Newspaper Summary 170226

 Based on the sources provided, here is the reproduced article regarding the impact of new Labour Codes on Nifty50 firms:

Nifty50 firms take ₹13,000 cr hit in Q3 on new Labour Codes

By Sourashis Banerjee, Chennai

Compliance Cost. Employee-heavy firms are bearing the brunt of a significant rise in social security benefits following the implementation of India's new Labour Codes. A businessline analysis of standalone results for Nifty50 index companies in the third quarter of FY26 reveals that these firms incurred additional provisions and expenses totaling ₹13,161 crore due to the revised rules.

The Core Changes The implementation of these codes began on November 21, 2025, forcing companies to make large, one-time adjustments in their books during Q3 FY26 to increase reserves for employees' social security benefits. These adjustments were necessitated by two primary changes:

• Salary Restructuring: The new codes mandate that basic salary must constitute at least 50 per cent of the overall salary, which directly impacts the calculation of Provident Fund (PF) and other statutory benefits.
• Gratuity Timeline: Gratuity must now be paid to all fixed-term employees after one continuous year of service, a sharp reduction from the previous five-year requirement.

TCS Leads the Hit TCS, due to its massive workforce, reported the largest financial impact, consisting of ₹1,816 crore in gratuity and ₹312 crore for long-term compensated absences. Other major firms following TCS with substantial increases in employee expenses include:

• Larsen & Toubro: ₹1,791 crore.
• Infosys: ₹1,146 crore.
• InterGlobe Aviation: ₹969 crore.
• HCL Technologies: ₹948 crore.
• HDFC Bank: ₹800 crore.
• Maruti Suzuki: ₹594 crore.
• Wipro: ₹303 crore.

Varying Degrees of Impact While many firms faced high provisioning, another group of major employers anticipated negligible financial impact for the quarter. Reliance Industries stated that the incremental impact assessed was "not material," while State Bank of India (SBI) indicated that it continues to comply with major provisions and will account for any consequential impact as further notifications arise.

Axis Bank reported an immediate additional outgo of ₹25 crore but provided ₹434 crore for future implementation costs. Adani Enterprises acknowledged the reforms in its earnings review but did not quantify a specific financial hit.

Anthropic’s Claude gains momentum in India with revenue run-rate doubling

By Sanjana B, Bengaluru

India has become the second-largest global user base for Claude AI, with Anthropic’s revenue run rate doubling since the company announced its India operations in October. Speaking at the company’s Builder Summit in Bengaluru, Anthropic CTO Rahul Patil highlighted that India’s unique position is driven by its optimism about AI, with surveys indicating 75 per cent of Indians expect AI to be largely beneficial.

Technical Talent and Intellectual Openness Patil noted that India possesses an "unmatched" intellectual openness compared to the rest of the world. This is supported by a massive talent pool; one in three developers joining GitHub each year is from India, underscoring the nation’s importance as a global hub for builders.

The company is seeing Indian developers create unique ideas that would be difficult to conceive within the Silicon Valley ecosystem alone. For instance, the co-founders of Maya AI have built language models for a thousand unique dialects in India. Patil believes India’s "applied AI" sector is where the country will truly shine due to its ability to scale quickly.

Usage Skewed Toward Productivity Irina Ghose, Managing Director for Anthropic India, confirmed that six per cent of the overall global conversation on the platform now originates from India. CEO and Co-founder Dario Amodei added that India stands out for the technical intensity of its Claude usage, which is heavily skewed toward productivity-focused professionals. Nearly half of all usage in India involves computer and mathematical tasks, such as building applications, modernizing systems, and shipping production software.

Deepening Commitment: Bengaluru Office and Language Fluency To support this growth, Anthropic officially opened its Bengaluru office—its second in Asia after Tokyo. The office will focus on hiring local talent for roles such as solutions architects and applied AI managers.

The company is also working to bridge the performance gap between English and local languages. Six months ago, Anthropic launched an effort to curate high-quality training data in 10 widely-spoken Indian languages, including Hindi, Bengali, Marathi, Telugu, Tamil, Punjabi, Gujarati, Kannada, Malayalam, and Urdu.

Future Outlook Looking ahead, Patil expects the AI landscape to move toward keyboard-less interactions and increased engagement with the physical world over the next two to three years. Anthropic is also partnering with non-profits like Digital Green and Adalat AI to build evaluations for performance in locally relevant domains such as agriculture and law.

‘AI in defence must have the rationality of a human being’

By S Ronendra Singh, New Delhi

MODERN WARFARE. As artificial intelligence (AI) becomes increasingly relevant in defence applications, experts warn that while it can synthesise vast volumes of data, it lacks the objective rationality of a human being. This absence of human-like reasoning is a primary concern in military decision-making, where the consequences are exceptionally high due to the potential human cost.

Logic and Decision Costs Speaking at the Sovereign AI for National Security: India’s Path to Digital Sovereignty session, Lt General Harsh Chibber, Director General Information Systems, Indian Army, noted that current AI is built on inductive logic. He emphasized that military decisions are "very costly," and the lack of human rationality in AI interfaces presents a significant risk when life-and-death choices are involved.

Defence Systems and Automation Bias Lt Gen Chibber explained that modern defence systems rely on multi-sensor, multi-data, and multi-source fusion to analyze information. However, integrating AI into these systems introduces the danger of automation bias—the human tendency to trust an automated output over personal instinct. He warned that this becomes threatening if there is uncertainty about the system's reliability, though he maintained that persistent surveillance guided by AI remains a necessity.

Cognitive Warfare and Narratives The role of AI extends into cognitive warfare, where it can generate narratives at lightning speed. In this environment, a superior algorithm is essential to defend against an enemy's cognitive offensive and to create supporting narratives for military actions.

‘India Has an Edge’ Lt Gen Chibber highlighted that India possesses a competitive advantage in superior algorithm creation. This edge facilitates the development of military applications capable of addressing modern, emerging challenges.

The Challenge of Autonomy and Infrastructure The experts also addressed autonomous systems, which remain a source of significant worry as the industry debates how much autonomy should be granted to military applications. Brijesh Singh, ADGP, Maharashtra, added that India must avoid "AI wrappers" and instead build its own cognitive public infrastructure. He described this as the "architecture of independence," noting that while India has the talent, the primary hurdle remains compute power. Singh also pointed out the geopolitical stakes, stating that GPUs are being used to control geopolitics, making sovereignty across all layers of technology vital.

French start-up Brad Technology scouting for Indian partner in agritech

By Prabhudatta Mishra, New Delhi

STRATEGIC PARTNERSHIP. Brad Technology, a French agritech start-up, attended the AI Impact Summit in search of an Indian partner to help launch its farm advisory venture. The company identifies immense potential in India despite the challenge of small land holdings, which is often viewed as a barrier to technology adoption by farmers.

Low-Cost IoT Solutions The startup is developing an IoT solution designed specifically for the global south to collect data from both the soil and air of a plot. CEO Olivier Lepine explained that the technology aims to support small farmers in making production decisions during uncertain times caused by climate change.

Regarding the role of AI in the field, Lepine stated that the data collected triggers a vocal AI agent that helps agronomists provide better guidance to farmers. While some Indian agritech firms have already entered this space, Brad Technology believe its unique vision—summarized by the motto "ground truth, global vision"—offers room for many players.

Addressing Cost and Scaling A major focus for the company is helping small farmers finance the use of IoT and AI, which is currently considered too expensive. Lepine suggested that "massification" is the best solution to reduce costs and that any successful proposal must address the farmer's actual revenue.

To keep expenses low, the company employs what Lepine calls a "jugaad approach," utilizing a very low-cost subscription model of approximately $100 per year.

Global Footprint Currently, Brad Technology has covered 10,000 hectares in France and has initiated a 50-acre pilot program in Morocco. The company is now eager to collaborate with Indian agritech startups to provide proven solutions to the local market.

Digital capex has a huge multiplier

By Ravi Pokharna & Kuntala Karkun

Invisible Steel. As Budget 2026-27 was unveiled with a capital expenditure (capex) of ₹12.2 lakh crore, public debate centered on physical assets like highways and semiconductor fabs. However, India’s most productive investment of the last decade—Digital Public Infrastructure (DPI)—continues to slip through the accounting cracks. This “invisible steel,” existing in code and interoperable standards rather than physical corridors, has become a core driver of India’s economic velocity.

Reframing Capex Traditional industrial-age infrastructure, such as roads and ports, is characterized by high upfront costs and linear returns. In contrast, digital highways like Aadhaar, UPI, and the account aggregator exhibit increasing returns to scale. While a bridge serves only those who cross it, digital infrastructure creates a foundation for infinite layers of private innovation; for example, the billionth UPI transaction costs almost nothing to process, yet its spillover benefits for small merchants can be transformative.

Structural Transformation The data supporting this DPI-led shift is no longer anecdotal:

• Financial Inclusion: India achieved a level of inclusion in just nine years that would typically have taken 47 years without its digital commons.
• Payments Velocity: In FY 2024-25, UPI processed 186 billion transactions valued at ₹261 trillion. By January 2026, it reached a record ₹28.33 lakh crore in monthly transaction value.
• Welfare Delivery: The Aadhaar-linked 'JAM' trinity and Direct Benefit Transfer (DBT) mechanism have saved the government approximately ₹3.5 trillion by eliminating leakages and "ghost" beneficiaries.
• Credit Access: Platforms like ONDC and OCEN are reducing customer acquisition costs for small lenders by 30-40 per cent, opening credit to previously “unbankable” segments.

The Multiplier Effect The magnitude of return is striking: government spending on core ‘India Stack’ components was less than $2 billion over a decade, yet it has facilitated a digital economy now valued at over $350 billion.

Accounting Challenges Despite these outcomes, DPI barely registers in Budget debates for three reasons:

1. Fragmentation: Spending is scattered across various ministries and regulators (e.g., Aadhaar under MeitY, UPI via RBI/NPCI).
2. Diffused Returns: Economic gains accrue across all sectors rather than just to the sponsoring department, a spillover traditional accounting does not recognize.
3. Timing Asymmetry: Costs are front-loaded, while the compounded savings and innovation benefits manifest over decades.

A ‘Digital First’ Fiscal Strategy To institutionalize DPI, the authors propose:

• Explicit Classification: Recognize DPI as capital expenditure under a dedicated ‘Digital Infrastructure’ head in the Capital Budget.
• Medium-Term Framework: Establish a five-to-seven-year investment framework anchored in outcome metrics—such as transaction volumes and inclusion indicators—rather than just inputs.
• Sustainability and Coordination: Invest in cybersecurity and resilience to mitigate macroeconomic risks, while incentivizing States to integrate with national rails to avoid digital duplication.

Conclusion While physical infrastructure remains essential, the next decade’s productivity gains will increasingly come from reducing friction. DPI is India’s highest-leverage mechanism for growth and should be recognized as the country’s most powerful capex multiplier and a bedrock for the Viksit Bharat ambition.

Tea prices surge at Kochi auctions on rising demand, low offerings

By V Sajeev Kumar, Kochi

MARKET RALLY. A combination of rising demand and low offerings has driven up tea prices at the Kochi auctions, with orthodox leaves seeing a significant increase of ₹15 per kg.

Production Impact Traders have attributed the price surge to dropping temperatures in the high ranges, which continue to adversely affect tea production. This has resulted in reduced arrivals on the auction platform, a trend currently being witnessed across almost all production centres.

Sale Highlights In Sale 7, the offered quantity of orthodox leaves was 1,57,560 kg, which saw a high 97 per cent sale rate. The market was supported by strong buying from CIS and Middle East countries.

Price Trends by Grade According to auctioneers Ewart & Figgis, price movements across different grades were as follows:

• Whole Leaf and Brokens: Prices were higher by ₹5 to ₹10, and in some instances more.
• Clean Black and Well-Made Medium Grades: These saw strong features, with prices increasing by ₹10 to ₹20.
• Brokens and Fannings: Remained firm to dearer across all categories.
• CTC Dust: Witnessed strong demand, particularly for good liquoring teas, which sold at a steady rate.

As the sale progressed, the market generally became firm to dearer.

What the Dhaka transition means for India, world

By Elizabeth Roche

Political Phase. A new government led by Tarique Rahman is scheduled to be sworn in on February 17, 2026, following a general election victory by the Bangladesh Nationalist Party (BNP) and its allies on February 12. The radical Jamaat-e-Islami and its partners secured 77 seats in an election from which the Awami League was barred following the 2024 ouster of Sheikh Hasina. This transition marks the end of 18 months of interim rule under Nobel laureate Mohammed Yunus and the formal start of a new political era for the nation.

Evolution of India-Bangladesh Ties India is seeking to stabilize a relationship that "nosedived" during Yunus’s interim administration after a "Golden Chapter" under Hasina’s 15-year tenure. Recent tensions have been fueled by India providing shelter to Hasina, reports of attacks on Hindus in Bangladesh, and contentious remarks regarding India’s North-East port access. Furthermore, New Delhi is concerned about Dhaka’s growing alignment with Beijing, citing the revival of a World War II-era airbase with Chinese aid and the handover of a former India-linked special economic zone to China for a drone manufacturing facility.

India’s Outreach Prime Minister Narendra Modi was among the first global leaders to congratulate Rahman, signaling India’s willingness to "do business" and rebuild trust. With Rahman prioritizing economic recovery and investment, India may look to fortify regional cooperation through the BBIN (Bangladesh, Bhutan, India, Nepal) initiative and a re-energized BIMSTEC grouping.

Steps for a Reset To restore goodwill, experts suggest India could focus on the following:

• Economic Cooperation: Improving trade ties that suffered during the interim rule.
• Port Access: Lifting embargoes on the usage of Indian land ports.
• Visa Policy: Easing visa restrictions, particularly for medical cases, which has been a significant "sore point" for Dhaka.
• Demographic Engagement: Reaching out to Bangladesh’s 115 million people of working age.

Broadening Global Ties The guest list for the swearing-in ceremony includes representatives from India, Pakistan, Malaysia, China, Saudi Arabia, Turkey, the UAE, Qatar, Brunei, Sri Lanka, Nepal, the Maldives, and Bhutan. These invitations signal a strategic shift by the new administration to broad-base its international relations, moving away from the Hasina era when India was accorded clear primacy as the partner of choice.

Bilateral Trade Context Trade between the two nations remains below its potential peak. After hitting $18.1 billion in 2021-22, bilateral trade declined to $13.5 billion in 2024-25.

India, US may strike mini deal by March

By Dhirendra Kumar, New Delhi

Interim Pact. India’s goods trade deficit widened in January as imports surged, just weeks before a delegation departs for the US to carry forward discussions following the agreement between the two nations on an interim trade pact.

Finalizing the Legal Text Commerce Secretary Rajesh Agrawal announced on Tuesday that an Indian delegation, led by Chief Negotiator and Joint Secretary Darpan Jain, will visit Washington next week to finalize the legal text of the interim deal. The team will work to convert the current "joint understanding" into legally binding language. While Agrawal noted it is difficult to specify a hard deadline, he stated there is a possibility the proposed mini deal could be finalized by March.

Reciprocal Tariff Cuts A central part of the pact involves the US lowering reciprocal tariffs on Indian goods to 18 per cent from 25 per cent. Furthermore, US President Donald Trump has removed a separate additional 25 per cent levy on the condition that India stops buying Russian oil. New Delhi views the 18 per cent tariff rate as a significant win, positioning Indian exports more competitively than those from Bangladesh, Vietnam, and Indonesia.

India’s Commitments In exchange for these concessions, India is prepared to lower or eliminate import duties on most industrial products and various agricultural goods. This includes imposing "zero tariffs" or reduced duties on certain imports from the US to boost local sectors that would benefit from these goods. However, official sources clarified that digital trade is not part of the interim deal and has been deferred to negotiations for a full-fledged bilateral trade agreement (BTA).

Trade Environment The negotiations come at a time of trade strain; India’s trade gap swelled to $34.68 billion in January 2026, with goods exports remaining nearly flat at $36.56 billion. Despite this gap, the US remains the top destination for India’s goods exports. Officials intend for this interim arrangement to lay the groundwork for a more comprehensive trade agreement in the future.

Companies are replacing CEOs in record numbers—and they’re getting younger

By Theo Francis

Leadership Shift. A record wave of CEO turnover is sweeping through U.S. public companies, placing a new generation of younger and less experienced executives at the helm of massive enterprises. According to an analysis by executive-recruiting firm Spencer Stuart, approximately one in nine CEOs was replaced last year across 1,500 of the largest publicly traded companies. This represents the highest turnover rate since at least 2010.

A Changing Business Environment The surge in replacements comes as boards seek leaders capable of navigating a "new environment" defined by the rapid rise of artificial intelligence, shifting trade practices, and a volatile global economy. James Citrin of Spencer Stuart noted that "someone who’s going to replay the playbooks of the past is not necessarily right," adding that boards have become increasingly impatient with leaders who fail to gain immediate momentum with investors and operations.

Massive Market Impact The scale of these transitions is staggering:

• In Q4 2025, companies with a combined market capitalization of $1.3 trillion appointed or lost chiefs, including Verizon and Yum Brands.
• In early 2026, companies adding or losing leaders represented a value of $2.2 trillion, with Walmart accounting for nearly half of that total.
• Other major firms bringing in new leadership include Procter & Gamble, Lululemon, Disney, PayPal, HP, and Kroger.

The New Executive Profile The incoming class of CEOs looks significantly different from their predecessors:

• Age: The average age of incoming CEOs has dropped to 54, compared to nearly 56 a year prior.
• Experience: More than 80 per cent of last year’s 168 new CEOs were first-timers with no prior experience running a public company, and two-thirds had never served on a corporate board.
• Gender: New female CEO appointments became scarcer, dropping to 9 per cent from 15 per cent the previous year. Currently, only 46 women lead companies in the S&P 500.

Sudden Departures and Stopgaps While some transitions, like Greg Abel succeeding Warren Buffett at Berkshire Hathaway, were long-planned, others were abrupt. CarMax ousted its CEO in November following a sales slump, and Codexis replaced its leader of three years while simultaneously cutting 24 per cent of its workforce. In some cases, companies have resorted to stopgap moves, appointing board members to run daily operations—a trend seen in 15 per cent of incoming technology, media, and telecom CEO transitions.

Europe’s regulations must ease for India to score on trade with it

By R.V. Anuradha

A Momentous Reset. January 27, 2026, marked a significant shift in global geopolitics with the signing of the EU-India Security and Defence Partnership and the conclusion of negotiations for the India-EU Free Trade Agreement (FTA). Prime Minister Narendra Modi hailed this as a “tide-turning moment,” and the FTA has been described by both sides as the “mother of all deals”. However, the true test of this partnership lies in addressing the complex regulatory hurdles that currently hamper bilateral trade.

The Regulatory Labyrinth While the FTA focuses on reducing tariffs, the real barrier for Indian businesses is not the duty rate—effective EU tariffs are already low at 4-5 per cent—but the prohibitive cost of compliance with Europe's dense regulatory framework.

• Services and Data Security: India’s exports to the EU, led by IT and consulting, stand at approximately €37 billion. A major impediment is that India does not yet have “data secure” status under the EU’s General Data Protection Regulation (GDPR). With India’s own Digital Personal Data Protection (DPDP) Act now in force, there is a strong case for the EU to recognize India as data secure, which would significantly boost IT and ITeS exports.

• Goods and Over-Regulation: Indian exporters must contend with what former European Central Bank President Mario Draghi identified as over-regulation and fragmented rules. Specifically, directives such as the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive are viewed as regulatory over-reach that impacts EU imports as much as domestic industry.

Agricultural and Industrial Burdens Indian agricultural exports frequently struggle with the EU’s Maximum Residue Limits, which often exceed global standards, and the recent Deforestation Regulation adds further layers of reporting and verification that small Indian enterprises are ill-equipped to handle.

The Challenge of CBAM The EU’s Carbon Border Adjustment Mechanism (CBAM) presents an immediate threat to India’s aluminium and steel exports. This levy works on the principle of price equalization; Indian exporters must pay the difference between India's carbon price and the EU's.

• Even with India's new Carbon Credit Trading System, the price gap is estimated to be over €60 per tonne of carbon.
• This levy focuses entirely on price rather than the actual quantum of embedded carbon, which significantly dilutes the benefits of any tariff reductions achieved under the FTA.

A Question of Fairness The author notes that India has consistently complied with its commitments under the UN Framework Convention on Climate Change and the Paris Agreement. Therefore, requiring Indian exports to pay a carbon-price difference raises fundamental questions of fairness that remain unanswered.

Conclusion The success of the India-EU deal will not be measured by the signing ceremony but by its implementation. For the “mother of all deals” to truly work, it must be just and equitable, ensuring that regulatory alignment does not become a new form of trade protectionism.

The writer is a partner at Clarus Law Associates, New Delhi.