages increased in tandem with GDP, yet they comprise less than 8 per cent of the rural workforce.
• Women in "regular" jobs experienced absolute declines in real wages on average.
• Self-employed incomes declined significantly for women and barely increased for men in rural areas.

This inequality explains the paradox of declining or stagnant mass consumption demand despite a rising aggregate GDP. Because mass demand is weak, private investment remains lacklustre, responding primarily to government contracts rather than consumer needs. This underlying crisis is what the Economic Survey and the Budget should have prioritised.

Window of opportunity for semicon industry

THE GAINERS: The tariff cut can be a major catalyst for India’s electronics and tech ecosystem, say experts

By Sanjana B | Bengaluru

The India-US bilateral trade deal is being viewed as a significant catalyst for deeper technology and semiconductor collaboration, strengthening India’s role across chip design, backend manufacturing, and advanced electronics supply chains.

A Strategic Trade Shift Under the agreement, the US will lower reciprocal tariffs on Indian goods to 18% (down from 25%) and remove non-tariff barriers. In exchange, India will ease its own trade restrictions and increase imports of US energy, technology, and agricultural products. Experts believe this shift provides a "window of opportunity" for the semiconductor sector:

• Bilateral Trade Target: The $500 billion total trade target could translate into more than $100 billion specifically for the electronics and semiconductor sector.
• Reviving Initiatives: Initiatives such as the Initiative on Critical and Emerging Technology (iCET) and its evolved form, Transforming the Relationship Utilizing Strategic Technology (TRUST), are expected to regain momentum. These programs focus on cooperation in semiconductors, AI, quantum computing, and space technologies.

Enhancing India’s Global Status Ashok Chandak, President of SEMI India and IESA, noted that the deal enhances India’s attractiveness as a global manufacturing and innovation hub. He stated that it will accelerate semiconductor design, boost electronics value addition, and expand cooperation in AI and data centers, ultimately creating high-skill jobs.

Growth in Backend Manufacturing (OSAT) The deal is particularly beneficial for Indian outsourced semiconductor assembly and test (OSAT) facilities. Shetal Mehta, Co-founder of Suchi Semicon, explained that US chip companies are currently reassessing supply-chain concentration risks and seeking cost predictability. A clearer tariff framework:

• Reduces friction in commercial negotiations.
• Moves India from short-term pilot engagements to multi-year backend manufacturing programs.
• Encourages fresh capital investment and higher utilization of domestic capacity.

Boosting Indian Chip Design Lower US tariffs also improve the commercial viability of Indian-designed chips. Nikul Shah, Co-founder & CEO of IndieSemiC, pointed out that Indian fabless firms possess strong design talent and cost efficiency, and the new tariff economics make collaboration with US customers more practical. Furthermore, eliminating tariffs on US technology imports grants Indian firms better access to semiconductor IP, EDA tools, and design ecosystems, allowing them to move into more complex and application-specific designs.

Worldwide IT spending likely to rise 10.8%, hit $6.15 t in 2026: Gartner

PICKING UP PACE: Data centres fastest-growing segment; total spend is expected to increase 31.7 per cent

Worldwide IT spending is projected to reach $6.15 trillion in 2026, representing a 10.8 per cent increase from $5.55 trillion in 2025, according to the latest forecast from Gartner.

AI and Data Centre Growth Despite concerns regarding an AI bubble, AI infrastructure growth remains rapid, with increased spending across both AI-related hardware and software. John-David Lovelock, Distinguished VP Analyst at Gartner, noted that demand from hyperscale cloud providers is a primary driver for investments in servers optimized for AI workloads.

Data centre systems have emerged as the fastest-growing segment; spending in this area is expected to jump 31.7 per cent, exceeding $650 billion in 2026 compared to nearly $500 billion the previous year.

Software and IT Services While still seeing significant growth, the forecast for software spending in 2026 has been slightly revised downward to 14.7 per cent from an earlier estimate of 15.2 per cent. Total outlays for software are expected to rise from $1.25 trillion in 2025 to $1.43 trillion in 2026.

IT services remains the largest segment by value and is projected to expand steadily. Spending is forecast to rise from $1.72 trillion to $1.87 trillion, with the growth rate improving to 8.7 per cent.

Generative AI and Devices Spending on Generative AI (GenAI) models continues to see explosive growth, with a projected increase of 80.8 per cent in 2026. GenAI’s share of the overall software market is expected to rise by 1.8 per cent during that year.

In contrast, the devices segment is seeing more moderate growth. Spending is forecast to reach $836.4 billion in 2026, but the growth rate is expected to slow to 6.1 per cent.

Market Constraints Analysts attribute the slowing growth in devices to rising memory prices, which increase average selling prices and discourage users from replacing their devices. Additionally, high memory costs are creating shortages in the lower end of the market and thinning profit margins, leading to more muted shipments of mobile phones, PCs, and tablets.

Communications services continue to be the slowest-growing category, with spending expected to reach $1.36 trillion in 2026, a 4.7 per cent increase.

Jio BlackRock launches wealth management platform at ₹350/year

Jio BlackRock Investment Advisers on Tuesday launched a tech platform to offer personalised suggestions starting at ₹350 per year, pegging the addressable opportunity in the Indian wealth management industry at 200 million people.

Maiden Foray and Technology This launch represents the maiden foray by BlackRock, a global entity managing over $14 trillion in assets, into offering an investment advisory platform directly to consumers in India through its equal partnership with Jio. The platform is powered by BlackRock’s Aladdin technology and initially offers advice on mutual fund bets. A backend investment team regularly updates the tool to ensure clients receive the best advice for any given situation.

User Experience and Market Strategy The platform is designed to be highly scalable and personalised through the use of technology. After registering, the platform:

• Assesses a user’s risk profile and investment objectives.
• Dishes out tailored advice based on that profile.
• Provides daily monitoring with proactive nudges to rebalance portfolios as needed.

Market Opportunity Marc Pilgrem, the company’s Managing Director and Chief Executive, stated that the firm estimates the addressable market to be approximately 200 million people. This figure was arrived at by considering India's 215 million direct equity holders and 60 million mutual fund accounts. Pilgrem emphasized that the platform aims to “democratise wealth management” in the country.

While the company did not disclose specific targets for assets under advice, it stressed that the platform is intended to help expand the overall market.

Based on the reports from the sources, here is the reproduced information regarding the rising credit-deposit ratios in Indian banks:

BANKS’ CD RATIO RISE: STRESS OR STRENGTH?

By Deepa Vasudevan

The credit-deposit (CD) ratio of India’s scheduled commercial banks reached 81.75% on 31 December 2025, the highest level recorded since 2000-01. While a high CD ratio generally indicates that banks are deploying funds efficiently in loans during periods of economic activity, the Reserve Bank of India (RBI) has previously warned about excessively high levels, though it does not mandate a specific "ideal" level.

Divergence Between Bank Groups Data shows a widening gap between private sector banks and public sector banks (PSBs) over the last two decades.

• Private Sector Banks: These banks tend to be more aggressive in mobilizing deposits and building loan books. Between FY23 and FY25, their deposit growth ranged from 12-20%, while credit growth swung widely between 9.5% and 28%.
• Public Sector Banks: PSBs maintain a more stable deposit base, with nearly 67% of deposits owned by households and 31% coming from rural and semi-urban regions as of March 2025. Their deposits grew at 8-9.5% while credit grew at 12-14.5% during the same period.

Key Outliers and General Trends Structural legacy factors and mergers have created outliers among private banks:

• HDFC Bank: Following its merger with HDFC, its CD ratio pushed to 110% because it inherited a large loan book funded primarily by borrowings.
• IDFC First Bank: Its CD ratio was 137% at the time of its merger but was brought down to 94.7% by September 2025.
• General private sector: Many are considered overstretched as loan growth consistently outpaces deposit growth; for example, ICICI Bank’s ratio rose from 85.4% in December 2024 to 87.4% in December 2025.

The Math of Lendable Resources Analysts estimate that for every ₹100 in deposits, banks must set aside ₹3 for the cash reserve ratio (CRR) and invest ₹18 in government securities for the statutory liquidity ratio (SLR). With an additional ₹2-4 kept as a safety buffer, banks are typically left with only 75-77% of deposits as lendable resources. Operating at a CD ratio of 80% or higher implies a reliance on non-deposit sources like borrowings.

Risks vs. Systemic Stability While a ratio above 80% presents potential risks—including tighter liquidity, reliance on high-cost borrowings, and potential hits to loan quality—none of these concerns appear to be manifesting currently.

• Non-performing assets (NPAs) are at multi-decade lows.
• Liquidity coverage ratios remain well above the 100% benchmark for all bank groups.
• Cost of borrowing fell in 2024-25 due to improved systemic liquidity.

The sources conclude that while the high CD ratio revives concerns about funding sustainability, it does not currently appear to be a threat to the overall health of the banking system.

How automakers ran into a commodity storm after the GST lift

Pressure to hike prices could threaten a rebound after the GST

By Ayaan Kartik | New Delhi

For Indian automakers, a significant surge in sales following the September tax cut has been overshadowed by a new, pressing concern: soaring raw material costs. Many companies are now contemplating price increases, even at the risk of suppressing the very demand that has driven their recent rebound.

Unprecedented Commodity Volatility Industry leaders have described the current market conditions as highly unstable. Tarun Mehta, co-founder and CEO of Ather, told analysts that the situation is “truly unprecedented in every way,” noting that several commodities are "going haywire". Since the beginning of October, geopolitical uncertainties and increased demand have driven up the prices of nearly all key raw materials:

• Aluminium and Copper: Prices have climbed between 15% and 25%.
• Platinum: Prices have surged by more than 40%.
• Steel: While prices remained flat during the October-December quarter, they rose 8% in January alone.

Impact on Major Manufacturers Several top automakers flagged the hit to their profitability during December quarter earnings calls:

• Maruti Suzuki: The company reported a 60-basis-point hit to its margins in the December quarter due to higher commodity costs. It is currently reviewing further price hikes.
• Hyundai Motor India: The company noted that commodity prices are weighing heavily on margins. While trying to absorb some costs, it passed others on through a January price increase, specifically on the Venue compact SUV.
• TVS Motor: CEO K.N. Radhakrishnan confirmed price rises in aluminium, copper, zinc, platinum, palladium, and rhodium. The company has recently implemented minor price increases of 0.2% to 0.3%.
• Bajaj Auto: After deferring pricing actions during the festive season, the company plans to increase prices in the January-March quarter to cover inflation.

Currency and External Pressures A depreciating rupee has compounded these issues. Major currencies like the US dollar, euro, and Chinese renminbi have appreciated by 4-5% since October, materially increasing input costs for auto suppliers. Additionally, Maruti Suzuki expressed concern that domestic steel players are using safeguard duties on imports as an opportunity to raise prices further.

Consultants note that while original equipment makers (OEMs) are seeing higher volumes, these escalating costs are weighing significantly on their bottom lines, leading the industry to prepare for a challenging period that could last several quarters.

MONETARY POLICY NOW ABOUT LIQUIDITY

EXPERT VIEW | By Kaushik Das

When the Monetary Policy Committee (MPC) meets on 6 February, baseline expectations are that the repo rate will stay at 5.25%, the stance will remain “neutral”, and the tone will be carefully balanced. However, the real story of India’s monetary policy this year will not be told through interest rates, but through liquidity, which has become the most critical macro variable shaping growth, markets, and financial stability.

Shift from Rates to Systemic Liquidity The Reserve Bank of India (RBI) delivered 125 basis points of cuts in 2025, including a significant 50 bps move last June. This easing cycle has now transitioned into a likely extended pause. Despite this pause on rates, the central bank is working aggressively to keep the system flush, utilizing open market operation (OMO) purchases and forex swap auctions to offset liquidity drags caused by slow deposit growth, foreign capital outflows, and persistent intervention to stabilize the rupee. The priority has moved decisively toward preserving the transmission of earlier rate cuts.

Future Liquidity Operations The February policy is expected to reinforce this shift. Current estimates suggest the RBI may need to conduct:

• ₹2 trillion of OMO purchases over the remainder of FY26.
• Another ₹4 trillion in Q1 FY27 to ensure durable liquidity remains above 1% of net demand and time liabilities (NDTL). The RBI will also continue to use variable rate repo (VRR) auctions to keep the overnight call rate aligned with the repo rate.

Inflation and Growth Outlook

• Inflation: The RBI is expected to retain its 2.0% consumer price inflation forecast for FY26, with the FY27 projection likely remaining at 4.5%. While a new CPI series with an updated base year is expected on 12 February, core inflation remains subdued near 4% (and below 3.5% excluding gold).
• Growth: The RBI's FY27 growth projection currently stands at 6.6%, though this will be reassessed after 27 February when a new GDP series is released.

Potential Market Implications A significant twist could occur if the RBI raises its FY27 growth forecast to 7% or above (aligning with the Economic Survey's estimate of 6.8-7.2%) while maintaining a 4.5% inflation outlook. Markets would interpret this as a hawkish signal, potentially shifting expectations toward rate hikes rather than cuts. DB Research anticipates the first rate hike could occur in Q2 2027, potentially lifting the repo rate to 6.25% by March 2028.

Conclusion: RBI’s Near-Term Priorities The immediate challenge for the RBI is to prevent liquidity tightening from undermining the transmission of past cuts. Heavy forex intervention to manage rupee depreciation has drained liquidity, making large-scale OMOs and VRR operations essential pillars of support. The MPC is expected to avoid further repo rate cuts to maintain the interest rate differential with the US and encourage continued capital inflows.

SC warns Meta not to share WhatsApp user data for ads

2021 policy allowed sharing phone numbers, device info, interactions with business accounts

By Krishna Yadav | New Delhi

The Supreme Court on Tuesday issued a strong warning to global technology giant Meta Platforms and its messaging service WhatsApp, stating they cannot be allowed to share user data for advertising purposes under WhatsApp’s 2021 privacy policy. A three-judge bench, led by the Chief Justice of India Surya Kant and including Justices Joymalya Bagchi and Vipul Pancholi, told Meta that any continued sharing of such data for advertising would not be tolerated.

“A Decent Way of Committing Theft” During the hearing, the Chief Justice compared the commercial exploitation and sharing of personal data to a “decent way of committing theft,” remarking that the companies must have already taken "millions of bytes of data". The court asserted that it would not permit the companies to breach the right to privacy of millions of "silent consumers" in India.

The Chief Justice further stated, “We will not allow you to share even a single piece of information. You cannot play with the rights of this country—let a clear message go out... You are making a mockery of constitutionalism". The bench also observed that consumers often have no real choice because the companies have “created a monopoly”.

Criticism of Policy Language The court strongly criticized the complexity of the policy’s opt-in and opt-out choices, calling the language incomprehensible to ordinary people. “Imagine a street vendor—a poor woman sitting on the street selling fruits. How will she understand your terms and conditions?” the bench asked, describing the policy as “very cleverly crafted”.

Legal Background and Next Steps The dispute centers on WhatsApp’s 2021 privacy policy, which required users to agree to share data—including phone numbers and device information—with Meta on a “take-it-or-leave-it” basis to continue using the service. This led the Competition Commission of India (CCI) to impose a ₹213.14-crore penalty for abuse of dominant position, a decision that was largely upheld by the National Company Law Appellate Tribunal (NCLAT).

The Supreme Court is currently hearing petitions from Meta and WhatsApp challenging that penalty, as well as a counter-challenge from the CCI regarding the removal of a five-year ban on data sharing.

Current Status:

• The court initially asked for an affidavit providing a clear undertaking that data would not be shared for ads, warning of a potential case dismissal.
• After senior advocate Mukul Rohatgi requested time to explain the policy, the court permitted Meta and WhatsApp to file an affidavit detailing their data-sharing practices.
• The Ministry of Electronics and Information Technology has been impleaded as a party to the case.
• The next hearing is scheduled for 9 February.

Why hospitals are eyeing health insurance business

By Rwit Ghosh | Bengaluru

As India seeks to deepen health insurance adoption, a few companies are combining treatment and care with medical coverage, promising improved outcomes and lower premiums.

The Integrated Healthcare Model Non-life insurance premiums, including health coverage, are expected to grow at an annual average rate of 13–15% in the medium term, according to PwC. Such an increase often makes consumers less likely to renew due to affordability concerns, but experts believe an integrated healthcare model may offer a solution.

“The future of health insurance and care is where the provider is an active partner,” said Ravi Vishwanath, director of Narayana Health Insurance, the insurance arm of Narayana Health. The company launched its insurance business in 2024 as part of its integrated healthcare vertical. While the segment grew at 90% year-on-year in Q2 of FY26, it currently contributes a small portion (₹190 million) to total revenue.

Key Benefits of Integration Unlike traditional health insurance, integrated plans offer outpatient department (OPD) services. Providers are betting on multiple benefits:

• Better Care: Consumers only visit hospitals when truly sick.
• Lower Premiums: Policyholders fall sick less often thanks to preventive OPD services.
• Fewer Claims: With proactive management, fewer claims are filed, reducing payouts for the insurer.

Shruti Ladwa, partner and insurance leader at EY India, noted that advanced risk prediction models and remote monitoring will enable more proactive management of long-term care.

New Entrants and Funding The model, while new to India, has been successful in the US since the 1980s, exemplified by Kaiser Permanente. Recent Indian entries include:

• PB Health: Launched by PB Fintech founder Yashish Dahiya, raising $218 million in seed money.
• Even Healthcare: Has raised $70 million in total funding, including a recent $20 million round in January. The startup currently runs one hospital and two clinics in Bengaluru and plans to have six more hospitals operational by late 2026.

Challenges and Hurdles Despite the potential, the model faces significant obstacles:

• Low Penetration: Only 29.8% of women and 33.3% of men aged 15–49 are covered in India.
• Capital Intensity: Insurance is a capital-intensive business with strict regulations and high costs for building or acquiring hospitals.
• Barriers: EY’s Ladwa highlighted technological barriers and the sharp urban-rural divide.
• Consumer Habits: Sunil Thakur of Quadria Capital noted that Indian companies haven't reached the necessary scale and that consumers are not yet accustomed to proper health triaging.

Ultimately, while investors remain cautious, proponents like Kosturi Ghosh of Trilegal point out that hospitals are recession-proof businesses, making the market ripe for those who can establish a strong digital and insurance presence.

Musk merges xAI, SpaceX with eye on space data centres

Elon Musk seeks to raise billions of dollars for his outer space projects.

Elon Musk has announced that his rocket company, SpaceX, will take over his artificial intelligence startup, xAI, as he looks to secure billions of dollars for ambitious outer space initiatives. Writing on the SpaceX website, Musk stated that the merger would create the "most ambitious, vertically-integrated innovation engine on (and off) Earth". He highlighted that the combined entity will leverage capabilities in AI, rockets, space-based internet (Starlink), direct-to-mobile device communications, and real-time information and free-speech platforms.

The Move to Space Data Centres The merger occurs as the terrestrial AI buildout faces mounting tension due to massive electricity requirements. Musk noted that global electricity demand for AI "simply cannot be met with terrestrial solutions," concluding that the "only logical solution therefore is to transport these resource-intensive efforts to a location with vast power and space".

Strategic Vision and IPO Plans The project fits into Musk’s long-term goal of establishing colonies on the Moon and Mars. He described the absorption of xAI as a "first step towards becoming a Kardashev II-level civilization," a term referring to a futurist concept of a civilization capable of utilizing the entire energy output of its star. Musk characterized the mission as an effort to "make a sentient sun".

Financially, the merger precedes a highly anticipated stock market listing for SpaceX this year, which is expected to be the largest in history. Reports suggest the initial public offering could occur in June with a target of raising $50 billion. While the announcement confirms the merger, it did not disclose specific financial terms of the acquisition or a concrete timeline for initial satellite deployments.

U.S. manufacturing is in retreat and Trump’s tariffs aren’t helping

Levies on imports were supposed to bring back a golden age of U.S. manufacturing. They haven’t.

By David Uberti

The manufacturing boom President Trump promised would usher in a golden age for America is going in reverse. After years of economic interventions by both the Trump and Biden administrations, fewer Americans work in manufacturing than at any point since the pandemic ended.

Job Losses and Shrinking Activity Manufacturers have shed workers in each of the eight months following the unveiling of the “Liberation Day” tariffs, extending a contraction that has seen more than 200,000 roles disappear since 2023. An index of factory activity tracked by the Institute for Supply Management shrunk for 26 straight months through December, though it showed a surprising uptick in new orders and production in January. Additionally, the Census Bureau estimates that manufacturing construction spending fell in each of Trump’s first nine months in office.

The gradual slowdown is partly a continuation of decades-long trends that pulled factory jobs overseas and emptied out Midwestern cities. In November, the Federal Reserve slashed estimates for overall U.S. output since the pandemic, with one analyst noting, “We never got all the way back”.

The Impact on Industry: A Case Study In the trucking industry, Charlotte-based NN Inc., which operates 23 plants globally, has trimmed its U.S. workforce to compete with low-cost factories abroad and respond to slowing electric-vehicle demand. While CEO Harold Bevis believes tariffs will ultimately benefit the company by curbing Chinese competition, import taxes have currently pushed up costs for steel and aluminum, adding to the pressure of soaring market prices for gold and silver used in their products.

Bevis noted that for the auto business, places like Michigan and Massachusetts remain a “hard sell” compared to Mexico, where many products remain tariff-free through trade deals. He also pointed out that China is consolidating auto supply chains within its borders at a much faster pace than the U.S..

Fragility and Uncertainty Other sectors are also feeling the strain:

• Furniture: Meganne Wecker, CEO of Skyline Furniture Manufacturing, noted that tariffs hit hardwood from Vietnam and textiles from India and China, causing prices to rise. She described the sector as "fragile," stating that tariff uncertainty has dampened the outlook for new domestic production.
• Steel Reinforcement: H.O. Woltz III, CEO of Insteel Industries, stated that very little in his product portfolio benefited from tariffs. With tariffs on foreign steel doubling to 50% this year, the company has struggled to source the metal it needs for major infrastructure projects, such as the Gordie Howe bridge.

Looking Ahead Trump has taken other measures to jump-start the sector, including deals with Japan and South Korea for hundreds of billions in U.S. investment. Major projects by firms like Apple, TSMC, and AstraZeneca have also been announced. Administration officials maintain a long-term vision of industry self-sufficiency, but the timeline for these investments to "kick in" remains unclear.

Economists suggest that while output may have stabilized, gains in efficiency could limit the number of new jobs created. In the short run, the primary effect of the tariffs has been to boost costs on materials sourced abroad, forcing firms to raise prices or scramble for supplies. Additionally, the possibility that the Supreme Court could nullify some import taxes continues to add to the prevailing uncertainty.