U.S. Slaps 126% Countervailing Duty on Indian Solar Cell Imports

High | Trade, Global Economy

The U.S. Department of Commerce imposed a preliminary countervailing duty (CVD) of 125.87% on Indian solar cell imports on February 24, 2026, following a complaint by the Alliance for American Solar Manufacturing and Trade alleging that subsidised Indian exports contravened WTO agreements on subsidies. The probe specifically named Adani Group entities (Mundra Solar Energy Pvt. Ltd. and Mundra Solar PV Ltd.), Premier Energies Photovoltaic, and Waaree Energies. While the duty rate was set against Adani firms, it applies to all Indian exporters. Indonesia (86%–143%) and Laos (81%) were also hit. Indian solar cell exports to the U.S. grew from 232 MW in 2022 to 2,297 MW in 2024, with photovoltaic exports reaching $1.94 billion in FY24 before falling to $954 million in April–December 2025. These duties are additional to existing tariffs of up to 40%. The final determination in the CVD investigation is scheduled for July 6, 2026, and a concurrent anti-dumping duty probe is also underway.

Perspective & Context:

  • In simple terms: The U.S. has effectively made Indian solar panels unaffordable in the American market by slapping a 126% extra tax on them, on top of the 40% duty already in place. This is because the U.S. believes Indian companies are getting government subsidies that let them undercut American solar manufacturers. India’s major solar exporters — Adani, Waaree, Premier Energies — are directly affected.
  • CVD (Countervailing Duty) — a tariff imposed to offset the advantage a foreign exporter gains from government subsidies. If India subsidises solar panel makers (through cheap land, tax breaks, or production incentives), the U.S. adds a matching duty so the imported panels are no longer artificially cheap.
  • What’s happening in parallel: The U.S. is also running an anti-dumping probe — checking whether Indian firms are selling solar cells in the U.S. below their production cost. If both CVD and anti-dumping duties are imposed, the combined tariff wall could exceed 150–200%.
  • India exported $1.94 billion in photovoltaics to the U.S. in FY24 — roughly the size of India’s entire tea export revenue — making the U.S. the single largest market for Indian solar manufacturers.
  • This action comes despite the broader India-U.S. trade framework negotiations, highlighting how sector-specific trade disputes can escalate even amid diplomatic goodwill. The U.S. Supreme Court had earlier quashed Trump’s blanket tariffs as unconstitutional, but CVD investigations operate under separate trade law authority.

Carbon Capture and Utilisation — India’s Path to Decarbonising Hard-to-Abate Industries

Medium | Environment, Energy

Carbon Capture and Utilisation (CCU) technologies capture CO₂ from industrial sources or directly from the air and convert it into useful products such as fuels, chemicals, building materials, or polymers. India, the world’s third-largest CO₂ emitter, needs CCU particularly for hard-to-abate sectors like cement, steel, and chemicals where renewable energy alone cannot eliminate emissions. The Department of Science and Technology has created an R&D roadmap, and the Ministry of Petroleum and Natural Gas has presented a draft 2030 CCUS roadmap identifying pilot projects. In the private sector, Ambuja Cements (Adani Group) is running an Indo-Swedish CCU pilot with IIT Bombay to convert captured CO₂ into fuels and materials, JK Cement is collaborating on a CCU testbed for lightweight concrete blocks and olefins, and Organic Recycling Systems Limited (ORSL) is leading India’s first pilot-scale Bio-CCU platform converting biogas CO₂ into bio-alcohols and specialty chemicals. Key risks include cost competitiveness of CCU-derived products against cheaper fossil-based alternatives, uneven infrastructure readiness, and the absence of clear standards and certification for CO₂-derived products.

Perspective & Context:

  • In simple terms: Instead of just pumping CO₂ underground and forgetting about it, CCU turns captured carbon into things we actually use — concrete, fuel, plastics, chemicals. India’s biggest polluting industries (cement, steel) can’t simply switch to solar panels, so CCU offers a way to keep producing while cutting emissions. It’s still expensive and early-stage in India, but pilot projects are underway.
  • CCU vs CCS: Carbon Capture and Storage (CCS) permanently buries CO₂ underground; Carbon Capture and Utilisation (CCU) recycles the captured CO₂ into commercial products. CCU creates economic value from waste carbon, while CCS is purely a disposal method.
  • What makes sectors “hard-to-abate”: Cement production releases CO₂ as a chemical byproduct of heating limestone — no amount of renewable electricity eliminates this. Similarly, steel requires carbon as a chemical reducing agent. These process emissions account for roughly 30% of India’s industrial CO₂ output.
  • Globally, the EU supports CCU through its Bioeconomy Strategy and Circular Economy Action Plan, the U.S. incentivises it through tax credits, and the UAE is building CO₂-to-chemicals hubs paired with green hydrogen — India’s roadmap draws on these models but is still at the pilot stage.
  • India’s net-zero target of 2070 gives it more runway than Western nations (most target 2050), but scaling CCU from lab pilots to industrial deployment typically takes 10–15 years, making early investment critical.

PM Modi’s Israel Visit — India-Israel Bilateral Trade and Defence Ties in Focus

Medium | Trade & Foreign Policy

Prime Minister Narendra Modi visited Israel on February 25, 2026 — his second visit after the landmark 2017 trip, which was the first by any Indian PM. The visit comes shortly after India joined over 100 countries at the UN in criticising Israel’s settlement expansion in the West Bank. India-Israel bilateral trade, which peaked at over $10.7 billion in 2022-23, declined sharply to $3.6 billion in 2024-25 due to war-related disruptions and trade route difficulties. India has maintained a trade surplus with Israel since 2014-15, though it narrowed from $6.1 billion (2022-23) to $663 million (2024-25). Refined petroleum products (~44%) and diamonds (~22%) dominate India’s exports, while rough diamonds (~33%), fertilizers, electronic integrated circuits, and radar apparatus are key imports. On defence, India accounted for over 38% of Israel’s arms exports between 2014 and 2024 (SIPRI data). Israel’s cumulative FDI into India crossed $347 million (2000–September 2025), primarily in technology, while Indian ODI into Israel stood at $443 million (April 2000–April 2025). Around 32,000 Indian workers were employed in Israel as of October 2024, many recruited post-Gaza conflict to replace Palestinian labour in construction.

Perspective & Context:

  • In simple terms: PM Modi visited Israel to strengthen ties across trade, defence, and technology. While trade between the two countries boomed in recent years, it fell sharply after the Gaza conflict disrupted shipping routes and economic activity. India remains one of Israel’s biggest arms buyers and a growing partner in tech and agriculture.
  • India-Israel diplomatic relations were established in 1992, but the relationship accelerated significantly after 2014, expanding beyond defence into technology, agriculture, water management, and labour mobility
  • What the trade data shows: India exports mostly refined petroleum and polished diamonds to Israel, while importing rough diamonds that are cut and polished in India and re-exported — this diamond trade loop is a distinctive feature of the bilateral relationship
  • India buying 38% of Israel’s total arms exports over a decade makes it one of Israel’s single largest defence customers — comparable to India’s other major defence suppliers like Russia and France
  • The sharp trade decline from $10.7 billion to $3.6 billion in just two years illustrates how conflict and disrupted sea routes (particularly via the Red Sea) can rapidly impact bilateral commerce

Union Cabinet Approves Renaming Kerala as ‘Keralam’ — Constitutional Process Initiated

Medium | Politics

The Union Cabinet approved a proposal to rename Kerala as ‘Keralam’ and will refer the Kerala (Alteration of Name) Bill, 2026 to the Kerala State Legislative Assembly for its views under the proviso to Article 3 of the Constitution. After receiving the Assembly’s views, the government will obtain the President’s recommendation before introducing the Bill in Parliament, which requires amending the First Schedule to the Constitution. The Kerala Assembly had unanimously adopted a resolution on June 24, 2024 requesting the name change, noting that ‘Keralam’ is the name in Malayalam and that states were formed on a linguistic basis on November 1, 1956. The Cabinet meeting was the first held at the PM’s new office ‘Seva Teerth’.

Perspective & Context:

  • In simple terms: Kerala is set to officially become ‘Keralam’ — its name in Malayalam. The Union Cabinet has started the constitutional process, but it still needs the state assembly’s views, the President’s recommendation, and Parliament’s approval through a Bill amending the Constitution’s First Schedule.
  • Article 3 of the Constitution — empowers Parliament to alter the name of any state; the proviso requires that the President first refer the Bill to the concerned state legislature for its views (though the views are not binding on Parliament)
  • Precedents: Several states have been renamed similarly — Madras→Tamil Nadu (1969), Uttaranchal→Uttarakhand (2007), Orissa→Odisha (2011), Pondicherry→Puducherry (2006) — all involved First Schedule amendments under Article 3

IDFC First Bank ₹590 Crore Cheque Fraud — Deposit-Side Fraud Trend Flagged

Low | Banking Sector

IDFC First Bank disclosed a ₹590 crore cheque-based fraud at its Chandigarh branch involving forged cheques and alleged connivance between bank employees and an external party linked to a Haryana government department. Four branch officials suspended, KPMG appointed for forensic audit, and Haryana de-empanelled the bank from handling state government business. RBI is not expected to introduce policy changes but may engage bilaterally. Industry observers note banking frauds have increasingly shifted from the advances side to the deposit side over the last five years.

Perspective & Context:

  • In simple terms: Forged cheques were used to steal ₹590 crore from a government account at an IDFC First Bank branch, with bank employees allegedly involved. The broader takeaway is a trend shift — banking frauds are increasingly occurring on the deposit side (cheque fraud, mule accounts, account takeovers) rather than the traditional loan side.
  • Maker-checker system — one person initiates a transaction, another verifies it; the fraud exposed how this control fails when employees collude with external parties

CAFE-3 Draft Norms Submitted to PMO — Small Car Targets and Compliance Flexibilities Under Discussion

Medium | Economy, Environment

The Bureau of Energy Efficiency (BEE) is submitting the final draft of Corporate Average Fuel Efficiency (CAFE)-3 norms to the PMO. The draft incorporates several compliance flexibilities: OEMs can pool together to meet targets, bank and trade carbon credits within an initial three-year block (followed by two-year blocks), and manufacturers with annual volumes below 1,000 units are exempt. The revised compliance slope is set at 0.00154 litres per 100 km per kg (tapering to 0.00128 by FY32), with the reference weight raised from 1,170 kg to 1,229 kg — meaning entry-level small cars face more stringent targets while heavier vehicles may see relaxation. Concerns persist within sections of the government and auto industry over the treatment of small cars, with the draft creating confusion by replacing “small vehicles” with “small volume manufacturers” in certain sections.

Perspective & Context:

  • In simple terms: The government is finalising rules that set fuel efficiency targets for car manufacturers — essentially telling them how many kilometres per litre their cars must deliver on average. The controversy is that the new formula may inadvertently make small, affordable cars harder to sell by imposing tougher efficiency targets on lighter vehicles, while giving heavier SUVs an easier ride.
  • CAFE (Corporate Average Fuel Efficiency) — a regulation that sets a fleet-wide fuel efficiency target for each automaker; the manufacturer’s entire range of cars sold in a year must collectively meet the target, so selling more efficient cars offsets gas-guzzlers. CAFE-3 is the third version of these norms
  • How the compliance slope works: The formula links fuel efficiency targets to vehicle weight — lighter cars must be more fuel-efficient per kg. By reducing the slope from 0.002 to 0.00154, the new draft somewhat eases the target for heavier vehicles while making it relatively harder for small cars
  • Carbon credit pooling and banking — allows two or more OEMs to combine their fleets for compliance (e.g., a small car maker could pool with an SUV maker), and lets manufacturers carry forward excess efficiency credits to future years, providing flexibility to meet targets over time
  • India’s auto industry is dominated by small cars (under 1,200 kg) — Maruti Suzuki alone holds ~40% market share, mostly in the small car segment. Stringent CAFE-3 norms for this segment could raise costs and push buyers toward costlier vehicles

CCEA Enhances Power Grid’s Investment Limit to ₹7,500 Crore for HVDC Transmission Projects

Medium | Infrastructure

The Cabinet Committee on Economic Affairs (CCEA) approved enhanced delegation to Power Grid Corporation of India (PGCIL) under Maharatna CPSE guidelines, raising the permissible equity investment limit per subsidiary from ₹5,000 crore to ₹7,500 crore, while retaining the existing cap of 15% of the company’s net worth. The approval enables PGCIL — India’s largest transmission service provider — to bid for capital-intensive projects such as Ultra High Voltage Alternating Current (UHVAC) and High Voltage Direct Current (HVDC) transmission networks. The move supports evacuation of renewable energy capacity toward the 500 GW non-fossil fuel target, and broadens competition in Tariff Based Competitive Bidding (TBCB) for critical transmission projects, ensuring better price discovery and affordable clean energy for consumers.

Perspective & Context:

  • In simple terms: The government gave Power Grid permission to invest more money per project — up from ₹5,000 crore to ₹7,500 crore — so it can bid for expensive but critical high-voltage power lines. These are the “highways” that carry electricity from remote solar and wind farms to cities where it’s needed.
  • HVDC (High Voltage Direct Current) — a technology for transmitting electricity over very long distances with minimal power loss; essential for carrying renewable energy from solar-rich Rajasthan or wind-rich Tamil Nadu to demand centres thousands of kilometres away
  • Why this matters for renewables: India plans 500 GW of non-fossil fuel capacity by 2030, but generating clean power is useless without transmission lines to deliver it. HVDC corridors are the missing link — they’re expensive (₹5,000–10,000 crore each) but critical for grid stability
  • TBCB (Tariff Based Competitive Bidding) — the process through which private and public companies compete to build transmission lines at the lowest cost; PGCIL’s enhanced limits mean more competition and potentially lower tariffs

WTO Establishes Dispute Panel on China’s Challenge to India’s PLI Schemes for Auto and Batteries

High | Trade, Economy

The WTO’s Dispute Settlement Body (DSB) has agreed to establish a panel to examine China’s complaint against India’s Production Linked Incentive (PLI) schemes for automobiles, new-generation batteries (ACC battery storage), and EV passenger cars. China alleges that these schemes require companies to favour local manufacturing, violating WTO rules on national treatment and prohibition of import substitution subsidies. India rejected the allegations, arguing the schemes are legitimate development tools that do not specifically target or block Chinese goods, and expressed disappointment over China’s insistence on a panel. India had blocked the first panel request at the January 27 DSB meeting, but WTO rules require the DSB to honour a second request. The US, a third party, supported India’s position and alleged China was diverting attention from its own non-market policies and excess capacities. India is hopeful of a favourable verdict; an unfavourable ruling could be appealed to the WTO Appellate Body, which is currently dysfunctional due to the US blocking appointment of judges.

Perspective & Context:

  • In simple terms: China has taken India to the WTO’s court, arguing that India’s PLI schemes unfairly favour domestically made goods over Chinese imports. India says these schemes are about building manufacturing capacity, not blocking Chinese products. The case will take years to resolve, and even if India loses, the appeals court is broken — so enforcement is effectively impossible right now.
  • PLI (Production Linked Incentive) — government subsidies given to manufacturers based on incremental production/sales over a base year; the auto PLI targets ₹42,500 crore in fresh investment, while the ACC battery PLI aims to build 50 GWh of battery manufacturing capacity in India
  • Why China is challenging: India’s PLI schemes require minimum domestic value addition (e.g., 50% for auto components) to qualify for incentives — China argues this discriminates against imported (Chinese) inputs and violates the WTO’s Agreement on Subsidies and Countervailing Measures (SCM)
  • The Appellate Body problem: The US has blocked new judge appointments since 2019, leaving the WTO’s appeals court non-functional. This means even if the panel rules against India, India can appeal “into the void” — the case enters legal limbo with no resolution, effectively shielding India’s PLI schemes from enforcement
  • This is part of a broader trend of China using WTO dispute mechanisms against developing countries’ industrial policies, while itself facing criticism for subsidies, overcapacity, and market access restrictions

India’s Q3 FY26 GDP Growth Estimated at 8.1% — SBI Research Report

High | Inflation & GDP

SBI Research estimates India’s real GDP growth at approximately 8.1% for Q3 FY26 (October–December 2025), citing resilient high-frequency activity data across 50 leading indicators in consumption and demand. The percentage of indicators showing acceleration increased to 87% in Q3, up from 80% in Q2. Rural consumption remains strong, driven by positive farm and non-farm signals, while urban consumption shows consistent uptick since the festival season, supported by fiscal stimulus. The Ministry of Statistics will release formal Q3 data on Friday with a new base year of 2022-23 (replacing 2011-12), along with back-series data for three years. SBI’s estimate is notably higher than ICRA’s projection of 7.2%, the MPC’s projection of 7%, and the first advance estimate of 7.4% for full-year FY26. On the banking sector, PSBs’ net profit grew 12.5% to ₹1.46 lakh crore in 9M FY26, while eight major private banks grew around 3% to over ₹1.30 lakh crore. Aggregate deposits grew 12.5% YoY (vs 10.3%) and credit grew 14.6% (vs 11.4%) for the fortnight ended January 31, 2026.

Perspective & Context:

  • In simple terms: India’s economy likely grew at over 8% in the October–December quarter — faster than most forecasters expected. This is based on an SBI study tracking 50 economic indicators, 87% of which showed improvement. The official numbers come out Friday, but will use a completely new methodology with 2022-23 as the base year, making comparisons with older data tricky.
  • Base year change (2011-12 → 2022-23) — the CSO periodically updates the reference year for GDP calculation to better reflect the current structure of the economy; the new base year will incorporate updated sector weights, newer data sources, and revised methodologies. Back-series data for three years will also be released
  • Why estimates vary so widely: SBI says 8.1%, ICRA says 7.2%, RBI MPC projected 7% — the gap reflects different methodologies and uncertainty around the base year switch. The new base year could revise historical numbers, making Q3 growth look different depending on the recalibrated denominator
  • Banking sector takeaway: PSBs outperformed private banks on profit growth (12.5% vs 3%) in 9M FY26 — continuing the trend captured in the NPA slippages article. The credit-deposit gap (14.6% credit growth vs 12.5% deposit growth) highlights ongoing pressure on banks’ funding base
  • The Economic Survey’s FY27 growth estimate of 6.8–7.2% suggests a moderation ahead, even as Q3 FY26 appears strong — reflecting global headwinds and the high-base effect

India Emerges as World’s Third-Largest Renewable Energy Market with 5% Global Share

Medium | Energy

India accounted for approximately 5% of global renewable energy capacity in 2024, ranking third after China (41%) and the US (10%), with 35 GW of RE capacity added in CY2024. India’s total installed electricity capacity is projected to rise from 475 GW in FY25 to 705 GW by FY30, driven by solar (+160 GW) and wind (+30 GW) additions, offset by 2 GW of coal retirals. Solar installation costs in India fell 60.6% and wind costs 20.4% between FY16 and FY24, making renewables significantly cheaper than fossil fuels. Renewables’ contribution to power generation is projected to increase from 14% in FY25 to 30% by FY30, while thermal power’s share declines to 58%, per data from Clean Max Enviro Energy Solutions and CRISIL Intelligence.

Perspective & Context:

  • In simple terms: India is now the world’s third-largest clean energy market and is adding renewable power capacity at a rapid pace. Solar panel costs have dropped by more than 60% in eight years, making solar power cheaper than coal in most parts of India. By 2030, nearly a third of India’s electricity is expected to come from renewables — up from just 14% today.
  • India’s RE capacity additions (35 GW in CY2024) — for context, 35 GW is roughly equivalent to the entire installed power capacity of a country like Bangladesh; India is adding this much clean energy in a single year
  • Cost decline trajectory: India’s solar installation cost fell from ₹1,332/kW (CY16) to ₹525/kW (CY24), now below the global average of ₹691/kW — giving Indian solar projects a cost advantage over most countries
  • The 705 GW by FY30 target includes solar expanding from its current base to become the single largest source of new capacity, while coal sees net retirals of 2 GW — the first time coal capacity is projected to shrink
  • India’s RE share doubling from 14% to 30% of generation by FY30 is central to its COP commitments — India pledged to reach 500 GW of non-fossil fuel capacity by 2030 and achieve net-zero emissions by 2070

State Government Securities Outstanding Up 5-Fold Since FY15, Annual Borrowings Near Parity with Centre

High | Finance, Economy

State government securities (SGS) outstanding have surged roughly five-fold since FY15, far outpacing the 2.7x growth in Central government debt (G-Secs) over the same period, per a Vedartha (Bandhan AMC) report. Annual State borrowings have climbed to approximately ₹12 lakh crore in FY26E, now approaching parity with Central government borrowings. States are also shifting to longer-dated borrowings — the weighted-average maturity of SGS issuance is expected to be around 16 years in FY26, up from 11 years in FY20, with over half of all issuances now in tenors beyond 10 years. However, SGS volumes remain a fraction of G-Sec trading volumes due to buy-and-hold ownership patterns, fragmented issuances across multiple tenor buckets, and numerous ISINs, leading to persistent illiquidity and higher term premiums. The report recommends creating a single standardised yield curve for SGS with 8–10 benchmark maturities across all States, limiting new ISIN creation to ~12 per State per year, and mandating 60% of borrowing through reissuances of benchmark securities.

Perspective & Context:

  • In simple terms: State governments are borrowing from the market at nearly the same pace as the Central government now — a dramatic shift from a decade ago. They’re also locking in longer loan terms (16 years vs 11 years earlier) to take advantage of falling interest rates. But because each state issues its own bonds in different sizes and tenors, these bonds are hard to buy and sell, making them less attractive to traders despite offering higher yields than Central government bonds.
  • SGS (State Government Securities) — bonds issued by state governments to borrow from the market, similar to G-Secs issued by the Central government. They carry slightly higher yields (typically 25–50 basis points above G-Secs) to compensate for lower liquidity and varying state credit quality
  • Why this matters for banks: Banks are major holders of SGS and G-Secs to meet SLR requirements. As SGS issuance grows, banks’ portfolios are increasingly exposed to state credit risk and liquidity risk — a dimension RBI monitors closely
  • The liquidity problem explained: The Centre issues a few large, standardised bonds that trade actively. States issue hundreds of small, fragmented bonds across different tenors — like trying to trade 28 different currencies instead of one. The report’s fix: standardise tenors and reissue existing bonds instead of creating new ones
  • The shift to 16-year average maturity reflects states locking in lower rates during RBI’s easing cycle — smart debt management, but it also means investors are locked into state credit risk for longer periods

UP, Rajasthan and AP Lead in EV and Green Hydrogen Adoption — IEEFA-Ember SET Report

Medium | Energy, Infrastructure

The States’ Electricity Transition (SET) report by IEEFA and Ember, analysing 21 states representing 95% of India’s power demand, found Uttar Pradesh, Andhra Pradesh, and Rajasthan leading in EV and green hydrogen adoption through regulatory measures including green tariffs, green open access mechanisms, and solar-hour-aligned time-of-day (ToD) tariffs. UP recorded a 10% EV adoption rate in FY25, targets 22 GW solar capacity by FY27, and has set a green hydrogen target of 1 million tonnes by 2028 with a green tariff premium of ₹0.34/kWh. Rajasthan has the lowest green tariff premium at ₹0.05/kWh with 6.6% EV adoption. Andhra Pradesh recorded 6.2% EV adoption, has 1,440 MW of pumped hydro storage operational or under construction, and a green tariff premium of ₹0.75/kWh. Karnataka, Himachal Pradesh, and Kerala lead in decarbonising electricity systems with higher RE share. Delhi and Haryana lead in power ecosystem readiness, supported by distributed solar adoption and sound discom performance.

Perspective & Context:

  • In simple terms: A major study ranked Indian states on how fast they’re shifting to clean energy and electric vehicles. UP surprised by leading in EV adoption (1 in 10 new vehicles is electric), while Rajasthan offers the cheapest green electricity in the country. The report highlights that states are using tariff design — charging less during sunny hours when solar power is abundant — to nudge consumers toward renewable energy.
  • Green tariff — a special electricity rate that lets consumers buy certified renewable energy directly from discoms; the “premium” is the extra cost over regular tariff. Rajasthan’s premium of just ₹0.05/kWh means green power costs almost the same as conventional power there
  • ToD (Time-of-Day) tariff — electricity prices that vary by time of day; solar-hour-aligned ToD makes power cheapest during peak solar generation hours (11 AM–5 PM), incentivising industries to shift consumption to when renewable supply is highest
  • Pumped hydro storage — water is pumped uphill when excess solar/wind power is available, then released downhill through turbines when power is needed; AP’s 1,440 MW capacity acts as a giant rechargeable battery for its grid
  • UP’s 1 million tonne green hydrogen target by 2028 is ambitious — India’s total National Green Hydrogen Mission target is 5 million tonnes by 2030, meaning UP alone aims to deliver 20% of the national goal

Government to Auto-Credit ₹30.52 Crore in 7.11 Lakh Inoperative EPFO Accounts

High | Budget & Government Policy

Labour Minister Mansukh Mandaviya approved a pilot project to auto-credit EPF balances in 7.11 lakh inoperative accounts holding ₹1,000 or less, totalling ₹30.52 crore. The refund requires no documentation — only bank verification that the beneficiary’s or nominee’s account is Aadhaar-seeded and functional. An EPF account is declared inoperative after 36 months without any contribution. In total, ₹10,903 crore lies in 31.86 lakh inoperative accounts accumulated over two decades; this amount spiralled over five-fold from ₹1,638.37 crore in FY19 to ₹8,505.23 crore in FY24. If the pilot succeeds, the initiative will be expanded to the remaining 24.76 lakh accounts with larger balances. Separately, the Ministry amended the Labour Welfare Scheme (Education Component) to allow children of unorganised workers to receive both welfare-based and merit-based scholarships from Central or State agencies simultaneously — removing earlier overlapping eligibility restrictions.

Perspective & Context:

  • In simple terms: Millions of workers have EPF accounts with small amounts stuck in them — often because they changed jobs and forgot about old accounts. The government is now pushing this money back to them automatically, without requiring any paperwork. It’s starting with accounts holding ₹1,000 or less as a test run, before tackling the bigger accounts.
  • Inoperative EPF account — an account that has not received any employer or employee contribution for 36 consecutive months; the money continues to earn interest but the account holder often loses track of it, especially informal sector workers who switch jobs frequently
  • Why Aadhaar-seeding matters: By linking EPF accounts to Aadhaar and bank accounts, the government can verify identity and push money directly — no forms, no office visits. This is the same JAM (Jan Dhan-Aadhaar-Mobile) infrastructure used for DBT
  • The scale of the problem is striking: ₹10,903 crore locked in 31.86 lakh dormant accounts, with the amount growing 5x in just five years (FY19–FY24) — reflecting high labour mobility and poor awareness about EPF portability
  • The scholarship reform for unorganised workers’ children removes a catch-22 where students lost their welfare scholarship if they won a merit scholarship, effectively penalising academic achievement

Mutual Fund AUM Hits 32% of Bank Deposits — SIP Inflows Touch Record ₹32,000 Crore

High | Finance, Banking Sector

The mutual fund industry’s average AUM reached ₹82 lakh crore as of January 2026, accounting for 32% of total bank deposits at ₹254 lakh crore — up from 30% a year ago when MF AUM was ₹68 lakh crore against deposits of ₹226 lakh crore. MF assets grew 20% year-on-year, outpacing bank deposit growth of 12%. SIP inflows touched a record ₹32,000 crore in January 2026. Unique investor count rose 13% to 6.02 crore. Aggregate NFO flows over the past year stood at ₹65,100 crore, with equity funds comprising 61% (₹39,433 crore). The MF AUM-to-bank deposit ratio has risen from 11% in FY16 to the current 32% over the past decade.

Perspective & Context:

  • In simple terms: For every ₹100 sitting in bank savings and fixed deposits across India, ₹32 is now invested in mutual funds — up from just ₹11 a decade ago. This shift is being driven largely by SIPs (monthly automatic investments), which hit a record ₹32,000 crore in a single month. Banks themselves are among the biggest sellers of mutual funds, effectively channelling their own depositors’ money into MFs.
  • SIP (Systematic Investment Plan) — a method of investing a fixed amount in mutual funds every month, automatically debited from a bank account; it has become the primary vehicle through which retail Indians invest in equity markets
  • Why this ratio matters for banks: As more household savings flow into mutual funds instead of fixed deposits, banks face pressure on their deposit base — the very funds they use for lending. This is why RBI and banks have been actively raising deposit rates to retain savers
  • MF AUM-to-deposit ratio trajectory: 11% (FY16) → 32% (Jan 2026) — this structural shift means mutual funds are no longer a niche product but a mainstream savings vehicle competing directly with bank deposits
  • The 6.02 crore unique investors represent less than 5% of India’s population, suggesting significant room for further growth — in the US, over 50% of households own mutual funds
  • The deposit-to-MF shift is creating structural liquidity pressure on banks: government cash balances hovered between ₹1.5–4 lakh crore in early 2026, and physical currency withdrawals surged to ₹4.4 trillion in the 14 months to January 2026 — three times the previous year’s trend — further squeezing banks’ lendable resources

Government Cuts RoDTEP Export Benefits by 50% with Immediate Effect

High | Budget & Government Policy, Trade

The government has restricted benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme to 50% of notified rates and value caps, with immediate effect, per a DGFT notification approved by the Commerce Minister. The cut follows a sharp reduction in budgetary allocation for RoDTEP in FY27 to ₹10,000 crore, down from ₹18,232.5 crore in FY26. Exporters and trade bodies including FIEO have urged an immediate review, warning that even a 1–2% cost increase can determine whether orders are won or lost, particularly in price-sensitive sectors competing against Vietnam and Bangladesh. India’s goods exports in January 2026 grew a marginal 0.61% year-on-year to $36.56 billion, while the trade deficit widened to a three-month high of $34.68 billion.

Perspective & Context:

  • In simple terms: The government just halved the tax refunds it gives to exporters. Under RoDTEP, exporters get back domestic taxes (state taxes, fuel levies, electricity duties) embedded in their products that they can’t claim refunds for otherwise. Cutting this by 50% means exporters’ costs go up immediately, making Indian goods less competitive in global markets — especially bad timing given slowing global demand.
  • RoDTEP (Remission of Duties and Taxes on Exported Products) — a WTO-compliant scheme that refunds embedded Central, State, and local taxes that are not rebated through any other mechanism (like GST input credits). It replaced the earlier MEIS scheme in January 2021
  • Why this matters for competitiveness: The principle behind RoDTEP is that “taxes should not be exported” — if an Indian textile maker pays state electricity duty and local fuel cess, those costs get baked into the export price. RoDTEP refunds them so Indian goods compete on a level playing field with countries that have lower embedded taxes
  • The FY27 budget allocation of ₹10,000 crore (down 45% from ₹18,232.5 crore) suggests the cut is fiscally driven rather than policy-driven, though the government may top up funds in revised estimates
  • The trade deficit hitting a 3-month high of $34.68 billion in January 2026 adds pressure — reducing export incentives when the trade balance is already strained is a risky fiscal trade-off

NMP 2.0 Launched — ₹16.72 Lakh Crore Asset Monetisation Target Over FY26–FY30

High | Budget & Government Policy, Infrastructure

Finance Minister Nirmala Sitharaman launched the National Monetisation Pipeline 2.0 (NMP 2.0) with an aggregate monetisation target of ₹16.72 lakh crore over five years (FY26–FY30), including ₹5.8 lakh crore in private sector investment under the asset monetisation pipeline of Central ministries and public sector entities. NMP 2.0 is over 2.6 times higher than NMP 1.0, which achieved nearly 90% of its ₹6 lakh crore target set for four years. An empowered Core Group of Secretaries on Asset Monetisation under the Cabinet Secretary’s chairmanship will monitor progress. Revenue from monetisation projects implemented by Central ministries flows to the Consolidated Fund of India, proceeds from PSU-led projects accrue to the concerned PSU, and royalty payments from mines and coal sectors accrue to State Consolidated Funds.

Perspective & Context:

  • In simple terms: The government is leasing out public infrastructure — roads, railways, pipelines, warehouses, power plants — to private companies for a fixed period, and using the money earned to build new infrastructure. NMP 2.0 is the second, much larger version of this programme, targeting ₹16.72 lakh crore over five years.
  • Asset monetisation — the government retains ownership of the asset but transfers operating rights to a private entity for a defined period (typically 15–30 years) through models like InvITs, TOT (Toll-Operate-Transfer), or long-term leases. It is not privatisation — the asset reverts to the government after the contract period
  • NMP 1.0 vs NMP 2.0: NMP 1.0 (FY22–FY25) targeted ₹6 lakh crore and achieved ~90%; NMP 2.0 targets ₹16.72 lakh crore (2.6x higher), reflecting confidence from the first round’s success and a larger pipeline of monetisable assets
  • How the money flows: Central ministry projects → Consolidated Fund of India; PSU projects → the PSU itself; mining/coal royalties → State Consolidated Funds — this structure ensures proceeds are recycled into new capital expenditure
  • The ₹16.72 lakh crore target over 5 years averages ~₹3.3 lakh crore per year — roughly 20% of the central government’s annual capex budget, making asset monetisation a significant funding source for new infrastructure

TEXMiN Signs MoU with Russia’s GIREDMET on Rare Earth and Critical Mineral Processing

Medium | Trade, Technology

TEXMiN Foundation (Technology Translation Research Park), a Section-8 company under the National Mission on Interdisciplinary Cyber-Physical Systems (NM-ICPS) at IIT (ISM) Dhanbad, has signed a strategic MoU with Russia’s GIREDMET JSC — an entity of Rosatom State Atomic Energy Corporation — for cooperation in rare earth processing, critical minerals, and advanced materials. The collaboration covers the full mining value chain: exploration, mineral beneficiation, extraction, separation, refining, and advanced materials development. Joint R&D will focus on process technologies for rare earth and critical mineral processing, high-purity metals and alloys, rare earth magnets, refractory metal powders, and materials for electronics and optics.

Perspective & Context:

  • In simple terms: An Indian research institute (at IIT Dhanbad) has partnered with a Russian government lab to develop technologies for processing rare earth minerals — the metals used in everything from smartphone screens to electric vehicle motors and wind turbines. India has rare earth deposits but lacks the processing technology to refine them, which this partnership aims to address.
  • Critical minerals and rare earths — a group of 17 elements (like lithium, cobalt, neodymium) essential for electronics, defence, renewable energy, and EVs. China dominates ~60% of global mining and ~90% of processing, making supply chain diversification a strategic priority for India
  • TEXMiN — a research translation hub at IIT (ISM) Dhanbad, set up under the Department of Science and Technology’s NM-ICPS programme to bridge the gap between lab research and industrial application in the mining sector
  • GIREDMET — Russia’s State Research and Design Institute of Rare Metal Industry, part of the Rosatom nuclear energy conglomerate; it has decades of expertise in rare metal extraction and refining technologies
  • India identified 30 critical minerals in 2023 and has been actively seeking processing partnerships — this MoU with Russia complements similar efforts with Australia (Critical Minerals Investment Partnership) and the US (under the India-US interim framework’s rare earth cooperation clause)

Government’s Export Promotion Mission to Fund CBAM and REACH Compliance Costs for MSMEs

High | Budget & Government Policy, Trade

Commerce Minister Piyush Goyal announced that the government’s Export Promotion Mission (EPM), a five-year scheme with a corpus of ₹22,060 crore, will partly fund compliance costs for international regulations such as the EU’s Carbon Border Adjustment Mechanism (CBAM) and REACH for Indian exporters, particularly micro and small enterprises. Goyal noted that nine FTAs have been finalised in the past three to three-and-a-half years with 38 developed countries, covering nearly two-thirds of global GDP and trade, opening opportunities in textiles, leather, footwear, and pharmaceuticals. He outlined a five-pillar quality agenda: strict SOPs with continuous inspections, workforce skilling to reduce waste, benchmarking against global best practices, streamlined certification to cut delays, and shared automated testing infrastructure across manufacturing clusters.

Perspective & Context:

  • In simple terms: Indian exporters, especially small ones, face expensive foreign regulations — like the EU’s carbon tax on imports and chemical safety rules. The government is now offering to pay part of these compliance costs through a ₹22,060 crore fund, so that small manufacturers aren’t priced out of export markets just because they can’t afford the paperwork and testing.
  • CBAM (Carbon Border Adjustment Mechanism) — the EU’s carbon tax on imports, which charges foreign producers for the carbon emitted during manufacturing; Indian steel, cement, aluminium, and fertilizer exporters are directly affected. Without verified low-carbon processes, Indian goods face additional costs at EU borders
  • REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) — the EU’s chemical safety regulation requiring exporters to register and prove the safety of chemicals in their products; compliance can cost lakhs per product, making it prohibitive for small exporters
  • Export Promotion Mission (EPM) — a five-year government scheme with ₹22,060 crore corpus aimed at boosting India’s export competitiveness through compliance support, quality infrastructure, and market access facilitation
  • The 9 FTAs with 38 countries in ~3 years is historically unprecedented for India — previous FTAs (like with ASEAN in 2010) took years of negotiation individually. This aligns with the earlier article on India’s FTA coverage jumping from 22% to 71% of exports

Bharti Airtel to Invest ₹20,000 Crore in Airtel Money After Securing NBFC Licence from RBI

High | Banking Sector, Finance

Bharti Airtel announced an investment of ₹20,000 crore ($2.2 billion) in its financial subsidiary Airtel Money over the next few years, with Airtel contributing 70% and promoter group Bharti Enterprises contributing 30%. The unit received its NBFC licence from the RBI on February 13, 2026, and has already achieved over ₹9,000 crore in disbursements. India’s formal credit-to-GDP ratio stands at 53% (Care Edge Ratings), highlighting significant scope for lending expansion. The move intensifies competition in India’s non-bank lending sector against Jio Financial Services and established players like Bajaj Finance.

Perspective & Context:

  • In simple terms: Airtel is entering the lending business in a big way. With its new NBFC licence from RBI, it can now directly lend money to customers — and it’s putting ₹20,000 crore behind this bet. Think of it as Airtel using its massive customer base (350+ million subscribers) as a ready-made market for loans, insurance, and other financial products.
  • NBFC (Non-Banking Financial Company) — a financial institution that lends money and offers financial services like a bank, but cannot accept demand deposits (savings/current accounts); NBFCs are regulated by RBI and must obtain a licence to operate
  • Why telecos are entering lending: Companies like Airtel and Jio have detailed data on millions of customers — their payment history, recharge patterns, and digital behaviour — which can be used to assess creditworthiness and offer small, targeted loans at scale
  • The ₹20,000 crore investment is significant — it’s larger than the net worth of many mid-sized NBFCs and signals Airtel’s intent to be a serious financial services player, not just a payments app
  • This mirrors a global trend of telecos becoming fintech platforms — Kenya’s M-Pesa (Safaricom) and China’s Ant Financial (Alibaba) followed similar paths from payments to lending

India-US Trade Deal Delayed; Russian Oil Imports Hit 38-Month Low as US Oil Purchases Rise

High | Global Economy, Trade

India’s trade delegation postponed its February 23–25 visit to Washington to finalise the India-US Interim Agreement, with both sides citing the need to evaluate implications of the US Supreme Court’s tariff ruling. Commerce Minister Piyush Goyal had indicated the deal could be implemented between mid-March and early April. Meanwhile, India’s crude oil imports from Russia fell to a 38-month low in December 2025, with Russia’s share dropping to below 25% from 34% the previous month, while US oil imports rose 31% year-on-year — though at an 8% price premium ($506.7 per tonne vs Russian oil). Post the Supreme Court ruling striking down IEEPA tariffs, the US currently has no legal mechanism to penalise India for purchasing Russian oil without Congressional approval. Under the February 6 joint statement, India committed to importing $500 billion worth of energy products, aircraft and parts, precious metals, technology products, and coking coal from the US over the next five years. India’s electronic parts imports grew 117% year-on-year to approximately $2.1 billion in April–December 2025.

Perspective & Context:

  • In simple terms: India was about to finalise a trade deal with the US, but both sides hit pause after the Supreme Court struck down Trump’s tariff powers. This changes the dynamics — the US can no longer threaten India with tariffs for buying Russian oil, so India has less pressure to rush into concessions. Meanwhile, India had already been shifting its oil purchases toward the US, but American oil costs more than Russian oil.
  • What the $500 billion commitment covers: Energy (crude oil, LPG, LNG), aircraft and parts, data centre and quantum computing components, precious metals, and coking coal — products India needs but largely doesn’t manufacture domestically, so importing them doesn’t hurt local industry
  • Why the postponement matters: A delayed deal means Indian manufacturers get more time before facing competition from duty-free US imports, but it also means India continues paying higher tariffs on items it needs to import (electronic components, telecom equipment, organic chemicals)
  • The Russian oil price advantage is significant but shrinking — at $506.7/tonne for US oil vs roughly $469/tonne for Russian oil in December 2025, the gap is about 8%, down from 15–20% a year ago as Russian crude discount sanctions tightened
  • The 117% surge in electronic parts imports reflects India’s booming smartphone and electronics assembly sector — companies like Apple, Samsung, and Dixon are ramping up Indian production, driving demand for imported components

India Amends Three-Decade-Old Tax Treaty with France — Dividend Tax Cut for Major Holdings

High | Budget & Government Policy

India and France have signed a protocol amending their Double Taxation Avoidance Convention (DTAC), the CBDT announced. The protocol replaces the single 10% dividend tax rate with a split structure: 5% for holdings of at least 10% of capital, and 15% for all other cases. It deletes the Most-Favoured Nation (MFN) clause from the protocol — settling long-standing interpretational disputes following the Supreme Court’s ruling in Nestle SA (2023), which held that MFN benefits do not flow automatically without a separate notification under Section 90 of the Income Tax Act. The amendment grants full taxing rights on capital gains from share sales to the country where the company is situated (India, in most cases). It also aligns the definition of fees for technical services with the India-US DTAA, expands the scope of permanent establishment by adding service PE, and introduces provisions for exchange of information and mutual assistance in tax collection per international standards.

Perspective & Context:

  • In simple terms: India updated its tax treaty with France to fix several long-standing problems. The biggest change: France can no longer claim automatic tax benefits just because India gave better terms to another country (the MFN clause is gone). Dividend tax is now split — big French investors pay less (5%), small ones pay more (15%). And India now has full rights to tax profits when French investors sell shares of Indian companies.
  • DTAC/DTAA (Double Taxation Avoidance Convention/Agreement) — a bilateral treaty ensuring income earned in one country by a resident of the other is not taxed twice; India has DTAAs with over 90 countries
  • MFN (Most-Favoured Nation) clause — a provision that automatically extended to France any better tax terms India offered to other OECD countries. The Supreme Court in Nestle SA (2023) ruled these benefits don’t apply automatically without a government notification under Section 90 of the IT Act — deleting the clause removes this litigation-prone ambiguity entirely
  • Service PE (Permanent Establishment) — under the expanded definition, a French company providing services in India for a specified period can now be treated as having a taxable presence in India, even without a physical office here
  • Why the 10% ownership threshold matters: It distinguishes strategic investors (holding significant stakes, bringing technology and long-term capital) from portfolio investors (small stakes, potentially transient). The lower 5% rate rewards committed FDI.
  • Impact on P-note flows: France-based FPI investments in Indian shares stood at $21 billion as of January 2026, with bilateral trade at $15 billion. The amendment makes India less attractive for P-note (participatory note) investors routing through France, as capital gains can now be taxed and the higher 15% dividend rate applies to sub-10% holdings typical of P-note structures — though long-term FDI flows are expected to benefit from greater clarity
  • India has been systematically renegotiating older DTAAs (Mauritius, Singapore, Cyprus revised earlier) to plug tax avoidance routes — the France amendment follows the same pattern of closing loopholes while staying attractive for genuine investment

SEBI to Overhaul Portfolio Manager Regulations; Reviewing RBI’s 100% Collateral Norm for Stockbrokers

Medium | Finance

SEBI Chairperson Tuhin Kanta Pandey announced that a comprehensive review of the SEBI (Portfolio Manager) regulations is underway, with a consultation paper proposing changes targeted for release by June 2026. Separately, SEBI is examining representations from stockbrokers regarding the RBI’s new norm mandating 100% collateral on credit extended to stockbrokers and other capital market intermediaries. On governance, SEBI suspended General Manager Achal Singh over alleged integrity issues, with Pandey stating the regulator would “get to the bottom of it” where evidence of egregious behaviour is found.

Perspective & Context:

  • In simple terms: India’s market regulator SEBI is planning to update the rules governing portfolio managers — firms that manage investments on behalf of wealthy clients. It’s also looking into complaints from stockbrokers who say the RBI’s new rule requiring them to put up 100% collateral for any credit they receive is too burdensome.
  • Portfolio Managers — SEBI-registered entities that manage investment portfolios for clients, typically high-net-worth individuals (minimum investment threshold is ₹50 lakh); the regulatory overhaul could change entry requirements, fee structures, or disclosure norms
  • What the RBI’s 100% collateral norm means: Banks lending to stockbrokers must now secure the entire loan amount with collateral — for every ₹100 lent, ₹100 in assets must be pledged. Brokers argue this raises their cost of doing business and limits available capital for trading operations
  • The collateral norm is part of RBI’s broader push to tighten bank exposure to capital markets — a response to rapid growth in retail trading and derivatives volumes that has drawn regulatory concern

India’s Green Ammonia Auction Sets Global Cost Benchmark — SECI Contracts 724,000 Tonnes Annually Under SIGHT Programme

Medium | Energy

The Solar Energy Corporation of India (SECI) has concluded India’s first large-scale green ammonia auction under the Strategic Interventions for Green Hydrogen Transition (SIGHT) programme of the National Green Hydrogen Mission. The tender, floated in June 2024 for an aggregated demand of up to 724,000 tonnes per year across 13 fertilizer plants, concluded in August 2025 with seven successful bidders securing 13 delivery contracts and 10-year fixed-price offtake agreements. Discovered prices ranged from ₹49.75 to ₹64.74 per kg ($572–$744 per tonne), approximately 40–50% lower than prices from the EU’s H2Global auction. Production subsidies of ₹8.82/kg, ₹7.06/kg, and ₹5.30/kg apply for the first three years. The contracted volumes account for approximately 30% of India’s total ammonia imports, offering insulation from global gas price volatility and currency risks. Grey ammonia currently costs up to $515 per tonne, meaning the cost gap with green ammonia has significantly narrowed.

Perspective & Context:

  • In simple terms: India ran an auction to buy “green ammonia” — ammonia made using renewable energy instead of natural gas — for its fertilizer factories. The prices came in surprisingly low, beating European benchmarks by 40–50%. This matters because ammonia is a key ingredient in fertilizers, and India imports a lot of it — locking in green ammonia at competitive prices reduces dependence on volatile global gas markets.
  • Green ammonia — produced by combining nitrogen from air with green hydrogen (made by splitting water using renewable electricity); conventional “grey” ammonia uses natural gas, making it carbon-intensive and price-volatile
  • SIGHT (Strategic Interventions for Green Hydrogen Transition) — a component of the National Green Hydrogen Mission that provides financial incentives (production subsidies) to make green hydrogen and its derivatives cost-competitive with fossil-fuel alternatives
  • What the 10-year fixed-price contracts do: They guarantee producers a buyer and a price for a decade — this bankability attracts investment into green ammonia plants that are expensive to build but cheap to run once operational
  • India’s 724,000 tonnes/year of contracted green ammonia is roughly equivalent to replacing 30% of its ammonia imports — currently sourced largely from the Middle East and dependent on natural gas prices that have swung wildly since 2022
  • The auction attracted 15 bidders — far more than comparable EU or South Korean tenders — signalling strong commercial interest in India’s renewable energy cost advantage (among the lowest solar and wind tariffs globally)

India’s FTA Network Set to Cover 71% of Exports by 2026 — EU and US Deals Anchor New Trade Strategy

Medium | Trade & Foreign Policy

India’s network of free trade agreements is projected to cover nearly 71% of its total export basket by 2026, up sharply from approximately 22% in 2019, reflecting a decisive shift from regional arrangements toward deeper integration with advanced economies. Total exports (merchandise and services combined) reached $825.25 billion in 2024–25, a 6.05% annual increase, against a Foreign Trade Policy target of $2 trillion by 2030. The India-EU FTA, signed on January 27, 2026 after nearly two decades of negotiations, creates a free trade zone covering nearly two billion people, reducing or eliminating tariffs on over 90% of traded goods — particularly benefiting textiles, leather, pharmaceuticals, chemicals, and marine products. Separately, India and the US signed an interim framework for reciprocal trade in early February 2026, prioritising collaboration on rare earths and semiconductors to support India’s high-technology manufacturing and electronics export capacity.

Perspective & Context:

  • In simple terms: India has rapidly expanded the number of countries it has trade deals with — from covering roughly a fifth of its exports to nearly three-quarters in just seven years. Two landmark deals — with the EU and the US — are the centrepieces, giving Indian exporters easier access to the world’s richest consumer markets while also opening doors in strategic sectors like semiconductors.
  • FTA (Free Trade Agreement) — a pact between countries to reduce or eliminate tariffs (import taxes) on each other’s goods and services, making trade cheaper and more competitive
  • What the India-EU FTA does: Removes tariffs on 90%+ of goods traded between India and the 27-nation EU bloc — Indian textiles, pharma, and leather exporters gain price competitiveness against rivals like Bangladesh and Vietnam, while Indian manufacturers get cheaper access to European machinery and inputs
  • The $825 billion in total exports is roughly split between merchandise ($440 billion) and services ($385 billion) — India’s services exports, especially IT and business services, have been a consistent strength
  • The FTA coverage jump from 22% to 71% in seven years is one of the fastest trade-integration expansions by any major economy — for comparison, it took the EU decades to build a similar coverage network

India’s Trade Position After US Supreme Court Strikes Down IEEPA Tariffs

High | Global Economy, Trade

The US Supreme Court’s 6-3 ruling on February 20 struck down reciprocal tariffs imposed under IEEPA as executive overreach, holding that Congress was improperly bypassed. The Trump administration has responded with a 15% global tariff under Section 122 of the Trade Act, 1974, citing balance-of-payments deficits — but this expires after 150 days (July 2026). More permanent tariffs under Section 301 (unfair trade practices) and Section 232 (national security) require time-consuming investigations. Over half of India’s exports to the US will now attract 15% plus MFN tariffs. India’s country-specific reciprocal tariff of 18% under the February 6 framework agreement has ceased, though sectoral tariffs on steel and aluminium under Section 232 remain. India is unlikely to rescind the interim framework deal, instead seeking to leverage the post-ruling confusion to renegotiate favourable terms on agricultural standards, digital sovereignty, and delinking trade from geopolitical alignments.

Perspective & Context:

  • In simple terms: The US Supreme Court told President Trump he can’t slap tariffs on countries without going through Congress. Now the administration is scrambling to use other legal routes to keep tariffs alive, but each comes with its own limitations and legal vulnerabilities. For India, this is a mixed outcome — the harsh reciprocal tariffs are gone, but a 15% blanket tariff still applies, and the situation remains volatile.
  • IEEPA (International Emergency Economic Powers Act, 1977) — lets the President take economic action during national emergencies; the Court ruled that trade deficits don’t qualify as the kind of emergency Congress intended
  • Key US tariff tools now in play: Section 122 (temporary, 150-day global tariffs for balance-of-payments issues), Section 301 (targets unfair trade practices, needs investigation), Section 232 (national security tariffs — already used on steel/aluminium), and Section 338 of the Tariff Act, 1930 (up to 50% on “discriminatory” imports, vague and untested)
  • What India’s framework deal clause means: The February 6 joint statement includes a provision allowing either country to modify commitments if tariff terms change — India can now use this to push for better terms without walking away from the deal
  • The ruling’s political fallout is significant: the 15% tariff expires in July 2026, forcing a Congressional vote just before November midterms — a politically toxic timeline for Republicans in manufacturing states

US Supreme Court Tariff Ruling Could Reshape November 2026 Midterm Elections

Medium | Global Economy

The US Supreme Court’s 6-3 ruling striking down IEEPA-based tariffs has injected a major variable into the November 2026 midterm elections. Polling shows ~75% of Americans blame tariffs for rising living costs and reduced hiring. With the President’s approval at 35% and disapproval exceeding 50% on the economy, tariffs, immigration, and foreign policy, Democrats are favoured to retake the House, where the president’s party has historically lost an average of 26 seats per midterm. The Senate remains tilted Republican since most of the 22 GOP seats up for election are in states Trump won by 10+ points in 2024, but independent voters trending Democratic mean a slim Democratic majority is no longer ruled out. The 15% replacement tariff under Section 122 expires in July 2026, forcing a Congressional vote months before the election.

Perspective & Context:

  • In simple terms: The Supreme Court just handed Democrats a powerful campaign weapon — the tariffs most Americans blame for higher grocery and housing bills have been ruled illegal. Republicans who supported these tariffs now have to defend an unlawful policy, and Congress will be forced to vote on tariffs right before election season.
  • How US midterms work: All 435 House seats and one-third of the 100 Senate seats are elected every two years, midway through the President’s term. They function as a referendum on the sitting President — since WWII, the President’s party has lost an average of 26 House seats and 4 Senate seats per cycle
  • Why the Senate is harder for Democrats: Of the 33-34 seats up in 2026, 22 are Republican — but most are in deep-red states Trump won comfortably, giving the GOP a high floor. Democrats need 51 seats for control (the VP casts tie-breaking votes)
  • The wealth inequality dimension is bipartisan: the top 1% owns 50% of the US stock market while the bottom half owns just 1.1%, and 81% of all Americans — including 66% of Republicans — believe the rich have too much power

India’s Data Centre Rush — Less Than 6% of Global Capacity Despite Producing a Fifth of World Data

Medium | Infrastructure, Technology

India currently has 1.4 GW of operating data centre capacity with another 1.4 GW under development and approximately 5 GW in the planning stage, according to a Macquarie Research report. Despite producing nearly a fifth of the world’s data, less than 6% of global data storage infrastructure is located in India — a gap that American tech giants Microsoft, Amazon, Google, and Meta are racing to fill with a combined $67.5 billion investment in Indian AI and data centre infrastructure. The expansion comes amid growing political sensitivity in the U.S. over rising electricity costs linked to AI data centres, with the average American electricity bill up 5% year-on-year. Data centres have become critical to the U.S. economy, with Harvard economist Jason Furman noting that GDP growth in H1 2025 would have been just 0.1% without the data centre and tech investment surge. Major Indian business houses are also entering the sector as data localisation requirements and government digital pushes accelerate demand.

Perspective & Context:

  • In simple terms: India generates a huge amount of data but stores very little of it domestically — most gets processed in data centres abroad. Now both American tech giants and Indian companies are investing heavily to build data centres in India. This matters because it means faster internet services, more jobs, and greater control over Indian data staying within the country.
  • Data centre capacity (measured in GW) — data centres consume enormous amounts of electricity for servers and cooling; capacity is measured in gigawatts of power consumption. India’s current 1.4 GW is tiny compared to the U.S. (~30 GW) or China (~15 GW)
  • What’s driving the rush: Data localisation laws require certain data to be stored within India, and the sheer volume of data from 1.4 billion increasingly connected people makes local processing faster and cheaper than routing through overseas centres
  • India’s 1.4 GW of operating data centre capacity could power roughly 1.4 million homes — yet the planned expansion to ~8 GW would make India one of the top five data centre markets globally within a few years
  • The $67.5 billion in committed investment from four U.S. tech companies alone exceeds the GDP of many small nations and signals India’s emergence as a global digital infrastructure hub alongside the U.S. and Singapore

RBI Proposes Stricter Cross-Selling Norms; Finalises Acquisition Financing Guidelines at 20% of Tier-1 Capital

High | RBI & Monetary Policy, Banking Sector

RBI has issued draft guidelines to curb mis-selling of financial products by banks, requiring not just refunds but also compensation to affected customers. The norms target cross-selling of third-party products like insurance, mutual funds, and pension schemes — a practice that has grown significantly at several private banks, narrowing the gap between core and other income. Separately, RBI finalised acquisition financing guidelines allowing banks to fund M&A transactions up to 20% of their Tier-1 capital, double the originally proposed 10% cap, opening a segment long dominated by foreign lenders to domestic banks.

Perspective & Context:

  • In simple terms: When you visit a bank for a loan or account, you’re often pushed to buy insurance or mutual funds you didn’t ask for. RBI wants to stop this — banks that mis-sell will now have to refund the customer and pay compensation on top. Separately, Indian banks can now finance company takeovers and mergers, something mostly foreign banks did until now.
  • Cross-selling / mis-selling — banks sell third-party products (insurance, MFs, pension) alongside their own services; mis-selling happens when customers are pressured or misled into buying products they don’t need or understand, often to meet sales targets
  • Other income — revenue banks earn beyond lending (interest income), including fees and commissions from selling third-party products; for some private banks this has become a significant share of total revenue, so stricter norms could dent earnings
  • Acquisition financing — loans banks provide to companies to fund mergers and acquisitions (buying other companies); the 20% of Tier-1 capital cap means a bank with ₹50,000 crore Tier-1 capital can lend up to ₹10,000 crore for a single acquisition
  • Tier-1 capital — a bank’s core capital (equity + retained earnings) that absorbs losses; regulators use it as the benchmark for setting lending limits because it reflects a bank’s real financial strength
  • The acquisition financing move levels the playing field — Indian banks with strong underwriting can now compete with foreign lenders like JPMorgan or Citi on large M&A deals in India

India’s CPI Revised with 2024 Base Year — Basket Expanded to 12 Categories, Services Get Higher Weight

High | Inflation & GDP

India’s Consumer Price Index (CPI) has been revised with 2024 as the new base year, replacing 2012. The consumption basket is now split into 12 categories (up from 6), aligned with the international COICOP 2018 standard. Food’s weight has declined while housing and services — health, education, transport, personal care — carry a larger share, based on updated HCES data. CPI General (Combined) for January 2026 stood at 104.46 (provisional), with inflation at 2.75%. The highest state-level inflation was in Telangana (4.92%), Kerala (3.67%), Tamil Nadu (3.36%), Rajasthan (3.17%), and Karnataka (2.99%) — all services-intensive economies. Rajasthan’s figure reflects a methodological fix: CPI 2024 now captures rural housing, previously understated.

Perspective & Context:

  • In simple terms: The government updated how it measures inflation. The old method gave too much weight to food prices and too little to things like rent, healthcare, and education. The new method fixes this, so the inflation number now better reflects what households actually spend on. States where services cost more — like Telangana and Kerala — now show higher inflation than before.
  • CPI (Consumer Price Index) — measures how the price of a fixed basket of goods and services changes over time at the retail level; it’s the main number RBI watches when deciding interest rates
  • COICOP (Classification of Individual Consumption According to Purpose) — an international standard for categorising household spending; India’s adoption of the 2018 version makes its CPI comparable with other major economies
  • HCES (Household Consumption Expenditure Survey) — a government survey of what Indian households actually spend on; this data determines the weights in CPI (how much importance each category gets)
  • CPI level vs inflation rate — CPI at 104.46 means a ₹100 basket from 2024 now costs ₹104.46 (how expensive things are); the 2.75% rate compares Jan 2026 to Jan 2025 (how fast prices are rising) — two different things, often confused
  • Since food prices swing seasonally but service costs (rent, school fees) tend to stay elevated, the new weights help RBI tell apart temporary spikes from lasting inflation — a crucial distinction for deciding whether to cut or hold interest rates

U.S. Drops ALARA Radiation Safety Principle, Diverging from Global Standards

Low | Everything Else (Science)

On January 12, the U.S. Department of Energy (DOE) eliminated the ALARA principle from its directives, departing from decades of international radiation protection practice. ALARA is grounded in the Linear No-Threshold (LNT) model, which holds that any amount of ionising radiation carries some cancer risk. The DOE cited its nuclear operating experience and the goal of fostering innovation. Critics argue the shift relies on non-peer-reviewed internal reports and risks undermining worker protection. The U.S. is now at odds with the ICRP, WHO, and the UN Scientific Committee on the Effects of Atomic Radiation — all of which continue to rely on LNT. Alternative models like hormesis exist but lack reproducible human data. India has not indicated any similar shift.

Perspective & Context:

  • In simple terms: The U.S. has dropped a long-standing safety rule that required nuclear facilities to keep radiation exposure as low as possible. Every other major country and international body still follows this rule. The U.S. says the change will help nuclear innovation, but critics say it weakens protections for workers and communities near nuclear sites.
  • ALARA (As Low As Reasonably Achievable) — the principle that radiation exposure should not just stay below a ceiling limit, but be continuously pushed as low as practically possible through better shielding, procedures, and engineering controls
  • LNT (Linear No-Threshold) model — the scientific assumption that there is no “safe” dose of radiation; even tiny amounts carry some risk, and the risk increases linearly with dose. This is the basis for radiation safety rules worldwide
  • What the DOE did: Removed ALARA from its regulations, meaning U.S. nuclear facilities are no longer required to minimise exposure beyond meeting fixed dose limits — a shift from “reduce as much as you can” to “just stay under the cap”
  • The move puts the U.S. out of step with every major international radiation body, potentially complicating cross-border nuclear cooperation and regulatory harmonisation
  • A 2023 Nature Medicine study of nearly a million young individuals found blood-related cancers at very low radiation doses, reinforcing the LNT model’s relevance

PSBs Show Sharply Lower NPA Slippages Compared to Private Banks Over Last Three Years

High | Banking Sector

Over the last three financial years, public sector banks (PSBs) added fresh NPAs worth just 18–24% of their opening NPA balance, compared to 61–93% for private sector banks (PvSBs), per RBI data. In FY25, PSBs added ₹82,762 crore in fresh NPAs but reduced ₹1,38,653 crore — reductions consistently exceeding slippages. PvSBs added ₹1,18,224 crore (91.53% of opening balance), with reductions roughly matching additions. DFS Secretary Nagaraju M noted at the IBA’s 78th AGM that PSBs have achieved record-low NPA levels with robust profitability. The Association of ARCs flagged that PvSB slippages are partly driven by the post-Covid unsecured lending boom, though these banks have contained gross NPAs through monitoring, recovery, and sales to ARCs.

Perspective & Context:

  • In simple terms: Government banks have dramatically cleaned up their bad loans — for every ₹100 of existing bad loans, they’re adding only ₹18–24 in new ones while recovering even more. Private banks, surprisingly, are doing worse on this front, adding ₹61–93 in new bad loans for every ₹100. This is a role reversal from a decade ago when government banks were seen as the weak link.
  • NPA (Non-Performing Asset) — a loan where the borrower has stopped repaying for 90+ days; it’s effectively a “bad loan” that the bank may not recover
  • Slippage ratio (fresh NPAs as % of opening NPA balance) — measures how fast new bad loans are forming relative to existing ones; a lower ratio means tighter lending discipline
  • What’s changed: PSBs have flipped the script — their NPA reductions now exceed fresh slippages every year, meaning the bad-loan pile is shrinking. PvSBs are breaking even at best, with new bad loans nearly matching recoveries
  • PSB closing NPA balance fell from ₹5,42,174 crore (FY23) to ₹2,83,650 crore (FY25) — a reduction of nearly 48% in two years
  • The PvSB slippage problem traces to the post-Covid unsecured lending boom (credit cards, personal loans) — a segment RBI has been flagging as a systemic risk area

SEBI Board Meeting on March 23 to Review Conflict of Interest Framework and FPI Netting Proposal

High | Finance

SEBI’s board meeting on March 23 is expected to take up around 20 agenda items, including several deferred from December 17. Key items: the conflict of interest framework for SEBI’s senior officials (based on a high-level committee report), a proposal to allow netting of FPI transaction obligations across trades, and tightening ‘fit and proper person’ eligibility for intermediaries. Other items include ETF price band changes, reporting relaxations for stockbrokers, master circular modifications for exchanges and clearing corporations, and easing regulatory processes for REITs and InVITs.

Perspective & Context:

  • In simple terms: India’s stock market regulator SEBI is holding a major board meeting to decide on about 20 proposals — including rules about how its own senior officials handle conflicts of interest, making it easier for foreign investors to trade in India, and raising the bar for who can operate as a market intermediary.
  • Netting of funds — instead of settling every buy and sell trade separately, netting offsets them so only the net difference is paid. For example, if an FPI buys ₹500 crore and sells ₹450 crore in a day, it only needs to pay ₹50 crore instead of handling both legs separately — this frees up capital and reduces costs
  • Fit and proper person criteria — SEBI’s eligibility standards that determine who can be a stockbroker, clearing member, or other market intermediary; the proposal aims to tighten integrity and disclosure requirements to weed out unsuitable players
  • REITs and InVITs — Real Estate Investment Trusts and Infrastructure Investment Trusts; these let retail investors invest in large real estate or infrastructure projects (like highways, office parks) without buying the assets directly
  • The conflict of interest framework is notable because it governs SEBI’s own officials, not just market participants — the regulator regulating itself