Core sector output growth eases to 5.4 per cent in July
MIXED BAG. Iron ore, cement, power expand while natural gas, crude output dip
Our Bureau
New Delhi
Nine key infrastructure sectors' output rose by 5.4 per cent in July as against 6.2 per cent in June, official data for the Index of Core Industries (ICI) released on Thursday showed.
The growth rate was 3.2 per cent in the same month of last year. These nine sectors include coal, iron ore, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity. As these nine have more than 40 per cent share in the Index of Industrial Production (IIP) on this data, experts feel that overall industrial growth may be lower in July. Overall industrial growth data for July will be announced on August 28.
GROWTH DRIVERS
According to an official statement, iron ore, cement, electricity, coal, steel, and refinery products observed positive growth of 13.1 per cent, 9 per cent, 7.6 per cent, 2.9 per cent, 2.7 per cent and 2.5 per cent, whereas natural gas, crude oil and fertilizers witnessed negative growth in July. Iron ore, electricity, and cement have been the major drivers of overall growth of ICI during recent months. Cumulative growth rate of ICI during April-July 2026 was 4.3 per cent compared to 1.5 per cent in the corresponding period of the previous year.
Aditi Nayar, Chief Economist at ICRA, said the growth in core sector output moderated to 5.4 per cent in July on a year-on-year basis, owing to an unfavourable base, while remaining quite strong. This alone exerted a downward pressure to the tune of 80 bps on the core output print in July relative to the previous month. Besides, electricity generation growth also witnessed a slowdown to 7.6 per cent in July 2026, while fertilizer and crude oil saw a steeper contraction, reflecting the impact of monsoon rains.
COAL OUTPUT GROWS
Refinery products output expanded for the first time in three months, although the pace of growth was muted at just 2.5 per cent.
While growth in coal output touched an 11-month high of 9.4 per cent, cement output expanded by 9 per cent in the month, suggesting strong construction activity in the country.
The replenishment of inventory after the extended period of construction activity in June owing to the seasonal monsoon deficit in the month is likely to have supported cement output in July.
“Given the trends in core sector, we expect the IIP growth to moderate to 4-4.5 per cent in July compared to 5.2 per cent in June,” Nayar said.
India, Japan agree to safeguard undersea communication cables
Dalip Singh
New Delhi
With the ongoing US-Iran conflict threatening critical sea lines of communication (SLOCs), India and Japan have affirmed to strengthen coordination between both sides for the protection of undersea communication cables through mutual visits by naval ships and units.
This emerged during the bilateral meeting between Defence Minister Rajnath Singh with his Japanese counterpart Shinjiro Koizumi in New Delhi on Thursday.
At the bilateral meeting, the Ministries of Defence of the two countries signed a memorandum of understanding on maritime security and cooperation, which focused on deepening operational cooperation between their navies, as per a joint statement issued by the Ministry of Defence.
India and Japan rely on sea lines of communications for most of their trade, making the security of these lines central to their individual economic security.
Due to that, both sides are trying to pool their resources and talents to focus on choking-point operations and surveillance tracking and quick-response mechanisms to handle any undersea threat. They could also focus on maritime domain awareness (MDA) to prevent sabotage and geological hazards.
MINE DEFENCE
For protection of maritime lines of communication, both sides agreed to explore possibilities to synergise energy and capabilities—the need for which is again felt following the West Asia conflict.
It demonstrated the strategic lethality of naval mines, which Iran effectively used to disrupt maritime traffic and enforce a selective blockade in the Strait of Hormuz.
NAVAL SHIPBUILDING
The two countries also agreed to explore the possibility of joint development in naval shipbuilding and design by leveraging Japan's technological expertise and India's production capabilities in accordance with their respective relevant policies, the joint statement said. Refined cooperation would focus on areas such as naval design, engineering and green energy systems to meet environmental regulatory norms in the future, it added.
Given that the two sides are working for the co-production of Unified Complex Radio Antenna (UNICORN) for Indian Navy's destroyers, the statement said, they welcomed progress on discussions on the framework of defence shipbuilding and related areas and open discussions on Japan's use of India's production capabilities under the framework of 'Make in India'.
The DRDO and Japan's ALTA will intensely engage to explore advanced technologies. Both Ministers also encouraged on-progress reciprocal provision of ship repair facilities. Earlier, Koizumi appreciated the "high capabilities and strong mind of the Indian Armed Forces" and Navy Chief Admiral Dinesh K Tripathi during his previous day's visit to the Western Naval Command and the destroyer INS Chennai. "I can say that Admiral Tripathi is a great person, not only as an Admiral but also as the host of yesterday's visit and today's visit. I have a special place for India in my heart."
“On August 6, 2018, I visited India with other members of Parliament and participated in a memorial ceremony for the victims of the atomic bomb. India is probably the only Parliament which is holding such a ceremony every year, and I would like to express my sincere appreciation for this tradition," he said while offering his commitment to work with the Indian Defence Minister to steer the partnership to a level it has never reached before.
Singh said that the coming together of India's Mutual and Holistic Advancement for Security and Growth Across Regions (MAHASAGAR) vision and Japan's Free and Open Indo-Pacific (FOIP) initiative is "more important than ever before" as maritime lifelines are facing growing vulnerabilities.
(Photo Caption):
STRENGTHENING TIES. Defence Minister Rajnath Singh with his Japanese counterpart Shinjiro Koizumi during a bilateral meeting in New Delhi on Thursday. — PTI
India open to buying Venezuelan oil till US sanction exemption continues: Sources
Amit Sen
New Delhi
The easing of US sanctions on Venezuela has provided a window for India to source crude from the South American nation, and Indian refiners are looking to increase purchases as long as the exemption continues and the economics are favourable, sources said.
“New Delhi does not want to make long term commitments on buying crude from Venezuela because there is no clarity on when the US could reimpose sanctions. However, as long as there is a window of opportunity, we will try to make transactions without the fear of sanctions. Venezuela widens India’s sourcing options amid the West Asia crisis,” a source said.
In April this year, the US eased sanctions on Venezuela’s oil sector and several other state-run financial institutions, three months after US forces ousted former Venezuelan leader Nicolas Maduro in Caracas and an interim government led by Delcy Rodriguez took charge. The easing of financial restrictions helped facilitate Venezuela’s oil exports, allowing direct access to US dollars and easing the processing of payments through the international financial system.
ENERGY TRADE
India’s oil imports stepped up significantly from Venezuela over the last few months. In fact, in August, Venezuela was India’s fourth largest supplier of crude with supplies touching 4,44,000 barrels per day, which was more than the volumes India took from Iraq or the US.
However, Venezuelan crude comes with logistical challenges, including high shipping costs that will have to be weighed against its price, the source noted. Unlike lighter grades from the Gulf and Iran, Venezuelan crude is particularly heavy and requires specialised refining capacity. The voyage to India can take five to six weeks, involving a long journey across the Atlantic and Mediterranean, through the Suez Canal and across the Arabian Sea.
“This means Indian refiners will have to calculate the landed cost of Venezuelan crude against supplies available from other sources. There is the freight cost as well as the processing cost since our refineries need to be retooled to handle more of such heavy crude,” the source said.
The economics, however, cannot be assessed simply by comparing the price of a barrel of crude with other grades. Its heavy composition tilts the product slate more toward heavy fuel oil and bitumen, alongside diesel, kerosene, naphtha and other refined products.
“The product slate changes depending on the type of crude. Everything has a market value, although heavy fuel oil is among the lower-value products. So the economics depend on how much of each product it can extract from a barrel and what those products are worth,” the source said.
(Photo Caption):
KEY SUPPLIER. In August, Venezuela was India’s fourth largest supplier of crude with supplies touching 4,44,000 barrels per day.
Indian exports to Australia surge 200% in 5 years; CECA talks to widen trade: Australian diplomat
Our Bureau
Ahmedabad
India’s exports to Australia have surged by 200 per cent over the past five years, paving the way for diversifying India’s exports to the rest of the world, senior Australian diplomat Christian Jack said on Thursday. Speaking at a roadshow on India-Australia Economic Cooperation and Trade Agreement (ECTA), Jack said that both nations are now looking to build on the gains of the bilateral trade agreement to sign a broader Comprehensive Economic Cooperation Agreement (CECA) covering areas including services, digital economy and movement of people.
“India’s exports to the rest of the world have grown by about 40 per cent in the last five years, while in the same period, India’s exports to Australia have grown by 200 per cent. Because of that, we feel the bilateral trade relationship has increased not only in value but also in growth in India’s trade relationship with Australia relative to its trading partners. Our bilateral trade relationship is now AUD 50 billion (around ₹3 lakh crore),” Jack said.
“...and our ministers have committed to finalizing this by the end of the year. Our goal is to reach $100 billion by this decade. We have the opportunity to be the engine of that growth,” Jack, who is the Consul General at the Australian Consulate General in Mumbai, said while addressing the 3rd edition of the CII Gujarat International Trade Summit in Ahmedabad.
“Additionally, the relationship is leading to a stage of delivery with the implementation of ECTA, which came into force in December 2022, and boosting bilateral trade. From January 1, 2026, Indian exports entering Australia are subject to zero tariffs, which is a great benefit,” he said. The negotiation is also “significantly advanced” and is ongoing, according to Jack, who added that there was mutual utilisation seen under India’s other trade agreements and, in most cases, more than double.
FOCUS AREAS
With several bilateral visits across several sectors, the India-Australia relationship has clear focus areas. In addition to resources, education, agriculture, and double tax avoidance, agricultural exports have increased by around 20 per cent, Jack said.
The diplomat said that on the trade front, both nations are seeking to build on ECTA and move to a broader CECA. While ECTA had a strong focus on trade in goods, the proposed CECA would expand the relationship into services, digital economy, and movement of people, among other areas.
“There have been a range of discussions of negotiations on this agreement. My Prime Minister Anthony Albanese was very keen to get this done. Minister Goyal was in Australia recently. He gave the clearest instructions to the Indian side to finalise this deal, as we have received very clear instructions from our side,” Jack said.
He attributed the strengthening India-Australia relationship to three broad drivers:
- Strategic alignment
- Economic complementarity
- The growing Indian diaspora in Australia and the close personal chemistry
The diplomat also highlighted that several Indian IT and infrastructure partners have offices in Victoria, New South Wales, and Gujarat. Speaking on the infrastructure and architecture partnerships, Jack highlighted Cox Architecture in India, which is working on the Sardar Vallabhbhai Patel Sports Enclave at Motera in Ahmedabad. The sports enclave is expected to be a centre for sports and entertainment games. The firm is also involved with Mumbai Metro.
SPORTS ECOSYSTEM
Australia and Gujarat are also planning a high-level sports delegation and exhibition in Gujarat in the first half of 2027, Jack said. The delegation is expected to showcase the Australian sports ecosystem and examine areas of joint experience in sports infrastructure, sports management, and training.
Age of AI: When seeing is no longer believing
Deepfakes. Algorithms can reweave the very fabric of reality and the absolute authority of audio-visual evidence may be crumbling
Sandeep Mittal
Director General of Police, Tamil Nadu
The scene was set in a quiet home office in Hong Kong, where a finance worker logged onto what he believed was a high-stakes corporate video call. On his screen sat a grid of familiar faces, including the company’s Chief Financial Officer, whose gravely, authoritative voice commanded the room. Alongside several directors, they discussed a confidential acquisition, eventually instructing him to execute a series of massive wire transfers.
By the time the call ended and his coffee had gone cold, $25.6 million was gone. It wasn’t a sophisticated network hack, but achieved through “a hack of the human eye.” Every single “colleague” on that screen had been an AI-generated ghost, a digital phantom designed to steal.
For over a hundred years, our society and justice systems have operated on a simple, foundational belief: seeing is believing. We relied on the objective truth of photographs, audio confessions, and leaked videos to anchor our collective reality.
However, we have now entered the 'Age of AI,' where deep learning algorithms can reweave the very fabric of reality and the absolute authority of audio-visual evidence may be crumbling. In a world where any digital medium can be simulated with pinpoint accuracy, how do we prove what actually happened?
BEHIND THE ILLUSION
Behind this digital deception is a process known as a Generative Adversarial Network (GAN). To understand how a GAN works, one should imagine a creative battle, one between a forger, the “Generator,” and a museum curator, the “Discriminator”.
The Generator uses vast amounts of data, say thousands of photos of a face, to create a masterpiece, while the Discriminator looks for any telltale flaw, such as an unnatural shadow or a missing skin pore. This cycle repeats millions of times until the creation becomes statistically indistinguishable from the real thing.
In the early days of deepfakes, the algorithms struggled with nuance. Subjects famously rarely blinked because training data rarely captured people with their eyes closed. However, developers quickly adapted, feeding thousands of blinking eyes into their databases to perfect the illusion. Today, with the integration of neural networks and massive cloud computing power, deepfakes are no longer the domain of sophisticated laboratories; they are democratized, with user-friendly apps allowing for real-time video manipulation during active security checks or high-stakes corporate meetings.
THE FORENSIC FIGHTBACK
As these fakes approach perfection, human perception is no longer a reliable defence. We are forced to transition into an era of “Multi-Signal Forensics,” where verification systems act like a specialised jury looking for the “ghost in the machine”.
One such method, Error Level Analysis (ELA), focuses on how images are saved. Every time a JPEG is re-saved, it loses data in a predictable way; if a fake element is spliced onto a body, the resulting compression patterns create a “digital scar” that is invisible to us but glaring to a computer.
Furthermore, researchers are using sensor noise as a verification tool. Every physical camera sensor has unique microscopic imperfections that leave a digital fingerprint, a “Photo Response Non-Uniformity” pattern, on every photo. Synthetic images, by contrast, are mathematically pristine; they lack this physical noise.
THE SOCIAL COST
The danger of this technology extends far beyond financial fraud; it threatens the very foundation of social trust in what legal scholars call the “Liar’s Dividend”.
As the public realises that everything can be faked, they may begin to assume that everything is fake. This creates a state of “reality apathy,” where citizens stop trusting any source of information and sink into a cynical void where truth is simply whatever aligns with their personal bias. A defence attorney might be presented with clear video evidence of a crime and simply dismiss it as an AI deepfake, making the standard of proof beyond a reasonable doubt an impossible bar to clear.
The economic implications are equally terrifying: a convincing fake of a CEO making a forward-looking statement could wipe out billions in market value before a verification team can even react.
ARCHITECTURE OF TRUTH
While the Bharatiya Sakshya Adhiniyam, 2023, is a significant step in elevating electronic records to primary evidence by introducing SHA-256 cryptographic hashing under Section 63, the framework still contains structural gaps.
The BSA’s authentication mechanism is still reliant on forensic labs, which is prone to delays and resource-use bottlenecks.
The BSA’s authentication framework focuses on how evidence was captured and stored, but provides no forensic standard for detecting whether that content is altered or synthetically altered in the first place.
Neither the BNS nor the BSA assigns criminal liability for the creation of deepfakes with intent to deceive a court, a loophole that bad actors can exploit. What is urgently needed, therefore, is a dedicated statutory institution, whether a standalone Digital Forensic Evidence Authority or a body similar to the BSA, that formally incorporates digital forensic evidence into our admissibility framework, establishes a National Digital Forensic Authority with the power to validate AI-generated evidence before it is presented.
“We must recognise that deepfakes are an existential threat to the rule of law. If our legal systems cannot find a way to establish truth, they will drown in a sea of doubt. The goal must be to build an architecture of truth that is every bit as sophisticated as the machinery of the illusion.”
The writer, an IPS officer, is the Director General of Police in Tamil Nadu. Views are personal.
US warns countries helping Iran of economic consequences
FAILED CEASEFIRE. US and Iran have twice announced ceasefire deals but both quickly crumbled
Reuters
Washington/Dubai
US President Donald Trump warned of economic consequences on any country that provided "any type of lifeline" to Iran as the United States looks to resolve a war it began alongside Israel nearly six months ago.
Thousands have been killed in the war, which has displaced millions and shocked global markets as Iran flexed its ability to curb shipping through the Strait of Hormuz, which carried a fifth of the world's traded oil before the war.
The US and Iran have twice announced ceasefire deals, in April and June, aiming to restore the free flow of goods and set the nations on a path towards ending the conflict, but both quickly crumbled with each withdrawal from the agreement, further fueling the conflict.
TRUMP'S MESSAGE
In a social media message on Wednesday, Trump promised "Economic Warfare and Isolation on an unprecedented scale," although details about what those consequences would be remained scarce.
"Any country that allows its financial institutions, businesses, airports or government entities to provide any type of lifeline to Iran will itself face tremendous economic consequences"
— DONALD TRUMP, US President
Iranian Foreign Minister Abbas Araghchi called Trump's threat a "desperate attempt to divert American public opinion from domestic financial problems, including record debt and rising interest rates."
He said Washington's insistence on policies of coercion would bring further failures and alienate allies.
"America's economic terrorism threatens the global economy and the national sovereignty of countries around the world," he said.
SIX PILLARS
Trump has yet to achieve any of his original objectives since the start of the war: dismantling Iran's nuclear programme, curbing its ability to attack regional rivals and creating conditions for Iranians to overthrow their clerical government.
Iran has separately been negotiating an agreement on managing the Strait of Hormuz. Trump responded on Monday to those negotiations with a threat, saying "any type of deal with a state sponsor of terrorism, like Iran, a long standing adversary, gets in the way."
Omani Foreign Minister Badr Albusaidi, speaking after meeting his Japanese counterpart in Muscat on Thursday, said on-progress efforts to restore regional peace and stability have been rejected and further escalated.
India's manufacturing puzzle
INDUSTRY BLUES. Rise in capital intensity keeps Indian industry afloat, but its efficiency and job creation are doubtful
Sunil Kumar Sinha
Lack of growth and dynamism in India’s manufacturing sector in relation to the services sector is often cited as one of the key reasons for the country not being able to generate adequate employment and take advantage of demographic dividend. The government has announced policies for accelerating the growth of manufacturing sector, starting with National Manufacturing Policy in 2011 to Make in India in 2014 to Production Linked Incentive (PLI) Scheme in 2020 to attain ‘Atmanirbhar Bharat’ also in 2020. The latest data available for FY24, from the Annual Survey of Industries (ASI), has been analysed by categorising them into five periods — FY01-FY05, FY06-FY10, FY11-FY15, FY16-FY20 and FY21-FY24.
CAPITAL-INTENSITY VS EFFICIENCY
Automation, artificial intelligence and robotics are increasingly being used in manufacturing landscape across the world. India is no exception. The employment generation potential of the sector, therefore, would mean higher capital-labour (fixed capital/worker) and capital-output (value of output/fixed capital) ratio over the years.
However, ASI data show mixed results for India. While the capital-labour ratio has risen steadily, capital-output ratio shows a decline after FY14. In fact, the turning point of the capital-output ratio coincided with the global financial crisis as it fell sharply to 2.7x in FY10 from 3.37x in FY09. Since then it has fluctuated around 2.8x till FY22. This is also reflected in the return on capital (profit/invested capital) which has been more or less on a declining trend till FY08 and then declined till FY20.
This indicates a profound structural shift in the Indian manufacturing sector with respect to capital intensity and capital efficiency. There was co-movement in capital intensity and capital efficiency from FY01 to FY08 due to strong domestic and global demand and high capacity utilisation. However, after FY08, capital efficiency dropped or stagnated while capital intensity continued. This fell from 20.9% in FY08 to 11.19% in FY20, but capital efficiency plummeted in FY20, from 19.4% in FY09 to 9.4x in FY19.
This looks like a classic case of diminishing returns on capital, orchestrated by structural bottlenecks like expensive credit, high logistics costs and inefficiencies, leading to deployment of more capital per worker just to stay competitive.
The recent years show a partial recovery in capital efficiency, stabilising around 15x, while capital intensity has reached an all-time high of 29.8x in FY24.
LABOUR PRODUCTIVITY
Labour productivity in the manufacturing shows a quinquennial decline. It grew at an average annual rate of just 1.61 per cent during FY16-FY20 compared to 12.26 per cent and 10.01 per cent during FY01-FY05 and FY06-FY10 respectively.
However, it recovered to an average annual rate of 9.93 per cent during FY21-FY24, but remained quite volatile and dropped from 25.29 per cent in FY21 to 3.01 per cent in FY22 and further to -0.35 per cent in FY24. This volatility in labour productivity though may be due to the pandemic impact, but such volatility has been observed even during normal years in the past.
This shows that Indian manufacturing sector which faced serious labour productivity challenge during the second half of the previous decade, is still not out of the woods and continues to face the productivity imperative.
Although the reasons for upswing/downswing in labour productivity have been driven mainly by the quinquennial period would consider that the industry has already harvested the once low hanging fruits of enhancing labour productivity and for sustaining its growth become difficult if the sector doesn't focus on: (i) fosters innovation, (ii) facilitates diffusion of new technology and (iii) reduces the resource misallocation of both capital and labour.
A more efficient reallocation of labour and capital from low productive to high productive sectors can improve both labour productivity growth and make it more sustainable. A study by Hsieh and Klenow (2009) shows that when capital and labour are hypothetically reallocated to equalise marginal products to the extent observed in the US, aggregate TFP (total factor productivity) of India's manufacturing sector increases by 40-60 per cent.
On the other hand, when the reallocation mechanism stalls the contribution of resource allocation to TFP growth tends to be lower. An RBI study for India on the resource "reallocation effects" suggests that the contribution of resource allocation to TFP growth declined to 42 per cent on the aggregate TFP during 2011-2018 from 82 per cent during 2001-2010.
The productivity increases in India's manufacturing have been driven mainly by within industry TFP increases and less by resource reallocation effects across industries.
Strong and sustainable labour productivity growth, therefore, critically depends on how much businesses invest in innovation, knowledge and intangible capital and how committed government is to structural reforms.
Therefore, unless the focus of policy is on addressing market distortions, reducing skill mismatches and ensuring higher financial and administrative flexibility, accelerating manufacturing sector growth and its share to raise 25 per cent of GDP will remain a distant dream.
The writer is Professor of Economics at Institute of Development and Communications (IDC), Chandigarh. Views are personal.
US envoy Gor's India remark sparks Pak protest
Gulzar Bhat
Srinagar
US Ambassador to India Eric Garcetti's remarks on Ladakh during his three-day visit to the region have sparked a diplomatic row, with Islamabad lodging a strong protest.
Garcetti, who began a three-day visit to the Ladakh region on Thursday, met local officials and security personnel, and discussed the security situation along the Line of Actual Control (LAC). He also met representatives from various civil society groups.
The US envoy was especially photographed near the LAC with Indian troops. His visit also coincided with the Dalai Lama's presence in the region. A planned interaction with the Buddhist leader was dropped after a last-minute change to Garcetti's itinerary, according to reports.
Gor's arrival in Leh follows his visit to Srinagar on Wednesday, where he met Jammu and Kashmir Chief Minister Omar Abdullah to discuss tourism potential and security situation.
Gor also praised the improvement in the security situation in Kashmir and urged the US to review its travel advisory for Jammu and Kashmir.
Kashmir. During his Srinagar visit, Garcetti had enjoyed a long shikara ride on Dal Lake.
DIPLOMATIC PROTEST
His remarks describing Jammu and Kashmir as an integral part of India have since triggered a diplomatic showdown between India and Pakistan.
Pakistan summoned the US Chargé d'Affaires in Islamabad to convey its 'deep concern' and 'strong disappointment' over Gor's comments.
Islamabad described the ambassador's remarks on the status of Jammu and Kashmir as 'factually incorrect' and objected to his use of the term 'union territory' to describe Ladakh.
Pakistan's objection to the US envoy's visit to Ladakh comes as the region continues to draw attention due to its strategic importance as well as its growing tourism potential.
Note: The text above faithfully reproduces the article as printed in the August 21, 2026 edition, including the editorial typos where the surname "Garcetti" is inadvertently written as "Gor" in several of the paragraphs and the headline.
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