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. When AI starts spending your money

Why are NPCI and card networks building frameworks for agentic payments? While AI can already compare products and find deals, completing purchases currently requires human handover for approval. To automate the final checkout, systems like UPI Circle and Reserve Pay are creating delegation protocols that set strict spending limits and digital identity checks. This allows AI agents to buy products on your behalf while protecting account details and managing liability risks.

2. How pure is your silver, really?

Why is the Indian government moving toward mandatory silver hallmarking? Unlike gold, silver purity has lacked compulsory regulation, leaving buyers reliant on unverified jeweller stamps. BIS is expanding its Hallmark Unique Identification (HUID) system to silver, stamping articles with traceable digital IDs. While testing infrastructure and transport costs pose hurdles for small jewellers, the mandate aims to bring standardised purity and consumer protection to India’s fragmented silver market.

When AI starts spending your money

Ask an AI to find you a good pair of shoes today, and it can already do most of the annoying work. It can search across websites, compare prices and narrow down the options. But eventually, you still have to take over. You open the merchant’s app or website, add the shoes to your cart and approve the payment.

Companies are already trying to remove that final handover. Razorpay and the National Payments Corporation of India, or NPCI, have piloted purchases inside ChatGPT and Claude using UPI tools such as UPI Circle and Reserve Pay. Pine Labs has also built its own protocol on top of UPI. Mastercard and Visa are building similar systems for card payments, while Google has proposed a broader standard called AP2.

These are separate products, pilots and protocols built by individual companies or partnerships. India may now try to create a common framework across the UPI ecosystem.

Reuters reported that NPCI is working on a Unified Agent Protocol, or UAP. It could give banks, merchants, payment apps and AI agents a shared way to identify an agent, define what it may spend, record what it did and decide who is responsible when something goes wrong.

Until now, software mostly helped move money after you had chosen what to buy. Agentic payments ask it to do both: make the choice and complete the payment.

How do you let software spend?

Before we get to AI, consider what happens during an ordinary payment. The system must know where the money should go and whether you approved sending it.

With cash, both are obvious. If you buy something for ₹500 and hand the seller a ₹500 note, the money changes hands because you physically gave it to them. No bank or payment network needs to separately verify your permission.

Digital payments work differently. The instruction to move money and the proof that you approved it are two separate things.

One instruction tells the system who should receive the money and how much. Another check establishes that the account holder approved it.

A cheque does this using your signature. In a card payment, the merchant sends a request through the payment network to the bank that issued your card. The bank checks the transaction and either approves or rejects it.

Internet banking lets you send instructions directly from your bank account. IMPS made these transfers instant and available around the clock. These systems did not neatly replace one another. Each removed a different piece of friction.

Then UPI compressed much of the process into a few taps.

UPI launched in 2016 and gave banks and payment apps a common system. Instead of entering someone’s account number and IFSC code, you could scan a QR code or enter a UPI ID.

The QR code or UPI ID tells the app who should receive the money. You enter the amount, choose your bank account and approve the transaction. UPI then carries that instruction between the apps and banks involved.

But the bank still needs to establish that you authorised the payment. That is what the UPI PIN helps do. The PIN does not unlock money stored inside your phone. It tells your bank that you approved that particular instruction.

From the user’s point of view, a digital payment therefore involves two basic questions: where should the money go, and did the person controlling the account agree to send it?

UPI made answering those questions remarkably easy. In August 2026 alone, Indians used it for 24.51 billion transactions worth ₹29.82 lakh crore.

But the person generally still had to approve each purchase. That began to change with mandates.

UPI AutoPay allows you to approve payments to a known merchant in advance. There is nothing particularly intelligent about telling software to pay Netflix ₹499 every month. The merchant is known, the purpose is known and the rule is largely fixed.

The software is just executing your decision, and not really making one for you.

Then software started making the choice

Now let’s change the instruction. Tell the software to keep you subscribed to whichever streaming service offers Formula 1 at the lowest price.

The payment is suddenly the easy part. The software must figure out which service has the rights, compare the plans and decide which one offers the best deal. It may even need to cancel one subscription before starting another.

Large language models, or LLMs, have made it easier for software to work with the vague way people naturally speak. You can ask for a “decent morning flight to Delhi that isn’t too expensive” without defining exactly what decent, morning or too expensive means.

That does not mean the model will interpret those words exactly as you intended. It simply means the software can now attempt to work with them.

Give the model access to other tools and it can do more. A search tool can pull live flights. A calendar can tell the agent when you need to arrive. A browser can fill in the booking details. Add a payment tool, and the agent can carry the task through to checkout.

But it cannot simply take your card or bank account and spend whenever it wants. The payment system needs a way to limit that authority.

Card-based systems are trying to solve this using tokens and records of user consent.

Suppose you ask an agent to book a flight to Delhi for no more than ₹10,000. You may first authorise it to use a particular card within defined limits.

The payment provider does not need to give the agent your actual card number. It can create a separate digital credential linked to that card. This substitute credential is called a token.

The token may be restricted to a particular merchant, amount or period. The agent can use it after finding a flight that fits your instructions, while the payment system checks whether the transaction falls within the authority you granted.

The token protects the card details. Other parts of the system still need to record what you asked the agent to do. After all, proving that the agent had a valid payment credential is not the same as proving that it followed your instructions correctly.

UPI approaches the problem differently.

One building block is UPI Reserve Pay. It allows a customer to approve a block of money and lets multiple payments be taken from that block without requiring a new PIN each time.

Suppose you block ₹5,000 for purchases from a grocery platform. That money is set aside in your account. The platform can then collect several smaller payments from it as orders are placed, subject to the permission you gave.

This gives an agent room to make repeated purchases, but only from a limited pool of money and generally for a specified merchant. Reuters reported that banks currently cap such blocks at ₹10,000 for up to 90 days, although those limits may be reconsidered for agentic payments.

The second building block is UPI Circle.

UPI Circle was originally designed to let an account holder delegate limited payment authority to another person. Under full delegation, the second person can complete payments from the primary user’s account without asking for approval each time, as long as the transaction stays within the limits set by the account holder.

NPCI has since extended this idea to certain connected devices and software. An approved device or software profile can act as the secondary user and make domestic merchant payments within defined limits.

This is not open access for any chatbot that asks nicely. Under the current rules, the software or device must be approved, linked with the user’s consent and checked during each payment request. Such payments are currently restricted to domestic person-to-merchant transactions, with caps on individual transactions and monthly spending.

Reserve Pay and UPI Circle therefore solve different parts of the problem. Reserve Pay limits the pool of money available. UPI Circle decides who—or what—has the authority to initiate the payment.

The reported Unified Agent Protocol could tie these pieces together. It may give merchants a common way to connect with AI agents, allow users to express rules about when and how much an agent may spend, and create identity checks and audit trails for agent-led transactions.

Instead of every AI company, merchant and payment provider building its own arrangement, they could work through a shared set of rules. But getting the payment side ready solves only one part of the transaction. The agent must also understand what merchants are selling.

The payment is the easy part

Think about how you shop online. You can usually make sense of a messy product page because you know how to fill in the gaps. You can spot that two differently named products are essentially the same, judge whether an old review is still useful and work out whether something will reach you on time.

An agent has a harder time doing that.

It works best when important details such as price, size, stock, delivery time, return policy and product specifications are presented in a structured form.

A 2026 study by Visa Acceptance Solutions reported that 48% of online shoppers had used AI while researching their most recent purchase. But only 15% of merchants had catalogues that agents could easily discover and interpret.

Consumers may start shopping with AI before many merchants are ready to serve AI shoppers.

That could quietly favour large marketplaces. Amazon and Flipkart already organise prices, reviews, stock levels, delivery estimates and return policies in one place. Smaller merchants may have the same product at a better price but present the information in a form that an agent finds harder to read.

So even if an agent can search across the internet, it may lean towards marketplaces simply because they are easier to compare. That is a possibility, not yet an established outcome.

The difficult part is judgement, not payment

Suppose you ask an agent to book a “reasonably timed” morning flight to Delhi for under ₹10,000. It finds one for ₹9,550 and books it. The fare fits the limit and the payment goes through. But the flight leaves at 4:45 am, while you meant something closer to eight.

Nothing was stolen. The agent had permission to spend and followed the stated budget. It simply interpreted “reasonably timed” differently.

Agentic payments can therefore go wrong in at least three ways. An agent may spend without valid permission, making it an unauthorised transaction. It may have permission but exceed the limits attached to it, suggesting that someone failed to enforce them. Or it may stay within every rule and still make a poor choice. In that case, the payment worked; the judgement failed.

That judgement may also be shaped by incentives the user cannot see. The company operating the agent decides which merchants it can access and may have commercial relationships with some of them. An assistant could recommend a ₹9,000 product from a marketplace that pays it, even when an equally good ₹8,500 option exists elsewhere. The purchase is valid, but the agent may be serving two masters. Economists call this the principal-agent problem.

Someone could also manipulate the agent directly. Agents read websites, emails and product pages while they work. A harmful page or message could feed them misleading instructions and influence what they choose. In that case, a fraudster may not need to steal your PIN at all. They only need to manipulate the software that already has permission to act for you.

Google says this kind of prompt injection is one of the biggest risks for agentic browsers because it can push an agent into actions the user never intended, including making a payment.

So who absorbs the loss? Existing rules may cover payments made without authority. If an agent exceeds a clear limit, responsibility may lie with whoever failed to enforce it. But if it follows every rule and simply buys the wrong thing, reversing the payment may not be enough.

NPCI’s reported framework is expected to address liability, but no details are public. Until they are, people may delegate grocery orders—but think twice before handing over flights, investments or expensive purchases.

How pure is your silver, really?

If you’ve ever bought a silver anklet or chain, you probably looked at the “925“ stamp and took the jeweler’s word for it. It is ideally supposed to mean that in the article, at least 925 parts out of every 1,000 are silver.

How do you know this for sure? Usually, such a piece gets a hallmark from an independent party, which indicates that this number is verified.

But there’s one problem. Unlike gold, where every new piece sold in a covered district must carry a digitally traceable BIS hallmark, silver has had no such mandatory requirement. So a jeweller could stamp any number they liked, and it was the customer’s prerogative to believe them at face value or not.

Now, that could change.

The government plans to begin mandatory silver hallmarking soon. While BIS’s own mandatory-hallmarking page doesn’t list silver yet, BIS has already been putting in guardrails. Since September 2025, every silver article that a jeweller voluntarily gets hallmarked receives its own six-character digital ID which is traceable. More than 77 lakh silver pieces have gone through it so far.

The process

So, how does hallmarking work?

The jeweller sends the article to a BIS-recognised Assaying and Hallmarking Centre (or AHC), an independent lab equipped to test precious metal purity. If the metal matches the declared fineness, it gets a BIS hallmark. For now, BIS hallmarking in India covers only two precious metals, gold and silver.

But, at the end of the day, a hallmark is a stamp that can be forged. Anyone could use it to deceive a customer.

That’s why BIS introduced the six-character digital code we mentioned above to all hallmarked articles. It’s called a Hallmark Unique Identification, or HUID.

Even before HUID, BIS hallmarks already identified the purity, testing centre and jeweller. But that information was only physically stamped on the article. There was no centralised digital record a buyer could independently check.

HUID adds unique article-level data that buyers can look up in the BIS CARE app. Enter the code and you can see the purity, article type, hallmarking date, testing centre details and jeweller registration number. That makes the certification far easier to trace, though it doesn’t perform a fresh test of the metal by itself. BIS has already tested this model with gold.

Silver is following the gold playbook

All of this is fine. But we couldn’t help asking ourselves: why was compulsory hallmarking for silver only being considered now?

Well, it turns out that gold itself remained voluntary for two decades. That’s why, by 2021, only about 30% of gold jewellery in India was hallmarked. That same year, the mandatory order was implemented, but initially, it was only in districts where testing centres were available.

Gold HUID was introduced just a month later. From April 2023, the government restricted the sale of older-format hallmarked gold without HUID.

Silver has also moved through similar stages on similar timelines. Silver’s hallmarking problem is also bigger than gold because silver articles are cheaper, sold in far higher volumes, and spread across a much more fragmented market. That makes the case for compulsion clear.

But passing the order is the only straightforward thing about it. The implementation is much harder.

Bottlenecks to implementation

You see, for businesses submitting new stock, the jeweller has to submit a batch through BIS’s system, send the articles to an AHC, wait for them to be tested and marked, and then collect them. Retailers buying already-hallmarked stock from manufacturers don’t necessarily manage this process themselves, but they have to pay those who do.

For a large manufacturer in a major city, this is manageable. But for a small jeweller selling anklets, toe rings and diyas in a town far from the nearest AHC, it is a tedious and expensive matter.

The prescribed hallmarking charges are ₹35 per silver article, subject to a minimum of ₹150 per consignment, plus applicable taxes. Gold costs ₹45 per article, with a ₹200 minimum. Jeweller registration with BIS is free. ₹35 is barely noticeable on a ₹10,000 article, but it’s a different proposition on a ₹500 toe ring. The existence of a minimum charge also disadvantages small consignments.

Beyond that, someone has to transport valuable metal safely, and lower-value silver articles come in huge volumes. That security service also needs to be paid for. All of this is most burdensome on small, less-capitalized jewellers.

The infrastructure gap

Additionally, there was a reason the government only started gold hallmarking with districts that already had testing facilities. Silver is likely to face the same infrastructure constraint.

In September 2025, India had roughly 230 silver AHCs across 87 districts. By August 2026, that had grown to 341 centres across 102 districts, with more than 25,000 silver jewellers registered. That is fast growth, but India has nearly 800 districts. Gold’s mandatory system, by comparison, has enrolled over two lakh jewellers. Some gold AHCs can theoretically test silver, but to qualify for both, an AHC has to apply for further BIS certification.

More than that, silver appears in places besides jewelry, like utensils, religious articles, gifts and so on. India’s annual silver consumption is estimated at 5,000-7,000 tonnes, with jewellery accounting for about 35%. India’s gold jewellery demand, for comparison, was 430.5 tonnes in 2025. A mandatory regime doesn’t just mean testing more metal, but also processing millions of low-value individual objects spread across a highly fragmented supply chain.

That being said, numbers suggest jewellers are already moving into the system. Around 32 lakh silver articles were hallmarked in FY25. That rose to roughly 59 lakh in FY26. Since HUID was introduced, more than 77 lakh articles have received one.

Conclusion

None of this becomes real until the government publishes the final order for making silver hallmarks compulsory.

Again, gold is a useful guide here. It gave exemptions to small jewellers, very lightweight articles, and certain traditional jewellery. If you already owned un-hallmarked gold when the mandate came in, you could keep it, wear it, and resell it to a jeweller. The mandate applied to what jewellers sell to customers, not to what consumers sell back to jewellers. Nobody had to rush to get their old jewellery tested.

For silver, similar questions stand. Will the mandate cover only the 102 districts that currently have silver AHCs, or go wider? Will tiny articles, utensils and puja items be treated differently from jewellery? Will consumer-owned household silver get the same treatment? Any silver notification will need to be checked for how it handles these.

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

Tidbits

1. Auto dealers face service revenue pressure as alternative-fuel vehicles overtake petrol cars

Petrol passenger vehicles fell below the combined share of EVs, hybrids, and CNG vehicles in August for the first time. Dealers are now discussing ways for manufacturers to offset lower after-sales income as EVs require less routine servicing.

Source: Livemint

2. SEBI eases compliance rules for FPIs investing only in government securities

SEBI has removed the requirement for foreign portfolio investors that invest exclusively in government securities to furnish investor-group details. The change follows the RBI’s withdrawal of concentration limits for such investors, making the earlier disclosure requirement redundant.

Source: The Economic Times

3. REC raises ₹500 crore through India’s first tokenised corporate bond

State-owned REC has issued India’s first tokenised corporate bond, raising ₹500 crore through a blockchain-based platform operating under the Securities and Exchange Board of India’s regulatory sandbox. The issuance used a tokenised settlement framework and same-day execution mechanisms to enhance efficiency and transparency in capital markets.

Source: The Hindu BusinessLine

4. India’s crude import reliance remains concentrated despite adding new suppliers

Despite adding 10 new crude oil suppliers recently, India’s import diversification remains limited, with the top five countries still accounting for 76% of total inbound shipments. Nine of the new suppliers contributed just 1.4% of total imports, while returning supplier Venezuela accounted for nearly 5%.

Source: The Economic Times

5. SECI prepares pooled green-power framework for MSMEs and industrial heating

The Solar Energy Corporation of India is working on a framework to aggregate green-power demand from MSMEs and industrial heating users. By pooling demand from smaller buyers, the scheme aims to make renewable electricity more affordable and easier to procure for industries looking to reduce their use of fossil fuels.

Source: Financial Express

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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 logic behind ISRO and DRDO’s tech transfers

Why are ISRO and DRDO handing perfected technologies to private firms? Public labs excel at R&D, not factory mass production. To scale up India’s space and defense manufacturing, mature systems like rockets and missiles are being transferred to private partners. This frees scientists for next-gen breakthroughs while building a commercially viable domestic industry.

2. India’s surveillance takes a turn

Why have Chinese CCTV cameras vanished from India’s market? Strict cybersecurity rules now ban camera brains (SoCs) and firmware sourced from land-bordering nations over national security and spying risks. The mandate has cleared out foreign supply chains, creating huge opportunities for domestic chip designers and camera makers.

The logic behind ISRO and DRDO’s tech transfers

Imagine spending a decade solving a problem nobody else in the country has managed to solve, like a brand new missile or rocket. Once it’s proven, the plan is to commercialise it, for which you might need to partner with the private sector.

That is more or less what’s happening inside DRDO right now. The defence ministry has cleared the transfer of technology for all conventional missile systems to Indian companies, so they can manufacture missiles at scale rather than DRDO doing it alone.

ISRO has also been walking the same road for a while now. The Indian Space Policy 2023 explicitly tells ISRO to step back from manufacturing space systems it has already mastered and instead hand them over to industry to build and sell.

Take, for example, the SSLV, ISRO’s compact rocket for small satellites. ISRO designed it, tested it, and got it flying. Then it ran a competition, and Hindustan Aeronautics Limited won the rights to manufacture and sell it commercially.

Neither ISRO nor DRDO were particularly designed to make use of a factory floor.

Yet, this doesn’t seem to solve one pressing question. Scientists spend years, even decades, perfecting a technology. But why would they hand it to someone else to manufacture it once its viability is proven? Why would any organisation do that on purpose?

The nature of public R&D

There are multiple reasons, and they all stem from the nature of what a research organisation like DRDO or ISRO is meant to do.

Every new technology starts as an idea. Scientists test individual parts, then prototypes, then full systems, and the conditions get closer to reality with every round. Things break, designs get tweaked, and the cycle repeats until the organisation is confident the technology works and reaches maturity.

Early on, the question is simply “can we make this work at all”. Once something reaches maturity, the question becomes “how do we make thousands of these reliably and cheaply?” India has a legal policy framework to assess this progress, collectively called Technology Readiness Levels (TRLs).

A scientist’s job is to discover the unknown. That means there are endless outcomes, each of which has an unknown probability of being achieved. That is a lot of uncertainty, and one way to reduce it is to use public money to fund R&D efforts that don’t have immediate profit motives attached.

But once that uncertainty disappears, the harder problems become sourcing components, maintaining quality across a production run, and reducing unit cost. That may or may not be within the job description of a pure scientist or research lab. And that is the primary reason behind ISRO’s tech transfers.

You see, to achieve scale and speed in mass-manufacturing together, you may have to partner with other actors, including in the private sector. The government’s own ambition puts India’s space economy at ~$8.4 billion today, on track for $40-45 billion by 2030. That’s a scale ISRO alone was never going to build out on its own payroll. Similarly, a brilliant missile design means very little in an actual conflict if the country can’t produce enough of them fast enough.

But that’s not the only reason for why ISRO or may be asked to transfer technology.

Talent is another. Once ISRO knows how to build a working rocket, the country’s best propulsion scientists may not want to spend their careers supervising a production line when they could be working on the next big breakthrough technology.

A third reason is the need to build an industry that survives beyond government orders. The bigger bet is that Indian companies eventually sell rockets, satellites and imagery commercially, in India and abroad. Defence exports stay far more tightly controlled given the security stakes, but approved Indian systems can still reach foreign militaries under government clearance, and India’s defence exports reached a record ₹38,424 crore in FY2025-26, up nearly 63% year-on-year.

Anyway, inheriting a mature technology doesn’t hand a company a business. It can walk away with world-class know-how and still fail if nobody’s buying their product. Capital-heavy industries like space and defence need steady, predictable demand to justify investments in factories, machinery and a trained workforce. That demand isn’t guaranteed just because the technology works.

The real measure of this experiment, then, was never going to be how many technologies DRDO or ISRO manage to sign away. It’s whether the companies receiving them actually manufacture at scale, win repeat orders, improve the product, and discover new customers.

From 2D to 3D

Now, what happens when DRDO or ISRO transfers a technology?

Depending on the technology, a company can receive step-by-step production instructions, design specifications, material requirements, testing procedures and quality checklists. DRDO bundles all of this into what it calls a Transfer of Technology document. Crucially, its own scientists stay on to guide the manufacturer through the first production runs, rather than handing the file over and walking away.

The space sector runs its own version of this process, split across three separate organisations. One, ISRO develops the technology. Two, IN-SPACe regulates and enables private companies to access it. Lastly, NSIL handles the commercial side, including signing the actual transfer agreements. A company applies through this chain, gets assessed, works out fees and terms, and then ISRO’s own people support the transition of technical knowledge on the ground.

Interestingly, in many of these deals, the company isn’t buying the underlying intellectual property outright. The government typically keeps the underlying IP, retains rights over sensitive uses, and controls where the product can be exported. What a company actually receives is the know-how (and right) to manufacture and sell it, but on terms the government still writes.

The prize

That naturally leads to the next question. If not every company gets these rights, who does, and why? The answers differ slightly for space and defence.

Space

In space, the SSLV rocket is a good example of how the selection process works.

You might think that HAL got the rights to build it simply because it is government-owned, but that wasn’t actually the case. IN-SPACe actually held an open competition where bidders had to show they had the money and technical experience to build the rocket. HAL competed against two other groups and won.

The other bids show how startups can still participate. Alpha Design, an established aerospace company, teamed up with Agnikul, while government-owned Bharat Dynamics partnered with Skyroot. In both cases, a larger company brought the money and manufacturing capacity, while the startup brought its specialised rocket expertise.

A startup doesn’t need to build an entire rocket to have a role here. Some make propulsion systems, some build satellites or sensors, while others use satellite images to help farmers or insurers. Many smaller companies simply specialise in one job.

As we covered in two past stories, this large supplier ecosystem was only enabled with the government opening up space to the private sector. The creation of IN-SPACe and NSIL was specifically intended to govern private sector space activity. India had just one registered space startup in 2014. By August 2026, that number had grown to around 440. However, only a smaller number of them have IN-SPACe approval to build specific space systems.

We recommend going through those stories for a brief history of the private sector’s role in India’s space age.

Defence

Defence is a little different. India already had companies that could make many of the mechanical and electronic parts used in defence systems, so they weren’t always starting from scratch. The sector also had a decades-long head start, with government-owned defence companies and ordnance factories already working with large networks of suppliers.

By December 2025, the government said around 2,000 companies were capable of manufacturing DRDO-developed systems. Some can even get involved before a technology is ready. Under DRDO’s Development-cum-Production Partner programme, a company can help develop a technology and later become one of its manufacturers once it is ready.

So this isn’t really a story of startups competing with companies like Tata. The government is trying to bring both into the same supply chain. Large companies bring money, factories and experience, while smaller ones can focus on solving very specific problems.

What could still derail this

None of these tech transfers are a done deal, though. There are things that could still break agreements.

Former ISRO chairman G. Madhavan Nair has questioned whether companies are ready to take over critical work such as the final assembly, testing and launch of rockets like the PSLV. His concern is that ISRO has spent decades building this expertise, and handing it over isn’t as simple as transferring a design.

There is another problem. The companies that can take on an entire rocket programme are already a small group. In the SSLV transfer, for instance, bidders needed at least seven years in business and annual turnover of ₹400 crore or more just to qualify. Those requirements make sense for something as complicated as a rocket, but they also risk concentrating production among a handful of large companies.

When it comes to defence, a licence to manufacture a missile isn’t the same as an order to build one. In fact, defence projects are very prone to delays. A 2022 CAG audit found that 119 of the 178 projects it reviewed missed their original deadlines, some by more than five times. The reasons included faults unearthed during manufacturing, poor monitoring, and slow approvals.

Delays that long create another problem. A technology can become outdated by the time it finishes testing and reaches the forces. And handing manufacturing to private companies doesn’t fix that on its own. A company could set up a production line for a DRDO missile, only to have it sit idle for years if the military’s order gets delayed.

What’s more, a defence manufacturer can’t easily use exports as a fallback. Exports need government clearance, and the Armed Forces are the only buyer within India. A licensed factory’s fate depends almost entirely on New Delhi’s own procurement calendar staying on schedule, and DRDO has little reason to assume that will be true.

Conclusion

None of this is about either organisation shrinking in their aims, either.

ISRO, for instance, already has a long list of what it wants to work on next. That includes human spaceflight, a space station by 2035, a crewed Moon mission by 2040, reusable rockets and so on. Transferring an existing technology doesn’t mean ISRO stops working on it.

DRDO is trying to do something similar. Its scientists are increasingly focused on newer areas such as hypersonic weapons, directed-energy weapons, quantum technology and artificial intelligence.

Even this new research is no longer happening entirely inside government labs. Startups, universities and established companies are being brought in much earlier, sometimes from the design stage itself, instead of waiting for DRDO or ISRO to finish a technology and hand it over later.

India spent decades building institutions that could invent indigenous technologies. But as with any public research lab, the effectiveness of these institutions is decided by how quickly and efficiently they get monetised. Space and defence are among the most critical industries, and in no way is the job here going to be easy. But this is a start.

India’s surveillance takes a turn

In 2024, the Indian government introduced new security requirements for the CCTV cameras it purchased. Cameras procured by central government departments and other entities covered by the public-procurement order had to meet a set of Essential Requirements for Security.

The government later added these requirements to the certification regime covering all CCTV cameras. This extended the rules beyond government procurement to cameras sold across India. The wider requirement took effect in April 2025.

Companies were given a temporary window to clear old inventory and get new CCTV models certified. That window closed on 1 April 2026.

From then on, CCTV cameras that did not meet the security requirements could not be sold in India. The rule has reshaped India’s ~$2 billion network-camera market. Chinese brands and components once made up a large part of India’s CCTV supply chain. As the new rules took effect, many struggled to qualify, leaving Indian camera makers and chip designers to fill the gap.

What exactly is the government testing?

To understand what changed, we need to look at the government’s Essential Requirements for Security.

The basic idea is simple: CCTV cameras can no longer be treated like ordinary electronic goods. Their hardware, software and supply chains must be tested before they can be certified for sale.

The Bureau of Indian Standards already administers the registration system for CCTV cameras. Under the new framework, the Standardisation Testing and Quality Certification Directorate, or STQC, is responsible for the security testing also now.

Before these rules, CCTV cameras already needed BIS safety certification, but they did not have to undergo a mandatory cybersecurity assessment. Now, every model or eligible product series must clear a set of prescribed security checks.

The STQC guidance focuses on a few critical parts of a CCTV camera. These include the system-on-chip, or SoC, firmware, circuit-board assembly, network card and physical ports such as USB.

However, these components are not all tested in the same way. Labs check the origin of the SoC and firmware, inspect the circuit-board assembly, and test the network card and physical ports for security vulnerabilities.

Most importantly, the SoC and firmware cannot be sourced from a country that shares a land border with India.

This means the logo on the camera tells us little about whether it will qualify. A camera made in India can still fail if its technology or supply chain does not comply. The same applies to an American or European model.

The published rule also does not automatically disqualify a model simply because its brand is Chinese. On paper, the restriction concerns the source of its SoC and firmware.

But why focus on these two components?

A modern CCTV camera is essentially a small computer. The lens captures light, the image sensor converts it into an electronic image, and the network connects the camera to other systems. At the centre of it all is the SoC—the camera’s brain.

The SoC processes and compresses footage, runs features such as motion or face detection, manages storage, and helps handle encryption and network communication. It accounts for roughly 25–35% of a camera’s bill of materials. But its strategic importance is far greater than its share of the cost suggests.

If the SoC or firmware is compromised, with or without malicious intent, the entire camera could behave differently from what its owner expects.

That is why it matters where the SoC came from—and who designed, manufactured and supplied it. Under the new rules, manufacturers must provide invoices, technical documents and other records that allow the component to be traced through the supply chain.

But establishing a chip’s origin is not straightforward.

A chip may be designed by a Chinese company, fabricated by TSMC in Taiwan, packaged in Malaysia and finally imported by an Indian camera maker. So what determines its origin: the designer, the foundry, the seller—or all three?

The rules do not offer a neat answer for every mixed supply chain. Instead, they leave STQC to examine the evidence and determine whether a component complies with the requirements.

That is probably why Chinese CCTV models have largely disappeared from the Indian market. STQC is interpreting the rules and checking whether a camera’s SoC or firmware can be traced back to China.

Which brings us to the larger question: why does the government care so much about who controls the chip and code inside a camera in the first place?

Why does the government care so much?

A network camera does more than record video. It can connect to the internet, receive software updates and communicate with other systems. If compromised, an attacker could access its footage, redirect data or use it as a way into a larger network.

The stakes depend on where the camera is installed. Footage from a home is sensitive. Footage from a military base, RBI office or nuclear facility can become a national-security risk. In such places, the government cannot afford to be unsure about who controls the camera or where its data travels.

But does this mean Chinese cameras are spying on India? There are two separate concerns.

The first is product security. In 2021, the Australian Cyber Security Centre warned about a flaw in certain Hikvision cameras that could let an attacker take control of the device and target other systems on the same network. This proves that the cameras had a serious vulnerability. It does not prove that Beijing planted or exploited it.

The second concern is strategic. China’s National Intelligence Law requires organisations to support and cooperate with state intelligence work. A foreign-designed SoC raises questions about what is embedded in the device and how thoroughly it can be inspected. Control over the firmware, remote updates or cloud services creates a more direct concern because the supplier may retain an ongoing route into the system.

The policy is therefore partly evidence-based and partly precautionary. Governments do not want to discover the risk only after sensitive systems have been compromised.

For Indian camera makers, this creates an opportunity. Companies can replace Chinese components with compliant alternatives from elsewhere, while Indian chip designers such as Mindgrove, Netrasemi and IndieSemiC build their own SoCs.

Cameras may become more expensive because Chinese suppliers were cheaper. And an approved camera will not necessarily be entirely Indian. It may still use a foreign lens, image sensor or foundry. The goal is not complete self-sufficiency. It is to reduce the riskiest dependencies.

India is not alone. The US, UK and Australia have also restricted Chinese surveillance equipment in sensitive settings, each in its own way.

And this concern extends beyond cameras. It applies to drones, routers, cloud infrastructure and chips too: what happens when a critical part of your technology is controlled by someone you cannot fully inspect or trust?

That is the question behind India’s new CCTV rules.

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

Tidbits

1. Govt mandates manual verification of imported drugs and medical devices

Customs officers must now manually verify licences, permissions and registrations before clearing imported drugs, medical devices, cosmetics and related inputs. The temporary step has been introduced because CDSCO documents are not yet fully integrated into the SWIFT 2.0 system.

Source: The Economic Times

2. Russia pushes back against pressure over oil sales to India

Russia’s ambassador to India has criticised Western pressure to curb purchases of Russian crude, saying Moscow is ready to supply as much oil as India needs. His comments come as a US sanctions bill proposes steep tariffs on major buyers of Russian energy, including India.

Source: Business Standard

3. Govt considers allowing FDI in more plantation crops

The government is considering expanding foreign direct investment rules to cover more commercial plantation crops. The move is part of a broader push to attract investment into agriculture as India targets $100 billion in agricultural exports by 2030, up from about $53 billion currently.

Source: Financial Express

4. AIFs push to retain existing foreign-control rules

India’s alternative investment funds are urging the government and regulators to retain the current definition of “foreign control” as FEMA rules are reviewed. The industry argues that tighter rules could reduce foreign capital flows into funds that are managed domestically.

Source: The Economic Times

5. India proposes mandatory battery storage for new government solar and wind projects

India has proposed requiring new government solar and onshore wind projects commissioned from July 2027 to include battery storage equal to at least 10% of generation capacity. The draft is aimed at making renewable power more reliable and reducing the need to curtail excess generation.

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. Indian homebuyers get a much-needed painkiller

Why did the Supreme Court intervene in Noida's stalled real estate market? Local authorities tried to force homebuyer groups, who were self-funding stalled construction, to pay hundreds of crores in bankrupt developers' delay penalties. The court struck down these demands, ruling that public bodies cannot penalise victims to recover lost revenue.

2. Is India withdrawing its EV subsidies too soon?

Is India's EV market ready to survive without direct buyer subsidies? While three-wheelers are self-sustaining at 58% penetration, two-wheelers, cars, and trucks still rely heavily on upfront discounts and charging networks. Phasing out subsidies too fast risks stalling consumer adoption before the broader market matures.

Indian homebuyers get a much needed painkiller

Real estate is quite the ground for movie scripts.

One such famous Indian movie is Khosla Ka Ghosla. For those unaware, it’s about a middle-class family in West Delhi which has invested its money in a piece of land, but finds themselves scammed out of the land by a builder. The 2006 movie is beloved for being funny, but its relatability may have gotten only more intense over time.

Just last week, the Supreme Court passed a crucial decision related to a real estate bankruptcy in the city of the New Okhla Industrial Development Authority — or more famously, Noida — which is just a metro ride away from West Delhi. It told the city authority that it cannot charge homebuyers for penalties racked up by a bankrupted developer called Granite Gate.

The decision may sound like it should be obvious to anyone. Why should homebuyers be charged for something they didn’t do? If anything, they’re the victims here.

But this decision doesn’t sit in isolation. It involves one of India’s most notorious urban real estate bubbles, with many high-profile developers going bust left and right, and some being outright fraudulent.

Most importantly, the fallout of this bubble has left many families in India frustrated and confused for years. It gave them no clarity on whether their houses, which they might have invested their life savings in, will ever be completed.

This has important ramifications for homebuyers anywhere in India. That’s the story we’ll be telling you today.

The Noida bubble

To understand why cases like Granite Gate keep reaching the Supreme Court, you need to understand the fragile foundations on which Noida and Greater Noida’s real estate market was built.

Unlike most Indian cities where developers often buy land outright, the Noida model runs on leases. Noida and GNIDA (Greater Noida Industrial Development Authority) are public bodies that acquire land, build trunk infrastructure, and then lease plots to developers on long-term agreements. The developer builds, and the homebuyer eventually gets a sub-lease for their flat.

During the boom years of 2008-2012, Noida and GNIDA went on a questionable spree of allotting land to anyone and everyone.

A 2021 CAG report found that 82% of housing schemes launched between 2005 and 2018 were secretly passed by Noida’s Group Housing wing without ever being submitted to the board for approval. Nearly half of all plot allotments happened in just two years.

The bidding process was hardly competitive, either. In 42 out of 49 group housing allotments during 2008–2011, only two bids were received for each allotment. In 15 of those allotments, the bidders were from the same group. In fact, developers often created shell companies that would bid against themselves, just to give a false impression of transparency. The authority also permitted builders with insufficient capital to acquire multiple plots of land.

Simultaneously, GNIDA converted thousands of acres of agricultural land acquired for industrial purposes into residential use, creating a flood of cheap housing schemes that people rushed into.

The developers, meanwhile, were doing what developers in a bubble do: taking on more projects than they could finance. They diverted homebuyer advances to acquire new land or retire old loans, instead of building the towers people had paid for.

So when the market turned in 2015, the whole thing came crashing down.

As of 2024, Greater Noida had nearly 75,000 stalled residential units — the highest of any Tier-1 city in India. Noida and Greater Noida are known for multiple ghost societies where entire high-rises have no occupants.

One of the most famous collapses was of the developer Amrapali. It owed ₹5,500 crore to the city authorities, and also siphoned ₹837 crore of homebuyer money using dummy companies and fake bills. It used diverted funds to buy personal assets and fund family weddings. The Supreme Court also found that the local authorities had colluded with the group in allowing this.

Then, in June this year, the directors of Earth Infrastructures (EIL) were arrested by the ED for laundering ~₹2,000 crore collected from over 19,000 homebuyers.

Fraud or not, it was clear that many developers had bitten off way more than they could chew. Hence, what followed was a flood of bankruptcy proceedings in court.

And that’s where the trouble truly began.

A clash of incentives

You see, India’s Insolvency and Bankruptcy Code (IBC) was designed for a specific kind of problem: a company can’t pay its creditors, so a structured process decides whether to revive the company or liquidate its assets and distribute whatever’s left. The creditors just want their money back, plain and simple.

But real estate wasn’t wholly suited for this model.

Why? Well, in real estate, there’s a new, large class of creditors who may not want money. They want a house to live in. And that causes a clash of incentives of homebuyers with other creditors.

See, when a developer declares insolvency, the homebuyers who’ve paid advances are grouped into a Committee of Creditors (CoC), which includes everyone else who is owed money: banks, financial institutions, and suppliers. The CoC now has to make a tough choice: do we go for liquidation, or do we find a new developer to finish these houses?

It is this choice that creates factions within this committee.

On one side are the homebuyers. They’ve already paid huge advances to the developers, and continue to pay EMIs to the bank, all in anticipation of a home they still need. For them, liquidation would be a nightmare. They’d get pennies on the rupee and no home.

The better option is to find a way to finish construction. But that means keeping the insolvency process going, negotiating with potential new developers, and hoping someone bids on the stranded assets. That could take years.

What’s more, the home-owning members of the CoC itself might not agree. Think about it: these are all families with different risk appetites, different life ambitions, and different kinds of people to look after. So even if a majority (whose decision is legally binding) goes one way, the minority may choose to file separate complaints in court, which only further lengthens the battle.

On the other side are banks and other financial creditors. They want cash fast. They can wait for a new bidder to come in, or they can push toward liquidation to recover whatever they can. Either way, they get some money, but they don’t particularly care whether the project gets built. In fact, they are most likely to lean towards liquidation. Their incentives don’t align with homebuyers.

Before 2018, this mismatch was even worse. Homebuyers had no formal standing in insolvency proceedings at all. Banks called all the shots and got first right over the developer’s assets, while homebuyers were left to fend for the leftovers.

As we covered last year, that changed in 2018 when the IBC was amended to treat homebuyers like any other financial creditor. Now, in principle, they had as much of a claim as banks did.

But giving homebuyers more power didn’t solve everything. What about the authority that allotted the land?

NOIDA or GNIDA lease land to developers under long-term agreements which have certain penalty clauses in the case of delays. The original developer was supposed to pay lease premiums and complete construction on time. But now this developer is gone, while lots of dues remain unpaid.

In that case, who pays the authority?

The developer is bankrupt. The banks are looking to recover, not to invest. The only party with any skin in the game left is the CoC, which is often composed primarily of homebuyers. This CoC may choose to continue construction, that too only because it is the only option they have to protect their investment. But does that decision now make them liable to the authority for the developer’s past defaults?

That question is at the heart of the Granite Gate case.

The Granite Gate case

Granite Gate had taken two plots on long-term lease from NOIDA to build and deliver two high-rise projects by 2016. But it overshot the timeline and eventually went bankrupt. By the time insolvency proceedings began, homebuyers had been waiting years. But they knew those proceedings could go for even longer.

Which is why, in an extraordinary move, without waiting, they took matters into their own hands. Since the CoC formed in this case was dominated by homebuyers, they decided to pool their own money and continue construction themselves.

So now, beyond the home loan EMIs, they’re paying for something that ideally, a developer should have handled. Plus, they were actively managing its progress despite not being real estate professionals. But they were just people who acted on what they saw was the best way out, and were willing to bear twice the stress of buying a house. Eventually, though, a resolution plan was approved with a new developer to finish the rest.

But NOIDA had its own claims.

The land lease deeds had a clause for charges in the case of a time extension. Each year had a charge attached. NOIDA argued these charges should be classified as the administrative expenses of the insolvency process, which, as per the IBC, must be paid out before anyone else gets a rupee. Since the homebuyers had taken on funding the construction, this penalty bill would have landed squarely on them.

What’s more, NOIDA had sealed three towers of one of the properties for ~₹700 crore in unpaid dues, shutting down any ongoing construction work. The NCLAT sided with NOIDA and ordered the homebuyers to pay up.

However, the Supreme Court dismantled NOIDA’s arguments.

It reasoned that the time extension charge was meant to deter a developer from dragging its feet. But it was never meant to penalize the homebuyer, who was already a victim. Attempting to enforce a delay penalty against them, or against a new builder trying to rescue the project, served no contractual or even rational purpose.

Moreover, the Court reminded NOIDA that as a public body, its mandate was not limited to squeezing revenue from leased land. It was supposed to promote development and provide housing, which is a fundamental right as per India’s Constitution.

All charges were dismissed, much to the relief of homebuyers.

Home alone

Granite Gate is only the latest in a string of recent legal interventions that form a pattern.

In May 2026, the courts delivered an equally aggressive order in the EIL case. For the stalled projects of EIL, a resolution plan with a new developer was made. But GNIDA blocked it, arguing that the leasehold land technically belonged to the developer’s subsidiaries, not the developer itself.

The Supreme Court ignored this distinction, waived off the charges, and approved the resolution plan. Moreover, it criticised GNIDA itself for “persistent inaction and ineptitude“ in managing the land allotments. The court noted that the developer hadn’t been paying dues since 2013, but GNIDA sat idle throughout and did nothing to beat them into shape.

Before that, the law bypassed normal insolvency procedures entirely to hand 16 unfinished projects of the developer Supertech to a state-run firm.

In each case, the message is the same: public development authorities cannot treat insolvency proceedings as a revenue recovery mechanism, and the costs of developer failure cannot cascade down to homebuyers.

But the courts are doing work that legislation and regulation should have done. The underlying system remains broken. Homebuyers continue to pay upfront for something that takes years to deliver with limited protection if the developer fails.

This isn’t just a Noida problem, either. It was extreme because the allotment machinery amplified every fault line. But wherever pre-sales funding, weak escrow enforcement, and undercapitalised developers exist, a similar dynamic might play out. As residential construction keeps expanding into tier-2 and tier-3 cities, the risk extends well beyond Delhi-NCR.

Even the solutions the court has suggested aren’t fully working. For instance, in the Supertech case, homebuyers have raised concerns that developer delays have been replaced by bureaucratic ones, which are common to state-run firms.

The court has been building the cure. But not much has changed to prevent a future wave of stranded homebuyers.

Is India withdrawing its EV subsidies too soon?

Heavy Industries Secretary Kamran Rizvi recently suggested that EV subsidies cannot last forever. Over the next four to five years, he expects the industry to gradually move away from government support and learn to compete on its own.

That is a reasonable goal. No industry can, or should, depend on subsidies forever. But it also raises a more difficult question: is India withdrawing support too early?

India’s EV market has grown rapidly. According to the Ministry of Heavy Industries, EVs accounted for 0.71% of new vehicle registrations in FY20. The ministry’s more recent data puts it at 8.2% in FY26.

That is a significant increase, but the headline number hides important differences. India does not have one EV market. Electric three-wheelers, two-wheelers, passenger vehicles, buses and trucks are all at different stages of adoption, and face different economic and practical constraints.

To judge whether that shift is premature, we first need to understand what the government has been supporting.

How India built its EV market

The easiest way to understand India’s EV policy is to look at the problems the government was trying to solve.

The first was the price. Batteries made electric vehicles more expensive than comparable petrol and diesel vehicles, so the Centre introduced a series of purchase-incentive schemes to narrow that gap. The Centre used FAME-I and II, followed by EMPS and PM E-DRIVE.

The model was straightforward. Buyers received an upfront discount, and the government reimbursed the manufacturer.

The support varied across vehicle categories. FAME-II covered electric two-wheelers, commercial three-wheelers, commercial cars and buses. Private electric cars, for the most part, did not receive a direct central purchase subsidy.

The Centre also cut GST on EVs from 12% to 5%, and GST on chargers from 18% to 5%. States added their own incentives, including purchase subsidies, scrappage and interest benefits, and exemptions from road and lifetime tax. These could sit on top of the central support. A buyer might receive a central subsidy, pay lower GST and also get a state-level road-tax waiver.

But making an EV affordable was only the first step. The government also had to make it practical to own one.

Lower running costs are a major advantage of EVs, but that advantage matters little if charging is unavailable, expensive or unreliable. The Centre declared EV charging a de-licensed activity, issued rules around tariffs and connections, and supported charging stations under FAME-II. PM E-DRIVE has allocated ₹2,000 crore for charging infrastructure.

This is where the chicken-and-egg problem comes in. Chargers may not be commercially viable until there are enough EVs. But buyers may not purchase EVs until they know that reliable charging is available. Government support is meant to break that loop.

The government was also trying to build the industry behind the vehicles. It wanted the batteries, components and EVs themselves to be made in India.

The automobile and auto-component production-linked incentive scheme has an outlay of ~₹26,000 crore, while the advanced-chemistry-cell battery PLI scheme has an outlay of ₹18,100 crore.

This is why we need to be precise when we say the government is “stepping back”. India may reduce what it pays on each electric scooter while continuing to support factories, batteries and supply chains.

The policy stack is now changing

Purchase subsidies are clearly shrinking. Under the most generous version of FAME-II, electric two-wheelers received up to ₹15,000 per kWh, capped at 40% of the vehicle’s cost.

In June 2023, that cap was cut to 15% of the ex-factory price. Under PM E-DRIVE, the maximum incentive fell to ₹10,000 per electric two-wheeler in FY25 and then to ₹5,000. The scheme’s two-wheeler component ended on 31 July 2026.

The L5 electric three-wheeler subsidy also ended in December 2025 after reaching its target. Other three-wheelers continue to receive limited support.

State-level tax support is changing too. Karnataka had exempted EVs from lifetime road tax. In 2026, it introduced a lifetime road tax of 5–10%, depending on the vehicle’s price rates. Electric two-wheelers remain exempt. Karnataka alone does not mean every state is retreating. Policies remain uneven: some states are continuing or redesigning incentives, while others are letting them expire.

But the broader direction is clear. Support for buyers is shrinking, while support for manufacturing, shared infrastructure and harder-to-electrify segments remains.

One EV market, four different realities

That shift will affect each part of the EV market differently.

Electric three-wheelers may be closest to standing on their own. They are used intensively, so the fuel savings add up quickly and the commercial economics increasingly make sense. Research by IEEFA also suggests that adoption was increasingly driven by operating economics, rather than subsidies alone.

Electric two-wheelers are more sensitive. Scooters have become more competitive, but buyers still respond strongly to upfront prices. When FAME support was reduced in June 2023, many buyers brought forward their purchases, and sales weakened after the deadline. This makes two-wheelers the immediate test of the secretary’s confidence.

Passenger vehicles look more market-led. They have generally not received direct central purchase subsidies, but registrations have grown as more models have arrived, range has improved, battery prices have fallen and manufacturers have competed more aggressively.

Even here, however, “market-led” does not mean “policy-free”. Electric cars continue to benefit from 5% GST, registration-fee concessions, state tax exemptions in some places, charging support and manufacturing incentives.

Buses and trucks are further behind. Electric buses still depend heavily on government orders, payment guarantees and depot infrastructure. Electric trucks face high upfront prices, financing challenges, charging constraints and uncertain resale values.

The timing matters

The question is not whether subsidies should end. It is whether they are being withdrawn at the right time.

A market is ready to stand on its own when sales continue growing after subsidies fall, the upfront price gap narrows, financing and resale improve, and charging becomes viable without constant government support. India has not yet formally separated policy-driven adoption from market-driven growth, so we cannot know how much demand would survive if the entire policy stack disappeared.

China offers one example of a successful transition. It reduced purchase subsidies after building manufacturing scale, battery capacity, charging networks and consumer demand. By 2024, around two-thirds of electric cars sold in China were cheaper than comparable conventional cars even before incentives. But China continued supporting the industry through tax concessions, trade-in schemes and industrial policy.

Europe offers the opposite warning. EV sales stagnated in 2024 as subsidies weakened, partly because electric vehicles still carried substantial price premiums.

Withdraw support too early, and the market may stall. Wait too long, and companies may never learn to compete without it.

India’s three-wheelers may be ready to move on. Its scooters, cars, buses and trucks are at different stages. The timing, therefore, cannot be the same for all of them.

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

Tidbits

1. Godrej Consumer Products outlines ₹150 crore R&D investment and higher operating costs

Godrej Consumer Products plans to invest approximately ₹150 crore to establish a new research and development centre. The company expects the facility, along with increased international go-to-market and digital-marketing initiatives, to add around ₹200 crore to its annual operating costs once fully implemented.

Source: The Economic Times

2. Data centre boom projected to add just 0.13% to India’s GDP by 2030

Moody’s Ratings expects India’s expanding data-centre sector to contribute only about 0.13% of GDP by 2030 despite heavy investment. High dependence on imported equipment and the sector’s capital-intensive operations limit domestic value addition and long-term job creation.

Source: Financial Express

3. Afcom signs letter of intent to acquire four Boeing 777-8F freighters

Cargo airline Afcom has signed a letter of intent with Boeing to acquire up to four 777-8F freighter aircraft to support its logistics network. The proposed deal would expand Afcom into wide-body freighter operations and strengthen its long-haul cargo capacity, subject to a final purchase agreement.

Source: Financial Express

4. Swiggy’s Crew expands into dedicated travel concierge service

Swiggy’s premium concierge platform CREW has launched a 24/7 personal travel service covering planning, bookings, and on-trip support. The move follows a year of running CREW as a broader personal concierge, with travel emerging as its strongest-use category.

Source: The Economic Times

5. Shipping groups welcome proposal to add Indian recycling yards to EU list

Major international shipping associations, including BIMCO and the International Chamber of Shipping, have backed a European Commission proposal to include two Indian ship-recycling facilities on its approved European list. If finalised, the inclusion of the Alang-based yards would signal that upgraded non-OECD facilities can meet the bloc’s stringent environmental and safety standards.

Source: Marine Insight

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E — Economy

[1] Private banks saw faster deposit growth than public sector banks

Indian banks have spent the last few years fighting for deposits.

Banks need deposits because they use that money to make loans. When deposits grow slowly but lending keeps rising, banks either have to pay customers more for their money or slow down lending. Private banks seem to be doing better on this front.

Their deposits grew nearly 3.5 percentage points faster than public sector banks by the end of June.

That matters because deposits are becoming one of the biggest constraints on bank growth. A bank may have plenty of people who want loans. But unless it can keep attracting money from savers, it cannot keep expanding its loan book at the same pace. We have written about this problem before. Private banks have been growing their loan books faster than their deposits, forcing them to look for other ways to fund that growth.

It is also about who can convince you to keep your money with them.

[2] Bank lending to industry is rising as companies borrow more

Bank lending to industry picked up sharply in July, with credit growth accelerating to around 20%. That is worth watching because corporate borrowing tells us something about what businesses plan to do next.

Companies usually borrow when they need money for factories, machines, inventories or working capital. Stronger industrial credit can therefore support the broader signs that private investment is starting to recover. But not every type of lending is accelerating.

Gold-loan growth has started moderating after expanding rapidly earlier.So banks are slowly seeing the mix of their loan books change too.

For years, personal loans drove much of bank credit growth while large companies remained cautious about borrowing. We have written about that lending slowdown before, when banks were pulling back on several types of retail credit and overall loan growth was cooling.

Source

Now industrial credit is picking up again. If that continues, companies could start taking a larger share of bank lending growth.

[3] Foreign investors are buying Indian stocks again

Foreign portfolio investors put ₹30,919 crore into Indian markets in August. That marked their second straight month as net buyers.

But that does not mean foreign investors have suddenly turned consistently bullish on India. Daily flows are still jumping around. In the five trading sessions through September 3, FIIs sold more than they bought overall, even as domestic institutional investors kept buying.

Source

Foreign investors move money between countries based on everything from interest rates and currencies to company earnings and global risk. When they buy Indian assets, they bring dollars into the country. When they leave, they take those dollars back out. That means these flows matter beyond stock prices.

Strong inflows can support the rupee and improve market liquidity. Large outflows can do the opposite.

Two months do not make a long-term trend. But after periods when foreign investors repeatedly pulled money out of India, the direction has at least started to change.

I — Industry

[4] India wants coal plants to respond faster as renewable power grows

India is adding huge amounts of solar and wind power. That creates a strange problem for coal plants. Traditionally, a coal plant tries to run steadily for long periods. But solar power floods the grid during the day and disappears after sunset.

The Central Electricity Authority now wants thermal plants to become much more flexible. It has proposed faster ramping and even two-shift operation for some plants.

In simple terms, coal plants may need to reduce production when renewable power is abundant and increase it quickly when solar generation falls. That changes what India needs from coal.

The grid does not just need coal plants to produce electricity anymore. It increasingly needs them to fill the gaps left by renewable energy. So even as India builds more solar and wind capacity, coal plants may become more important as the system’s backup.

[5] Electric truck makers now have to make more of the vehicle in India

India’s localisation rules for electric commercial vehicles have started taking effect.

That creates a challenge for manufacturers.

An electric truck may carry an Indian brand name and come out of an Indian factory, but companies can still import expensive parts such as motors, electronics and battery components. Localisation rules force manufacturers to source more of that value from within India if they want access to government support.

That sounds straightforward until you look at the supply chain.

India still does not manufacture every EV component at the scale or price that companies need. Forcing localisation too quickly can therefore raise costs even as it encourages suppliers to start producing those parts locally. That is the trade-off.

India does not just want companies assembling electric vehicles here. It wants the factories that make everything going inside them too.

[6] Indian Railways wants private firms to help build new freight lines

Indian Railways plans to build six freight lines with private companies using a funding model that India already uses for highways.

Under the hybrid annuity model, the government pays part of the project cost during construction. The private developer finances the rest and receives payments over time.

That solves one of the biggest problems with private railway projects. Building a freight line requires huge upfront investment, while the developer may have to wait years before traffic generates enough money. That makes companies reluctant to take the entire risk themselves.

The hybrid model splits that risk.

The government still puts money into the project. But private companies bring capital and construction capacity too. If the model works, Railways could build freight infrastructure without putting the entire bill on its own balance sheet. Also, we have written about freight here.

C — Company

[7] Apple wants India to make a much bigger share of the world’s iPhones

Apple could shift 30–35% of global iPhone production to India over the next five years.

That would be a much bigger shift than simply making more phones for Indian customers.

Apple has spent decades building a supply chain around China. Moving production means moving much more than final assembly.

Suppliers need to make enclosures, electronics, camera modules and other components close to the factories putting the phones together. India has already attracted companies like Foxconn and Tata Electronics. The next step is getting more of their suppliers to manufacture here too.

That is where the bigger economic benefit sits.

Every extra iPhone assembled in India creates some jobs. But every component that moves here brings another factory, another supplier and another part of Apple’s manufacturing ecosystem with it.

[8] Yum Brands has sold Pizza Hut. Why?

Yum Brands has completed the sale of Pizza Hut outside mainland China to private equity firm LongRange Capital for about $1.5 billion. Pizza Hut is not a small business. It has more than 15,500 restaurants across over 100 countries and generates roughly $10 billion in annual system-wide sales.

So why would Yum sell it?

Because Pizza Hut has become a different kind of problem from Yum’s other brands. KFC and Taco Bell have generally grown faster and fit more cleanly into Yum’s current strategy. Pizza Hut, meanwhile, has had to deal with changing eating habits, stronger competition from delivery-first pizza chains and the cost of keeping a huge global restaurant network relevant.

Selling the business lets Yum focus more tightly on KFC and Taco Bell.

LongRange gets something very different: a famous global brand that already has scale, franchisees and customers, but still has room to improve how the business runs. It does not need to build Pizza Hut from scratch. It needs to make an old brand work better.

We have written about Pizza Hut and the broader QSR recovery, including how chains like Pizza Hut have been trying to improve sales and store economics after a difficult few years.

[9] Tata Motors is buying Iveco to grow its commercial vehicle business in Europe

Tata Motors has cleared the final regulatory hurdle for its proposed €3.8 billion acquisition of Italian commercial vehicle maker Iveco Group. The European Central Bank gave the last approval needed for the deal to move ahead.

Iveco makes trucks, buses and other commercial vehicles, which makes this a very different business from Tata Motors’ passenger-car operations.

The deal gives Tata a much bigger presence in Europe almost immediately.

Building that kind of business from scratch would take years. Tata would need factories, dealers, customers, service networks and regulatory approvals across multiple countries.

Iveco already has all of that.

The acquisition also gives Tata more scale in commercial vehicles at a time when the industry is changing. Truck makers are spending more on electric drivetrains, alternative fuels and connected-vehicle technology, and larger companies can spread those costs across more vehicles and markets. So Tata is not just buying another vehicle brand.

It is buying distribution, manufacturing capacity and a much faster route into the European commercial-vehicle market.

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. When did social media stop looking innocent?

How did social media evolve from a tool for human connection into an alleged youth mental health crisis? Driven by addictive design choices like infinite scroll, streaks, and personalized feeds, platforms now face a massive global backlash—culminating in Meta's landmark $18 billion settlement to enforce strict daily time limits and restrictions for teenagers.

2. SEBI finds another SME IPO fraud

Why did regulators halt Trafiksol’s wildly popular SME IPO just hours before its stock market debut? Behind a massively oversubscribed issue lay cooked books, circular trades, and a zero-revenue shell vendor set up to receive the bulk of the proceeds. While a last-minute investor complaint saved public funds this time, the scandal highlights severe due-diligence failures among merchant bankers—underscoring why SEBI is aggressively tightening rules across India's booming SME market.

When did social media stop looking innocent?

There is a decent chance you found this story through one of the platforms it is about.

Maybe it appeared on Instagram. Maybe someone sent it to you on X. Maybe YouTube, or another app. And when you finish reading, there will almost certainly be something else waiting for you. That ability to always have the next thing ready is now at the centre of one of the biggest fights over social media.

On August 26, Meta agreed to settle a case brought by US states that accused Facebook and Instagram of using design features that encouraged children and teenagers to keep using the apps compulsively.

The multistate settlement could cost Meta up to $18 billion. Meta did not admit wrongdoing.

The number sounds enormous, but Meta does not have to pay it all at once. The settlement is spread over ten years, and part of the amount is conditional. The settlement also does not prove that Instagram caused America’s youth mental-health problems.

But Meta has agreed to change how its apps work for younger users. That makes this a strange place for social media to have ended up. Twenty years ago, the goal was to get more people onto social media.

Today, governments are asking whether children should be on these platforms at all.

How the feed took over

The early story of social media was almost the opposite of the one we tell today.

Facebook arrived in 2004 and Twitter in 2006. Their promise was easy to understand: they let ordinary people reach a large audience directly. Before this, newspapers and television channels decided who got heard. Social media lowered that barrier. Anyone could publish, find an audience or organise a group. For a while, that looked enormously empowering.

The Arab Spring became one of the strongest symbols of that optimism. Arab spring began in Tunisia in December 2010, after street vendor Mohamed Bouazizi set himself on fire after repeated harassment by local officials. The protests that followed soon spread across the region. Social media mostly helped information spread faster.

But over time, people started seeing another side of social media.

A Cambridge University researcher named Aleksandr Kogan built a personality quiz app on Facebook. Facebook’s rules at the time allowed the app to collect data from the people who used it. The app could also collect data from millions of their Facebook friends. It was later confirmed that Kogan’s app also collected data this way.

Some of that information later reached Cambridge Analytica. Facebook said Kogan broke its rules when he shared the data with the company. It was the time of US Elections. Cambridge Analytica used that information to build profiles of voters. Political campaigns could then show different messages to different kinds of people based on their profiles, with the intention of influencing their votes.

How much this actually influenced the 2016 US election is still debated. But the scandal also turned attention towards Facebook. Its platform had allowed outside developers to collect information about millions of people who had never used those apps themselves.

US regulators eventually went after both sides. The Federal Trade Commission took action against Cambridge Analytica and Kogan. It also brought a separate privacy case against Facebook. Facebook eventually agreed to pay a $5 billion penalty.

This changed how people in general looked at Facebook. It was not simply a place where friends posted things for each other. Facebook also watched how people behaved on the platform. It used those signals to decide what appeared in each person’s feed.

That raised another question. Why did Facebook want to get so good at predicting what people would watch or click next?

Part of the answer was simple. These platforms made money from advertising. So the longer people stayed on these apps, the more opportunities the platforms had to show ads. That made attention valuable.

That does not mean every feature was built to be addictive. But it gave the companies a clear reason to keep people coming back.

Over time, the products got better at removing the little moments when we might otherwise stop.

A newspaper eventually runs out of pages; infinite scroll does not. Finishing a television episode normally forces you to decide whether to watch another; autoplay removes that decision. Close the app and a notification can pull you back. Snapchat’s Streaks give people a reason to come back every day, because missing a day can break the streak they have built.

The concern around social media therefore moved from what people posted and their personal data to how the apps themselves were designed.

That was harder to escape because a few big platforms accounted for much of people’s online attention. Moving from Instagram to TikTok, YouTube or Snapchat often meant entering another app built to keep you engaged.

And the concern became sharper when the users were children and teenagers. In a 2025 Pew survey, 48% of American teenagers said social media had a mostly negative effect on people their age, up from 32% in 2022. But only 14% thought it had a mostly negative effect on them personally.

But is social media actually harming children?

That brings us to the harder question: are these fears actually backed by evidence?

The answer is not very clean.

Some stronger studies do find harm. In one large experiment, researchers randomly asked Facebook users to deactivate their accounts for four weeks. Those who did reported a small improvement in their wellbeing.

But other studies find much weaker effects. A 2019 study of more than 350,000 teenagers found only a tiny link between heavier digital use and worse wellbeing. Digital use explained less than 0.4% of the differences in wellbeing they found.

Part of the problem is that screen time tells us very little about what someone actually does online. Take two 15-year-olds who both spend three hours on Instagram. One spends that time chatting with friends and watching cricket. The other spends it doomscrolling through posts and videos.

Their screen time is identical but not their experience.

That is why averages can hide a lot. Social media may barely affect one teenager, help another stay connected and make things much worse for someone who is already vulnerable. This raises another question: where exactly does that harm come from?

Sometimes, it comes from what users post. Someone can upload a cruel comment, a disturbing video or an image that makes another person feel worse about themselves. In Pew’s 2025 survey, teenagers themselves pointed to things like bullying, sleep loss and feeling worse about their own lives as part of their experience online.

But platforms are not just passive pipes. They decide who sees that content, what gets recommended next and when a notification brings you back. The post may come from a user, but the platform shapes the experience around it.

That distinction later became important in court. Platforms had long enjoyed strong legal protection from being held responsible for what their users posted. The harder question was whether that protection also covered the systems they had built around that content.

The research did not offer a simple answer either. It did not show that every extra hour online harms every teenager. But it did suggest that some users, some experiences and some product features can carry much greater risks.

A major review by the US National Academies reached a similar middle ground. It stopped short of blaming social media for population-wide harm. But it still found enough risk to recommend precautions.

Then, in 2021, the debate changed again.

Former Facebook employee Frances Haugen shared internal company documents. Some included Meta’s own research on teenagers and Instagram.

One internal slide said Instagram made body-image problems worse for one in three teenage girls who were already struggling with them. Meta argued that critics were presenting the finding without enough context.

But the documents revealed something different. Meta itself was studying some of the same risks that outside researchers and regulators were worried about. That left governments with an awkward choice. The science still did not offer a simple verdict. But the risks were becoming harder to ignore. Many decided not to wait.

Governments stopped waiting for an answer

Europe moved first on the broader idea that platforms themselves needed to change.

Under the Digital Services Act, large platforms have to assess and reduce risks to children. By 2025, the European Commission was already telling them to cut back on addictive features and improve age checks. Then, in July 2026, it said Instagram and Facebook may have broken the law because features like infinite scroll, autoplay and notifications were designed to keep people on the apps for longer.

That was only a preliminary finding, so Meta had not yet been forced to remove those features. But the Commission could eventually order changes or impose penalties if it concludes that Meta has not done enough to reduce the risk.

Australia went further.

Since December 2025, major platforms such as Facebook, Instagram, TikTok, Snapchat, X and YouTube have had to stop children under 16 from holding accounts. Britain and Indonesia have moved in a similar direction, while Britain has also proposed switching off autoplay and personalised feeds by default for older teenagers.

But age limits create a harder problem: platforms still need to know who is actually underage. A birthday is easy to fake. More reliable checks can involve government IDs, facial scans or outside identity-verification services.

So a rule meant to collect less data about children may first require platforms to collect more sensitive information about them.

India already faces this trade-off. Under the Digital Personal Data Protection Act (DPDP Act), companies generally need a parent’s verified consent before using a child’s personal data. The law also limits tracking and targeted advertising aimed at children.

Now some states want to go further. Karnataka has proposed restricting social-media use for children under 16. That makes the same question much harder for platforms: how do you protect children without collecting even more information just to prove their age?

In the United States, that concern moved into the courts.

Instead of writing new rules for platforms, parents, young users, school districts and state attorneys general went to court. But there was a problem. Platforms had long been protected from many lawsuits over harmful content posted by their users.

That is where Meta’s own internal research became more important. Plaintiffs could point not only to the design of the product, but also to evidence that the company itself had studied some of the risks.

So lawyers changed the argument. Instead of saying, “Instagram showed me harmful content,” they increasingly argued that Instagram’s own design had caused harm.

The lawsuits changed the target

As we have seen, platforms were already protected from the lawsuits over what their users posted. That protection came from Section 230 of the US Communications Decency Act of 1996. So the newer lawsuits focused on features the platforms had built themselves, such as Instagram’s feed, Snapchat’s Streaks and YouTube’s recommendations.

And slowly, arguments began getting further in court.

Earlier this year, a Los Angeles jury sided with a young woman who said Meta and YouTube had contributed to her social-media addiction. She was awarded $6 million in damages, while TikTok and Snap had settled even before the trial. Around the same time, New Mexico won a separate $942 million judgment against Meta and forced Meta to make changes aimed at protecting younger users.

By August, the pressure had moved into another major trial. Attorneys general from California, Colorado, Kentucky and New Jersey began presenting their case against Meta on August 18.

Eight days later, Meta settled the case. The timing does not tell us why Meta settled.

Meta has agreed to change how teenagers use Facebook and Instagram. Users under 18 will face a default two-hour daily limit across the two apps. They will need a parent’s permission to turn that limit off.

Meta will also restrict most use between midnight and 6am It will mute most notifications during school hours. The company will also try harder to identify a teenager who enters an adult birthday. It will remove accounts that it believes belong to children under 13.

An independent auditor will check whether Meta follows these rules. If TikTok and YouTube adopt similar protections, Meta’s limit will fall to one hour per app. The overnight restriction will also expand from 10 p.m. to 7 a.m.

That matters because the settlement itself is tied to what Meta’s rivals do. Meta has split the payment into two parts. It will pay about $12.7 billion to participating states over ten years. The remaining $5.3 billion depends on what TikTok and YouTube do. Meta will pay it only if both platforms adopt similar teen protections and make matching payments.

Meta has an obvious reason to want that.

If Instagram alone becomes less attractive to teenagers, they can simply spend more time on TikTok or YouTube. But if all three platforms face similar rules, the settlement starts to look less like a Meta-only penalty and more like a new industry standard.

That is a much bigger shift than the headline fine.

SEBI finds another SME IPO fraud

Over the past two years, SEBI has been pulling apart India’s SME IPO market, one order at a time.

Just recently, we covered the case of Varanium Cloud, which fabricated revenues and diverted IPO proceeds away from what it said on the prospectus. Last year, SEBI barred Synoptics Technologies for siphoning 54% of its fresh issue proceeds the day before listing, and Varyaa Creations for transferring over 70% of its IPO money to third parties.

In essence, a small company raises money from the public, the money disappears, and SEBI steps in after the fact.

Last week, the regulator published another one. This time it’s Trafiksol ITS Technologies, a company that builds intelligent transportation systems, toll management software, and traffic automation for government projects. It raised ~₹45 crore through an SME IPO on BSE in 2024. The IPO was oversubscribed 345 times, attracting bids worth over ₹10,000 crore. The shares were allotted and the listing was scheduled for the next day.

But right before that day, an investor complaint pointed out that the vendor Trafiksol had chosen for its biggest expenditure item — a ₹17.70 crore software purchase — hadn’t filed financial statements for three years and reported zero revenue.

BSE immediately halted the listing and SEBI froze the proceeds. It began an investigation whose final results have just been published.

An audit at midnight?

The story begins with the vendor.

The software vendor, Oasis Corpcare, had been purchased by one Kishanlal Kumhar for ₹20,000. Kishanlal told SEBI that a middleman named Vijay Oswal had asked him to give Trafiksol a quotation. Oswal prepared the quote himself in return for a commission. Call data records placed Kishanlal, Oswal, and Trafiksol’s managing director Jitendra Das at the same location on September 17 — the exact day BSE halted the listing.

The financial statements Oasis submitted to BSE were signed by a CA one day after the halt. All three years’ audit identification numbers were generated within a five-minute window and emailed to BSE at midnight.

When SEBI called one of Oasis’s directors, he answered the phone and then switched it off. A site visit found the office locked.

The Securities Appellate Tribunal called it a “sham transaction.” Trafiksol’s board had approved procurement from Oasis within two days, ignoring its own policy requiring at least three quotes.

Dressed up financials

SEBI’s latest order digs into Trafiksol’s books for FY24, the year right before the IPO, and finds systematic revenue inflation.

First, on March 31, 2024, Trafiksol booked ₹4.5 crore in “unbilled revenue“ through journal entries against three customers. It claimed this was revenue recognised proportionate to work completed.

But these amounts were never reflected in the company’s GST filings. When SEBI asked for proof of work, like work orders, milestone records, or invoices, they couldn’t produce anything.

In the prospectus, this same unbilled revenue showed up under the name of an entirely different entity called ARS Technocrats, which was listed as a top customer despite having bought nothing from Trafiksol at all.

Trafiksol’s own auditor later qualified the next year’s financials, noting the ₹4.50 crore had been reversed. Jitendra Das’s own statement during the investigation was telling: “This is a book entry passed to inflate the turnover in March 31, 2024.”

Second, Trafiksol had been running circular transactions between two entities, Limco and Ishira. Ishira would sell goods to Trafiksol, and Trafiksol would sell the same goods to Limco at a ~10% markup. Then, the same products would cycle back the other way. One of Trafiksol’s own ledger narrations described it as “third party invoicing from Limco to Ishira.” Receivables from these two entities, totaling over ₹11 crore, remained uncollected more than two years later.

In the prospectus, Trafiksol “netted“ its purchases from these entities against sales, making them look like they accounted for 13% of total sales. The real figure, on a gross basis, was closer to 30%.

As a result, SEBI estimated that at least 20% of Trafiksol’s reported ₹65.81 crore revenue was artificially inflated.

The phone that went off the Sea Link

A couple of other details are worth noting.

On the same day Trafiksol paid ₹50 lakh in merchant banking fees to its lead manager Ekadrisht Capital, it also transferred ₹67 lakh to the personal bank account of the father of Ekadrisht’s director and 99% shareholder. This was supposedly booked as a security deposit for office rent. SEBI didn’t necessarily deem it illegal, but said that it should have been disclosed, since it exceeded the merchant banking fee itself.

When SEBI asked Jitendra Das for data from his mobile phone, he said he’d bought a new phone during the investigation and had discarded the old one off the Bandra-Worli Sea Link after deleting its data. SEBI alleged that this was done to wipe out incriminating evidence. But there was no way to prove what evidence was really on there.

Why this matters beyond Trafiksol

Trafiksol, Das, and his wife and co-promoter Poonam Das have been barred from the market for one year and fined a combined ₹1.05 crore. The merchant banker has filed a settlement application.

The penalties are lighter than the Varanium Cloud order. But that’s because Trafiksol was a real business, plus the worst of the damage was avoided because investors got refunded before the shares ever traded.

But step back, and the pattern across these cases is consistent. Small companies raise money from the public on inflated or fabricated financials. The merchant bankers, who SEBI relies on to catch exactly this, either don’t look hard enough or don’t look at all. In the Synoptics case, the lead manager actually instructed the fund transfer. In Varyaa Creations, the modus operandi was identical. SEBI has now restricted two merchant bankers this year alone, including First Overseas Capital, which was the lead in the Varanium deal.

The regulator has been tightening SME IPO rules since late 2024, including minimum EBITDA thresholds, caps on promoter share sales, higher minimum application sizes, mandatory monitoring of proceeds. Those reforms are sensible. But Trafiksol’s IPO predated most of them, and the complaint that actually stopped the listing came from one individual investor who checked the Ministry of Corporate Affairs.

Until the gatekeepers start doing what they’re paid to do, rules on paper will only go so far.

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

Tidbits:

[1] Japan’s JCRA upgrades India’s sovereign rating to A- from BBB+

The Japan Credit Rating Agency has upgraded India’s sovereign rating to A- from BBB+, marking the country’s first return to the ‘A’ rating category from an international agency in over 35 years. The agency cited India’s solid economic growth, sustained public infrastructure investment, and a healthier banking system driven by structural reforms as key drivers for the revision.

Source: The Economic Times

[2] Canada’s La Caisse acquires 24% stake in Altius Telecom for ₹12,100 crore

Canadian investment group La Caisse has acquired a 24% stake in Altius Telecom Infrastructure Trust for about ₹12,100 crore. Altius owns more than 258,000 telecom towers and sites across India, giving La Caisse major exposure to the country’s expanding 4G and 5G infrastructure market.

Source: The Hindu

[3] Digital Communications Commission to decide satellite spectrum fee and tenure

The Digital Communications Commission is expected to soon consider a proposed satellite-spectrum usage charge of 5% of adjusted gross revenue, along with allocation-tenure rules. The framework will shape how operators including Starlink, Eutelsat OneWeb, and Jio Satellite access spectrum in India.

Source: The Economic Times

[4] Banking system liquidity reaches four-year high of ₹7.7 lakh crore

Indian banking liquidity has surged to a four-year high of ₹7.7 lakh crore, driven primarily by strong inflows of foreign-currency non-resident deposits. The sharp increase in surplus funds is expected to help domestic lenders lower their cost of funds and potentially alleviate recent pressure on net interest margins.

Source: Financial Express

[5] DGGI proposes payment tracking after uncovering ₹70,000 crore in illegal betting transactions

The Directorate General of GST Intelligence has proposed mandatory tracking of websites that redirect users to payment gateways and stronger mapping of linked bank accounts. The recommendation follows a 14-month probe that detected about ₹70,000 crore of transactions in one financial year routed through illegal online betting networks.

Source: The Economic Times

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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. A self-purge inside the world’s largest nickel player

Indonesia has launched an aggressive nationalisation campaign, seizing nearly 6 million hectares of palm oil plantations and cutting mining quotas for thermal coal and nickel. To curb tax leakage and under-invoicing, President Prabowo raised low-grade nickel royalties to 30% and shifted commodity exports under state entities like Danantara and Agrinas. These moves pushed LME nickel prices above $17,900 per tonne while straining ties with Chinese processors. For India, the policy shift threatens critical imports of palm oil, thermal coal, and ferronickel for steelmaking.

2. What’s wrong with the sardines market?

A 46% decline in Moroccan sardine landings—caused by overfishing and warming ocean waters—led Morocco to ban raw sardine exports for 12 months, squeezing European processors. In contrast, India’s Kerala region recorded a decade-high catch of 1.68 lakh tonnes in 2025 due to monsoon upwellings, though an oversupply of undersized juveniles crashed local prices. With an impending El Niño threatening future breeding seasons, extreme ecological unpredictability remains the primary risk for global sardine supply chains.

A self-purge inside the world’s largest nickel player

Something is happening in Indonesia.

The country has launched one of the most aggressive nationalisation campaigns in recent memory. The government has taken over nearly six million hectares of palm oil plantations, created a state-owned export monopoly for its biggest commodities, and collected billions of dollars in fines from companies it accuses of having looted the country’s natural wealth.

In early 2026, Indonesia slashed its nickel ore mining quotas from 379 million tonnes to 250 million tonnes. It then hiked royalties on low-grade nickel ore from 17% to 30%, while introducing new taxes and licensing requirements on many other minerals.

Indonesia is the world’s largest producer of palm oil and nickel, and among the top 3 producers of both tin and coal. Such a large crackdown will inevitably move the global markets for these commodities. This includes India, as we are heavily dependent on the country for palm oil, thermal coal and nickel.

The response from the industry was immediate. Chinese firms, which dominate Indonesia’s nickel processing, began scaling back production. Nickel prices on the London Metal Exchange surged past $17,900 per tonne. In a letter to Prabowo, the China Chamber of Commerce in Indonesia argued that their firms faced “excessively stringent regulation” and alleged extortion by authorities.

So, why is Indonesia going through all of this, and why now? And how much of this is reform, how much is revenue desperation, and how much is power consolidation?

Indonesia’s resource nationalism

All of this doesn’t fully come out of the blue, but has some history behind it.

Indonesia is one of the most commodity-rich countries in the world. But, you see, much like other developing nations, it has always had a singular frustration: the country kept exporting raw materials cheaply and importing finished goods at high prices. It enjoyed very little benefit of the profit that would arise out of value addition on its own raw materials.

This frustration existed for a reason, though. Until its independence in 1945, Indonesia was a colony of the Dutch, who would only take raw materials for their own finished goods. This was a common worry at the time among post-colonial countries, including India. So, Indonesia’s founding President Sukarno undertook a large-scale nationalization of Dutch-owned plantations and companies.

But Indonesia’s version of the struggle to localize this value addition became unusually intense. One big reason for this is the deep entanglement of the military.

The roots go back to the 1970s oil crisis which sent oil prices soaring. Indonesia’s leading state oil company Pertamina, which was headed by Lieutenant-General Ibnu Sutowo, reaped huge benefits with those prices. Those revenues were channeled into social welfare programs, but they were also used to fund further military interests and political patronage. In fact, generals often received special mining concessions and were promoted to leadership positions in state-owned firms.

Eventually, this resource nationalism only got stronger. Indonesia forced foreign giants to divest 51% or more of their business to national entities. In 2012, the Constitutional Court dissolved BP Migas, Indonesia’s independent oil and gas regulator, ruling that it favoured foreign companies.

The nickel gambit

This same impulse drove Indonesia’s most famous recent act of resource nationalism: the nickel export ban.

For years, Indonesia exported raw ore to be processed elsewhere, mostly in China. Then, in 2014, it introduced a partial export ban on unprocessed minerals, meant to force companies to build processing infrastructure inside Indonesia. Several Western mining MNCs pulled out. This eventually turned into a full export ban in 2020.

But another actor smelled an opportunity there. Chinese state-backed firms are building smelters and processing facilities in Indonesia at a pace no one had anticipated. Even when Indonesia imposed the full ban in 2020, an infrastructure buildout was already underway with Chinese capital.

Indonesia’s nickel exports jumped ten-fold between 2017 and 2023, from ~$3 billion to $33.5 billion. By the first half of 2025, nickel exports reached $16.5 billion, overtaking coal as Indonesia’s most valuable export. Indonesia’s share of global processed nickel leapt from being negligible in 2013 to ~40% by 2024. Indonesia also became the largest producer of stainless steel, which needs nickel.

By most conventional measures, the nickel ban worked spectacularly. It was the most crucial first step towards Indonesia’s own EV ambitions.

But the success came with a catch.

Most of Indonesia’s nickel refining capacity is now controlled by Chinese companies. Over $30 billion in investment flowed in, financed by state-owned Chinese banks and built alongside dedicated coal power plants. The processing happens in Indonesia, but ~75% of the direct profits flow to foreign shareholders, while the environmental costs of deforestation, carbon-intensive smelting, and toxic waste are borne locally.

Indonesia had climbed the value chain, but now finds itself overly dependent on a single foreign partner. That has created a new pain point in China-Indonesia relations.

Leaks in the system

But localisation is only half the problem.

Even where Indonesia has managed to bring much of the investment in-house, the money that should reach the state coffers from there simply doesn’t.

Transfer pricing

One reason for that is that firms in Indonesia undertake a practice called transfer pricing.

Imagine a company A situated in Indonesia that sells nickel. It has an offshore subsidiary in a tax-friendly region like Singapore. Company B, which is located in China, wants to buy a unit of nickel at the market price of $100. How A sells that nickel is not directly to B, but by first selling it to the offshore unit at a highly-suppressed price (say $30). That way, A is able to avoid domestic taxes on that sale entirely, ultimately hurting state tax revenues.

If government speeches are to be believed, due to transfer pricing and under-invoicing, Indonesia lost as much as $908 billion over 3 decades. It is a staggering figure, though difficult to verify.

Corruption

If that wasn’t enough, blatant corruption is also rampant in Indonesia.

For instance, investigations found that ~5.6 million metric tons of nickel ore were smuggled to China between 2020 and mid-2023. Many analysts and traders suspect that it was misclassified as iron ore on customs declarations.

Then, in 2023, a major nickel-smelting firm was prosecuted for bribing the governor of Maluku to secure an extraction license. In April 2026, the attorney general arrested the active chairman of the National Ombudsman, on charges of accepting bribes from a nickel firm.

The widespread nature of this corruption also explains why Indonesia has such a large informal mining sector. In tin alone, the state estimated it was losing 80% of its total tin output to illegal mining and cross-border smuggling.

Part of this corruption stems, ironically, from how Indonesia historically pursued resource nationalism. With selective concessions, Indonesia created a class of military elites and business oligarchs to whom much of Indonesia’s resource wealth accrued.

This is the context in which Prabowo’s crackdown exists.

The big squeeze

Since late-2024, Prabowo, who himself was a former military general, has made multiple interventions at a frightening pace under the promise of using Indonesia’s natural wealth in the service of its majority instead of just a narrow set of people.

The most dramatic such move has been the forest task force. It is a military-backed operation that has seized nearly 6 million hectares of oil palm plantations and over 10,000 hectares of mining concessions. Fines worth hundreds of millions of dollars have also been collected.

Much of this seized land has been transferred to Agrinas, a state-owned company created in early 2025 that has, almost overnight, become the world’s largest palm oil grower by land area. Agrinas is run largely by retired military officers and forces local farmers into restrictive revenue-sharing arrangements where the state keeps 40-45% of proceeds. Harvest payments have been delayed by over 30 days, and many farmers are walking away.

Prabowo has said another few million hectares could be seized. This would mean that more than half of Indonesia’s ~17 million hectares of palm oil plantations are, in the government’s telling, operating informally.

In nickel, Indonesia has changed licensing rules in such a way that mining firms must now re-apply for approved extraction limits every single year rather than once every three years. In the Halmahera island of the country, where the world’s biggest nickel mine is located, soldiers conducted a televised raid last year merely because the mine operator had violated a forestry permit.

Indonesia has also aggressively pursued cuts in production quotas, ideally to create an artificial scarcity which would push up nickel prices, and hence state revenues. For instance, the Halmahera mine received a quota cut. In coal, the state has slashed mining quotas for 2026, aiming to bring national production down to 600 million metric tons from 790 million last year. In many ways, this was also the strategy OPEC followed for crude oil.

In May 2026, the government announced that all exports of palm oil, coal, and ferroalloys would be channeled through a subsidiary of the country’s sovereign wealth fund, Danantara. It is meant to be a state-controlled commodity trading monopoly whose stated goal is to combat under-invoicing. But critics ask a simpler question: if the problem is dodgy invoicing, why not reform customs and taxes?

Prabowo has also announced Icomex, a new Indonesian commodities exchange launching in Jan 2027 which is designed to wrest pricing power from the London Metal Exchange and the Shanghai Futures Exchange.

All of this is happening against economic stress. The rupiah hit a record low against the dollar in June 2026. This year, Indonesia may be servicing its largest debt servicing bill, spending 19% of state revenues on interest payments. Danantara itself has been asked to remit $6.8 billion to shore up the state budget. The crackdown is also a desperate search for revenue as much as it’s politically-driven.

Global ripples

Undoubtedly, the implications of this crackdown have had their impact globally. India isn’t exempt from these effects, either.

For one, we import over 60% of our edible oil, and palm oil from Indonesia and Malaysia makes up the lion’s share. Our kitchen budgets could acutely feel disruptions to Indonesian palm oil production. In fact, we already are, but due to a different reason altogether: Indonesia is diverting much of its palm oil away from exports and towards its own biodiesel production. We’ve been here before in April 2022, when Indonesia’s wholesale ban on palm oil exports hurt our import bill.

Then, there’s coal, which, along with cooking oil, drives most of our trade deficit with Indonesia. We are the second largest buyer of Indonesian thermal coal. That being said, our import dependence for coal as a whole has been reducing, with our import-based power plants increasing their share of domestic coal use to 50% this year. This has provided a healthy cushion.

Lastly, there’s nickel, for which India is nearly wholly import-dependent. India imports more than 80% of its ferronickel, a critical alloy for steel manufacturing, from Indonesia, creating an immediate risk for our steel industry. Plus, Indian EV battery manufacturers will likely see an inflated bill of materials.

And remember, most of Indonesia’s nickel refining capacity is controlled by Chinese companies. So Indian steelmakers are exposed not just to Jakarta’s regulatory upheaval, but to the escalating Indonesia-China dispute, which won’t just increase supply chain costs, but also put us in messy geopolitical crosshairs.

Interestingly, in the midst of all this, India and Indonesia concluded one round of trade talks and signed a few deals on critical minerals, defence and agriculture.

Conclusion

Every country has had their own version of localisation of supply chains. In that sense, Indonesia’s story is a familiar one. But it is the context within which it’s happening that is different.

The current approach to localisation is faster, broader, and very coercive. The tools being used look a lot like the ones that created those problems in the first place. Selective concessions built the oligarchic system he says he’s dismantling. With the rupiah at record lows and debt servicing consuming a fifth of revenues, the line between reform and revenue extraction is almost impossible to draw.

Indonesia is certainly not wrong to want more from its resources. But it’s doing everything at once: military-backed seizures, monopolies, a new commodities exchange, quotas and taxes. How different this attempt at resource nationalism will be from the ones in the past is still up for debate.

Fishy business in the sardines market

Sardines are suddenly having a moment in America. For years, they were the slightly embarrassing tin sitting at the back of the supermarket shelf. Now they are showing up on restaurant menus, in social-media recipes and in brightly designed cans, marketed as an affordable source of protein.

The timing is awkward. Just as sardines are becoming fashionable in America, some popular canned-sardine brands are becoming harder to find in US stores.

That does not mean the world is running out of sardines. “Sardines” is a trade term used for several different species, caught from different fish stocks around the world. That makes the story more complicated than it first appears.

At the centre of it is a country in North Africa - Morocco.

Why Morocco matters

Moroccan sardine landings fell 46% between 2022 and 2024, from about 965,000 tonnes to 525,000 tonnes.

“Landings” simply means the fish brought ashore. They are not a count of how many fish remain in the sea. So this drop does not, by itself, prove that the sardine stock declined by 46%. It could also reflect where the fish were found, how much fishing took place and how the fishery was managed.

But the economic impact is clear. Far less fish reached Moroccan ports, processors and buyers.

Morocco’s importance becomes clearer when we look at trade. In 2024, it exported $700 million worth of prepared or preserved sardines. That made it the largest exporter in this specific customs category, including the US.

Because landings were falling, Morocco suspended exports of fresh, refrigerated and frozen sardines for 12 months from 1 February 2026. Canned sardines were not covered by the ban.

The idea was to keep domestic supplies and prices stable, while ensuring that Moroccan processors continued to get enough fish. But the raw fish could no longer be shipped abroad. Only processed, canned sardines could be exported.

That matters for buyers outside Morocco. In the first ten months of 2025, Morocco supplied roughly 94% of Spain’s frozen-sardine imports from outside the European Union. The ban would therefore hit Spanish processors and its canned-sardine industry, which rely on imported raw fish.

So why did this happen?

Why did Moroccan landings fall? The evidence points to two pressures: fishing and the environment. Neither gives us the complete explanation.

On the fishing side, a 2026 stock assessment concluded that sardine stocks in central and southern Moroccan waters were overexploited. Morocco’s National Institute of Fisheries Research has separately reported that different fishing zones were overexploited between 2023 and 2024. Overfishing leaves fewer fish to reproduce and replenish the stock, making future catches more vulnerable.

Climate, however, still matters.

Sardines eat plankton. The waters off Morocco are usually very productive because of a process called upwelling. Winds push warm surface water away from the coast, allowing colder, nutrient-rich water from below to rise. Those nutrients help plankton grow, giving sardines plenty to eat.

When the sea becomes warmer or upwelling weakens, the amount of plankton can change. Sardines may grow more slowly, remain smaller, reproduce less successfully or move elsewhere in search of better conditions. A similar shortage was already being felt in French markets, where suppliers blamed warmer water, reduced plankton and fishing pressure.

Fishing and climate can both be affecting the sardine population. Managers cannot control the sea, but they can control how much is caught, when fishing happens and whether young fish are protected.

The question is not which one is solely responsible. It is whether the fishery is healthy enough to withstand both pressures at the same time.

India’s sardines tell a different story

India’s oil sardine is a different fish, found in a different ocean. In 2025, India landed 2.53 lakh tonnes of oil sardines, making it the country’s third-largest marine resource by landings. Kerala accounted for 1.68 lakh tonnes, its highest oil-sardine catch in a decade.

That abundance may not last. The Central Marine Fisheries Research Institute has warned that oil-sardine landings could fall sharply in 2027 if a projected El Niño brings unusually warm conditions to the northern Indian Ocean during the fish’s breeding season. Another outlook says El Niño is strengthening and puts the chance of it becoming very strong at more than 90%.

But a forecast is not a guarantee. It points to a serious risk, not a certain crash.

The timing is important. Oil sardines spawn between roughly May and September. Warmer water, weaker upwelling and less food can affect their ability to mature and the survival of young fish. When the sardine landings in 2015 fell, there was an analysis done. It found a statistically significant link between El Niño conditions and lower landings. But it also said excessive fishing played a role.

Kerala’s swings show why these forecasts matter. Oil-sardine landings crossed 4 lakh tonnes in 2012 but fell to about 3,500 tonnes by 2021. In 2024, the problem was different: Kerala saw an unusual surge in young sardines, averaging around 10 cm in size. Researchers linked this to stronger monsoon rainfall and nutrient-rich upwelling, which increased plankton and helped more sardine larvae survive.

But the sudden increase in young fish created its own problem. Too many of them were competing for food, so they remained small and gained less weight. The glut pushed sardine prices down, and Kerala temporarily suspended fishing for juvenile sardines.

The real risk is volatility

This is why the sardine problem is not simply about scarcity. In Morocco, lower landings and an export restriction are squeezing buyers of raw fish. In Kerala, an oversupply of young sardines has pushed prices down and could affect the fishery’s future.

For fishers, processors and retailers, the bigger problem is unpredictability. Kerala’s experience—a boom, a collapse and then a surge of juvenile fish—shows how quickly supply can change, leaving businesses little time to adjust their contracts, factory schedules or prices.

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

Tidbits

1. Tata Motors secures regulatory approvals for proposed €3.8 billion Iveco Group acquisition

Tata Motors has received clearance from the European Central Bank and other regulators for its proposed €3.8 billion (approximately ₹40,000 crore) acquisition of Italian commercial vehicle manufacturer Iveco Group. The ECB approval clears a key hurdle for the tender offer, bringing the Indian automaker closer to expanding its footprint in the European commercial transport sector.

Source: The Economic Times

2. UpGrad acquires Unacademy for over $200 million in steep valuation reset

Edtech platform upGrad has completed the acquisition of Unacademy for slightly more than $200 million, marking a massive markdown from Unacademy’s peak $3.4 billion valuation. The consolidation reflects ongoing funding constraints and a broader market correction within India’s online education sector as companies prioritise profitability over aggressive expansion.

Source: The Hindu BusinessLine

3. Reliance Consumer Products enters ice cream market with ₹10 entry price

Reliance Consumer Products has launched Bombay Creamery, with cones, cups, tubs, bars, and sticks starting at ₹10. The brand is initially available in western India and will be rolled out nationally as Reliance expands further into packaged consumer goods.

Source: The Economic Times

4. HFCL secures ₹2,329 crore telecommunications export contract

Domestic telecom equipment maker HFCL has secured its largest-ever single export order, valued at ₹2,329 crore, to supply high-fibre-count optical fibre cables to an international customer over three years. The contract strengthens its global optical-fibre business and aligns with India’s broader push to establish itself as a manufacturing hub for critical network infrastructure.

Source: The Economic Times

5. Mahanadi Coalfields files draft papers for IPO as Coal India plans stake sale

Mahanadi Coalfields, a subsidiary of state-owned Coal India, has filed a draft red herring prospectus for an initial public offering. The offering will consist entirely of an offer-for-sale of up to 66.18 crore shares by Coal India, representing about a 10% stake, with the mining unit itself receiving no proceeds from the transaction.

Source: ET Now

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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 is eating into Indian QSR’s lunch?

An ICRA study shows that while Indian quick-service restaurant (QSR) operators expanded revenues by adding new stores, sales at existing stores remained sluggish, dragging operating margins down to ~15.9% in H1 FY26. Though Q1 FY27 brought a modest recovery, individual strategies differ sharply: Domino’s is leveraging delivery dominance while upgrading 400 dine-in stores; Devyani and Sapphire rely on KFC’s steady growth while restructuring Pizza Hut; and Westlife (McDonald’s) is managing supply chain disruptions like fryer shortages to protect footfalls through value meals.

2. How are banks lending against cheese as collateral?

In Northern Italy, regional bank Credito Emiliano accepts wheels of Parmigiano Reggiano as loan collateral. Because authentic Parmesan must age for 12 to 36 months before sale, producers face significant working capital lockups. The bank holds young wheels in climate-controlled vaults—now storing over 500,000 wheels worth €300+ million—providing producers 60–80% of estimated value upfront. However, climate change-induced heatwaves and droughts are driving up operational costs by reducing milk yields, inflating local fodder prices, and increasing vault cooling expenses.

What is eating into Indian QSR’s lunch?

India’s listed restaurant chains usually had a fairly simple way to keep growing: open more stores.

An ICRA study of five large quick-service restaurant operators found that industry revenue grew 10% in FY25 and 11% in the first half of FY26, largely because the companies kept adding outlets. But sales at existing stores remained weak, while operating margins fell from around 20% in FY23 to 15.9% in the first half of FY26.

Q1 FY27 suggests that demand is beginning to improve. Domino’s, KFC and McDonald’s all reported positive growth at existing stores. But the recovery looks very different inside each company.

Domino’s is getting much of its momentum from delivery and is now trying to repair dine-in. The two large KFC and Pizza Hut operators are moving towards a merger while taking opposite decisions on weak Pizza Hut stores. McDonald’s is seeing customers return, but inflation has wiped out much of the benefit.

The interesting QSR story is now less about who opens the most outlets. It is about what each company is doing with the stores, kitchens, delivery networks and brands it already has.

Winner winner, pizza dinner?

Let’s start with Jubilant, the largest (and by many metrics, the most successful) QSR operator in India. While Popeyes may be Jubilant FoodWorks’ fastest-growing brand, Domino’s remains the centre of the business.

Jubilant’s standalone revenue rose 9.2% year-on-year (y-o-y) to ₹1,849 crore in Q1 FY27. Domino’s India alone generated ~95% of that revenue. It ended the quarter with 2,513 stores after adding 58 outlets across 19 new cities.

The core business is growing, although not at the pace last year’s number may make you expect. Domino’s like-for-like sales grew 2.5%, compared with 0.2% in the previous quarter. Like-for-like sales tells us whether older restaurants are actually selling more, not merely whether the company has grown by opening new ones. In contrast, in Q1 FY26, like-for-like growth stood at 11.6%. Order volumes rose 6.5% year-on-year, which tells us that more orders were being placed even though growth in sales per existing store was slower.

Management still wants Domino’s to produce 5–7% like-for-like growth over the medium term and expects Q2 to be better than Q1. The favourable base will eventually disappear, and Domino’s will have to show that order growth can translate into stronger sales at each store.

For now, delivery is doing most of the work. Domino’s delivery revenue grew 12.1% during the quarter, faster than the brand’s overall revenue, and delivery accounted for roughly three-fourths of sales. This is a strength built over years: Domino’s has its own app, delivery staff, kitchen network and customer data instead of depending entirely on Swiggy and Zomato.

But delivery is not the most profitable channel. Jubilant reduced the minimum order value on its app to stay competitive and encourage repeat orders.

This is also why Jubilant has not abandoned the restaurant. It is upgrading about 400 Domino’s stores to improve service, throughput and the customer experience. Value offers, such as the ₹119 My Meal and Best Deal Wednesdays, are meant to bring people in without relying only on blanket discounts.

The two channels therefore solve different problems. Delivery gives Domino’s frequency and reach, while Dine-in gives it a chance to sell drinks and sides without bearing the full cost of the last mile. A dense physical network still matters even in a delivery-led business because a kitchen closer to the customer can improve speed and reduce the distance of each order.

Pricing is the difficult balance underneath all of this. During the slowdown, Domino’s tried to keep ordering affordable through entry-level pizzas, bundled lunch meals and low delivery charges. This helped protect order volumes, but left the company with less room to pass rising costs on to customers. Additionally, in Q1, Jubilant took a net price increase of about 1.4% to absorb part of the rise in LPG and employee costs.

That being said, Jubilant hopes that Popeyes’ becomes its new driver of growth.

Revenue almost doubled, like-for-like growth stayed above 40% for a third straight quarter, and average daily sales crossed roughly ₹95,000. Jubilant ended the quarter with 88 Popeyes stores and wants to add 35–40 a year, with an ambition to build a ₹1,000 crore brand over the next few years.

Those numbers are promising, especially because like-for-like sales are improving alongside expansion. Jubilant can also reuse parts of the supply chain, property capability and digital system it built for Domino’s. But Popeyes is still very far from being a strong second engine for Jubilant.

At the same time, Jubilant is cutting fat elsewhere. It will not renew the Dunkin’ franchise agreement after December 2026; the brand contributed only about 0.6% of revenue and was loss-making in FY25.

One merger, several problems

Now, we move on to Devyani and Sapphire.

If you’d remember, it wasn’t long ago that both brands announced a blockbuster merger, the largest in Indian QSR. The merger is still underway: Devyani International and Sapphire Foods still report separately. But it makes more sense to read them together. They’re very similar businesses, quite literally. After all, both operate KFC and Pizza Hut in different territories.

Devyani’s consolidated revenue grew 16.5% to ₹1,581 crore, while PAT rose from ₹2.4 crore in Q1 FY26 to ₹17.1 crore in Q1 FY27. The nearly sevenfold jump looks dramatic because last year’s profit base was unusually small compared to previous years. It was still a genuine operating recovery, but this was more of a return to normal than expansion of new business.

Sapphire’s PAT stood at about ₹14 crore, compared with a loss in the same quarter last year, while restaurant sales grew 15% to ₹888 crore. In both businesses, KFC did most of the heavy lifting.

At Devyani, KFC same-store sales grew 3.3% and average daily sales reached around ₹98,000. Management believes brand-contribution margins can cross 20% once average daily sales reach roughly ₹1.05–1.10 lakh. That leaves a gap of ₹7,000-₹12,000 per restaurant per day. Devyani is trying to close that gap with three global KFC initiatives: Kwench beverages, customised sauces and a larger boneless-chicken portfolio.

The more revealing change is where Devyani wants those sales to happen. Management has shifted marketing away from deep online discounting and towards dine-in offers. KFC’s dine-in and takeaway share has risen to around 57%. Delivery may add reach, but as Jubilant is finding out, aggregator commissions, discounts and delivery costs make margins less attractive. A customer eating inside the restaurant is also more likely to add a drink or side, which are the exact categories KFC is expanding.

Sapphire is seeing something similar. Its KFC India sales grew 17%, same-store sales rose 5%, and restaurant EBITDA margin improved to 16.9%. It linked the improvement partly to a higher dine-in and takeaway mix, helped by a ₹99 burger meal and occasional buy-one-get-one bucket offers.

Pizza Hut remains the harder problem. Devyani’s Pizza Hut same-store sales fell 2.2%, average daily sales were only around ₹32,000, and the brand made a ₹3.6 crore contribution loss. Devyani closed 13 net Pizza Hut stores in the quarter, reducing its network to 626, and is undertaking a back-to-basics reset around ingredients, menu clarity and better pricing.

Sapphire’s Pizza Hut business offered a small sign of recovery: same-store sales grew 1% after five negative quarters. But the brand’s EBITDA margin was still in the negative. If the expectation from the merger is to reduce operational inefficiencies and bring back EBITDA in the green, it will be far easier said than executed.

Besides Pizza Hut and KFC, Devyani has also been making other side bets. One such major bet is Biryani By Kilo (BBK).

BBK was built largely as a delivery-led brand, and biryani consistently ranks as the top-most ordered item on Zomato and Swiggy. But Devyani is now testing food-court, airport and dine-in formats with BBK, having rolled out lower-capex BBK Express outlets and experimenting with vegetarian menus after turning the brand positive at the contribution level.

Smaller express outlets let BBK enter a catchment without paying for a large restaurant. Dine-in creates visibility and occasions beyond a delivery search. Vegetarian food can soften the sharp drop a meat-heavy brand may face during religious periods. But a broader menu also adds ingredients and kitchen complexity.

The joker card

Westlife Foodworld, which runs McDonald’s in western and southern India, had the clearest gap between sales growth and profit.

Revenue rose 11.9% to ₹736 crore and same-store sales grew 4.3%, supported by double-digit growth in guest counts.

Gross margin dropped by about four percentage points from last year to 67.6%. However, as per management, commodity inflation was not wholly responsible for this — in fact, they were able to absorb a large chunk of it with cost optimization. It was because, since Q3 FY26, they moved certain supply chain and processing charges to the “cost of goods sold”, automatically reducing gross margins. Otherwise, this metric remained somewhat stable.

Yet, net profit fell by more than half to a measly ₹0.6 crore. This was due to depreciation and finance costs, which increased by more than ₹8 crore from last year.

Management has so far avoided a broad price increase, preferring to protect traffic through its Everyday Value platform. That helped dine-in footfalls, while on-premise sales, which include dine-in and takeaway, grew 12% and remained 59% of revenue. Off-premise sales, which include delivery and drive-through, grew at a similar pace, with McDelivery continuing to outperform.

Meanwhile, digital sales formed 74% of revenue. But digital is not a separate channel: it simply means the order was placed through an app or self-ordering kiosk. A digital order can therefore be ordered at an on-premise kiosk, or off-premise, such as a McDelivery order.

The operational response is becoming more local. Westlife is dividing its management structure from three regions into five so that decisions sit closer to restaurants. The South returned to positive same-store growth during the quarter after a weaker period. The new structure should make it easier to adapt promotions and store operations across very different markets. It will only be useful if the extra divisions produce faster decisions rather than extra layers.

Then there is the fryer problem.

Westlife opened five restaurants and closed one in Q1, taking its total to 482. This was not because it had suddenly lost its appetite for expansion. A commercial LPG disruption forced the company to convert equipment in existing restaurants, so electric fryers meant for new stores were diverted to keep old ones running. A temporary global fryer shortage then delayed replacements.

A fryer shortage hasn’t dissuaded the company from planning to open more than 60 restaurants in FY27. That will, however, depend on kitchen equipment, fuel supply and execution as much as it depends on demand.

Conclusion

None of these companies has stopped expanding. Jubilant is still adding Domino’s stores and building Popeyes. Devyani expects KFC and its newer brands to lead additions. Sapphire continues to open KFC outlets while being cautious on Pizza Hut. Westlife is holding on to its annual McDonald’s target despite the slow first quarter.

What has changed is the assumption behind expansion. A new store can add revenue, but it can also add rent, staff, delivery distance and another kitchen that needs enough daily sales to become useful. When growth at older stores is weak, opening more outlets can make the company bigger without making it much healthier.

Jubilant has to make Domino’s delivery growth profitable while giving customers a reason to sit inside 400 upgraded stores. Devyani and Sapphire have to combine two large systems, improve KFC’s store productivity and decide how much of Pizza Hut should survive the reset. Westlife has to convert returning footfall into profit while reorganising its regions and catching up on openings.

The bank where cheese is collateral

In northern Italy, a wheel of cheese can help you get a bank loan.

This is not an average supermarket cheese, obviously, but an enormous wheel of authentic Parmigiano Reggiano or commonly known as Parmesan. Producers can pledge these wheels to a bank, receive a loan against them and reclaim the cheese when the money is repaid. If they default, the bank can eventually sell it.

This arrangement might look strange, but there is a very sensible financial reason behind it.

Parmeshan cannot be sold as soon as it is made. The cheese must mature for at least 12 months, and many wheels are aged for 24 or 36 months. During this time, producers have already paid for the milk, labour, salt, electricity and everything else that goes into making it.

Their money is tied up in cheese sitting inside a warehouse. That is working capital: money locked into the business until the product can be sold. But producers still need cash to make the next batch. That is where Credito Emiliano comes in.

The regional Italian bank has accepted young Parmesan wheels as collateral since 1953. In other words, producers can pledge the cheese while it is still maturing, rather than waiting until it is ready to sell. Credem’s subsidiary stores and matures the wheels in specialised warehouses until they are reclaimed or sold to recover the loan.

These two warehouses now contain more than 500,000 wheels worth over €300 million. Producers can receive roughly 60–80% of a wheel’s estimated value upfront. In lending parlance, this is the loan-to-value ratio. The money helps producers fund their working capital while the cheese ages and they continue making more.

The system also works because Parmesan is not ordinary inventory. It can become more valuable as it ages. But first, it must earn the name.

Why is this cheese so precious?

“Parmesan” is used loosely around the world for hard, grated cheese. Parmigiano Reggiano is different. It is legally protected and can only be made in Parma, Reggio Emilia, Modena and specified parts of Bologna and Mantua.

The rules governing it are strict. The milk must come from farms within this region, and at least 75% of the cows’ forage must also be produced there. Silage, a type of fodder fermented to make it last longer, is prohibited. This leaves farmers with less flexibility when heat and drought reduce local grass and hay production.

The cheese itself contains only raw cow’s milk, salt and calf rennet. No additives or preservatives are used. It takes roughly 550 litres of milk to make one wheel weighing about 40 kilograms.

The milk is curdled, cooked and shaped into wheels, which are then placed in brine. Each wheel receives the familiar “Parmigiano Reggiano” markings and a unique traceability code linking it to the dairy and production date.

After sitting in the brine, the wheel begins ageing.

Once a wheel reaches 12 months, experts from the Parmigiano Reggiano Consortium inspect it by tapping the rind with a small hammer. The sound helps them detect cracks, air pockets and other defects. Wheels that pass receive the official fire-branded mark. Those that do not lose the right to be sold as Parmigiano Reggiano.

This is why the cheese is not risk-free collateral. A wheel can develop defects while it ages, reducing its value. Market prices can also change before it is ready to be sold.

Credem can lend against the wheels because it knows how to manage these risks. Its warehouses maintain controlled temperature and humidity, while trained workers inspect, clean and turn the cheese as it matures.

By keeping the wheels under its supervision, the bank can continuously monitor their condition and value. If a producer defaults, it can sell the cheese once it has matured.

It is an unusually neat arrangement. Ageing turns milk into a more valuable product, while the loan turns part of that future value into money the producer can use today.

But climate change is making both processes more expensive.

When the cows feel the heat

During recent heatwaves, temperatures in the Parmigiano Reggiano-producing region have risen above 40°C.

Climate change is putting pressure on the cheese industry at three different points: on the farm, in the search for fodder and inside the warehouses where the cheese matures.

1. The cows produce less milk

Extreme heat makes cows eat less and use more energy to cool themselves. This affects both the quantity and quality of their milk. During severe heat, milk output can fall by as much as 10%.

This is not unique to Italy. Indian dairy companies face similar seasonal pressure. In a February 2026 earnings call, Parag Milk said summer typically brings milk scarcity, lower production and higher milk prices.

Farmers are trying to protect their animals by keeping barns open and installing industrial fans and water-misting systems. But this equipment is expensive to buy and operate. Reuters reported that it is increasing farms’ energy costs and, in turn, the cost of producing the cheese.

2. Fodder becomes harder to find

Drought creates another problem. If hot, dry weather reduces grass and hay production within the protected region, farmers cannot replace the entire shortage with cheaper forage from elsewhere. At least 75% of the cows’ forage must come from within the designated area.

That makes locally compliant fodder scarcer and more expensive, leaving farmers with fewer options when local supplies are hit.

3. The cheese costs more to store

Parmigiano Reggiano wheels can spend one to three years maturing. Throughout that period, they must be kept at controlled temperatures and humidity levels so they do not spoil or lose value.

At the peak of this year’s heat, daily electricity consumption at cheese vaults increased by around 30%. The warehouse operator has responded by upgrading refrigeration, improving insulation and expanding renewable-energy generation. But these measures also raise the cost of maintaining the cheese — and therefore the collateral backing the loans.

This does not mean there is an immediate “Parmesan crisis”. The warehouses continue to operate normally, the cheese is aging under optimal conditions and the Parmigiano Reggiano Consortium says production is not currently at risk.

But the financial pressure is real. Italy produced more than 4.19 million Parmigiano Reggiano wheels in 2025, generating consumer turnover of approximately €3.96 billion. More than half of total sales came from exports.

Parmigiano Reggiano is valuable because it can be produced only in a specific region, using locally sourced milk and a centuries-old production system. But that also means producers cannot simply move somewhere cooler as the region gets hotter.

The cheese may become more valuable with age. Climate change is making the wait more expensive.

- This edition of the newsletter was written by Kulsum.

Tidbits

1. India’s services exports rise 13.4% to $38.25 billion in July

India’s services exports rose 13.4% year-on-year to $38.25 billion in July, while imports increased 19.1% to $20.61 billion. The country still recorded a services trade surplus of about $17.65 billion during the month.

Source: The Economic Times

2. Government notifies ₹1.28 lakh crore Semicon 2.0 scheme for domestic chip ecosystem

The Indian government has introduced the Semicon 2.0 policy, allocating approximately ₹1.28 lakh crore to broaden support for the domestic semiconductor industry. The revised incentive framework moves beyond fabrication facilities to cover raw materials, chip design, manufacturing equipment, assembly, testing, and R&D support.

Source: The Economic Times

3. ITC Infotech to acquire 22.1% Happiest Minds stake ahead of merger

ITC Infotech will acquire a 22.1% promoter stake in Happiest Minds for about ₹1,330 crore, with the two companies also proposing a merger subject to regulatory and shareholder approvals. The combined IT services company is targeting $1 billion in annual revenue by FY28.

Source: The Hindu BusinessLine

4. GRT Jewellers to acquire 74.12% stake in Tribhovandas Bhimji Zaveri

Chennai-based GRT Jewellers has entered into an agreement to acquire a 74.12% stake in heritage jewelry retailer Tribhovandas Bhimji Zaveri. The acquisition represents a major consolidation in India’s organized jewelry retail sector, allowing GRT to rapidly expand its geographic presence into western and northern markets.

Source: Livemint

5. Maruti Suzuki outlines ₹77,500 crore capital expenditure plan through FY31

Maruti Suzuki plans to invest ₹77,500 crore over the next five years as it prepares for its next phase of expansion. The spending will support higher production capacity, new vehicle models and research and development.

Source: The Hindu BusinessLine

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Hi, Kashish here. I’m part of the Markets by Zerodha team that runs this newsletter. In whatever little free time I get, I end up thinking about what exactly we’re trying to do with this initiative.

I’ve been part of quite a few “content strategy groups” and “YouTube communities” over the years, so I thought I’d finally pen down how I understand the space today.

What follows is basically a vomit of thoughts, cleaned up slightly by my editor and personal assistant: AI.

So I’ve been working on YouTube channels for a good part of my career, and I now spend a lot of time thinking about YouTube strategy. Because there is no point making videos, putting in all that effort, without first asking a basic question: what are we actually trying to achieve?

For a brand, the larger goal is fairly simple. You want to reach more people, get in front of them repeatedly, earn some mindshare and, over time, build trust. Maybe some of those people eventually give you business. But that last link is incredibly flimsy. It is very hard to say that X number of views led to Y amount of business. Yet I’ve seen plenty of organisations try to make exactly that correlation, which I think is a pretty stupid way to measure content.

That led me to a more fundamental question: what exactly should we measure on YouTube? How do we know what is working, what isn’t, and whether we are moving in the right direction?

The North Star, at least for us at Markets by Zerodha, remains fairly straightforward. We want to make content that we ourselves would want to consume. We want to make things that genuinely help us become smarter about business and markets. That takes care of the input. We try to do the best work we can, and the response to that work has also been very encouraging.

But we still need to measure something.

I’m not entirely sure what that one thing is. But I do know why we are measuring it. We want to know whether we are reaching people in a meaningful way, whether they are spending time with us, and whether we are slowly building some sort of trust and rapport with them.

The obvious metric is views. But views only answer one part of that question: did you get in front of someone? They tell you very little about what happened after that. The internet is full of subpar, stupid and, more importantly, completely unintentional content that reaches millions of people. That does not necessarily create recall, let alone trust. You can make a reel that goes viral for three days and still achieve almost nothing for the brand.

And at Zerodha, at least I’d like to believe, that isn’t what we are trying to do.

So if views are not enough, what should we look at?

One metric I really like is comments. A comment usually comes very late in the content-consumption journey. Someone chose to watch your content, spent time with it, thought about it, and then cared enough to actually write something. That is a fairly high-signal action.

The best comments go even further. They challenge something you said, ask a difficult question, add context or start a conversation. That tells you the person wasn’t merely exposed to your content. They were actually thinking about it. “Engagement” has become such a vague internet word that it can mean almost anything, but this is the kind of engagement I care about. Comments also give you direct feedback on what people understood, what they disagreed with and what they want more of.

The other metric I keep coming back to is ‘watch time’.

We largely make long-form videos today, though I also want us to get much better at short-form. For long-form especially, average view duration and total watch hours tell me something views cannot: the quality of the view.

If somebody clicks on a 30-minute video and leaves after a minute, that view and a view from someone who watches for 20 minutes are technically counted in the same bucket. But for what we are trying to achieve, they are obviously not the same. The latter tells me that someone intentionally chose to spend a meaningful amount of time with us. And that is probably much closer to the kind of relationship we actually want to build.

So maybe that is the distinction I’m trying to get at. I care less about how many people briefly encountered our content and more about how many people intentionally consumed it. Comments, watch time and average view duration all get us a little closer to measuring that.

None of this, of course, proves that the content eventually drives business for a brand. That link will probably always remain messy. Fortunately, that is also not how I understand content at Zerodha. We do not need to reverse-engineer every video into some dubious revenue attribution model.

That gives us the freedom to focus on the thing that actually matters: making genuinely good content.

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 did a government audit find in India’s EV subsidy scheme?

A CAG audit of India’s FAME EV scheme revealed major missteps, including misallocated budgets, widespread localisation rule violations by manufacturers, and severe portal accounting mismatches. Additionally, public charging infrastructure lagged drastically behind schedule, leaving key targets missed and installed chargers unusable.

2. Why are major fragrance companies under investigation?

India’s competition regulator is investigating global fragrance giants like Givaudan and IFF over suspected price collusion and anti-poaching agreements. Although scents represent a tiny fraction of product costs, fragrance houses hold immense leverage because formula changes carry high technical risks.

What a government audit found in India’s EV subsidy scheme?

In 2015, 0.08% of vehicle registrations in India were electric vehicles. By 2023-24, that had risen to 6.82%. There are many reasons for that jump. But FAME, one of the government’s main EV schemes, would certainly have helped.

It paid manufacturers a cash incentive for every eligible EV sold, bringing the price down for buyers.

FAME started small in 2015. FAME II followed in 2019 and ran until 2024, with ₹11,500 crore allocated to it. The scheme was not just about making EVs cheaper. It also funded public charging stations and EV research, while requiring manufacturers to gradually replace imported parts with locally made ones to remain eligible for subsidies.

But it did not work quite as smoothly as those headline numbers suggest. The Comptroller and Auditor General (CAG), the government’s official auditor, recently reviewed nine years of the scheme and found plenty of problems with how FAME was run.

The government got the mix wrong

When FAME II was designed, the government had to guess which EVs Indians would buy. It got that mix wrong. Of the ~₹8,600 crore set aside for vehicle incentives, ₹2,000 crore went to two-wheelers, ₹2,500 crore to three-wheelers, ~₹550 crore to four-wheelers and ~₹3,550 crore to electric buses. By March 2023, two-wheelers had already used 127% of their allocation. Three-wheelers had used just 16%, and four-wheelers 28%.

So in May 2023, the government moved the money around. Two-wheeler funding rose 75%, while allocations for three-wheelers and four-wheelers were cut by 72% and 54%, respectively. The Ministry said this was not simply because Indians preferred scooters over cars. The weak demand and limited charging infrastructure had held back three- and four-wheelers, while two-wheelers had already taken off. The CAG agreed with the shift, but said the original estimates were unrealistic, given how much money had to be moved so late in the scheme.

The three-wheeler target makes the point. FAME II originally aimed to subsidise 5 lakh vehicles, then cut that target to about 1.55 lakh. It eventually subsidised roughly 1.65 lakh, which the government called 106% achievement. Against the original target, it was closer to 33%.

The subsidy checks were full of holes

FAME II was not just meant to get more people to buy EVs. It was also meant to build an EV manufacturing industry in India. Under its Phased Manufacturing Programme, companies had to gradually replace imported parts with locally made ones. These included the onboard charger, hub motor and motor controller.

To receive an incentive, a manufacturer had to get a sample vehicle tested and certified, then promise that all vehicles sold under FAME would continue meeting these localisation rules.

That promise was where the problem began. Once a company was certified and started receiving incentives, there was no regular system to check whether the vehicles it was selling still met the rules. Manufacturers were meant to renew their eligibility certification periodically. But the government largely relied on them to report their own compliance.

The issue emerged only after complaints that some manufacturers were violating the rules. Testing agencies then examined company records, inspected factories and took vehicles apart to check whether the parts were actually made in India.

They found that five manufacturers were still importing parts that should have been made locally. These companies had also failed to renew their annual certification. The CAG does not say how many manufacturers were examined in total, only that these five had collected ₹468 crore in incentives despite the violations.

Two have since returned ₹190 crore, including interest. The other three still owe ₹278 crore. The Ministry has ordered them to deregister, barred them from its schemes for two years and referred the case to the Serious Fraud Investigation Office. The report does not name the five manufacturers, and we could not independently confirm their identities.

The Ministry says PM E-DRIVE, which replaced FAME, has tightened the process. Testing agencies must now randomly pick vehicles from customers or factories each year, take them apart and verify whether the required parts are made in India.

A separate issue exposed another weakness. To qualify for the subsidy, an electric two-wheeler could not have an ex-factory price above ₹1.5 lakh. Three manufacturers got around this by leaving the onboard charger out of the listed price and selling it separately as an accessory.

But the charger was not optional. It was a mandatory part, and one that also had to be made in India. Selling it separately kept the official vehicle price below ₹1.5 lakh, allowing the models to qualify for subsidies. The government paid ₹1,420 crore in incentives on them.

The Ministry asked manufacturers to refund customers for the separately sold chargers. But the CAG said that did not fix the main problem. Had the charger been included in the vehicle’s price from the start, many models would have crossed the ₹1.5 lakh limit and not qualified for the subsidy.

We also found reports from 2023 of a similar issue. Ola Electric, TVS Motor, Ather Energy and Hero MotoCorp had separately charged customers for chargers on electric scooters. After the Ministry intervened, all four agreed to refund the cost, amounting to a few hundred crore rupees.

The portal could not track the money

Both the localisation violations and the charger issue were caught only after incentives had been paid. Ideally, they should have been flagged while claims were processed. That was partly the job of the online portal used to process and track incentive payments. But the CAG found serious problems with the portal itself.

For FAME I, which ran from 2015-16 to 2018-19, the CAG compared records from the portal, its underlying database and the Ministry’s physical files. All three should have matched. Instead, each showed a different number.

The portal homepage showed ~₹356 crore claimed. Another section showed just ~₹200 crore. The raw data behind the portal showed an even stranger figure negative ~₹423 crore.

The Ministry’s physical files had yet another number: ₹321 crore. But they did not contain individual vehicle details, so the CAG could not cross-check the claims. There were four different sets of numbers for the same scheme. With no reliable record to fall back on, the CAG said it could not verify whether FAME I incentives were correct, or even valid.

For FAME II, the Ministry built a new portal with the same vendor that had built the troubled FAME I portal, even though it had not figured out what went wrong earlier. The new portal had different problems. It accepted claims with invoice dates from 2027, 2044 and even 2088 — decades after the scheme was meant to end — as well as dates from 1975 and 1990, before FAME even existed.

It also accepted duplicate vehicle registration numbers, and paid some duplicate claims. For much of FAME II, the portal was not directly linked to Vahan, the government’s vehicle-registration database. Officials instead had to manually compare Excel files to check whether subsidy claims matched registration records.

So, for years, a scheme handling thousands of crores relied on manual checks for something as basic as whether a subsidy claim was genuine.

Chargers that never arrived

So far, the problems were with incentives paid on EVs. But FAME was also meant to build the charging network those vehicles needed. Here too, it fell far behind plan.

FAME II’s city-charging programme was meant to set up public chargers at community spaces and workplaces. This mattered especially for people in apartments or without dedicated parking, who cannot charge an EV overnight. The government approved 2,877 stations. Only 148 were set up and made operational.

A separate plan for 1,576 stations along highways and expressways was cancelled after barely any progress. Another 8,412 were assigned to three state-owned oil marketing companies. But by the March 2024 deadline, not one had been commissioned—that is, connected to power and ready for use.

CAG auditors also inspected 104 charging stations in 2023, built by BHEL, REIL and EESL across five cities and two highway stretches.

Many simply could not be used. Some had no power supply; others had been removed or could not be located. Some were damaged, while software problems stopped the Ministry from monitoring others remotely. At a few sites, staff did not know how to operate the chargers. At one, a car charger had been installed in a two-wheeler parking spot.

CHAdeMO chargers may be the clearest example of money spent on infrastructure nobody could use. CHAdeMO is a fast-charging plug mainly used by Japanese EVs, and the government required agencies to install it under its city and highway projects. It expected Japanese automakers, which had a large share of India’s passenger-car market, to launch CHAdeMO-compatible EVs here. They never did.

By the time the requirement was dropped, agencies had already ordered and, in some cases, installed these chargers. Across FAME scheme, ₹10 crore was spent on these chargers that, according to the CAG, could not be used because no compatible EVs were on Indian roads.

The bigger lesson from FAME

The problems went beyond vehicle subsidies and charging infrastructure. FAME I also funded 16 research projects to develop India’s EV technology. By the time of the audit, only nine were complete. Four had been shut before completion, one was cancelled and two were still ongoing.

Some fixes came during FAME itself. In 2023, the Ministry brought in IFCI to manage the scheme, automate claims and finally link the FAME portal directly to Vahan, the government’s vehicle registry. After the localisation violations surfaced, testing agencies introduced a common process in December 2024 to take vehicles apart and check whether the required parts were actually made in India.

PM E-DRIVE, which replaced FAME, now requires annual strip-down tests to check localisation rules. It also uses Aadhaar-authenticated e-vouchers when an EV is bought, adding another check against fraudulent claims.

None of this takes away from the fact that FAME helped more Indians switch to EVs. But schemes like FAME are usually judged by their biggest numbers: the outlay, the vehicles subsidised and the jump in adoption. Those numbers are real, and they make for easy headlines. But this audit shows why they do not tell us whether a scheme actually worked.

Money can be released and still be spent badly. A charging station can be installed and never switched on. An incentive can go to a vehicle that should never have qualified, simply because nobody checked. None of this shows up in the outlay or adoption figures. It only shows up when someone looks at what happened to the money after it left the government’s hands. That is what this audit did, and what most public conversation around a scheme like this misses.

FAME helped more Indians switch to EVs. But this report makes clear that this fact alone tells us far less about the scheme than it seems.

Why are fragrance companies under investigation?

Making a bottle of shampoo involves many small jobs. Surfactants remove oil and dirt. Conditioners make hair easier to manage. Preservatives stop the product from spoiling. Then there is the separate formula that gives the shampoo its familiar smell.

That formula is often developed by a company whose name never appears on the bottle.

Givaudan, dsm-firmenich and International Flavours & Fragrances, or IFF, are three of the world’s largest fragrance houses. They create scents used in shampoos, soaps, detergents, deodorants, cosmetics and perfumes.

India’s Competition Commission is investigating whether the three colluded on prices instead of competing independently. There is no finding of wrongdoing yet. But the case becomes more interesting once you understand how the industry works.

What goes into a fragrance

A commercial fragrance is made from aroma chemicals, natural extracts, essential oils, solvents and other materials that help it work properly. A fragrance house combines these into a proprietary formula, which is then added to shampoo, detergent or another consumer product.

Some companies specialise in one part of this chain. India’s Privi Speciality Chemicals, for instance, makes aroma chemicals. But the industry is not divided so neatly. Large fragrance houses make some ingredients themselves, use them in their own formulations and may even sell them to other fragrance houses. IFF says it sells certain fragrance ingredients even to competitors.

The formula has to do more than smell pleasant. A detergent fragrance must remain stable in an alkaline mixture, survive storage and a wash cycle, and leave the intended scent on fabric. A shampoo fragrance must work with surfactants and other ingredients without separating, degrading or changing the product.

These formulations are eventually sold to consumer companies making everything from soaps to cosmetics. They usually send a product brief to their approved suppliers, test the proposed formulations and choose one based on scent, cost and technical performance.

What makes this industry so different?

Before getting to the collusion allegations, there are two questions worth separating. Do a few companies dominate this market? And why do fragrance houses have so much power over their customers?

There are plenty of local and niche fragrance companies. But the number that can serve multinational consumer-goods companies across products and countries is much smaller. That does not, by itself, establish that they are dominant under competition law. CCI would need to define the relevant market and assess their actual market shares.

Fragrance is usually a small part of a product’s cost. According to some estimates consumer fragrances account for only 0.5–2% of end-product costs. For fine fragrances, the figure is around 4–6%.

But smell can have an outsized influence on whether people recognise and repurchase a shampoo or detergent. Changing suppliers may mean creating a new formula, running stability and performance tests, clearing regulatory checks and possibly conducting fresh consumer trials.

That gives fragrance houses unusual power. Their product is cheap relative to the finished product, but changing it can be risky. A consumer-goods company may not want to alter a familiar scent just to save a little money.

The barriers to entering this top tier are also steep. It is not just about spending money on a factory. It requires years of accumulated knowledge around formulas, ingredients, consumer preferences, regulation and application testing.

At the end of 2025, IFF employed roughly 3,000 people in research, innovation, creation and design. It spent $694 million on R&D and held 849 granted US patents. Most of its formulas are kept as trade secrets.

Large FMCG companies also maintain “core lists” of approved suppliers. A new fragrance house must build the scientific capability, supply chain, regulatory infrastructure and customer trust needed even to get invited to compete. That makes it harder for new players to break in, which in turn helps the existing giants stay entrenched.

Talent is part of this moat too. CCI is separately examining allegations that some of the same companies agreed not to hire one another’s employees.

The industry depends on specialised perfumers, chemists and technical staff. Givaudan’s perfumery course alone lasts four years, during which students learn roughly 500 ingredients. Restricting employee movement affects salaries. But it causes bigger problems too. People moving between companies is one way specialised knowledge spreads, including to smaller competitors. Limiting that movement could reinforce the barriers that already protect the largest fragrance houses.

India is not alone

The Indian case did not emerge in isolation. Many authorities across the world began coordinated investigations into the fragrance industry.

The Swiss regulator named Givaudan, Firmenich, IFF and Symrise. It said it was examining possible price coordination, restrictions that prevented rivals from supplying certain customers, and limits on the production of particular fragrances.

The European investigation was also initiated in 2023 and remains unresolved. In 2024, however, the European Commission separately fined IFF €15.9 million after a senior employee deleted WhatsApp messages exchanged with a competitor during an inspection. That was a finding of obstruction, not cartelisation.

The US Justice Department closed its investigation in February 2026, although private cases brought by fragrance buyers continued. IFF paid $26 million to settle claims brought by direct purchasers, without a finding of liability.

None of this proves that the companies fixed prices or restricted hiring. CCI will need evidence that competitors actually coordinated with one another.

Similar price increases are not enough on their own. These companies face many of the same input costs, like raw materials, freight and energy. If those costs rise together, their prices may also rise together without any agreement between them. The industry’s concentration and high entry barriers explain why regulators are looking closely, but not evidence that proves collusion.

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

Tidbits:

1. Sashidhar Jagdishan to exit HDFC Bank in October 2026 after deciding against another term

HDFC Bank’s managing director and CEO Sashidhar Jagdishan has formally informed the board he will not seek reappointment and will retire on October 26, 2026. The decision follows a period of governance scrutiny, highlighted by the abrupt resignation of the bank’s part-time chairman earlier this year, and puts the focus on succession at India’s largest private-sector lender.

Source: Livemint

2. OpenAI unveils custom Jalapeño AI inference chip with Broadcom

OpenAI has introduced Jalapeño, its first custom AI processor, developed with Broadcom specifically for running model inference. The chip is designed to improve efficiency and reduce OpenAI’s reliance on Nvidia hardware for inference workloads.

Source: The Times of India

3. NPCI readies UPI AutoPay interoperability for consumers and merchants

The National Payments Corporation of India is preparing to implement an interoperability framework for UPI AutoPay, allowing users to move existing recurring payment mandates between UPI apps without cancelling and recreating them. The framework reduces customer and merchant lock-in while allowing businesses to shift mandates between payment gateways more seamlessly.

Source: Livemint

4. ONGC explores deepwater drillship acquisition to support Mission Samudra Manthan

Oil and Natural Gas Corporation has issued an expression of interest to acquire deepwater drillships or form joint ventures to secure dedicated drilling capacity for offshore exploration. The initiative supports the government’s ₹84,084 crore Mission Samudra Manthan scheme, aiming to reduce dependence on foreign-owned chartered rigs as India expands its deepwater energy search.

Source: Business Standard

5. Hair loss drug developers become Wall Street’s next aesthetic health bet

Investors are increasingly backing companies developing new treatments for pattern hair loss, aiming to capitalise on consumer-health demand following the success of GLP-1 weight-loss drugs. Capital inflows are rising as several experimental therapies advance in a category that has seen few major new treatment options for decades.

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. How do you manufacture a medicine that keeps changing?

Moderna’s personalised cancer vaccine challenges traditional pharma manufacturing by creating a different treatment for every patient, shifting the advantage from mass-producing one drug to efficiently scaling the entire process of personalisation.

2. Can Meghalaya actually stop uranium mining?

Meghalaya cannot legally ban uranium mining on its own, but its unique land ownership system, local approvals and community rights give the state significant practical power over whether a centrally approved uranium project can actually proceed.

How do you manufacture a medicine that keeps changing?

On August 19, Moderna and Merck announced positive results from the Phase 3 trial of their personalised cancer treatment. Moderna’s stock jumped 177% that day; Merck rose 12.6%. A one-day stock move tells us very little about what the treatment will ultimately be worth, but the market clearly thought something important had changed.

The trial was for melanoma, a skin cancer that becomes dangerous once it starts to spread. And every patient in the trial had already had their tumour surgically removed.

That sounds like the cancer should be gone. Often, it isn’t quite that simple.

Surgery can remove everything doctors can see. But microscopic cancer cells may already be left behind elsewhere in the body, too small to detect. Months or years later, those cells can grow again and cause a recurrence.

So after surgery, doctors sometimes use additional treatment to reduce the odds that the cancer comes back. For melanoma, one of those treatments is Keytruda.

We’ve written about Keytruda before. In short, cancer cells are abnormal cells that keep growing when they shouldn’t. Normally, immune cells called T-cells can recognise and attack them. But some cancer cells use certain signals to switch those T-cells off.

Keytruda jams that switch. It keeps the immune system awake and able to attack.

But that only solves half the problem. You can wake the immune system up. How do you tell it exactly which cells to go after?

That is the part Moderna is trying to add.

Its approach starts with the tumour removed during surgery. Doctors study the mutations inside it — the specific quirks that make this person’s cancer different from someone else’s.. They then use those quirks to design a vaccine tailored to that one patient.

So the cancer itself ends up supplying the recipe for the medicine meant to destroy it.

At the expense of oversimplifying, the two treatments split the work. Keytruda keeps the immune system switched on. Moderna’s vaccine shows it a photograph of the enemy. And that makes this treatment unusual in another way.

Keytruda can be manufactured years in advance and in bulk. That does not make it easy to manufacture. Biologic drugs like Keytruda are notoriously difficult to make consistently. But once you crack the process, the goal is still to make the same drug again and again. Moderna’s vaccine is different. The final medicine itself changes with every patient. It does not exist until doctors have studied that person’s tumour.

Most of modern pharma was built around one idea: find a medicine that works, then make millions of identical copies of it. This treatment asks whether the industry can do the opposite — run the same manufacturing process again and again, but produce a different medicine for every patient.

A factory that makes one at a time

It starts with the tumour that was removed.

Doctors read its genetic code and compare it with healthy DNA from the same patient. They are looking for mutations that appeared in the cancer cells but are missing from the patient’s healthy cells.

Why? Because some of those mutations change the proteins a cancer cell makes. That can leave tiny abnormal markers on the cancer cell’s surface. These markers are called neoantigens, which T-cells can recognise.

Those markers are useful targets. But a tumour can carry hundreds or even thousands of mutations, and most will not make good targets. The challenge is figuring out which ones the immune system can actually see and attack.

And that answer differs from person to person.

Our cells have their own machinery for picking up pieces of proteins and showing them to T-cells. But that machinery varies widely between people. So the same cancer mutation might give the immune system a clear target in one patient and be practically invisible in another.

Moderna therefore has to narrow the list down. Its system predicts which mutations in that particular patient’s tumour are most likely to produce useful targets. The treatment can encode up to 34 of them. That shortlist is then turned into mRNA.

mRNA is simply a temporary set of instructions for cells. Here, those instructions tell cells to make copies of the selected cancer markers for a short period. That gives the immune system a chance to learn what they look like and build T-cells that can hunt cells carrying the same markers.

Melanoma is a useful place to test this approach because it often carries a large number of mutations, many caused by ultraviolet damage. That gives researchers a bigger pool of possible targets to choose from.

But that is also an important caveat. Cancers with fewer mutations, or cancers that suppress the immune system in different ways, may not be equally suited to the same strategy.

And this is where the manufacturing story changes.

Normal pharma gets scale by making bigger batches of the same medicine. A company might go from a 100-litre batch to 1,000 litres and keep going. The more it can make in one run, the cheaper each dose can become.

So instead of scaling up, Moderna has to scale out: make lots of small, different batches at the same time.

The advantage is no longer how much medicine you can squeeze out of one giant batch. It is how many different batches your factory can reliably push through the same process.

That also changes what the factory itself looks like. The tumour has to be analysed, the targets selected, the mRNA made, packaged and checked — separately for every patient. The sequence changes each time, but the machinery around it does not.

Moderna is therefore not trying to mass-produce one medicine. It is trying to mass-produce the process of making one-off medicines.

And once that is the model, speed becomes part of the product.

This treatment cannot be made before the patient arrives. The process starts only once doctors have the tumour. From there, the sample has to be processed and sequenced, the targets selected, the mRNA manufactured, and the finished dose checked before treatment can begin.

That still takes weeks rather than days, although the exact turnaround depends on the manufacturing setup.

The patent still matters. But so does the system connecting the hospital, sequencing, software and manufacturing. A company that can move from tumour sample to finished dose faster and more reliably has an advantage even if competitors understand the same underlying mRNA technology.

And that leads to the next problem. If every finished dose is supposed to be different, what exactly is a regulator meant to approve?

Regulating the recipe-maker

That creates a problem for regulators.

Drug regulation is built around consistency. A company develops one medicine, and then has to prove that it can make that medicine reliably, batch after batch. Personalised vaccines change what consistency means.

The Food and Drug Administration (FDA) still needs confidence that every dose is made safely and correctly. But it cannot simply compare one patient’s vaccine with another and expect them to match. So more of the scrutiny moves to the process behind the dose.

The FDA is already thinking about this. In draft guidance released in August 2026, the agency acknowledged that some of the usual quality tests may not make sense for a medicine produced separately for every patient. Testing each tiny, one-off batch in exactly the same way can be impractical.

Instead, companies may be able to rely more on proving that the manufacturing process itself works reliably, confirming that the right genetic instructions went into each dose, and using other checks to make sure the finished treatment meets quality standards.

The software that chooses those instructions matters too.

Remember, Moderna starts with a long list of mutations in a patient’s tumour and has to decide which ones make the best targets. Software helps make that choice. So it is not sitting somewhere outside the medicine. Its decisions partly determine what actually goes into each patient’s dose.

And that creates another regulatory question: what happens when the company improves the software?

The FDA’s draft guidance acknowledges that changes to this system can change the final medicine and may therefore require additional studies. What looks like a normal software update can become a drug-development question.

This does not mean the FDA is approving an algorithm instead of a medicine. The guidance is still a draft, and its recommendations are not legally binding. Every finished dose still has to meet quality requirements.

But what regulators need confidence in is broader than before. They are no longer only asking whether a company can reproduce the same medicine. They also have to ask whether the system that designs and makes a different dose for every patient remains reliable.

And that matters for the business too. If more of the value sits in this entire system for designing and making the medicine, competing requires much more than knowing how to copy a finished drug.

The replication trap

That shift matters for India because it cuts against the model that made Indian pharma successful.

For decades, Indian companies built an advantage by taking medicines the world already understood and making them more cheaply. That is a big reason India came to be called the “pharmacy of the world.”

Generics fit this model neatly. The molecule already exists. Once patents expire, the challenge is to reproduce it reliably and at scale. India supplies roughly 20% of the world’s generic medicines by volume. Biosimilars are much harder but the basic logic survives: however difficult the process, everyone is still trying to reproduce the same medicine.

Indian companies are already good at this. Biocon, for instance, has announced biosimilar versions of major cancer drugs including pembrolizumab, sold as Keytruda, and nivolumab, sold as Opdivo.

Personalised medicines change what exactly needs to be scaled.

There is no single patient-specific vaccine waiting to be copied. But there is still a large industrial stack around every dose: sequencing the tumour, choosing the targets, making the mRNA, packaging it, testing it, moving samples and doses between hospitals and factories, and doing all of this quickly enough for an actual patient.

That creates a more interesting question for India. Can it make personalisation itself cheaper?

The advantage may not come from producing a cheaper copy of Moderna’s finished vaccine. It could come from doing parts of that surrounding process — sequencing, manufacturing, testing or logistics — at lower cost, or eventually stitching the whole thing together more efficiently.

That is a very different kind of scale from the one Indian pharma mastered with generics. Instead of making millions of identical pills, the challenge is to run the same complicated process across millions of different patients.

India does have some ingredients that could matter here. A large patient population could generate useful tumour and treatment data, while its pharma and manufacturing base gives it experience in driving costs down. But neither advantage works automatically. Hospitals would need to collect good clinical and genetic data, track patients over time and connect much more tightly with testing and manufacturing infrastructure.

There may therefore be an opening in affordability.

If personalised treatments remain too expensive for most patients, somebody will eventually have to make the whole system cheaper. Indian pharma’s old advantage was making known medicines cheaper. The next one may be industrialising personalisation itself.

A factory for millions?

For now, this is still a melanoma result, not a cure for cancer.

The earlier Phase 2b trial shows why people are excited. After five years, the combination was associated with a 49% lower risk of recurrence or death and a 59% lower risk of the cancer spreading elsewhere or death than Keytruda alone. But those are not the new Phase 3 results. Moderna and Merck have not yet released the detailed effect sizes from that trial.

Cancer can also still find ways around an immune attack. Giving the immune system several targets is meant to make that harder, not impossible.

So the trial is strong evidence that this personalised approach can work in melanoma.

The harder question is what comes next — whether it can be made fast, reliable and cheap enough to move from a promising melanoma treatment to something far more widely usable.

Can Meghalaya actually stop uranium mining?

The Meghalaya Assembly has unanimously passed a resolution opposing uranium exploration and mining in the state, largely over concerns about the environmental and health impact of uranium mining.

Chief Minister Conrad Sangma pointed to the effects seen around uranium-mining areas elsewhere while moving the resolution. The resolution urged the Centre, the Department of Atomic Energy and Uranium Corporation of India Ltd (UCIL) not to pursue uranium mining in the state.

That raises a basic question: can a state government actually stop a uranium mine?

Is mining a state subject or a central subject?

Mining is partly a state subject, but the Centre has already taken over much of its regulation.

Under the Constitution, regulation of mines and mineral development appears in the State List. But that entry itself says Parliament can regulate mining where it considers this necessary in the public interest. Parliament used that power to pass the Mines and Minerals (Development and Regulation) (MMDR) Act, which we covered very recently in The Daily Brief.

So states still do a lot of the actual administration of mines. This involves granting and executing leases, collecting royalties, dealing with land and local implementation. But, they do this inside a framework written by the Centre.

Over the last few years, that framework has become even more centralised for strategically important minerals.

For one, an amendment to the MMDR Act in 2023 created a new category of 24 “critical and strategic minerals” while giving the Centre the power to auction mining leases and licences for them. It also created a new exploration licence for critical and deep-seated minerals. At the same time, six minerals including lithium, titanium, beryllium, niobium, tantalum and zirconium were actually removed from the list of atomic minerals, so that private companies could participate more freely in their exploration and mining.

Then came another amendment in 2025. Among other things, it made it easier to add additional minerals found inside an existing mining lease. But it specifically preserved a wall around atomic minerals, saying that an atomic mineral above the prescribed threshold cannot simply be added to an ordinary non-atomic mining lease.

What that meant was that uranium did not get liberalised in the way lithium and some other critical minerals did. It remains an atomic mineral under a much tighter central regime.

And uranium has another constitutional layer on top of the MMDR Act: atomic energy and the minerals needed for it are specifically Union subjects. So uranium mining is governed both by the MMDR framework and by India’s nuclear-energy law.

Who decides whether a uranium mine can open?

Indeed, the Centre has the stronger hand over atomic minerals like uranium. The state does not have a clear legal veto over India’s uranium policy. But the state does not disappear from the process. The Centre can’t just point at a map and open a mine.

Under the atomic-mineral concession framework, several practical steps still involve the state government. Land has to be identified and demarcated — and land is exclusively a State subject under the Constitution. Mining leases have to be processed and executed. State agencies are involved in local approvals and implementation.

In fact, Meghalaya has already shown how powerful that lever can be for a state. The UCIL has tried for years to develop uranium deposits in the state. Projects received central-level approvals, but state-level issues around land, mining leases and other permissions remained unresolved. So the Centre may have the stronger legal power over uranium, but that has never automatically translated into a working mine.

Law of the land

In Meghalaya’s case, though, land is way more complicated than merely being a State List subject.

Unlike most states in India, Meghalaya has an unusual land system. Large parts of the state are governed by the Sixth Schedule of the Constitution. What that means is much of the land is owned and controlled by individuals, clans or local communities. Autonomous District Councils also have powers over the allotment, occupation and use of land.

Interestingly, because of this, unlike in other states, the Supreme Court has previously recognised that landowners in Meghalaya can hold rights over both the surface and the minerals underneath. But that does not mean they can mine those minerals however they want.

The Court has also made clear that mining in Meghalaya must still comply with the MMDR Act. The Sixth Schedule does not create a separate mining regime outside central mining law.

That creates an interesting split.

The Centre controls whether uranium can legally be explored and mined, and Meghalaya cannot necessarily stop uranium mining simply by passing a resolution. But the land sitting above that uranium may belong to tribal communities, clans or individuals and may be governed by Meghalaya’s special land laws, and the Centre can’t exactly override that.

A uranium project may have to deal with landowners, Autonomous District Councils, state agencies and get local political consent before mining can actually begin.

That is why the Assembly resolution matters even if it is not legally a ban. This split between the land and the minerals beneath the land was, as we’d covered earlier, one of the most important debates in the MMDR Amendment Bill that was passed earlier in August.

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

Tidbits:

1. BPCL explores buying Gulf oil on FOB basis, lifts Iraqi oil

Bharat Petroleum Corporation is preparing to receive its first Iraqi oil cargo of the fiscal year and is open to lifting more crude from the Gulf on a free-on-board basis. The refiner said it is willing to lift cargoes from inside the Strait of Hormuz if insurance costs, vessel availability and other shipping risks remain commercially viable.

Source: The Economic Times

2. Govt pulls plug on ECLGS just over three months after launch

The government has halted the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 just over three months into its operation. The scheme’s entire ₹2.5 trillion guarantee allocation was exhausted rapidly, leaving banks in a difficult position with several borrowers holding sanctioned but undisbursed loans.

Source: Business Standard

3. Venezuela weighs OPEC exit as it deepens US energy ties

Venezuela is considering leaving OPEC, the oil group it helped found more than six decades ago, though no final decision has been made. The idea has been discussed with US officials as Caracas deepens energy ties with Washington.

Source: Bloomberg

4. Dream11 completes pivot to a global sports engagement platform

Following the nationwide regulatory ban on online real-money gaming, Dream11 has officially completed its transition from a fantasy sports operator into an AI-driven global sports engagement platform. The company has discontinued all prize-based offerings, shifting its focus entirely to live streaming, sports content, statistics, and community-building.

Source: Livemint

5. GST Council may cut 18% tax on mobile phones as handset demand slows

The GST Council may consider reducing the current 18% tax on mobile phones as smartphone shipments weaken. The proposal is aimed at supporting demand and ensuring the tax does not become a drag on India’s mobile-phone manufacturing ambitions.

Source: Livemint

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

Hi everyone, I’m Mridula, and welcome to the second edition of Weekly Tidbits.

We’ve been writing The Daily Brief for a while now, and one thing is clear: the tidbits at the end have their own fan base. We also spend a lot of time reading interesting news that never makes it into a full story.

So this is our way of giving those stories a home. Once a week, we’ll pick out some of the most interesting things we came across and add a little more context than the usual tidbits.

Last time, we also asked you for name suggestions, and one of them stuck. Thank you, Yajat Gupta, for “Brief-Cases”. We like it for now, but we’re still open to more ideas.

We’ll sort everything into EIC: Economy, Industry and Company.

If you have a better name, send it our way. Best suggestion gets a dessert on us ;)

E — Economy

[1] Is the RBI sending mixed signals on interest rates?

The RBI seems to be saying two slightly different things.

SBI Research says the latest Monetary Policy Committee minutes sound more worried about inflation than Governor Sanjay Malhotra’s public comments. Why does that matter? Markets use these signals to figure out where interest rates could go next.

If inflation stays high, cutting rates becomes harder. But keeping rates high for too long also keeps loans expensive for households and businesses. So markets are now stuck reading between the lines. The Governor sounds relatively comfortable. The committee minutes sound more cautious.

[2] India wants trade deals to cover most of its global commerce

India is currently negotiating a whole new set of trade deals. That includes talks with the Eurasian Economic Union, Peru, Chile, Israel, Canada and the Maldives.

India is also trying to upgrade existing agreements with countries like South Korea, while reviewing other existing trade arrangements. If these deals go through, Commerce Minister Piyush Goyal says roughly 75% of global trade could eventually be covered by countries with which India has preferential trade arrangements.

That is a big change from India’s older, much more cautious approach to trade deals.

India spent years worrying about what cheaper imports could do to domestic industry. Now it is making a much bigger bet on what easier access to foreign markets could do for Indian exports.

[3] India’s informal economy is still adding workers

A huge part of India does not work for large companies. It works in small shops, repair businesses, restaurants, transport services, workshops and millions of other informal enterprises that are not incorporated as companies.

Employment in this part of the economy rose 6.6% from a year ago in the April–June quarter, according to government data.

That makes the informal sector an important counterpoint to all the hiring data we usually get from listed companies and formal payrolls. India may want more workers to move into formal jobs over time. But for now, a large part of the country’s hiring is still happening outside the formal corporate economy.

I — Industry

[4] India wants to make the parts that go inside batteries too

India has already spent years trying to attract battery-cell manufacturing. Now the government wants to go one layer deeper. The Centre is planning a ₹13,000 crore incentive scheme for components used inside battery cells.

A battery may be assembled in India while important parts and materials inside it still come from abroad. That leaves domestic manufacturers exposed to foreign suppliers even as local production grows.

So the next phase of India’s battery push is not just about building more factories. It is about making more of what those factories actually need.

[5] West Bengal is expanding its shipbuilding industry

The Defence Ministry is putting about ₹3,420 crore into shipbuilding and manufacturing projects in West Bengal. The interesting part is what happens beyond the shipyard.

Building a ship creates demand for steel, engines, cables, electronics and specialised machinery. Each large order can pull in dozens of suppliers. So West Bengal is not just trying to build more ships.

It is trying to build the manufacturing network that comes with them.

[6] India’s mushroom boom is running into an infrastructure problem

India’s mushroom production has grown almost seven-fold in less than a decade. Output rose from about 51,000 tonnes in 2015 to nearly 3.5 lakh tonnes in 2024, with Bihar leading the growth.

But mushrooms are not an easy crop to scale. They spoil quickly, need reliable cold storage and depend on good-quality compost and mushroom spawn. Indian farms also produce roughly half as much mushroom from a tonne of compost as leading producers in countries like the Netherlands and Poland.

That means the next phase of growth will need more than just more farmers growing mushrooms. India now needs better cold chains, better inputs and much more professional production if this boom is going to last.

C — Company

[7] Why is Reliance looking at aluminium?

Reliance Industries may be preparing to enter the aluminium business. That sounds like a big jump for a company better known for oil, petrochemicals, telecom and retail.

But aluminium needs one thing Reliance is already thinking a lot about: energy.

Producing aluminium takes enormous amounts of electricity. Reliance has won coal blocks in Andhra Pradesh and is exploring a large coal-gasification project there. A large aluminium business could give that energy a ready industrial use.

Adani Enterprises is also planning a major aluminium project in Odisha. So Reliance may be preparing to meet Adani in yet another big industry.

[8] Nvidia wants more than the AI chip market

Nvidia reportedly wants to buy Hugging Face for $12.9 billion. Hugging Face is one of the main places where developers find, share and build AI models.

Nvidia sits somewhere else in the AI chain. It makes the chips that power many of those models. Buying Hugging Face would bring the company much closer to the developers actually building AI products.

So Nvidia would no longer just sell the machinery underneath AI. It would also own one of the places where people decide what to build on top of it.

[9] Meta settles a social media addiction case before trial

Meta has agreed to settle a lawsuit that accused its platforms of contributing to social media addiction. The case was closely watched because it was expected to test whether companies like Meta could be held responsible for designing products that keep users hooked.

That question goes to the heart of how social media works. Features like endless feeds, recommendations and notifications are built to keep people engaged for longer. The more time users spend on the platform, the more opportunities Meta has to show them ads.

By settling, Meta avoids having that business model picked apart in court.

But the larger legal fight is not going away. Similar cases against social media companies are still moving through the courts, and they could eventually force platforms to defend not just what users post, but how the products themselves are designed.

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. The split personalities of Indian FMCG

   Why are India’s consumer goods giants caught between shrinkflation and premiumization? After years of flat volumes masked by subtle packet-size reductions, FMCG majors like HUL, Marico, and Britannia are finally seeing a volume-led recovery. However, this growth is split down the middle: rural demand is being propped up by higher government MSPs and disinflation rather than real wage growth, while urban growth is powered by affluent consumers splurging on premium products via quick commerce. With raw material and packaging costs rising again due to oil volatility, companies are walking a tightrope to maintain margins ahead of the festive season.
   

2. How are NPAs in India so low?

   How did Indian commercial banks drive net bad loans down from a peak of 6.0% in 2018 to a two-decade low of 0.4% today? While a doubling loan book helped the ratio, the decline was primarily powered by aggressive provisioning, with banks raising their coverage ratio from 48% to over 76%. At the same time, fresh bad loan additions halved, and banks cleared ₹27.8 lakh crore in old NPAs through recoveries, upgrades, and write-offs. While the massive corporate debt cleanup of the last decade is now complete, early stress in retail and microfinance serves as a reminder that low NPAs reflect a completed credit cycle rather than its end.

Subtext by Zerodha

Rohit Chandra’s short history of Indian energy

Hi folks. I’m Pranav, and I am so excited to finally release what is, so far, my favorite episode of Subtext that I have been a part of…

Read more

13 days ago · 8 likes · Zerodha

The split personalities of Indian FMCG

For quite some time, the big consumer goods giants of India have been navigating a tricky landscape.

For one, that pack of biscuits or chips, or even the bottle of skincare lotion you buy, might have been feeling a little lighter by weight while being the same price. It’s also possible that prices of these items have increased slightly. They’ve been playing a game of see-saw of value and volume to protect profits.

At the same time, the companies making these daily essentials are now promoting a lot of high-end products, like protein snacks, face serums, and so on. That’s in line with the trend of premiumization that we’ve been talking about on The Daily Brief for so long, and much of it has been driven by urban consumers rather than rural ones.

Meanwhile, raw material costs have spiked due to a historic oil crisis, creating an urgency for the industry to find new growth drivers as soon as possible.

These sound like disparate images, but they’re really part of one cohesive story, for which we’ll be looking at the latest quarterly earnings calls of 4 FMCG companies: HUL, Marico, Britannia and Nestle India.

The volume-value see-saw

For a long time, FMCG earnings reports looked great on paper, but that wasn’t necessarily because they sold more. The sales of soap bars, packets of tea, or bags of chips have been fairly flat, and in some cases, even falling.

Which only means one thing: revenues went up because of a price effect. That could mean a price hike, but mostly, FMCG firms pursued another strategy: shrinkflation. Instead of raising prices outright, companies quietly trimmed a few grams off a package while keeping the price at a familiar ₹10 or ₹20. Companies do this knowing that it might hurt volumes.

Obviously, there is a limit to how small a biscuit packet can get before consumers notice and start looking for alternatives. This is where companies diverged this quarter.

Marico, for instance, chose not to implement any additional grammage reductions on its flagship Parachute Coconut Oil. Instead, management attributed the brand’s resurgence to adjusting prices downward on its larger family “loyalty packs”. Marico saw some of their fastest quarterly growth in a while, and also why it recorded its highest profit growth in the past 7 years.

But Marico was an outlier. Many companies committed to more shrinkflation or even price increases. Britannia, for instance, openly admitted to still trimming packet sizes. HUL, meanwhile, actively implemented price hikes this quarter, while also signalling future hikes are possible. This was primarily done to offset cumulative palm oil and packaging inflation, which we’ll eventually talk about.

Yet, despite that, these companies also benefited from very strong volume growth. Britannia saw sales volumes recover, while HUL enjoyed price and volume growth equally, contributing to what is their best growth period in 13 quarters. There are clear signs that volume growth seems to have returned across the board.

With the festive season approaching, FMCG firms expect to drive even higher volumes. Which is why they have stepped up their ad spending at a blistering pace. Nestlé India, for instance, hiked its ad spend by over 40%, while HUL spent over ₹1,657 crore on brand building in a single quarter.

A comeback for rural growth?

To see where this actual volume growth is coming from, you have to look at two very different parts of the Indian economy: small rural kirana stores and 10-minute delivery apps in cities.

Let’s start with the former.

Between 2021 and 2023, rural sales were sluggish as village households dealt with high food inflation and unpredictable monsoon seasons. But recently, rural India seems to have staged a comeback, as FMCG rural volumes seem to be outpacing, or at least matching, that of urban areas.

So, what made rural demand come back?

The well-known explanation is disinflation. A drop in general food inflation means rural families, who spend a massive chunk of their budgets on daily food, should have more disposable cash left over.

However, beyond this disinflation, real rural wages have not meaningfully increased over the past 2 years, and FMCG firms themselves are among the first to admit that.

What that means is farmers didn’t earn more from what they produced. Either crop output remained muted, or even if it rose, farmers couldn’t earn more from it. In essence, farm productivity hasn’t improved, and agriculture hasn’t moved the needle much. So if inflation trends, which can be fickle, reverse, rural growth goes back to square one again. We covered this trend last year.

So if wages were flat and the harvest itself only grew modestly, what actually put more money in rural pockets this cycle? Well, that answer came from HUL itself: the government raised the Minimum Support Price on crops by around 5-6% this cycle.

Yet again, though, that’s a temporary price effect meant to support farmers through a rough El Nino season. It is not a structural volume effect. If MSP increases tone down in the future, or don’t keep pace with any renewed inflation, the rural income cushion that’s currently propping up FMCG volumes could disappear.

As a result, the network of kirana stores that forms the backbone of rural retail (also known as Traditional General Trade) is bustling again. HUL’s traditional trade channels are back in positive territory, while Nestlé India confirmed that its volume growth was led primarily by rural markets. Marico saw double-digit volume growth in general trade thanks to its rural expansion push.

Part of this rural growth came from companies fixing their own internal glitches. Britannia’s General Trade grew 1.5 times faster than its rate for the entire previous year. But that was largely unlocked after the company completely eliminated something called dual-pricing. This “dual pricing” here isn’t about charging the consumer two different MRPs, but is rather a glitch on the B2B side of things.

Sometimes, companies offer steeper discounts or older inventory to massive, unorganized wholesale markets. This creates a “dual pricing” effect, meaning a box of biscuits is suddenly cheaper in the wholesale market than it is coming directly from the company’s official rural distributor.

Since rural kirana owners operate on razor-thin margins, they’d rather buy that box for ₹92 at the wholesale market than from the official distributor trying to sell it for ₹95. But that, in turn, fills up the distributors’ warehouses with unsold stock. As a result, they stop placing new orders with the FMCG firm whose official “rural volume growth” then plummets.

This dual-pricing issue had previously disrupted wholesale channels in April and May, but its elimination brought unorganized retailers back in droves in June, allowing Britannia to exit the quarter with mid-teen sales growth.

A K-shaped hole

Meanwhile, urban cities are seeing a massive shift toward quick commerce and premium products.

India has been seeing what is often described as a K-shaped consumption boom. Here, the upper-income bracket (the top arm of the ‘K’) sees surging wealth and spends aggressively on premium goods and lifestyle upgrades. Meanwhile, the lower- and middle-income segments face stagnant incomes, forcing them to tighten their belts.

This divergence is visible across sectors. For instance, as per Franklin Templeton, sales of premium TVs and high-value autos have surged by 18% and 28% respectively, while mass-market appliances and lower-value autos have seen volume declines.

Consumer companies are leaning heavily into the top-half of the K by expanding their premium and health-focused lineups. For example, HUL saw rapid double-digit growth in premium body washes and skincare brands like Simple, Pond’s, and Vaseline Gluta-Hya. Britannia’s premium croissant business grew over 30%, doubling its run-rate to roughly ₹200 crore with profit margins that match its core business. Meanwhile, Nestlé India reported that its premium NESCAFÉ coffee variants recorded double-digit, volume-led growth.

Much of this urban growth is now being driven by quick commerce. HUL’s sales on quick commerce apps are growing between 40% and 50% year-on-year, while Marico saw a 50% jump in e-commerce revenue primarily due to q-com.

Britannia revealed an even more striking stat: quick commerce now makes up an overwhelming 80% to 85% of its total e-commerce sales. This shift has forced companies to overhaul their supply chains.

Meanwhile, Nestlé India pointed out that because quick commerce dark stores operate with just two days of physical inventory, suppliers have to deliver with near-perfect reliability to keep products on those digital shelves.

While q-com is exploding, it still only accounts for a small fraction of total revenue. Legacy premium upgrades like Pond’s or Vaseline are growing across all traditional and modern retail channels. However, Quick Commerce punches way above its weight in the premium category. With their short inventory model, dark stores have extremely limited shelf space, so they’d much rather prioritize stocking high-margin, premium items (like a ₹400 face serum) over giant, low-margin sacks of basic staples.

As a result, while legacy brands sell everywhere, “digital-first“ premium brands rely heavily on these apps to reach affluent urban millennials. And many of the acquisitions made by legacy FMCG players are geared toward this strategy.

HUL in particular has been quite aggressive with its M&A strategy. Last year, it acquired digital-first skincare brand Minimalist. Then, earlier this year, it executed a complete buyout of plant-based nutrition brand OZiva. Similarly, Marico’s digital-first wellness portfolio, comprising brands like Plix, Beardo, and Cosmix, crossed a combined run-rate of ₹1,100+ crore, with Beardo notably delivering double-digit profitability through online channels.

Input Costs

FMCG companies are simultaneously dealing with a fresh wave of raw material inflation. Much of it is driven by the Strait of Hormuz disruption, which increased the price of crude oil and gas, which are key inputs in the manufacturing process. Plastics are also a by-product of crude oil, which means that packaging costs for these firms also spiked.

That being said, depending on the core products, the impact of raw material inflation differed across companies.

For Marico, global prices of copra — the kernel of a coconut that’s used to extract coconut oil — were discounted by 30-35%. Meanwhile, global energy and hydrocarbon cycles drove crude oil-linked polymers (HDPE) and Liquid Paraffin packaging inputs rising significantly. Ultimately, due to softer copra prices and a favourable portfolio mix, Marico saw a 30 basis point expansion in gross margins.

Britannia, conversely, faced severe margin pressure from refined palm oil rising and packaging laminates inflating. Crucially, a large part of its baking uses LPG and CNG, both of which “shot through the roof” in April and May. As a strategic hedge against gas volatility, Britannia leaned more on biomass. HUL followed a strategy of only passing on half of its cost increases in Q1 FY27, but didn’t rule out future measured pricing steps.

The Bottom Line

At the end of the day, the Indian consumer goods market is no longer a simple game of flooding kirana shelves with basic staples or relying on price-tag tricks. The rules of the game have fundamentally changed. To win today, FMCG giants must run a delicate, high-speed balancing act, capturing mass-volume demand from a recovering rural core, while simultaneously racing to deliver 10-minute convenience to urban consumers eager to splurge on everyday luxuries.

With this urgency to adapt to a new consumer landscape has come a massive wave of leadership reshuffling across HUL, Britannia, Dabur, Colgate, and so on. Companies are actively bringing in new executives and CEOs that may be best suited to navigating such a medley.

As the festive season approaches, the industry is hoping for a stronger period of demand. However, with input cost volatility persisting and US-Iran tensions only escalating, while an El Nino continues to threaten the year’s crop season, it will be difficult to say how bright the festivities might be.

India’s net NPAs are at a historic low, but why?

A chart by Zerodha Capital on Indian banks went viral recently.

It showed the net NPA ratio falling from 6% in March 2018 to 0.4% in June 2026. CareEdge, whose calculations underlie the chart, says asset quality has now improved for 20 consecutive quarters.

This chart gives us a pretty good 30,000-foot view of what has happened to Indian banks over the last few years, but the line by itself does not tell us why this happened. And that matters, because FY18 was also an unusually bad starting point, coming after the RBI’s Asset Quality Review forced banks to recognise a lot of stress that had built up over the previous credit cycle.

So to understand how net NPAs went from 6% to 0.4%, we need to look at what changed underneath that line.

Start with the word “net”

The first clue sits in the metric itself. This chart is not showing gross NPAs. It is showing net NPAs — bad loans left on the books after banks have already set aside provisions against expected losses.

That distinction matters a lot here.

Gross NPAs tell us the total stock of loans classified as bad. Net NPAs tell us how much of that stock is still effectively uncovered after provisions and other permitted deductions.

And Indian banks have become much more aggressive about provisioning.

In March 2018, Indian banks’ provision coverage ratio was only 48.3%. In other words, they had provided for less than half of their gross bad loans. By March 2025, provision coverage had risen to 76.3%.

So even if the underlying bad loan did not disappear, a larger part of the expected loss had already been recognised and absorbed through the bank’s profits.

That alone pushes the net NPA ratio down. It is one big reason the chart looks as dramatic as it does.

But the improvement is not merely accounting

Higher provisioning explains part of the fall in net NPAs. But the underlying stock of bad loans also shrank sharply.

Scheduled commercial banks had ₹10.40 lakh crore of gross NPAs in March 2018. By March 2025, that had fallen to ₹4.32 lakh crore.

That can happen in two ways: fewer fresh loans turn bad, and old NPAs leave the pool through recoveries, upgrades or write-offs.

The first is probably the more important part of the story.

Banks added ₹6.04 lakh crore of fresh NPAs in FY18. By FY25, annual additions had fallen to ₹2.26 lakh crore, even though the overall loan book had become much larger.

A cleaner way to see this is through the It shows fresh NPAs added during the year as a share of the standard loan book at the start of the year. That ratio fell from 7.6% in FY18 to 1.4% in FY25, and further to 1.2% in FY26.

So this is not just old bad loans being provisioned away. Far fewer performing loans are turning bad in the first place.

The other side of the equation is how old NPAs leave the system.

In FY25, banks removed ₹2.75 lakh crore from the gross NPA pool. Of this, recoveries and upgrades accounted for 42.8% of the reduction. Write-offs made up the remaining 57.2%.

Recoveries are straightforward: the bank gets some money back, whether through direct collection, settlements, IBC, SARFAESI or other recovery routes. Upgrades are loans that stop being NPAs because the borrower clears the required dues and the account returns to standard.

Write-offs are different. The bank removes the loan from its reported balance sheet, but that does not necessarily mean the borrower is forgiven. The bank can still continue recovery efforts.

This matters because write-offs have been the single biggest route through which old NPAs have left banks’ books.

But they are not a separate explanation for the fall in net NPAs. By the time a loan is fully provided and then written off, most of the reduction in its net value has already happened through provisioning.

Put simply: provisioning brings down net NPAs. The eventual write-off cleans up gross NPAs.

The loan book also became twice as large

There is one more reason the ratio fell: the denominator got much bigger.

Gross advances of scheduled commercial banks rose from ₹92.66 lakh crore in March 2018 to ₹194.49 lakh crore in March 2025. So the loan book more than doubled in seven years.

That matters because even if net bad loans had stayed flat, spreading them over a much larger loan book would have pulled the ratio down.

But this was not just a denominator effect. Net NPAs themselves also fell sharply, from ₹5.21 lakh crore to less than ₹1 lakh crore.

So both things happened at once: banks had fewer net bad loans, and a much larger loan book.

What does the 0.4% figure really tell us?

The 0.4% net NPA ratio is a useful snapshot, but it is also the end result of a very specific credit cycle.

Banks recognised a large pile of old stress, provisioned heavily against it, recovered or wrote off bad loans, and then grew the loan book on top of that. At the same time, fresh slippages fell sharply.

A lot of that clean-up was concentrated in the corporate loan book, where the last cycle did the most damage. That problem is now much smaller.

But credit cycles do not disappear. When stress falls for long enough, lending standards can loosen, risk can build in new pockets, and eventually some of it shows up again.

Today, some of those pockets are visible in parts of retail lending and microfinance, even if they are nowhere close to the scale of the old corporate NPA problem.

That does not tell us where NPAs go next. It is just worth remembering that a historic low is not the same thing as the end of the cycle.

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

Tidbits:

1. Data centres hire acoustic experts as noise complaints grow

As AI drives a boom in data-centre construction, operators are increasingly hiring acoustics consultants to address noise from cooling systems, generators, and other equipment. Specialists are helping developers design mitigation measures, comply with local regulations, and reduce community opposition.

Source: Bloomberg

2. FSSAI issues notices to JW Marriott and Juniper Hotels over safety lapses

The Food Safety and Standards Authority of India has issued show-cause notices to luxury hospitality operators, including JW Marriott and Juniper Hotels, citing violations of hygiene, labelling, and storage protocols. The regulatory action follows inspections that uncovered deficiencies in sanitation and food management.

Source: Business Standard

3. Flipkart Minutes overtakes Swiggy Instamart in dark store network across top cities

Flipkart’s quick-commerce service, Flipkart Minutes, has surpassed Swiggy Instamart in the number of dark stores across India’s top 10 cities. According to a CLSA report, Flipkart now operates 627 micro-warehouses compared to Swiggy’s 615 in these key markets, reflecting intense competition as companies rapidly expand physical infrastructure to dominate the 10-minute delivery sector.

Source: The Economic Times

4. BPCL plans e-commerce and payment gateway entry with grocery deliveries

Bharat Petroleum is leveraging its large LPG distribution network to deliver groceries alongside cooking gas cylinders. To support this non-fuel expansion, the state-owned oil marketing company is developing its own e-commerce platform and digital payment gateway, with pilot projects already underway.

Source: The Economic Times

5. JSW Group puts Odisha battery plant on hold over LFP technology access

JSW Group has paused its proposed battery-cell manufacturing project in Odisha after failing to secure a technology partner for lithium iron phosphate (LFP) cells. The company noted that access to LFP know-how remains heavily concentrated in China, delaying its plans to manufacture cells domestically.

Source: The Hindu

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. SEBI finds fraud in the cloud
Why did SEBI just slap a seven-year ban and massive penalties on Varanium Cloud and its promoter? Riding the data center hype, the startup raised public funds by touting edge data centers and cloud services that barely existed in reality. Instead, regulators uncovered ghost facilities, completely fabricated financials, and an elaborate scheme that siphoned over ₹129 crore into the promoter's pockets. The saga reached a comical low when the promoter's 235-page legal defense was exposed for using AI-hallucinated laws and non-existent case citations—proving that in the frenzy of a tech bubble, some businesses are nothing but smoke and mirrors.

2. An unseen fallout of insurance commission caps
Why did SEBI drop a ₹3,900 crore case against Max Financial and Axis Bank? To bypass strict commission caps, the companies used discounted unlisted share deals to route extra payouts as capital gains. While fined by the insurance regulator, SEBI ruled that exploiting sectoral loopholes isn't securities fraud—showing how rigid caps trigger complex legal workarounds.

SEBI finds fraud in the cloud

Every industrial revolution, from the first car to the first robot, may be different in product characteristics, but has some uncanny similarities.

When a new technology shows commercial potential, entrepreneurs rush in and fuel tons of money in the hope that one day, they will reap outsized returns. But this creates a frenzy where too much money ends up chasing far fewer returns.

Eventually, this bubble bursts and causes a recession. But, with the right policies, such a recession gives way to a golden age of productivity.

Now, in the chaos of a bubble which is fueled by easily-accessible capital, there will almost certainly be bad actors. They may rely on the shine of this new technology to manipulate markets without actually advancing it. They may even resort to blatant fraud.

In the age of a massive data center buildout, we are already seeing signs of this in India.

In 2022-2023, a company called Varanium Cloud, led by promoter Harshwardhan Sabale, raised money from the public markets. It made many promises on the back of data centers and cloud services. But on Monday, SEBI published a 155-page final order which found nothing but smoke and mirrors instead, and accused it of outright fraud.

It’s only words

The story starts from Varanium’s listing.

In its prospectus, Varanium said to investors that it would use the proceeds of its ₹40 crore IPO in three things. First, it would build three edge data centers, which are small data center units that are meant to serve only the devices close to it. Second, Varanium would set up three digital learning centers. Third, it would run a BPO operation out of these locations.

Between listing and the interim order in May 2024, Varanium made 25 corporate announcements. Here’s some of the big ones:

1. Varanium was meant to inaugurate an edge data center in Goa

2. It announced a partnership with Secur Credentials for BPO operations

3. It also launched a cloud-based medical wearable device

4. It disclosed plans to acquire a cable company for ₹2,683 crore, to be paid wholly in cash.

5. It told the stock exchanges it was setting up a data center in Malta, and separately, that it was planning to list a subsidiary on the NASDAQ.

None of these announcements materialised. Yet, SEBI found that 11 of the 25 announcements moved the stock price upward, including two that triggered upper circuits.

So, how do we know what was real, and what was up in the clouds? Well, in January 2025, SEBI and NSE conducted site visits at every location Varanium claimed to operate from. And it found many damning facts.

To start with, at the given Goa address, there was no edge data center building, which Varanium told investors it had commissioned in December 2022. Instead, a Varanium admin office was found, whose staff had no idea of any edge data center plans. The lease for the premises was dated April 2023, four months after the supposed commissioning.

Then, there was the electricity bill. Even the most unknowing person is aware that data centers are among the most power-hungry facilities in existence. But a single monthly billing cycle towards the end of 2023 showed just 6 units consumed. That’s what a light bulb uses in a few days. That is weird for a “data center” that’s been in commission for a whole year.

What’s more, in the immediate next month, the electricity bill jumped to a whopping 2,450 units. Possibly, someone had switched things when the law’s long hand reached them.

At another location, Sawantwadi, Varanium had publicly announced it employed over 125 young people” in its BPO. But SEBI only found eight people, who said that they were only involved in ”documentation work”. They were doing very little of what a BPO does.

The vendor who was meant to build all of this was Avance Technologies, which is also a publicly-listed company. Somehow, it had zero fixed assets on its balance sheet. Avance later confirmed to SEBI that it didn’t execute any work because Varanium chose to handle the projects directly. The quotation Varanium obtained from Avance for the IPO prospectus exceeded Avance’s own annual revenue.

Cooked books

If the operations were fiction, the financial statements were a masterpiece of the form. Over FY23 and the first half of FY24, SEBI found that most of Varanium’s reported sales and purchases were fictitious.

The centerpiece was Amtelfone, an entity Varanium claimed to sell services to. Over two years, Varanium booked ₹594 crore in sales to Amtelfone. A public domain search yielded only basic information about the company. Neither Varanium nor its suppliers could furnish any invoices or contracts in support of the transactions.

When SEBI examined Varanium’s tally ledger, the entries for Amtelfone were monthly lump sums recorded at the end of each month, but without corresponding bank receipts. Instead, Varanium’s journal entries offset Amtelfone’s receivables against payables to Amazon Web Services.

Now, Varanium claimed to have purchased ₹444 crore in cloud services from AWS. But when SEBI asked, AWS sent back invoices that merely amounted to ₹20,000 to ₹23,000. Varanium’s books also contained a single journal entry of ₹107 crore worth of sales to a US-based clothing company called Courage Clothing. For one, this company had nothing to do with cloud services. But secondly, no receipts existed as evidence of this transaction. All of this should tell you enough about the quality of Varanium’s accounting.

Then, there were sales to entities owned by the same promoter, all of which followed the same pattern. Three such promoter-group entities each had two sales entries booked at quarter-end, with token amounts of ₹5 lakh moving through the bank account to create the appearance of a transaction. Few of these transactions were also not disclosed as related-party transactions.

Where the money went

While the books showed hundreds of crores in fictitious transactions, the actual money raised from investors took a much simpler path.

Of the ₹40 crore raised through the IPO, ₹19 crore was transferred to BM Traders and three promoter-owned entities: Turmeric Lifestyle, and Varanium Earth, and Varanium Lifestyle. Beyond having a common promoter, Varanium had no disclosed business relationship with any of these entities. The IPO prospectus certainly didn’t envision transferring money to them.

Post-IPO, Varanium raised ₹48 crore more through a rights issue. Shockingly, 90% of it went to Harshwardhan Sabale’s personal bank account and promoter-group entities.

Meanwhile, Sabale was selling his shares. The stock had opened at ₹131 on listing day and, aided by the stream of corporate announcements, rose to over ₹1,500 by January 2023. Between November 2022 and March 2024, promoter entities sold shares worth ₹149 crore. After accounting for acquisition costs, SEBI calculated the unlawful gains at ₹129 crore. By May 2024, when SEBI issued its interim order, the stock had collapsed to under ₹18.

A board that existed only on paper rounded out the picture. The compliance officer told SEBI that Sabale would withhold her salary if she didn’t follow his orders. The CFO, didn’t even have experience in finance and was a network engineer by profession. As CFO, he didn’t work on anything finance-related, and only stuck to the technical stuff he knew.

All these Board members testified to the same fact: Harshwardhan Sabale had immense amounts of control on the money lever.

Ghosts in the machine

Now, based on these findings, SEBI gave the promoter and some of the other accused folks a show cause notice. In response, Sabale came up with a 235-page defence, but SEBI found it very easy to dismiss all of it.

The reason for that is the most entertaining part of the whole ordeal. After all, it was found to have been full of AI hallucinations! The evidence used to back up the defence either didn’t exist, or was used completely out of context.

For instance, Sabale said that, as per the judgement of the now-infamous Ketan Parekh case, proving fraud requires showing the existence of five specific elements. But the judgment itself was untraceable at the given citation. He also cited another case for the principle that corporate governance lapses cannot constitute personal fraud liability. While that case exists, it had nothing to do with directors’ liability; instead, it was related to some other act. Six other cited judgments were simply non-existent.

The reply also argued that the SEBI Act distinguishes between “Category A” (fraudulent) and “Category B” (administrative) violations. Sabale said that since these were “corporate governance lapses”, these offenses should be category B rather than A. But no such distinction exists in Indian capital markets law! SEBI observed that the AI tool appeared to have confused the current SEBI Act with the proposed Securities Markets Code Bill.

Some jokes write themselves: here’s a company involved in data centers that used AI to build up its case and hilariously failed at it.

Meanwhile, the non-AI defences were also dispatched quickly.

Sabale argued the proceedings violated his right to a hearing. But he was given a hearing, which his representative attended. The representative told the panel he was “very tired” and declined to make oral arguments because he’d been drafting Sabale’s reply late into the previous night. That being said, none of this is the same as the government denying you your right to be heard.

Now, Sabale personally was undergoing bankruptcy proceedings as per the IBC — he owed a lot of money. As per the Section 96 of the IBC, he argued, there should be a moratorium on all proceedings. But that section only applies to debt recovery, not regulatory penalties. SEBI’s actions fall outside that.

As for the Goa data center’s electricity consumption, Sabale argued that going from 6 units to 2,450 units is business-as-usual for a data center trying to scale up. But then, if the data center was commissioned in December 2022, why was it not operational for a whole year? Why did this bump only occur when regulators started looking in? Additionally, Sabale also tried to pass off the office space in Goa as proof the data center exists, which SEBI didn’t buy.

Where this fits

Sabale has been barred from the securities market for seven years and ordered to disgorge the ₹129 crore. Varanium has been directed to return ₹62.5 crore in diverted proceeds with 12% interest. On top of this, the total penalties across all 11 noticees come to about ₹33 crore.

The Varanium order doesn’t exist in isolation. First Overseas Capital, the merchant banker that managed Varanium’s IPO, was supposed to be the gatekeeper that verifies the issuer’s claims before public money comes in. Clearly, their due diligence was not enough. In fact, this isn’t the first fiasco they’ve been a part of. In January, SEBI found that FOCL had facilitated the siphoning of 54% of another SME company’s IPO proceeds. In sum, SEBI gave FOCL a two-year market ban.

BM Traders, the conduit through which IPO money and ₹119 crore from Sabale’s personal account flowed, got a four-year ban and a ₹10 crore penalty. Athos Capital, the advisory firm that helped prepare Varanium’s IPO documents, got a two-year ban. Some of the directors were also slapped with bans and penalties.

SEBI has been tightening the SME IPO framework since late 2024 by raising minimum application sizes, requiring operating profit track records, and so on. Lately, it has been considering overhauling it, and the Varanium order is a case study in why.

But this is also a story of the fraud that entails any technology that might show signs of a bubble. The dot-com bubble, the crypto boom, even the first buildout of the railways in the US, all of these famous bubbles have been replete with fraud. There will always be bad actors that try to cash in, and data centers may not be immune to this. The answer to that has always lay in how swiftly the crackdown on them is.

An unseen fallout of insurance commission caps

India’s insurance regulator caps how much an insurer can pay a bank for selling its policies. There is a good reason for the cap: without it, insurers would bid up commissions and policyholders would end up funding the bidding war.

The Max Life-Axis Bank arrangement is a case study in what happens when a bank wants more than the cap allows.

How the money moved

In 2010, Max New York Life — later Max Life Insurance — signed a ten-year agreement making Axis Bank its distributor. Axis was then India’s third-largest bank and good at selling insurance. Before this, Max Life was doing only about 4% of its new business through banks.

Alongside that distribution deal, a second set of transactions began.

In December 2011, Max Life issued 7.66 crore shares to Axis Bank at ₹10 each. This may not have reflected its actual worth. This included an option agreement, which let either side force a buyback later at a price linked to the fair market value. Through 2016, Max bought the shares back in four tranches: at ₹54, ₹54.1, ₹71.9 and ₹111.

On the other side, Axis earned several hundred crore rupees along the way. This is a textbook capital gain that, seemingly, Axis took in lieu of capped insurance commissions.

Again, in 2016, Max Financial and its Japanese partner Mitsui Sumitomo transferred 9.57 crore shares to Axis at ₹10 each, and repurchased most of them in multiple tranches between 2018 and 2021.

Then in 2020, the relationship was formalised. Max Financial’s board approved selling 29% of Max Life to Axis, but that flouted RBI’s investment limits. So, in early 2021, only ~12% of Max’s stake changed hands, and it was split between Axis Bank, Axis Capital and Axis Securities so that, in accordance to RBI’s rules, no single entity crossed 10%.

What’s in dispute

Now, selling shares for cheap and buying them back expensive as a way of paying a distributor more than commission rules allow is not merely theory. This was IRDAI’s conclusion.

The commission cap is IRDAI’s rule to enforce. It found that Max Life and Axis Bank had used the share deals to get around the limits on what an insurer may pay a corporate agent, and fined Axis Bank ₹2 crore and Max Life ₹3 crore. SEBI itself concluded that this was a regulatory workaround for the insurance commission limits. That was never in question.

What SEBI brought was a different question. IRDAI regulates insurers, but has nothing to say about the rules a publicly-listed company has to follow, which is wholly SEBI’s territory.

See, Max Financial, Max Life’s listed parent, is writing the cheques to buy shares back at ₹166, so its public shareholders ultimately fund the arrangement. But were they told what was happening? And does dressing up compensation as an investment equal defrauding them?

In October 2024, SEBI issued a show cause notice to 25 entities, alleging a ~₹3,900 crore loss to Max Financial and a matching gain for the Axis group.

But this Monday, all charges were dropped on Max Financial, Max Life (now Axis Max Life), and all the three Axis companies.

Why the case failed

So, why did that happen? There are two reasons, both of which are about SEBI’s case rather than the conduct.

The first is related to disclosure. Now, SEBI does believe that the disclosures from all parties have been inadequate, and sent them multiple notices across the years about this. But the problem is when they said this.

Most of it predated the LODR Regulations of December 2015. Before that, the rulebook was the Listing Agreement, which required disclosure of material and price-sensitive information, but didn’t define the material and price thresholds. SEBI’s own later papers acknowledged the ambiguity. Under a rule that vague, a regulator has to argue why a specific item was material at the specific time. But the notices didn’t do much beyond pointing at the size of the numbers.

The second is related to whether this is fraud or not. Under Indian securities law, fraud requires either that someone was induced into a trade and injured by it, or conduct blatant enough that wrongful intent is evident on its face.

But SEBI couldn’t prove fraud on any of those terms. There was no manipulation of price or volume and no artificial market. They couldn’t truly prove that the parties were secretly colluding. In fact, the SEBI order also noted that the pricing structure had been filed with and approved by the sectoral regulator.

But clearly, ₹10 a share was too cheap. So why isn’t that the end of the fraud argument?

Well, that’s because the shares priced at ₹10 are the shares of Max Life, which is unlisted, while the listed company is the parent. SEBI’s fraud rules are aimed at manipulation in the public markets, but there is no market in Max Life shares to distort.

The nuances

As a result, all the main allegations fell away. That being said, the order does not say that the pricing was fair. It finds that injury to shareholders was not demonstrated and intent was not evident, but that is not commentary on the valuation.

Meanwhile, Max’s defence was that, if the numbers are to be believed, the partnership worked. Axis came to generate about 45% of Max Life’s premiums, while Max Life’s embedded value rose from roughly ₹3,200 crore to over ₹24,000 crore. Max Financial’s shares went from about ₹175 to a peak of ₹1,311, and shareholders approved the 2020 sale wholeheartedly.

But SEBI refused to treat any of that as a defence. In its own words: “a scheme or an arrangement can be highly profitable yet inherently fraudulent.”

A couple of loose threads survive in the order without much examination. One such thread was around the 2020 sale, where the valuation report was never circulated to shareholders. It was made available for inspection at the registered office during the COVID lockdown, which proxy advisors said left shareholders unable to decide properly. The order records the complaint, but does not squarely rule on it.

What’s still open

Thirteen of the original 25 noticees, who are Max Financial’s independent and non-executive directors, filed settlement applications which are still being processed. Their orders are held in abeyance.

SEBI also added the customary note that nothing prevents it from acting if the transactions are later found to violate securities laws. So far, the commission cap remains in place, but so does the incentive to work around it.

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

Tidbits:

[1] The government has approved a ₹5,070 crore support scheme targeting 5 GW of floating solar capacity with energy storage across reservoirs and other water bodies. While the model avoids land constraints, developers face higher costs, technical risks and concerns around aquatic ecosystems.

Source: Business Standard

[2] The United States has sanctioned four Indian firms as part of Operation Economic Outcast to curb illicit petroleum trade linked to Iran. The move highlights increasing geopolitical scrutiny and regulatory pressure on Indian entities navigating trade with heavily sanctioned regimes.

Source: The Hindu BusinessLine

[3] PepsiCo bottler Varun Beverages is setting up a wholly owned subsidiary focused on ready-to-drink alcoholic beverages, appointing former Diageo executive Prathmesh Mishra to lead it. The move marks a major strategic expansion beyond its core soft drinks and packaged water operations.

Source: The Economic Times

[4] Tamil Nadu has dropped plans for a second Chennai airport at Parandur following strong opposition from farmers over the impact on agricultural land. Authorities are now evaluating alternative locations while simultaneously working to expand Chennai’s existing airport.

Source: Reuters

[5] Indian Railways is preparing new public-private partnership frameworks, including a Development Partner Model and Hybrid Annuity Model, to attract private capital. The broader ₹2.62 trillion pipeline spans new rail lines, station redevelopment, freight infrastructure and other railway assets.

Source: Livemint

[6] Fashion retailers including H&M and Mango are scaling back larger size assortments as consumer demand patterns shift alongside the rise of GLP-1 weight loss drugs. While brands are adjusting inventory, analysts continue to debate the exact causal impact of the medications on retail sizing choices.

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. India can’t find a sweet spot for its sugar policy
Just months after approving 20 lakh tonnes in sugar exports to clear a perceived surplus, India executed a complete policy reversal as domestic spot prices jumped to record highs. The government banned exports, imposed strict stock limits, and opened duty-free imports after crop estimates dropped 11% due to adverse weather, crop disease, and cane diversion to khandsari units. While ethanol blending was not the primary cause of the miscalculation, the sudden crunch exposes how fragile policy buffers become when fragmented data and thin reserves leave no room for forecasting errors.

2. Can hydrogen actually power Indian trains?
India is currently testing two hydrogen-rail pilots—a passenger train in Haryana and an industrial freight locomotive for NTPC—to explore where fuel-cell technology fits into its rail network. With almost the entire broad-gauge network already electrified, hydrogen is unlikely to replace traditional electric trains, but it could offer a clean alternative for unwired industrial routes, power plants, and heritage lines. However, high fuel costs (₹279–₹350/kg), competition from advancing battery technology, and global reliability issues pose major hurdles before widespread adoption.

India can’t find a sweet spot for its sugar policy

In February, India had a sugar problem: we had too much of it.

The government had already allowed mills to export 15 lakh tonnes of sugar during the 2025–26 season. In February 2026, it added another 5 lakh tonnes, taking the total export quota to 20 lakh tonnes. The official reason was to manage India’s “surplus sugar availability”. Mills eventually exported only around 8 lakh tonnes against that quota.

By August, though, the problem had done a complete 180-degree flip. Domestic spot sugar prices had jumped roughly 10% in a month and climbed to a record high.

The government’s response was almost the opposite of what it had been doing a few months earlier. It prohibited further exports, began physically verifying mill inventories, restricted how much traders and large consumers could hold, and opened a duty-free window for 10 lakh tonnes of raw-sugar imports until 31 October.

What went wrong?

The reversal makes sense once you look at what happened to the production estimates.

Sugarcane-growing states had initially projected production of around 343 lakh tonnes. The government now expects roughly 306 lakh tonnes, about 11% lower than the original estimate. The government was not alone in getting it wrong — the US Department of Agriculture (USDA) also cut its India estimate by 53 lakh tonnes. The exact numbers vary depending on who you ask. But directionally, all estimates were lower than initial expectations.

But what’s worth asking is why did it take so long for this mismatch in expectations to become so obvious?

You see, the season had started strongly. Production was running well ahead of the previous year, especially in Maharashtra and Karnataka. But early production can be deceptive. Sugar output depends on both how much cane reaches mills, as well as how much sugar mills recover from every tonne of that cane. A mill can crush a lot of cane early without the total crop for the year being any larger. It may simply be processing the available crop faster.

That is broadly what happened. By 15 April 2026, India had produced 275 lakh tonnes of sugar, just around 8% more than a year earlier. But only 19 mills were still operating, against 38 at the same point the previous year. Then by 30 April, output was still 7% ahead of the previous year. Yet only 5 mills remained operational, against 19 a year earlier.

So the strong first half did not necessarily mean the crop was much larger, but just that a greater share of it had arrived early.

At the same time, the quality of the crop itself had weakened for several reasons. Excess rain hurt parts of Maharashtra. Crop disease damaged cane in UP and Maharashtra. Weaker cane quality also lowered recovery, which meant the same tonne of cane produced less sugar. The USDA, too, cited excessive rainfall when it cut its India estimate.

In UP specifically, even the cane that was available did not necessarily reach sugar mills. The state’s cane availability for crushing was estimated to be 2–3% lower. Some mills closed around 15 days earlier than scheduled while others reportedly received around 25 lakh quintals less cane.

Industry representatives said some farmers had sent cane to khandsari (raw sugar) units, which could offer better prices and immediate payment. This connects to a problem we explored the last time we covered sugar, which is that sugar mills must pay farmers a government-regulated price for cane, while the price they get for sugar keeps changing. When sugar and ethanol sales do not cover costs, mills can run short of cash and delay payments to farmers. That can make khandsari units, which often pay immediately, more attractive.

This alone wouldn’t explain all of the shortfall, but it is another reason why estimating cane output alone is not enough.

Now, beyond this, the data around sugar production itself is too fragmented to get a fully accurate picture. Mills report production, sales and stocks to the government. Traders now update inventories through the Department of Food and Public Distribution’s online portal. But there is still no single public, live balance that tells you how much sugar was produced, sold, exported, dispatched or remains in stock.

India had sugar, but the buffer was thin

Even now, nobody quite agrees on whether India has a genuine sugar shortage.

The government initially argued that the price rise was not justified by demand and supply. It blamed hoarding, speculative transactions and paper trades in which sugar was sold without physically leaving the mill.

The industry has pushed back too. The National Federation of Cooperative Sugar Factories estimates net production at 279 lakh tonnes, after around 24 lakh tonnes of sugar-equivalent was diverted to ethanol. It expects the next season to begin with around 35 lakh tonnes of stock. Against monthly demand of roughly 22 lakh tonnes, that should ideally bridge the market until fresh sugar arrives.

Technically, both sides can be right. India could have enough sugar in the national balance while the market for sugar that was unsold and ready to move was still tight. Once the buffer became thin, hoarding or delayed selling could make that tightness much worse.

That is why the government’s response focused first on finding and moving the sugar that was already inside the country.

On 24 July, officials were asked to physically verify mill inventories and reconcile declared stocks with sales, dispatches, mill returns and GST-linked information. A discrepancy could even affect a mill’s future domestic sale quota.

Then came stock limits. From 1 August to 30 November 2026, sugar dealers were required to report inventories every week and stay within prescribed holding limits. From 1 September to 30 November, businesses consuming more than 10 tonnes of sugar a month were also barred from holding more than 15 days of their normal requirement.

These measures can stop people from sitting on inventory. But they cannot create more sugar out of thin air.

That’s where wheat imports come in. The government opened a duty-free window for 10 lakh tonnes of raw sugar until 31 October. Unlike stock limits, imports actually add to supply.

But not immediately. Sugar from Brazil can take around 40–45 days to reach Indian ports, before unloading, refining and inland transport. Industry representatives expect only some consignments to arrive before 15 October. Raw sugar sitting at a western port is not the same as white sugar reaching a bakery in northern India.

The industry has also suggested starting the next crushing season earlier. That can bring fresh sugar into the market sooner, but less mature cane generally gives lower recovery. In other words, early crushing can move sugar from a later month into an earlier one without necessarily increasing total production.

Did ethanol drink India’s sugar?

The most obvious suspect in this imbalance is a commodity that we only see ourselves covering more as its mentions grow in government announcements: ethanol.

Sugar mills do not only make sugar. They can also divert cane juice and molasses towards ethanol, which oil companies buy for blending into petrol. Every tonne of sugar-equivalent that goes towards ethanol is, by definition, sugar that does not enter the food market.

So when sugar prices rise after a production shortfall, it is tempting to say: perhaps India simply turned too much of its sugar into fuel. That argument sounds plausible because ethanol policy was designed primarily to absorb India’s excess sugar. For years, India struggled with too much sugar, weak mill finances and delayed payments to farmers. Ethanol gave mills another buyer for the sucrose inside cane and a more predictable revenue stream.

But this year, ethanol does not really explain the hole.

The government says the share of sugar diverted towards ethanol fell from around 12% in 2022–23 to 9% in 2025–26. It also says nearly three-fourths of India’s ethanol now comes from foodgrains. It seems that no matter what the estimate, ethanol did not create that forecasting miss. It did, however, reduce the cushion once the crop turned out smaller.

Cutting cane-based ethanol would release more sugar into the food market, but it would not explain why the crop estimate was wrong in the first place. It would also weaken a revenue stream that helps mills generate cash and pay farmers.

So the real policy problem is not sugar versus ethanol. It is how much cane India can safely commit to ethanol before it knows how large the crop will actually be.

That question is still unresolved. The government’s draft Sugarcane (Control) Order, 2026 tried to bring ethanol and khandsari more formally into cane economics, but was withdrawn in May after opposition from states and other stakeholders. Its withdrawal did not cause the current price spike. But the tension remains: when sugar is abundant, India wants more cane to become fuel, and when the crop disappoints, it needs more of that cane back in the food market.

Who wins and who pays?

The price spike does not hit everyone in the sugar chain the same way. Mills, farmers, food companies and consumers, all feel it differently.

For mills sitting on cheap inventory, higher sugar prices are obviously helpful. Balrampur Chini, for instance, held 45.67 lakh quintals of sugar on 30 June 2026, valued in its books at ~₹37 per kg. Its average June-quarter realisation was nearly ₹42 per kg. That is why sugar stocks rallied as prices rose as investors were betting on the margin sitting inside those inventories.

But the upside is not unlimited. Some stock may already be contracted and domestic sales are regulated. Additionally, higher cane costs, weaker recovery, interest expenses and lower volumes can eat into the benefit. That became obvious when Balrampur Chini, Dhampur Sugar and Bajaj Hindusthan fell around 5% each after duty-free imports were announced. More supply threatened the same price advantage investors had been betting on.

Farmers benefit less directly. Cane prices are set through the central Fair and Remunerative Price, or a higher state-advised price in some states. So a spike in sugar prices does not automatically mean farmers get paid more.

What higher sugar prices can do is improve mill cash flow, making it easier to clear cane dues and compete for the next crop.

For food companies, the effect runs the other way. Sugar is a major input in biscuits, drinks, ice cream, confectionery and bakery products. Large companies have more protection through contracts and pricing power. Smaller bakeries, sweet shops and regional manufacturers are more exposed to spot prices and frequent purchases, especially under the 15-day stock limit.

Consumers eventually feel some of this too, either through higher retail sugar prices or through pricier sweets, biscuits, drinks and desserts. The pass-through will not be immediate or uniform, but festival-season inflation is exactly why sugar gets politically sensitive so quickly.

The missing safety margin

The cautionary tale doesn’t lie in the fact that India got its sugar forecast wrong. It is in the nature of forecasts to not be accurate.

The problem is that policy left very little room for that error.

India manages almost every part of the sugar market: cane prices, ethanol prices, domestic sales, exports, imports and stock limits. That means the government is constantly balancing three interests that rarely line up neatly — farmers want higher cane prices, mills want better realisations, and consumers want cheap sugar. In a surplus year, the system pushes sugar out through exports and ethanol. In a tight year, it suddenly pulls the other way.

That is why the buffer is important. India needs a much clearer view of how much sugar is actually available through the season, not just scattered numbers on production, stocks, ethanol diversion, sales and dispatches. And there should be some safety margin before more sugar is allowed to leave the food system, because the next crop will bring the same problem back.

Can hydrogen actually power Indian trains?

India now has two very different hydrogen-rail experiments underway.

Last month, Indian Railways launched its first domestically built hydrogen-powered passenger train on the Jind–Sonipat route in Haryana. Meanwhile, Concord Control Systems has a ₹47 crore contract with NTPC to convert an existing diesel locomotive into a 3,100 HP hydrogen fuel-cell hybrid locomotive at its Sipat power plant in Chhattisgarh.

The two projects could help answer a much bigger question. Where does hydrogen actually fit into India’s railway system? After all, almost the entire broad-gauge railway network is already electrified. Hydrogen isn’t likely to replace our wired, electric trains anytime soon. So where does this ambition stand?

A pilot

The Haryana train is, for now, a pilot program to test how hydrogen propulsion, refuelling and maintenance work under Indian conditions before deciding where else to use the technology.

A hydrogen fuel-cell train is still an electric train. Where it differs is that instead of getting electricity continuously from an overhead wire, the train itself carries hydrogen and uses a fuel cell to produce electricity onboard.

For green hydrogen, electricity is first used to make hydrogen. It then has to be compressed, stored and put into the train, where it is converted back into electricity. That’s a lot of extra steps when an electric train can simply take electricity directly from the wire.

Where could hydrogen make sense?

NTPC’s project shows where hydrogen could be more useful.

Its locomotive is being developed to haul coal within NTPC’s Sipat operations. Industrial sites such as mines, ports, steel plants and power plants can have their own railway systems where diesel locomotives are still used and installing overhead wires may not always make sense.

These locomotives also keep returning to the same area, so one hydrogen refuelling facility could potentially serve the operation instead of requiring stations across the country. Heritage and hilly routes are another possible niche, particularly where installing overhead electrical infrastructure is difficult or undesirable.

But can it actually compete?

But the biggest bottleneck in all these visions is that hydrogen itself, whether green or white, is still expensive. Recent Indian tenders have priced green hydrogen at roughly ₹279–350 per kg, which is why Railways is now looking for ways to procure it more cheaply.

Beyond just the absolutely prohibitive price, hydrogen still has to beat batteries.

For short routes or locomotives that have plenty of time to recharge, batteries may be simpler and more energy-efficient because they don’t require hydrogen production, storage and refuelling infrastructure. Hydrogen is more suited to when trains need to operate for longer without stopping to charge.

And reliability isn’t settled either. Germany launched the world’s first commercial hydrogen passenger service in 2018, but a later 27-train fleet in the country’s Taunus region suffered reliability problems and required upgrades. Some services had no choice but to revert back to using diesel as a substitute.

What happens next?

The Haryana pilot will test how hydrogen trains cope with Indian weather and regular passenger use, including repeated refuelling.

The NTPC project is a different test. It will show whether hydrogen can handle a locomotive pulling heavy loads every day.

These two projects should give us a better sense of where hydrogen can actually be useful on Indian railways.

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

Tidbits:

1. Karnataka suspends food licences of quick commerce apps over toxic seed sales

The Karnataka government has suspended the food safety licences of major platforms like Amazon, Swiggy Instamart, and BigBasket for selling toxic Datura seeds online. The regulatory crackdown highlights growing scrutiny over the safety and vetting processes of rapid-delivery grocery networks.

Source: Livemint

2. Mahindra unveils new heavy vehicle with AI-assisted driving mode

Mahindra & Mahindra has introduced a new generation of heavy commercial vehicles equipped with an artificial intelligence-enabled autonomous driving mode. The technological upgrade aims to improve fleet efficiency, driver safety, and operational logistics for long-haul freight operations.

Source: Business Standard

3. Singtel seeks foreign direct investment approval for Indian satellite market

Singapore Telecommunications has applied for foreign direct investment approval to enter India’s emerging satellite communications market. The move intensifies competition in the domestic space-based broadband sector, positioning Singtel against established players like Starlink, Jio, and OneWeb.

Source: The Economic Times

4. TCS secures $1.45 billion Porsche contract and acquires its IT arm

Tata Consultancy Services has signed a $1.45 billion deal with Porsche, which includes acquiring the German automaker’s dedicated IT division for $373 million. The acquisition will allow the Indian software major to deepen its automotive engineering capabilities and expand its European operational footprint.

Source: Livemint

5. Government lifts wheat export ban to support local farmers

India has officially lifted its ban on wheat exports to protect the financial interests of farmers facing depressed domestic grain prices. The policy reversal reopens a crucial supply line for international grain markets while attempting to stabilise local agricultural incomes.

Source: The Hindu

6. Amazon and Flipkart increase seller penalties ahead of festive season

E-commerce giants Amazon and Flipkart are tightening their policies by imposing stricter financial penalties on sellers who cancel confirmed customer orders. The operational shift aims to ensure supply chain reliability and protect consumer trust ahead of the crucial holiday sales period.

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. Can a “miracle drug” change how we work?

   GLP-1 drugs like Ozempic are often touted for boosting workplace productivity, but a landmark Danish study reveals a more nuanced picture. While the medication reduced long-term sick leave by 17%, it produced no net gain in employment or income, as Denmark’s welfare system absorbs illness costs—saving money for employers and municipalities rather than raising worker pay. With generic semaglutide expanding rapidly across India, the economic impact could unfold very differently in a market without formal safety nets.

2. SEBI wants to create a mutual fund distributor for bonds.

   SEBI has proposed creating Fixed Income Channel Partners (FICPs) to expand retail participation in India’s ₹60 trillion corporate bond market, borrowing a blueprint from mutual fund distributors. However, unlike mutual funds, single bonds carry concentrated credit risk, thinner secondary liquidity, and complex pricing. With capped upfront commissions potentially incentivising portfolio churning, the key challenge will be expanding reach without creating mis-selling risks for retail investors.

Can a “miracle drug” change how we work?

GLP-1s began as diabetes treatments. Then they became a breakthrough in weight loss. Now the promise is expanding again: better health should mean people miss less work, stay productive, and remain economically active for longer.

That last claim matters a lot. It is increasingly used to justify spending on these drugs. But until recently, nobody had tested it properly.

Someone finally did.

Their employment rate had not moved either. If anything, the estimate leaned slightly negative, though it was statistically indistinguishable from zero.

That finding comes from a July 2026 working paper circulated by the National Bureau of Economic Research in the US. Five economists used Danish administrative records to track what happened after people started taking Ozempic. The paper has not been peer-reviewed yet, but it is the most careful attempt so far to test whether these drugs improve people’s working lives.

The answer is yes, just not in the way many expected.

This matters to us because India is now running its own version of the experiment, at speed and without a control group. Semaglutide’s core compound patent in India lapsed in March 2026, and dozens of generic brands entered almost immediately, many at prices far below what the innovator had been charging. Sales spiked, then growth slowed sharply within a few months.

Meanwhile, an estimated 10.5% of Indians aged 20 to 79 were living with diabetes in 2024, while roughly 8% of adults were obese. The disease burden is huge, the drugs are suddenly much cheaper, and nobody in India is systematically measuring what any of this does to people’s working lives.

Denmark, thankfully, measures everything.

Why you can’t just compare people who take the drug to people who don’t

Before getting to what the researchers found, there is one important question: how do we know Ozempic actually caused any of it?

That is harder to answer than it sounds. If you simply line up Ozempic users against non-users and find that the users do better at work, you’ve learned almost nothing. People who show up at a clinic, get a prescription and stick with an injectable drug for years are not a random slice of the population. They may be sicker in specific ways, but also better informed, more motivated or more connected to the healthcare system. Any of those things could affect employment and income on their own. You’d be measuring the kind of person who takes Ozempic, not what Ozempic does to them.

So the researchers did something cleverer. They compared people who started Ozempic in its first seventeen months on the Danish market with people who started the same drug roughly four years later. Then they matched the two groups on age, sex, diabetes, obesity, and a long list of social, health and economic characteristics. That left 7,011 early starters paired with 7,011 near-identical later starters, covering 71.6% of everyone eligible in the early group.

The logic is simple. Both groups eventually took Ozempic, so they are much more alike than users and non-users would be. The crucial difference is timing. The later group therefore becomes a stand-in for what might have happened to the early group if their treatment had been delayed by four years.

There is one more caveat before we get to the results, because it shapes how we should read them. Everyone in the sample was between 30 and 59 when the study began, and 84% had diabetes. So these are not necessarily the people you picture when you hear “GLP-1” today. This was not a broad weight-loss population. It was mostly middle-aged people with diabetes, most of whom were already employed, taking the drug for the reason it was originally approved.

The drug worked, and it took its time

So, with those caveats in mind, what actually happened after people started taking Ozempic?

First, most of them kept taking it. Four years after starting, 75% of early users filled at least one semaglutide prescription that quarter. That doesn’t prove continuous use, let alone that every dose was injected. But it is a remarkably high persistence rate for a chronic medication, helped in part by Denmark’s heavy drug subsidies.

Then the absences started falling.

Denmark’s main measure of long-term sick leave generally captures medically certified absences lasting more than 30 days. Before treatment, people in the study spent about 5.5% of their months on such leave. After starting Ozempic, that fell by 0.95 percentage points, or 17.3%. Put differently, roughly one in six of those long periods of sick leave disappeared.

And the effect took time. In the first two years, sick leave fell by about 0.8 percentage points. By years three and four, the decline had widened to roughly 1.1 points. That is what you might expect if the benefits come from gradual improvements in health rather than something that changes overnight.

Other measures moved in the same direction. Municipality-paid sickness benefits, which kick in after the first 30 days of an absence, fell too. The researchers also found fewer emergency department visits, fewer cardiovascular drug prescriptions and fewer consultations.

That makes for a coherent story, but there is an important limit to how far we can take it. The Danish records tell us about prescriptions, hospital visits and benefit payments. They don’t tell us people’s weight, blood glucose readings, or why each person went on sick leave. So the study can show that health indicators improved while long-term sickness leave fell. It cannot prove that those health improvements caused the decline in absences.

So where did the gain go?

Here is where the paper gets genuinely surprising. The same treatment that cut prolonged sickness absence by a sixth produced no detectable improvement in whether people were employed, how much they worked, or what they earned.

And this is not just a case of noisy data. The estimates are precise enough to put a ceiling on what could be hiding underneath them: the researchers can rule out an employment gain larger than 0.4 percentage points and an income gain larger than 0.7%. If there were a meaningful labour-market payoff, it should have shown up. They also split the sample by sex, age and education to see if the effect appeared somewhere else. It didn’t. Some estimates were even negative.

The explanation is not medical. It is institutional, and it may be the most useful idea in the paper.

In Denmark, employers generally cover the first 30 days when an employee falls ill. After that, the municipality pays sickness benefits to those who qualify. For many lower-paid workers, those benefits replace most of the income they would otherwise lose. So a Danish worker who is sick for two months may take only a small financial hit. And if that two-month illness is prevented, their measured income does not rise much either.

The money is still being saved. It just goes to whoever would have paid for the absence. The employer avoids paying for those first 30 days. The municipality avoids paying afterwards. The economic benefit shows up not as higher income for the worker, but as a cost that never appears on someone else’s books.

It is worth being clear about what this does not mean. This is an offset, not a verdict. The paper does not run a full cost-benefit analysis, subtract these savings from the price of the drug, or measure things like whether people become more productive while they are actually at work.

“Ozempic pays for itself” is not a claim this study makes.

A different study found the opposite, for different people

Around the same time, another NBER paper by Rebecca Diamond looked at American women taking GLP-1s specifically for weight loss. Among women who weren’t employed before starting treatment, employment was estimated to be 26.9% higher over quarters six to eighteen.

That is an enormous effect. It is also one to treat carefully.

The full matched study includes only 242 treated women, and the non-employed subgroup is smaller still. A stricter statistical check puts the result just outside the conventional 5% significance threshold. And when all the women are pooled together, the employment effect gets smaller and is no longer statistically significant.

There is another complication. Diamond notes that the result fits two very different stories. Losing weight might make it easier for someone to work. Or employers might respond differently to visibly thinner applicants. The data cannot tell us which one is happening.

But this doesn’t necessarily contradict the Danish paper. The two studies are looking at different people starting from very different places. Denmark’s sample was mostly people with diabetes who were already working, so better health could show up mainly as fewer days away from work. Diamond looked at women taking GLP-1s for weight loss who weren’t working to begin with, so any labour-market benefit could instead show up as entering employment.

What travels to India, and what doesn’t

Denmark’s result is partly a product of Denmark’s plumbing. Because workers can have much of their income replaced during a long illness, the financial gain from preventing that illness largely went to employers and municipalities rather than workers. Change the plumbing and the money lands somewhere else. In a system where a long illness can mean lost wages or even a lost job, preventing it could show up directly in the household — as more hours worked, higher earnings, or a job retained. The government’s savings would be smaller for the simple reason that it wasn’t paying much of the cost to begin with.

That is more likely to be the shape of the effect in India, where most workers don’t have a 30-day employer-funded cushion followed by a municipality picking up the tab. Which is exactly why we need to measure the effect here rather than import the Danish estimate. The system is different enough that the Danish number tells us very little about where the economic gains would land in India.

The patients would differ too. Denmark’s early adopters were overwhelmingly people with diabetes, a group with a lot to gain clinically. A cheap, widely marketed weight-loss drug can bring in a very different patient: someone with less illness to reverse, and potentially less sickness absence to prevent. India’s post-patent market could increasingly include that second group.

And right now, we can’t see much of it. Pharmacy sales data can tell us how many units moved. It can’t tell us how many distinct people started treatment, whether they were treating diabetes or trying to lose weight, or how long they stayed on the drug. That last part matters enormously. In Denmark, the effect took years to build. A market where people fill two prescriptions and stop is unlikely to reproduce the same result, no matter how many boxes get sold.

So the useful question was never simply whether GLP-1s pay for themselves. It is who benefits financially, through which channel, and over how long. In Denmark, part of the answer was employers and municipalities, quietly, over four years, through absences that never happened.

In India, we don’t know yet. And the data that could tell us largely isn’t being collected.

SEBI wants to create a mutual fund distributor for bonds

SEBI wants to create a new kind of bond distributor.

It has proposed a new intermediary called a Fixed Income Channel Partner, or FICP, that would help people buy bonds through online bond platforms. The inspiration is fairly obvious: mutual fund distributors helped take mutual funds beyond wealthy, urban investors. SEBI now wants to see if something similar can work for bonds.

There is just one complication. A bond is a much trickier product to hand to a commissioned salesperson than a mutual fund.

Why it matters: India’s corporate bond market is worth roughly ₹60 trillion, but retail investors barely participate in it. SEBI has spent the past few years making bonds easier to buy. Distribution is the next problem it wants to solve.

Driving the news: In a consultation paper released on August 21, SEBI proposed allowing individuals and firms to enlist with stock exchanges as FICPs. SEBI-registered Online Bond Platform Providers, or OBPPs, could then appoint them to find and assist investors.

SEBI released another consultation paper the same day proposing tighter advertising rules for OBPPs, including restrictions around pitches such as “fixed returns”, “passive income” and FOMO-style marketing. The two papers fit together neatly: SEBI wants bonds sold more widely, while trying to make sure they aren’t oversold.

Catch up quick

SEBI has already tried fixing access.

In 2024, it reduced the minimum face value of many privately placed bonds from ₹1 lakh to ₹10,000. Before that, its 2022 OBPP framework brought online bond-selling websites under regulation, requiring them to register as stock brokers in the debt segment and follow disclosure rules.

That made buying a bond easier. It did not necessarily make bonds mainstream.

SEBI’s own assessment is that OBPPs have mostly attracted tech-savvy, urban investors. But the investors outside that bubble haven’t necessarily followed.

Mutual funds offer an obvious template for what comes next. India has roughly 2.75 lakh AMFI-registered mutual fund distributors sitting behind an industry with ₹79.5 lakh crore of assets. Distributors played an important role in taking mutual funds beyond the largest cities.

How FICPs would work

The entry barrier is deliberately low. An individual needs to be an Indian citizen, at least 18, have passed Class 12, have a clean record, and hold the relevant NISM Fixed Income Securities certification.

SEBI is also creating two obvious pools of potential distributors.

AMFI-registered mutual fund distributors would have their enlistment fee waived, although they would still need the NISM certification. Stock brokers that are not already registered in the debt segment could become FICPs too. That second route could end up being just as important.

An FICP would enlist with one stock exchange, with the enlistment valid for three years, and could work with multiple OBPPs. They could help with onboarding, documentation and KYC.

But the actual transaction stays with the platform. Orders must route through the OBPP. The FICP cannot handle the client’s money or securities, or issue contract notes.

And this is where things get interesting: the FICP gets paid by the OBPP out of its brokerage. Total charges to the client cannot exceed 2.5% of the investment value.

The guardrails

SEBI seems well aware of what can go wrong when you put a commission between a salesperson and a complicated financial product.

So much of the liability sits with the OBPP.

The platform would be responsible for what its FICPs do. It must conduct know-your-distributor checks and in-person verification, keep track of which clients came through which FICP, and resolve complaints within 21 days.

For clients in remote areas, the OBPP must also call them to check for malpractice.

Sales incentives cannot include gift vouchers, gadgets or entertainment. And some of the riskiest products are simply kept out: AT1 bonds and unsecured perpetual debt cannot be sold through FICPs.

Those restrictions matter because India has already seen what bad bond distribution can look like.

A few years back, YES Bank’s AT1 bonds were sold as “Super FDs”, but roughly ₹8,800 crore worth of them were eventually written off completely. About 1,346 individual investors held them. Keeping AT1s away from this new distribution channel looks very much like a lesson learned.

Where the mutual fund analogy breaks

There is a reason mutual fund distributors worked so well: the product they were selling was designed for retail investors. A bond isn’t quite the same thing.

A debt mutual fund can spread your money across dozens of issuers. Buy one corporate bond, and you are taking the credit risk of one company.

A mutual fund gives you a daily NAV. With many corporate bonds, figuring out whether the price you are being offered is actually fair is much harder.

And if you want out, there may simply not be a buyer. Secondary-market liquidity in many corporate bonds remains thin.

But perhaps the biggest difference is how the salesperson gets paid.

An MFD typically earns a recurring trail commission as long as the investor remains invested. An FICP would earn from the OBPP’s brokerage when the bond is sold. That changes the incentive. The mutual fund distributor benefits from keeping assets invested, but the bond distributor would benefit from just churning the portfolio.

That makes SEBI’s 2.5% cap worth looking at closely.

On a three-year bond yielding 9%, a 2.5% charge is equivalent to roughly 80 basis points a year before considering compounding. On a shorter bond, the drag is even larger. Stating the cap as a percentage of the amount invested rather than an annual charge makes the same fee progressively more expensive as maturity gets shorter.

There is another problem: investors may not see that economics as clearly as they would with a mutual fund expense ratio. If the distributor’s compensation ultimately sits inside the price or yield being offered, the investor mostly sees the final yield.

And then there is the question of what gets sold.

The safest corporate bonds often yield only modestly more than bank deposits. That leaves less room for platforms and distributors to earn attractive spreads while still giving the investor a compelling yield. Move down the credit curve and the economics get better. The downside is that the risk gets higher too.

What happens next

Comments on the proposal close on September 11. After that come SEBI’s final rules and the exchange-level machinery needed to make the system work.

But there are three things worth watching.

First, the fee. Does the 2.5% cap survive, and does SEBI eventually require clearer disclosure of exactly what the distributor earns?

Second, the platforms. Making OBPPs fully responsible for their distributors creates compliance costs that larger, better-capitalised platforms should find easier to absorb.

And finally, the distributors themselves. India may have 2.75 lakh mutual fund distributors, but they don’t automatically become bond distributors. They still need the fixed-income certification. How many bother to get it will determine whether FICPs become a genuine distribution network or just another regulatory acronym.

SEBI is probably right that India’s bond market has a distribution problem. And mutual funds are good evidence that distribution can change how far a financial product travels.

But mutual funds didn’t become mainstream simply because India created an army of salespeople. The product itself was built for retail: diversified, professionally managed, transparently priced and relatively easy to exit.

With bonds, SEBI is now trying to build the salesforce around a product that still lacks many of those protections.

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

Tidbits

1. Govt mandates disclosure of sterilisation subcontractors on medical device labels

To improve traceability, the Ministry of Health and Family Welfare has mandated that medical device manufacturers outsourcing sterilisation must disclose the subcontractor’s licence number on their device labels. Domestic manufacturers have raised concerns that the new compliance burden could delay export shipments.

Source: Business Standard

2. Urban Company sues Kent RO over ads targeting its water purifiers

Urban Company has filed a defamation and disparagement suit against Kent RO Systems in the Delhi High Court over advertisements claiming its Native water purifiers were “unsafe” and “risky.” Following a court hearing, Kent RO agreed to pull down the offending advertisements and promotional content within 15 days.

Source: The Economic Times

3. Govt comes down heavy on Starlink for signing MoUs with states without a licence

The Indian government has strongly reprimanded Elon Musk’s Starlink for entering into Memorandums of Understanding with state governments before obtaining a valid commercial operating licence. The move signals regulators’ intent to strictly enforce compliance before allowing satellite broadband operations to commence in the country.

Source: The Hindu BusinessLine

4. Govt helps Indian chipmakers pool demand for global foundries

The Ministry of Electronics and Information Technology (MeitY) is stepping in to help Indian fabless chip designers pool their manufacturing demand. Pooling their orders could give smaller Indian chip designers more bargaining power on pricing, capacity, and manufacturing terms with global foundries.

Source: Livemint

5. Citigroup and Axis Bank team up on leveraged dollar deposit boom

Citigroup and Axis Bank are partnering to capitalise on a leveraged dollar deposit boom in India, as the RBI seeks to attract dollar inflows and bolster foreign-exchange reserves. Under the arrangement, Axis Bank will provide standby letters of credit to support offshore financing extended by Citigroup.

Source: Business Standard

6. Finance Ministry flags oligopoly concerns in airport privatisation

The Finance Ministry has raised concerns over an emerging oligopoly in India’s aviation sector due to the current trajectory of airport privatisation. The ministry noted that private operators Adani and GMR now account for more than half of the country’s air passenger traffic, highlighting potential risks to competition and pricing.

Source: Business Standard

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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:

Story: The areca nut with an identity crisis.

Why is India's humble supari causing a massive customs headache? To protect millions of domestic farmers, India imposes steep 100% import duties on foreign areca nuts, inadvertently creating a massive incentive for smuggling. By routing cheap Southeast Asian supplies through neighbouring countries like Bangladesh and using fraudulent free-trade paperwork, importers allegedly evaded over ₹2,500 crore in customs duties. As regulators constantly redraw classification rules, uncovering the true origin of these nuts remains a highly complex, high-stakes game of cat and mouse.

Chart: Who gives out the most personal loans in India?

Why are Non-Banking Financial Companies (NBFCs) completely dominating the personal loan space? While traditional banks focus on a smaller number of large, high-value loans, NBFCs now account for a staggering 91% of all personal loans by volume, largely driven by digital disbursements under ₹1 lakh. As technology and fintech partnerships automate the lending process, handing out thousands of micro-loans has become highly efficient—though this fast-growing segment is now flashing warning signs of higher repayment stress and delinquencies.

The areca nut with an identity crisis

Areca nut sits at the centre of paan, gutkha and a whole family of chewing products. India also protects its domestic areca growers with steep import duties. And that has created a big incentive to find ways around them.

Recently, the Directorate of Revenue Intelligence (DRI) uncovered one such scheme. According to the agency, areca sourced from Indonesia, Thailand and Malaysia was first shipped to Bangladesh. There, it was allegedly repacked and given fraudulent certificates showing Bangladesh as its country of origin.

The DRI says this helped importers evade more than ₹2,500 crore in customs duty over the past few years.

So what made the Bangladesh label so valuable? Start with why India imports areca at all.

Why is India importing foreign areca at all?

The obvious guess is that the country doesn’t grow enough of it.

But India is actually the world’s largest producer of areca nuts, accounting for about 63% of global output. Karnataka alone produces about 10 lakh tonnes. More importantly, a lot of livelihoods sit behind this crop. The Agriculture Ministry estimates that roughly 60 lakh people depend on areca farming for work

India grows so much areca because it also consumes a lot of it. Areca is chewed as plain supari and goes into paan, pan masala and gutkha. Pan-masala manufacturers are major buyers, and their demand can move prices in producing markets.

There is also an uncomfortable wrinkle here. Areca is associated with serious health risks, including oral cancer. So the same crop that supports millions of livelihoods also feeds products that create a public-health problem.

Imports add another pressure point. Areca grown in countries such as Indonesia can be cheaper than the domestic crop because production costs and local prices differ across countries. If those cheaper nuts entered India freely, they could undercut Indian growers.

So India has built a fairly high wall around the market. For most countries, imported areca normally faces a 100% basic customs duty. Most imports also cannot come in below a minimum import price of ₹351 per kilogram.

But there is an important exception. A genuinely Bangladeshi areca nut can avoid the normal 100% customs duty. It still has to satisfy the ₹351 minimum import price, but the duty saving alone is enormous.

That is what made the alleged fraud attractive. Cheaper supply existed outside India, demand was strong inside it, and a Bangladesh label offered a way around the most expensive part of India’s import wall.

So what actually makes a Bangladeshi nut ?

The exception comes from the South Asian Free Trade Area, or SAFTA. It is a trade agreement between India, Bangladesh, Pakistan, Sri Lanka, Nepal, Bhutan, the Maldives and Afghanistan that lowers or removes duties on eligible trade between these countries. For qualifying areca nuts from Bangladesh, the basic customs duty can be 0%.

Bangladesh does grow areca. But cheaper and more plentiful supplies are available elsewhere in Southeast Asia.

So the incentive was obvious: source the nut from one place, and somehow make it qualify as if it came from another. Take a look at what happened in the Bangladesh case. The nuts were first routed through an export-processing zone(EPZs) in Bangladesh. Investigators say the containers and bags were changed there, which helped make the cargo look less like the same shipment that had arrived from Southeast Asia.

After that came the paperwork. Fraudulent SAFTA Certificates of Origin were allegedly arranged, allowing the nuts to be presented to Indian Customs as Bangladeshi-origin goods.

This is where Rules of Origin come in.

They exist because shipping a product through a country does not automatically make it a product of that country. To claim the trade benefit, the product has to satisfy specific origin rules. Either because it was produced there, or because enough qualifying production happened there.

Imagine an areca nut grown in Indonesia and shipped raw to Bangladesh. If Bangladesh simply changes the bag and sends it on to India, the nut does not suddenly become Bangladeshi. It is still an Indonesian nut that happened to pass through Bangladesh.

But now imagine that something actually happens to it there. It is processed, value is added, and it is then exported to India. This is where the rules start asking harder questions. Was what happened in Bangladesh substantial enough? Did enough local value get added? Did the processing satisfy the particular origin rule that applies to that product?

Only if those conditions are met can the nut genuinely claim Bangladeshi origin and the SAFTA benefit.

That is why a Certificate of Origin matters. But also why the certificate cannot always be the end of the story. In 2020, India introduced CAROTAR, which gives Customs a way to ask what sits behind that certificate. If something does not add up, the importer can be asked to show how the goods actually satisfy the origin rule.

And that is what makes the Bangladesh case more than a forged-certificate story. The paperwork said Bangladesh. DRI’s case is that the nuts themselves had begun their journey in Indonesia, Thailand, and Malaysia. But there is another complication in our example.

Suppose that Indonesian nut was not merely repacked in Bangladesh. Suppose it was roasted there. Customs now has two different questions to answer. The first is about origin. Did enough happen in Bangladesh for the nut to become Bangladeshi under SAFTA?

The second is about classification. Did roasting change the nut enough for Customs to treat it as roasted areca rather than raw areca? Those are separate tests. A nut could be roasted in Bangladesh for classification purposes without automatically qualifying as Bangladeshi-origin.

And that distinction mattered because, until April 2025, roasted areca could receive easier import treatment than raw areca. Importers therefore had a reason to argue that their nuts belonged in the roasted category.

Then the government changed the rule. Roasted areca was brought under the same ₹351-per-kilogram minimum import price. Its classification later changed again, but the restriction stayed.