Newspaper Summary 100326

 

Indonesia in initial deal to acquire BrahMos missiles

Our Bureau New Delhi

Indonesia has entered into an initial agreement with India to acquire BrahMos supersonic missiles, making it the second country after the Philippines to utilize the system to increase its air defence capabilities, according to senior Defence Ministry sources. While a final contract is yet to be signed, sources confirmed that an initial agreement is in place.

Indonesian Defence Ministry spokesperson Rico Ricardo Sirait told Reuters that the deal is "part of the modernisation of military hardware and defence capabilities, especially in the maritime sector". Although the specific value of the deal has not been disclosed, it is known that the missiles are jointly produced with Russia and that negotiations between New Delhi and Jakarta have been ongoing for more than three years.

General Romeo S. Brawner Jr., Chief of Staff of the Armed Forces of the Philippines, who was attending the Raisina Dialogue 2026, also revealed that Indonesia had entered into the contract. He expressed satisfaction with the Philippines' own purchase, noting that the BrahMos missiles demonstrated precision-guided strikes during Operation Sindoor.

"The Philippines was the first country to buy the BrahMos missile systems. Now, Indonesia has bought the same system. I can say that we’re happy with our purchase, and hopefully we can do more business with India," said General Brawner. It is further understood that Vietnam is at an advanced stage of acquiring these missiles, which travel at a speed of 2.8 Mach.

Rupee depreciation against dollar cushions domestic bullion prices

Suresh P Iyengar Mumbai

The sharp depreciation of the rupee against the dollar has cushioned domestic bullion prices from the impact of the global slide in gold prices. The rupee depreciated to an all-time closing low of 92.32 against the US dollar, losing 58 paise on Monday, as the conflict in West Asia worsened with Iran putting pressure on neighbouring countries to tame US aggression.

Gold prices in the US were down 1.2 per cent to $5,098 an ounce after shedding 2 per cent in the earlier session as the dollar strengthened against major currencies. In the futures market, the gold April contract dropped to $5,112 an ounce, and silver was down 2 per cent at $82 per ounce. Despite the growing crisis, gold prices fell as investors preferred to book profit after a prolonged rally.

SPOT GOLD PRICE

However, in India, spot gold prices were down marginally by ₹77 at ₹158,674 per 10 grams against ₹158,751, according to the Indian Bullion and Jewellers Association. Silver slipped by ₹667 to ₹260,056 per kg against ₹260,723 on Friday.

Prithviraj Kothari, President, India Bullion and Jewellers Association, stated that domestic bullion prices are derived from international spot prices but are adjusted for the USD/INR exchange rate, import duty and GST. With the rupee weakening to around ₹92 per dollar, largely due to rising crude oil prices and capital outflows, the currency effect is offsetting the decline in international prices.

Manav Modi, Commodities Analyst, Motilal Oswal Financial Services, said the disparity in domestic and international prices was largely due to rupee depreciation, which made gold prices costlier than the international market and somewhat covered the dip in global prices. He added that the rupee traded at 90.50 against the dollar a couple of weeks ago and has moved down sharply to about 92.5 now.

Govt prioritises LPG for home use; directs all refiners to step up production of gas

Rishi Ranjan Kala New Delhi

As the conflict in West Asia entered its tenth day with no signs of de-escalation, the government has begun prioritising LPG for household cooking needs. New measures include increasing the minimum waiting period for booking a cylinder to 25 days from the earlier 15 days and giving preference to domestic consumption over commercial use.

Top sources stated that the LPG situation remains comfortable with “no alarm right now”. However, to ensure stability, the government revised a previous order on Monday, now directing all domestic and SEZ oil refining companies, including petrochemical complexes, to maximise LPG production. Refiners are required to ensure that their entire production of C3 and C4 streams (including propane, butane, propylene, and butenes) is dedicated to gas production.

Checking Hoarding

The increase in the lock-in period for refills—which was recently raised from 15 to 21 days before hitting 25 days—is intended to check hoarding and prevent panic buying. An official explained that in a typical non-PMUY household, a 14.2-kg cylinder lasts about 55 days, meaning consumers still have sufficient time to plan for refills. A formal order prioritising households over commercial users is expected to be issued shortly.

IMPORTS DIVERSIFIED

India is the world’s second-largest LPG importer and third-largest consumer. In FY25, the country consumed more than 33 million tonnes (mt) of the fuel, with over 90 per cent used by households for cooking. While domestic production stood at 12.79 mt, 20.67 mt was imported during the year. Sources noted that India has diversified its imports, including securing supplies from Canada.

COMFORTABLE ON LNG

The government also maintained that it has “comfortable” stocks of liquefied natural gas (LNG) and is actively procuring additional cargoes from the US and Canada. Oil Minister HS Puri confirmed on X (formerly Twitter) that uninterrupted energy supplies are being maintained despite the soaring oil prices.

Standard Chartered reshaping retail push in India to prioritise wealthy customers

Sindhu Hariharan Chennai

Standard Chartered is undertaking a strategic redrawing of its retail banking strategy in India, shifting its focus toward establishing multi-product relationships with affluent clients who require cross-border financial services, rather than the mass retail segment. The bank is increasingly pivoting its wealth and retail banking (WRB) business to help clients grow and protect their wealth both domestically and overseas.

Judy Hsu, CEO of Wealth and Retail Banking at Standard Chartered, stated in an exclusive interaction that the bank "can't be everything to everybody" and aims to focus on its core strengths: international, cross-border, and affluent segments. This move aligns Standard Chartered with other foreign banks that have been reducing routine retail transaction banking in India.

GROWING SEGMENT

Historically, the bank focused on lending and regular retail products in India, but it is now targeting the country's growing segment of wealthy individuals. Standard Chartered currently serves more than a million WRB clients in India, with over 200,000 in the affluent category. To support this, the bank has:

• Added 11 "affluent centres" within its existing branch network.
• Planned further investments to redesign these centres for providing specialized advisory services.
• Enhanced its digital channels to complement in-person advisory.

GIFT CITY ROLE

GIFT City, India’s first International Financial Services Centre, will play a critical role in this new strategy. Standard Chartered is exploring ways to use the hub to provide more access to international products and support its wealth business. Since September, the bank has been engaging with specialists to gain regulatory clarity on structuring its wealth management proposition from GIFT City.

Additionally, the bank announced last October that it is launching US dollar clearance from the financial center.

'GLOBAL INDIANS'

The bank identifies "Global Indians" and "Global Chinese" as key drivers for its WRB business. Hsu noted that India’s high-net-worth individuals (HNIs) are particularly savvy regarding investment avenues and are more digitally native compared to their global peers.

1,250 Gulf-bound fruit containers stranded at Nhava Sheva port; pallets stuck at airports

T E Raja Simhan Chennai

More than 1,250 sea containers carrying fruits, such as bananas, grapes and pomegranates, meant for the West Asian markets during the holy month of Ramadan are stranded at the Nhava Sheva port near Mumbai with shipping services disrupted by the Iran war. Pallets of fruits are also stuck at several airports as Gulf-based airlines suspended operations to the region.

Ramadan is a peak season for Indian fruits, and exporters are worried about the fate of large volumes stuck at the terminal. Of the containers lying in the terminal, around 1,250 are carrying fruits; the value of the stranded cargo could not be ascertained. Most fruit exports from India to West Asia move through Nhava Sheva to Jebel Ali in Dubai, with a usual transit time of two-three days. Consignments are currently stored in reefer containers that remain plugged in, ensuring the cargo stays safe for now, but sources warn that a prolonged delay could be disastrous.

RAMADAN DEMAND HIT

Exporters say a large share of their annual business depends on Ramadan sales. If exports slow during this period, the produce may have to be diverted to the domestic market where prices are significantly lower and there may not be enough demand to absorb the volumes. While buyers are cautious about placing fresh orders due to rising costs, sources said two ships are expected to sail to a port in Oman in the next couple of days, and some fruit consignments may be loaded onto those vessels.

AIR CARGO DISRUPTION

While the disruption in air cargo is smaller, it remains a concern. Shipments to Oman are least affected, and with Emirates resuming some flights, the capacity crunch has eased somewhat, though it is still far from normal. "Air freight costs to Europe are 50-70 per cent higher than two weeks ago," said Kaushal Khakhar, CEO of Mumbai-based Kay Bee Exports. According to CK Govil, CMD of Activair Airfreight India Pvt Ltd, many farmers who planned to export produce during Ramadan have been unable to do so.

Buybacks not a problem — it is policy volatility

Saumitra Bhaduri The writer is Professor, Madras School of Economics

While share buybacks are a routine corporate finance decision in the developed world, in India, they have been repeatedly shaped by evolving tax policies, often yielding unintended consequences. The recent Union Budget’s decision to revisit buyback taxation is therefore not merely a technical correction, but a window into how India views corporate payouts, investor behaviour, and market discipline.

Straightforward Logic

At a basic level, a share buyback is simply a company returning excess capital to its shareholders by purchasing its own shares. The economic logic is straightforward: when firms generate cash beyond their investment needs, buybacks allow capital to be returned efficiently without locking shareholders into recurring obligations, as dividends do. Buybacks also play a role in improving capital efficiency and signalling management confidence.

Global Norms

International data underscores how buybacks have become the norm. Global listed companies spent over $1.6 trillion on buybacks in 2022, the highest on record, nearly tripling since 2012. In 2022, buybacks accounted for 94 per cent of total dividends paid out by major companies worldwide. This surge was primarily driven by North American firms, along with strong contributions from the oil & gas and technology sectors. In stark contrast, emerging markets, including India, lagged far behind, with buybacks representing only 18 per cent of dividends.

India’s Volatile Journey

India’s journey has been markedly different and volatile:

• Until 2013: Dividends were taxed at the company level through Dividend Distribution Tax (DDT), while buybacks were taxed as capital gains for shareholders, often at lower rates, which incentivised buybacks.
• 2013: The Finance Act introduced a company-level tax on buybacks to limit arbitrage.
• 2020: DDT was abolished, and dividends became taxable at slab rates for shareholders, while the company-level buyback tax remained, sharply increasing the relative appeal of buybacks again.
• 2024: The Finance Act (effective October 1, 2024) taxed buyback proceeds as deemed dividends in shareholders' hands. For high-income investors, the effective tax rate crossed 35 per cent, causing buyback activity to plunge from ₹49,314 crore in FY24 to just ₹8,147 crore in FY25.

Signalling Instruments

While both return surplus cash, dividends and buybacks signal different things. Dividends are a commitment device signalling confidence in stable, recurring cash flows. Buybacks, by contrast, are a flexible instrument signalling that management views shares as undervalued or that excess capital cannot be deployed profitably elsewhere. They also improve per-share metrics such as earnings per share (EPS) and return on equity (ROE).

Course Correction

The 2026 Budget marks a clear course correction by undoing the taxation of buybacks as dividends and returning them to capital gains taxation. To curb arbitrage, promoters face additional levies ensuring minimum effective rates of 22 per cent for companies and 30 per cent for others. These changes restore two credible payout instruments, enabling firms to choose optimally.

The way forward lies in a stable, predictable framework that treats dividends, buybacks, and capital gains consistently. The correction in the Budget of 2026 should be seen as an opportunity to commit to durable policy clarity.

XED, first IPO from Gift City, delayed amid West Asia crisis

Our Bureau Ahmedabad

Citing “prevailing uncertainties” in the Gulf region, XED Executive Development, a leading provider of executive education, has rescheduled its IPO to March 16-24. The company initially planned to open the issue on March 6, but the ongoing conflict between Iran and US-Israel prompted a delay to reduce potential market volatility and ensure smoother participation from international investors. The IPO, priced at $10-10.5 per share, will be a dollar-denominated listing through GIFT City, targeting overseas investors under the International Financial Services Centres Authority (IFSCA) framework.

FOUNDER CONFIDENT

John Kallelil, Founder and Managing Director, XED, said, “We remain confident about the offering and are committed to concluding the process successfully within this month”. The offering has received approvals from Gift City-IFSC authorities and the listing exchanges. The shares will be listed on NSE International Exchange and India International Exchange, marking a historic first IPO from the financial services hub.

Nasscom calls for contingency plans amid West Asia turmoil

Our Bureau New Delhi

Information technology (IT) industry body Nasscom on Monday advised companies to strengthen operational preparedness and cybersecurity frameworks in the wake of the evolving geopolitical situation in West Asia. The body cautioned that periods of uncertainty can heighten the risk of disruptions and cyber threats.

Contingency Frameworks

Issuing a fresh advisory, the industry organization stated that while business operations currently remain stable, organizations are reviewing and activating contingency frameworks. These measures are intended to ensure operational continuity and uninterrupted service delivery in the event of regional disruptions. Organizations are also prioritizing employee well-being by enabling remote work arrangements and closely monitoring employees located in affected geographies.

Close Watch

Nasscom continues to monitor the situation and remains in regular contact with the West Asian Council to assess developments. Companies are being encouraged to ensure cloud and data center resilience and to safeguard critical systems. Additionally, firms are advising employees to limit non-essential travel and explore alternative transit routes where required.

Cybersecurity Posture

The industry body noted that periods of geopolitical uncertainty often see a rise in coordinated cyber threats, disinformation campaigns and infrastructure targeting. Organizations are therefore advised to strengthen their cybersecurity posture and prioritize immediate actions, such as rotating credentials and accelerating patching.