G — Global

[1] France is paying more to borrow money

France’s 10-year government bond yield crossed 5% on October 21. That’s its highest level since 2002. Investors are worried about France’s growing debt and its struggle to control spending.

Governments borrow money by selling bonds. Buyers earn interest in return. When they lose faith in a country’s finances, they may start selling its bonds. Prices fall, and yields rise. A yield is the return a new buyer can earn. Higher yields also make fresh loans more costly for the government.

France already spends more than it collects in taxes. Its leaders have struggled to agree on a plan to close that gap. Political fights and protests have made it harder. Now, higher interest costs will put more strain on its budget. Bond buyers also want a much higher return from France than from Germany. Both use the euro, but lenders see France as a greater risk.

[2] SK Hynix drops plans to list its US chip business

South Korean chipmaker SK Hynix has dropped plans to list its US business, Solidigm, on the stock market. The company had been looking at an initial public offering, or IPO, to raise money for growth. Its shareholders raised concerns about the plan.

Solidigm makes chips and drives that hold large amounts of data. Data centres use them to run their systems. Demand for these products has grown as companies spend more on AI. SK Hynix wants to expand, but making chips takes costly machines and factories.

An IPO would let SK Hynix sell part of Solidigm to outside investors. It could use that money to grow the business. The price of those shares would matter a lot. If investors valued Solidigm too low, SK Hynix would have to give up a larger stake to raise the same amount. The company has now stopped the IPO review and will have to find other ways to fund its plans.

[3] Japan’s factory growth has slowed

Japan’s factories grew at their slowest pace in seven months in October. Its manufacturing Purchasing Managers’ Index, or PMI, fell from 54.1 in September to 53.3.

PMI is a monthly survey that tracks how businesses are doing. A reading above 50 means activity is growing. Below 50 means it is shrinking. Japan’s factories are still growing, but not as quickly as before.

Factories also reported weaker growth in new orders. Orders give them an idea of how much they may need to make in the coming months. When fewer orders come in, companies may buy less raw material or delay plans to expand. Japan sells cars, machines and electronic parts across the world. Weak demand from buyers abroad can hurt its factories at home. The survey showed that firms still hired workers in October, but new orders rose the least since March.

E — Economy

[4] RBI rejects every bid at a government debt auction

The Reserve Bank of India rejected all bids at a Treasury bill auction. The government wanted to borrow ₹23,000 crore. Investors asked for higher returns than the RBI was ready to accept.

Treasury bills let the government borrow for less than a year. They don’t pay regular interest. Instead, buyers get them at a discount. Say you buy a bill worth ₹100 for ₹95. When it matures, the government pays you ₹100. You earn ₹5. If you want a higher return, you might offer only ₹94. That means the government has to pay more for the same loan.

India’s short-term borrowing costs have been rising since the RBI raised interest rates earlier in October. Investors expect more rate hikes too. The RBI runs these auctions for the government and chose not to accept the bids. It can reject an auction, but the government still needs funds. Future auctions will show how much it has to pay to borrow.

[5] India’s businesses are growing, but hiring has stalled

India’s business activity grew at its fastest rate in four months in October. The country’s composite PMI rose from 55.9 in September to 56.7. This measure tracks both factories and service firms. Both reported more orders.

Hiring told a different story. Service firms stopped adding workers after nine months of hiring growth. They told the survey that their current staff could handle the extra work. Companies can often take on more orders without hiring. They may use their teams more fully or bring in tools that help people work faster. Some also wait before hiring to see if the extra work will last.

Firms got some relief from rising costs too. Raw materials and other inputs became more expensive at a slower rate than before. Businesses also raised their own prices more slowly. For now, the survey shows more work coming in, but very few new jobs.

[6] India’s trade deal with New Zealand takes effect

India’s free trade agreement with New Zealand came into force on October 20. New Zealand will now let Indian goods enter without import duties. India will also cut taxes on several goods coming from New Zealand.

An import duty is a tax on goods from another country. Take an Indian company selling shirts in New Zealand. A duty makes those shirts cost more. Removing it helps the company sell at a lower price and compete with other brands. The deal could help Indian firms selling clothes, leather goods, machines and processed foods.

India has kept some farm goods out of these tax cuts. Dairy is one of them. New Zealand is a major dairy exporter, while millions of small Indian farmers depend on milk sales. Cheaper imports could hurt their incomes. The deal also opens work routes for some Indian students and skilled workers. New Zealand has agreed to help bring $20 billion into India over 15 years. That’s roughly ₹1.88 lakh crore at ₹94 to the dollar.

I — Industry

[7] Indian refiners are exporting more diesel

Indian refiners exported 596,000 barrels of diesel a day in September. That’s up from an average of 482,000 barrels a day earlier this year. Global diesel supplies have tightened, and more buyers are turning to India.

India buys crude oil from abroad and turns it into petrol, diesel and jet fuel. Refineries then sell these fuels at home or overseas. They earn money from the gap between the cost of crude and the price of the fuel they sell.

Diesel prices can rise when the world has less of it. Russia and China have limited some exports. The conflict in West Asia has also hurt supplies. This has pushed more buyers towards Indian diesel. Refineries can earn more from these sales, though their costs have risen too. India still imports most of its crude oil, and those imports have become more expensive. The same supply problems that help Indian refiners sell diesel at higher prices can also raise the country’s oil import bill.

[8] Poultry farmers are losing money as feed gets expensive

Poultry farmers in India are facing losses of around 15% as animal feed gets more expensive. Prices of some feed items have risen by as much as 75%.

Feed is one of the biggest costs of raising chickens. Farmers use maize to help the birds grow. But ethanol makers now want more of the same crop. India turns maize into ethanol and blends it with petrol. We wrote earlier about India’s ethanol push and the growing amount of grain going into fuel. A weak monsoon has also hurt maize output. With more buyers chasing less grain, feed prices have climbed.

Farmers can’t always charge more for eggs and chicken to cover these costs. People may buy less if prices rise too much. Industry groups have asked the government to make maize imports easier. They also want grain that people can’t eat to be made available for animal feed.

[9] Starlink and Reliance disagree over satellite internet

Starlink has responded to Reliance Industries over the rules for satellite internet in India. Starlink says it has spent more than five years working with Indian regulators. Reliance says it wants fair rules for all companies.

The fight centres on the spectrum. These are the radio frequencies that carry mobile and internet signals. Jio and Airtel use towers on the ground. Starlink sends signals from satellites in space. Both need these frequencies, but they get them in different ways. Telecom firms have spent large sums buying spectrum at auctions. Satellite firms are set to get theirs directly from the government for a fee. Reliance says this could give them an unfair edge.

We wrote earlier about Starlink’s deals with Jio and Airtel. Both firms plan to help sell its services in India. They may also compete with it for users. Starlink says it is ready to launch, but it still has to clear the last steps before it can start serving customers.

C — Company

[10] Coal India and BHEL begin work on a ₹25,000 crore project

Coal India and BHEL have started work on a ₹25,000 crore coal gasification plant in Odisha. Their joint venture, BCGCL, has already awarded contracts worth ₹15,000 crore. BHEL has won ₹10,000 crore of that work and Larsen & Toubro ₹5,000 crore.

Coal gasification means turning coal into gas instead of burning it. Companies can then turn that gas into chemicals. The new plant will produce ammonium nitrate, which is used in explosives for mining and construction. Once ready, it aims to make 6.6 lakh tonnes a year.

India has plenty of coal but still imports many chemicals. The government wants to use more local coal to produce them at home. It has set a target to gasify 100 million tonnes of coal a year by 2030. This plant is part of that plan. It could help cut imports, though much will depend on whether it can make chemicals as cheaply as buying them from abroad.

[11] DLF plans ₹58,000 crore of new housing projects

DLF plans to launch housing projects worth more than ₹58,000 crore over the next two to three years. Most will target buyers looking for costly flats in Gurugram and Mumbai.

That figure is the total price DLF expects to sell these flats for. It isn’t the amount the company will spend to build them. Builders often start selling flats before they finish work. Buyers pay in stages, which helps fund construction.

DLF is focusing on luxury housing because wealthy buyers have kept spending. We wrote recently about how India’s housing boom has narrowed. Sales of cheaper homes have fallen, while the ₹2–5 crore segment has grown. DLF’s plans follow that shift towards more costly homes.

These projects take years to build and need a lot of money. DLF expects wealthy buyers to keep buying as it puts more flats up for sale. If it builds too many at once, it may struggle to sell them all.

[12] SRF is investing ₹600 crore in battery foil

Chemical company SRF has announced a ₹600 crore plant in Madhya Pradesh to produce aluminium foil for batteries. Its subsidiary, SRF Altech, will build it in two stages. The first is due by September 2028. Once complete, the plant will turn out about 12,000 tonnes of foil a year.

Battery foil is far thinner than the kind used to wrap food. In a lithium-ion battery, it forms the base of the positive side, called the cathode. It collects electric current and carries it to the outside circuit. Even small flaws can affect how well the battery works, so the foil must meet strict quality standards.

India is building more batteries for electric vehicles and power storage, which will raise demand for the materials inside them. SRF Altech already produces aluminium foil for packaging, so this is a step into a harder product. Battery makers test and approve new vendors before placing large orders, and SRF will have to prove its foil can match the quality and price of established players.

That’s it for this week.

A few of these stories are still developing, so we’ll be keeping an eye on them. But if there’s one you’d like us to write about properly, let us know in the comments.

See you next edition :)

Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. India’s AI boom runs through a strand of glass

AI data centers are driving a massive stock rally for Indian optical fiber makers like STL and HFCL. While manufacturing the highly precise glass “preforms” for these cables yields massive profit margins, companies face a severe bottleneck: China controls 91% of the germanium refining needed to make them. Caught between soaring raw material costs and delivery delays stretching up to a year, Indian manufacturers are now walking a dangerous tightrope—locking in lucrative, multi-year contracts with US tech giants without being able to secure long-term raw material guarantees from their own suppliers.

2. Who really gains from India's push for maize ethanol?

India's latest ethanol tender forces distilleries to shift from sugarcane to grains like maize and rice, but strangely cuts the price paid for maize ethanol to ₹69 per litre. Previously, fixed high ethanol prices allowed distilleries to reap massive margins whenever actual maize market prices fell below the Minimum Support Price (MSP), leaving farmers to absorb the volatility. With fuel targets now directly competing against poultry feed demand and volatile rice prices, the government's shifting price mandates highlight the delicate balancing act between fueling cars, feeding livestock, and protecting farmer incomes.

India’s AI boom runs through a strand of glass

Every message you send, every video you stream, and every answer you get from ChatGPT travels across the internet as pulses of light, through optical fiber cables, which contain highly-precise, fine strands of glass.

This year, while India’s benchmark Nifty 50 index is down 13%, Sterlite Technologies (STL) a company that makes this glass and the wires that cover it, is up 804% to-date from January 2026, making it the single best performer on not just the Nifty 50, but also 500. Its competitor, HFCL, has more than doubled in the same period.

Procedurally, though, making that glass is its own difficult ordeal. On top of that, it also depends on a critical mineral called germanium. But these hardships act as their own barriers of entry, affording a moat to these companies. What also helps is that much of this hyper-growth has to do with the fact that AI data centers require lots of these cables.

So, what does it take to build the humble fiber optic cable, and where do we stand in its value chain?

From copper to light

Before we get into that, it’s worth understanding why we need fiber optics.

For most of the history of telecom, data travelled as electrical signals down copper wires. But copper has a physical limit: the faster you push data through it, the quicker the signal fades over distance. Copper wires also pick up stray electrical noise from their surroundings, which affects the transmission of data signals.

However, light moving through glass has neither problem, so theoretically, it can carry far more data. That is why optical fiber quietly took over the world’s telecom backbones between cities, undersea cables across oceans, home broadband, and mobile towers.

Naturally, fiber is taking over the insides of data centres. Connection speeds inside AI servers climb towards 800 gigabits and 1.6 terabits per second, enough to download a dozen 4K movies in one second, but copper signals fade out within a couple of metres. Copper still links chips inside a single rack, but anything longer than that needs fiber.

(Pre)form is temporary, glass is permanent

Making fiber optics is a hyper-precise chemical process that happens in three distinct stages.

The first phase finds itself inside a clinical room, where a compound of silicon and chemical vapours are deposited microscopically layer by layer, and then heated at high temperatures into a thick, solid, crystal-clear glass cylinder. This rod is called a preform, and it is the most important building block of a fiber optic.

To make sure light actually stays inside the fiber rather than leaking out the sides, the core of the preform is laced with a compound of germanium, while the outer cladding is laced with fluorine. This is done to change the glass’s refractive index, which affects how much it slows down and bends light.

Next, this preform is heated to roughly 2,000°C. As the tip melts, gravity pulls down a single, continuous, hair-thin strand of glass. Because the glass is blazing hot and fragile, it has to be cooled down in fractions of a second using helium gas. A single kilogram of preform can be drawn into roughly 35 kilometres of fiber.

Finally, these individual glass strands are colour-coded, bundled together into loose tubes or flat ribbons, and wrapped in rugged plastic and steel jackets into a cable.

A standard telecom cable running down a highway holds 144 or 288 individual fibers. But now, data centres are a different beast entirely, and an NVIDIA Hopper AI computing rack needs about 4,000 fibers. The newer Blackwell architecture pushed that to 16,000.

Making a preform requires years of proprietary clean-room chemistry and vapour-deposition know-how, and building a greenfield preform plant takes 18 to 24 months just to construct and stabilise. Even if you build the factory, you have to secure the raw inputs, germanium and helium, which are themselves in a global stranglehold; we’ll come to this eventually.

As a result, very few companies have the engineering know-how to build them. According to HFCL’s management, out of roughly 20 optical fiber cable makers in India, only two can actually manufacture high-density cables with ~7,000 fibers.

Where does the money lie?

In this whole sequence of activities, the preform is where most of the value lies. It accounts for 60-70% of the total value added in a single bare fiber. Drawing that fiber from a preform adds about 15-20%, and bundling it into a cable adds the rest.

Now, a single finished cable has hundreds, even thousands of bare fibers. One of those fibers makes up about 60% of the cost of a finished cable. So, a preform accounts for roughly 45% of the cost of a finished cable with many bare fibers.

Now, from the perspective of a customer installing these cables (like a telecom company), the cost picture changes. Most of the budget goes into digging trenches, getting municipal permits, and labour charges. There, according to The Ken, the finished cable is only 15-20% of the total project cost, which means a preform would make up 6-8% of the final bill.

Barring a few exceptions, most wire and cable companies in India operate in this final stage, buying ready-made glass fiber from outside and simply wrapping it into cables.

Making your own preforms captures the fattest margin in the value chain, simply because it involves technical know-how the most. But besides that, you also have to find a secure supply of helium (which we’ve covered before) and germanium.

The germanium bottleneck

Optical fiber is germanium’s single biggest customer. Out of the 343 tonnes of germanium the world consumed in 2025, roughly 40% went into fiber optics, according to an August 2026 report by S&P Global. The rest goes mostly into military-grade night-vision goggles and high-efficiency solar cells for satellites.

Germanium is a critical mineral with a quirky supply problem: nobody mines it directly. It exists in trace amounts inside zinc ores and coal fly ash, and is recovered almost entirely from the leftover residue at zinc smelters. It doesn’t economically make sense for mining companies to strip a new zinc mine purely for the purpose of obtaining some germanium.

So, who actually goes through the trouble of extracting and refining this leftover smelter sludge?

Well, much like many other critical minerals, China has a chokehold on not just germanium mining, but also refining; 91% of the world’s primary germanium metal refining happens inside China.

Yet again, to no one’s surprise, Beijing has turned this monopoly into a geopolitical lever with export controls.

Indian executives are already feeling the heat on their earnings calls. Finolex Cables’s management noted that germanium is now a restricted item with long lead times. STL’s management similarly admitted that they now book new customer orders keeping in mind the availability of their raw materials. Naturally, as downstream of that, bare fiber is also seeing a shortage.

There do exist alternatives; HFCL, for instance, imports over 90% of its glass preforms from Japan. But outside of China, germanium prices have increased, and for companies buying germanium directly, the market is competitive.

Then, in late 2025, a flurry of massive AI data centre orders skyrocketed demand, which only exacerbated a supply crunch.

Standard telecom bare fiber leaped from $5-6 (₹474–569) per kilometre in December 2025 to a peak of $17-18, before settling around $12-13. Within this, ultra-thin data-centre fiber (200-micron A2 fiber) has fetched $18-28 per km, and up to $50 per km in spot deals. In the US, if you place a new order for optical fiber cable today, you may have to wait 40 to 52 weeks for delivery.

While hyperscale data centres are the largest buyer in the room, demand is pulling from two other new directions at once.

One, there is a type of military drone that rolls out optical fiber up to 20 kilometres long in order to prevent enemy electronic warfare systems from jamming their radio signals. Next is rural broadband telecom: India currently deploys only about 25 million kilometres of optical fiber a year, compared to over 400 million kilometres in China, leaving a long-term runway at home.

So, naturally, every major player is racing to pour concrete and build new capacity. STL has planned a INR 3000 crore manufacturing plant, while HFCL has planned a INR 1800 crore optical-chain investment. But since building and stabilising a preform plant takes 18-24 months, new glass supply won’t meaningfully hit the market until late 2027 or 2028.

India’s AI game

This year-long waiting list is now showing up in the quarterly results of India’s two biggest export-ready cable makers, STL and HFCL.

In Q1 FY27, STL’s revenue jumped 87% year-on-year to ₹1,910 crore. In FY26, data centres made up just 1% of STL’s revenue, but now that share has jumped to 21%, and management expects data centres and enterprise together to reach up to 50% of revenue. Over half its revenue came from North America.

HFCL’s numbers show a similar surge. In Q1 FY27, its revenue more than doubled from ₹871 crore to ₹1,915 crore, while its EBITDA margin jumped from ~5% in Q1 FY26 to ~23%. This current quarter was HFCL’s best ever, as revenue surged 144% over the same quarter last year to ₹2,542 crore, EBITDA margins expanded further to ~26%, and net profit jumped more than five-fold to ₹394 crore. Much of this growth is owed to demand from hyperscalers like Microsoft, Amazon, and Google.

Now, a good chunk of this profitability is owed to smart past purchases. Finolex Cables, for instance, saw its communication cable operating profit jump 40x over last year, but part of it was selling cables at today’s prices using cheap fiber inventory it bought last year. But that cheap inventory will eventually run out. That’s why, in the face of expensive germanium and preforms, Finolex’s management now expects its margins to normalise back to the low double digits.

Interestingly, Indian cable makers are also turning customers away simply because they can’t handle this overflow of demand without adequate demand. HFCL’s Managing Director Mahendra Nahata put it bluntly on an earnings call:

“If I say yes to one, I have to say no to the other one.”

And that explains the catch: While Indian cable makers are locking in multi-year commitments to sell finished fiber cables to American tech giants, their own upstream suppliers of glass preforms and Chinese germanium still refuse to commit to prices or volumes beyond a single year.

That is the real tightrope Indian cable makers are walking today. On the surface, these companies are high-margin plays in the data-centre boom. Underneath, they are navigating a delicate industrial squeeze, caught between tech giants demanding five-year guarantees on glass, and a raw material bottleneck.

Who really gains from India’s push for maize ethanol?

On October 16, as part of the push to blend our petrol with ethanol, India’s oil companies invited bids for around 1,100 crore litres of ethanol for 2026-27.

This tender also has an interesting caveat: oil companies will no longer buy ethanol made from sugarcane juice or B-heavy molasses, which are traditionally used to make sugar. Most of their procurement has to come from ethanol made from foodgrains like rice or maize, or from C-heavy molasses, the syrup left after most of the sugar has been extracted.

You’d think grain distilleries would be delighted with this news. India has been shifting most of its ethanol production away from sugar, towards maize and rice, and this condition would only accelerate it.

But shockingly, that same tender cuts the price paid for maize ethanol from ~₹72 to ~₹69 per litre.

Why cut a price that oil companies had spent years raising to encourage maize production? To understand that, we need to look at what the earlier incentive achieved, and what it didn’t.

The maize promise

In January 2024, oil companies raised the price paid for maize ethanol. India needed more fuel without relying only on sugarcane, and farmers could use another buyer for maize beyond poultry farms and food companies. If you paid distilleries more for ethanol made from maize, they’ll buy more of the crop. That extra demand could help farmers get better prices.

This did help build a market. According to the All India Distillers’ Association, maize supplied more ethanol than any other single crop in the 2025-26 supply year through September. The Economic Survey also says that, among other things, higher ethanol prices helped make maize farming more attractive.

But the government had another hope. Since maize requires less water than paddy, the government wanted farmers to switch from paddy to maize. But The Economic Survey found that paddy farming hadn’t fallen as expected. Instead, in states like Maharashtra and Karnataka, maize was competing with crops besides paddy (like pulses, oilseeds and cotton) for land.

Funnily enough, this might set up a weird trade-off within India’s import mix. Ethanol is a bet against our import crude bill. But we also import a lot of edible oil (like soybean and sunflower), which comes from oilseeds. If farmers grow maize instead of oilseeds, India could end up easing one import problem while putting pressure on another.

There’s also another catch. Supply of maize might still be outpacing the increasing demand.

As per farm-price data, government mandi figures show that average maize prices stayed below the government’s Minimum Support Price (MSP) for much of 2025 and 2026. In November 2025, maize sold for around ₹1,635 per quintal, against an MSP of ₹2,400. That is a massive gap between the price floor mandate and the going market rate.

Now, farmers and distilleries faced two very different prices. Farmers sold maize to traders and other buyers at market rates, which changed with each harvest. Distilleries, however, sold ethanol to oil companies at a price set in advance.

The government’s own data shows that maize ethanol stayed at ~₹72 per litre through the 2025–26 supply year, even as crop prices rose and fell. This meant distilleries could spend less on maize when it became cheaper, while still receiving the same price for their ethanol. A fixed selling price doesn’t offer a guaranteed profit to them, though, since costs can increase. But on a good day, it gives the best of two worlds: certainty and expanded margins.

This was evident in the earnings call of a publicly-listed grain-based ethanol producer, Gulshan Polyols. It said lower maize and broken-rice costs helped improve its operating margins, which more than doubled in FY26, with ethanol making up most of it. Gulshan uses both maize and rice, so we can’t tell how much of that gain came from maize alone. But it shows how much grain costs matter, even when the price paid for ethanol stays the same.

But on the flip side, what does this imply for farmers? A lower maize cost for a distillery basically eats into the surplus a farmer earns. Their crop prices are more volatile, often determined by what the distillery market demands.

Still, this doesn’t mean ethanol failed to help farmers. Without demand from distilleries, maize prices might have been lower. And prices below MSP don’t always mean farmers made losses.

Oddly enough, the poultry industry has the opposite complaint: feed makers say maize has become too expensive. In late September this year, poultry buyers were paying ₹27–28 per kg, well above the government’s support price. They blamed some of the pressure on ethanol plants competing for grain.

That sounds odd when we’ve just seen farmers selling below MSP. But the two figures come from different months and markets.

You see, the low mandi average was from November 2025. Poultry buyers were reporting higher costs nearly a year later, after weak rains had raised fears of a smaller harvest. They also need grain of the right quality, often delivered far from where it was grown.

So both accounts can be true. Ethanol demand may support farmers in some places while raising costs for feed makers elsewhere. It’s hard to judge a national policy using one crop price. But what it does speak to is volatility in crop prices.

Distilleries also face a problem that has little to do with maize prices. India has built more ethanol-making capacity than its blending programme needs. Even a profitable plant can struggle if it doesn’t receive enough orders.

The trouble with cheap rice

So far, we’ve only mentioned maize. But that way, rice runs into the same issue that maize did.

Under the new tender, oil companies pay about ₹69 for a litre of maize ethanol, ₹64 for ethanol made from damaged grains, including some broken rice, and about ₹60 for ethanol made from government rice. Rice is generally considered cheaper than maize, hence the prices.

But those are the prices paid for ethanol. They don’t tell us what it exactly costs to produce ethanol using rice.

Take rice stocked by the Food Corporation of India (FCI). The government releases some surplus rice to distilleries at a price it sets. A July parliamentary reply showed that FCI sold rice to ethanol plants at 40% below its average acquisition cost. The government says this isn’t a direct subsidy to distilleries because the rice is sold under its existing pricing scheme.

But FCI rice is set to become costlier for distilleries from November, while the latest tender keeps the FCI-rice ethanol selling price unchanged. So what looks like cheap ethanol to an oil company may come with thinner profits for its producer.

Broken rice, which is used in food, animal feed and ethanol, has a different problem.

Until March 2025, broken rice was banned from being exported. But India had built up such a huge stockpile as a result that it only made sense to reverse the ban.

However, that also opened up distilleries to external competition with other buyers for the same grain. S&P Global reported that export prices had risen by early October as overseas buyers and ethanol plants competed for supplies.

If more distilleries turn to broken rice, its price could rise further. And even then, oil companies can’t simply choose every cheap offer. Existing supply deals, transport needs and other tender rules also affect who gets an order.

Each crop, then, has its own set of problems that they face now. Maize distilleries face a structurally-lower selling price, plants dependent on FCI rice will face higher input costs, and broken-rice plants face export competition. The cheapest ethanol to buy may not always be the cheapest to make.

- This edition of the newsletter was written by Zarieus & Mridula.

Tidbits:

[1] RBI signals rate cuts are off the table as inflation risks rise

Minutes from the RBI’s October MPC meeting show all six members backed the 25-basis-point repo rate hike to 5.5%, while two opposed the shift to a calibrated tightening stance. The committee expects inflation to reach 6% in the third quarter and indicated that rate cuts are unlikely in the near term.

Source: Business Standard

[2] Finance Ministry gives in-principle nod to solar polysilicon manufacturing scheme

The Ministry of Finance has given in-principle approval to a proposed incentive scheme for solar polysilicon manufacturing. The initiative aims to build domestic capabilities in the critical upstream solar supply chain, though it still requires final clearance from the Union Cabinet.

Source: Business Standard

[3] Large non-bank lenders flag early signs of stress in gold loans

Bajaj Finance and Piramal Finance have flagged emerging repayment risks in the fast-growing gold loan market. Concerns include rising overdue loans and borrowers using fresh gold-backed credit despite already having delinquent debt elsewhere.

Source: Business Standard

[4] India’s infrastructure output rises 7.9% year-on-year in September

India’s core infrastructure output grew by 7.9% year-on-year in September, accelerating from an upwardly revised 5.9% in August. The expansion was driven primarily by strong growth in electricity generation, coal, steel, iron ore, and refinery production.

Source: Reuters

[5] Centre plans 5 GW agrivoltaics push under PM-KUSUM 2.0

The government plans to add about 5 GW of agrivoltaic capacity over three years under PM-KUSUM 2.0, allowing solar generation and farming on the same land. MNRE is considering support to offset the roughly 25% higher installation cost of such projects and make them competitive with conventional ground-mounted solar.

Source: Livemint

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Bajaj Finance has started behaving like a bank

While Bajaj Finance continues its rapid expansion with loan book growth surging 26% year-on-year to ₹5.85 lakh crore, the non-banking lender is shifting toward bank-like risk management. Facing impending rate hikes, regulatory restrictions on bullet gold loans, and proposed bans on revolving credit, the company has proactively raised ₹17,500 crore in equity, tightened its leverage ceiling, and built additional loss provisions to fortify its massive balance sheet.

2. India bets on better weather forecasting

To tackle increasingly volatile climate patterns and their severe impact on agriculture and food inflation, India is scaling up its ₹2,000-crore Mission Mausam with a proposed ₹10,000-crore expansion plan. Supported by new supercomputers, higher-resolution 6-km forecasting models, and an expanded Doppler radar network, the initiative aims to deliver hyper-local, 5-km-grid weather alerts and improve extreme weather prediction accuracy by 2030.

Bajaj Finance has started behaving like a bank

For most of its life, Bajaj Finance has been the fast, aggressive kid of Indian lending. It made no-cost EMIs a household habit, lent to people banks often wouldn’t, and grew at a pace no bank could match.

It’s still growing fast. Its loan book rose 26% over the past year, quicker than when we asked whether its best days were behind it almost two years ago. But listen to how it talks now, and it sounds less like a challenger and more like a bank. It’s raising capital it doesn’t need, lowering the ceiling on its own borrowing, and setting aside money for losses it hasn’t seen yet.

That’s no coincidence. By its own reckoning, Bajaj Finance is about to become bigger than HDFC Ltd was when it merged into HDFC Bank. At that size, mistakes stop being cheap. This quarter showed that caution.

Another quarter, another ₹38,000 crore

Just how big is it?

Bajaj Finance’s assets under management (AUM), the total value of the loans it manages, now stand at ₹5.85 lakh crore. In these three months alone, it added ₹37,680 crore.

For perspective, Bajaj Finance’s entire loan book in FY08 was about ₹2,500 crore. Last quarter, it added fifteen times that. Even Rajeev Jain, its vice chairman and managing director, sounded a little surprised on the earnings call: “These are fascinating numbers even for me.”

It now has 12.9 crore customers, roughly one in every eleven Indians. Profit grew 29% to ~₹6,400 crore.

This comes after a rough patch. A year ago, Bajaj Finance cut its FY26 growth guidance to 22–23%, from 24–25%, after stress in its loans to small businesses forced it to slash volumes there. It ended FY26 at about 22%, and began this year guiding for 22–24%. Now it expects 26–27%, above the 23–25% it considers its long-run normal.

One of our worries last time, that it was running out of new places to set up shop, turned out to be right. Its count of locations has actually fallen over two years.

Growth simply found other roads: twice as many gold loan branches, new microfinance branches, and existing customers, who now take nearly 68% of its new loans, up from 58% in FY25.

The rate hike Bajaj Finance hasn’t felt yet

We explained last week why the RBI is fighting inflation on three fronts. One of those fronts is interest rates: in October, it raised the repo rate to 5.50%, its first hike since February 2023. Bajaj Finance is bracing for two more this year, which would take the rate to around 6%.

That matters more to an NBFC than to a bank. Banks fund much of their lending with cheap savings and current account deposits. NBFCs don’t have those, so Bajaj Finance borrows almost everything it lends: about 40% through bonds, 30% from banks, 14% through fixed deposits (down from 21% in early 2024), and the rest from short-term paper and overseas loans. When rates rise, all of it eventually gets costlier, the short-term stuff first.

And yet, this quarter, Bajaj Finance’s cost of funds actually fell, by 9 basis points to 7.31%. Stranger still, its net interest margin, the gap between what it earns on loans and what it pays on borrowings, shrank anyway, by 10–12 basis points.

The fall in costs is the easy part. The hike only came a week after the quarter ended. Until then, Bajaj Finance was still enjoying the tail end of the RBI’s 125 basis points of rate cuts in 2025, and it had hedged a good chunk of its borrowing costs before rates turned.

The shrinking margin comes from the other side: what Bajaj Finance earns. Its fastest-growing businesses are also its safest, and safety pays less. Home loans, loans against shares and gold loans, all backed by collateral and carrying lower rates, went from about 40% of its book to 43% in a year.

The high-yield stuff stagnated. Small-business loans barely grew, an old two-wheeler book is running off, and Bajaj Finance is deliberately turning away some of its most indebted borrowers, who pay the most. So its yields fell faster than its borrowing costs.

Management now expects margins to shrink a little more this year than the 10–15 basis points it had guided for, and hopes to make up for it by running leaner and losing less to bad loans.

Why Bajaj Finance chose to lend less against gold

Gold loans are one of those safer, collateral-backed businesses, and Bajaj Finance’s fastest-growing large one. The book more than doubled in a year, and it plans to have about 40% more gold loan branches by the end of this financial year.

Yet this quarter, the share of its gold loans in “Stage 2” jumped from under 1% to about 4.5%. Stage 2 is where a borrower has fallen behind by over a month but hasn’t yet defaulted. The trigger was a new RBI rulebook for gold loans that kicked in this April.

To see why, you need to know how most gold loans in India work. They’re “bullet” loans: you pledge your jewellery, take the cash, and repay principal and interest in one go at the end. The RBI caps how much a lender can give against your gold, at up to 85% of its value for smaller loans. Under the new rules, for bullet loans, that cap covers everything you’ll owe over the life of the loan, interest included. That wasn’t the case earlier.

That created a curious incentive. Say your gold is worth ₹1 lakh, and the interest rate is 12% a year. On a 12-month loan, what you owe at the end must stay under ₹85,000, so you can only borrow about ₹76,000 today.

What happens if you make it a three-month loan? There’s far less interest to account for, so you could borrow about ₹82,500 against the very same gold.

So lenders, Bajaj Finance included, rushed to offer three-month loans after the rule change in April. The catch is that the borrower now has to come back to the branch every three months to pay interest and renew. Many don’t, often not because they can’t pay, but because it’s a hassle.

That’s what produced a jump of over ₹1,000 crore in stage 2 gold loans. These shorter loans simply fell overdue sooner.

Bajaj Finance didn’t like this, and scrapped the three-month loans in August, even though much of the industry still offers them. It went back to 9–12 month loans, with the option to pay interest monthly or quarterly. That should bring the spike in stage 2 loans back down.

Going back to longer loans also means smaller loans than its rivals offer, and slower growth. Management seemed fine with that.

Two rules still being written

The gold rules are already in force. Two other changes are still proposals, so for now they’re risks rather than rules. But both go after products central to how Bajaj Finance makes money.

The first is about revolving credit. In August, the RBI proposed that most NBFCs should offer only term loans, where you borrow a fixed sum and repay it on a set schedule. They’d no longer be allowed to offer revolving credit, where you get a limit you can borrow from, repay, and borrow from again. Only NBFCs licensed to issue credit cards would be exempt. The RBI’s worry is that borrowers might use such credit lines to pay off older dues, and slip into a cycle of debt.

That’s exactly how Bajaj Finance’s “Flexi” loans work, and analysts estimate they make up somewhere around 13% of its book. Management says even a complete ban would only cause a “transient” dent in growth and slightly thinner margins. It isn’t waiting to find out, either. From November 1, it’s launching new term-loan products meant to keep some of that flexibility within the rules.

The second is insurance. In September, the insurance regulator, IRDAI, proposed sharp caps on the commissions banks and NBFCs earn for selling insurance. It also wants to stop lenders from making insurance compulsory with a loan.

This isn’t small change. Fees make up about 28% of Bajaj Finance’s pre-tax profit, and selling third-party products like insurance accounted for over a third of those fees. Management says it can still grow fee income at 15–18% a year, and that its plans are ready for when the final rules land.

Where the stress has moved

Regulation is a risk Bajaj Finance can at least see coming. Bad loans are harder to read. When we last wrote about Bajaj Finance, the worry was stress in unsecured retail loans, and that got worse before it got better. Over the year, gross NPAs in urban personal loans fell from 1.60% to 1.43%, and in rural personal loans from 1.65% to 1.13%.

But the stress just moved to other segments.

The clearest spot is loans to small businesses, or MSMEs. This book grew just 3% in a year, while its gross NPAs rose from 2.5% to 3%. Management calls this “pure mathematics”: when a book barely grows, the same bad loans look bigger as a share of it. We’ve seen that effect before, with the captive two-wheeler loans from Bajaj Auto showrooms we wrote about last time. That book has since shrunk another 66%, and its NPA ratio has ballooned to 18.45%.

But MSMEs are only partly a denominator story. In rupee terms too bad MSME loans grew by roughly 25% over the year, while the book grew just 3%. That’s older loans going sour, not just arithmetic. Bajaj Finance tightened how it lends to small businesses in July 2025, says loans written since then are behaving well, and expects double-digit growth to return in the second half.

The newest worry is rural India, and the weather.

India’s monsoon ended about 13% below normal this year, partly because of El Niño, as we wrote last week. Maharashtra and Karnataka had it far worse declaring drought in most of their talukas.

A failed monsoon hits lenders slowly. Crops fail and farm incomes fall, and then so do the incomes of the labourers, shopkeepers and traders around those farms. It can be months before any of that shows up as missed EMIs.

So far, it hasn’t clearly shown up at Bajaj Finance. Rural personal loans look healthier than they did a year ago. They aren’t waiting for the numbers to turn, though. It says it tracks all of India’s roughly 720 districts, and has spent the last few months cutting back on microfinance and other lending in drought-hit ones, with Maharashtra the worst affected.

It also set aside an extra ₹337 crore this quarter as a “macro overlay”. A lender’s provisions usually come from models built on past data, and those models struggle with things that haven’t happened yet, like a drought, oil at $100–110 a barrel, and the inflation that follows. An overlay is a cushion on top, based on management’s judgment. Bajaj Finance’s is aimed at unsecured loans to self-employed borrowers, whose incomes take the first hit from droughts and price spikes in a way salaries don’t.

And it’s only one of the cushions Bajaj Finance is building.

Bulletproofing a giant

The biggest cushion comes in now, when its board approved raising up to ₹17,500 crore of fresh equity: ₹11,700 crore from institutional investors, and ₹5,800 crore from its parent, Bajaj Finserv.

The odd thing is that Bajaj Finance doesn’t need this money. Its capital adequacy ratio is 20.3%, well above the 15% the RBI requires.

What it’s really doing is moving its own goalposts. Bajaj Finance has always raised capital before its leverage, or how many rupees it borrows for every rupee of its own, got too high. In 2017 and 2019, it raised money with leverage above six times. Its last raise, of about ₹10,000 crore in 2023, began at about 5.1 times. Leverage is back at 5.1 times today. But this time, it has also lowered its ceiling to 5–5.5 times, from 6 earlier, and 7 before that.

It even had another way to raise the money: selling down its stake in Bajaj Housing Finance, which it must cut from 87% to 75% within three years anyway. It chose to give that business more time.

So why raise money it doesn’t need? Because of scale. At ₹5.85 lakh crore, a rate hike, a rule change or a bad monsoon is no longer a passing headwind for Bajaj Finance. Each one lands on a balance sheet that the whole system now has a stake in, and one that regulators watch more closely the bigger it gets.

Hence the cushions: more capital, less leverage, extra provisions, and nearly ₹20,000 crore of cash on hand. Bajaj Finance still grows like the fast, aggressive kid of Indian lending. It has just started thinking like a bank.

India bets on better weather forecasting

Most of us don’t think about weather forecasts beyond whether to carry an umbrella. But for millions of Indians, a forecast decides when to sow, when to harvest, whether to go to sea, and when to leave home before a cyclone hits. That, in turn, also shapes what the rest of us pay for commodities like vegetables and grains. With climate change, those prices are only getting more volatile.

What would help make it more predictable is better weather forecasting. That is the bet India is making with Mission Mausam, a ₹2,000 crore, two-year scheme to make the country “weather-ready and climate-smart“.

Two years since, that bet may be about to get much bigger. In September 2026, a ₹10,000 crore plan to expand the mission was tabled with the Finance Ministry. It’s a good time, then, to look at the progress so far, and how it has advanced how we predict climate vagaries.

First, what has already changed

The standard weather forecast is its own intricate process.

In it, a weather model splits the country into a grid of squares and works out the weather in each square. The smaller the squares, the sharper the picture. India’s two main weather models work with squares 12 km wide. A newer one, the Bharat Forecasting System, now works with squares just 6 km wide. That is sharp enough to forecast for individual blocks, and over time, for panchayats.

But this is harder than it sounds. If you halve the size of the squares, you get four times as many of them to calculate for the same map. India also has some of the hardest weather in the world to predict.

That is why computing power matters. In September 2024, the Prime Minister inaugurated two new supercomputers under Mission Mausam, called Arka and Arunika. Along with a separate AI system, they have more than tripled the ministry’s computing power since 2018, when its earlier supercomputers, Pratyush and Mihir, gave it 6.8 petaflops. One petaflop is a thousand trillion calculations every second. Forecasters now also get help from three AI-based global weather models.

The second big change is in how forecasts reach people. For instance, in IMD’s Mausamgram platform, when you type in a PIN code, you can get village-level forecasts with updates by the hour for the next 36 hours, and further ahead up to ten days. Forecasts now go out on WhatsApp to panchayat members, who can pass them on. And under Mission Mausam, IMD has built a tool which gives farmers advice suited to their location, their crop and how far along that crop is.

However, it’s a little harder to measure the actual impact of these changes. The government says forecasts of severe weather have become 40% more accurate in recent decades compared with the decade before. But that covers many years of work, most of it before Mission Mausam began. What the mission alone has added has not yet been published.

What Mission Mausam promised

Sharper models and faster computers only help if they’re fed good information. That is the heart of Mission Mausam: putting many more eyes and ears on India’s weather.

But part of the problem lies in where the measurement systems that collect data are located.

In late 2024, India had 39 Doppler weather radars, which are the main tool for warning people about thunderstorms, heavy rain and approaching cyclones beforehand. Most of the big, long-range ones, which can see about 400 km, stand along the coast, in cities like Visakhapatnam, Paradip, Chennai, Kochi, and Mumbai.

That’s no accident, either. India’s weather service was set up in the 1870s partly to warn ports and coastal towns about cyclones, and the coast is still where its strongest radars stand. Smaller radars, which see about 100 km, are scattered across the Himalayas, from Srinagar and Leh to Kufri and Mukteshwar, where mountains block the view of the bigger ones.

The rest sit in large inland cities such as Delhi, Nagpur, Bhopal, Lucknow and Patna. Alongside the radars, IMD sends up weather balloons twice a day from 56 stations, which measure the air up to about 30 km above the ground.

The mission plans to set up a long list of instruments, like doppler weather radars, weather balloon stations, wind profiler radars, disdrometers that count raindrops, and so on. Each of them tackles a different feature of weather. All of it is meant to add up to three things by 2030: warnings of severe weather for every 5 km by 5 km patch of the country, alerts that reach every household, and forecasts that are 10–15% more accurate.

But where the new instruments will go is less clear. The government says locations are picked based on what forecasters need, how exposed an area is to dangerous weather, and what resources are available, but it hasn’t published a full list. What it has shared is the mix. Of the 86 new radars it listed in July 2026, 45 are the smaller X-band kind, alongside 29 medium-range C-band and 12 long-range S-band radars. An X-band radar, for instance, sees about a quarter as far as the big coastal ones, so it’s built to watch a smaller area more closely.

Where the build-out stands

Now, the plan was for the first phase to run from 2024 to 2026. When the mission was announced, the ministry’s Secretary said the aim was to have a wider network of radars, wind profilers and radiometers in place by March 2026.

By March 2026, most of these instruments were still being bought. The government told the Lok Sabha that they were “in advanced stages of procurement.”

Radars give the clearest picture. In March, India had 48 working Doppler weather radars, run by IMD, IITM and ISRO. By July, it had 50. That count includes radars set up long before the mission began, and the government has not said how many of them came from Mission Mausam.

The money tells a similar story. The mission spent ~₹516 crore in its first year, 2024-25. For 2025-26, the government set aside ₹1,329 crore, then cut it to ₹840 crore partway through the year. The biggest cut was in capital spending, the money used to buy equipment and other lasting assets, which fell from ~₹529 crore to ~₹178 crore. Put together, about ₹1,356 crore of the ₹2,000 crore was set to be spent in the first two years.

None of this has to mean the plan has been dropped. Weather radars are complex machines, and big government purchases often slip from one year to the next. The 2026-27 budget sets aside ~₹1,342 crore for the mission, including ₹487 crore for equipment. That suggests the buying has simply moved into this year.

But it does mean that two years in, many of the instruments at the centre of the mission are, as far as the public record shows, still on their way.

So why ask for more money now?

If so much of the first phase is still being built, why is the government already planning a second one, and a ₹10,000 crore expansion?

As per Mint, which cited two people aware of the plan, the money would go towards more radars, more satellites and more trained staff. But that’s still source-based, and the government hasn’t explained its thinking in public yet.

To be fair, a second phase was always part of the plan. IMD’s own mission document says Phase I would run from 2024 to 2026, and Phase II from 2026 to 2031, in the government’s next spending cycle.

But another possible reason for why the expansion was announced now is that this kind of equipment takes years to plan, order and install. If funding for the next stage is decided only after every first-phase radar is up and running, work could stall in between.

Yet another reason is that there are gaps that the first phase was never meant to fill. In January 2026, Earth Sciences Secretary M. Ravichandran said the second phase would focus on measuring the weather higher up in the sky, including through readings taken from aircraft, Informist reported.

So, should the government wait for results first? There is a fair case on both sides.

The case for waiting is simple. The first phase spent less than planned, and the equipment budget was cut sharply in 2025-26. More money can’t make a radar arrive faster if the slowdown is in buying and installing it.

The case against waiting is also strong. Extreme weather is not waiting, and erratic weather and disasters are already pushing up the social and economic costs of installing new measurement systems. There may even be a middle path: approve the next phase, but tie the money to clear milestones, such as the number of instruments installed each year, and share that progress in public.

Either way, the success of India’s weather forecasting bet will depend on timing which is only going to get harder to land with time.

- This edition of the newsletter was written by Kashish & Kulsum.

Tidbits

1. SBI investigates suspected data leak involving customer records

State Bank of India is investigating a suspected data leak after around 3.75 lakh records linked to the bank surfaced on the dark web. Preliminary analysis identified 3,897 customer records containing personally identifiable information, while SBI said the incident has had no material impact on its operations.

Source: The Economic Times

2. Government to pitch 11 airports to global investors ahead of December bidding

The Indian government plans to hold promotional roadshows in international financial hubs to attract foreign investors for the upcoming airport privatisation process. The December bidding round will cover 11 airports across the country.

Source: The Economic Times

3. Newsprint manufacturers seek PM’s intervention over coal supply disruptions

The Indian Newsprint Manufacturers Association has sought Prime Minister Narendra Modi’s intervention regarding irregular coal dispatches to the non-regulated sector. The industry body warned that rail rake delays are severely disrupting operations and forcing manufacturers to buy open-market coal at exorbitant prices, sharply driving up production costs.

Source: Business Standard

4. India’s strategic petroleum reserve expansion gains urgency amid energy-security concerns

India is developing 6.5 million tonnes of additional commercial-cum-strategic crude storage at Chandikhol in Odisha and Padur in Karnataka under Phase 2 of its reserve programme. The projects are being viewed as increasingly important as geopolitical disruptions expose India’s dependence on imported crude.

Source: The Hindu BusinessLine

5. Satellite-based highway tolling to begin on select stretches, not replace FASTag immediately

The government is targeting satellite-based tolling on select national highways from around 2028, with the system initially operating alongside FASTag and other electronic tolling infrastructure. A nationwide transition would come only later, subject to technical readiness and successful phased deployment.

Source: Livemint

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. What does owning a foreign mine actually buy India?

To secure critical industrial raw materials like coking coal, copper, and lithium, India has launched a ₹34,300-crore National Critical Mineral Mission targeting 50 overseas mines by 2031. However, recent disputes over Tata Chemicals’ soda ash mine in Kenya and operational bottlenecks in Mozambique show that owning foreign mines acts primarily as a price hedge and output claim rather than guaranteeing discounted minerals, while failing to overcome host-nation export bans or China’s overwhelming dominance in global mineral refining.

2. Why would rivals agree on when to compete?

Biocon recently settled a global patent dispute with Genentech over its breast cancer biosimilar, Pebrilzo, agreeing to delay its lucrative US market entry until late 2028. While US patent rules allow originator firms to protect drugs using secondary process and dosing patents, European markets open faster as patients shift to newer treatments. In contrast, Indian patent law places a higher burden of proof on originators, enabling domestic drugmakers to challenge secondary patents and launch affordable biosimilars sooner.

What does owning a foreign mine actually buy India?

In early September, Kenya’s President William Ruto told Tata Chemicals to leave the country.

He was talking about Magadi, a soda ash operation on the shores of a Kenyan lake that has run since 1911, and that Tata Chemicals has owned since 2005. Soda ash, in case you’re wondering, is a key ingredient in glass, detergents and a host of everyday products.

This was no small project. Magadi can produce around 350,000 tonnes of soda ash a year, sold to buyers across India, Southeast Asia, the Middle East and Africa. Yet by the time Ruto spoke, shipments had already been halted for weeks, while the government reviewed whether Tata was following local rules. Tata says it is fully compliant, and is waiting for a government panel’s decision, with a High Court hearing due in November.

But Ruto’s complaint wasn’t really about paperwork. It was about what Kenya gets out of the mine. He wanted to bring in new investors to build a glass factory and a chemicals plant in Kenya.

We came across this story while trying to make sense of a bigger push. India, through both its government and its companies, is trying to secure minerals abroad, and owning foreign mines is a big part of that plan. Magadi made us ask a simple question: what does owning a mine actually get you?

To answer that, it helps to start at the other end. A steel mill or a battery maker doesn’t want a mine for its own sake. It needs three things. It needs the right material, in a form its plant can actually use. It needs that material to arrive reliably, without anyone else being able to switch it off. And it needs a price it can plan around. That’s the story we wanted to pursue today.

Why is India looking abroad at all?

It isn’t because India lacks minerals underground. From what we can tell, it’s because what lies underground often isn’t what our factories need. Each mineral has its own story.

Take coal. India has over 400 billion tonnes of coal resources.

Most of that, though, is the kind burnt in power plants. Steelmakers need coking coal, which is heated without oxygen to make coke, the carbon-rich fuel that runs a blast furnace. And much of India’s coking coal carries too much ash. Washing can bring that ash down to around 16–18%, but a significant portion of the coal is lost in the process, and what’s left is still well short of the low-ash coal steelmakers prefer. So India imported around 66 million tonnes of coking coal in FY26.

Copper has a different problem. India has 1.66 billion tonnes of copper ore resources, but only about 9.87% of these resources are classified as economically mineable. The rest is too poor in quality, or too costly to dig out. So India’s smelters import about 85% of the copper concentrate they use. Concentrate is ore that has already been crushed and processed to raise its copper content, ready to be smelted into metal.

Lithium is further behind still. India has identified lithium deposits in Jammu and Kashmir, but when the government put the block up for auction, it drew no bids, and the auction was cancelled.

That’s three minerals with three different gaps, but they end in the same place: the material Indian industry needs isn’t coming out of Indian ground in the form, or the volume, it needs.

That’s the gap the government now wants to fill from abroad. In January 2025, it approved the National Critical Mineral Mission, a ₹34,300-crore plan spread over seven years, which includes a target of securing 50 overseas mines by 2030–31. And since finding a mine worth owning is expensive and uncertain, in July 2026, it introduced a scheme to share some of those costs. It offers up to ₹100 crore for early exploration, and up to ₹300 crore for drilling to find out how much mineral a deposit actually holds.

The scheme’s fine print is revealing. Companies that take this money must agree to supply a share of whatever they find to Indian buyers, but at prices comparable to international rates. In other words, the government isn’t trying to get India cheaper minerals. It’s trying to get India access. That tells us a fair bit about what “security” means in official thinking.

The rest of the state machinery is moving too. The Steel Ministry has reportedly asked SAIL and NMDC to scout for mines abroad, both have set up units in GIFT City to finance such deals. The Mines Ministry also has placed officials in Indian embassies in 13 mineral-rich countries to help companies deal with local rules.

India isn’t alone in this race. The US has been spending heavily on its own supplies, including a $12 billion strategic minerals stockpile under President Trump, and another $3 billion announced in August 2026 for mineral and battery projects

One distinction is worth making before we go further. Not every Indian-owned mine abroad is about India’s supply. Vedanta, for instance, is investing nearly $600 million to double its South African zinc capacity to 500,000 tonnes a year. But zinc is a metal India largely produces at home, with Hindustan Zinc alone holding about 77% of the domestic market. That’s a sensible commercial bet, but it isn’t a supply-security play.

Why not just sign long-term contracts?

Before asking what owning a mine buys, it’s worth asking whether you need to own one at all. The simplest route to steady supply is to sign long-term agreements with several suppliers, across several countries. There’s no mine to buy and no foreign regulator to manage, and if one supplier falters, you lean on another.

This works better than one might expect. Copper concentrate has been scarce worldwide since 2024, yet Hindalco says it isn’t facing supply problems, because of its long-standing supplier relationships. Relationships, it seems, are a form of security in their own right.

But a contract has a hard limit. It’s a promise from a seller, and the seller’s government can override it. Countries have been introducing export restrictions on cobalt, lithium, graphite, rare earths, bauxite, manganese and more.

When that happens, a contract is only as good as the export licence behind it. And a contract does nothing for price, since you pay whatever the market charges. So contracts secure supply in normal times, and normal times aren’t when anyone worries about supply. That, presumably, is why companies and governments go a step further and buy into the mine itself.

So what does owning a mine actually get you?

Three Indian bets, each at a different stage, give us a reasonable picture.

The earliest is KABIL (Khanij Bidesh India Ltd), a joint venture of three public-sector companies set up to secure minerals abroad. In January 2024, it signed an agreement with Argentina’s Catamarca province to explore five areas for lithium. But what it holds is a licence to search, not a mine. By February 2026, it had only surveyed the surface, without drilling underground, and in August, Parliament was told that KABIL had spent just 10% of its $25 million five-year budget. Exploration is also a gamble. Coal India learnt this in Mozambique, where it spent around $80 million exploring two coal blocks from 2009, only to find them commercially unviable and surrender them. At this stage, ownership buys a lottery ticket and a long wait.

Further along is Benga, a coking coal mine in Mozambique controlled by ICVL, a joint venture of Indian public-sector companies formed to secure coking coal. The mine has 236 million tonnes of mineable coal, which is washed down to 10–13.5% ash so that it suits Indian steelmakers like SAIL, NMDC and RINL. But every tonne travels 15 km by truck and around 590 km by train to port before it’s shipped, on a rail system that was reported to handle only about six million tonnes a year.

Two things about Benga stood out to us. First, owning it didn’t keep it running. In 2015, when coking coal prices crashed to around $80 a tonne, ICVL halted production because the mine had become financially unviable. A mine you own still answers to the market. Second, even its owners buy its coal through a contract. SAIL sought approval for a long-term supply agreement with Benga’s operating company, alongside plans to more than double output to about 4.5 million tonnes a year. Even at that level, Benga would cover under 7% of India’s coking coal imports.

The third bet is JSW Steel’s. In October 2025, it completed a $60 million investment, taking its stake in M Res NSW to 83.33%. Through a chain of holding companies, that works out to about 30% of the business running coal mines in Australia’s New South Wales. Alongside, JSW can buy 30% of the coal produced, at prices linked to international markets.

So owning a piece of the mine doesn’t get JSW cheaper coal. The deal gives JSW both a right to buy coal for the life of the mine, and a share of the mine’s profits. That combination is another real case for ownership. When coking coal prices spike, JSW pays more for its coal, but its share of the mine’s earnings rises too, acting as a hedge in periods of high prices.

But a hedge only protects what it covers. The two mines have averaged about 6.5 million tonnes a year, so JSW’s 30% comes to roughly 2 million tonnes. One brokerage estimated that, at 35 million tonnes of steel capacity, JSW would need around 28 million tonnes of coking coal a year. That makes the Australian stake roughly 7% of the need.

So here’s how we’d answer the question. Owning a mine can buy a claim on output, a financial hedge, and some control over quality. It doesn’t buy cheaper minerals, whether for JSW or under the government’s own scheme. It doesn’t override market prices, as Benga showed. And at the scale India has managed so far, it covers only a slice of what industry needs.

There’s one more thing it doesn’t buy: the final say.

Who really decides what happens to a mine?

The country it sits in. And more and more, mineral-rich countries want something beyond royalties from mines that simply dig and ship.

That’s what Magadi is really about. Tata already turns Magadi’s raw mineral into soda ash locally. Kenya wants the next step, the glass factory, and the jobs that come with it.

Kenya is no outlier. Host countries pull different levers, and the gentlest is simply charging more. Australia supplies most of India’s imported coking coal, and Queensland, its biggest coking coal state, added new royalty tiers in 2022. New South Wales, where JSW’s mines are, raised royalties on underground mines from 7.2% to 9.8% in July 2024. Even stable, investor-friendly democracies rewrite the terms when prices run high.

The harder lever is banning raw exports to force processing at home. Indonesia banned exports of raw nickel ore in January 2020.

Zimbabwe, after restricting raw lithium ore, suspended exports of lithium concentrate in February 2026, and it wants companies to turn that concentrate into chemicals like lithium sulphate before exporting. A full ban on concentrate exports begins in January 2027.

Mozambique has brought in similar rules for graphite.

What we found most interesting is who ends up doing that processing. When countries force it onshore, someone has to build the plants.

In Indonesia, Chinese companies control about three-quarters of nickel refining capacity. In Zimbabwe, Chinese firms dominate lithium mining, and the country’s only lithium sulphate plant belongs to China’s Huayou, which can’t yet take concentrate from other producers. Even then, lithium sulphate is only an intermediate. It still has to be refined into lithium hydroxide or carbonate before it goes into a battery. So, as far as we can tell, pushing processing onshore hasn’t loosened China’s grip. It has often just moved the first stage of China’s supply chain closer to the mine.

That brings us to the last link in the chain.

Even if the minerals arrive, can India use them?

Most minerals are of little use to a factory until they’ve been refined into metals or chemicals. And this is where concentration is most extreme. China has a huge advantage here. It handles around 71% of global lithium refining, over 75% of cobalt refining, 91% of rare earth processing for magnets and 94% of graphite production for batteries.

What’s more striking is the direction of travel. Mining is spreading to more countries, which gives India more places to buy from, but refining isn’t. In 2020, the top refining country for each major mineral handled an average of 68% of global output. By 2025, that was around 70%.

Breaking that pattern is expensive. The IEA estimates that building refining plants outside the countries that already dominate can cost anywhere from 20% to over 150% more.

Running them is also around 50% more expensive on average, partly because the equipment, technology and skilled workers are concentrated where the industry already exists.

India already refines some minerals at scale, copper among them. But its capacity to make specialised chemicals for batteries remains limited, and building it would take serious money.

Where is the weakest link?

Seen this way, whether India should own mines abroad seems to depend on the mineral. For coking coal, the gap is ore quality, so overseas mines make sense, as long as we’re clear that they hedge a slice of demand rather than secure all of it. For copper, India has the smelters but not the ore. For lithium, graphite and rare earths, the binding constraint is the refinery, and a mine alone doesn’t loosen it.

That leaves one question we couldn’t answer. Countries like Kenya and Zimbabwe want processing done on their soil. India needs processing capacity it doesn’t have. So far, Chinese companies have been the ones offering to build those plants. Can Indian companies make the same offer?

Why would rivals agree on when to compete?

Last week, Biocon did something that sounds odd for a company that has just built a cheaper cancer drug. It agreed to wait.

On October 14, Biocon settled a global patent fight with Genentech, the US arm of Swiss drugmaker Roche. The fight was over Perjeta, a drug for breast cancer. In this type of cancer, a protein called HER2 keeps telling cells to multiply, and Perjeta works by blocking that signal. Biocon has made its own version, called Pebrilzo. It’s a biosimilar, a near-copy of a complex biological medicine. We’ve explained these before.

Under the deal, Biocon can sell Pebrilzo in Europe and the UK from the first quarter of 2027. In America, it must wait until the third quarter of 2028. Other markets open up somewhere between 2026 and 2028. All of this still depends on regulators approving the drug.

These dates matter, because Perjeta is not a cheap drug. In India, a single vial has a listed price of around ₹2.5 lakh, and a patient may need many doses.

What makes the deal puzzling is that Perjeta’s main US patent already ran out in 2025. Roche itself expected cheaper copies to show up in 2026. So why would Biocon, with a drug ready to go, sign up to wait until late 2028?

The short answer is that a patent settlement isn’t really a peace treaty. It’s a calendar. This story is a mini class on how that calendar gets drawn.

One patent expired. Twenty-eight others didn’t.

A drug is rarely protected by a single patent. The main one covers the molecule itself. Others cover how it’s formulated, how it’s dosed, what it’s used for and, especially for biological drugs, how it’s made. These expire at different times. So when the headline patent lapses, a rival can still trip over all the others.

Genentech knew exactly which of those patents to use, because American law had already given it a look at Biocon’s recipe. Under the US system, a company seeking approval for a biosimilar can go through a process nicknamed the patent dance. It hands its application, including details of how it makes the drug, to the original drugmaker. The two sides then exchange lists of patents they want to fight over.

Biocon and Genentech went through this dance, and agreed on their list on July 1. By the end of that month, Genentech had sued Biocon over 28 patents, covering the drug, its uses and various ways of manufacturing it.

Now weigh what Biocon stood to lose. The Biosimilars Forum, an industry group, estimates that a biosimilar costs $100 million to $300 million to develop. That’s roughly ₹960 crore to ₹2,900 crore, though this is an industry figure, not Biocon’s own cost. A courtroom loss could have shut that investment out of the world’s most lucrative drug market for years.

Roche had something to lose too. If a court struck down an important patent, the door wouldn’t just open for Biocon. It would open for every other copycat in the queue.

So each side swapped a gamble for a date. Biocon got the certainty that it can sell, and Roche got time. Biocon isn’t the only one with a date, either. China’s Henlius, whose copy Poherdy became the first Perjeta biosimilar approved in the US last November, also settled with Genentech in January.

Perjeta’s competition in America, in other words, is being scheduled rather than fought out.

Why Europe opens first

So we know why the two sides settled on when cheaper copies would enter the US. But why do they get into Europe sooner, almost 18 months sooner? That’s an interesting story too.

Start with where Perjeta makes its money. In 2025, the drug earned Roche about CHF 3 billion. The US alone brought in about 43% of that. Europe brought in just about 18%, and its sales fell 13% from the year before.

So Europe is a shrinking market, for a reason Roche spells out in its own results. It is moving patients from Perjeta to a newer drug called Phesgo. Phesgo combines Perjeta’s active ingredient with another antibody in one quick injection under the skin. Perjeta, by contrast, is given through a long IV drip. Many European patients have already made that switch from the drip to the injection.

In Europe, Phesgo now makes more money than Perjeta. In America, that isn’t the case yet.

That may help explain why Biocon gets into Europe much sooner. There, it will be selling a copy of a drug that is already shrinking for Roche. In America, the IV Perjeta business is still large, and every extra year gives Roche more time to move those patients over too. We can’t know whether this shaped the negotiations. But the dates line up neatly with Roche’s own sales map.

We’ve seen this shape before. Humira, a drug for arthritis and Crohn’s disease, was for years the world’s best-selling medicine. Its main US patent ran out in 2016, but its maker AbbVie held many more. In 2017, AbbVie settled with Amgen, which had built a cheaper copy. Amgen could launch in Europe in 2018, but in America only in 2023. Europe first, America last, because America is where drug prices, and therefore profits, are highest.

Some large buyers of Humira sued. They argued these deals were pay-for-delay, where a drugmaker pays a rival to stay out of a market, which can break competition law. The worry is simple: patients miss out on cheaper drugs, while the original drugmaker effectively pays rivals to stay away.

In 2022, a US appeals court ruled against them. It said that holding a lot of patents isn’t illegal by itself, and that letting a rival into Europe early wasn’t a hidden payment for keeping it out of America, since patent rights differ from country to country.

That ruling is the backdrop for deals like Biocon’s. Agreeing on a future launch date isn’t illegal on its own, and nothing public suggests anything more than that here. But a deal can be good for both companies without being the best outcome for patients. Had Biocon fought and won, cheaper Perjeta might have reached Americans sooner. Had it lost, perhaps much later. There’s no way to know. What’s certain is that the fastest route is now closed until late 2028, at least for Biocon.

At home, the rules flip

In India, the same fight is playing out very differently. Zydus didn’t wait for a deal. It launched its own Perjeta copy in 2024, and Roche took it to court.

One of Roche’s Indian patents doesn’t cover the medicine itself. It covers a method of making it. And that creates a problem for Roche. To prove Zydus copied its method, Roche first needs to know how Zydus makes its drug. But that’s Zydus’s secret.

Indian law does offer a way around this. A court can order a company to reveal its manufacturing process, but only if the patent holder first shows that the two products are identical. In July 2025, Roche tried exactly this. Its argument was that Zydus had used Perjeta as the benchmark for its own drug. The Delhi High Court wasn’t convinced. That only proved the two drugs were similar. Similar isn’t identical. So Zydus didn’t have to reveal anything.

In America, it’s the other way round. Through the patent dance, Roche got to see Biocon’s manufacturing details before it even went to court. That made it much easier to build a case, which put Biocon in a weaker spot. So in America, Biocon settled for a date. In India, Zydus launched and fought.

We’ve written before about Indian pharma’s push into complex cancer drugs. This is the less glamorous side of that story. Building the drug is now only the first test. For Biocon, the question in 2028 won’t be whether it can sell its drug in America. It’ll be how many patients are still on the drug it copied. And for patients, there’s still the bigger question. Did this deal bring a cheaper drug closer, or push it further away?

- This edition of the newsletter was written by Vignesh & Mridula.

Tidbits

1. Festive Car Sales Leave Dealers With Leaner Inventories

Festive buying is helping car dealers clear their stock faster. In September, the gap between cars shipped to dealerships and those registered by customers narrowed 45% compared with a year ago. For dealers, that means less money tied up in unsold cars and lower costs of holding them. It also takes some pressure off them to offer steep discounts to make room for fresh stock.

Source: Business Standard

2. Trade Margins on 137 Cancer Drugs Capped From November 9

From November 9, a 30% cap on trade margins will apply to 137 non-scheduled anti-cancer medicines. The NPPA’s move limits the markup allowed as these medicines move through the supply chain to patients. Along with customs duty waivers on key ingredients, the measures are expected to reduce prices of some medicines by up to 70%. The actual savings will depend on which drug a patient needs.

Source: Mint

3. Accenture may sell its China business for up to $1.5 billion

Accenture is exploring a sale of its Greater China operations for as much as $1.5 billion after receiving unsolicited interest over the past year. It has hired JPMorgan for a strategic review, with private equity and strategic buyers expected to show interest. Accenture could also retain a significant minority stake after the sale.

Source: Reuters

4. Everyday Goods Could Get Costlier After Diwali

FMCG companies are facing a familiar problem: the ingredients and packaging that go into their products are getting more expensive. Palm oil prices are up 21% year-on-year and sugar prices 18%, squeezing the margins companies earn on their sales. Brands are now considering price hikes after Diwali to recover some of those costs. For shoppers, that could mean a higher bill for everyday purchases once the festive season is over.

Source: Mint

5. Sugar Stocks Slide as Government Restricts Ethanol Diversion

Sugar stocks fell after the government set zero diversion of sugar syrup and B-heavy molasses for ethanol in the 2026/27 tender. These are materials mills can use to produce ethanol, so the decision changes how they had planned to divide production between sugar and fuel. The government is prioritising domestic sugar availability and keeping prices in check, while mills will have to rework their plans around the restriction

Source: Reuters

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Where is India’s crackdown on food safety headed?

Food safety regulators across major Indian cities carried out 7 lakh inspections between April and September 2026—nearly double the rate from the previous year—following FSSAI’s shift toward risk-based inspections and perpetual licensing reforms. However, aggressive state-level raids have faced judicial pushback over procedural overreach, while lagging NABL-accredited lab capacity and ongoing disputes over front-of-pack warning labels highlight systemic bottlenecks in translating inspections into long-term safety standards.

2. Yes Bank’s 2020 problem is back

The Supreme Court ruled that Yes Bank’s 2020 write-off of ₹8,415 crore in AT1 bonds was legally invalid because it was executed by an administrator after the official reconstruction scheme took effect. While the total capital of the bank remains stable, reversing the write-off restores bondholder claims, shrinks Yes Bank’s core CET1 capital cushion by 250 basis points, and potentially forces new equity dilution to cover accumulated coupon obligations.

Where is India’s crackdown on food safety headed?

If there’s anything moving faster than today’s LLM improvements, it’s FSSAI crackdowns.

Almost every few days, there’s a restaurant facing action, a product’s labelling being questioned, or a licence being suspended by India’s central food safety regulator. And this is happening across cities like Mumbai, Bengaluru, and Delhi, that too inside establishments that have somehow run for decades before and have made a name among locals.

But why did all this happen all so suddenly? Is the regulator more active? Are States enforcing the rules harder? Or is enforcement simply more visible? This story is us trying to make sense of it all.

A year of overhaul

It was only a few months ago when FSSAI made a major overhaul to its rulebook.

In March, we covered how FSSAI changed the duration of its licenses to have perpetual validity instead of temporary. That also meant that inspectors had much less power in demanding bribes to renew said license. It also relaxes the threshold of basic, state and central registration, making it cheaper for smaller businesses to meet compliance requirements.

But one of the things that we couldn’t cover in that story was that 9 days before the amendment, there was a meeting between the FSSAI and the state-level Commissioners of Food Safety. There, Rajit Punhani, the CEO of FSSAI called for more stringent enforcement. In it, he emphasized on the need for risk-based inspections.

In the same rule change, “risk-based inspections” were formalized into the FSSAI rules. They are supposed to be different from routine inspections, which didn’t really have any criteria behind them. In the new framework, investigation would depend on the type of food business, past compliance history, third-party audit results, and the risk category of food products involved. The stated objective is to reduce repeated inspections of compliant businesses while targeting repeat non-compliant ones.

This was only made easier by the fact that license renewal was no longer a lever of power anyone could pull. These were generally the mandate of state inspectors, not central ones. And 98% of food business operators fall under state licenses, which meant that states spent a disproportionate amount of time on paperwork around renewals instead of enforcement. That made it all the more prone to bribes to fast-track things.

Additionally, the raising of the revenue threshold for licenses is expected to do the same thing. Now, lakhs of small businesses no longer need pre-inspection from state officers.

As we’ve talked about before, states have always been hemmed in terms of their capacity to conduct such enforcements, be it inspectors or labs to check quality. These moves, however, would vastly free up space for them.

Wide and strong nets

That, it seems, may have made a lot of difference in some states.

For instance, Telangana went through a whole restructuring of its entire enforcement apparatus. Then in September, the new body inspected 16 quick-commerce dark stores across Hyderabad, and suspended licences for four dark stores which belonged to Swiggy Instamart, Flipkart, and Zepto. Twelve of 16 stores drew some form of action.

In August, the Food and Drug Administration (FDA) Commissioner of Karnataka issued two formal advisories tightening food safety requirements for hotels, dhabas, and food service establishments, giving them 15 days to rectify deficiencies before re-inspection. The state formed 30 special teams for surprise inspections at star hotels, roadside eateries, and e-commerce warehouses.

Nowhere has the system been pushed harder than in Maharashtra.

In May 2026, IAS officer Tukaram Mundhe took charge as Commissioner of the state’s FDA. Within days, the enforcement intensity changed. Between May 25 and July 31, the Maharashtra FDA inspected 3,137 food establishments, seized food products worth ₹55.72 crore, and suspended 116 licences. By August, the count had crossed 3,000 raids. Domino’s, Pizza Hut, the Cricket Club of India, Parsi Dairy Farm, JW Marriott — no name was too big.

As per FSSAI, regulators carried out about 7 lakh inspections between April and September 2026, which was nearly twice as many in the same period in 2025.

But one has to wonder: is there a potential over-reaching of power with so many raids being conducted?

You see, of the ~3,100 establishments Maharashtra inspected between May and July, over 75% did not require any corrective action. Three out of four businesses raided were fine. A risk-based system is supposed to focus resources on habitual offenders, but in this case, the net was spread far too wide.

What’s more, courts have also started pushing back.

Take Pune-based store Guru Nanak Dairy & Sweets, which had its licence suspended in June after a food poisoning complaint. The owner rectified the deficiencies and submitted a compliance report. The FDA re-inspected and found that it met 35 out of 36 parameters. But the licence stayed suspended. As a result, the shop remained shut for 34 days, losing ₹8.5 lakh in revenue. The Bombay High Court revoked the suspension, and ordered the FDA to pay ₹5 lakh in compensation.

The FDA challenged the compensation before the Supreme Court, which removed it, saying that the action was taken in the interest of public health and was not arbitrary.

This isn’t an isolated case, either. Multiple courts in Maharashtra have questioned and even stayed FDA suspensions in many cases in recent weeks.

Testing times

There’s another, more structural worry that goes beyond the headline step of investigating a food business: we don’t have enough labs to handle these raids.

At the end of the day, if a Food Safety Officer finds a problem, it has to take a sample to send to a laboratory for analysis. And FSSAI doesn’t run one giant lab network of its own, but gives legal recognition and certifies labs that can analyse food samples. The list of FSSAI-certified labs includes its own National Food Labs, state labs run by State and Union Territory governments, other government institutions and private labs accredited by the NABL. A State officer’s sample could end up in any of them.

As Maggi’s case would show, this is not merely procedural detail, either.

In 2015, FSSAI ordered Nestlé India to withdraw Maggi noodles from the market after tests raised concerns about lead levels. Nestlé challenged the order before the Bombay High Court.

The court didn’t simply ask whether Maggi contained lead. It examined how the samples had been tested and whether the statutory requirements governing that testing had been followed. The court found that the laboratories that had tested Maggi weren’t accredited as the law requires, and ordered fresh tests at accredited labs. It ultimately set aside the ban orders.

Maggi wasn’t a one-off, either. A 2017 CAG audit found that 65 of the 72 State food labs that FSSAI and States sent samples to weren’t NABL-accredited either, and were short of staff and equipment.

Now, let’s come back to the present day. With more crackdowns, the number of samples collected is only bound to multiply. Are our labs equipped well enough to handle this workload?

Well, things seemed to have improved since 2017. In March 2026, the Health Ministry said FSSAI had notified over 250 NABL-accredited labs and 24 referral labs, deployed over 300 mobile labs, and upgraded around 50 State labs. It also said that more than 5.18 lakh food samples had been analysed over three years.

But while the scale of sample analysis has improved, their failure rate is yet to change substantially. In FY26, ~18% of all samples failed to meet safety standards, and the ratio more or less hovered around this number in the years prior.

Yet again, Maharashtra provides the perfect battleground for analyzing how the authorities cope with such scarcity. Between June and August 2026, the FDA collected nearly 35,000 food samples, which was a 340% increase over the same period in 2025-26.

Now, last year, by June, labs had received over 9,400 food samples, of which only 17% were tested. But in the last few months, that rate jumped to 56%.

What was telling was how they reached this number. They didn’t build more labs, but rather juiced out the most out of existing infrastructure. For instance, people worked on longer shifts. They also classified samples on the basis of priority, fast-tracking the examination of milk, dairy products, and other perishable food items.

That being said, they’ve recognized that this is unsustainable. It’s why four new labs are under construction in the state.

Should we put a label on it?

Now, live enforcement of food businesses that sell food products is one side of the story. The other is prevention of what packaged food can contain and what their labels tell consumers.

For instance, a couple of weeks ago, FSSAI issued notices to the makers of Celevida GLP+, a protein product from Dr Reddy’s and Nestlé’s joint venture, and to the e-commerce platforms that sold it: Flipkart, Amazon and Netmeds. GLP-1 drugs are meant for weight loss, while Celevida GLP+ is food. FSSAI’s objection was that its name and ads made it look like part of that drug treatment.

A nutrition table tells you what is in a food, but that’s always contained in the fine print. It’s what a consumer is able to understand at a glance from the front of the pack that’s at the heart of the debate over labelling.

FSSAI has been working on this for years. On 13 September 2022, FSSAI published a draft proposal for an Indian Nutrition Rating system, which would have rated packaged foods from half a star to five stars based on nutritional factors.

But this stayed a draft, mainly because of disagreements between industry and consumer groups. While the industry association was in favor of a rating system, consumer groups didn’t think a number was an effective measure of consumer awareness. Instead, they wanted more explicit warning signs that told consumers to explicitly stay away. In fact, in 2024, a consumer health organisation petitioned the Supreme Court to mandate warning labels for packaged foods which had a lot of fat, sugar and salt. The court pushed FSSAI to act.

Then, in August 2026, FSSAI proposed a red hexagonal warning label on the front of packaged foods. It would read something like “HIGH FAT”, “HIGH SUGAR”, “HIGH SALT” or “HIGHLY SWEETENED BEVERAGE”, and was based on thresholds in ICMR-NIN’s Dietary Guidelines for Indians. It was to roll out in two phases: first, only products high in two or more of these nutrients; later, products high in any one.

However, consumer groups flagged another gap. Under phase one, a product high in just one nutrient would carry no warning. On 10 September 2026, the Supreme Court questioned the two-phase plan, asked why the labels couldn’t be mandatory from the start, and directed FSSAI to set a fixed timeline.

Then, on 23 September, FSSAI dropped the two phases. Its revised plan puts the warning on any product high in even one nutrient of concern. It said it would need about four months to finalise the rules, followed by a 365-day voluntary period for food companies. The red-hexagon still remains in the proposal stage.

Conclusion

To FSSAI’s credit, there has indeed been an improvement in administrative capacity that allows for better enforcement.

But whether that looking translates into lasting change depends on two things the crackdown alone can’t fix. One is ample lab capacity that can process the flood of samples fast enough for the results to hold up in court. Second is the front-of-pack labelling regime that lets consumers make the call before they buy. The first is a capacity problem, while the second is still stuck between a regulator, an industry, and a Supreme Court bench.

This is still a moving story. On 6 October, FSSAI told States to step up inspections and sampling ahead of the festive season. It’s likely that we’ll be seeing more headlines in the coming weeks.

Yes Bank’s 2020 problem is back

For the last couple of years, Yes Bank has been one of Indian banking’s better comeback stories. We wrote about it ourselves. The bank once called the next HDFC Bank nearly collapsed in 2020 and was finally finding its feet. When Japan’s Sumitomo Mitsui Banking Corporation (SMBC) agreed to buy 20% of it, it felt like the final chapter. The worst seemed to be behind it.

There was one loose end, though, sitting in the footnotes. A legal fight over bonds Yes Bank had wiped out in 2020. On October 15, the Supreme Court ruled that the wipe-out was illegal. The ₹8,415 crore Yes Bank thought it had walked away from, is back. The stock fell about 15% that day.

To see why, we need to go back to 2020.

Somebody had to take the hit

By late 2019, bad loans had eaten through Yes Bank’s capital. A bank’s core equity, or CET1, is the shareholders’ own money on its balance sheet. When a loan goes bad, the loss is written off against this money first, so depositors don’t lose theirs.

The CET1 ratio measures how big that cushion is relative to the bank’s risky assets. Yes Bank’s had fallen to 0.6%, against a requirement of 7.375%. The cushion was all but gone. On March 5, 2020, the RBI placed the bank under a moratorium, superseded its board and appointed Former SBI CFO Prashant Kumar as administrator. Administrator acts as a substitute for the Board of Directors to manage the bank’s day-to-day operations, restore depositor confidence, and help with a revival plan.

On March 6, 2020, a day after the moratorium, the RBI unveiled a draft reconstruction scheme for Yes Bank and invited suggestions from shareholders, depositors and creditors. Think of the scheme as the rulebook for the rescue: who puts in money, at what price, and who takes what loss. The final version was approved by the Central Government and came into force on March 13, 2020.

Under it, an SBI-led consortium put in roughly ₹10,000 crore at ₹10 a share.

The fresh money didn’t erase losses already made, though. Someone still had to absorb them. The people who lost everything were holders of Yes Bank’s AT1 bonds.

Debt that behaves like equity

Under global Basel III rules, which the RBI also follows, banks can count certain bonds as capital. AT1 bonds are the riskiest of these. That’s because they never mature, banks can skip interest payments on them and they are built to absorb losses.

So, if a bank’s core capital falls below a trigger because of a huge loss, the bonds can be written down or converted into shares. That risk is why they paid well, and why so many people held them. They usually pay 1.5%–2.5% more interest than a normal FD.

Mutual funds had about ₹2,800 crore in Yes Bank bonds. Indiabulls Housing held ₹662 crore. Many retail investors held them too, often because bank staff pitched them as safe “super FDs”. SEBI later fined Yes Bank ₹25 crore and Rana Kapoor ₹2 crore over the mis-selling. That’s a separate saga, and the bank’s penalty was stayed on appeal.

A feature, not a bug

Any finance textbook gives a clear order for who absorbs losses. Shareholders go first, then bondholders, then everyone else. Equity gets all the upside when things go well, so it should take the first hit when they don’t.

AT1 bonds are the exception, and by design. That’s what sets them apart from ordinary bonds. A regular bondholder gets hurt only once shareholders have been wiped out, usually when a bank is wound up. AT1s are built to be written down while the bank is still alive. The whole point is to rebuild a failing bank’s capital without shutting it down. So AT1 holders can lose everything even while shareholders hang on. That risk is exactly why they paid such high coupons.

That’s roughly what happened at Yes Bank. Existing shareholders weren’t wiped out, just diluted. By March 2020, the rescuing bank consortium held 78.5% of Yes Bank. That left old shareholders with roughly a fifth of a bank they once fully owned, with 75% of their shares locked in for three years. AT1 holders, meanwhile, got nothing. Bondholders had even offered to convert into equity and accept an 80% haircut, but that never happened.

Yes Bank isn’t the only case. In 2023, Swiss authorities had Credit Suisse write $17 billion of AT1 debt down to zero while shareholders still received $3.23 billion under the UBS deal. Markets were shocked, but that’s the bargain AT1 investors sign up for.

So the Supreme Court’s problem wasn’t that the bonds were wiped out. Writing AT1s down ahead of equity is perfectly legal. Its problem was how it was done.

A write-off that came one day too late

The draft scheme that we were talking about earlier had a line saying Yes Bank’s AT1 bonds would be written down permanently, in full. But when the government notified the final scheme on March 13, that line was gone. The new rulebook said nothing about writing off the bonds.

A day later, on March 14, the administrator wrote them off anyway. By then the final scheme was already in force, and the RBI’s rules say AT1s must be written down before a bank is rescued, not after. So the write-off was done by the wrong person, on the wrong day, without the scheme’s backing.

Debenture trustee Axis Trustee, bondholders and investors like Indiabulls went to court. In January 2023, the Bombay High Court agreed with them and quashed the write-off. That order was stayed while Yes Bank and the RBI appealed.

Justices Dipankar Datta and Augustine George Masih have now settled it. At the point of non-viability, the power to write down the bonds belonged to the RBI, and the court said it was the administrator, not the RBI, who made the call. It pointed to Lakshmi Vilas Bank, whose AT1s were written down a day before its merger with DBS, which is the right sequence. It also called the RBI a mere bystander while Yes Bank’s capital collapsed.

Notice what the court did not say. It never said AT1s can’t be written off. It said this write-off was done by the wrong person, at the wrong time.

Who wins, who pays

Bondholders get their bonds back. But AT1s are perpetual, so there’s no principal to hand over now. The court has ordered coupons to be paid as per the original terms. Whether six years of missed interest is also owed will be clear only once the full judgment is out. If it is, some estimates put the arrears at about ₹5,090 crore.

Mutual funds that marked these bonds at zero can now write them back up. Kotak MF has paused fresh money into its affected funds so newcomers can’t grab that gain. Because the bonds were side-pocketed in 2020, any recovery goes to the investors who held those funds back then, not to today’s.

Shareholders pay. A bank’s top-tier capital has two layers. The bottom one, CET1, is the shareholders’ own money. AT1 bonds sit just above it. When Yes Bank wrote off its bonds in 2020, it no longer owed that money to bondholders, so the amount was booked as a profit and became a part of shareholders’ layer.

Undoing the write-off reverses that. What counted as shareholders’ capital moves back to AT1 again. No money leaves the bank, and its total capital barely changes. But CET1, the layer regulators care about most, shrinks. Yes Bank says its CET1 ratio would fall by 250 basis points. If six years of missed coupons are also owed, that cash really does go out, and it also comes straight out of shareholders’ money. Anand Rathi estimates net worth could shrink by 16-26%, depending on whether those coupons are owed.

The bank hadn’t set aside a rupee for this. With a thinner CET1 cushion, it may have to raise fresh capital to rebuild it.

This affects SMBC too, Yes Bank’s largest shareholder after it bought more from Carlyle. To be fair, the case was disclosed, and SMBC would have priced it in or negotiated protection. Either way, everyone who bought after 2020, starting with the rescuers at ₹10, bought a bank whose old losses they believed were settled. They weren’t.

Is this the end?

Practically, yes. Yes Bank can file a review petition and then a curative one, but lawyers say both are narrow routes. What’s still open is the size of the bill. The Q2 earnings call is the next place to look.

The timing is awkward. A day earlier, Fairfax was named buyer of 60.72% of IDBI Bank. IDBI is another survivor of the same bad-loan era. Should this rattle foreign money?

We don’t think so. The courts didn’t unwind a rescue on a whim. The message is that India can impose losses on investors, but only through the right authority and in the right order. That is exactly what a foreign investor should want.

The real failure was the RBI and the Centre botching the process, and today’s shareholders are footing the bill.

- This edition of the newsletter was written by Srusti & Kashish.

Tidbits

1. Milky Mist launches high-protein milk to expand value-added dairy portfolio

Milky Mist Dairy Food has launched a new high-protein, lactose-free milk to expand its value-added dairy portfolio. The new 250ml pack delivers 25g of protein, targeting rising consumer demand for functional and protein-rich dairy products.

Source: The Hindu BusinessLine

2. CERT-In flags AI agents accessing Indian organisations’ live systems without authorisation

CERT-In has warned that AI agents accessed live systems of several Indian organisations without authorisation, reading business records that included personal and confidential data. The incidents exploited conventional security weaknesses such as exposed credentials and cloud configurations, with some breaches disclosed voluntarily by AI model providers after their own reviews.

Source: The Hindu BusinessLine

3. Nokia to sell Enterprise Campus Edge business to Aurelius

Nokia has agreed to sell its Enterprise Campus Edge (ECE) business to investment firm Aurelius, with the transaction expected to close in the first half of 2027. ECE, which provides private wireless and industrial edge solutions to nearly 900 global customers, will operate as an independent entity focused on industrial digitalisation.

Source: ET Telecom

4. Government likely to skip spectrum auction for second straight year

The government is unlikely to hold a telecom spectrum auction this fiscal year as operators have limited demand for additional airwaves. The Department of Telecommunications is still reviewing TRAI’s recommendations on reserve prices and other auction terms.

Source: Livemint

5. Mahindra re-enters CNG passenger vehicle market with XUV 3XO ZNG

Mahindra & Mahindra has re-entered the factory-fitted CNG passenger vehicle market with the launch of the XUV 3XO ZNG, priced from ₹9.99 lakh. The dual-fuel compact SUV features twin CNG cylinders positioned beneath the luggage area to preserve 270 litres of boot space, positioning it to compete with the Maruti Brezza and Tata Nexon.

Source: Financial Express

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G — Global

[1] Investors are getting nervous about CoreWeave’s debt

CoreWeave rents computing power to AI developers. It buys thousands of expensive GPUs, the chips used to run AI models, and installs them in data centres it mostly leases from other companies. Customers then pay to use that computing power.

The business needs a lot of money upfront, so CoreWeave has borrowed heavily to expand. By the end of June, it owed around $35 billion, roughly ₹3.3 lakh crore at ₹94 to the dollar. In the April–June quarter, it made $128 million in adjusted operating profit but paid $640 million in net interest expenses, even before repaying the loans themselves.

Now, investors are getting nervous. The cost of insuring CoreWeave’s debt against default has climbed to distressed levels. This insurance comes through credit default swaps, or CDS, which can pay out if a borrower defaults. Their prices rise when investors see greater repayment risk.

We wrote earlier about how data centres are financed, and CoreWeave shows one of the risks in that model. GPUs lose value as newer chips arrive, while loans still need to be repaid. CoreWeave has large customer contracts, but it must turn those contracts into enough cash to pay its lenders and keep expanding.

[2] Jefferies alleges fraud in $900 million of commodity deals

A fund managed by investment bank Jefferies has alleged fraud in commodity-financing deals worth nearly $900 million, or roughly ₹8,460 crore at ₹94 to the dollar. The deals involve iron ore traders Radiant World and Sapphire Minmetals. Jefferies has taken the matter to court, but the allegations have not been proven.

The deals used something called receivables financing. Imagine a trader sells iron ore to a customer who promises to pay after 90 days. The trader doesn’t want to wait that long, so it borrows money from a lender using that future payment as security. When the customer pays, the lender gets its money back.

This only works if the sale actually happened and the customer really owes the money. If the documents are fake, or the trader has promised the same payment to several lenders, the lender could lose its money. Jefferies alleges that the transactions behind these loans were not what they appeared to be. If the allegations hold up, the case would show how much risk lenders take on when they rely on paperwork without checking the actual trades.

[3] Bank of America faces a $1.21 billion penalty

US authorities have fined Bank of America more than $1.21 billion, roughly ₹11,370 crore. Regulators say the bank failed to properly monitor and report suspicious transactions, even after earlier warnings about its anti-money-laundering controls.

Banks have to know who their customers are and watch for unusual activity. A customer repeatedly moving large sums through unrelated accounts, for example, should set off an alert. Bank staff then look into it and report it to the authorities if something seems wrong.

Bank of America handles a huge volume of payments every day, and its monitoring software is supposed to flag such patterns for employees to review. Regulators found serious gaps in that process, including missed activity linked to Chinese money-laundering networks and other high-risk payments. The bank had already been warned about weak compliance, and the new penalties came after it failed to fix those problems.

E — Economy

[4] India’s wholesale inflation has reached 11.39%

India’s wholesale inflation climbed to 11.39% year-on-year in September, up from 9.92% in August. Fuel and power prices were 25.85% higher than a year earlier, while manufactured products became 9.76% more expensive.

The Wholesale Price Index, or WPI, tracks prices earlier in the supply chain: raw materials, fuel and goods that factories sell to other businesses. Retail inflation tracks what consumers pay in shops. The two often move differently.

Fuel feeds into almost every business’s costs. Factories spend more to run machines, trucking companies pay more for diesel, and manufacturers face higher bills for materials made from oil or gas. Each then has to choose between absorbing the increase and earning less, or raising its own prices. That is why wholesale inflation often signals pressure before it reaches shops. How much of it consumers eventually feel will depend on whether demand is strong enough for companies to charge more without losing customers.

We wrote recently about how the RBI is fighting inflation on three fronts. It has raised interest rates, stepped in to support the rupee and tightened banking-system liquidity to stop rising costs from spreading further through the economy.

[5] India’s grain surplus could raise the food subsidy bill

The Food Corporation of India, or FCI, holds 84.38 million tonnes of grain, nearly three times its prescribed buffer. Stocks that large could push the government’s food subsidy spending past its budget.

The government buys wheat and rice from farmers at minimum support prices. FCI and state agencies store it and hand much of it out through ration shops, with the government paying for every step along the way.

Grain that just sits in warehouses keeps costing money. FCI has to finance the stock, run storage facilities and protect it from damage. Selling large amounts on the open market isn’t easy either, since a sudden flood of supply can drag prices down and hurt farmers.

We wrote recently about the odd side of this surplus. Rice prices have been rising even with record stocks in storage. That is partly because traders haven’t always wanted FCI’s rice at the price and quality on offer. Meanwhile, procurement keeps adding to the pile, and to the bill for holding it.

[6] India is attracting more greenfield investment than China

Foreign companies committed $351 billion in greenfield investment to India between 2021 and 2025, roughly ₹33 lakh crore at ₹94 to the dollar, according to Boston Consulting Group. China attracted $159 billion over the same period. India’s figure was also 61% higher than in the previous five years.

Greenfield means building from scratch rather than buying an existing business. A foreign carmaker setting up a fresh factory in India would count. These figures are announced projects, not necessarily money already spent.

Global firms have spent the past few years trying to rely less on China. Trade tensions, tariffs and supply-chain disruptions pushed them to look for other places to manufacture, and India’s large domestic market made it an obvious contender.

Announcing a plant is the easy part, though. Building and running one takes land, reliable electricity, local suppliers, skilled workers and costs that can compete. How many of these plans turn into working factories will decide how many jobs and exports India actually gets out of them.

I — Industry

[7] India’s semiconductor startups are attracting buyers

Investors and global chipmakers are paying more attention to India’s semiconductor startups. Around 620 have emerged over the past five years, raising more than $1 billion between them, roughly ₹9,400 crore at ₹94 to the dollar. Seven acquisitions have been announced in 2026 alone.

Making a chip involves three broad stages: designing it, manufacturing it and testing the finished product. India’s strength has long been the first. Many global chipmakers run large engineering centres here, but the engineers in them have mostly worked on technology their employers own.

That is starting to change. More Indian startups now develop their own products, which makes them attractive to firms looking for specialised technology. Germany’s Infineon, for example, plans to acquire Bengaluru-based C2i Semiconductors, which makes power-management chips for electronic devices.

India is still setting up its first fabrication plants. But a company with valuable designs doesn’t need to run an expensive factory of its own to grow. That gives the industry another route forward while manufacturing catches up.

[8] Jindal Ferrous opens a ₹5,000 crore steel plant in Odisha

Jindal Ferrous has started operations at its first integrated steel plant in Jajpur, Odisha, built at a cost of ₹5,000 crore. Its steel melting shop, where iron is refined into steel, can produce 2.2 million tonnes a year.

An integrated plant brings the different stages of steelmaking together at one site. That cuts the cost of moving materials between separate facilities and gives the company more control over its operations. Jindal Ferrous is working with Japan’s JFE Steel for technical support.

Odisha has become a hub for steelmakers because of its large iron ore reserves and an established network of mills and suppliers. India also needs more steel for construction, roads, railways and factories.

But a bigger plant doesn’t guarantee bigger profits. Steel mills carry heavy fixed costs and need a steady flow of orders to run efficiently. If the industry adds output faster than demand grows, producers may have to cut prices to win buyers.

[9] SEBI is keeping the old method for settling derivatives

SEBI has decided to keep the existing method for setting the final settlement price of futures and options contracts on expiry day. The regulator announced changes to its closing auction rules on October 15, and the revised framework took effect on December 7.

When a futures or options contract expires, traders need a final reference price to work out who owes what. SEBI is introducing a closing auction, a short session near the end of trading where buy and sell orders help determine a stock’s official closing price.

But using that auction price to settle derivatives raised concerns. A trader holding a large derivatives position could benefit from pushing the stock’s price during that short window.

SEBI will therefore retain the volume-weighted average price, or VWAP, from the last 30 minutes of regular trading for derivative settlements. VWAP averages prices across that period and gives more weight to larger trades. This reduces the influence of any single small transaction, although it doesn’t eliminate the risk of manipulation.

The closing auction will still help determine official closing prices, but its price won’t replace the existing method for settling expiring derivatives.

C — Company

[10] Tata Motors and Stellantis are expanding their partnership

Tata Motors Passenger Vehicles and Stellantis have agreed to jointly develop vehicles for international markets, with manufacturing expected to take place in India. The two companies already make vehicles together through a joint venture. The new agreement extends that relationship from manufacturing into vehicle development.

Much of the work will centre on shared vehicle platforms. A platform is the common base, including the frame and core systems, that a carmaker can use to build several different models. Reusing one platform across many cars saves the time and money of engineering each model from scratch.

Tata Motors could get to use more of its engineering and technology in cars sold outside India. Stellantis, meanwhile, can use India’s manufacturing base and engineering talent for its global products. The companies expect the vehicles to reach more than 50 markets, though they haven’t yet announced which models they will develop or when production will begin.

[11] FMCG companies are competing for a stake in Farmley

ITC, Britannia, Emami and Orkla India are reportedly interested in buying a stake in Farmley, a packaged nuts and healthy-snacks brand. A deal could value Farmley at around ₹2,000 crore, though talks are at an early stage and no buyer has been chosen. Its early investors, who together own about 31%, are reportedly looking to sell.

Farmley started out supplying nuts and dry fruits to other businesses before launching its own brand of roasted nuts, trail mixes and flavoured snacks. Its revenue grew 72% to ₹396 crore in FY25. Around 80% of its sales now come online, including through quick-commerce apps. These platforms let young brands reach customers without first building a network of distributors and shops.

That network is what the interested buyers already have. Companies like ITC and Britannia supply thousands of stores across the country. Buying Farmley could give them a growing brand in healthy snacking, which they could then sell through their existing distribution networks to reach more shoppers offline.

[12] HCLTech is building an AI business with Anthropic

HCLTech has announced a partnership with Anthropic, the company behind the Claude AI models. The Indian IT firm will set up a dedicated Anthropic business unit and use the technology to help clients automate more of their work.

Businesses already use AI to summarise documents, write code or answer questions. HCLTech wants to take its clients further with AI agents, which are systems that can carry out tasks across different software. An agent could receive a customer complaint, look up the order, find the problem and prepare a refund. Clients would still need rules on what information it can access and which actions need a human to approve.

The deal also says something about HCLTech’s own business. In our Who Said What episode on Indian IT, we noted that its CEO expects AI to shrink revenue from some of its existing work. But someone has to set up and manage these new systems. HCLTech is betting that this new demand can make up for what automation takes away.

That’s it for this week.

A few of these stories are still developing, so we’ll be keeping an eye on them. But if there’s one you’d like us to write about properly, let us know in the comments.

See you next edition :)

Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Breaking down the Nobel Prize for Economics 2026

The 2026 Nobel Memorial Prize in Economic Sciences was awarded to Robert E. Hall and Michael Woodford for laying the microeconomic foundations of macroeconomic stabilisation. Hall’s landmark research showed that forward-looking households base their spending on expected lifelong income rather than temporary current earnings, while Woodford built the modern central banking framework—demonstrating how managing interest rate expectations and forward guidance can stabilise inflation and aggregate demand.

2. IDBI’s long road to privatisation

In a landmark deal, the Union Cabinet named Prem Watsa’s Fairfax Financial Holdings as the strategic buyer for a 60.72% controlling stake in IDBI Bank for roughly ₹53,000 crore. The transaction—set to become the largest foreign direct investment in India’s financial sector—marks the culmination of a decade-long turnaround for the formerly non-performing lender, though binding agreements remain subject to stringent RBI ownership and voting rights regulations.

Breaking down the Nobel Prize for Economics 2026

You may already know that the Nobel Prize for Economics is not a real Nobel Prize. It’s really awarded by the Swedish Central Bank. And this year, they’ve awarded the prize to economists Robert Hall and Michael Woodford.

Their work provided much of the intellectual foundation to the policies pursued by most central banks in the world, from the RBI to the US Federal Reserve.

Well…maybe the Federal Reserve is having second thoughts about that now.

You see, Kevin Warsh, the new chairman of the US Federal Reserve, has spent his first months in office dismantling one of Michael Woodford’s signature ideas: forward guidance, which refers to the practice of telling markets what the central bank plans to do with interest rates in the future. Warsh explicitly said that, unlike most of his peers, he “doesn’t believe in it”.

This tension is what makes this prize — and the criticisms it’s already under — worth understanding.

The rule that rewrote macroeconomics

To understand why the Nobel committee picked these two, we need to start with a problem that nearly destroyed mainstream economics in the 1970s.

In the 1970s, Western economies got hit by a one-two punch of high inflation and high unemployment simultaneously, primarily due to the oil crisis of the 1970s. At the time, one of the long-standing beliefs in the economic profession was that there was a trade-off between inflation and unemployment. To curb one, you sacrificed the other. But the new crisis broke that relationship entirely.

Robert Lucas, an economist who would later win his own Nobel Prize, famously critiqued that economic models of the time treated relationships between economic variables as fixed rules, only because past information said so. But people aren’t particles. When the government changes its policies, people change their behaviour in response, and a relationship that held true earlier could fully fall apart.

Another such relationship was that if your income goes up by ₹100, you’ll spend some predictable, large fraction of it (like ₹80) and save the rest. This “consumption function“ was the engine of the policy toolkit of the time. If the government wanted to stimulate the economy, it could put money in people’s hands (like a stimulus or a tax cut), and they would spend a predictable share of it, creating a multiplier effect that rippled through the economy.

But there’s just one hitch with this tale. What if households aren’t just people relying on historical data, but also forward-looking?

Suppose you find out today that you’re getting a big raise in April 2027. If you can borrow against that future income, you start spending more now without waiting for the future paycheck. When you stretch it over a longer horizon, you come to the idea that people spend not on the basis of what they earn today, but what they expect to earn over their whole lifetime. You’d also make such a prediction based on what you earned in the past.

Now, if true, it would mean that the old idea of giving people money today and they’ll spend a predictable chunk of it didn’t stand up to scrutiny, even if it sounded legitimate in theory. If, say, a government cuts interest rates, the spending boost would get spread out over a lifetime of spending, rather than being immediate.

That’s where Robert Hall enters the story.

In a landmark 1978 paper, Hall said that if consumers are rational and forward-looking, and can borrow and save freely, what they spend today contains all the information you need about what their future consumption looks like. Past information about their paychecks is not necessary, and if there’s a difference between tomorrow and today’s consumption, it would only be because of an unforeseen event.

Hall and his colleague Fredric Mishkin tested this theory on actual household data in 1982, they found that it described about 80% of households well. The remaining 20%, which were predominantly lower-income families without access to savings or credit, spent what they got, when they got it. The old model wasn’t entirely wrong, but Hall and Mishkin’s results seemed to have severely undermined it.

Eventually, there were critiques of these results, and we’ll come to that. But in the short run, Hall’s 1978 result gave macroeconomics what it desperately needed after the stagflation crisis. Hall had many contributions to economics, but this was the most influential one.

The question that arises now is, keeping Hall’s hypothesis in mind, how should a central bank navigate rate hikes or cuts, or how should a government decide when to announce a tax cut or raise to influence household expenditure?

A couple of decades later, Hall’s co-winner, Michael Woodford — who actually never wrote a paper with Hall — would provide a model for that.

The operating system for central banks

In 2003, Michael Woodford published a book called Interest and Prices. It revived an old economic idea which said that there exists a “natural rate of interest“ (r*) at which the economy is neither overheating nor cooling down. If the central bank can find this rate and park its policy rate there, prices stay stable, and the economy hums along.

What Woodford built was a three-part model that gave central banks a complete operating manual.

The first part was Hall’s 1978 contribution. Woodford turned Hall’s spending rule into the demand side of his model: after all, changes in the interest rate affect consumption significantly. When the central bank raises interest rates above r*, households save more and spend less, cooling the economy. When it cuts rates below r*, spending heats up.

The second part connected this to the supply side. In a perfectly flexible economy, interest rate changes would just move prices around without affecting jobs or output. But in the real world, prices are “sticky“. A restaurant, for instance, doesn’t reprice its menu every time input costs change. This stickiness means that when the central bank changes interest rates, it changes real spending and real production in the short run, not just inflation. Woodford formalised this rigorously.

The third part was the policy rule itself. Woodford showed that a central bank doesn’t need to control the physical supply of currency to control inflation. It just needs to follow a simple rule: when inflation rises, raise interest rates by more than inflation rises. It incentivises people to save rather than spend, cooling inflation.

Put together, these three components gave central banks a unified framework for deciding what interest rate to set and why it should work. But how do you communicate all of this effectively to households?

That’s where Woodford’s forward guidance comes in.

If people are truly forward-looking, as Hall’s theory assumes, then what the central bank says it will do in the future should be almost (if not equally) as powerful as what it actually does today. A credible promise to keep rates low for the next two years should stimulate spending right now, because households and businesses will make decisions today based on where they expect rates to be tomorrow.

This idea became central bank orthodoxy, especially after the 2008 crisis when interest rates hit zero. Promising to keep rates at zero for an extended period became one of the primary tools through which central banks like the Fed tried to stimulate the economy. It was Woodford’s theory, turned into policy, deployed at a global scale.

However, Woodford’s framework fell extremely short of predicting the devastating 2008 crisis, and not because of any accidental error, either.

The fallibility of rational expectations

The model was built in a way that made it impossible to see the crisis coming, even in principle. We’ll address three of the many criticisms of the model on those lines.

Not so creditworthy?

Start with the most basic issue. Woodford’s model has just three actors: households, firms, and a central bank. But where are commercial banks? Where are credit markets? In Woodford’s model, credit is just a transfer of existing resources from savers to borrowers.

But real-world commercial banks don’t operate like that.

Say you want a home loan of ₹50 lakh. A bank loans that out to you, but it doesn’t really depend on lending out someone else’s savings to do so. Mostly, it allows you to avail that new loan by crediting your account with deposits that didn’t exist before. No transfer of money from another account was involved.

Commercial banks can’t do so without limit; they need to meet certain statutory requirements. But they’re not merely middlemen.

This problem extends further back to Hall’s hypothesis. Remember, it started with the assumption that “consumers are rational and forward-looking, and can borrow and save freely”. But credit markets are never frictionless in the real world, and that’s not a bug either. Credit limits and collateral requirements are based on income levels. Hall and Woodford’s work is often accused of focusing less on income and wealth levels compared to abstract things like household expectations (which are derivative of income and wealth levels).

On top of this, Woodford’s model assumes what economists call “complete contingent markets“, which means every possible risk in the economy can be hedged through some financial instrument. In this world, risk is always correctly priced, which is much, much easier said than done.

Think about what all of this means. There is no way for a credit market to freeze or go bust. This means there is no mechanism in the model through which a bank can fail. There is no channel through which excessive lending can build up into a bubble that bursts. Consequently, the cascade of events that defined the 2008 crisis — too much mortgage lending, securitisation of bad debt, interconnected bank balance sheets — is all defined out of existence.

In fact, Hall’s own empirical test of his hypothesis was supposedly a bit fragile. In 1989, economists John Campbell and Greg Mankiw tested it on aggregate US data and found that the share of hand-to-mouth consumers wasn’t 20% as Hall and Mishkin had estimated, but closer to 50%. Half of all consumption in the American economy behaved as if people simply spent their current income, not future income. One reason why these results were so different was because the authors didn’t assume consumers could access credit freely.

The natural rate of interest

Secondly, there’s the natural rate of interest itself.

Claudio Borio, the head of the monetary department at the Bank for International Settlements (whose work we love quoting), has been the most prominent institutional critic of r*. In a speech on the dangers of navigating by r*, Borio said simply that the natural rate is supposed to be the central bank’s compass, but what if the compass itself is moving? What if the central bank’s own past decisions change the financial cycle, which in turn changes where the natural rate sits?

In that case, the central bank is chasing a target it is simultaneously shifting. But there is no neutral benchmark independent of what you’ve already done. It’s partly why no one can agree on the actual value of r*. Some say that r* doesn’t even exist, but we’ll address that another time.

Borio also points out that the standard monetary policy framework treats inflation as the primary signal that something is wrong with the economy. But in the years before 2008, the models said everything was fine because inflation is low and stable. What the models couldn’t see was that low inflation can coexist with a massive credit bubble.

Forward guidance

Lastly, there’s forward guidance itself, Woodford’s most famous policy prescription.

There is empirical research to show that consumers are often most influenced by everyday prices of groceries and gas. They also don’t pay much attention to central bank announcements and they shouldn’t be expected to, either — Woodford himself recognized this limitation later.

Moreover, a promise made by a central bank today about interest rates 3 years from now is hard to make credible, because future central bank committees can simply change their minds when conditions shift. It was easier to maintain this line when the global economy was in a long lurch in 2008 even when rates were at zero, but not otherwise. This is why Kevin Warsh even advised that the Fed should scale back their reliance on it.

Conclusion

Hall and Woodford truly transformed how we think about how expectations shape consumption and how that flows into monetary policy. As a result, central banks are obviously measurably better at fighting inflation today than in the 1970s.

But the prize also honours a framework at a moment where monetary policy as a whole is being deemed inadequate to solve economic crises. Can you really build a reliable theory of economic stability on a model that has little room for financial instability?

The framework’s architects say yes, as long as you keep improving the model. Indeed, Woodford and Hall’s work has seen improvements that account for these situations. But these are bolt-ons, which, the critics say, is like renovating a house whose foundations are cracked.

IDBI’s long road to privatisation

Every February, the finance minister pencils in how much the government will raise by selling stakes in state-owned companies. And almost every year, it misses. The last time the Centre beat its original target was 2018-19. This year, a single deal could finally break that streak.

On October 14, the Cabinet Committee on Economic Affairs named a subsidiary of Prem Watsa’s Fairfax Financial Holdings the “strategic buyer” for 60.72% of IDBI Bank. The price is ₹81 a share, or ~₹53,000 crore. The government sells 30.48% and LIC sells 30.24%. If it goes through, it will be the largest foreign direct investment ever made into India’s financial sector. The government’s share alone is enough to carry this year’s ₹80,000 crore disinvestment target across the line.

That “if” matters. The government has accepted Fairfax’s offer, but that doesn’t mean Fairfax owns IDBI. By Fairfax’s own admission, no binding agreement has been signed yet. And as we’ll see, the Reserve Bank of India still has a lot to say.

From factory financier to fixer-upper

IDBI wasn’t born a bank. It started life in 1964 as the Industrial Development Bank of India. It was a development finance institution, or DFI, much like ICICI. It was a long-term lender built to fund the factories and power plants of a young economy. It began as an RBI subsidiary and passed to the government in 1976. Once liberalisation dried up the cheap funding DFIs relied on, Parliament repealed the IDBI Act, and in 2004 IDBI became a commercial bank under the Companies Act.

Through all of this, the government remained IDBI’s promoter and majority owner. Its stake only grew over time as it kept pumping in capital, reaching around 80%.

Then came the bad loans. In 2015, RBI’s asset quality review forced banks to stop hiding stressed loans, and IDBI’s turned out to be among the worst. In 2017 it became the first bank put under RBI’s Prompt Corrective Action framework, effectively a regulatory ICU that restricts lending until the bank recovers. By around 2018, nearly a third of its loans had gone bad.

The government leaned on LIC, which paid ₹21,624 crore for a 51% stake in January 2019. Because LIC isn’t technically the government, RBI then reclassified IDBI as a private-sector bank. That quirk becomes very important later. More capital went in, and the bank exited PCA in March 2021.

Today, it’s almost unrecognisable. In Q1 FY27, IDBI had gross NPAs of 2.30%, net NPAs of 0.16%, and loans growing 22% year-on-year.

Selling it, though, was another matter. The Cabinet approved a sale in May 2021, and bids were invited in October 2022. Kotak Mahindra Bank, Emirates NBD and Fairfax all cleared RBI’s checks and were in the line. But in the February 2026 round, Fairfax’s bid of ₹75 a share fell short of the government’s ₹94.42 reserve price, and the bids were rejected.

So the government changed how it valued IDBI. The stock is thinly traded and had swung between ₹61 and ₹118 during the valuation period, so the government stopped leaning on the market price. It set a fresh benchmark of ₹75.99 instead, an average of what comparable banks’ multiples and IDBI’s net assets implied. Bids against that number produced Fairfax’s winning ₹81. The losing bidder was Emirates NBD, which had meanwhile bought RBL Bank.

Why Prem Watsa wants it

Watsa founded Fairfax in Toronto in 1985, and has been one of India’s most persistent foreign investors ever since. In 2018, Fairfax rescued CSB Bank. It also owns 49% of insurer Go Digit and 30.2% of IIFL Capital.

IDBI is the piece that ties it all together. Fairfax plans to fold Digit and IIFL Capital into the bank. That would create a single group selling insurance, broking and wealth products through IDBI’s branches.

That combination, however, is a separate proposal needing its own approvals from RBI, SEBI and IRDAI. The bank purchase can go ahead without it.

Own 61%, vote 26%

This is where Indian bank regulation starts to bite.

Foreigners can own up to 74% of a private Indian bank. Because of that 2019 reclassification, IDBI counts as private, so the 74% cap applies rather than the 20% limit for public sector banks.

But the Banking Regulation Act caps any single shareholder’s voting rights at 26%, no matter how much it owns. So Fairfax gets to run the bank, but it can’t outvote everyone else. It must also lock in its stake for five years, then gradually dilute to 26% over 15 years.

Then there’s the two-banks problem. RBI doesn’t let one promoter hold large stakes in two banks, and Fairfax already owns about 40% of CSB Bank. Fairfax has offered RBI a two-year glidepath to fix this, with merging CSB into IDBI the likeliest route.

Don’t expect RBI to go easy here. Uday Kotak took the regulator to the Bombay High Court in 2018 over how fast he had to dilute his stake. He withdrew the case in 2020 after agreeing to cut his holding to 26%.

And crucially, none of this is settled yet. So far, RBI has only run its initial “fit and proper” check, and the Home Ministry has done its security clearance. That was just enough for Fairfax to be allowed to bid.

Before a single share changes hands, Fairfax must present its credentials to RBI and submit a roadmap showing how it will meet every one of these conditions: the lock-in, the dilution schedule, and the CSB fix. Minority shareholders also get their turn. Buying 60.72% triggers a SEBI open offer for another 26%, at no less than ₹81 a share.

Price, people and precedent

Fairfax is paying about 10% less than IDBI’s closing price on October 14, and the stock fell as much as 7% the next day. Depending on which book value you use, the deal values IDBI at roughly 1-1.5 times book. That puts it between state banks like PNB, which trades below book value, and private banks like ICICI, which commands about 2.5x. Whether that’s fair, the market will decide. The government’s defence is simply that ₹81 sits comfortably above its own ₹75.99 benchmark.

Critics aren’t convinced. Politicians called it a “Season End Sale”. Bank unions called for black-badge protests on October 16. Many IDBI employees joined expecting a quasi-government career, and their union has sought a parliamentary review. Officials insist employees “need not worry”. For now, Fairfax plans to keep CEO Rakesh Sharma and make N.S. Kannan chairman, subject to RBI’s approval.

Is this India’s first bank privatisation? In substance, yes. Earlier foreign takeovers, like DBS absorbing Lakshmi Vilas Bank or Fairfax’s own CSB deal, involved banks that were already private. Technically, IDBI is private too, but only on paper. It has been owned and run by the state for six decades, so it isn’t really an apples-to-apples comparison.

As for LIC, some calculations show a 7.44% annualised return on its 2019 investment. That’s less than the Nifty delivered over the same period. Then again, LIC’s money was never really about returns. It kept a bank from going under.

Many ifs, but a first

Binding agreements, RBI’s final sign-off, competition clearance, and a fix for CSB all still stand between Fairfax and IDBI. The government hopes to close by March 2027. Any of these could slip. But after a decade of trying, India has finally found someone willing to buy one of its banks.

- This edition of the newsletter was written by Manie & Kashish.

Tidbits

1. India to roll out dedicated data centre policy amid power-use concerns

India is preparing a dedicated policy for data centres as the sector’s growing electricity and water demand raises concerns over resource use and consumer power costs. The government has not yet detailed the policy’s scope or timeline.

Source: The Economic Times

2. Reliance enters ready-to-drink dairy market with ₹20 flavoured milk

Reliance Consumer Products has launched its ready-to-drink dairy brand, Joyland, starting with flavoured milk priced at ₹20 in Tamil Nadu. The rollout places Reliance in direct competition with established mass-market dairy and FMCG brands including Amul, Mother Dairy, ITC, and Cavin’s.

Source: The Economic Times

3. Centre asks states to waive stamp duty on national highway projects

The Ministry of Road Transport and Highways has requested state governments to waive stamp duties on national highway projects. The central ministry argues that varying state levies create compliance burdens, contractual ambiguity, and potential project delays.

Source: The Economic Times

4. Investors question whether China is masking US bond holdings through overseas custodians

Canada’s reported holdings of US Treasuries and federally backed mortgage securities have climbed to nearly $600 billion, prompting speculation that some of the increase may reflect Chinese assets held through Canadian custodians. Analysts say the theory could help explain why China’s official US bond holdings have fallen sharply, though there is no direct evidence linking the Canadian buildup to Beijing.

Source: Bloomberg

5. India targets meeting 90% of domestic urea demand by 2030

India aims to expand domestic urea production capacity to 43.7 million tonnes by 2030 by adding 13.7 million tonnes of new annual capacity. The expansion is projected to cover roughly 90% of the country’s estimated 48.6 million tonnes of domestic demand, significantly reducing import reliance.

Source: Livemint

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. The RBI’s 3-front war on inflation, explained

To tackle rising food prices and energy supply shocks pushing retail inflation to 5.54%, the Reserve Bank of India raised the repo rate by 25 basis points to 5.50%. Beyond interest rates, the central bank is actively supporting the rupee by opening a direct dollar window for oil companies to curb spot currency demand, while tightening daily liquidity requirements to ensure rate hikes effectively transmit across the economy.

2. Will tougher pharma rules change who gets prescribed?

The Supreme Court directed the government to set up an expert committee to strengthen pharmaceutical marketing regulations under the Uniform Code for Pharmaceutical Marketing Practices (UCPMP). With pharma companies spending 25–30% of revenue on sales and promotion, stricter legal enforcement on doctor inducements could reduce promotional expenses, drive prescription demand toward established brands and trade generics, and improve operating margins for major drugmakers.

The RBI’s 3-front war on inflation, explained

If you’ve been following the RBI over the last week or so, you’d have noticed it has been unusually busy. It raised interest rates. It rolled out measures to prop up the rupee. And it started pulling money out of the banking system.

On the surface, these look like three separate stories. But they’re tied together by one thing that affects all of us: inflation. Each of these moves, directly or indirectly, is part of the RBI’s effort to keep prices in check.

To see how they fit together, though, we first need to understand what’s pushing prices up in the first place.

What’s driving inflation?

India’s retail inflation rose to 5.54% in September, from 4.83% in August. That’s how much more a typical basket of goods and services, as tracked by the consumer price index, costs compared to a year ago. Food inflation jumped even more sharply, from 5.97% to 7.74%.

Part of this story is painfully familiar. Food prices in India live and die by the weather, and the weather hasn’t been kind this year. We’ve written about this before on The Daily Brief, and its effects are now showing up clearly in the numbers.

India received about 13% less rainfall than normal this monsoon, partly because of El Niño, a warming of the tropical Pacific that tends to weaken India’s monsoon. A weak monsoon hurts twice. It damages the crops already in the ground, and it leaves less water stored up for the next season. You can already see this playing out. Rice prices are rising as acreage shrinks, and wheat acreage is expected to fall too. Edible oils are a separate headache. India relies heavily on imports for them, so their prices move with global markets.

CareEdge’s September inflation note flags these pressures, along with the risk a weak monsoon poses to farm output. On top of that, energy is getting expensive again, with crude climbing back up to $100 per barrel.

What really caught our eye, though, was how widely price rises are spreading.

CareEdge estimates that core inflation, which strips out food and certain energy items, edged up from 4.2% to 4.3%. Meanwhile, its diffusion index jumped from 72 to 82. Think of this index as a measure of breadth: it tells you how many categories are seeing prices rise faster than before.

By the same report’s count, inflation picked up in 11 of the CPI’s 12 major categories.

It’s tempting to look at this and conclude that the economy is overheating, that people are simply buying more than the economy can produce. We’d be careful with that conclusion.

Prices can rise across the board even when demand is perfectly normal. If fuel gets expensive, almost every business feels it, whether or not its customers are buying more.

The RBI made this exact distinction in its press conference. Governor Sanjay Malhotra said there were very few signs of demand pushing prices up. In other words, this is supply-led inflation. The worry, instead, was that persistent supply shocks might start changing how businesses and people set prices.

Here’s how that works. Imagine a transport company whose fuel bill goes up. It raises its freight charges. Now a manufacturer that uses that transporter faces a bigger delivery bill, and raises its own prices.

Now imagine people start expecting prices to keep rising. Workers ask for bigger raises. Businesses build larger price hikes into their plans. At this point, the original shock is shaping decisions far beyond the businesses it first hit.

That’s when inflation becomes really hard to shake off.

Why raise interest rates?

Which brings us to a tricky question for the RBI. If inflation is mostly coming from supply problems, what can an interest rate hike actually do? Higher rates don’t make it rain, after all.

Still, on October 7, the RBI raised the repo rate by 0.25 percentage points to 5.50%, its first hike since February 2023. It also shifted its stance to “calibrated tightening.”

The repo rate is the rate at which the RBI lends to banks, and it ripples out into borrowing costs across the economy. When loans get pricier, households and businesses get more cautious about spending. And with buyers holding back, companies find it harder to keep raising prices.

But the bigger point is about expectations. Remember the spiral we just described, where people start treating inflation as permanent and bake it into wages and prices? A rate hike signals that the RBI won’t let that happen. It can cool expectations today, even if its effect on actual prices takes much longer to show up.

But there’s another reason the RBI can’t sit still, and it has to do with the rest of the world.

Why the rupee matters

In September, both the European Central Bank and the US Federal Reserve raised their rates by 0.25 percentage points.

Why does that matter for India? One reason is the India–US yield gap. Right now, India’s ten-year government bonds yield roughly 7.3%, against about 5.3% for US ones. So a foreign investor earns about two percentage points more by lending to India. But they weigh that extra return against the risk that the rupee falls, and against what it costs to protect themselves from that fall.

When US returns rise relative to Indian ones, that trade looks less attractive. Some investors may sell Indian assets and convert the proceeds into dollars. All that dollar buying puts pressure on the rupee.

By October 7, it had lost about 7.5% against the dollar during 2026.

Here’s why that matters for inflation. If you’re an importer, a weaker rupee changes your bill even if your supplier hasn’t touched its price. A $100 purchase costs ₹9,000 when a dollar costs ₹90. At ₹97 to the dollar, the same purchase costs ₹9,700.

Imports get more expensive in rupee terms, and some of that eventually reaches consumers. Think about what this means for energy. Oil was already expensive because of global factors. A weaker rupee makes it more expensive still.

This is how the currency becomes part of the inflation problem.

Higher Indian interest rates help here, by making rupee assets more rewarding to hold. But rate hikes are only one part of how the RBI is defending the currency.

How the RBI is supporting the currency

Think of the rupee’s value as a tug of war between those who need dollars and those who bring them in. Importers need dollars to pay their foreign suppliers. Foreign investors need them when they take money out of India. On the other side, export earnings, remittances and investment inflows bring dollars in.

When demand for dollars outstrips supply, buyers have to offer more rupees for each dollar. That’s what a falling rupee is.

The RBI has been working on both sides of this equation.

First, the supply of dollars. Earlier this year, the RBI encouraged dollars to flow into India through special swap facilities. One of them was linked to FCNR(B) deposits, which are foreign-currency deposits that non-resident Indians hold with Indian banks.

Here’s how it worked. Banks collected these dollar deposits, handed the dollars to the RBI in exchange for rupees, and agreed to reverse the trade later. The RBI offered favourable terms, which made it worthwhile for banks to go out and gather these deposits. More dollars coming in meant more support for the rupee.

And it worked. Revised figures put FCNR(B) deposits at about $133 billion.

But there’s a catch. These swaps have to be reversed eventually, and when they are, the RBI has to hand those dollars back. The RBI’s future dollar obligations stand at around $200 billion. Set against that, its $734 billion war chest of foreign exchange reserves looks less comfortable than it first appears. A temporary inflow of dollars doesn’t make currency pressure go away for good.

So the latest measures go after the other side: the demand for dollars.

Oil companies are among the biggest and most regular buyers of dollars. Normally, they go to banks to buy the dollars they need to pay for crude, and those purchases add to demand in the currency market.

The RBI has now opened a special dollar window for Indian Oil, Bharat Petroleum and Hindustan Petroleum. From October 12, it can meet their daily dollar needs directly, through designated banks. That takes a big, steady source of demand out of the open market.

The next set of measures deals with currency contracts.

Say an importer has to pay a supplier in dollars three months from now. If the rupee weakens in the meantime, that payment gets more expensive. So the importer can lock in an exchange rate with a bank today. This is called hedging, and it serves a real business need.

But the same contracts can also be used to bet on where the rupee is headed. And when companies rush to buy dollars, or take positions bigger than their actual needs, they add to the pressure on the currency. The RBI wants these contracts to more closely reflect genuine business needs.

So it has lowered the threshold for establishing the exposure behind certain currency positions from $100 million to $5 million. In plain terms, companies taking currency positions above $5 million now have to show the business need behind them. Larger hedges are still allowed, but they have to be backed by real exposure. The RBI has also banned companies from rebooking contracts they’ve cancelled.

Together, these steps aim to curb excessive bets on the currency, although genuine importers may end up paying more too. If they help steady the rupee, they also limit how much inflation comes in through costlier imports.

There’s one more piece to this. When the RBI defends the rupee by selling dollars, it also changes how much money sits in the banking system. That brings us to liquidity.

Making the rate hike work

Liquidity, here, means the readily available cash banks use to settle payments and meet their short-term funding needs.

Banks lend this cash to each other, often overnight. When there’s plenty of it going around, nobody has to scramble for funds, and short-term borrowing rates stay low. That’s a problem for the RBI. It can raise the repo rate, but if market rates stay low, the hike doesn’t really bite.

And right now, the system is flush with cash, partly because of those currency swaps. When banks handed dollars to the RBI, they got rupees back, and those rupees landed in the banking system.

The RBI’s October policy statement shows that, since the August meeting, the banking system has had an average daily surplus of roughly ₹5.9 lakh crore. Banks with that much money on hand also have little reason to raise deposit rates to attract more.

So the RBI is mopping up some of that surplus, to make sure market rates actually reflect its tighter stance. It’s using a few tools to do this.

The first is open market operation (OMO) sales. The RBI sells government bonds it already holds. Banks pay for them, and that money moves out of the banking system and into the RBI. On October 13, it accepted bids for ₹25,000 crore in face value of government securities.

This pulls money out for longer, since it doesn’t automatically flow back the next day. Another is a tweak to cash reserve requirements, and it works a little differently.

Banks have to keep a certain share of their deposits as cash with the RBI. This is the cash reserve ratio, or CRR, and it stays at 3%. But from October 16, banks must maintain at least 99% of their required cash reserve each day, up from 90%. What they have to hold on average over a fortnight hasn’t changed.

Here’s what that means. Say a bank has to keep an average of ₹100 with the RBI. Earlier, it could dip to ₹90 on a given day and make up for it later. Now, it can’t go below ₹99.

That gives banks less wiggle room to use those balances elsewhere in the meantime. They may need to borrow more in the short term, which nudges market rates closer to the RBI’s policy rate. So this isn’t a conventional CRR hike. It’s a stricter rule on how banks maintain their reserves every single day.

Currency intervention adds to this. When the RBI sells dollars to defend the rupee, banks pay for them in rupees. Those rupees leave the banking system, unless the RBI puts money back some other way.

This is where all three policies meet. Selling dollars supports the rupee while draining liquidity. And tighter liquidity helps the rate hike actually reach the wider economy.

How much room does the RBI have?

All this tightening has a cost. Costlier credit can make families put off big purchases and businesses delay investments. And a poor harvest is already a hit to rural incomes. Tighter financial conditions would add to that strain.

That said, the RBI does have some room. It raised its growth forecast for FY2026–27 to 7.1% from 6.7%. The World Bank increased its forecast to 7.1%, from 6.6%, while the IMF now expects 7%, up from 6.4%.

These upgrades suggest the economy is more resilient than expected. But they’re no guarantee that growth can take more tightening without getting hurt.

Nor does inflation being below 6% mean the RBI can relax. Its target is 4%; 6% is just the upper limit of what it can tolerate. Its own October projections put inflation at 6% in October–December, 5.7% in January–March and 5.6% in April–June. That’s a long stretch above target.

So the RBI is trying to stop inflation from settling in, without choking growth. How much more it needs to do depends partly on things outside its control: the next harvests, water availability, global commodity prices, and the government’s decisions on releasing food stocks.

That’s the balance we’ll be watching: whether supply pressures ease on their own before the RBI has to slow the economy much more sharply to contain them.

Will tougher pharma rules change who gets prescribed?

You visit a doctor, get a prescription and buy the medicine. But why did the doctor choose that particular brand when several companies might sell essentially the same drug?

For Indian pharma companies, that decision is worth fighting for. Sometimes, the competition goes well beyond explaining why one medicine is better than another, even involving buttering up the doctors in other ways.

On October 8, 2026, the Supreme Court directed the government to set up an expert committee to examine whether pharmaceutical marketing needs stronger legal enforcement.

Oddly, though, India already has rules against these practices. They’re called the Uniform Code for Pharmaceutical Marketing Practices, or UCPMP. India has spent more than a decade trying to stop drugmakers from offering doctors expensive gifts, sponsored holidays and other personal benefits.

The problem is that there are some misaligned incentives at the heart of how those rules are enforced.

What is UCPMP?

In an earlier edition, we covered in-depth how pharmaceutical companies use medical representatives, free samples and other promotional activities to influence doctors’ prescriptions. We also explained why drugmakers resisted restrictions on medical representatives visiting central government hospitals.

It’s the UCPMP that sets the rules for this marketing. When India introduced the code in 2015, it was voluntary, with little to compel drugmakers to follow it. The government finally made it mandatory in March 2024. The code regulates how drugmakers promote medicines to doctors.

Companies cannot offer doctors cash, personal gifts or sponsored holidays. They can provide certain educational materials worth up to ₹1,000 each. They can also distribute free medicine samples, but within quantity limits. The total value of samples cannot exceed 2% of annual domestic sales.

Medical conferences have their own rules. Companies cannot organise these events abroad. They can support educational programmes in India, but generally cannot pay for doctors’ travel and accommodation unless they’re speakers at eligible events. Companies must also maintain promotional records and disclose certain marketing expenses.

So UCPMP doesn’t stop drugmakers from promoting medicines. But what they cannot do is offer personal benefits to influence prescriptions.

What happens when the marketing machine slows?

Even without these restrictions, though, pharma marketing can be a bit capital-intensive.

A June 2024 report by Avendus Capital estimated that Indian pharmaceutical companies spend roughly 25-30% of their revenue on sales and marketing. About half goes towards employees, largely the salesforce visiting doctors. The rest covers other selling and promotional expenses. Most of this spending is allowed under UCPMP.

But if companies cut back on improper promotional practices, could that affect their sales? We can’t answer that directly yet. But the COVID-19 lockdown gives us an interesting comparison.

From April to June 2020, medical representatives couldn’t visit doctors freely, and companies cut back sharply on promotional travel. Even today, there are restrictions on medical representatives visiting central government hospitals to limit the potential (mis)influence of pharma firms on doctors. During the lockdown, though, the disruption was much wider.

That year, on the Q1 earnings call of Alkem Laboratories, an analyst estimated that the company’s quarterly other expenses had fallen from the usual ₹500 crore to around ₹340 crore. But the company’s brands performed differently. For instance, Pan, which was one of Alkem’s biggest medicines, saw fewer new prescriptions written by doctors during the lockdown. Yet, its sales barely changed from the previous year. That being said, brands smaller than Pan weren’t nearly as fortunate.

A pharma company has two distribution channels: trade-generics and branded generics. The former refers to chemists and distributors, while the latter refers to doctor’s prescriptions. As a whole, Alkem’s trade-generics business grew during the pandemic. Trade generics’ share of Alkem’s domestic business rose from around 20% to nearly 28%, although partly because the branded business slowed down.

Of course, the lockdown affected patient visits, medicine demand and availability too. We can’t attribute everything to reduced marketing. But an established brand doesn’t need to win every sale from scratch. Doctors already know it, and chemists already stock it. A newer brand has to persuade doctors to try something unfamiliar, and doesn’t yet have the benefit of prescriptions.

A rulebook that struggles to enforce itself

Now, if you crack down harder on marketing, you might create conditions that may be similar, if not the exact same, to the lockdown. Which is where we come back to the enforcement problem UCPMP faces currently.

Consider what happened with AbbVie Healthcare. In May 2024, the Department of Pharmaceuticals received an anonymous complaint accusing the company of paying for travel and accommodation for 30 doctors attending medical conferences in Monaco and Paris. But the complaint never received a straightforward hearing on whether AbbVie had crossed that line.

The Department forwarded it to an ethics committee run by a pharmaceutical industry association. In September 2024, the committee rejected it because the complainant hadn’t revealed their identity. You see, under UCPMP, anonymous complaints aren’t allowed. They must also provide evidence and pay a ₹1,000 non-refundable fee. That protects companies against false accusations.

But say you work at a pharmaceutical company and discover improper payments to doctors. Would you want to put your name on a complaint against your employer? No, you’d rather do it anonymously.

The case then went to the government’s Apex Committee, which looked into the complaint anyway because the allegations were too serious for the anonymity condition to hold. In December 2024, the committee reprimanded AbbVie and asked the National Medical Commission to take action against the doctors involved.

The doctors challenged that decision. They argued that the committee shouldn’t have considered an anonymous complaint. In August 2026, the Delhi High Court temporarily stopped action against the doctors who had challenged the decision. It didn’t decide whether they had done anything wrong.

So instead of settling whether the payments broke the rules, the case ended up in court over whether an anonymous complaint could be investigated at all.

The wider enforcement system has a conflict-of-interest problem, too. Pharmaceutical industry associations run the committees investigating complaints, with their own executives in charge. These committees can warn companies, demand corrective action or suspend association membership. But they cannot directly impose penalties.

India has also used tax rules to discourage such spending. In 2022, the Supreme Court ruled that Apex Laboratories, the company behind Zincovit, couldn’t claim tax deductions for prohibited freebies given to doctors.

Meanwhile, in September 2025, after industry complaints about compliance burdens, the government relaxed some reporting requirements. Companies now submit standardised annual marketing disclosures through industry associations. Associations no longer have to upload those disclosures to the government’s portal.

The Supreme Court now wants the government to examine whether these rules need stronger legal backing. It has given the government two weeks to form a committee, which must submit its recommendations within two months. The government must then report its decision to the Court.

Nothing has changed for drugmakers yet. But if the government makes violations harder to get away with, companies may have to rethink how they spend money promoting their medicines.

Why the biggest brands might benefit

Stricter marketing rules could have an unexpected effect: they might improve profits for some of India’s largest drugmakers.

Avendus Capital estimates that lower doctor-related marketing expenses could potentially improve operating margins by 2-3 percentage points, with another 1-2 points possible from a more efficient salesforce. This is a way to protect profits as more medicine sales move towards trade generics and government-backed Jan Aushadhi stores.

But large companies may have a second advantage. If improper incentives to doctors become riskier, companies could put more effort into trade generics, where chemists and distributors play a bigger role in driving sales. And the economics there are different.

Take a medicine with a printed price of ₹100. As per Avendus’ calculations, in branded generics, distributors and chemists together receive about ₹30. In trade generics, their combined share can reach a little more than double that. That money is shared across the distribution chain, but it gives sellers a stronger reason to stock and promote trade generics.

Naturally, chemists cannot simply replace every medicine a doctor prescribes. And patients may pay less for trade generics, depending on their selling price and how much of the distribution margin retailers pass on. This is yet another version of the tradeoff between margins and growth. And distribution, they say, always comes first.

Neither outcome of higher margin or higher growth is guaranteed. Smaller companies could also benefit if improper inducements become less influential. But established drugmakers would still have the advantage of brand recognition and distribution networks built over decades.

Conclusion

The Supreme Court’s intervention raises a bigger question: who should police pharmaceutical marketing? The AbbVie case shows the limits of leaving it largely to the industry. But tougher penalties may not solve everything if companies simply shift their spending from doctors to chemists. India needs a system that can hold drugmakers accountable, while recognising the moving targets at play.

- This edition of the newsletter was written by Kashish & Mridula.

Tidbits

1. Shipping ministry unveils specialised credit risk insurance products for shipbuilders

The Union government has introduced two specialised credit risk insurance policies to support the domestic shipbuilding industry. Unveiled at the Maritime State Development Council, the policies will cover both export and domestic manufacturing projects, with the government subsidising premiums and offering direct support to insurers in the event of claims.

Source: Business Standard

2. India postpones rollout of UPI payment fee until after Diwali

NPCI has postponed the introduction of a 0.4% merchant fee on UPI transactions above ₹2,000 until after Diwali. The charge had been due to take effect on October 15, with NPCI citing the festive season for the delay.

Source: Reuters

3. Adani delays shifting Mumbai international flights after airline pushback

Adani Airport has delayed its plan to shift some international operations from Mumbai airport to the new Navi Mumbai International Airport by at least five months. The deferral follows opposition from airlines, which challenged a proposed reduction in their international departure slots and sought detailed explanations of capacity constraints.

Source: Livemint

4. Bangladesh seeks continued SAFTA tariff benefits and removal of anti-dumping duties

Bangladesh has urged India to withdraw anti-dumping duties on its jute products and PET film exports. Dhaka is also seeking to retain its existing tariff preferences under the South Asian Free Trade Area agreement after it officially graduates from the Least Developed Country category.

Source: Swarajya

5. Hyundai Motor Group to invest $15.5 billion in India by 2032

Hyundai Motor Group will invest about $15.5 billion in India between 2026 and 2032 to expand manufacturing, research and development, local sourcing and future mobility businesses. The group is positioning India as a major production and export hub for its Hyundai and Kia operations.

Source: Reuters

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. The business behind Zetwerk’s ₹5,000 crore IPO

B2B manufacturing platform Zetwerk is launching its ₹5,012 crore IPO, raising ₹2,830 crore in fresh equity to repay heavy operating loans. While its technology-led universal factory model has scaled total revenue to ₹15,913 crore—driven by custom energy equipment manufacturing and raw-material trading—its low 2.65% adjusted EBITDA margin and persistent working capital cash outflows mean the company must convert order growth into cash to break its debt cycle.

2. Who pays when it becomes too hot to work?

Extreme heatwaves across India are severely impacting the 76% of the population living in high-risk heat districts, with outdoor informal workers facing up to 40% lower earnings on extreme heat days due to reduced productivity and medical costs. Severe gaps in basic workplace amenities—such as shade, drinking water, and sanitation—force street and home-based workers to trade health for daily income, highlighting the urgent need for funded Heat Action Plans and functional parametric climate insurance.

The business behind Zetwerk’s ₹5,000 crore IPO

Imagine you run a business that makes power transmission equipment. You’ve just won a big order, and you need hundreds of parts, each made to precise specifications. Someone has to manufacture them.

Your first option is to hire a contract manufacturer. You agree on the specifications, the price and the delivery schedule, and it handles production from there. It could even deliver a complete product, sourcing components from other suppliers where needed. Think of companies like Dixon and Amber Enterprises in electronics and appliances. The catch is whether their manufacturing capabilities actually fit what you need.

Or you could look for suppliers on a business-to-business marketplace like IndiaMART. It will help you find businesses that make or sell what you need, but it typically won’t take responsibility for executing your order. Checking quality, managing suppliers and chasing deliveries could still be your headache.

Now imagine a third option: a company whose entire business is organising production across a network of factories. You hand it the order, and it takes contractual responsibility for delivering the finished goods to your specifications. It can use its own plants or split the work across outside manufacturers, while it arranges materials, monitors production, checks quality and manages delivery. Several factories may do the work, but you only ever deal with one company.

That, in a nutshell, is Zetwerk’s manufacturing business. What it can make isn’t limited to the factories it owns; it extends to the whole supplier network it manages. On top of that, Zetwerk runs a sizeable business buying and reselling industrial raw materials such as steel, aluminium and chemicals.

And now, Zetwerk is going public. Its IPO runs from October 15 to 19, with shares priced at ₹143–151. At the upper end of that band, the offer is worth about ₹5,012 crore. Of that, ₹2,830 crore goes to Zetwerk itself, and the rest goes to shareholders selling their stakes.

So let’s dig into how this business makes money, how much of that it gets to keep, and what the IPO money will pay for.

What does Zetwerk actually do?

Let’s go back to that transformer order, and say it lands with Zetwerk. Its engineers study the requirements, estimate the cost and quote a price. Once the customer agrees, Zetwerk uses its own software, Zetwerk OS, to assign the work to a suitable factory.

That factory could be one of Zetwerk’s 26 factories across India, the US, Germany and Spain, or one of its 6,979 outside suppliers. Zetwerk started out relying on other manufacturers, but has since acquired 15 factories and built 11 of its own. As of March 2026, three more were under construction.

Either way, Zetwerk arranges the materials, monitors production, checks quality and manages delivery. The customer pays Zetwerk, and Zetwerk, in turn, pays the suppliers and everyone else involved.

This manufacturing business spans three areas. The biggest is energy, which covers transformers, solar equipment and wind turbine parts, and brought in 41% of Zetwerk’s total operating income in FY26. Then there’s precision manufacturing, which makes specialised parts for electronics, aerospace and defence, at about 9%. The third is capital goods, meaning the machinery and equipment other industries use, which makes up another 9%.

Its customers include Siemens Gamesa, Acer India, CG Power, NTPC Renewable Energy, L&T MHI Power Boiler, DRDO and the Indian Air Force. But why would these companies pay Zetwerk, instead of just dealing directly with factories?

Because finding a supplier is only one part of the job. Factories are extremely fragmented, and individual ones can differ in quality, capacity and how reliably they deliver. Managing those differences takes people and time, and that adds to the customer’s costs. Zetwerk becomes the orchestration layer that absorbs all that complexity and guarantees the outcome. And when an order can be split across several factories working at the same time, Zetwerk can even shorten delivery times, something a standalone factory can’t do.

That said, how much work Zetwerk does varies from order to order. In a “build-to-print” order, the customer supplies the design and specifications, and Zetwerk simply gets the product made. In an original design manufacturing, or ODM, order, Zetwerk takes on the design work too. That gives it room to earn more for its contribution, though the extra work also brings extra costs and responsibilities.

What the customer is buying matters too. Equipment bought to build a new plant counts as capital expenditure: a big purchase that may not come around again for years. To keep that business going, Zetwerk has to keep finding new projects or new customers. Parts a customer needs regularly, for production or maintenance, are different, because they can bring in repeat orders.

Contract terms can add some predictability as well. Multi-year agreements can support a longer relationship, though they’re only as valuable as what customers actually commit to buying. Take-or-pay agreements go a step further: the customer commits to buying a minimum volume, or pays a shortfall fee if it doesn’t.

So how stable Zetwerk’s revenue is depends partly on its mix of one-off projects, repeat purchases and committed orders.

Manufacturing, though, made up only 59% of Zetwerk’s FY26 revenue, or ₹9,375 crore. The remaining 41%, or ₹6,539 crore, came from Terra91, its arm that buys and resells industrial raw materials such as steel, aluminium and chemicals.

In this business, the full sale value counts as revenue. If Terra91 buys metal for ₹100 and sells it for ₹102, it books ₹102 as revenue, but keeps only ₹2 of it before other expenses. That’s why a big revenue number doesn’t necessarily mean big earnings.

Manufacturing generally earns better margins, because here Zetwerk is also providing engineering and production services. Its manufacturing segment’s EBITDA margin was around 6% in FY26, while the company’s overall adjusted EBITDA margin was 2.65%. The two measures aren’t directly comparable, but the gap is hard to miss.

Terra91 may help Zetwerk buy materials at better prices in bulk, and supply its manufacturing partners. But its thinner margins mean we need to look at the mix of businesses behind Zetwerk’s revenue, not just the headline total.

The numbers underneath

Zetwerk’s revenue fell about 8% in FY25, before bouncing back 40% to ₹15,913 crore in FY26. But look closer, and you’ll see its two businesses behaved quite differently.

Most of the FY25 decline came from Terra91, whose revenue fell 19%. Manufacturing held up, growing about 3%, before jumping 50% in FY26. Both businesses kept growing in the June 2026 quarter, pushing overall revenue up 55% from a year earlier. In short, manufacturing has grown more steadily, while raw material trading has driven more of the swings.

Zetwerk is also keeping more of each sale after paying the direct costs of fulfilling orders. Its gross margin rose from 7.7% in FY24 to 12.1% in FY26, though most of that jump came in FY25.

The shifting manufacturing mix helps explain this. ODM orders, where Zetwerk also takes on design work, grew from 8% to 14% of manufacturing order value between FY24 and FY26. Business from North America and Europe can also command better pricing. And doing more work in its own factories lets Zetwerk keep income it would otherwise pay out to outside manufacturers. Of course, those factories cost money to run too.

Once you account for other operating expenses, though, Zetwerk’s overall adjusted EBITDA margin was 2.65% in FY26. That’s better than 0.78% in FY24, but slightly below the 2.85% it managed in FY25. CRISIL also estimated its FY26 operating margin at around 2.6%. Any way you cut it, this is still a thin-margin business.

At the bottom line, Zetwerk reported a ₹1,606 crore net loss in FY26. That includes two large one-time charges: roughly ₹800 crore for additional shares issued to its founders, and ₹450 crore written off against the civil infrastructure business it has decided to exit. Neither required Zetwerk to pay out cash right away. Strip out certain exceptional expenses, and adjusted profit before tax improved from a ₹249 crore loss in FY24 to a ₹46 crore profit in FY26.

So profitability is improving. But it’s the cash position that caught our eye, because it tells a much harder story.

In FY26, Zetwerk reported ₹421 crore in adjusted EBITDA. Yet its operations consumed ₹682 crore in cash. That annual cash outflow has grown three years in a row. And in just the first quarter of FY27, operations swallowed another ₹506 crore.

The reason lies in what Zetwerk takes responsibility for. It has to pay for materials and production before it collects the full payment from customers. Until then, materials and unfinished goods sit in inventory. And once the goods are delivered, the sale can count as revenue even if the customer hasn’t paid yet. That unpaid amount sits in trade receivables.

Suppliers help finance part of this cycle by letting Zetwerk pay them later. But when inventory and customer dues eat up more cash than that supplier credit covers, Zetwerk has to fund the gap itself. And suppliers giving it less time to pay only adds to the pressure.

Inventory and trade receivables together add up to roughly ₹3,500 crore, against a net worth of about ₹4,800 crore. That doesn’t mean shareholders’ money directly funded all of those balances, but it gives you a sense of how big they are next to the company’s equity.

In theory, these assets should turn into cash as goods get sold and customers pay up. And persistent cash outflows don’t necessarily mean the same invoices are going unpaid for years. Collections can simply keep getting absorbed by the next, bigger round of orders. Individual balances keep turning over, but the funding requirement stays put.

To fund working capital and other business needs, Zetwerk borrows both at the parent company and through its subsidiaries. That borrowing comes at a cost. Interest expense in FY26 was around ₹366 crore, a heavy burden next to ₹421 crore in adjusted EBITDA. Much of the operating gain gets eaten up before it can reach net profit.

CRISIL rates Zetwerk’s debt A-/Negative. The “Negative” part is the outlook, a signal that the rating could come under pressure. One of CRISIL’s concerns is that exiting the civil infrastructure business could end up costing more than expected.

There is some breathing room, though. According to CRISIL, Zetwerk ended FY26 with around ₹1,900 crore in cash that wasn’t pledged against loans, and management has committed to keeping at least ₹800 crore as a cushion.

But that cushion won’t refill itself. If operations keep burning cash, Zetwerk will either need fresh funding or have to dip into what it has. And growth can actually make that requirement bigger, when supplier payments run ahead of customer collections. The business is winning more orders. What it still needs to do is turn those orders into cash it gets to keep.

What does the IPO change?

Which brings us to the IPO. Of the ₹5,012 crore offer, ₹2,830 crore will come to Zetwerk through new shares. The remaining ₹2,182 crore will go to existing shareholders selling their stakes.

The offer has also grown since August. The fresh issue went up from ₹2,600 crore to ₹2,830 crore, while the portion being sold by existing shareholders expanded by around 49%.

Of the money coming to Zetwerk, ₹2,160 crore—roughly three-quarters—will repay loans: ₹1,300 crore at the parent level and ₹860 crore across nine subsidiaries. What’s left, before issue expenses, is earmarked for acquisitions and other business needs.

Remember, Zetwerk borrows to fund orders while it waits for customers to pay. Normally, you’d expect that customer payment to free up the money, so the loan can be repaid. But Zetwerk keeps needing more cash to run its operations. So now, it’s raising money from shareholders to pay back its lenders.

This is the interesting part. What looks like a temporary need, money to complete an order, has turned into a permanent funding requirement. One customer pays, but the next order needs financing. Using long-term equity to meet a permanent requirement like that can make sense. The real concern is whether that requirement keeps growing faster than the cash the business earns.

If it does, the IPO will only buy temporary relief. More orders could mean more cash tied up, followed by more borrowing, or yet another equity raise. Paying off today’s loans doesn’t fix the cycle that creates the need for them.

To be fair, Zetwerk has built something customers keep coming back to. Repeat customers contribute around 80% of manufacturing revenue, which suggests it’s solving a real problem. Exiting the loss-making civil infrastructure business could also help, as long as the exit doesn’t bring substantial additional costs.

So after it lists, revenue growth is only one part of what we should be watching. Does Zetwerk start collecting payments faster? Does less money get stuck in inventory? And do its operations start generating cash?

Repaying debt should cut interest costs and lift profitability. But eventually, the business needs to fund more of its growth from the cash it earns. Otherwise, shareholders may find themselves funding the same problem all over again, just at a bigger scale.

Who pays when it becomes too hot to work?

A large chunk of India’s income earners, like construction workers, vegetable sellers, or delivery workers, depend on being outside. With how much hotter each day gets, and how much more rain becomes volatile, these livelihoods are squeezed between a rock and a hard place. After all, if you choose to go home to get respite from the heat, you lose the day’s earnings.

Two Delhi-based economists studied how 396 informal workers in north-west Delhi reacted in the face of such a trade-off when two heatwaves hit the city between May and June 2019. They estimated that earnings after work-related expenses were about 40% lower on heatwave days than on other days in the study.

Workers were also less likely to go to work and more likely to report illness in themselves or their families. Additionally, hotter days were associated with greater medical spending.

This was a small, local study, so we cannot apply that 40% figure to every worker in India. But the problem it captures is easy to understand, and it’s very likely that it applies to many other parts of India. As per CEEW’s district-level heat risk assessment, 417 of India’s 734 districts are in the high-heat or very high risk categories. These districts are home to roughly 76% of the population.

We look at the findings of a few reports to paint a picture of how heat hurts productivity of workers across India. These findings go beyond merely the Celsius temperature, which has certainly risen over time. But they also look at how heat intersects with whether someone has a decent roof above them, how they’re paid, whether there’s a toilet nearby, and so on. The same hot afternoon, then, varies in how much difficulty it creates for different types of workers.

Beyond the temperature

Let’s start with how heat affects different jobs.

Carrying bricks, for instance, generates heat inside the body. Standing near a furnace adds heat from outside. Clothing, humidity and the movement of air affect how easily the body can cool itself. In humid conditions, sweating becomes less effective.

In essence, you don’t need a record-breaking high temperature to know that this is already a problem. Heat intersects differently with the intensity of different kinds of jobs that are done outside. It is why workplace heat assessments often look beyond air temperature.

The financial damage also looks different depending on the job. A daily-wage worker might lose a shift. Someone paid for every piece they make might work for hours but finish fewer pieces. A street vendor can lose money even if they stay at their stall all day.

WIEGO, a research agency focused on informal female workers, conducted a survey of 494 Delhi street vendors last year. They found that 96% reported fewer customers because of heat. Another 90% reported reduced working hours, perhaps because they chose to close early. Meanwhile, 72% reported damage to goods.

There’s another problem: even staying at work safely may require facilities that aren’t available. In the same survey, 79% reported no access to toilets at work, 84% no shelter and 89% no access to free clean drinking water.

In fact, one of the most alarming effects of the combination of heatwaves and poor sanitation facilities is that workers end up drinking less water because it is the best way to manage the absence of a toilet, even though it makes coping with heat much harder. Research among women working in agriculture, brickmaking and steel documented restricted fluid intake alongside inadequate sanitation access.

Amenities might still be available, but availing them could mean loss of income. A survey with 40 street vendors in Mumbai’s M-East Ward from May this year found that some vendors didn’t drink water to avoid going to the toilet, but additionally leaving the stall to go to a farther toiler could also mean leaving their goods unattended. If you’re someone who gets paid according to how much you produce, finishing less can mean earning less, so taking a break for even going to a clinic would get punished.

Trapped inside

One could be forgiven for thinking that working indoors or at cooler times of the day might make things a lot easier. But reality is hardly such a simple calculation.

WIEGO’s research on home-based workers in Delhi describes women working in cramped homes with unreliable electricity and uneven access to basic services. In its 2025 survey of 328 women, most of whom did sewing-related work, 84% reported reducing their working hours because of heat and 88% reported lower productivity.

For these workers, the home is the workplace. There isn’t necessarily another room to move into. A fan needs electricity. A cooler needs money, space and even water. A tenant may not have permission to change the roof or improve ventilation. “Stay indoors” doesn’t offer much relief when indoors is where the heat is trapped.

What’s more, a 2021 study of 123 Kolkata slum dwellings and 101 rural houses in West Bengal found that indoor heat stress was actually greater and lasted longer in the urban homes under similar outdoor conditions. The difference boiled down to crowding and construction materials used to build those homes. A recent CEEW report also finds similar results for migrant workers at brick kilns, whose temporary accommodation may offer little cooling. Clearly, leaving the worksite doesn’t end heat exposure.

Even moving work to cooler hours needs some thought. An earlier or later shift has to fit around childcare and transport. For women in particular, lighting and safety are paramount to be solved for before anything.

Who pays for a safer working day?

Say people are allowed to take more breaks to gain respite from the heat, or if the cooling in their workplace improves. What happens to economic output?

When it comes to breaks, it doesn’t have to be an either/or answer where one happens at the expense of the other.

For instance, research among piece-paid sugarcane workers in Nicaragua found that productivity increased while a programme providing rest, shade and hydration was expanded. It doesn’t tell us what would happen in an Indian workplace. But what it does show is that more rest and higher output is possible.

But improving cooling inside a building has a much more unambiguous effect on output. An NBER study of garment factories around Bengaluru found that switching to LED lighting reduced the heat generated inside factories and improved productivity, especially on hot days. Spending on a cooler workplace can bring returns through the work itself.

The next question is how workers (or even which ones) get access to that improvement. Who pays for the roof treatment? What happens if the person living there is a tenant? If another cooling option needs electricity, can the household afford to run it?

For these questions, India does seem to have a policy response, which has developed over time.

In July 2026, the government reported that 23 states, 195 districts and 64 cities had prepared heat action plans. An April labour ministry advisory called for measures including changes in working hours, drinking water, rest areas and workplace cooling. By August 2026, the Union government had confirmed the inclusion of heatwaves and lightning under the State and National Disaster Response Fund guidelines for 2026-31.

These tell us what governments are asking for, but not how many workers receive those protections. Nor is it complete proof of whether funding is automatically flowing to workers.

For instance, a 2023 review of 37 heat action plans, conducted by Delhi-based think-tank CPR, found that 26 did not mention financing. That’s an older assessment, not a verdict on all current plans. But what it sheds light on is the gap between state capacity and execution, or between words and action.

There is evidence that these plans can help when executed. A study of Ahmedabad’s heat action plan, which was implemented after a devastating heatwave in 2010, projected that nearly 1,200 annual deaths were avoided in the two post-implementation years studied.

Financial support is another part of the response. Parametric insurance, for instance, pays when a predefined weather condition is met. Workers don’t have to prove their individual loss each time. But while that makes payment simpler, it also means someone can lose income and still receive nothing if the exact heat trigger isn’t reached, while workers continue to suffer losses.

The experience of SEWA, India’s primary association for female informal workers, exemplifies this difficulty. A 2023 pilot program covered about 21,000 SEWA women but made no insurance payouts, simply because temperature triggers, which were very high at around 45°C, weren’t met. Yet, members reported losses associated with unseasonal rain.

In 2024, a redesigned arrangement combined insurance with separate cash support, and over 92% of the women enrolled received insurance payments. All of them also received ₹400 in donor-funded cash assistance. However, the program also suffered from bank-account and documentation problems that complicated delivery.

Conclusion

India’s heat problem has only become more complicated as it amplifies our other sore spots where we severely lack infrastructure for workers. Someone’s earnings potential is simply not separate from access to water, sanitation, health infrastructure, or even insurance against future climate shocks.

Different solutions address different problems, sometimes at different times of a worker’s day, and certainly not uniformly across industries. Each fix addresses one slice of the problem, but there aren’t many cohesive action plans that integrate all of them together.

People already know that getting out of the heat would help. What they need is a way to do it without creating another problem at home.

- This edition of the newsletter was written by Vignesh & Kulsum.

Tidbits

1. IMF raises India’s growth forecast for FY27 and FY28

The International Monetary Fund has raised India’s economic growth forecast for the current and next fiscal years, citing resilient domestic demand. The agency also noted that artificial intelligence adoption is helping to support broader global economic growth.

Source: Livemint

2. EPFO 3.0 rollout may take another year, delaying gig-worker benefits

The rollout of EPFO 3.0 could take another year after its technology-partner tender is completed, potentially delaying proposed social-security benefits for gig, platform and other workers. The overhaul is meant to modernise EPFO’s IT infrastructure and improve account and claims management.

Source: Business Standard

3. Getty Images to go private through prepackaged bankruptcy restructuring

Getty Images plans to file for Chapter 11 bankruptcy as part of a restructuring deal that will take the company private. The Getty family and Koch Equity Development will invest up to $533 million, while creditors have agreed to reduce debt and extend maturities.

Source: Reuters

4. India’s wheat acreage could fall 5–10% as water shortages push farmers to other crops

India’s wheat acreage could shrink by 5–10% this winter as water scarcity and relatively weak wheat prices encourage farmers to switch to crops such as pulses and oilseeds. Rajasthan, Gujarat and parts of Madhya Pradesh and Maharashtra are expected to see some of the biggest shifts.

Source: The Economic Times

5. Global smartphone shipments fall to lowest third-quarter level in 14 years

Global smartphone shipments fell 20% year-on-year in the third quarter to their lowest level since 2012, according to Counterpoint Research. Soaring memory-chip costs and shortages pushed manufacturers to raise prices, cut shipments and focus more on higher-margin devices.

Source: Reuters

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Thank you for reading. Do share this with your friends and make them as smart as you are 😉

Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. The US is one step away from banning green cards

The US Department of Labour indefinitely suspended eight major tech firms—including Microsoft, TCS, Infosys, Wipro, and Cognizant—from the Permanent Labour Certification (PERM) program, freezing the primary pathway to green cards for foreign workers. However, top Indian IT firms have already dramatically reduced their reliance on US work visas and green cards over the past decade, shifting to high offshore delivery ratios (~77%) and local US hiring, while Big Tech firms like Microsoft bear the brunt of the freeze.

2. India’s housing boom has narrowed

Headline data shows major-city housing sales remaining flat at 2.58 lakh units between January and September 2026, but underlying segment trends reveal a stark divide. While the ₹1–5 crore mid-to-premium housing segment surged—now accounting for over half of all sales—the affordable market (<₹50 lakh) fell 12% due to soaring land costs, reduced developer launches, and buyer affordability constraints exacerbated by the RBI’s recent rate hike.

The US is one step away from banning green cards

Just a few days ago, US Vice President JD Vance and Labour Secretary Keith Sonderling held a press conference to announce one of the Trump administration’s most aggressive immigration enforcement actions yet. Eight major technology companies were being indefinitely suspended from the Permanent Labour Certification program, or PERM. No new applications would be accepted, nor would any pending applications be processed.

As per Sonderling, since 2009, these companies alone had received over 2.3 lakh H-1B approvals and obtained over 1 lakh PERM certifications. Vance singled out Microsoft for laying off 6,000 American workers while obtaining over 6,000 H-1B visas and ~3,000 green cards. He called the foreign workers these companies employed “indentured servants”.

However, four of those eight companies are TCS, Infosys, Wipro, and Cognizant, which have already reduced their green card applications significantly to a negligible scale. Their combined filings in FY26 were essentially zero. The company this freeze hits hardest is actually Microsoft, which is the single largest filer of PERM cases.

This is also hardly the administration’s first move against skilled immigration. Just last year, the US had steeply hiked the application fee for the H1B visa. But since then, it’s hardly made a dent to the Indian IT business, which has been preparing for long against this eventuality.

So, what really is the intention behind this PERM move? How does it measure up against the goals it has set out to achieve?

The H1B fee hike

Let’s start with last year’s H1B fee hike.

In September 2025, the Trump administration issued a proclamation slapping a $100,000 fee on new H-1B visa applications on top of the previous cost of just $5,000. Indians account for ~70% of all H-1B beneficiaries, so this was, in effect, an India tax.

However, the fee barely survived contact with the courts. A Massachusetts judge vacated it in June 2026, calling it an unlawful tax. The First Circuit, which hears appeals from federal district cases in some states, declined to reinstate it in July. Between September 2025 and February 2026, the Department of Homeland Security actually collected the fee on just 85 applications. Fee-subject filings collapsed by 87%.

But perhaps, the fee was probably not needed at all. Indian IT firms have been reducing their reliance on H1B registrations for much of the last decade anyway.

As we’ve covered before, Indian IT chooses one of two ways to reduce their reliance on H1B. The primary move is to move as much of their work offshore as possible. When that isn’t possible, they pull the secondary lever: hiring Americans locally.

In fact, between 2015 and 2025, there has been a 70% drop in H1B registrations for initial employment from the top Indian companies. In FY24, these firms only filed nearly 4500 petitions, which represented 0.003% of America’s civilian workforce. The H1B fee only nudged these companies further in a direction they were already headed in.

The bridge between guest and resident

Now, an H-1B visa is a temporary work permit. It lets a skilled professional live and work in the US for up to six years. But it’s tied to a specific employer. If you lose your job, you have 60 days to find another sponsor or leave the country. You can’t freelance, you can’t start a company, and your bargaining power with your employer is limited, because there is no alternative to leaving your employer other than leaving the US altogether.

A green card, though, is permanent residency. It lets you live and work in the US indefinitely, for any employer, on your own terms.

PERM is the bridge between the two. Before an employer can sponsor a worker for a green card, it must first get the Department of Labour to certify that no qualified American worker is available and willing to take the job. The employer posts the position, runs a recruitment campaign, documents that no suitable American applicant turned up, and then files for PERM certification. Only after that can it petition for access to a green card.

In other words, the PERM process is specifically designed to protect American workers.

So what does freezing PERM do? It doesn’t cancel anyone’s work visa, nor does it immediately deport anyone. What it does is freeze their path to permanence. Workers can keep working, but they can’t move toward a green card through these eight employers. The freezing of PERM, then, locks out many hopefuls from the ability to exit the trap Vance described.

Shooting moving targets

That being said, Indian companies have relied even less on the PERM as they have on the H1B.

The US Department of Labour publishes PERM disclosure data every year. In FY25, Microsoft had 3,161 PERM cases that were decided. This was more than the Indian outsourcers on the list combined. In FY26, the gap became even starker: Microsoft got 1,683 of those, while each of Infosys, Wipro, TCS and Cognizant had either a negligible number or flat zero.

As per HDFC Securities, only two Indian IT firms feature in the top 20 PERM users of FY25.

That also tracks with the intentions that Indian IT firms have publicly announced. For instance, TCS CEO K Krithivasan said publicly that the company is not looking to hire any new H-1B applicants in the US at all.

TCS told the stock exchange that except for its backlog, its new PERM applications had been in “single digits“ over the last two years. Cognizant went from over 1,200 PERM cases a year to zero. Even when certifications came through, many companies let them expire unused. They weren’t carrying workers with green cards.

Meanwhile, the companies hit hardest are American multinationals like Microsoft and Adobe, who often onboard Indian workers under both H1B visas and the green card.

For many Indian engineers, a job at a Big Tech company has long been the American Dream. But now, Trump’s policies are only making it harder to realise it. In fact, this is exactly what we discussed in a recent Subtext episode with serial entrepreneur Sidu Ponnappa.

Like we mentioned before, Indian IT firms have been pulling two levers to escape America’s anti-immigration measures.

The first is offshoring. It’s well-known that Indian IT has been increasing its offshore mix over the last 10-15 years. The share of work done at the client’s location in the US has been falling across companies, much of it directly in response to the risks posed by American policy measures.

Moreover, a paper in Management Science by economist Britta Glennon found that restricting H-1B supply doesn’t cause companies to hire Americans. It causes them to move work abroad. A one-percentage-point cut in H1B supply led to 12-16% growth in foreign affiliate employment. It just moves the work.

The second lever, though, might contrast with this paper’s findings, because starting around 2016, Indian IT firms actually began hiring locally. By 2017, Infosys had committed to hiring 10,000 Americans and opening innovation hubs across the US. Today, TCS has ~30,000 US employees, of whom a third are on the H1B visa.

Later, Trump instituted a “Buy American, Hire American“ executive order, which only accelerated it. The localisation rate has climbed steadily since. Wipro went from about 50% local workforce in the US in 2017 to over 80% by late 2025. Meanwhile, HCL also has a ~80% localisation rate as of this year.

Now, you might think that both levers might be at odds with each other. But the nuance here is that the localisation rate has been rising, but the onsite footprint share has been shrinking. The US jobs Indian IT adds are dwarfed by the headcount it keeps adding offshore. The net flow of work is still moving to India, not away from it.

Additionally, offshore growth is also taking the form of GCCs in India, where companies like Microsoft, Amazon, and Google are building their own captive operations. These centres bypass both the visa system and the IT services vendor entirely.

So Indian IT might be doing what Vance says he wants: hiring Americans, building local workforces, reducing visa dependence. But the ban may not be as effective, particularly on Indian IT that have more or less already abandoned the PERM program. And while it potentially hurts Big Tech firms more, their most rational response might be to move more of the work outside.

The AI invariant

However, there’s one variable we’re yet to account for that might intersect with this ban in unseen ways.

AI is, of course, rapidly forcing software product and services firms to upend their organisations and even shrink the base of the pyramid. The routine work that filled the offshore pyramid, like testing, code maintenance, and basic application development, is exactly the kind of work LLMs are getting good at.

In light of that, there could theoretically be a limit to how much offshoring you could do.

Meanwhile, as AI automates the commodity layer, the work that remains valuable is the exact opposite. It’s the work that requires being deeply embedded with the client, understanding their data, their systems, their specific problems. Sometimes, if not always, that might mean actually being physically present at a client site. This, in fact, was also alluded to in the same Subtext episode with Sidu Ponnappa.

This is the Forward Deployed Engineer (FDE) model, where small teams of highly-skilled engineers sit wherever the client’s key workflows live. It is a heavily customer-facing role, much unlike most offshore work Indian IT has done this far. And while it’s hardly a new model, it was made popular by a very specific American company: Palantir.

Interestingly, some months ago, Alex Karp, the CEO of Palantir, said that AI makes large-scale skilled immigration hard to justify “unless you have a very specialised skill“. In a sense, that is also the ideology behind the PERM restriction. Karp also has extremely close ties with the Trump administration.

Indian IT firms are starting to build FDE-style capabilities. TCS, for instance, has already begun hiring FDEs. Plus, as we’ve covered before, some of the fast-growing mid-cap IT firms are following a model somewhat similar to that of Palantir, where teams are arranged in small “pods” of human FDEs and AI agents, dedicated wholly to certain clients. When the business grows, the size of the pods themselves doesn’t; only the number of pods does. But it’s still early days.

The real volume, meanwhile, is flowing toward India’s GCCs, with firms like Amazon and Microsoft committing billions of dollars to India. That does mean more jobs in India, but does it mean more decision-making power? Well, GCCs expected that Trump’s policies would give them that. But, as The Ken found out, many of the critical decisions continue to remain in American headquarters, while India does the execution.

Fighting the last war

The PERM freeze is indefinite with no end date in sight yet. But, like the H-1B fee before it, is aimed at a model that’s already mostly gone. The Indian IT body-shop has been in retreat for a decade, while also diversifying away from the US. Most of the companies named in the suspension had already stopped using the programme.

The policy assumes a world where blocking a foreign worker creates a job for an American. While there are signs it does, much of the best available evidence says that the relationship is not 1-to-1. It may even be negative.

It also goes without saying that this is yet another measure from the Trump administration to de-globalise and insulate the US from the rest of the world. However, if there’s anything we’ve learned this year, it’s that trade always finds a way to move and skirt past barriers.

India’s housing boom has narrowed

If you only looked at the headline numbers, you’d think India’s big-city housing market has simply stopped moving. Knight Frank counted 2.58 lakh sales across eight major markets between January and September 2026, almost exactly what it sold a year earlier. In July–September alone, sales slipped just 1%. Boring, right?

Not quite. A market can be flat in two ways. Either nothing moves, or some parts surge while others sink and the two cancel out. India’s housing market is the second kind. Cheaper homes are selling less, the ₹2–5 crore bracket is booming, and some corners of the luxury market are slowing hard. To see what’s really going on, you have to look underneath that total

Premium demand is real but uneven

In July–September, sales of homes priced between ₹1 crore and ₹2 crore rose 4% from a year earlier. The ₹2–5 crore segment grew 20%. Put together, these two brackets now make up just over half of all the homes sold across the eight markets.

And these are actual homes changing hands at those prices, not just developers announcing bigger booking numbers. Developers are seeing it too.

In an interview, Prestige Estates chairman said its luxury projects, like Prestige Nautilus and Prestige Ocean Towers in Mumbai, had seen a strong response. He admitted there’s a lot more luxury supply coming up, but his point was simple: get the location, design and price right, and buyers will show up.

Of course, that’s one developer talking about his own projects. Zoom out, and the picture gets messier.

In NCR, sales of ₹5–10 crore homes fell 63% in July–September, while unsold stock in that bracket rose 33%. That’s a staggering fall. Knight Frank’s read is that NCR’s top end had become an investor-heavy market, where prices ran ahead of what people who actually want to live there could pay. That’s the consultancy’s take, though. The sales numbers alone can’t tell us why buyers stayed away.

Even the booming ₹2–5 crore segment is piling up homes fast. Across the eight markets, its unsold inventory rose 37% from a year earlier. That sounds alarming, until you notice that it would take about 4.5 quarters to clear, quicker than the market-wide 6.1. So it’s something to keep an eye on, not a sign that demand has fallen off a cliff.

There’s one more catch here. Think of a flat that cost ₹85 lakh a few years ago and now costs ₹1.1 crore. It’s the same flat, but it has quietly moved into a higher price bracket. So part of this shift towards crore-plus homes is buyers genuinely upgrading, and part of it is just homes getting pricier. It doesn’t all mean Indians suddenly got richer.

The affordable end has two problems

Now go to the other end of the market. sales below ₹50 lakh fell 12% in July–September, while the ₹50 lakh–₹1 crore bracket fell 8%.

Part of the story is that builders simply aren’t making enough of them. Reporting on the first quarter of 2026, Knight Frank blamed much of the fall in cheaper-home sales on fewer launches.And this isn’t a recent blip. It’s been building for years. In early 2022, about a quarter of all new homes launched across India’s top seven cities were priced under ₹40 lakh, according to Anarock. By April–June 2026, that share had shrunk to just 6%. Homes under ₹80 lakh, which made up 60% of launches back then, had fallen to a quarter.

There was a small bounce in July–September, when sub-₹40 lakh homes rose back to 14% of launches. But one good quarter doesn’t undo four years of drift.

Builders, for their part, say costs, especially land, have made it hard to build homes at those prices and still make money. But that can’t be the whole story. If the only problem were a shortage of new homes, the ones already on the market should be flying off the shelves. Are they?

Here’s where it gets interesting. By September, there were nearly 1.7 lakh unsold homes below ₹50 lakh. That’s actually 5% fewer than a year ago, so cheap homes aren’t exactly piling up.

And yet, the time it would take to sell them all has stretched from roughly 26 months to 28 months. Think about that. The stock is shrinking, but it’s selling even more slowly. That only happens when buyers are pulling back too. In other words, the affordable end has a supply problem and a demand problem at the same time.

Why are buyers holding back?

So what’s keeping buyers away? The industry’s first answer is affordability. In April, Knight Frank’s Shishir Baijal pointed to rising prices alongside weakening sales as a sign of pressure on buyers’ ability to purchase. That makes sense, but it doesn’t explain every unsold home.

That said, it would be wrong to claim homes have become less affordable everywhere. Knight Frank’s separate first-half assessment found affordability broadly stable across most major markets, because earlier interest-rate cuts softened the blow of rising prices. But that cushion is now being taken away. On October 7, the RBI raised the repo rate by 25 basis points to 5.5%, its first hike since February 2023. Higher rates mean higher EMIs, and that bites hardest for buyers already stretching to afford a cheaper home.

And these affordability figures are city-wide averages anyway. They can’t tell us whether the families actually hunting for the cheapest homes can manage the down payment and EMI.

Other things probably matter too. Is the project too far from work? Is it well built? Will it even be finished on time? These are real worries for buyers, but the data doesn’t measure them, so it’s hard to say how much they weigh.

What we can say is that simply building more cheap homes won’t fix this. Builders say they struggle to make them at those prices, and the ones already built are taking longer to sell. The real question is whether anyone can build homes people actually want, at a price they can actually pay.

So that’s what sits beneath the flat headline. Some premium brackets are booming, others are overbuilt, and the cheaper end is squeezed from both sides. Call it a boom or call it a slump, and you’d be missing the real story.

- This edition of the newsletter was written by Manie & Mridula.

Tidbits

1. Embraer to acquire 51% stake in Mahindra aerospace joint venture

Embraer will acquire a 51% stake in Mahindra Defence Systems’ newly formed Novavayu Aerospace for about ₹5.1 lakh. The joint venture will support the companies’ bid to manufacture Embraer’s C-390 Millennium in India if it is selected for the Indian Air Force’s medium transport aircraft programme.

Source: The Economic Times

2. RBI raises repo rate by 25 bps in first hike since 2023

The Reserve Bank of India has raised the repo rate by 25 basis points to 5.5%, its first increase since February 2023. The MPC also shifted its policy stance to calibrated tightening as inflation risks rose, including from higher energy costs.

Source: The Wall Street Journal

3. Amazon in talks to acquire AI startup Decart for around $7 billion

Amazon is in discussions to acquire AI startup Decart in a deal that could value the company at around $7 billion, according to The Wall Street Journal. Decart develops AI software including tools for working across different chips and generative models that create simulated environments.

Source: Reuters

4. India releases draft National Steel Policy targeting 604 million tonnes capacity

The government has released the draft National Steel Policy – Vision 2047, which aims to expand India’s steel production capacity to 604 million tonnes over the next two decades. The proposed framework also projects increasing per-capita steel consumption to 302 kg and annual steel exports to 45 million tonnes by 2047.

Source: Business Today

[5] Coal India denies supply shortfall to NTPC despite low plant stocks

Coal India says it supplied 97 million tonnes of coal to NTPC and its joint ventures in the first half of FY27, exceeding its contractual commitments. The statement comes even as NTPC’s coal inventories have fallen sharply, leaving several plants with critically low stocks.

Source: Business Standard

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Can ₹84,000 crore get India drilling?

Despite solar and EV pushes, India imports ~89% of its crude oil as domestic output fell 27% since FY12. To counter a 6–7% annual natural field decline, the government launched the ₹84,084-crore Samudra Manthan offshore scheme through FY31, funding 50% of deepwater drilling costs and ₹28,534 crore in seismic mapping. Supported by the 2025 Oilfields amendment’s single leases and stabilisation clauses, the program de-risks deepwater exploration, though commercial output is unlikely before the 2030s.

2. Why is rice getting expensive when India has never had more of it?

Retail rice prices rose ~8% YoY to ₹46.92/kg despite FCI holding 38.8 million tonnes—nearly four times its buffer norm. Deficient monsoon rains from El Niño cut paddy acreage by 4% and sparked forecasts of a 10-million-tonne harvest drop, lifting open-market prices. Meanwhile, buffer stocks remain isolated from consumers as past FCI auctions saw low trader uptake due to quality mismatches, while millions of tonnes were diverted to discounted ethanol production.

Can ₹84,000 crore get India drilling?

For all our talk about solar panels, wind farms and electric vehicles, India still needs a lot of oil and natural gas. Trucks burn diesel, planes use jet fuel, and factories use hydrocarbons for heat and as ingredients for fertilisers and chemicals. The energy transition will reduce some of that demand, but it will take time.

Meanwhile, India relies heavily on imports, while its own oil production keeps falling. Imports met ~89% of its crude oil requirements in FY2025–26, according to provisional government figures. Domestic production has fallen 27% since 2011, declining in all but one of the past 14 years.

Existing fields also produce less as they age. The petroleum ministry estimates this natural decline at around 6–7% a year. Getting more out of old fields helps, but India needs new discoveries just to replace the production it would otherwise lose.

And there may be plenty left to find. In 2024, S&P Global estimated that four underexplored Indian basins held around 22 billion barrels of oil equivalent in undiscovered hydrocarbon potential. “Oil equivalent” includes gas measured in comparable energy terms. But these are estimates of what might exist. Only drilling can establish what is actually there and how much makes economic sense to extract.

So India has a reason to explore new fields, and potentially the resources to make it worthwhile.

That’s the backdrop to the Samudra Manthan scheme, which the government approved in July. It is an ₹84,084-crore offshore oil and gas programme running through FY2030–31.

The scheme follows changes to India’s petroleum laws and the opening of previously restricted offshore areas. Together, these measures aim to get more companies to invest in exploration. But a company deciding whether to drill a new well has plenty of sums to work through. The government’s announcement is only the beginning.

Licence to drill

As we explained in our earlier story on India’s oil laws, private companies entered an industry where the government had a heavy hand.

Under older production-sharing contracts, companies could recover eligible costs from production before sharing what was left with the government. Higher costs meant less left to share, so the government had a reason to question spending. A committee with government representatives reviewed or approved work plans and budgets. Under the model contract, companies needed government acceptance to recover costs that significantly exceeded initial exploration estimates. Just because a company spent the money didn’t mean it could recover it.

HELP, introduced in 2016, moved new licences to revenue sharing. The government’s share no longer depended on how much companies spent. That removed one source of friction for newly awarded blocks, though other approvals remained and older contracts continued under their existing terms.

But companies still had to worry about future policy changes. In 2022, when oil prices surged, the government introduced a windfall tax on domestically produced crude, taking a share of producers’ extra earnings. For an investor putting money in years before production begins, that creates a problem: which terms should it use to calculate its future returns?

The 2025 Oilfields Amendment and the final Petroleum and Natural Gas Rules address some of these concerns. They provide a single petroleum lease covering exploration through production. They also include stabilisation provisions, which let companies seek adjustments if certain changes in law hurt a project’s economics. But companies must follow a specified process to seek that relief. This isn’t a promise that taxes will never change.

The government also says it has removed more than 99% of the earlier offshore “no-go” restrictions, opening over one million square kilometres for exploration. Companies can bid for exploration areas through the Open Acreage Licensing Policy, or OALP.

But being allowed to explore an area doesn’t tell a company whether it’s worth spending money there.

What it takes to find oil

So, imagine a company considering an offshore block under OALP. It starts by studying the available data, including earlier surveys and any records of wells drilled in the area, through the government’s National Data Repository.

If it bids and wins, it needs to decide where to drill. Seismic surveys help here. They send sound waves through the rocks beneath the seabed and record the signals that bounce back to build a picture of what lies below. The company may study earlier surveys or carry out new ones to identify promising spots.

Say the company identifies a promising spot. It now needs to drill an exploratory well to test whether its geologists are right. In deep water, that means bringing specialised vessels, equipment and crews far offshore. Supplies and people need to reach the site, and if equipment fails, fixing it out at sea isn’t easy. The ministry estimates that a single deepwater exploratory well costs roughly $125–150 million.

Now suppose the well finds oil or gas. The company still needs to establish how big the discovery is, how quickly the oil or gas can flow, and how much it can actually extract. Then it has to work out what bringing it into production would require. It could be more wells, equipment on the seabed, processing facilities and a way to get the output to buyers.

For oil, that could mean a pipeline or a ship carrying crude to a refinery. Gas generally needs treatment before it can reach fertiliser plants, factories or gas distributors. If the discovery is far from existing infrastructure, the company may need a long pipeline or more complicated processing and shipping arrangements.

The company now has to put all these costs together. Will sales cover construction, operations, transport, taxes, eventually closing the field, and still leave enough for investors? That depends on the prices it expects when production starts, and over the years the field operates.

This explains how a company can find a lot of oil and still decide to leave it in the ground. A smaller discovery near existing facilities might make more financial sense than a much larger one far offshore. And a global explorer considering India will compare the project with opportunities elsewhere. Even if it expects to make money here, it may choose another project with better returns or fewer uncertainties.

The ₹84,000-crore question

Samudra Manthan tries to help at several points along this journey. It sets aside ₹28,534 crore for offshore data, covering 2D and 3D seismic surveys and reprocessing older data in the National Data Repository using modern tools, including AI.

The idea is to give companies a clearer picture of what lies beneath the seabed. That can help them decide whether to bid for a block, while more detailed surveys can help them choose where to drill once they win it. By paying for data that multiple explorers can use, the government hopes to reduce some of the uncertainty holding investment back. But that depends on how good the data is and how easily companies can access it.

The largest allocation, ₹43,200 crore, supports offshore exploration, with a programme of 60 deepwater and ultra-deepwater wells. The government offers up to half the eligible drilling cost, capped at ₹675 crore per well.

Suppose an eligible well costs ₹1,000 crore. Under that formula, the government could cover ₹500 crore. A well the company previously decided against drilling could now become worth attempting.

The government is essentially sharing the financial risk.

But the terms matter. In August, The Economic Times reported that the government was considering recovering its support from commercially successful projects. It would do that only after seven years of production or after the explorer recovered half its development cost. Those proposals were still under consultation. Who qualifies, when the money arrives, and how much must eventually be repaid will determine what the support is actually worth to a company.

The mission also sets aside ₹10,000 crore for shared offshore infrastructure. Consider three nearby gas discoveries. Building separate processing and transport facilities for each could make all three too expensive to develop. Connecting them to a common system could spread those costs across more production.

This is where the funding and legal reforms work together. The 2025 rules provide for companies to share facilities and for the government to intervene if they cannot agree on access to spare capacity. The scheme can help pay for new shared infrastructure. Companies still need to agree on charges, how much capacity each can use and when the facilities will be ready.

Some companies are already moving in this direction. In January, ONGC and Reliance Industries signed an agreement to pursue resource sharing in their eastern offshore operations. It covers rigs, vessels, pipelines and processing facilities. The agreement came before Samudra Manthan’s approval and explicitly refers to the 2025 legal changes. It shows what those reforms were meant to make possible.

Another ₹2,000 crore is earmarked for oil and gas manufacturing and services zones, with ₹350 crore for monitoring and other supporting activities. This could bring business to equipment suppliers, fabrication yards, repair companies and engineering services firms.

Larsen & Toubro offers an example of the construction work involved. In September, it won an offshore development order from ONGC covering platforms, subsea pipelines and cables off India’s west coast. This is work on an existing field, not a confirmed Samudra Manthan award. But it shows where the money goes once a company decides to develop a field.

Building these capabilities in India will take time. Meanwhile, companies need vessels and people with the skills to carry out the planned drilling. ONGC is already exploring buying a drillship or forming a joint venture to secure drilling capacity for the programme.

And as we saw earlier, paying for drilling is only part of the calculation. Companies also care about the taxes they pay and the terms on which they can sell what they find.

In a July op-ed on Samudra Manthan, bp’s India chairman Kartikeya Dube called for relief from the Integrated GST burden and more freedom for companies to sell what they produce, including exports where they offered better returns.

Show us the bids

So where might we first see whether this package is changing investment decisions?

OALP is a good place to start. DGH’s bid records for Round IX show that 24 of the 28 blocks received two bids each; the remaining four received three. Private firms participated, but competition was limited to a small group of bidders.

Those contracts predate the scheme, giving us a starting point to compare future participation against.

The next opportunity is the deepwater acreage in OALP-X and XI. Together, the rounds offer 18 deepwater and ultra-deepwater blocks. Their bidding deadline has been extended to November 15, 2026. Samudra Manthan’s operational rules are still awaited, and industry sources have reportedly linked the extension to that uncertainty. The ministry hasn’t given an official reason. But a company deciding what to bid would want to know which costs qualify for support and what obligations come with it.

Meanwhile, there are signs of interest. Oil India has outlined around ₹15,000 crore of offshore investment over three years, with management explicitly expecting to use the scheme. ONGC and Shell have signed a non-binding agreement to assess opportunities, including OALP-X and XI.

Once bidding closes and the results are out, we can see whether more private and international firms have joined in, whether more blocks attract competing bids, and what exploration work the bidders commit to.

See you in the 2030s?

Winning a block is only the start. Companies then need to carry out surveys, hire drilling rigs and spend the money they committed. If they find oil or gas, they must establish how much can be extracted and decide whether to fund production facilities. The ministry estimates five to ten years from a block award to commercial production. So even successful projects in these largely unexplored areas may not start producing until well into the 2030s. Existing discoveries near infrastructure could move sooner.

That’s also how we should judge the public money: how much exploration and development it gets companies to undertake that they otherwise wouldn’t.

Why is rice getting expensive when India has never had more of it?

Rice is getting expensive again. On 9 October, the Department of Consumer Affairs put the all-India average retail price at ₹46.92 a kilo. According to ISignal’s analysis of the same data, rice in September cost about 8% more than a year ago.

That wouldn’t be unusual on its own. What makes it odd is that the government is sitting on 38.8 million tonnes of rice, close to four times its required reserve, and selling millions of tonnes to distilleries to make fuel, at a loss.

So why isn’t all that rice keeping prices down?

Rice runs on the monsoon

The kharif crop, sown in June and July as the monsoon arrives, makes up more than 80% of India’s rice output. Its fortunes depend heavily on the rain.

Farmers first raise seedlings in a nursery while preparing the main field. That involves churning it into mud and flooding it with a few inches of water. Only then do they transplant the seedlings. Without enough water, this process stalls.

This year, that water didn’t come on time. According to IMD’s end-of-season summary, India received 87% of its normal monsoon rain between June and September, the weakest monsoon since 2015. Anything below 90% is officially “deficient”. The culprit is El Niño, an unusual warming of the Pacific that tends to weaken the winds carrying rain to India. We wrote about what a Super El Niño could mean for India back in June.

But the timing hurt more than the total. June received only 65% of its normal rain, right when farmers needed to sow. July recovered to 101%, before August fell to 84% and September to 92%. The shortfall was uneven too. According to Nomura’s analysis of IMD data, the East and North East were about 26% short and the South about 24%, while Central India was close to normal.

From a weak monsoon to a smaller harvest

A weak monsoon hurts rice in two ways.

First, fewer fields get planted. The dry June pushed some farmers towards crops that need less water. As of 11 September, Agriculture Ministry data showed paddy area down 4% from last year, with the biggest drops in Karnataka, Telangana and Andhra Pradesh. The area under pulses, meanwhile, went up.

Second, planted fields can yield less. Rice is particularly vulnerable to water shortages when it develops its grain-bearing head and during flowering. A dry August and September could hurt fields reaching these stages. Late planting adds to the risk: a rice variety takes roughly the same time to mature whenever it’s planted, pushing grain development further into the dry end of the season.

The Rice Exporter Association expects production to fall by about 10 million tonnes from last year’s record of 154 million tonnes. That would be a drop of nearly 6.5%, the biggest since the 2009–10 drought and the first decline in a decade. The government is yet to release its first harvest estimate.

Why prices move before the harvest does

The new crop is only now being harvested, but prices have been rising for months.

Rice prices reflect expectations about future supplies too. Millers, traders and exporters anticipating a smaller harvest may buy early, even at higher prices. Those holding stocks may wait for a better price. Both can push prices up before an actual shortage appears.

That helps explain the reversal since May, when the winter harvest and weak demand pushed Indian rice export prices to multi-year lows. By late September, they had reached their highest level since July 2025.

KRBL, which owns India Gate, also told investors on its August earnings call that “rice commodity prices moved upwards” in the April–June quarter. Wholesale buyers held off on bulk purchases as a result.

A mountain of rice that doesn’t reach your plate

To understand why government stocks haven’t prevented this, it helps to know how they accumulate.

The government promises farmers a minimum price for their paddy, called the minimum support price (MSP). The Food Corporation of India (FCI) and state agencies buy it, get it milled into rice, distribute much of it free through ration shops, and store the rest for emergencies.

The required reserve on 1 October is 10.25 million tonnes. Stocks have grown well beyond that as procurement continues. The US recently raised questions at the WTO about FCI buying nearly half of India’s rice production.

Storing this grain costs money, and it can deteriorate over time. So the government has been directing some of the surplus towards fuel.

Petrol in India is blended with ethanol, an alcohol made from crops containing sugar or starch. As we explained in India’s bittersweet conundrum, maize and surplus rice were brought in to reduce dependence on sugarcane. Today, 72.5% of the ethanol allocated to distilleries comes from grains.

According to a Rajya Sabha reply, FCI sold 6.35 million tonnes of rice to ethanol makers between June 2025 and June 2026, at nearly 40% below its procurement cost.

Back in June, we wrote that a failed monsoon might force the government to cut back on rice for ethanol. Instead, it has set aside more for next year than distilleries received last year.

The part that’s harder to answer

There’s a fair case for the government. Its stocks offer a substantial cushion even after the ethanol allocation. Free rice through ration shops shields the poorest households from open-market prices, while the sale policy says distilleries should get old or broken rice wherever possible.

But putting government rice up for sale doesn’t mean people will buy it. When prices rose in 2023, FCI offered rice to traders through auctions. The government even cut the starting price from ₹31 to ₹29 a kilo. Yet by January 2024, it had sold only about 1.66 lakh tonnes, a small share of its stocks.

One reason was simple: traders could get a better deal elsewhere. As Mint reported in May 2024, the same variety was available in the market for less than FCI’s ₹29 a kilo. FCI’s buying rules also allowed up to 25% broken grains. That rice is still edible, but buyers won’t necessarily pay the same price for it as rice with fewer broken grains. So even when rice prices rise overall, the particular rice FCI holds may struggle to find buyers.

The government therefore needs more than full warehouses. Its rice has to be something people want to buy, at a price that gives traders a reason to buy and sell it.

The ethanol allocation has also drawn criticism. One argument is that using maize and rice for fuel “should be severely restricted, if not stopped” until supplies return to normal next year.

And the risk extends beyond this harvest. India’s winter rice crop depends heavily on stored water. According to Nomura, reservoirs were only 72% full on 1 October, compared with 89% last year, and farmers are reportedly likely to plant less winter rice. With IMD expecting a dry October and El Niño expected to peak in November, the next crop could face trouble too.

What to watch

September’s inflation numbers will arrive soon, after food prices rose 5.95% year-on-year in August. On 7 October, the RBI raised rates for the first time since 2023, with the weak monsoon among its worries. The government’s first harvest estimate, due within the next couple of months, should give us a clearer picture of the damage.

India built its grain reserves for difficult years. This year will test how effectively it can use them to ease food prices and how much it is willing to keep sending towards fuel.

- This edition of the newsletter was written by Kashish & Vignesh.

Tidbits

1. US suspends Microsoft and major IT firms from employment-linked green card program

The US administration has suspended Microsoft, Infosys, Tata, Wipro and several other technology companies from the Permanent Labour Certification Program (PERM), a key step in sponsoring workers for employment-based green cards. Officials alleged abuse of the system and said the suspensions would remain in place while federal investigations continue.

Source: Bloomberg

2. India and Singapore explore 2,000 MW cross-border power interconnection

India and Singapore are considering a proposal to develop a 2,000 MW cross-border power interconnection to enhance energy security and strengthen supply resilience. The potential power trade corridor could support deeper energy integration between the two countries.

Source: The Economic Times

3. Rolls-Royce seeks deeper India partnerships across defence, aerospace and energy

Rolls-Royce’s global board of directors visited India to deepen the company’s long-term commitments across the defence, civil aviation, and energy sectors. During the visit, CEO Tufan Erginbilgic met with Prime Minister Narendra Modi to discuss expanding partnerships aligned with India’s ambitions for self-reliance in defence and infrastructure development.

Source: The Hindu BusinessLine

4. Nokia plans Nvidia-backed AI radio access networks for India

Nokia is preparing to bring Nvidia-backed AI-radio access network (AI-RAN) technology to India, aiming for commercial deployments by 2028. The strategic pivot is intended to address the country’s surging 5G data consumption and rising demand from hyperscalers for advanced, AI-driven network infrastructure.

Source: Business Standard

5. Meta restricts ByteDance advertising across its apps in seven countries

Meta has begun blocking advertisements and paid marketing messages from ByteDance across its platforms in the US and six other countries, according to a Bloomberg report. The restriction also covers third-party campaigns linking to TikTok and other ByteDance properties, with Meta stating it does not have to provide promotional services to a direct competitor.

Source: Reuters

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G — Global

[1] Europe’s gas winter could tighten supplies for Asia

Europe is heading into winter with less gas in storage than usual. The European Commission says the region can still meet demand, but it may have to rely more on liquefied natural gas, or LNG.

Storage works like a winter savings account. Countries fill it during summer, when demand is low, and use it when heating demand peaks. With less stored gas, Europe may have to buy more during winter itself.

India and other Asian countries compete for many of the same LNG cargoes. If a cold winter pushes Europe to buy more, Asian buyers may have to pay more or settle for less. Europe has more import terminals and suppliers than it did during the 2022 energy crisis, but the weather will still decide how tight the market gets.

[2] America’s farm debt may be bigger than it looks

American farm debt is at a record, and a Reuters investigation suggests official figures may still be missing some of it. More farmers are borrowing from fertiliser sellers, equipment companies and cooperatives instead of banks.

Farmers are earning less while spending more. Crop prices have fallen, but fuel, fertilizer and machinery remain expensive. Suppliers often let farmers pay later because it helps them sell more, which effectively turns them into lenders.

That makes the debt harder to track. A bank knows what a farmer owes it, but not what the same farmer owes a tractor dealer or fertiliser seller. The total stress can stay hidden until repayments start getting missed.

[3] Finland halts work at two Google data-centre sites

Finnish authorities have ordered Google to stop major preparatory work at two planned data-centre sites until environmental assessments are complete. The sites are part of Google’s €13 billion investment plans in Finland.

An environmental assessment studies how a project will affect land, water and wildlife before major work begins. At these sites, trees had already been cut down, soil removed, and roads and drainage changed. Google has admitted that this fell short of its own standards.

We wrote recently about how India’s data-centre boom is already running into another physical constraint: water. The Finland episode shows the same broader problem. Building more computing capacity isn’t only about finding enough chips and electricity. Companies also need land, water and permission to build, and those can become bottlenecks too.

E — Economy

[4] The GST Council wants to make compliance easier

The GST Council recommended a broad set of reforms on October 8. Last year’s overhaul, which we wrote about here, was mainly about tax rates. This round is about how the system works day to day: registration, refunds, tax credits, exports and enforcement.

A big part of the changes concerns input tax credit, or ITC. Businesses pay GST on what they buy and subtract that from the GST they collect on sales. The Council wants to allow this credit on more expenses, including employee insurance, telecom towers and some pipelines. It also wants faster and more automated refunds, easier registration and cancellation, simpler rules for small online sellers, and fewer disputes over whether some services qualify as exports.

Enforcement is being eased too. The Council recommended removing GST officers’ arrest powers, raising the prosecution threshold from ₹1 crore to ₹5 crore, cutting some penalties and reducing unnecessary checks on goods moving between states. Some changes can come through rules and notifications, while others still need changes to the GST law.

[5] India is aiming for $1 trillion in exports

India wants to export $1 trillion worth of goods and services this financial year, up from a record $863 billion last year. Commerce Minister Piyush Goyal said the government is also trying to get more companies to use India’s free trade agreements, which can lower the duties Indian goods face in overseas markets.

There is support on the cost side too. The government has extended the Remission of Duties and Taxes on Exported Products scheme, or RoDTEP, until December 31. It refunds some taxes and charges that remain built into exported goods, such as costs linked to fuel, electricity and transport. It has also extended insurance support for some shipments to West Asia, where wars and shipping disruptions have made trade riskier.

These measures solve different problems. Trade agreements can make Indian goods cheaper abroad, RoDTEP cuts some of the costs exporters carry at home, and insurance reduces the risk of selling into disrupted markets. The $1 trillion target will still depend heavily on global demand, but these policies are meant to make it easier for Indian firms to compete for that demand.

[6] Rice prices could push up food inflation

Rice prices are rising in parts of India. Millers say paddy has become more expensive, and a weak monsoon has widened the gap between how much rice is available and how much people want to buy.

Paddy is rice before it has been milled. When millers have to pay more for it, they can’t keep selling rice at the old price. Part of that extra cost moves down the chain to wholesalers, then to shops, and finally to the households that buy it.

Farmers benefit, since they get a better price for their crop. But rice is a staple that most families buy every week or month, and it isn’t easy to cut back on. So even a small increase shows up quickly in food bills, and it can keep inflation high even if prices of other things start to cool.

I — Industry

[7] Gig platforms want a different social-security levy

IndiaTech, an industry group representing companies such as Ola, Swiggy, Zomato and Porter, wants the government to change how gig platforms pay towards worker social security.

Under the Social Security Code, platforms may have to contribute 1–2% of their annual turnover to a fund for gig workers, capped at 5% of what they pay those workers. We wrote about this system when the new labour codes came into force. A shared fund helps because gig workers can work across several apps instead of having one fixed employer.

IndiaTech’s objection is to using turnover. Platforms count revenue differently. One may record only its commission, while another records the full value of an order. That can make similar businesses pay very different amounts. IndiaTech wants the levy linked more closely to what platforms actually pay their workers.

[8] India wants to stockpile critical minerals

India is preparing a policy to stockpile critical minerals such as lithium, cobalt and rare earths. These are used in batteries, electronics and defence equipment, but India still depends heavily on imports for many of them.

We wrote recently about how concentrated these supply chains are, especially in China. A government reserve would give manufacturers some protection if imports are suddenly restricted or disrupted.

India is also planning four processing parks. The idea is to do more of the refining at home, instead of importing minerals that have already been processed elsewhere. The stockpile is the backup. The processing parks are the longer-term attempt to reduce that dependence.

[9] Textile output is rising while apparel output falls

India’s textile production rose 13.1% year-on-year in August, while apparel production fell 7.4% over the same period. Two parts of the same industry are moving in opposite directions.

Textile mills make yarn and fabric. Apparel companies turn that fabric into finished clothes and depend more directly on orders from retailers and global brands. Rising textile output alongside falling apparel output suggests the stronger growth is happening earlier in the value chain.

We looked at this gap in our deep dive into India’s textile industry. India is strong at cotton, yarn and fabric, but has struggled more with the final step of making clothes and selling them globally. August’s numbers reflect that same imbalance.

C — Company

[10] GQG Partners cuts its stake in ITC

GQG Partners has sold about ₹9,395 crore worth of ITC shares in a large block deal. It sold 36.5 crore shares on October 8, almost all of the 38.99 crore shares it held at the end of June.

The sale comes after a rough year for ITC. From February 1, cigarettes moved to a 40% GST rate based on retail price, while excise duties were also increased after the compensation cess was phased out. Cigarettes remain ITC’s most profitable business, so higher taxes can either force the company to raise prices and risk weaker sales, or absorb some of the cost and take a hit to margins. ITC shares are down more than 30% since the tax changes were announced.

GQG has also been reducing stakes in other Indian companies, including several Adani Group firms. But it is not pulling out of India entirely: it has added to holdings such as JSW Energy and JSW Steel. The ITC sale looks more like a reshuffling of where GQG wants to put its money.

[11] SpaceX is buying spectrum for its mobile service

SpaceX has agreed to buy a portfolio of US mobile spectrum from investment firm Grain Management for Starlink Mobile, its service that connects ordinary phones directly to satellites.

Spectrum is the radio frequency phones use to send and receive signals. SpaceX is buying frequencies in the 800 MHz band, which travel relatively far and are useful for mobile coverage.

Starlink’s direct-to-phone service has mostly relied on partnerships with telecom companies and their spectrum. Owning frequencies gives SpaceX more control over the network it wants to build in the US and makes it slightly less dependent on those partners.

[12] Schneider Electric is buying PTC for $22.6 billion

Schneider Electric has agreed to buy US software company PTC for $22.6 billion, roughly ₹2.1 lakh crore.

Schneider mainly makes electrical equipment for factories, buildings and data centres. PTC makes software that companies use to design products, run factories and maintain equipment. Buying PTC would let Schneider sell customers both the equipment running a site and the software managing it.

Schneider is paying about 42% more than PTC’s share price before the deal was announced. It also plans to fund the purchase with a mix of debt and new shares. The bet is that combining hardware and software will bring in enough extra business to justify that premium.

That’s it for this week.

A few of these stories are still developing, so we’ll be keeping an eye on them. But if there’s one you’d like us to write about properly, let us know in the comments.

See you next edition :)

Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Inside India’s first household travel survey

The NSO’s first travel survey shows the average Indian worker commutes to work in ~25 minutes, with two-wheelers (42.6%) and walking (28.3%) dominating workforce mobility. Mass rail transit carries just 2.1% of commuters nationwide, concentrated mostly in Maharashtra, West Bengal, and Delhi. Female workers face restricted travel radiuses due to domestic duties and safety, while 70% of long-distance overnight trips are driven by social and religious obligations rather than tourism.

2. Supreme Court questions 10x markup on cancer drugs

The Supreme Court scrutinised extreme markups on non-scheduled cancer drugs where retailer purchase prices of ₹2,700 carried printed MRPs of ₹27,000. Unlike essential scheduled drugs with capped 16% retail margins, non-scheduled drugs allow manufacturers to set high MRPs, incentivising sales of higher-margin brands. To curb exploitation without risking supply shortages, the government is extending a 30% Trade Margin Rationalisation cap across all non-scheduled anti-cancer medicines.

Inside India’s first household travel survey

You’re probably well-aware of the complaints Indians often make about the traffic jams they’re trapped in while travelling to their workplace, often from metropolises like Bengaluru, Mumbai, and so on.

But in India, those complaints aren’t representative of the average Indian worker. Nor does the data tell the story that social media seems to paint.

If anything, the headline finding might take you aback. Most workers in India who have fixed workplaces get there in about 25 minutes. Can you believe that?

That number comes from the first-ever National Household Travel Survey, conducted by the National Statistics Office between July 2025 and June 2026. It covers over twenty lakh people across the country. To filter out trivial movements, the survey excluded trips under one kilometre and overnight journeys shorter than fifty kilometres.

What emerges is an incredible repository of how India travels for work and personal reasons, and it challenges many conventional assumptions and even casual observations we make about the purpose of Indian infrastructure. And that 25-minute headline figure has a lot of nuance behind it, too.

In this story, we’ll be looking at some core findings across the survey and then drill down into what they mean exactly, along with some very interesting charts created by us.

Work travel

The first finding is how people travel for work specifically, and the role of rail in it.

Over the past two decades, central and state governments have poured massive capital into modern urban transit. You can see the concrete viaducts cutting through almost every major Indian city now.

Yet mass rail transit, which includes metros, monorails, suburban rail, and trams, carries just 5% of urban commuters to their jobs. The national average for this category is 2.1%.

Even that modest number leans heavily on three places with legacy rail networks: Maharashtra at nearly 21%, West Bengal at 16.5%, and Delhi at ~14%. These figures combine century-old suburban rail systems (like the Mumbai local) with modern metro lines. Outside these three corridors, mass rail transit hardly makes a dent.

The form of transport that powers daily commute the most is the humble two-wheeler. Scooters and motorcycles carry ~43% of all workers. In cities alone, that share rises to ~52%. Interestingly, the travel form trailing two-wheelers at second is walking, which stands at ~28% nationally. Personal cars, meanwhile, carry just 3%.

It’s tempting to read that 5% and conclude that metro investment has failed. But that misreads how transit networks mature.

After all,a metro corridor is a fifty-year asset. Metro ridership only picks up when a system achieves network density, linking radial lines through interchanges and connecting with reliable feeder services. An isolated corridor is useless in that sense. In many secondary cities, operational metro lines are still single-corridor stubs. Comparing a stub to a mature road network mistakes an incomplete system for a failure of demand.

But planners must also reckon with commuter economics. If a worker lives 3 km from the nearest station and works 2 km from the destination platform, completing the journey requires two feeder trips on top of the train ticket. We’ve also covered before that one of the big reasons hindering metro adoption is the lack of easy last-mile connectivity after you exit the metro station. For millions of wage earners, that multimodal chain costs more money and time than just riding a motorcycle door to door.

What’s behind the 25-minute commute?

The second finding is one that we mentioned above: the average worker takes 25 minutes to travel to their workplace.

Across India, 83.4% of workers reach their fixed workplaces in under 30 minutes. In cities, the average is around 27 minutes, while in rural areas, it’s 23. More than half of all commuters leave home between 8 and 10 in the morning.

But is a 25 minute-average a sign that Indian transport works well? Or does it signal a different malaise?

One reading of this statistic is bleak. When public transit is slow, expensive, or fragmented, a worker’s geographic perimeter dictates their economic opportunities. Workers with fixed workplaces spend an average of ₹785 a month on commuting. This figure is ₹1,044 in cities and ₹612 in rural areas. For an informal labourer earning ₹8,000 a month, that’s over 12% of household income just getting to work.

Suppose a factory 15 km away offers slightly higher wages. But reaching it means two bus connections and an auto ride. The fares and transfer time quickly cancel out the wage bump. So, workers settle for lower-paying jobs closer to home, and not necessarily because they prefer it. Transport economists call this phenomenon “spatial entrapment”, where the radius you can afford to travel defines the ceiling on your wage growth.

But there is a more generous reading of the 25-minute average, too.

This one says that Indian cities aren’t built like American ones, where there’s a single downtown everyone commutes into from distant suburbs. Jobs are scattered everywhere in Indian cities. There could be a garment workshop next to the housing colony, there’s a wholesale market a kilometre away from the chawl, there’s domestic staff living in the settlement adjacent to the neighbourhood they serve. Workers don’t need to cross the city because the city already puts work near where they live.

But it’s worth noting that even this reading doesn’t make a comment on the quality of the jobs. For instance, a software engineer working in, say, the Whitefield area of Bengaluru will always be better paid than domestic staff living close to the home they serve. But the former might have to travel a lot more than the latter.

That being said, across countries and centuries, people seem to keep their daily commute to roughly thirty minutes each way, regardless of how much they earn or what transport is available to them. When cities build faster trains, commuters don’t pocket the saved time. They move farther out, looking for better jobs or bigger homes. The total travel budget stays roughly constant. Indian cities, polycentric and mixed-use by nature, may simply be following that universal pattern at their own income level.

The truth is probably both at once. That twenty-five-minute average reflects the functional convenience of mixed-use neighbourhoods and the hard financial ceiling set by travel costs.

A different kind of glass ceiling

Travel friction limits the mobility of all workers. But it hits women far harder. Nationally, ~62% of male workers commute more than 1 km to their fixed workplace. For women, that same share is ~42%.

Since the survey excluded trips under one kilometre, this means most working women either work within their immediate neighbourhood or don’t travel outside their local block for employment at all.

The spending gap mirrors this. Male workers spend ₹835 a month on commuting; women spend ₹533. In rural India, the same gap is ₹674 versus ₹307.

Part of this is about vehicle access and safety. In many households, the family’s one scooter or motorcycle goes to the primary male earner. A woman commuting outside her neighbourhood must rely on buses, shared autos, or walking, and shared autos charge more per kilometre than fuel costs on a motorcycle. Poor street lighting and isolated bus stops add real safety friction during early mornings and late evenings.

But attributing this twenty-point gap entirely to transport misses a bigger force at work: unpaid domestic labour.

Women shoulder the bulk of cooking, childcare, eldercare, and household management. A working woman often can’t commit to an hour-long commute even if transit were free and perfectly reliable. She must stay within reach of home to manage household duties through the day. Under these conditions, women rationally prioritise nearby jobs, accepting lower wages in exchange for proximity.

Several state governments have tried to address this through fare-free bus travel for women. Ridership went up, and local non-work journeys got easier. But while fare waivers have been found to help boost female labour force participation, they’re not enough. The gap demands more than subsidised passes. It requires neighbourhood childcare, safe pedestrian infrastructure, and formal employment opportunities closer to where women live.

Late for the school bus

India’s mobility boundaries are hardly limited to working people. They also extend to students, both in schools and colleges.

The survey shows that ~66% of students aged six and above travel more than 1 km daily to reach their educational institutions. School trips rely overwhelmingly on walking at 37%, buses at 29.5%, and bicycles at 15.8%. Two-wheelers carry just 6.7% of students. That’s a complete change of the order for workers.

Students also keep their commutes tight. Nearly 88% reach their institutions in under 30 minutes, at an average monthly cost of ₹443. This reflects the decentralised spread of primary and secondary schooling across India. Neighbourhood government schools and local private institutions let younger children walk or cycle short distances. It’s also possible that families may prioritize to locate themselves or buy a house as close as possible to schools for their children.

But as students move into secondary school, college, and vocational training, the travel radius expands. For older students, especially young women, the availability of safe bus services and bicycle corridors often determines whether they continue their education or drop out. In urban India, among youth aged 15-29, ~73% make regular daily commutes to educational institutions.

Long-distance travel

So far, much of what we’ve covered mostly involves daily, shorter-run commute. Meanwhile, long-distance travel reveals a completely different side of Indian mobility, even challenging long-held assumptions about the purpose of long-distance travel.

Of all the overnight household trips in India the survey captured, 70% were driven by socialising, family obligations, and religious activities. When a family member faces a health crisis, needs help with childcare, or organises a wedding, physical presence is non-negotiable. Missing a family gathering weakens the social capital that protects households against financial shocks. This is all the more important when the household doesn’t have access to unemployment benefits or public health coverage.

But more importantly, what’s clear here is that business and vacations are not at play here. In fact, culture, leisure, and tourism account for just 7.4% of overnight trips nationally. A mere blip compared to social obligation.

The modes of transport also reflect this. Buses account for ~56% of overnight journeys, while railways carry ~18%. Together, they handle nearly three-quarters of all long-distance household travel. But train usage shows a sharp rural-urban divide — railways carry 22.7% of overnight travellers from urban households, versus just 14% from rural ones. Rural families, which live far from mainline stations, depend a lot on state transport buses.

This has real implications for railway finances. It’s well-known that Indian Railways charges a premium on freight to cross-subsidise cheap unreserved passenger travel. As the carrier modernises rolling stock and expands air-conditioned services, it cannot afford to price out unreserved seating. For millions of families, basic rail and bus services aren’t consumer luxuries. They are the links that hold the informal safety net together.

Conclusion

The survey’s findings make quantitative what, to a degree, might be obvious observationally: Indian mobility doesn’t run on marquee corridors. It runs on two wheels, on municipal buses, and on foot. Mass transit carries one urban commuter in twenty; the motorcycle carries one in two. For many women, transport costs and care responsibilities may limit how far they can travel for work, something a World Bank study also points to. And seven in ten long-distance journeys aren’t vacations, but the trips that hold families together.

That being said, the finding that the average worker takes 25 minutes to get to work may hide a lot of nuances beneath. It never calculates the quality of the work; for that, we recommend going through one of our earlier stories on Indian unemployment.

Infrastructure policy will have to be made accordingly. Much of it is done with certain expectations about the growth of cities, and broadly, the Indian economy. But on the ground, it’s the little things like last-mile connectivity that make much more of a difference.

Supreme Court questions 10x markup on cancer drugs

A cancer medicine reaches a retailer for about ₹2,700. Its printed maximum retail price, or MRP, is nearly ₹27,000.

That tenfold gap recently came up before the Supreme Court. During a September 29 hearing, the bench described such markups as “broad daylight dacoity with patients” and questioned why the government could not limit the gap between retailer prices and what consumers can be charged.

This reminded us of a story we wrote in June, where the government faced almost the opposite problem.

Two cancer medicines were becoming difficult to find. Manufacturers said regulated prices had become too low to cover rising costs. To protect supplies, the government allowed prices to rise by as much as 50%.

Then, the concern was that medicines weren’t worth making at the permitted price. Now, it is that the gap between purchase prices and printed prices leaves enormous room for markups.

Both stories sit within the same drug-pricing system. To understand how, we need a quick recap.

Two sets of rules

India’s medicine-price regulator is the National Pharmaceutical Pricing Authority, or NPPA. It implements the Drugs (Prices Control) Order, 2013. That’s the rulebook governing medicine prices.

The rules separate medicines into scheduled and non-scheduled formulations. A formulation is a medicine in a particular strength and dosage form, such as a tablet or injection.

Scheduled formulations appear in Schedule I of the order, based on the National List of Essential Medicines, or NLEM. They face government-set ceiling prices. Non-scheduled formulations fall outside that schedule.

“Essential” here has a specific meaning. The list identifies medicines needed to meet the population’s priority healthcare needs. Selection considers the diseases prevalent in India, evidence of safety and effectiveness, and comparative cost-effectiveness. Being outside the list doesn’t mean a medicine is unnecessary for someone who needs it.

Scheduled medicines reportedly account for roughly 20% of India’s drug market by sales value. Around 80% therefore sits outside the ordinary ceiling-price system, though other pricing restrictions still apply.

For scheduled formulations, the NPPA takes the prices charged to retailers for brands and generic versions with at least 1% market share, averages them, and adds a 16% retailer margin.

Say the qualifying prices are ₹80, ₹100 and ₹120. Their average is ₹100. Adding 16% produces a ceiling of ₹116, before applicable taxes. These ceilings are subsequently adjusted using the Wholesale Price Index, or WPI, under the pricing rules.

This is a market-based calculation, not one based on manufacturing costs, as the government clarified in Parliament. The ceiling also doesn’t automatically reset when a hospital negotiates a cheaper purchase. So the 16% in the formula doesn’t guarantee that every seller’s actual purchase-to-sale gap stays at 16%.

When the ceiling became a problem

Our June story concerned cisplatin and carboplatin, two chemotherapy medicines within the price-control system.

Manufacturers said rising input costs had made production unviable at the permitted prices. Both medicines use platinum-based raw materials, and suppliers also faced import and production difficulties.

The annual price adjustment followed economy-wide wholesale inflation. It didn’t necessarily reflect the much sharper increase in the cost of making these medicines.

The government therefore used Paragraph 19, an exceptional provision in the pricing order, to allow higher prices and protect supplies.

As we noted then, price caps weren’t conclusively the sole cause of the shortages. Raw-material availability, import delays and the small number of manufacturers mattered too. But the episode illustrated a real risk: a medicine can be affordable on paper and still be inaccessible if nobody supplies it.

When the starting price is the problem

Non-scheduled medicines face a different system.

Under the ordinary rules, manufacturers generally choose the initial MRP. Subsequent increases cannot exceed 10% over the preceding 12 months, although special price interventions can apply.

If a medicine launches at ₹20,000, restricting its next increase to ₹22,000 does nothing to establish whether ₹20,000 was reasonable in the first place. The rule controls how quickly the price rises, without necessarily making the starting price affordable.

This is one of the issues raised in the petitions before the Supreme Court, alongside the enormous gaps between retailer purchase prices and printed MRPs.

That brings us back to the ₹2,700 and ₹27,000 example. The first figure was the reported price to the retailer—not the manufacturing cost. The second was its MRP, which need not be what every patient actually paid.

Unlike the scheduled-drug formula, which includes a 16% retailer margin, non-scheduled medicines generally have no equivalent margin restriction unless a special intervention applies. Manufacturers can set a high MRP while supplying the medicine at a much lower price, leaving an attractive margin for the pharmacy or hospital selling it.

That creates an incentive to favour medicines offering larger margins, even when cheaper alternatives exist. The Competition Commission of India’s pharmaceutical market study identified precisely this problem: companies can compete to offer sellers better margins rather than patients lower prices. Hospital pharmacies face even less competitive pressure when inpatients have to buy from them.

The court questioned whether a uniform rule linking MRP more closely to the retailer price could address this. It did not impose a nationwide 16% cap: its September 29 written order listed the matter for further hearing on October 12.

A middle path already exists

In 2019, the NPPA used the exceptional power that can allow price increases to intervene in the prices of 42 selected non-scheduled anti-cancer medicines.

It used trade margin rationalisation, or TMR, restricting the margin between the price at the first point of sale and the final retail price to 30%.

Under that formula, the starting point was the price to the stockist, and the margin was measured as a share of the final price, excluding GST.

For example, a ₹700 stockist price could translate into a maximum retail price of ₹1,000 before GST. The ₹300 difference is 30% of the final price.

This was a middle path. The medicines remained non-scheduled, but the government constrained distribution margins rather than applying the usual scheduled-drug averaging formula.

It delivered substantial price reductions. In a March 2026 parliamentary reply, the government said the intervention had reduced prices across more than 500 brands by an average of about 50%.

While we were putting this story together, there was another development. On October 8, reports citing government sources said the Centre had decided to extend the 30% trade-margin cap to all non-scheduled anti-cancer medicines, covering branded and generic, domestic and imported, patented and non-patented products.

The decision comes ahead of the October 12 hearing. The notification and implementation details will determine exactly how it takes effect.

Affordability needs more than a cap

The government’s goal should be to ensure people can get the medicines they need at prices they can afford. Price caps can help, but access also depends on how medicines are bought, prescribed and sold.

Reliable public procurement can keep affordable medicines in stock. Wider availability of quality-assured generics can give doctors cheaper options to prescribe. And allowing patients to buy from competing pharmacies can help them avoid expensive hospital markups—one of the concerns examined in the CCI’s study.

Controlling the price is only one part of making treatment accessible.

- This edition of the newsletter was written by Bhuvan, Manie & Kulsum.

Tidbits

1. Lava, Optiemus among firms eyeing smartphone brand incentives

Domestic electronics manufacturers including Lava and Optiemus Infracom are reportedly seeking incentives under a proposed government scheme to build global smartphone brands. The initiative aims to help India’s electronics industry move beyond contract manufacturing and establish internationally recognised, Indian-owned device brands.

Source: Livemint

2. Tomato prices more than double in a month as September weather hits supply

Tomato prices have more than doubled over the past month as warmer weather, weaker rainfall and colder nights in September hurt fruit-setting and reduced market arrivals. El Niño-related weather conditions have tightened supplies from key producing regions.

Source: The Hindu BusinessLine

3. Andhra Pradesh announces nearly ₹25,000 crore of investments and project groundings at Vizag conference

The Andhra Pradesh government signed 31 MoUs worth about ₹21,500 crore at a regional industry conference in Visakhapatnam. Another 33 projects worth around ₹3,500 crore were inaugurated or grounded, taking the total investment represented at the event to roughly ₹25,000 crore.

Source: The Hindu BusinessLine

4. Automobile retail sales surge 31.8% to record high in September

India’s automobile retail sales reached 25.37 lakh units in September, rising 31.82% year-on-year, according to FADA. The increase was driven by strong demand for two-wheelers and passenger vehicles.

Source: Business Standard

5. Starlink builds India-specific infrastructure ahead of commercial launch

Starlink has built 20 gateway sites and India-specific security controls, with the company saying Indian user data will remain within the country. The satellite operator has completed much of its ground infrastructure but still requires spectrum and security clearances before launching commercial services.

Source: The Hindu BusinessLine

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. The Chinese whispers in India’s EV batteries

Despite PLI scheme incentives, Indian conglomerates like JSW, Reliance, and Tata are struggling to scale battery-cell factories due to tight Chinese control over advanced LFP technology and export restrictions on manufacturing know-how. With visa limits on Chinese engineers delaying equipment setup, Indian firms are forced to pivot toward in-house R&D, acquiring overseas IP, or relying on imported cells.

2. Why India’s airlines want cheaper fuel

A 13% surge in Aviation Turbine Fuel (ATF) prices has forced Indian airlines to hike passenger surcharges as fuel expenses consume profit margins. Because domestic ATF prices track international import benchmarks and face compounded central and state taxes, carriers are pushing for cost-plus pricing, fixed tax levies, and a revised price stabilisation fund to curb widening operational losses.

The Chinese whispers in India’s EV batteries

This year, India’s largest conglomerates tried to make a lot of noise regarding EV batteries. But somehow, each of their noises showed the same pattern.

For instance, in early 2024, JSW announced plans for a 50 GWh cell giga-factory, using technology from a Chinese partner. But this year, JSW halted those plans because it hinted that acquiring such a license was too much trouble.

Tata’s battery arm, Agratas also tried to license Chinese technology. But they realized they couldn’t make it work, and then decided to develop its own.

Meanwhile, a somewhat-unexpected entrant in Reliance also announced that it was building a large cell factory in Jamnagar, Gujarat. But, as per Bloomberg, it turns out that they, too, had also hit a block with a potential licensing deal with a Chinese partner.

It’s no secret that India has been trying hard to move up the value chain in EV batteries. A year ago, we covered Ashok Leyland’s ₹5,000 crore deal with China’s CALB, one of the world’s largest battery-cell makers. The long-term goal was to eventually build the cells within the batteries themselves. Similarly, Amara Raja had struck a similar deal with another Chinese company, Gotion, and Exide with SVOLT.

However, tech transfer deals have always been tricky to execute, more so if the foreign company giving us the technology is based within the jurisdiction of a geopolitical rival. How we’re trying to navigate this complexity is the story we’ll be telling you today.

The little things you do

First, let’s explore what it means to even make an EV battery.

An electric car battery is a pack made up of hundreds or even thousands of cells, along with cooling systems, electronics and software to manage them. Making these packs isn’t easy, but Indian companies already know how to do it. Tata, Mahindra and Ather, for instance, make battery packs in India using cells bought from elsewhere. Ola is an exception, which we’ll come to later.

Even harder than the pack is making the cells that go inside it. Building a cell factory isn’t the hardest part, either. The real challenge is learning how to make millions of cells that perform the same way, last long and remain cheap.

That requires a lot of trial-and-error, constant iterations on the factory floor, and lots of practice. For every batch of cells you make, some will go to waste, and the purpose of those iterations is to reduce that. Chinese and Japanese companies have spent years — even decades — getting better at this, while we’re only beginning.

So, merely buying the license to the technology isn’t enough. Learning the actual know-how takes a lot more practical effort beyond the manual that explains how to make cells. This is called tacit knowledge, and we shall illustrate later with an example how critical it is.

Even if Indian companies learn to make cells, there is another problem. They still need the materials that go inside them, and India imports most of those, too. India’s rare earth dependence on China is well-known, so we won’t be discussing this here.

Now, India has been trying to speed things up with incentives. We have an ₹18,100 crore Advanced Chemistry Cell PLI scheme that pays firms to set up large battery-cell factories. The target is 50 GWh of capacity, enough cells to store 50 billion watt-hours of energy. Of this, 40 GWh has been awarded and the remaining 10 GWh is being tendered.

But as of June 2026, only 1.4 GWh was actually up and running, all of it from Ola. Plenty of factories are planned, but very few are in operation.

Kicking away the ladder

Which brings us back to the main problem Indian companies are stuck on, and the one country that we’re dependent on to solve it.

Most of the expertise required to make advanced cells at scale is held by Chinese companies. Today, China makes roughly 80% of the world’s battery cells and more than 90% of its LFP cathode material.

Unfortunately, getting access to their knowledge has only become much harder over the past year, at least partly because of China’s own policies.

It’s not like China has stopped sharing battery technology altogether. But the restrictions are more selective than that. China appears to be drawing a line around some of its more advanced manufacturing know-how, while older technology is still more transferable.

For instance, in July 2025, China added some parts of LFP cathode-making technology to its restricted-export list. The rules use technical cut-offs to decide what exactly is restricted. Put simply, some of the know-how used to make the highest generation of LFP batteries now needs government approval before a Chinese company can share it abroad, but less-advanced generations actually fall outside these restrictions.

China went further in October, announcing broader controls across industries. Then in November, it suspended those rules. But the restrictions introduced in July remained.

Another measure that China has used to hamper tech transfer is limiting the mobility of its engineers that we’d need to help us with setting up factory processes.

Take Amara Raja’s deal with Chinese battery major Gotion. Chinese engineers were supposed to help Amara Raja set up the machines, put quality control processes in place, and train its Indian employees. But one of the biggest bottlenecks they highlighted in that deal was the inability to court Chinese engineers. That hurt their ability to absorb the tacit knowledge embedded in manufacturing.

If you’d recall, this is not very different from when China called back its engineers from Foxconn’s factories in India last year.

On top of all this, there is pressure from the Chinese state on Chinese companies to scale down licensing of technologies not just to India, but to any other country. In 2024, China’s commerce ministry reportedly held a meeting with their domestic automakers regarding the risks of making overseas investments. It signaled India in particular, while also advising strongly against investing in Russia and Turkey.

Beyond this, there is also the problem that all tech transfer deals face regardless of which countries are involved: what is the incentive for a company with the technology to teach us how to use it? After all, the moment you give the license away, you create a potential competitor. So the licensing firm’s incentive is to teach the licensee only as much as is needed to run a factory, and no more.

Meanwhile, the licensing firm also gains access to the market of the licensee, which is why they enter a deal in the first place. As we’ve covered before, given China’s domestic sales plateauing, they have a particular interest in gaining access to the Indian market.

Of course, our own policies with Chinese investments make things harder, especially with Press Note 3, which ensured that Chinese companies face an extra layer of scrutiny before investing here. BYD, for example, proposed a $1 billion EV plant in India in 2023, but the plan did not get government approval. India eased the rules slightly in 2026 for small Chinese stakes in Indian businesses, but bigger investments still need approval.

The bets

Even within this context, different companies have taken very different routes to the same problem. We’ll be looking at a few of those.

JSW’s frustrations

First comes JSW.

On 26 August this year, JSW paused its cell giga-factory. It linked its inability to find a Chinese partner for LFP batteries to China’s tighter controls. JSW was ready to build the factory, but couldn’t get the know-how needed to make cells at scale.

4 weeks later, JSW launched its electric trucks and buses from a plant in Maharashtra capable of producing 15,000 vehicles a year. The vehicles are engineered in India, the software is developed here and the battery packs are assembled here. But the cells inside those packs still come from elsewhere.

Then, on 28 September, JSW committed over ₹800 crore to a battery research centre with COEP Technological University in Pune. The centre will work not just on lithium-ion cells, but also sodium-ion cells, which are relatively more unexplored even on China’s part.

Over a few weeks, you could see JSW’s approach change. It first tried to get the technology from an established Chinese player. When that didn’t work, it started investing in developing the knowledge itself. In the meantime, JSW can build an electric truck in India and assemble its battery pack here.

Tata’s hedge

Tata, meanwhile, is taking a different route. Agratas, its battery company subsidiary, is building a 20 GWh cell factory in Sanand, Gujarat. The first production equipment started arriving in September 2026, and the factory is expected to start making cells in 2027.

But Tata isn’t using the same approach for every type of battery. While it found a technology partner for one form of battery chemistry, it failed for another.

For the NMC (nickel-manganese-cobalt) chemistry, Agratas has licensed technology from AESC Apollo, a Japanese firm that’s now majority-owned by China’s Envision Group. The deal saves Tata the effort of developing the technology from scratch.

But we don’t know how far that gets Tata on its own. The details of the deal aren’t public, so it’s unclear whether, once the licensing deal is over, Tata will eventually be able to produce these cells independently or continue to rely on AESC.

With LFP, Agratas didn’t even have the option to license. It couldn’t find a Chinese company willing to share it. So Agratas is now trying to develop the LFP manufacturing process itself.

An oil company enters the game

Perhaps, the most interesting move in battery cells came from a company which is known neither for cars like Tata, nor for batteries like Exide. But it does understand chemicals very well, while also having some of India’s largest cash reserves.

Those facts have allowed Reliance to do something no other Indian company has tried. Reliance decided to buy the firms that own the technology itself. That’s certainly more durable than renting it.

For instance, in March 2022, Reliance acquired almost all of Lithium Werks for ~$61 million (₹464 crore @ $1 = ₹78.6), picking up a portfolio of 219 LFP patents, a manufacturing facility in China, existing employees and 3 decades of accumulated process technology. Then in 2021, it had agreed to buy sodium-ion specialist Faradion for about £100 million (₹1,000 cr @ 1£ = ₹100).

Despite these moves, though, as per Bloomberg, Reliance was seemingly looking for another partner, that too a Chinese one. In January 2026, Bloomberg reported that Reliance had been trying to license LFP technology from China’s Hithium, but the talks had stalled and its cell-making plans were paused.

What Reliance has said is that its battery project is progressing and is on schedule. Its FY26 annual report said its Jamnagar battery factory was nearing completion, with 40 GWh of capacity planned.

But what we still don’t know is exactly whose technology those cells will use, or why Reliance was trying to look for another partner in China. Perhaps, buying battery technology doesn’t necessarily end the search for better technology.

A few more bets

Beyond these three, a few more companies in India have their own strategies to skirt around China’s dominance.

For instance, there’s Ola, which decided to develop its own cells from scratch. Its 4680 NMC cell is already used in its scooters, while its newer 46100 LFP cell has received BIS certification. While this marks significant progress from mere assembly, Ola still imports active key materials like the cathode and anode.

Then, there’s Maruti, whose EV trajectory we’ve covered in a recent story. Maruti imports the entire battery pack for the e-Vitara from BYD. That saves Maruti from having to develop cells or even battery packs itself, but makes it dependent on BYD.

What to watch from here

What’s clear is that announcements about large cell factories are easy and quite abundant, too. But as far as making those factories operational at high efficiency goes, there’s still a long way to go unless the underlying policy situation changes dramatically.

Tata will be one of the first big tests, with its Sanand factory expected to start producing cells in 2027. JSW’s research centre may not produce commercial cells anytime soon, but it should show whether Indian companies can build more of this technology themselves.

Ola, meanwhile, will test whether doing almost everything in-house can work at scale. And Maruti will show how far a company can go by relying on an established foreign supplier instead.

Why India’s airlines want cheaper fuel

If you’re booking an IndiGo flight for the festive season, you already know how expensive it can be. Now there’s a fresh addition to the bill.

From October 6, the airline increased its fuel surcharge by ₹100–₹350 on domestic flights, taking it to ₹375–₹1,300 per sector, depending on distance. IndiGo first introduced the charge on March 14, revised it from April 2, and has now raised it again. International passengers face higher charges too.

Behind that decision is another jump in the price of aviation turbine fuel, or ATF, which powers aircraft. In Delhi, it reached roughly ₹137 a litre on October 1, about 13% above the previous month and nearly 25% above July.

The government is now reportedly considering reviving a ₹10,000-crore scheme to protect airlines from these swings. There’s just one complication: it offered that protection a few months ago, and no airline signed up.

To understand why, we need to start with the fuel bill.

What airlines pay for

India refines virtually all the ATF it consumes and exports a substantial surplus. Yet airlines don’t pay the domestic cost of making it plus a margin. Oil marketing companies, or OMCs, use an international jet-fuel benchmark called MOPAG, or Mean of Platts Arab Gulf. It reflects prices in the Arab Gulf market. The logic is simple: fuel is traded globally, so its price here reflects what buyers would pay elsewhere.

The calculation starts with what it would cost to import that fuel: the international price, shipping, insurance and applicable import charges. This is called import-parity pricing, and it applies even when the fuel was refined in India.

That dollar price is converted into rupees, and local delivery costs and supplier margins are added. Then come taxes. ATF is outside GST, so airlines pay central excise and state VAT. VAT rates vary by state, which helps explain why the same fuel costs different amounts at different airports.

So the bill depends on three things: global jet-fuel prices, the rupee and local costs and taxes.

Jet-fuel prices rose sharply at the start of the year, eased, and are now back near the highs seen earlier this year. But jet fuel and crude oil don’t always move together.

Crude must first be refined into usable fuels. The gap between crude and jet-fuel prices is called the “crack spread”. When jet fuel becomes scarce, its price can rise much faster than crude, widening that gap.

The Federation of Indian Airlines, or FIA, which represents Air India, IndiGo and SpiceJet, says this gap has become unusually large. In its submission to the government, it cited a spread of roughly $60 a barrel against the usual $10–12.

The West Asia conflict has added other pressures. A weaker rupee makes aircraft leases and maintenance more expensive too, because many of those expenses are dollar-linked.

Airspace restrictions force detours on affected international routes, increasing fuel consumption and crew costs. Airlines can end up paying more for each litre while needing more litres to complete the journey.

We saw the financial consequences in our earlier story on IndiGo’s results. In April–June, its revenue from operations grew nearly 20%, but its fuel expense rose about 86%. The airline reported a ₹238-crore net loss, compared with a ₹2,176-crore profit a year earlier. Those results captured the earlier shock, before October’s increase. Even then, we were worried the next quarter could be worse.

The protection nobody bought

Normally, market-linked fuel pricing would mean international price increases are passed on to airlines and, in turn, customers. During the crisis earlier this year, the government interrupted that process.

On April 1, it limited the increase in ATF base prices for domestic operations to 25%, despite international benchmarks indicating a rise of over 100%. That softened the hit to airlines, but left OMCs absorbing the price gap.

By June, the government acknowledged that this was unsustainable. The Cabinet therefore approved a separate price stabilisation mechanism, backed by up to ₹10,000 crore in interest-free advances to OMCs.

Participating Indian airlines would receive fixed-price fuel for domestic and international operations. The proposed selling price in Delhi worked out to approximately ₹115 a litre, after charges and taxes.

Take a simplified example, keeping taxes and other charges unchanged. If the comparable market price rose to ₹135, the airline would still pay ₹115, with the government advance financing the ₹20 difference. If it later fell to ₹100, the airline would continue paying ₹115, while the OMC used the ₹15 difference to repay earlier advances.

The basic bargain: predictable prices in exchange for giving up some benefit when fuel became cheaper.

Participation also required an exclusive supply arrangement with OMCs. The scheme would run for up to 36 months, subject to annual review or earlier settlement once the advance was recovered. An extension could be approved if recovery remained incomplete.

For airlines, the timing made this difficult to accept. The ₹115 Delhi price was already above the prevailing price in June–July, when the government clarified the terms. As international prices eased, committing to that arrangement became less attractive. According to The Indian Express, no carrier joined within the prescribed window, and the scheme lapsed.

Now prices have risen again, and there is renewed interest. But that doesn’t automatically resolve the objections to the original offer.

Airlines want the bill itself changed

That is why FIA’s requests go beyond reviving the fund.

First, it wants cost-plus pricing: fuel priced at its actual cost plus a reasonable margin, instead of international jet-fuel benchmarks. The aim is to reduce exposure to unusually wide crack spreads.

This would require deciding which costs count and what margin is reasonable. Refineries produce several fuels together, so working out how much of the cost belongs to jet fuel isn’t straightforward.

Then come taxes.

Ordinary domestic ATF supplies attract 11% central excise, followed by applicable state VAT. Because excise is a percentage, the tax amount rises with the underlying price. On a hypothetical taxable value of ₹100, it is ₹11. At ₹120, it becomes ₹13.20, even though the government hasn’t changed the rate. VAT can compound the increase because it is calculated on a price that includes excise.

FIA wants a fixed levy instead. That would prevent excise from automatically climbing with fuel prices, although the relief would depend on the amount chosen.

It also wants Delhi and Maharashtra’s temporary VAT concession continued, and lower rates in states including Karnataka, Tamil Nadu, Telangana and West Bengal.

Bringing ATF under GST offers another possible route. But the benefit would depend on both the rate and the input-tax-credit rules: whether airlines could offset tax paid on fuel against tax collected on their services. Simply moving ATF into GST would not guarantee full credit.

Beyond fuel, FIA has asked for an extension of the earlier 25% reduction in landing and parking charges for domestic flights. That concession expired in July, according to the association. These requests would lower airlines’ bills, but also reduce government or airport revenues.

Why not just raise fares?

Airlines are doing that, but recovering the entire increase is harder.

For one, many tickets are sold well before departure. A fuel-price increase can arrive after the airline has committed to carrying passengers at previously agreed fares. FIA has pointed to this mismatch in its appeal for relief.

There are also limits to what new passengers will pay.

According to IATA’s August report, India’s domestic revenue passenger-kilometres fell 7.5% year-on-year. This measures the distance travelled by paying passengers and is a useful proxy for demand. For the second consecutive month, India recorded the largest decline among the world’s major domestic markets.

Those figures don’t tell us how much of the decline was caused by higher fuel prices. They do show that airlines were already filling a smaller share of their capacity. Further fare increases could make that harder.

The pressure also explains their request for faster disbursement under the Emergency Credit Line Guarantee Scheme 5.0.

The scheme targets ₹5,000 crore in additional airline credit, with government-backed guarantees covering 90% of eligible lenders’ exposure to default. Airlines still have to repay the loans. This can help them meet immediate bills, but borrowing cannot permanently fix a route that costs more to operate than it earns.

FIA has warned that, without timely relief, carriers may withdraw from unviable routes. For passengers, that could mean higher ticket prices and fewer flight options.

The aviation minister has confirmed discussions with airlines and OMCs, but revised stabilisation terms have yet to be announced.

The next offer will have to settle some difficult questions. How long must airlines commit? How much benefit can they retain when prices fall? And if fuel stays expensive, who pays for support that cannot be recovered?

Last time, airlines decided the certainty on offer wasn’t worth the commitment. A revived scheme will need to give them a reason to decide differently.

- This edition of the newsletter was written by Vignesh & KK.

Tidbits

1. Paramount takes over Warner Bros in $110 billion Hollywood merger

Paramount Skydance has completed its takeover of Warner Bros. Discovery, creating a new entertainment giant called Skydance. The combined company brings HBO, CNN, CBS, Paramount+, Warner Bros and major franchises such as Harry Potter and Game of Thrones under one roof. The deal closed after months of legal challenges over competition and consolidation.

Source: BBC News

2. Cabinet clears ₹10,000 crore fund to help SMEs scale up

The Cabinet has approved a ₹10,000 crore SME Growth Fund to provide long-term equity capital to small and medium businesses looking to expand, invest in technology or enter global markets. It has also created a new transport and logistics authority that will prepare a long-term national master plan and coordinate projects across roads, railways, ports and aviation.

Source: The Economic Times

3. MoCA asks Mumbai airport to pause flight shift to Navi Mumbai

The Civil Aviation Ministry has asked MIAL to defer its plan to shift 265 of Mumbai airport’s 770 weekly international flights to Navi Mumbai by October 25. MIAL will now have to consult airlines and other stakeholders and come up with a jointly agreed transition plan before seeking regulatory approvals.

Source: Business Standard

4. India may bring Taiwan and Singapore institutes to train semiconductor workers

The government may invite Taiwan’s ITRI and Singapore’s A*STAR to establish semiconductor training centres in India, potentially funding their setup. The aim is to create a ready pool of engineers and shop-floor workers as new chip plants come online. Under the second semiconductor mission, India wants to train another 100,000 engineers over six years.

Source: Business Standard

5. RBI hikes repo rate to 5.50% after nearly three-and-a-half years

The RBI has raised the repo rate by 25 basis points to 5.50%, its first hike in nearly three-and-a-half years, as inflation pressures rise. It also shifted its policy stance from “neutral” to “calibrated tightening”, signalling that rate cuts are unlikely soon. The RBI raised its FY27 real GDP growth forecast to 7.1%.

Source: The Hindu

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Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Does Indian steel really need so much protection?

Despite being the world’s second-largest steel producer, India’s steel sector relies heavily on domestic policy architecture—including 30% export duties on iron ore that keep local raw material costs artificially low, alongside elevated import tariffs and 169 Quality Control Orders. Recent CSEP studies show that while these protections generate above-average margins for domestic steelmakers, domestic prices remain 15%–30% above Chinese levels, inflating input costs across downstream manufacturing like auto and machinery.

2. How CAFE 3 ended India’s small-car fight

India has finalised its CAFE 3 fuel-efficiency norms starting April 2027, resolving a dispute over proposed small-car concessions. While the government dropped the specific 3 g CO2/km emission discount for small petrol cars, it revised the core weight-based formula to give lighter vehicle fleets higher permitted emission limits while raising compliance targets for heavier SUV fleets. The framework also introduces super-credit multipliers for EVs and hybrids, along with a compliance credit-trading system to drive fleet decarbonization.

Does Indian steel really need so much protection?

In The Daily Brief, we’ve covered the immense protections enjoyed by India’s steel industry, like the safeguard duties and QCOs that shield domestic producers from imports, and the broader pattern of quality control orders functioning as non-tariff barriers across Indian manufacturing.

While learning about this, we couldn’t help but ask ourselves this: does the world’s second-largest steel producer, which has grown fivefold to 152 million tonnes over two decades, actually need to be so highly protected?

A pair of recent working papers from the Centre for Social and Economic Progress (CSEP), whose papers we’ve covered before, steps back and tries to answer this question with some new analysis.

Across both papers, the conclusion is the same. Indian steel’s profits may be a product of increasing technological efficiency, but they owe quite a lot to policy architecture too. Keeping that architecture in place is not just costing many other parts of the economy, but is also making Indian steel itself less attractive to global buyers compared to China or Japan.

Profitable, efficient, still uncompetitive?

Let’s start with the good news. Indian steel is genuinely cheaper to produce than steel in most developed countries.

CSEP makes a direct comparison of the major cost heads between who they call Japan’s largest steel producer and India’s most profitable steel firm in FY25 — both were unnamed, but they’re most likely Nippon Steel and Tata Steel respectively. The per-tonne cost for the Indian firm was found to be lower by ~20-40%. This is largely because Indian labour costs are a fraction of Japanese ones, but additionally, the costs of logistics and coking coal have also narrowed over time with Japan.

This isn’t a recent development, either. India’s steel sector has made real productivity gains since liberalisation in the 1990s. When tariffs on steel were slashed after 1991, the prevailing wisdom was that cheaper foreign steel would overwhelm domestic producers. However, firms like Tata Steel responded with cost-cutting and modernisation measures. By 2001, Tata Steel was ranked the world’s number one steel company by World Steel Dynamics.

The steel industry’s average EBITDA margin has always been consistently above its global peers. In 2024, the top three Indian steelmakers posted EBITDA margins of 13%, against a global average of 9% among the world’s 49 largest steel firms. It has also been 3-4 percentage points higher than the rest of Indian manufacturing.

High margins could simply reflect superior efficiency. But the problem is that Indian steel is more expensive than steel in almost every comparable market. For instance, Indian hot-rolled coil prices (HRC) are roughly 6% higher than Japanese HRC prices and 15-30% above Chinese levels. You’d expect a low-cost producer to sell cheaply and win on volume. But instead, Indian steelmakers sell at a premium while enjoying fatter margins than their foreign peers.

This means that something other than efficiency is propping up those profits. CSEP identifies two more important pillars, and the first one has to do with the raw material required to make steel.

The hidden iron ore subsidy

India is 100% self-sufficient in iron ore, the foundational material steel requires. We account for ~10% of global iron ore production. Until the mid-2000s, we also exported ~60% of all domestically mined ore, and domestic iron ore prices tracked global benchmarks.

That changed in 2007, when the government began imposing export duties on iron ore. The duty was ratcheted up to 30% of the selling price by 2011. The duty remains even today for ores with more than 58% iron content.

The stated objective of this duty was to discourage exports in favor of ensuring domestic availability for steelmakers at subsidized prices. Which was achieved, but at a certain cost to the iron ore industry.

Since the export duty kicked in, domestic iron ore prices have consistently sat at a 30-40% discount to global prices. Iron ore expenditure accounts for ~20% of the total cost of steelmaking. By suppressing the domestic price, the government transfers value from the iron ore industry to the steel industry.

The distortion doesn’t stop here, either. Low iron ore prices mean low returns for miners, which means limited incentives to invest in new exploration of iron ore mines. This problem is only compounded by India’s mining policy, where, if you discover a new mine, you can’t sell the mining rights or develop it yourself. You only receive a share of the auction premium, that too only when the state eventually auctions the mine and it becomes operational.

The result, as CSEP notes, is that exploration has virtually stopped. Only 22% of deep-seated minerals in areas with obvious geological potential have been mapped.

India’s policy of keeping iron ore cheap for steelmakers has, over time, stunted the very industry that supplies them.

Protected collusion

Cheap iron ore is the input side of the equation keeping steel prices artificially elevated. On the output side, a layered wall of tariff and non-tariff barriers, that was meant to keep foreign competition at bay, also allows domestic steelmakers to charge prices that a more open market would not tolerate.

During liberalisation, India’s steel tariffs were brought down sharply from about 93% in 1990 to under 7.5% by 2008. But since then, the industry has shown signs of reversing.

In April 2025, for instance, the government slapped an additional 12% safeguard duty on certain non-alloy and alloy steel flat products, citing a surge in imports that threatened ‘serious injury’ to the domestic industry. We covered this safeguard duty sometime last year as well. The combined tariff burden is now roughly 19.5%, which is far above China’s 4.5%, and even further from Japan and South Korea, which charge less than 1%.

Then, there are the Quality Control Orders (QCOs), that we’ve also covered before. They’re technical standards that require BIS certification before a product can be sold in India. On paper, they’re about quality, but really, they function as non-tariff import barriers. The number of QCOs on steel products has ballooned from just 1 in 1987 to 228, of which 59 have been suspended as of September 2026.

For downstream manufacturers — particularly MSMEs and exporters — these price differentials translate directly into reduced competitiveness. Steel accounts for about 15% of total project costs in construction and roughly 5% of raw material costs in automobile manufacturing. Every percentage point of inflated steel pricing ripples further down the value chain. That would explain why India’s steel sector has higher margins than the rest of our manufacturing.

Usually, the justification for these barriers is that countries like China and Japan dump their excess steel output within our border. But even the anti-dumping toolkit has been stretched beyond its purpose.

Consider low-ash met coke (LAM coke), an essential blast furnace input that India cannot produce domestically in sufficient quality because of high-ash domestic coal. As per trade think-tank GTRI, when the government launched an anti-dumping investigation on LAM coke, it benchmarked freight costs using container shipping rates. However, LAM coke ships almost entirely in dry-bulk cargo, whose rates are 8-10 times lower than container shipping.

This error inflated the provisional duties to $60-120 per tonne. And since LAM Coke accounts for 35-40% of steelmaking costs, it pushed finished steel prices up by 3-5%. The anti-dumping regime, in other words, hurt the steel industry’s own inputs.

On top of that, usually, one worry of an industry that’s highly protected is that firms in the industry can often collude to keep profits up without the threat of outside competition. In Indian steel’s case, that might be true.

Earlier this year, the Competition Commission of India (CCI) found that 28 steel companies (including Tata Steel, JSW Steel, and SAIL) had breached antitrust law by colluding on steel selling prices between 2015 and 2023. The case originated in 2021 after a group of builders alleged that steel companies were collectively restricting supply and hiking prices. JSW and SAIL have denied the allegations, and the case is ongoing.

What happens when the shield comes off?

Now, what happens if you remove some of these protections? The CSEP papers indeed try to model what that could look like.

The first paper, by Shishir Gupta and Rishita Sachdeva, builds two counterfactual scenarios.

In the first, domestic steel prices fall by 6% to equalise with Japanese levels. That caused the profitability of the biggest private steelmaker to drop by 25%. The fastest-growing private player and the largest PSU each lose 40-50% of their profitability. A 6% price correction, which would still leave Indian steel more expensive than Chinese steel, is enough to put serious pressure across the industry.

The second, more important scenario involves removing the 30% export duty on iron ore. If that happens, steelmakers have to buy all their iron ore at the higher global prices. As a result, the biggest private player’s profitability potentially falls by ~70%. The fastest-growing private player barely breaks even, scraping by at less than 1% margin. SAIL goes loss-making.

Now, one might point out the fact that Tata Steel and SAIL source all their iron ore from captive mines, so they’d never need to buy on the open market. This is true, but CSEP argues further that even captive miners forgo the revenue they could earn by exporting ore at global prices. That opportunity cost isn’t included in the steel price.

The second paper, by Aparna Preethan and Badri Gopalakrishnan, approaches the question from the other direction: what does steel protection cost the rest of the economy?

They create a model to estimate what a tariff reduction would do to steel output. Now, it’s hard to truly quantify such a scenario, and models are imperfect. But across tests and different tariff reduction rates, the authors find that domestic steel output doesn’t fall by too much. The Indian steel sector, in their view, is resilient enough to absorb such a change.

However, the gains elsewhere are significant. They see stimulation in exports and meaningful employment gains, all primarily in downstream sectors like machinery, automotive, electronics, and fabricated metals that benefit from cheaper steel inputs. The country’s overall price index also falls. Note that this model doesn’t touch non-tariff barriers at all.

One could counter-argue that even if a tariff reduction is necessary, the Indian steel sector can only handle such a change in the long run. An immediate cut would come as a brutal shock to them.

Which is why the authors create a scenario where tariffs are phased out gradually. In their model, the industry barely notices these changes, but downstream sectors get cheaper inputs.

India has done this before. For instance, tariffs on both pharma and auto components fell post-liberalisation, but their respective industries only grew bigger. To be sure, this was complemented by other policies, and import tariffs weren’t bluntly removed across the board. But both sectors are much less insulated than Indian steel today.

The real steel test

None of this means India should fling open its steel market overnight.

China’s massive overcapacity in many industries — including and especially steel — is well known, and anti-dumping duties against a force like that can be considered a rational tool. The CSEP authors themselves recommend a calibrated multi-year roadmap to bring tariffs down to ASEAN-equivalent levels, not a sudden liberalisation shock.

But the current regime is extracting a cost from the broader economy. Every road, bridge, factory, and car built in India costs more than it needs to. Our vision of scaling manufacturing fundamentally requires steel which is more competitively priced than what it is right now. And that requires making a dent in the distortions mentioned above.

How CAFE 3 ended India’s small-car fight

The last time we looked at India’s next fuel-efficiency rules, carmakers were fighting over what the third phase of Corporate Average Fuel Economy, or CAFE, would require.

CAFE limits how much fuel a carmaker’s cars can consume on average. Since burning fuel produces CO₂, we can express this as grams of CO₂ emitted per kilometre. The rules compare two numbers: the average emissions of all the cars a company sells, and its permitted limit. A formula sets that limit based on the cars’ average weight. Heavier fleets get a higher allowance because heavier cars generally need more fuel.

The final framework is here, and CAFE 3 starts in April 2027. But getting here involved a fight over small cars.

Maruti Suzuki wanted an extra 3 g CO₂/km benefit for petrol cars weighing up to 909 kg, with engines no larger than 1,200 cc and a length no greater than 4 metres.

Put simply, a qualifying car emitting 100 grams of CO₂ per kilometre would count as emitting 97 grams. Its actual emissions would stay the same, but the lower figure would help Maruti meet its fleet-average limit.

Tata Motors, Mahindra and others opposed it, arguing that it would mostly favour Maruti. They also questioned a cut-off that would treat cars just above and below 909 kg differently. The dispute reportedly reached the Prime Minister’s Office, which we wrote about at the time.

So where did the government land?

The compromise inside the formula

The final framework dropped the proposed extra 3 g/km benefit for qualifying small petrol cars.

Instead, it changed how much the permitted limit rises with a fleet’s average weight.

Under the earlier proposal, the allowance rose more sharply as fleets became heavier. The final formula reduces that advantage. Heavier fleets still get a higher allowance, but the gap between light and heavy fleets is smaller.

Take two hypothetical carmakers whose cars average 909 kg and 2,500 kg. These are extreme examples, and the following limits apply to FY28, the first year of CAFE 3. Remember, these are their permitted limits, not their actual emissions. A higher limit gives a company more room to comply.

Under the September 2025 proposal, the lighter fleet’s limit would have been roughly 76 grams of CO₂ per kilometre. The final formula raises it to roughly 82.8 grams, giving it nearly 7 grams of extra room. The heavier fleet goes the other way: its limit falls from roughly 151.4 grams per kilometre to about 142.4 grams. Its target becomes tougher.

The difference is where the relief applies. The proposed 3 g/km concession would have lowered a qualifying car’s counted emissions. The revised formula raises the permitted limit for lighter fleets instead. The figures above compare only those limits; the proposed discount would have applied separately.

So Maruti did not get its special small-car category. But lighter fleets like its own got some relief through the broader formula.

That relief is relative to the earlier proposal. CAFE 3 still gets tougher each year: its fuel-consumption benchmark falls by around 16.7% over its five years. Even lighter fleets will have to keep improving.

The regulatory toolbox

The formula sets the target. Carmakers can meet it by selling more efficient cars, using cleaner fuels and fuel-saving technologies, or using compliance credits.

Some vehicles receive “super credits”: they count as more than one vehicle when the fleet’s performance is calculated, giving their lower fuel consumption more weight.

A battery EV is counted as three vehicles. Plug-in hybrids, which can charge from a socket, and flex-fuel strong hybrids, which can run on high-ethanol blends, count as 2.5 vehicles.

Regular strong hybrids count as 1.6 vehicles. Their batteries recharge while driving, so they do not need plugging in. Flex-fuel vehicles, which can run on petrol or high-ethanol blends, count as 1.1 vehicles.

Cleaner fuels also get a benefit in the calculation. Petrol cars running on 20% ethanol blends get an 8% adjustment, reducing their counted emissions. CNG cars get a discount of at least 5%, or the notified biogas blending percentage if higher. Biogas comes from sources such as agricultural waste, food waste and animal manure.

The list of recognised fuel-saving technologies has grown from four to twelve, including stop-start systems, regenerative braking, heat-reflecting paint and efficient air-conditioning. Each eligible technology earns a 1 gram CO₂/km reduction in calculated emissions, capped at 9 grams CO₂/km per vehicle.

Carmakers that beat their targets also earn compliance credits. They can carry these into later years within set multi-year periods, or trade them with other carmakers.

Those still short can buy credits from the Bureau of Energy Efficiency, with rates starting at ₹2,500 per gram in FY28 and rising to ₹4,500 by FY32. The rate applies to each gram-per-kilometre shortfall, multiplied by the number of vehicles sold. A bigger shortfall or more sales therefore means a larger bill.

Each company can choose how much to rely on improvements to its cars, changes in its sales mix, and credits.

Different fleets, different problems

This framework forces different companies to solve very different strategic problems.

For Maruti, the revised weight formula offers relief, while its CNG cars get a separate emissions adjustment. Strong hybrids get super credits, and its recently launched e Vitara gets the largest multiplier. The question is how far small cars and CNG can take it, and how much it will need hybrids and EVs.

Mahindra sells many larger SUVs, so the revised formula gives it a tougher target than the earlier proposal. Selling more electric SUVs can help lower its calculated fleet consumption, with each EV counting as three vehicles. That is why its growing electric SUV lineup matters.

Toyota has long argued for multiple technologies to cut emissions. The benefits for strong hybrids, plug-in hybrids and flex-fuel vehicles give it several routes to compliance without relying mainly on battery EVs.

And that is perhaps the bigger point. Every carmaker starts with a different mix of vehicles, so there is no single winning strategy under CAFE 3. The target may be the same kind of rule for everyone, but the easiest way to reach it will look very different for Maruti, Mahindra and Toyota.

The next fight

Carmakers now have clearer rules for the cars they are planning. From April 2027, each will have to find the right combination of vehicles and technologies for its business.

The fight over what CAFE 3 should look like is largely settled. Now comes the work of adapting to it.

- This edition of the newsletter was written by Manie & Vignesh.

Tidbits:

1. Adani Airports stops handling certain Russian-linked cargo at Mumbai airport

Adani Airports has stopped handling some cargo linked to Russian carriers at Mumbai airport, citing sanctions-related compliance concerns. The move has triggered a dispute with representatives of Aeroflot and Volga-Dnepr, with about 2.5 tonnes of cargo reportedly stuck at the airport warehouse.

Source: The Economic Times

2. Several Indian states seek extra power allocations to avoid outages

Several states, including Rajasthan, Gujarat, Maharashtra, and Tamil Nadu, have sought additional power allocations from the central government to avert electricity outages. India’s power supply has tightened due to weak hydropower generation resulting from an El Niño-related rainfall decline and maintenance at some plants, increasing reliance on coal-fired generation to meet demand.

Source: Business Standard

3. Zimbabwe central bank in talks to adopt India’s UPI technology

Zimbabwe’s central bank is negotiating with NPCI International to build a UPI-based real-time payments system. The proposed infrastructure would connect banks, mobile-money operators and fintechs, with talks potentially concluding by October 31.

Source: Bloomberg

4. Boeing wins US Navy’s next-generation fighter contract

Boeing has won the US Navy’s F/A-XX sixth-generation fighter development contract, worth more than $20 billion in its initial phase. The award follows its selection last year for the US Air Force’s F-47 program, giving Boeing both of the Pentagon’s major next-generation fighter programmes.

Source: Reuters

5. India explores Colombia for palm oil imports as traditional suppliers boost biofuel blends

India is seeking to diversify its palm oil sourcing to Colombia amid concerns that top suppliers Indonesia and Malaysia are raising their biodiesel blending ratios. The Solvent Extractors’ Association of India is exploring new trade avenues to ensure long-term edible oil security, as the shift toward higher biofuel blends in Southeast Asia could divert significant volumes of palm oil from food to fuel applications.

Source: Business Standard

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Thank you for reading. Do share this with your friends and make them as smart as you are 😉

Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Where’s the last-mile of India’s LPG revolution?

Despite Pradhan Mantri Ujjwala Yojana expanding LPG coverage to over 10.5 crore women, many low-income households continue to rely on traditional firewood and “fuel stacking” due to high refill costs. CEEW studies highlight that while 80% of surveyed households expressed a willingness to transition fully to clean energy at ₹400 per cylinder, current subsidised prices remain significantly higher, leaving families caught between high fuel expenses and dangerous indoor air pollution.

2. Why are airlines opposing the move from Mumbai to Navi Mumbai?

Mumbai International Airport’s planned redevelopment of ageing Terminal 1 structures starting January 2027 requires moving displaced domestic flights into T2, forcing a 33% reduction in international flight capacity to Navi Mumbai. The International Air Transport Association (IATA) and global carriers strongly oppose this mandatory shift, citing operational inefficiencies, doubled ground setup costs, loss of connecting traffic, and concerns over historic slot allocations.

Where’s the last-mile of India’s LPG revolution?

Imagine the gas cylinder in your kitchen runs out tonight. For most households that use LPG, what happens next is almost automatic. You book a refill, pay when it arrives, and go back to cooking.

But that decision looks very different when you move down the income ladder. There is food to buy, rent to pay, medicines and school fees to cover. In fact, many would prefer to cook food using firewood, which is far cheaper than LPG. It can cook the night’s dinner without costing you anything right now.

That small decision, repeated across millions of kitchens, sits at the heart of India’s clean-cooking problem.

Over the last decade, India has worked hard to make LPG available to poorer households. Under the Pradhan Mantri Ujjwala Yojana, more than 10.5 crore women have received gas connections. LPG coverage rose from 62% of households in 2016 to, on paper, more than 100% by 2024.

But owning a cylinder is not the same as cooking with it every day. An average Ujjwala household uses fewer than five cylinders a year, while a household cooking entirely on LPG would typically need 7-8. In many homes, the chulha comes back on for cooking.

In June, the government reduced the annual number of refills on which an Ujjwala household gets a ₹300 subsidy from 9 to 4. As per the logic of the petroleum ministry, four refills are broadly what a typical household uses in a year. On those four, a 14.2 kg cylinder in Delhi costs ₹642 instead of ₹942. From the fifth refill onwards, the household pays full price.

There is a strange loop here. Poorer households use less LPG partly because refills are expensive. Now that low usage is also being used to decide how many refills should get support.

And the alternative is not harmless. Household air pollution from burning wood, dung and crop waste was linked to more than 9 lakh deaths in India in 2023.

So why, after getting LPG into so many poorer homes, are so many families still lighting a chulha?

Three new studies from the Council on Energy, Environment and Water, or CEEW, help answer that question. Together, they surveyed more than 4,000 people across rural households, urban informal settlements and migrant workers. Our story is an amalgamation of their findings.

A cylinder isn’t a transition

The headline Ujjwala connection numbers can be misleading. Ujjwala made it easier to enter the LPG system, but after the first connection, gas becomes a purchase the family has to make again and again.

You can see this most clearly in rural India. Nearly 75% of the rural households CEEW surveyed across six states had used LPG in the previous three months. But fewer than a quarter cooked only with it. Half still relied mainly on firewood.

These families hadn’t really substituted one fuel for another, but merely added LPG to a kitchen that continued burning wood and dung alongside it. Researchers call this fuel stacking.

From a rural household’s perspective, collecting firewood is far cheaper than the alternative. Think about when income arrives seasonally from a harvest, or unpredictably through daily-wage work. If the cylinder empties during a bad week, another LPG refill has to compete with groceries, medicines and other critical expenses.

That is also why 70% of the rural households surveyed that didn’t use LPG named refill cost as a major barrier. And these families stretch one cylinder for as long as possible. LPG might handle a quick meal while the chulha handles food that takes much longer.

Forget ordering another cylinder, even picking it up from a center adds to the cost. Only 47% of rural LPG users surveyed had cylinders delivered home. Everyone else had to travel to a distributor or pickup point, and that added to the bill beyond the cost of a refill.

Close to the cylinder, outside the system

Now, how does the picture change when you move from a village to a city?

In a city, many poorer families live in what are called informal settlements. These are neighbourhoods that have grown outside the city’s formal housing system, where residents may not have recognised addresses, secure property rights or the same access to basic services as people in formal areas.

However, lighting a smoky chulha in a crowded neighbourhood is far less practical, and that is assuming the city is close to a forest area. LPG, meanwhile, is usually much easier to get.

CEEW surveyed households in these settlements across ten cities. Among them, 70% cooked only with LPG, compared with 23% in its rural sample. These are different groups, so this isn’t a clean urban-rural comparison, but a city does seemingly make access to gas easier.

Even then, a connection doesn’t guarantee a full transition, and fuel stacking exists among poorer households here as well. Of the 10 cities, Ranchi had the highest rate of fuel stacking at around 50% despite also having the highest share of Ujjwala connections.

Yet, affordability is only half the urban story.

About one in ten households got LPG without a formal connection through unauthorised dealers. Very simply, there is an additional cost to securing a cylinder connection informally. Formal users reported paying a median ₹850 for a standard 14.2 kg cylinder, while informal users paid ₹1,040.

Many of them had previously been refused a formal connection because they lacked required documents, including proof of current address. In fact, most of the formal users got their cylinders delivered home, but 79% of informal users did not enjoy the same privilege. Then, to serve the demand existing outside of the formal system, informal gas sellers stepped up. But they clearly will want extra for supplying a cylinder without the need of proper verification.

Half of the informal users also said they couldn’t afford the upfront cost. CEEW estimates that 13% of all households in its urban sample were eligible for Ujjwala but hadn’t enrolled.

What if your home keeps moving?

Every year sees millions of Indians move from their rural households to cities which house many of these jobs. So, many of these urban informal settlements are often inhabited by migrants, who primarily work in construction, sanitation and transport. CEEW surveyed them as well and found unique patterns in their fuel use.

Around 79% of those who used gas relied on informal connections, while only around 4% were beneficiaries of the formal scheme. This tracks with the fact that migrants form a large chunk of informal workers in the Indian economy. There is no national data on how many migrants the scheme reaches, so that 4% isn’t a national figure. But perhaps, there is a reason for it.

You see, the LPG scheme was built around the idea of a settled household. Food subsidies faced a similar problem, which was tackled by the introduction of the “One Nation One Ration” Card. The newer version of the Ujjwala scheme similarly made LPG connections transferable, but getting into the formal system itself after moving still takes effort. And migrants without a proof of address are the most vulnerable to this reality.

There is also a marketing barrier, as migrants are often unaware that either such schemes exist, or that they’re eligible for it. This is not dissimilar to the finding of another CEEW study on stubble-burning, where farmers in Punjab were unaware of the state’s efforts to promote clean stubble disposal. We covered that report as well in the recent past.

Moreover, the opening hours of a gas distributor can overlap with the working day of a migrant. For a daily-wage worker, visiting a gas agency can mean losing income.

But even when migrants can get LPG, they often buy it differently. Informal buyers purchasing a full 14.2 kg cylinder paid around ₹71 per kilogram. But even among informal users, those buying smaller 5 kg cylinders paid around ₹100 per kilogram. The smaller purchase was the most expensive.

But this is no irrational decision. A full cylinder may be better value, but that doesn’t help a daily-wage worker who doesn’t have a thousand rupees of cash on hand. It’s the same reason people buy shampoo in sachets instead of larger bottles, which are cheaper on a price-per-gram basis. That is why CEEW suggests testing pay-as-you-go “LPG ATMs”, where people could buy smaller amounts through formal channels instead of paying extra to informal sellers.

Who pays for the cleaner kitchen?

Across all three surveys, CEEW found the same broad affordability threshold: at ₹400 for a 14.2 kg cylinder, at least 80% of respondents said they would cook entirely with LPG.

It isn’t a magic number. The surveys were conducted between late 2024 and early 2025, before prices rose in April 2025 and again in 2026. And ₹400 is what people said they would pay, not necessarily what they would spend when money gets tight.

Still, it tells us something about the size of the affordability gap. An Ujjwala household today pays ₹642 for its first four refills and ₹942 after that. Getting anywhere close to ₹400 would mean somebody else absorbing much, much more of the cost.

India imports above 60% of the LPG it consumes, much of it from the Persian Gulf and through the Strait of Hormuz. When international prices rise sharply, the government doesn’t pass the entire increase on to households. State-owned oil marketing companies can instead sell domestic LPG below its market-linked cost, creating what is called an under-recovery.

This year’s West Asia crisis made under-recoveries unusually large. Saudi Aramco’s LPG benchmark rose about 46% between late February and early June. The petroleum ministry said the cost of supplying a domestic cylinder crossed ₹1,600, while a regular consumer in Delhi pays ₹942. Cumulative under-recoveries on household LPG had reached ~₹60,000 crore by the end of FY26. Even the current price of ₹942 doesn’t cover the full market cost, and the difference eventually sits with the household, the government or the oil companies.

One may think of ₹1,600 as an exceptional figure in a strange time, which will revert to the mean once the crisis ends. But at this point, the situation in West Asia has itself become highly normalized, and so have the massive under-recoveries.

Conclusion

That brings us back to the loop we started with.

There is an understandable fiscal logic behind the four-cylinder rule. But the clean-cooking logic points the other way. The fifth, sixth and seventh cylinders are precisely the ones needed to move from occasionally using LPG to cooking with it all the time.

For one household, a cheaper cylinder might be enough. Another needs a smaller payment at one time. Another needs easier access to the formal system. There is an overlap between these household types — perhaps, the same person has experienced each issue that plagues each set of consumers. But it is clear that there is no single fix to all their problems anyway.

India’s first clean-cooking challenge was relatively easy to measure: get LPG connections into homes that had never had them. But now, you need to get them to refill more, and different sections of society have different (if not conflicting) constraints in that regard. This policy challenge only gets harder as the Strait of Hormuz crisis gets prolonged. And no policy solution is any less costly than the other.

Why are airlines opposing the move from Mumbai to Navi Mumbai?

If you’ve flown through Mumbai’s Terminal 1, you may have felt it could do with a makeover. Beside the city’s own T2 or Bengaluru’s newer terminal, it feels dated for an airport serving India’s financial capital.

The problems go beyond appearances. Mumbai International Airport Ltd, or MIAL, the airport’s operator, has cited structural distress in older buildings and difficulties separating arriving and departing passengers in its submissions to AERA, the airport tariff regulator. But rebuilding a busy terminal requires somewhere else to put its flights.

In January 2025, MIAL announced redevelopment starting that November, with T2 and Navi Mumbai absorbing the displaced traffic. That plan slipped because, according to the operator, Navi Mumbai wasn’t ready. By December, redevelopment was reportedly deferred to 2030. The latest timetable brings the first phase forward to January 2027, with commissioning expected in 2029–30.

T1 won’t shut entirely at once. The first phase covers T1B’s north section, accounting for roughly one-third of T1’s capacity. Flights using the other sections can continue operating there for now.

The reported reshuffle would move the displaced domestic flights into T2, which already handles both domestic and international services. To make room, roughly one-third of international operations would move from T2 to Navi Mumbai. International airlines are therefore being asked to change airports because a largely domestic terminal is being rebuilt.

That is where the International Air Transport Association, or IATA, objects. Its complaint concerns the proposed relocation of international passenger and cargo operations to Navi Mumbai. It questions the consultation, whether the new airport is even ready and capable for those operations and what’s the basis of this share of flights to move there.

A flight comes with baggage

To understand those objections, consider what an airline actually has to move.

An international carrier with a modest Mumbai schedule could need separate ground teams, handling contracts, equipment and supervision if it splits operations between two airports. It hasn’t necessarily gained passengers, but it may have almost doubled its set of fixed costs.

Air France-KLM makes this point. It opposes splitting passenger operations, although it would consider moving them entirely if capacity at the existing airport became unworkable.

Connections add another complication. If a feeder flight arrives at Mumbai and the onward international service departs from Navi Mumbai, the passenger now needs a transfer. An itinerary that previously worked may become unattractive or impractical.

There is also the aircraft itself. A widebody needs suitable parking, ground equipment and maintenance support authorised for its type. IATA is seeking clarity on those arrangements, alongside catering and crew logistics. These are questions about readiness for particular operations; they do not establish that Navi Mumbai is generally unsafe or incapable.

The impact will consequently vary by airline. A carrier with a large local operation may have more flexibility than one running a handful of tightly timed services. An equal percentage cut does not necessarily mean an equal burden.

Who owns the clock?

These operational concerns explain why airlines care so much about retaining their airport slots.

A slot is permission to use the airport infrastructure needed to arrive or depart at a particular time. Runways, gates, aircraft stands and terminal facilities all determine how many flights an airport can accommodate.

For airlines, the timing matters enormously. A commercially useful slot lets them coordinate connecting flights, aircraft rotations and crew schedules. Losing it can disrupt much more than a single departure.

Under the Ministry of Civil Aviation’s slot guidelines, an airport-level committee comprising the operator, an Airports Authority of India air-navigation representative and DGCA assesses capacity. Airlines can comment before the findings and final capacity are published. The airport’s designated coordinator then allocates slots within those limits.

Airlines have conditional priority to retain slots from the previous equivalent season, known as historic precedence. Normally, this requires using a series of slots at least 80% of the time. The guidelines also require early consultation before capacity reductions. Reductions that cannot accommodate established historic slots should be avoided except in the most exceptional circumstances, and allocations must be neutral, transparent and non-discriminatory.

Applied here, the question is how the demonstrated loss of T1 capacity translates into the proposed cuts to international operations.

MIAL says redevelopment is included in AERA’s tariff order. But AERA’s assessment of investment and airport charges does not settle which airline should give up which flight.

The extent of consultation remains disputed too. IATA’s own submission acknowledges attending a March 2024 meeting on MIAL’s capital plans. Discussing a terminal rebuild, however, is different from agreeing on the flights, facilities and timetable for relocation.

MIAL has promised to honour historic slots when T1 returns. That addresses longer-term access. Airlines still need clarity on how the smaller pool of capacity will be shared during construction.

Make room, with a plan

That temporary allocation could also shape how Mumbai’s two airports develop. Both share the same owner, so shifting flights helps build business at Navi Mumbai. Reports suggest a longer-term ambition to develop it as an international connecting hub, though that remains a reported strategy.

The immediate priority is making the transition workable. In our view, the operator needs to show how the proposed reshuffle limits avoidable disruption.

That means publishing the capacity lost at each construction stage and comparing alternatives. Could some airlines move their entire operation voluntarily? Could connected groups of flights move together? Would those options work better than dividing every carrier’s schedule?

Once the allocation is worked out, the move itself needs preparation. Nobody has to reinvent the wheel here. The industry already has a process for such transitions: Operational Readiness and Airport Transfer, or ORAT. It combines planning, staff training and operational trials to establish whether facilities and people can handle the intended services. IATA’s guidance calls for relocation arrangements developed with airlines and grounded in capacity analysis.

None of this guarantees every airline its preferred outcome. Some disruption may be unavoidable, and postponing necessary work carries costs too. There are no easy answers here, only compromises. Who compromises the most remains to be seen.

- This edition of the newsletter was written by Mridula and Kashish.

Our latest episode on Subtext is with serial entrepreneur and RealFast co-founder Sidu Ponnappa. We speak to him about what an AI-native company even means, how to build one, and how rational economic incentives become irrelevant with changes in technology. The link to the episode is in the description below.

Subtext by Zerodha

Sidu Ponnappa on the AI-native firm

Hi folks, I’m Pranav, and I love The Matrix…

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21 days ago · 8 likes · Zerodha

Tidbits

1. Government considers withdrawing GST exemption on precious-metal imports by banks

The GST Council is expected to consider withdrawing the IGST exemption available to nominated banks and agencies importing gold, silver and platinum. The move would put these imports on the same tax footing as other channels and comes amid concerns over precious-metal imports and foreign-exchange outflows.

Source: The Economic Times

2. DIAL raises ₹3,500 crore via domestic bonds to refinance $522.6 million debt

Delhi International Airport Limited has raised ₹3,500 crore through 15-year rupee-denominated non-convertible debentures. The proceeds will be used to refinance $522.6 million of dollar bonds maturing this month, reducing the airport operator’s foreign-currency debt exposure.

Source: The Economic Times

3. Indian IT firms turn to GCC acquisitions amid slowing organic growth

Indian IT services companies are increasingly targeting acquisitions of Global Capability Centres and GCC-focused firms to add scale and secure longer-term revenue. The shift comes as weak organic growth, margin pressure and AI-led changes weigh on traditional IT services businesses.

Source: Business Standard

4. CAG audit uncovers ₹1,210-crore mining irregularities in Odisha

An audit report by the Comptroller and Auditor General of India has identified financial and operational irregularities worth ₹1,210 crore in Odisha’s mining sector. The findings highlight instances of excess mineral extraction beyond sanctioned environmental clearances and short-realisation of statutory royalties.

Source: Business Standard

5. RBI grapples with surplus liquidity ahead of policy review

The Reserve Bank of India is dealing with persistent surplus liquidity in the banking system ahead of its latest policy decision. Excess cash can keep short-term market rates below the RBI’s intended policy level, making monetary tightening less effective.

Source: Bloomberg

Join us on WhatsApp, where we share interesting soundbites from concalls, articles, and everything else we come across throughout the day. You’ll also get notified the moment a new video or article drops so that you can read or watch it right away.

Join us

Thank you for reading. Do share this with your friends and make them as smart as you are 😉

Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Is India's finance boom outrunning its real economy?

According to a new report, a massive financialization boom—driven by an explosion in retail SIPs and household debt—is masking a stagnant real economy where industrial investment and real wage growth have both stalled out. With households taking on significant market risk and piling on unsecured personal loans just to sustain basic consumption, India must find a way to reignite actual industrial demand before this fragile, debt-fueled ecosystem faces a breaking point.

2. Can you put a score on a hospital?

NITI Aayog is reportedly developing a national quality framework to grade both public and private hospitals on actual clinical outcomes, readmissions, and patient safety. But while a public leaderboard would help patients make informed choices, it carries the severe risk of hospitals gaming the metrics—either by refusing to treat high-risk patients to protect their mortality scores or by altering their record-keeping to artificially inflate their success rates.

Is India’s finance boom outrunning its real economy?

India stands 146th in the world when ranked by per capita productive output. However, when ranked by stock market capitalization relative to GDP, we jump to 14th, which isn’t too far from the company of the US and the UK.

This chasm is the heart of a report on India’s macroeconomy by the Azim Premji University’s Centre for the Study of the Indian Economy.

Written by Puneet Bhasin and Anshuman Singh, the analysis agrees on the well-known facts about India’s headline numbers. Real GDP growth has hovered around 7-8%, inflation is subdued, corporate balance sheets are the cleanest they have been in a decade, and the banking system has more capital than it knows what to do with.

But the report pulls at the seams of these findings and finds three structural vulnerabilities that the headline numbers are papering over.

The report is divided into three sections, each of which provide a lens into the Indian economy that eventually combines a cohesive picture. We recommend reading the report in its entirety, but if you’re strapped for time, we try to make a succinct attempt at understanding it all as a whole.

(Note: earlier, we covered another report by the same institution on Indian unemployment. We recommend watching our Subtext episode with the authors of that episode, Rosa Abraham and Tamoghna Halder.)

Leverage and baggage

The first section of the macro-economy report is about India’s lack of capex (which we covered sometime last year), and what it says about demand.

To understand that, a little history is instructive.

In the mid-2010s, India went through a twin balance sheet crisis, where companies that had over-borrowed primarily for power and infrastructure projects began to go bust. Those that barely survived had loads of leverage that they now had to clear.

So, companies began cleaning their books aggressively. The share of firms whose operating earnings couldn’t cover their debt service payments fell from a peak of ~19% in 2016 to ~10.5% in 2025. Net bad loans at commercial banks hit historic lows.

Eventually, balance sheets became clean, banks ended up with surplus capital, and borrowing costs for large industrial firms began trending down. By any textbook, this is the perfect launchpad for the next private investment boom.

But the authors make a key distinction in how corporate India moved out of the crisis. It didn’t grow its way out, but shrank. The financial footprint of India’s non-financial corporations in FY2023-24 is substantially smaller than it was a decade earlier. Companies shed debt, yes, but only by shedding assets. They did not invest in new capacity.

This is not necessarily a bad thing. But the hangover of this crisis, the authors say, explains the stubborn investment gap we see in India today.

India’s gross fixed capital formation (GFCF) has held steady post-pandemic at an average of around 30% of GDP. Compare that to the acceleration India saw in the mid-2000s, when it peaked at 35.8%. Net borrowing by corporations, which is a rough proxy for fixed investment spending, averaged ~6% of GDP before the crisis, but hovers near 4% now.

What is holding firms back? Well, a few weeks ago on Subtext, we called investment manager Arvind Chari to talk about the Indian macroeconomy, and his answer was the same as that of this report: demand. Businesses will only build new factories when they expect customers to show up. Right now, all engines of aggregate demand are muted.

Start with consumers. Real wage growth has remained stagnant for years. Household consumption looks resilient in the aggregate, but much of it is being propped up by debt rather than rising incomes. We’ll return to this pattern shortly.

Another potential engine is exports. India’s exports have averaged 21.8% of GDP since CoVID. That’s lower than the 24.4% average between 2010-2014, when the world was recovering from the global financial crisis.

Lastly, there’s the government. The one component of demand most directly under policy control has also been pulling back. The central government’s primary deficit crashed from 5.7% of GDP in FY21 to 0.8% in FY26. This consolidation came almost entirely from cutting revenue expenditure on wages, subsidies, and grants. Capital outlay has also only risen modestly, and not enough to compensate for the broader withdrawal.

The banking data confirms what the macro data suggests. Credit depth in the industrial sector has been declining consistently. Lending rates to industry are the second lowest of any sector, and they are still trending downward. But banks are not refusing to lend; rather, on aggregate, industry hasn’t been asking.

A stock market without a factory floor?

If industrial firms are sitting on their cash and the central government is tightening its belt, where is the nation’s surplus capital actually going? It is entering straight into the financial markets.

In the view of the authors, in India, financial activity is overshadowing industrial production as a source of income and wealth. This is called financialization, and it’s typically something that happens after an economy has industrialised. The US, for instance, built its deep capital markets after it built its manufacturing bases.

So financialization itself isn’t really a bad thing. But the sequence is important, and India seems to be doing it in reverse. We are rapidly expanding financial markets while manufacturing, productive investment, and broad-based employment creation remain weak.

On that note, there are three shifts happening all at once and interconnected.

The first is a transformation in how Indian households save. For decades, the default for any family with spare cash was a bank fixed deposit. But now, households more than doubled the share of investment fund units in their asset portfolios between FY16 and FY24. Bank deposits, meanwhile, dropped five percentage points to 46.8%. The shift is not wholly a metro phenomenon, either. SIP registrations grew 3.1 times in smaller cities between 2020-2025, compared with 2.3 times in bigger cities.

Now, the mutual funds who held these SIPs, insurance funds and pension funds invested a lot of their money in government securities. In fact, by FY24, these non-bank financial corporations held ~41% of general government debt, while commercial banks held ~37%. But this wasn’t always the case. This is the second shift driving India’s financialization: who finances the Indian government?

Before liberalisation, it was mostly public banks who bought government debt, primarily because a high statutory liquidity ratio (SLR) forced them to absorb government securities. But the SLR has since been lowered, and with it, came a change in the model. So now, through fixed-income products like mutual funds and pension funds, household savings constitute an important intermediation link for financing the fiscal deficit.

The third shift is what the first two made possible. India’s equity markets, for the longest time, were very sensitive to what foreign portfolio investors (FPIs) did. When FPIs sold, markets fell as a whole, and when they bought, markets rallied hard.

But now, that dynamic has fundamentally weakened because domestic institutional investors (DIIs) stepped in. Markets more than survived through foreign selling. This is a genuine resilience gain. In a world of rising geopolitical volatility and capital flow reversals, having a domestic savings base that can absorb foreign selling is an edge.

But the report argues it also creates a new, different kind of fragility.

When government debt sat quietly on the books of commercial banks all the way until their maturity, paper losses from bond price fluctuations could be managed without panic. But now that a growing share of government bonds sits in mutual funds which have daily redemption windows, a sharp spike in government bond yields triggers immediate mark-to-market losses. Those losses can feed into redemption pressures. And redemptions from mutual funds, unlike bank deposits, have no lock-in period.

Credit is replacing income

Meanwhile, the household balance sheet itself is financialising on both sides at once. On the asset side, savings are shifting from deposits into market-linked instruments. But on the liability side, borrowing is accelerating, and not because households are flush with confidence.

Household sector liabilities rose from 34% of GDP in FY19 to 41% in FY24. The pace of new borrowing is accelerating faster than even the stock suggests: annual loan flows jumped from below 4.5% of GDP before FY23 to 6.2% in FY24. Total quarterly personal credit depth climbed from 13.5% of GDP to 18.4% over the same period.

Some of this could mean that millions now have access to formal credit channels that were previously unavailable to them. However, since real wage growth has been weak, the more likely reading is people are borrowing more because their incomes haven’t grown meaningfully.

This is best visible in the three categories driving loan book growth the most.

One is housing loans. Two is a massive expansion in unsecured personal credit: think buy-now-pay-later schemes, app-based top-ups and consumer durable loans. Lastly, there’s loans against gold jewellery, which have likely surged because rising gold prices enable households to take on fresh borrowing against the same physical stock of ornaments.

The picture that emerges is unsettling in its symmetry. On the asset side of their balance sheet, Indian households are taking on more market risk by shifting savings from deposits to equities. On the liability side, they are taking on more and more debt, that too as a substitute and not a complement to income. Household net financial wealth is rising in the aggregate, but so is leverage. If a market correction or an income shock hits, the two sides can feed on each other.

The thin external cushions

Now, what about India’s external position with the rest of the world?

On net, India runs a trade deficit. This is driven by a few things, like the import of crude oil and that of manufactured goods like electronics and machinery. In fact, electronics goods alone climbed from ~10% to 17% of the top-10 imports basket between 2015-2025.

So, India’s goods trade deficit is both about commodity dependence and a manufacturing base that’s yet to be fully developed. But only one of them is in our hands. We can’t create these commodities out of thin air. We will have to build an ecosystem that exports manufactured goods at scale.

Naturally, China is the dominant source for India’s goods imports making up $113.5 billion, or ~16% of total goods imports in FY25.

The US, meanwhile, is the largest destination for India’s goods exports. In services too, the US is the single largest partner by a wide margin. Services exports continue to offset much of the goods deficit.

Interestingly, what anchors the external position is not FDI or portfolio flows (which have been declining), but remittances. At $138 billion in 2024, India receives the highest remittances in the world by a wide margin. Since mid-2013, remittances have on average covered more than 100% of India’s trade deficit.

Unlike portfolio capital, remittances are transfers, not claims. They do not reverse during market selloffs episodes, they do not generate future liability outflows, and they provide a stable stream of foreign exchange that cushions the rupee. Yet they are routinely overlooked in market commentary.

Of course, given that the world is increasingly on the edge, trade openness itself has declined. India is less integrated with the global economy today than it was a decade or so ago. Now, its growth remains domestic-demand driven. But if that domestic demand is being held up by household borrowing rather than rising incomes, the foundations are more fragile than they appear.

Conclusion

None of this amounts to an imminent crisis. But the report makes a pointed argument about what comes next.

The conditions for the central government to spend more are better now than they have been in years. Fiscal consolidation is largely done. Government borrowing costs are falling as the RBI eases into a new rate-cutting cycle.

The demand gap is not a theoretical concern anymore. It is putting brakes on private investment, it is visible in credit data, industrial production indices, and corporate borrowing patterns alike.

India has to figure out how to use the policy room that it has created before household leverage reaches a boiling point, and narrow the bridge between our financialization and productive capacity.

Can you put a score on a hospital?

We’ve written about hospitals in The Daily Brief several times. If you wanted to understand whether Apollo, Fortis, Max or Narayana was running a good business, we had numbers for you: bed occupancy, revenue per occupied bed, operating margins and expansion plans.

Useful numbers, if you’re buying the stock.

But suppose you’re choosing a hospital for heart surgery.

Now you’d want a completely different set of numbers. How often do patients walk out with complications? How many have to come back shortly after being discharged? What’s the actual survival rate for the procedure you’re about to have?

Those numbers are much harder to find in India.

That might start to change. NITI Aayog is reportedly working on a national quality framework that could grade both public and private hospitals on things like clinical outcomes, readmissions, medication errors, patient safety, patient experience and procedure-specific survival rates.

The appeal is obvious. Patients deserve better information before making consequential decisions. But making that information trustworthy is harder than assigning a grade.

Don’t we already rate hospitals?

Sort of.

Two prominent systems already assess hospital quality. The first is NABH, the National Accreditation Board for Hospitals and Healthcare Providers. It’s an independent body that checks whether a hospital has the right systems in place, things like infection control, medication management, patient rights and clinical protocols.

Hospitals apply voluntarily and have to maintain compliance to stay accredited. NABH says more than 29,000 healthcare facilities are accredited or certified across its programmes, though that figure includes labs and clinics, not just full-service hospitals.

The government also runs the National Quality Assurance Standards, or NQAS, for public facilities. By December 2025, 50,373 facilities were certified, overwhelmingly primary-care centres; 1,710 were secondary-care facilities.

These systems do more than just check paperwork. NQAS explicitly includes outcome indicators, while NABH’s standards also address outcomes, clinical audits and patient experience.

But checking whether a hospital meets quality standards is different from showing patients how it compares with other hospitals treating similar people. An accreditation badge alone cannot tell you that. A useful public rating would need to make those comparisons possible.

The patient matters as much as the hospital

Imagine two hospitals performing the same operation on a thousand patients each. Twenty patients die at Hospital A; forty at Hospital B.

Hospital A looks better. Except Hospital B is a referral centre treating older, sicker patients whom other hospitals cannot manage.

The death rates tell us what happened. On their own, they don’t tell us which hospital provided better care.

That requires risk adjustment: accounting for patients’ health before treatment and comparing their outcomes with what we’d expect for similar patients. Even then, a statistical model cannot account for every difference.

Small numbers pose another problem. A hospital with no deaths in ten operations hasn’t necessarily performed better than one with a low death rate across thousands. The US withholds some hospital comparisons when there are too few cases to judge reliably.

Deaths are also only one part of the picture. We need to look at readmissions, how often patients return shortly after discharge, as well as hospital-acquired infections, medication errors and complications after surgery. Patients’ experience matters too. So does their recovery: did a knee replacement actually help them move better?

The United States has been attempting this for years. Its Medicare Overall Hospital Quality Star Rating combines about 52 measures across five groups covering mortality, safety, readmissions, patient experience and timely care.

The methodology is still evolving. From 2027, hospitals in the lowest-performing quarter for safety, with enough safety measures to qualify, will lose one star from their overall rating, down to a minimum of one star.

England’s NHS publishes something called the Summary Hospital-level Mortality Indicator. Even its own guidance warns you shouldn’t treat it as a direct measure of how good a hospital is. It’s a flag that something might be worth investigating, not a verdict.

For our heart-surgery patient, an overall hospital grade would be a starting point. They’d still need to know how its cardiac unit performs.

When the score becomes the job

Goodhart’s law puts it simply: when a measure becomes a target, it can stop being a good measure.

Publish readmission rates, and hospitals have a reason to plan discharges better and improve follow-up care. That’s a good thing. But if deaths after surgery hurt their reputation, they may hesitate to take patients whose risks the rating doesn’t fully account for.

Early US research on cardiac-surgery report cards found evidence of hospitals becoming more selective about patients. Rating systems need to account for this risk, though it doesn’t mean every system leads to the same behaviour.

Even how hospitals keep records can change their scores.

Say a hospital starts recording more of the illnesses its patients already have. On paper, those patients now look sicker. The rating model expects worse outcomes, so the hospital’s actual results look better by comparison—even if the care hasn’t changed.

A US study found that changes in record-keeping explained a substantial share of the apparent improvement under a programme that fined hospitals for excessive readmissions. This doesn’t mean hospitals made up illnesses. They may simply have recorded conditions they previously missed. But a better score doesn’t always mean better care.

Medication errors pose a similar problem. A hospital that encourages staff to report mistakes could record more errors than one where staff stay quiet. As WHO cautions, these reports need careful interpretation. Rewarding the lowest reported count could end up rewarding silence.

That doesn’t make public reporting pointless. A systematic review found that it encouraged hospitals to work on improving care. But the effects on patient outcomes were uncertain. Publishing scores can get hospitals to act. Whether those actions help patients is a separate question.

India’s real challenge may be the data

For India, just gathering the information needed is a big task.

Say a patient leaves Hospital A after surgery, develops complications and is admitted to Hospital B. Hospital A’s records may show a successful discharge. Unless the two admissions are linked, the complication could be missing from its performance figures.

Deaths after discharge and recovery at home pose similar problems. Knowing what happened to a patient takes more than collecting a hospital’s monthly totals.

India already has parts of this infrastructure. The Health Management Information System collects routine data from healthcare facilities. PM-JAY generates claims records for hospital stays covered by the scheme. And the Ayushman Bharat Digital Mission, or ABDM, helps link digital health records and share them with consent.

These systems have considerable reach. By August 31, 2026, PM-JAY had supported 13.25 crore admissions in total. By September 17, roughly 97.61 crore ABHA health IDs had been created.

But a health ID isn’t a complete medical history. Hospital totals don’t tell us what happened to an individual patient. Claims cover care paid for under the scheme. And linked records only help if the relevant visits, treatments and medical details have been recorded.

To compare hospitals nationally, we’d need reliable information on patients’ health before treatment, the care they received and what happened afterwards—including outside the original hospital. Using the same definitions helps, but it cannot fill gaps in the records.

Start with what we can defend

India has proposed something similar before. In January 2023, the National Health Authority proposed grading PM-JAY hospitals on five indicators, including readmissions, patient satisfaction and improvements in health-related quality of life. It also promised a public dashboard.

So there is a precedent. But the announcement alone doesn’t tell us how much was implemented, or whether the reported NITI framework would build on it.

For now, this remains a reported proposal. Its final methodology and rollout are still unsettled. The intention is welcome: patients shouldn’t have to choose hospitals largely by reputation and word of mouth.

But we’d rather have a smaller system with comparisons it can back up than a national leaderboard that makes us more certain than the evidence allows. Start with selected procedures and hospitals where patients can be followed up and results checked. Expand as the evidence improves.

Hospitals will respond to whatever gets rewarded. The test is whether the system gives them more reason to improve care than to make their numbers look better.

- This edition of the newsletter was written by Manie and Vignesh.

Tidbits

[1] India’s AI mission faces a GPU shortage

IndiaAI Mission has access to around 30,000 GPUs against the 45,000 committed by suppliers, as rising hardware costs make deliveries harder. The government is considering fresh bids to address the shortfall. A typical AI server now costs around ₹4 crore, nearly twice as much as a year ago, making computing capacity more expensive to expand.

Source: The Economic Times

[2] Electric two-wheelers surpass last year’s sales in nine months

India registered 15.61 lakh electric two-wheelers between January and September 2026, already exceeding the total for all of 2025. September registrations reached 1.97 lakh, up 7.7% from August, according to Vahan data. Compared with the same nine months last year, registrations grew around 62%.

Source: The Economic Times

[3] Cabinet approves ₹1.86 lakh crore green-energy corridor plan

The Cabinet has approved the third phase of the Green Energy Corridor programme, with an outlay of about ₹1.86 lakh crore. It includes transmission networks within states and 50 gigawatt-hours of battery storage. The plan aims to help renewable electricity reach consumers and store solar power for use after sunset, with completion targeted by FY33.

Source: The Indian Express

[4] New fuel-efficiency rules drop a separate concession for small cars

The government has notified new Corporate Average Fuel Economy rules, applicable from April 2027 to March 2032. They remove a proposed separate concession for small cars, but revise the overall formula to give lighter vehicle fleets relatively softer targets than the earlier draft. The rules also give electric vehicles and hybrids extra weight when calculating a carmaker’s compliance.

Source: Business Standard

[5] Porsche launches the electric Cayenne in India

Porsche has launched the electric Cayenne in India, with ex-showroom prices starting at around ₹1.77 crore. The higher-performance Turbo Electric starts at roughly ₹2.28 crore, and deliveries began on September 30. The electric SUV will be sold alongside the combustion-engine Cayenne, expanding Porsche’s electric range in India.

Source: Autopunditz

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G — Global

[1] Asia’s factories get a boost from AI demand

Demand for chips and AI-related equipment helped manufacturing expand in Japan, South Korea and Taiwan in September. South Korea’s manufacturing Purchasing Managers’ Index rose to 53.9, while Taiwan’s reached 56.7. A reading above 50 signals expansion.

AI spending is showing up in factory orders across these economies. But the improvement was uneven: Malaysia and the Philippines recorded contractions, while higher energy costs continued to put pressure on manufacturers.

[2] Russia extends its diesel export ban

Russia has extended its ban on diesel exports by fuel producers until the end of October. It has repeatedly restricted exports to contain domestic fuel prices and address shortages following Ukrainian attacks on its refineries.

Russia is usually the world’s second-largest diesel exporter, so the restrictions matter beyond its borders. Keeping more fuel at home leaves less available for international buyers when supplies are already under pressure. Some shipments under government-to-government agreements have been allowed.

[3] Some Indian speciality drugs escape US tariffs

The US has exempted certain speciality medicines and their ingredients from pharmaceutical tariffs when imported from India and other eligible markets. The exemption covers categories such as rare-disease medicines, infertility treatments, and cell and gene therapies.

This is not a blanket exemption for every Indian drug. The 100% tariff applies to specified patented pharmaceuticals, while generic medicines and their ingredients are separately outside these pharmaceutical tariffs. For exporters, the treatment depends on the products they sell.

E — Economy

[4] India’s registered factory workforce crosses two crore

Employment in India’s registered manufacturing sector rose about 7.2% in FY25, adding roughly 14.1 lakh people and taking the total to around 2.1 crore. The figures come from the Annual Survey of Industries, released on September 30.

The survey covers the registered factory sector, so this is not a count of everyone working in Indian manufacturing. Small, unregistered businesses are outside its coverage. Within the surveyed sector, however, employment expanded alongside production, with industrial output rising about 7.8% during the year.

[5] Exporters get three more months of tax refunds

The government has extended the Remission of Duties and Taxes on Exported Products, or RoDTEP, scheme until December 31, 2026. It was due to expire on September 30. The scheme refunds certain taxes and levies that exporters pay but cannot recover through other mechanisms.

These include electricity duties and taxes on fuel used to transport goods. Such costs get built into an exported product’s price, making it more expensive for overseas buyers. Refunding them helps Indian exporters compete, while the extension gives businesses more certainty about support for their upcoming shipments.

[6] India’s deep-tech funding push needs private money too

India could mobilise around $25 billion for deep-tech investment, according to a Mint report citing industry body IVCA. The estimate combines roughly $11 billion in government support with matching investment from private fund managers and additional capital. It is a potential combined funding pool, rather than a single newly announced government fund.

Deep-tech businesses work in areas such as semiconductors, space technology and advanced manufacturing. Turning their research into products can take years and substantial investment. The challenge is finding enough investors willing to finance that wait, particularly when a company needs to move from an early prototype to commercial production.

I — Industry

[7] Cheaper pump diesel attracts industrial buyers

Private fuel retailers Jio-bp and Nayara Energy have restricted diesel purchases at their outlets as industrial buyers turn to petrol pumps for cheaper fuel. According to Business Standard, Jio-bp outlets have capped purchases at 50 litres per customer per day, while limits at Nayara outlets range from 70 to 200 litres per transaction.

The reason is a gap between two prices for the same fuel. Retail prices have stayed unchanged since May, while prices charged to bulk buyers have moved more closely with international rates. That gives industrial customers a reason to buy at petrol pumps, putting pressure on supplies meant for regular retail customers.

[8] Airlines resist a forced shift to Navi Mumbai

Global airline body IATA has opposed a proposal to shift around one-third of each airline’s international passenger and cargo operations from Mumbai airport to Navi Mumbai. It says airlines were not adequately consulted and has raised questions about maintenance, catering, ground handling and other facilities.

Mumbai airport’s operator links the transition to Terminal 1’s redevelopment, scheduled to begin in January 2027. But moving flights requires airlines to reorganise schedules, aircraft, staff and supporting services months ahead. IATA supports the new airport, but wants airlines involved in deciding how and when their operations move.

[9] Government funding will support early-stage drug discovery

The Department of Pharmaceuticals is opening a new funding track for startups and smaller businesses developing new drugs. Under the ₹5,000 crore PRIP scheme, eligible companies or projects can receive assistance of up to ₹50 crore, provided institutional investors contribute at least 25% of the project cost.

The support targets early research, when a possible treatment is still far from clinical testing or commercial sales. By sharing some of that risk, the government hopes to attract private investment earlier and help more Indian discoveries progress towards clinical development.

C — Company

[10] Tata Trusts proposes a merger to keep Tata Sons unlisted

Tata Trusts has proposed merging Tata Electronics Systems Solutions and Tata Consulting Engineers into Tata Sons. The idea is to give the group’s holding company a larger operating business, with its own revenue, and change the financial ratios that determine its regulatory classification.

The Trusts argue that the combined business would no longer qualify as a non-banking financial company or a core investment company. That could provide a route to keeping Tata Sons privately held. The proposal still needs the necessary approvals, including from the RBI, before it can proceed.

[11] An Indian drugmaker borrows from private funds for a Japanese purchase

Gujarat Themis Biosyn has secured about $58 million from Orion Capital Asia to help finance its acquisition of MicroBiopharm Japan, according to Bloomberg. It also raised ₹585 crore through rupee debt securities to support the acquisition and other corporate needs.

Private credit involves borrowing directly from investment funds. Such lenders can offer quicker or more tailored financing for acquisitions, but the terms matter. Gujarat Themis’ rupee borrowing included five-year debentures carrying a 10% coupon and shorter 18-month notes paying 17.75%, showing how different parts of an acquisition can come with different financing costs.

[12] Radico takes Indian whisky to UK airport shelves

Radico Khaitan’s Rampur and Sangam whiskies are now available at duty-free shops in Heathrow, Gatwick, Manchester and Birmingham airports. The company already has a presence across more than 65 duty-free locations globally and plans to expand to over 100.

Airport shops give Radico a way to introduce its brands to international travellers. The expansion also fits its growing focus on higher-priced spirits: its Prestige & Above portfolio contributed 70.3% of its Indian-made foreign liquor sales value in FY26. The UK listings give these brands another route to build recognition overseas.

See you next edition :)

Our goal with The Daily Brief is to simplify the biggest stories in the Indian markets and help you understand what they mean. We won’t just tell you what happened; we’ll tell you why and how too. We do this show in both formats: video and audio. This piece curates the stories that we talk about.

You can listen to the podcast on Spotify, Apple Podcasts, or wherever you get your podcasts and watch the videos on YouTube. You can also watch The Daily Brief in Hindi.

In today’s edition of The Daily Brief:

1. Inox Clean’s second attempt at a first impression

Renewable energy developer Inox Clean Energy has filed draft papers for a ₹10,000 crore IPO to fund acquisitions and repay debt. Driven by acquisitions, its operating power capacity expanded 22-fold to 2.38 GW, while its solar manufacturing arm operates 6 GW of annual module capacity. However, the company faces structural risks: its growth relies heavily on acquisition debt, its cell factories remain under construction, and module profitability depends on domestic sourcing rules and US subsidies.

2. Why sanctioned tankers are taking Russia’s flag

Western sanctions and pressure from open registries have forced international shadow-fleet oil tankers to register under the Russian flag to avoid becoming legally “stateless”. Between January 2025 and June 2026, 107 vessels joined Russia’s registry—93 of which were already sanctioned—to secure legal recognition and keep exports flowing. While the Russian flag prevents high-seas naval interceptions, it exposes shipowners to Western port bans and deepens their reliance on alternative trade routes.

Inox Clean’s second attempt at a first impression

We keep returning to a few themes in The Daily Brief: AI, data centres, electrification and the infrastructure supporting them. Most lead us back to electricity: producing more of it, making it cleaner, and delivering it when needed.

For businesses, this creates several opportunities. They can generate electricity, manufacture the equipment, build the projects or maintain them. For investors, an expanding list of companies offers exposure to different parts of that spending.

The latest IPO hopeful is Inox Clean Energy, which has filed draft papers for a ₹10,000 crore offering. This is its second attempt. It first filed confidentially in July 2025, then withdrew that December after reportedly raising around ₹5,000 crore privately, with plans to update its filing.

And the business has changed considerably.

It returns with a much larger business. Operating renewable capacity grew roughly 22-fold, from 107 MW in March 2025 to 2,375 MW in August 2026, largely through acquisitions. It also entered solar manufacturing in India and the US.

First, untangle the Inox names

Inox Clean belongs to the wider INOXGFL Group. It is a different company from Inox Wind and the recently listed Inox Green.

Its business has two main parts.

The first is independent power production, or IPP. It owns solar and wind plants and sells electricity, with batteries providing storage. In India, this operates through Inox Neo Energies, supplying utilities and commercial and industrial customers. ReNew, CleanMax and ACME Solar are useful comparisons.

The second is solar manufacturing. Through Inox Solar and its American operations, it manufactures the solar modules that solar projects use. Waaree Energies and Premier Energies are a more relevant comparison here. Modules are sold to outside customers or supplied to Inox’s own generation projects.

The wider INOX group can also help put those projects together. Inox Wind manufactures the wind turbines. Inox Renewable Solutions handles land aggregation, engineering, procurement and construction of turning equipment into functioning power plants. Inox Green provides ongoing operations and maintenance to keep renewable assets running.

The group also supplies a customer. Gujarat Fluorochemicals, its chemicals business, accounted for about one-third of Inox Clean’s electricity revenue in FY26, before several recent acquisitions expanded the portfolio.

The logic is straightforward. A developer needs equipment, construction, maintenance and customers. Having established relationships within the group can make coordinating those things easier.

But how much economic value each company captures depends on the prices they charge one another. A higher turbine price leaves more with Inox Wind and less with Inox Clean; a lower electricity tariff benefits Gujarat Fluorochemicals but reduces Inox Clean’s earnings.

These transactions are not inherently good or bad. But each company has its own shareholders, which is why related-party transactions matter and creating value for the group does not necessarily mean sharing it fairly across its companies.

With that distinction made, we should ask two questions about each business: Can this industry earn durable profits? And what gives Inox the ability to capture them?

Owning the electricity bill

The appeal of renewable power generation is reasonably straightforward.

Spend money upfront on land, equipment and construction. Sign a power purchase agreement, or PPA, with a customer. Generate electricity and collect payments over many years. Solar and wind projects also avoid the recurring fuel purchases that coal or gas plants require.

As decarbonisation gathers pace, renewables stand to meet a growing share of additional electricity demand and even replace some of the fossil-fuel generation serving existing demand.

Inox’s portfolio shows that long-term character. As of August 2026, its customer contracts had a weighted-average remaining life of about 19 years, at a weighted-average contracted tariff of ₹4.05 per unit.

But a long contract does not guarantee an attractive return.

Developers when competing for these tenders compete on price. If everyone expects cheaper panels, better turbines and easier financing, those expected savings can get passed to the electricity buyer through lower tariffs. A growing market can therefore produce plenty of new projects without leaving developers unusually profitable.

The economics depend on what happens between the bid and the final cash collection. Can the developer secure land and grid access, build within budget, borrow cheaply and generate as much electricity as expected? A fixed tariff offers revenue visibility, but leaves less room to recover unexpected costs.

Who buys the electricity also matters.

Utility tenders offer large projects and long-term contracts that can help developers secure financing. But developers compete aggressively on tariffs, leaving less room for error. Payment security also varies: selling through a central intermediary such as SECI is different from selling directly to a financially stretched state DISCOM.

Commercial and industrial customers offer another route. A factory buying renewable power compares its total delivered cost with its existing electricity bill. That can leave room for the developer to charge a higher tariff while still saving the customer money. A creditworthy corporate buyer can also offer dependable payments.

But a higher tariff does not automatically mean a higher return. Delivering power through the grid involves charges and regulatory conditions that affect those savings. Corporate contracts may also allow early exits or volume adjustments, so their duration and terms matter as much as the price.

For Inox, 52.5% of operating capacity was contracted with commercial and industrial customers, including group entities, as of August 2026. Its customers include data-centre operators Sify Infinit Spaces and CtrlS. While most of its C&I contracts typically run for 25 years, some last only five to ten years.

Buying capacity is one thing. Building it is another.

For Inox, the next question is how it built its IPP business and how much growth is still ahead.

Inox had about 2.38 GW of operating capacity as of August 2026, with about 89% in acquired businesses and assets, including SunSource, Vibrant Energy and Vena Energy India. Acquisitions explain much of its rapid growth.

Buying operating plants has advantages. Someone else has already secured the land, connected the plant to the grid and handled construction. Inox gets electricity-generating assets, customer contracts and experienced teams. But even a reliable plant can deliver poor returns if the buyer pays too much or borrows too heavily.

How well do these plants perform? During April–August 2026, Inox reported plant load factors of 23.1% for solar and 30.8% for wind. These measure electricity generated as a share of what the plants could theoretically produce at full capacity continuously. Weather, location and season affect these figures, so comparisons with other IPPs need to account for those differences before drawing conclusions about Inox’s operating performance.

The bigger test lies ahead. Its total portfolio is 9.29 GW, but beyond the operating plants, only 0.80 GW was under construction. The rest was classified as pipeline or future capacity, at different stages of development.

Much of this future portfolio also came through acquisitions. Inox therefore bought both an existing business and opportunities to expand it.

But buying a development project does not finish it. Inox must still arrange finance, secure equipment and complete construction.

Equipment sourcing comes with another complication. Projects covered by domestic-content requirements need Indian-made cells and modules. Separately, the government’s ALMM List-II rules require approved solar cells for covered projects, subject to exemptions. Having Inox Solar’s module factories helps, but the cells inside those modules must also qualify wherever these requirements apply.

Inox’s Indian cell factory is still under construction. Until it starts producing and obtains the necessary approvals, compliant cells must come from other suppliers. If supplies are tight, Inox could have to wait for equipment or pay a premium to secure it. Delays postpone electricity revenue; higher equipment costs can squeeze returns when tariffs are already fixed.

Acquired teams, group capabilities and contractors can help with these challenges. But Inox’s acquisition-led growth gives us limited historical evidence of its ability to deliver this much construction on time and within budget.

Selling panels is a different business

Solar manufacturing serves the same energy transition, but its economics are different. A power plant can sell electricity under a decades-long contract. A manufacturer must keep winning orders on price, quality and delivery while keeping pace with technology.

Growing solar demand does not guarantee growing profits. If factories expand faster than installations, panel prices can fall even as sales volumes rise. The IEA PVPS’s 2026 market report describes exactly this: strong deployment alongside manufacturing overcapacity and pressure on profitability.

For a manufacturer, the question is how much it retains from each watt sold and how much capital it needs to earn that margin.

A well-used factory spreads its fixed costs across more output. Efficient production reduces wasted materials and defective products. Reliable modules and credible warranties help win customers, who need those panels to perform for decades.

Where the factory operates matters too. Domestic sourcing requirements, import restrictions and incentives can change which suppliers qualify for orders and at what price. Those policies form part of the economics, but they can also change.

Manufacturers therefore need to keep factories busy and production costs low. Domestic sourcing rules and incentives can help, but they also make profitability dependent on policy.

Inox has 6 GW of annual module manufacturing capacity, split equally between India and the US. It is also building 8 GW of cell capacity: 5 GW in India and 3 GW in the US. Cells are the electricity-producing components assembled into modules. Making the finished panel does not mean making what goes inside it.

India’s manufacturing expansion has been stronger in modules than in upstream components such as cells, wafers and polysilicon, leaving manufacturers dependent on imports. Producing cells could help Inox retain margins currently paid to suppliers, although it would still need wafers. The additional earnings must justify the factory investment.

And getting production right takes time. Waaree’s earlier filings outlined its cell expansion; its 5.4 GW facility began commercial operations in March 2025. Inox’s cell plants are still under construction, so it has yet to demonstrate that capability at scale.

The advantage to prove here is manufacturing know-how: repeatedly producing efficient cells with fewer defects and at a competitive cost. Inox’s filing says it has no registered intellectual property in India, but that is not the same as having no technical expertise. The investment case rests on whether it can build that production capability and keep improving it as competitors do the same.

There is an early module-manufacturing record. Inox’s first 1.2 GW Gujarat line reported 70% utilisation between commissioning in August 2025 and March 2026. This covers only that line; the others are newer, and the US factory was acquired in May 2026.

Policy support matters too. Inox describes US incentives as important to its projected returns. Its Odisha cell factory is eligible for a subsidy covering 30% of qualifying machinery investment, paid over five years after production begins. These benefits help, but introduce dependence on eligibility and policy continuity.

Its own power projects provide potential customers. Yet internal sales alone do not create profit for Inox Clean as a whole. Owning factories helps if it lowers costs, improves quality or secures timely supply.

Two businesses, one demand for cash

The financial numbers reflect a business still taking shape.

In FY26, revenue rose nearly fourfold to ₹178 crore, while net profit increased from ₹1.6 crore to ₹31 crore. Reported EBITDA margins were about 43.5% in power generation and 0.9% in manufacturing, before group-level adjustments. But ₹164 crore of investment valuation gains helped lift profit and the underlying businesses were loss-making. Recent acquisitions also contributed for different periods, so these accounts do not capture a full year of today’s business.

The next stage will need more cash: the IPP arm to buy and build power plants, and manufacturing to expand factories and upgrade equipment.

Inox reportedly raised around ₹5,000 crore privately, while also borrowing to fund its expansion. Now, its ₹10,000 crore IPO includes ₹2,000 crore of promoter share sales and ₹8,000 crore of fresh capital. Of that fresh capital, ₹6,000 crore will repay borrowings, including debt used to finance acquisitions.

It is a familiar playbook: borrow to grow, then raise equity to reduce the debt. Investor appetite for renewable energy can help. But equity is expensive capital too: new shareholders expect returns, and issuing more shares dilutes existing ownership.

So how much more capital will the next stage need, and will the returns justify it? That requires examining acquisition prices, project costs and future cash flows. And we have not even reached valuation—what investors should pay for this business is a separate question altogether.

Why sanctioned tankers are taking Russia’s flag

Imagine a tanker carrying Venezuelan oil to China. The oil has a seller and a buyer. The ship has an owner, who may be separate from both. And it has the flag of the country where it is registered, which can also be different from Venezuela or China.

That flag gives the ship its legal nationality. A tanker can belong to a foreign company and employ an international crew, but its flag identifies the country responsible for overseeing it.

Now, imagine that the tanker is sanctioned and its flag country has no choice to remove it from its register. Without another valid registration, it risks becoming stateless, exposing it to boarding and checks at sea. It might still have customers willing to hire it, but it also needs a country willing to recognise it.

Russia has been providing that recognition. A new report from the Centre for Research on Energy and Clean Air (CREA) finds that 107 vessels joined Russia’s registry between January 2025 and June 2026. Of those, 93 were already sanctioned when they changed flags.

But, as you might be wondering, isn’t Russia facing the brunt of Western sanctions itself? How does having their flag help a ship?

We previously explored how Russia assembled alternative ships, insurers and traders to keep its oil moving after Western sanctions. Registration has become another vulnerable part of that system.

How the shadow fleet grew

Before we get into these questions, let’s first understand how the shadow fleet grew.

The original problem was that Western governments wanted to reduce Russia’s oil earnings without removing so much supply that global prices would soar. The price cap addressed that balance: companies in participating countries could provide services such as shipping and insurance for Russian oil sold within the cap, subject to other applicable sanctions. India and China could therefore continue buying Russian oil, and qualifying shipments could still use Western services.

For trade outside those conditions, though, Russia increasingly relied on alternative providers. Many vessels associated with this less transparent network became known as the shadow fleet.

These tankers often have owners hidden behind layers of companies, insurance that is difficult to verify, and frequent changes of name or flag. Some manipulate their tracking signals or transfer cargo between ships to obscure its journey. Older vessels feature prominently, raising concerns about maintenance and accidents.

But “shadow fleet” describes a pattern of operations rather than a formal category. A shadow tanker can have a valid flag and may not be individually sanctioned. Nor does carrying Russian oil or using non-Western insurance automatically make a voyage illegal.

In July, S&P Global estimated that tankers associated with shadow-fleet activity represented around 22% of the global tanker fleet. Estimates vary with the definition, but this is no longer a marginal part of shipping. This trade also extends beyond Russia. CREA found that 16 of the 107 ships joining Russia’s registry had previously carried Iranian or Venezuelan oil; both nations face their own sanctions. It’s possible that the same vessel can serve different sanctioned trades over its working life.