Producer Price Index to replace WPI over 5 years; services in bigger basket
Amiti Sen New Delhi
In a major overhaul of inflation metrics, the Centre will launch a revised Wholesale Price Index (WPI) series this month, kickstarting a five-year transition to replace it entirely with a new Producer Price Index (PPI). On June 15, the Department for Promotion of Industry and Internal Trade (DPIIT) will release the revised series of WPI with base year FY23, replacing the existing series with base year FY12. This revised series will incorporate an expanded basket of 957 commodities, up from the current 697 items.
Additions to the basket include items such as solar and wind energy and nuclear electricity.
NEW SERIES
Simultaneously, the government will introduce a new series of Output PPI, Trial Input PPI, and Service PPI. The Service PPI will cover seven services: banking, securities transaction, insurance, pension funds management, railways, air (passenger), and telecom.
“Considering the wide usage of the WPI in price escalation clauses, this index will be released for five years from the date of release of the revised series, along with PPI and will be discontinued thereafter," according to a DPIIT statement. This is intended to give users sufficient time to switch from WPI to PPI.
While the WPI tracks prices of goods at the wholesale/bulk level, the PPI will track prices at the point of production (farm/factory-gate).
GLOBAL BEST PRACTICE
Pointing out the advantages of PPI over WPI, an official explained that PPI would be more consistent with the national account framework and align with global best practices adopted by advanced economies.
“Availability of both Output PPI and Input PPI explains how inflation experienced by the producer on input items are passed through the output being produced," the official said. Further, both PPIs provide for an opportunity to eliminate the double counting of inflation unlike WPI. While WPI covers goods only, PPI includes services as well.
How AT1 bond issuances have hit a rough patch since 2025
Lokeshwarri SK Chennai
Additional Tier 1 bonds or AT1 bonds have been caught in one scandal after another, making issuers shy away from them in recent years. Only ₹3,500 crore was raised through these bonds in 2025, registering a 79 per cent decline from the issuances worth ₹16,859 crore in 2024.
AT1 bonds are high-yielding but very risky instruments issued by banks to meet capital requirements under Basel-III norms. These are perpetual bonds, meaning they have no maturity date and can be written off or converted into equity by the RBI if faced with a financial crisis. This means investors may not only forego interest but could lose their entire principal under certain circumstances.
These bonds have been involved in several cases of mis-selling where high returns were highlighted without adequately explaining the risks. For example, employees of HDFC Bank’s Dubai branch were found mis-selling Credit Suisse AT1 bonds to NRI clients. Additionally, the Supreme Court has yet to give a final order regarding Yes Bank’s write-off of AT1 bonds worth ₹8,415 crore in 2020.
DECLINING NUMBERS
Data from Prime Database shows these bonds remained in favor until 2024. In 2021, nine issuances raised ₹24,271 crore, and in 2022, 18 issues raised ₹30,172 crore. However, these numbers halved through 2023 and 2024 before dwindling completely in 2025.
“The decline in AT1 bond issuances is the result of a combination of factors: the hybrid debt-equity nature of the instrument, regulatory and valuation debates, the aftermath of the Yes Bank and Credit Suisse events, concerns over pricing adequacy, a limited investor base and increasingly selective investor appetite,” says Venkatakrishnan Srinivasan, founder and managing partner of debt advisory firm Rockfort Fincap.
Furthermore, the strong balance sheets of banks post-pandemic, characterized by reduced stressed assets, may have lowered the overall requirement for capital in recent years.
PSU BANKS LEAD
Since 2021, Public Sector Undertaking (PSU) banks have led AT1 fundraising. SBI has raised the most at ₹42,208 crore across nine issuances, followed by Canara Bank (₹17,903 crore) and Punjab National Bank (₹13,044 crore). Among private banks, only HDFC Bank issued AT1 bonds worth ₹3,000 crore in 2022.
Interestingly, banks have increasingly switched to AT2 bonds since 2024. These are considered one notch less risky than AT1 bonds and can be redeemed after five years.
Srinivasan adds that future growth will depend on achieving a more balanced risk-reward framework. If issuers offer spreads that properly reflect the unique risks of these instruments, demand may continue, especially for top-rated public sector and AAA-rated private sector banks.
bl interview: ‘Enterprise AI has arrived in India at scale’
Sanjana B Bengaluru
Microsoft has announced that three leading IT companies — Infosys, TCS and Wipro — have each scaled their Microsoft 365 Copilot licences to over one lakh employees, taking the collective commitment past three lakh seats in under six months. This announcement builds on the 50,000-seat deployments announced in December 2025, highlighting how integral AI is now across engineering, service delivery and business operations at enterprise scale.
Puneet Chandok, President, Microsoft India and South Asia, discusses India’s emergence as a key market for AI adoption, Microsoft’s investment plans and the broader impact of AI on jobs and enterprise operations.
Edited excerpts:
What are some key milestones or developments at Microsoft that stood out recently? The three Indian IT majors have each scaled Microsoft 365 Copilot seats to one lakh employees, with a collective deployment across roughly three lakh engineers. This is one of the largest and fastest enterprise AI roll-outs globally on Microsoft. It’s the strongest real-world proof of enterprise AI at scale. We’re moving from pilots and experimentation to real scale, with Copilot becoming the connective tissue across these three-lakh-plus engineers. It’s also a clear signal that enterprise AI has arrived in India at scale. India is setting the pace for Asia and is amongst the fastest-moving markets globally for Copilot and AI adoption.
AI is no longer a side project or a vision; it is how work is getting done in these businesses, and how work is measured. About 49 per cent of Copilot usage we are seeing is cognitive work, which is real analysis, creative thinking and problem-solving; 58 per cent of users tell us they can do what they couldn’t a year ago. Copilot is becoming the UI for AI across all knowledge workers. This is the real-world proof of AI and Copilots being embedded into workflows and how work gets done across IT services across sectors in the country.
Is largescale AI adoption giving Indian IT services firms a competitive edge globally? At a time when differentiation matters, how is AI helping the companies stand out? This is happening in multiple ways. First, they’re making the engineers more productive, meaning productivity benefits. Engineers have more time for more value-added work. Second, it’s reducing cycle times and helping enterprises do things faster for customers, which in turn allows them to do more. It’s also allowing employees to deliver more value-added work to customers than before.
Has the appetite for AI investment changed in light of the current global uncertainty or does the momentum remain intact? India is already one of the fastest-growing markets in the world for Copilots, leading the pack. There has been sustained double-digit growth over the last few years. People are using this to think about how they become Frontier Firms, and how to get AI to work for them to increase productivity, efficiency and effectiveness. There is significant growth across our platforms, Copilots, Azure and our service lines. That’s the reason we’re investing in India.
There is growing optimism that India could become a major beneficiary of the global AI infrastructure build-out. What role will Microsoft’s investments play in that journey? There are three ways to look at this. First, we are building the right infrastructure in the country for AI to meet India’s needs. We’re also building the largest data centre footprint in the country; Hyderabad, our next region, is going live soon. Second is talent, which is scaling. India is the largest classroom in the world, and we must train Indians to use AI the right way. Third is enterprise adoption, which is where India is leading. Taken together, these three factors give strong reason for optimism about India’s AI future.
Where do these milestones place India in Microsoft’s global strategy? India is one of the most exciting markets today in the world for tech and AI, be it infrastructure, talent and skilling, or enterprise AI adoption. That’s the reason we invest in building in India. We’re seeing significant growth, so we’re excited about what we’re building and doing with customers. In some cases, we’re leading across Asia and setting the template for enterprise-scale AI adoption not just in the global South, but the world.
Many workers worry that AI could lead to job losses as companies seek greater efficiency. Is that concern justified? Is Microsoft expanding its workforce in India? AI is reducing repetitive work, not eliminating roles. Rule-based tasks are getting automated, allowing us to lift human potential to do more higher-value-added thinking and decision-making work. The nature of work is shifting across functions.
Skills are becoming more important than job titles, and careers will become more fluid. We will move across roles more quickly based on the skills we bring to the table. We are also excited about new roles like AI workflow designers, agent managers, AI trainers and evaluators. The key for us is adaptability. Anybody willing to learn fast and apply AI to work will come out on the right side of this equation. We continue to hire in areas where we’re seeing customer demand and where we’re building new capabilities across the board.
What will the MPC do this time?
Madan Sabnavis
Robert Lucas and Thomas Sargent were proponents of the famous Rational Expectations theory. The theory said that if monetary or any policy is predictable, it ceases to have any impact on economic variables. If everybody knows that the central bank will act only when inflation crosses the defined threshold, it will be business as usual; however, if the central bank suddenly announces a major change, then the impact will be significant.
In a business-as-usual scenario, there is little reason for one to expect any action from the Monetary Policy Committee (MPC). Inflation is currently well below the 4 per cent mark. While it can be argued that inflation will cross the 5 per cent mark due to global conditions and policy actions, 5 per cent is still within the range of 4-6 per cent, meaning there is no immediate need for pre-emptive action.
Therefore, the RBI projection of inflation is critical. If the MPC acts now and the war ends, leading to a rollback of measures, the move might appear hasty. The general consensus is that there will be a status quo in the repo rate, as inflation remains low. The policy stance may also remain unchanged, though a new forward-looking term like ‘calibrated tightening’ could be used to provide articulation that is more potent than actual action.
RATIONAL EXPECTATIONS
However, if the MPC chooses to apply the ‘rational expectations’ theory, it could go for a rate hike well before it is needed. A 25 bps or 50 bps hike would send a strong message that inflation will not be tolerated, spiking bond yields and raising expectations for future hikes. While higher rates could benefit FPI investors in the debt segment, they would also increase the cost of borrowing for the government.
Higher rates will come in the way of future growth as investment becomes more cautious, lowering aggregate demand. The current economic environment, heavily influenced by global developments, has made policy formulation difficult. Crude oil remains a major factor upsetting calculations, and there is speculation regarding whether the Federal Reserve will be forced to raise rates.
The domestic situation is typified by rising inflation and volatile currency, alongside a fiscal deficit that could exceed targets, leading to higher government borrowing. While raising the repo rate might be tempting given the potential for higher inflation from the ongoing war and the El Nino effect, the risk to growth is significant, as premature hikes could slow down investment without effectively addressing cost-push inflation. This makes the upcoming credit policy particularly interesting.
The writer is Chief Economist, Bank of Baroda. Views expressed are personal.
Rupee set to consolidate
WEEKLY RUPEE VIEW Akhil Nallamuthu
The rupee continued its recovery and appreciated about 0.4 per cent (42 paise) over the past week to close at 95.27 against the dollar on Tuesday. The local currency has now recovered about 1.7 per cent from the record low of 96.96 it touched on May 20.
The rebound comes despite continued foreign outflows. According to NSDL data, net FPI outflows stood at about $2.3 billion over the past week. However, the pressure from outflows was offset by a sharp correction in crude oil prices. Brent crude futures ($94/barrel) slumped 12 per cent last week, reducing concerns over India’s import bill and offering support to the rupee.
Notably, the recovery has come even as the dollar index remained largely flat over the past two weeks. This suggests that domestic factors have also contributed to the rupee’s gains. Economic data released recently indicate resilience in the domestic economy. Supported by a 6.2 per cent growth in manufacturing, India’s Index of Industrial Production (IIP) expanded 4.9 per cent in April, compared with 3.2 per cent in the preceding month. Additionally, the Centre managed to contain the fiscal deficit at 4.4 per cent of GDP in FY26, in line with its target, and has set a lower target of 4.3 per cent for FY27.
That said, uncertainty surrounding West Asia continues to linger. While fresh military exchanges involving Iran and Israel have kept markets cautious, diplomatic efforts remain active. US President Donald Trump recently expressed optimism about reaching an agreement with Iran to extend the truce and reopen the Strait of Hormuz. Overall, easing crude prices and resilient domestic indicators have aided the rupee, although geopolitical developments remain a key risk.
CHART
The rupee has witnessed a notable recovery in recent sessions. After touching a three-week high of 94.75 on Monday, it has moderated to 95.27. The chart indicates that 95 is a key resistance level.
A breakout above 95 can extend the recovery towards 94.50 and subsequently to 94.20. On the other hand, if the local currency weakens from the current level, it can find support at 95.75 and 96. The next support below 96 is at 96.25.
In the near term, the rupee is likely to move sideways, in line with the prevailing trend in the dollar index. Since May 18, the dollar index has been oscillating within the 98.90-99.50 range. The direction of the breakout from this band will likely determine the next leg of the trend. A breach of 99.50 can lift the index to 100.50, whereas a break below 98.90 can drag it to 98. Therefore, if the dollar index rallies to 100.50, the rupee could weaken towards 96.25. Conversely, a decline in the index to 98 may help the local currency appreciate towards 94.20.
OUTLOOK
Overall, the rupee appears to have entered a consolidation phase after the recent recovery. In the near term, the local currency is likely to trade within the 95-96 range, with the next directional move depending largely on which side the dollar index breaks out of the 98.90-99.50 band.
bl. research bureau
‘Zee got media rights for FIFA events for under $60 m’
Vallari Sanzgiri Mumbai
Zee Entertainment has bagged FIFA rights for 39 global football events at a reported valuation of under $60 million, broadening the scope of sports revenue beyond cricket.
“Zee has likely won FIFA rights at reported valuation of under $60 million which is lower than ₹4.5 billion paid by Viacom 18/Reliance Media Co for FIFA World Cup 2022,” said CLSA capital markets in its report, anticipating the potential fan-following and advertiser build-up from the deal.
Zee is now sitting on an eight-year contract with the Federation Internationale de Football Association (FIFA) for one of the most loved sports in the world, at a sum much lower than the Indian Premier League’s (IPL) media rights deal of $6.2 billion for 2023-27. The FIFA World Cup remains one of the most premium global media properties, catching the attention of youth brands particularly in technology, smartphones, auto, fintech, e-commerce and gaming categories.
“For advertisers, FIFA (World Cup) is perhaps the biggest test yet of whether India has matured into a multi-sport media market or remains overwhelmingly dependent on cricket,” said Umair Mohammad, Founder & CEO at Nitro Commerce.
Even so, the 2026 FIFA World Cup is expected to generate over $6 billion in global revenues, making it the biggest tournament in history. The World Cup encompasses 48 teams and 104 matches, significantly increasing inventory for broadcasters and advertisers alike. With a claim to the media rights of 39 such events until 2034, Zee now has a differentiated platform to attract both audiences and advertisers.
ADVERTISER BUZZ
Media agencies speaking to businessline noted reactions from advertisers a day after the deal announcement.
“Football has steadily built a passionate fan base in India, especially among younger urban audiences,” said Raghu Khanna, Founder and CEO of CASHurDRIVE Marketing. Khanna noted that brands today are looking beyond reach towards fan engagement and community building. “The FIFA rights strengthen the competitive landscape in India’s sports media market. They provide advertisers with an alternative premium sports property beyond cricket,” he added.
Live sports remain one of the few categories that consistently attract mass, real-time viewership, according to Pramod Pawar, Quantitative Research-Vice President, Hansa Research Group. Beyond match timings, he noted that the real challenge for advertisers is the mode of viewing.
“With the growing second-screen behaviour, advertisers today have more ways to connect with fans. Repeat telecasts and match highlights can provide Zee with an additional platform to monetise ad inventory and drive incremental advertising. The final impact on ad revenues will depend on how effectively Zee monetises this cross-platform engagement,” said Pawar.
Rupee set to consolidate
WEEKLY RUPEE VIEW Akhil Nallamuthu
The rupee continued its recovery and appreciated about 0.4 per cent (42 paise) over the past week to close at 95.27 against the dollar on Tuesday. The local currency has now recovered about 1.7 per cent from the record low of 96.96 it touched on May 20.
The rebound comes despite continued foreign outflows. According to NSDL data, net FPI outflows stood at about $2.3 billion over the past week. However, the pressure from outflows was offset by a sharp correction in crude oil prices. Brent crude futures ($94/barrel) slumped 12 per cent last week, reducing concerns over India’s import bill and offering support to the rupee.
Notably, the recovery has come even as the dollar index remained largely flat over the past two weeks. This suggests that domestic factors have also contributed to the rupee’s gains. Economic data released recently indicate resilience in the domestic economy. Supported by a 6.2 per cent growth in manufacturing, India’s Index of Industrial Production (IIP) expanded 4.9 per cent in April, compared with 3.2 per cent in the preceding month. Additionally, the Centre managed to contain the fiscal deficit at 4.4 per cent of GDP in FY26, in line with its target, and has set a lower target of 4.3 per cent for FY27.
That said, uncertainty surrounding West Asia continues to linger. While fresh military exchanges involving Iran and Israel have kept markets cautious, diplomatic efforts remain active. US President Donald Trump recently expressed optimism about reaching an agreement with Iran to extend the truce and reopen the Strait of Hormuz. Overall, easing crude prices and resilient domestic indicators have aided the rupee, although geopolitical developments remain a key risk.
CHART
The rupee has witnessed a notable recovery in recent sessions. After touching a three-week high of 94.75 on Monday, it has moderated to 95.27. The chart indicates that 95 is a key resistance level.
A breakout above 95 can extend the recovery towards 94.50 and subsequently to 94.20. On the other hand, if the local currency weakens from the current level, it can find support at 95.75 and 96. The next support below 96 is at 96.25.
In the near term, the rupee is likely to move sideways, in line with the prevailing trend in the dollar index. Since May 18, the dollar index has been oscillating within the 98.90-99.50 range. The direction of the breakout from this band will likely determine the next leg of the trend. A breach of 99.50 can lift the index to 100.50, whereas a break below 98.90 can drag it to 98. Therefore, if the dollar index rallies to 100.50, the rupee could weaken towards 96.25. Conversely, a decline in the index to 98 may help the local currency appreciate towards 94.20.
OUTLOOK
Overall, the rupee appears to have entered a consolidation phase after the recent recovery. In the near term, the local currency is likely to trade within the 95-96 range, with the next directional move depending largely on which side the dollar index breaks out of the 98.90-99.50 band.
bl. research bureau
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