GLOBAL MOOD: Cautiously Risk-off
Drivers: US-Iran Deal Optimism, US Mixed Data

Asia-Pacific markets opened with a cautious risk-off bias on Friday, as lingering geopolitical uncertainty offset optimism over potential de-escalation in the Middle East. While Donald Trump signalled that the Iran conflict could end soon and confirmed a temporary Israel–Lebanon ceasefire, investors remained wary ahead of the expiry of the US–Iran truce.

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The European Union is planning a major expansion of its Carbon Border Adjustment Mechanism. This move could sharply increase carbon tax costs on Indian manufactured exports to Europe.

In a draft report issued on 10 April 2026, the European Parliament’s Committee on the Environment, Climate and Food Safety, or ENVI, proposed five major changes to the CBAM regime:

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The government has refrained from outlining the contours of the upcoming delimitation exercise even as it moves to raise the maximum strength of the Lok Sabha from 550 to 850 — a step linked to the implementation of one-third reservation for women.

The Constitution (One Hundred and Thirty-First Amendment) Bill, 2026, introduced in the Lok Sabha on Thursday, proposes that the House of the People shall comprise up to 815 members elected from states, along with a maximum of 35 members representing Union Territories.

While the amendment sets the upper ceiling for expanding the Lok Sabha, it does not specify the formula for allocating seats across states. This will instead be determined through a separate delimitation exercise based on the latest available census data.

The accompanying Delimitation Bill, 2026, provides the legislative framework for the process, empowering a Delimitation Commission to allocate seats, determine reservations, and redraw constituency boundaries.

The Commission will be required to carry out the exercise on the basis of the latest published census figures. However, the legislation stops short of clarifying how competing considerations — such as population changes, regional balance, and existing seat shares — will be reconciled.

Delimitation remains a highly politically sensitive issue in India, with southern states — which have achieved lower population growth — fearing a potential loss of representation, while states with higher population growth stand to gain.

The amendment also operationalises the long-pending reservation for women, but only after the completion of the delimitation exercise. It provides that one-third of seats in the Lok Sabha and state legislatures will be reserved for women, with constituencies allocated on a rotational basis.

India froze delimitation based on the 1971 Census for 25 years — a freeze that has been extended multiple times and is set to end in 2026.

Delimitation refers to the process of redrawing the boundaries of legislative constituencies. Since Independence, India has undertaken four such exercises — in 1952, 1962, 1973, and 2002. While the first three increased the number of seats, the 2002 exercise only redrew constituency boundaries based on the 2001 Census without altering the total strength.

At present, the Lok Sabha has 543 elected members.

The Union Government has proposed a significant overhaul of the composition of the House of the People through the Constitution (One Hundred and Thirty-First Amendment) Bill, 2026, which seeks to increase the strength of the Lok Sabha from the existing 543 to 850. 

Few constitutional exercises carry as much political charge in India as delimitation — the periodic redrawing of parliamentary constituency boundaries and, crucially, the reallocation of Lok Sabha seats among states. The process, frozen since 1976 and locked in by the 84th Constitutional Amendment until 2026, has now emerged as one of the most divisive debates of the current political season. 

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The financial year 2025-26 ended with overall unemployment at 5.1%, exactly where it stood twelve months earlier, according to March’s monthly bulletin of the Periodic Labour Force Survey. Urban unemployment was estimated at 6.8% in March, up from 6.6% the previous month and 6.5% at the start of the year. Rural unemployment stood at 4.3%, slightly higher than February’s 4.2% but below the 4.5% recorded in April 2025. (See Chart 1)

Unemployment rose marginally in March for both men and women, with estimated rates of 5% and 5.3% respectively. For the full year, men ended with a slightly lower unemployment rate than they began with; for women, it edged up. Neither move is large, but they sit within a more uneven picture underneath. (Note: Unless mentioned, all numbers pertain to those aged 15 years and above).

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India’s trade deficit widened sharply in 2025-26 as import growth far outpaced exports, while the war in the Gulf disrupted shipping through the Strait of Hormuz and exposed the country’s continuing dependence on imported energy, electronics and Chinese industrial inputs.

Data released by India’s commerce ministry today showed total goods and services trade rose 5.4% to $1.84 trillion in 2025-26, underscoring the economy’s growing integration with global markets. But the broader trade balance deteriorated.

Merchandise exports rose just 0.9% to $441.8 billion, reflecting weak global goods demand. Merchandise imports climbed 7.5% to $775.0 billion, widening the merchandise trade deficit 17.5% to $333.2 billion.

Including services, India’s total exports rose 4.2% to $860.1 billion while total imports increased 6.5% to $979.4 billion. The overall trade deficit widened 26% to $119.3 billion.

March Trade
The economic fallout from the Gulf conflict became visible in March 2026 trade figures after the physical disruption of shipping through the Strait of Hormuz.

India’s exports to the UAE plunged 61.8% to $1.3 billion in March, while exports to Saudi Arabia fell 45.6% to $528 million. Imports from the UAE dropped 66.2% to $2.6 billion, imports from Saudi Arabia fell 36.4% to $2.1 billion, and imports from Qatar declined 47.9% to $537 million.

Crude oil and petroleum-product imports also fell sharply, dropping 35.8% to $12.2 billion in March from $19.0 billion a year earlier, as disruptions in Hormuz constrained energy shipments.

Trade with the US offered relief, with India’s exports to the US rising 0.9% to $87.3 billion in 2025-26 despite elevated reciprocal tariffs on most Indian products.

Services Near Historic Milestone
India’s services exports are nearing a historic crossover with merchandise exports. Services exports rose 7.9% to $418.3 billion in 2025-26, compared with merchandise exports of $441.8 billion.

If current growth rates persist, services exports could overtake goods exports next year, making services India’s largest export category for the first time. The shift would cement the dominance of India’s IT and business-services sector, though GTRI warns that artificial intelligence is beginning to disrupt traditional outsourcing and software-services models. India needs a national strategy to transform its IT industry, move up the value chain, and build new strengths in advanced digital and business services.

Electronics Imports
India’s electronics imports topped $100 billion for the first time, rising 17.7% to $116.2 billion in 2025-26, highlighting India’s continued dependence on imported semiconductors, components and electronic equipment despite its manufacturing push.

Electronics exports also climbed 24.7% to $48.0 billion, helped by smartphone shipments, but remained far below imports.

China Deficit
India’s trade deficit with China crossed the $100 billion mark for the first time, reaching $112.1 billion in FY 2025–26.

Exports to China rose to $19.5 billion, but imports from China increased to $131.6 billion, underscoring India’s dependence on Chinese electronics parts, machinery, chemicals, battery components and pharmaceutical ingredients.

Trade continues to account for an increasing share of India’s economy. Based on estimated nominal GDP of $4.2 trillion, India’s total exports of goods and services now equal roughly 20.5% of GDP, while total trade amounts to nearly 43.8% of economic output.

The data highlight an economy becoming more globally integrated—but also more exposed to external shocks, supply-chain disruptions and strategic import dependencies.

India’s 2025-26 trade data highlight a structurally more globalised but increasingly vulnerable economy. The March disruption caused by the Gulf conflict and Strait of Hormuz blockade demonstrated how quickly geopolitical events can hit India’s trade and energy flows. At the same time, electronics imports crossing $100 billion and the trade deficit with China exceeding $112 billion underscore persistent dependence on imported technology and industrial inputs. GTRI noted that services exports may soon overtake merchandise exports, but warned that AI-driven disruption to the IT sector requires a national strategy to upgrade India’s digital and business-services capabilities.
]]> https://www.basispointinsight.com/Story/services-export-may-overtake-merchandise-in-2026-27--fingers-crossed-on-ai_761e77ef062c.html Wed, 15 Apr 2026 15:24:25 GMT Ajay Srivastava, founder of Global Trade Research Initiative, is an ex-Indian Trade Service officer with expertise in WTO and FTA negotiations.

India’s merchandise trade profile in 2025–26 was defined less by export strength and more by the composition of import demand, with the gap widening even as headline export growth held marginally positive.

Merchandise exports rose just 0.93% to $441.8 billion in FY26, a slowdown that reflects weak performance across traditional sectors even as newer segments gained traction. In contrast, imports grew 7.46% to $775.0 billion, pushing the merchandise trade deficit sharply higher to $333.2 billion from $283.5 billion a year earlier, according to official data.

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GAIL(India) Limited announced on Tuesday, that it has approved the development of 700 MW of solar power projects across Uttar Pradesh and Maharashtra. The state-run natural gas company will invest ₹38 billion to establish these renewable energy facilities, it said in a press release.

In Uttar Pradesh, GAIL will develop a 600 MW solar power project alongside a 550 MWh Battery Energy Storage System (BESS) at the TUSCO Solar Park in Jhansi. The company stated this facility will primarily cater to the captive energy requirements of its petrochemical plant at Pata in the Auraiya district.

The company will also set up a 100 MW solar power project with a 22 MWh BESS in Maharashtra's Chhatrapati Sambhaji Nagar district, formerly known as Aurangabad. Output from this site will mainly serve the captive requirements of GAIL’s propane dehydrogenation and polypropylene (PDH-PP) plant at Usar in the Raigad district.

GAIL noted these projects mark a significant milestone in its journey toward achieving Net Zero targets, aligning with India’s broader energy transition goals. Integrating advanced energy storage systems will ensure efficient solar power utilisation by addressing intermittency challenges and enabling the round-the-clock availability of renewable energy.

“GAIL’s installed renewable energy capacity shall increase substantially to over 1,000 MW from the current 147 MW upon commissioning of these projects,” Deepak Gupta, Chairman and Managing Director of GAIL, said. He emphasised the expansion underscores GAIL’s strategic vision of aligning its growth trajectory with environmental responsibility while ensuring long-term energy security.

Physicswallah Limited announced a reduction in its previously disclosed income tax demand, via a regulatory filing submitted to exchanges. The education technology firm stated that the tax demand for the assessment year 2023-24 decreased following a formal rectification order from the tax authorities.

This action reduced the initial tax assessment from ₹2.6 billion to ₹1.9 billion. According to the document, Physicswallah originally informed the stock exchanges regarding the initial ₹2.6 billion demand through an intimation letter dated March 18.

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Wipro Limited on Tuesday announced that it has signed a definitive agreement to acquire select customer contracts of Alpha Net Consulting LLC and its subsidiaries for a , via a regulatory disclosure.

Wipro will acquire the business assets for a cash consideration of up to $70.8 million. The official filing stated this sum remains subject to customary closing adjustments governed by the terms of the purchase agreement. Wipro noted the purchase consideration includes a deferred payment structured as an earnout, which is payable subject to the achievement of certain performance metrics and conditions.

Detailing the acquisition objectives and operational impact, Wipro reported the business acquisition will enable access to certain key clientele, their customer contracts, and the related workforce. The regulatory filing added this integration will augment Wipro’s existing AI-powered and consulting-led application services capabilities, thus helping drive new growth opportunities.

The exchange filing clarified the acquisition does not fall within related party transactions, and neither the promoter, promoter group, nor group companies hold any interest in the entity being acquired. Because the transaction constitutes a business acquisition rather than an entity acquisition, percentage shareholding transfer details do not apply to the transaction. 

An overview of the target entity in the disclosure indicates Alpha Net Group operates within the information technology services industry. Founded in 2001, the entity is headquartered in Santa Clara, California, USA, maintaining an additional operational presence across Singapore, India, the UK, and the Netherlands. Wipro reported the target group provides enterprise software development, data engineering, and managed services for a global clientele in an AI-first world.

As the global climate process turns toward implementation ahead of COP31, there is a growing recognition that the debate on green finance, while increasingly sophisticated, remains misdirected. For countries like India, which must simultaneously scale infrastructure and manage fiscal constraints, this moment presents not just a challenge but an opportunity to reshape the framing of the global financing agenda.

Over the past decade, the emphasis has been clear: mobilise more capital, crowd in private investment, and develop new financial instruments to support the transition. The result has been an expanding toolkit—green bonds, blended finance, carbon markets, sustainability-linked instruments—each presented as a critical part of the solution. Yet, despite this proliferation, the gap between ambition and financing remains stubbornly large.

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Labour unrest was suddenly in the spotlight in the industrial township of Noida, Uttar Pradesh, on April 13–14, turning violent as tens of thousands of workers took to the streets over minimum wages. The law-and-order situation was contained through a flag march and heavy security deployment, and the state government announced an interim wage increase pending the constitution of a Wage Board.

The protests were not without genuine cause. The current minimum monthly wage for unskilled workers in UP stands at a meagre ₹11,313.65. Workers receive a variable dearness allowance twice a year as a supplement, but basic pay for unskilled workers in rural areas remains ₹5,750 a month, a figure that has not been revised since at least 2016, while skilled workers can expect a monthly minimum of ₹13,940.37 including VDA. The 37 paise, one assumes, is essential to employer competitiveness and cannot be rounded up.

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Electricity consumption is widely regarded as a strong coincident indicator of economic activity because, until recently, it had to be consumed upon production and could not be stored on a utility scale. Although the first such storage facilities appeared in the early 20^th century, modern battery storage emerged much later, with major utility-scale lithium-ion demonstrations beginning around 2012.

Accordingly, nighttime luminosity captured by satellites and the more accurate visible infrared imaging radiometer suite have been used to track economic activity, particularly where traditional data are limited or unreliable. The advantage is that it can include informal activity, whereas it is less accurate in rural areas with low energy access, and sometimes also in highly developed areas where growth does not necessarily mean more light.

It also struggles to distinguish between specific types of economic activity. It is useful, therefore, to assess the evolving profile of electricity, both trends and twists, to judge how closely it mirrors economic activity.

Global Trends
As the earth warms and heat waves become more intense and frequent, global electricity demand is outpacing economic growth.

According to the International Energy Agency, worldwide electricity demand grew by 3% year-on-year in 2025 on top of 4.4% in 2024. This is set to become a broader trend — it will increase at a brisk pace over the rest of the decade to be 50% higher than the average for the previous decade.

Emerging economies will account for nearly 80% of additional electricity consumption, led by China, which is expected to add demand equivalent to the total electricity consumption of the European Union today. Close behind are India and Southeast Asia. Electricity demand in advanced economies is accelerating again after 15 years of stagnation, driven by artificial intelligence, data centres and advanced manufacturing. 

Half of the world’s electricity supply will be generated from renewables by 2030, led by solar and nuclear, and overtaking coal, which will, however, still remain the single largest source of electricity. The world will have to develop faster and more efficient expansion of grids and grid-related supply chains to securely and cost-effectively integrate a changing mix of generation and storage. 

Grid-enhancing technologies and regulatory reforms can also unlock capacity currently stuck in queues worldwide. Utility-scale battery deployment is accelerating rapidly and will become a significant source of short-term flexibility as battery costs decline.

The power sector is the largest source of global greenhouse gas emissions, accounting for about 30% of total emissions. Here, there is a welcome twist. Carbon dioxide emissions from electricity generation remained flat in 2025 and will plateau over the 2026-2030 period as renewables and nuclear continue to account for a growing share of generation, steadily reducing the CO2 intensity of electricity generation.

Affordability remains a key concern, with household electricity prices in many countries rising faster than incomes since 2019. Non-energy components — such as network charges, taxes and other levies — continue to account for a large, and often growing, share of household bills. In addition, electricity is also taxed more heavily than natural gas in many countries, weakening incentives for households to electrify heating, cooking or hot water use. Improving affordability will be the key challenge for all countries, for it holds the key to wider electrification.

Indian Experience, Outlook
Even as average wholesale electricity prices in 2025 rose year-on-year in several regions and countries, including in the European Union and the United States, they fell in India.

Fewer heatwaves in the summer and an early onset of the monsoon season led to demand growth slowing in 2025 to 1.4%, the weakest since the early 1970s, excluding the decline seen in 2020 during the pandemic. Slower industrial activity also contributed to the moderation in demand growth. Over the next five years, however, electricity demand is expected to rebound in line with economic activity, expanding cooling needs due to rising income levels, increasing industrial output, and escalating power consumption in agriculture and transport.

Renewable electricity generation grew by 20% in 2025, the strongest annual increase in the last decade. Solar photovoltaic generation expanded by a decadal high of 24%, boosted by substantial cost declines. Solar PV is projected to add more than 300 tera-watt hours over the next five years. Wind electricity generation also expanded robustly in 2025 and is forecast to grow at a steady average annual rate of over 8% through 2030. Hydropower rose by 14% year-on-year in 2025, up from 2.5% in 2024, but its outlook is more mixed, with a declining share in total supply despite capacity additions.

India has already achieved 50% of its installed capacity from non-fossil fuel sources ahead of its 2030 target. Between 2026 and 2030, India is expected to add almost 300 gigawatts of renewable power capacity, reflecting its national schemes-driven goal of a self-reliant clean energy supply chain.

India’s power sector is now shifting its focus to system integration and long-term reliability to align renewable expansion with grid strength and financial discipline. A task force for India Energy Stack has been mandated to develop a Digital Public Infrastructure for the power sector by creating a connected and interoperable energy ecosystem through a utility intelligence platform in collaboration with selected power distribution companies. Built on standardised open APIs and protocols, this platform should be able to integrate data from across IT systems, enhancing innovation, operational efficiency, and informed decision-making. Reforms in distribution should focus on improving financial sustainability and service reliability, including smart metering.

India is also looking to nuclear power as a key part of its energy security and decarbonisation strategy with the newly announced Nuclear Energy Mission, which includes a target of 100 GW of nuclear capacity by 2047. The strategy is to crowd in private sector participation in the development and deployment of advanced nuclear technologies, such as small modular reactors or SMRs.

Coal-fired generation will maintain its role as the main source of electricity, with a share of around 60% in 2030. This dominant role of coal makes India's electricity sector one of the world's most carbon-intensive power sectors, with emissions exceeding 1.2 billion tonnes annually. The grid emission intensity is roughly 0.70-0.82 kg per kilowatt hour. Total CO2 emissions from electricity generation fell by more than 3% year-on-year in 2025, the first decline since 2020. Emissions from power generation are forecast to resume growth, however, as coal continues to provide a significant portion of power to meet industrial and cooling demand. Aligning with the net-zero 2070 goal requires a dramatic reduction in coal dependency.

As the age of electricity reaches its zenith, perhaps electricity will be a good concurrent indicator of green, clean economic activity worldwide and in India. 
]]> https://www.basispointinsight.com/Story/the-age-of-electricity-meets-india-s-grid-test_15911c084156.html Wed, 15 Apr 2026 02:59:00 GMT Michael Patra is an economist, a career central banker, and a former RBI Deputy Governor who led monetary policy and helped shape India’s inflation targeting framework.

• What an 8% monsoon deficiency could mean for agricultural output
• How El Niño and uneven rainfall distribution amplify risks
• The transmission channels from the Iran war to Indian farmers
• Fertiliser supply disruptions and rising input costs
• Inflation risks and fiscal pressures on the government
• The outlook for foodgrain production and rural demand

“Few issues in economics are more susceptible to political misrepresentation than exchange rates.” - Niall Ferguson

Exchange rate movements are deeply embedded in macroeconomic conditions, which makes it genuinely difficult to isolate their effects. This is the classic endogeneity problem in econometrics: exchange rates are not exogenous shocks but part of a system of simultaneous equations. Despite the potentially significant policy implications of globalisation-related shifts in the exchange rate-economy relationship, the empirical evidence remains scarce and fragmented across economies.

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“A large number of students from prestigious institutions are aspiring to become lawyers as we see in Suits, and not lawyers as ought to be in Maamla Legal Hain,”

-Supreme Court judge, Justice Sanjay Karol while speaking at an event in NLIU, Bhopal

Yashwant Varma Becomes The Third Judge to Resign Than Face The Music 

Yashwant Varma, a judge facing an inquiry committee’s probe into allegations of corruption after unaccounted for cash was recovered from his residential premises, resigned from his post as a judge of the Allahabad High Court. Varma wrote a long letter to communicate his resignation and became the third judge in Independent India to resign from the post in the face of impending impeachment motion.

The incident around Varma’s case raises questions over accountability of the higher judiciary, transparency and institutional scrutiny. Be it former chief justice Gogoi being part of a bench to examine allegations of sexual harassment against himself and later going on to become a Rajya Sabha member, or now Varma who continued to hold the post of a high court judge, though without a roster, but proceeded to resign instead of facing a full inquiry and impeachment motion preventing the findings about the truth being disclosed – the judges seated in higher judiciary have continued to evade scrutiny.

In the absence of a decisive conclusion to such cases, the probability of increased erosion of public trust looms large. The citizenry of this country wants to see even the judiciary members brought to justice to feel there is real transparency in the system. Anything short of that may protect institutional reputation but not public trust. 

Key Rulings:

• Supreme Court reiterates that voting is not a fundamental right but a statutory right
  

• Top court rules that borrowers do not have the right to get a personal hearing by banks before their accounts are classified as fraud
  

Courts: 

• Bombay High Court quashes a demand of 11 billion rupees by MMRDA against Reliance Industries
  

• Former Delhi chief minister Arvind Kejriwal seeks recusal of a Delhi High Court judge from hearing his case on grounds that she attended four events affiliated to the RSS giving an impression that she may be sympathetic to the ideology and may be biased against Kejriwal
  

• Delhi High Court seeks centre’s response on plea challenging the validity of the Transgender Persons Protection Amendment Act, Kerala High court asks if hormone therapy and other procedures halted
  

• Supreme Court refuses to stay Adani’s resolution plan for Jaiprakash Associates on Vedanta’s plea, asks NCLAT to hear the case in a timebound manner and directs the monitoring committee for Jaiprakash to seek the appeals court’s permission before taking any policy decisions
  

Quasi Courts:

• NCLAT begins hearing Vedanta’s appeal against approval Adani’s plan for Jaiprakash Associates
  

Others:

• Yashwant Varma, high court judge accused of corruption, resigns from post
  

• Punjab & Haryana High Court asks judges not to take AI’s help to write judgments or for legal research
  

The Big Listings:

• Apr 16: NCLAT to hear Vedanta’s appeal against approval for Adani’s resolution plan for Jaiprakash Associates
  

• Apr 17: Securities Appellate Tribunal to hear appeal by Jane Street challenging SEBI’s move to allegedly refuse access to important documents to the firm in the case against it
  

• Apr 30: Supreme Court to hear PIL petition seeking tighter probe into Anil Ambani’s fraud allegations
  

• May 5: Supreme Court to hear challenge to Citizenship Amendment Act
  

• Jul 15: Delhi High Court to hear Apple Inc.’s plea against India’s competition law’s provisions on global turnover-based penalties on MNC
  

* The dates of hearing can change and a concrete list is prepared just a day before

Legal Moves: 

• Geetanjali Mehlwal joins IndiaLaw LLP as Senior Consultant
  

• Malabika Boruah elevated to partner, Stuti Shetty made COO at Naik Naik & Co.
  

• Gauri Joshi of Aditya Birla joins Godrej Housing Finance as Legal Head  
  

In the post-policy press conference following the latest Monetary Policy Committee review, the Reserve Bank of India’s messaging on capital flows revealed a layered yet contrasting reading of the data. Deputy Governor Poonam Gupta pointed to improvements in entry conditions for investors, citing more attractive valuations, a supportive exchange rate, and strong nominal GDP growth. Governor Sanjay Malhotra, for his part, framed foreign portfolio investment flows as inherently short-term and opportunistic, suggesting that such movements should not be over-interpreted in assessing India’s underlying investment appeal.

Between Gupta’s improved entry-point argument and Malhotra’s characterisation of FPI flows as transient, the RBI presents not a single view of capital flows, but arguably a hierarchy of relevance. Portfolio outflows are treated as noise, while FDI and growth fundamentals are positioned as signals.

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Foreign portfolio investors pulled ₹1.18 trillion out of Indian equities in March. This is the largest single-month exit on record, eclipsing even the ₹940 billion that left in October 2024. In the same month, Indian mutual fund investors put ₹320.87 billion into the market through SIPs, an all-time high.

The familiar triggers are a hawkish US Fed, West Asian conflict squeezing oil supply lines, and a rupee under pressure. But the more convincing explanation is that foreign fund managers do not invest in rupees, but in dollars.

A 12% rupee return sounds attractive. After capital gains tax revisions introduced in the 2024 Union Budget, withholding tax on dividends, and factoring in rupee depreciation at repatriation, the dollar-adjusted, post-tax return competes poorly against other emerging markets bidding for the same allocation. In 2025-26 net FPI outflows hit nearly ₹1.8 trillion, up 42% year-on-year, the highest in 34 years. India needs foreign capital. This is not the column that argues otherwise. FPIs set the marginal price, anchor valuations to global risk norms, and provide the liquidity depth that domestic capital alone cannot replicate. The argument here is narrower. Build a domestic base strong enough that when foreign capital exits, and it will, repeatedly, the floor does not give way.

Ownership Shifts
The National Stock Exchange of India’s data, as on December 2025, is unambiguous. Domestic mutual funds held 11.1% of all NSE-listed companies, the tenth straight quarterly record. Total DII ownership stood at 19%, ahead of FPIs for five consecutive quarters. FPI share slipped to 16.7% — a 15.5-year low. SEBI Chairman Tuhin Kanta Pandey confirmed in March 2026 that retail investors and mutual funds together hold 36% of Nifty 50 free-float market capitalisation. 

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...Intervention in the foreign exchange market is aimed at smoothening excessive and disruptive volatility without targeting any specific level or band for the exchange rate. This is consistent with our long-standing policy of the exchange rates being market-determined.
— RBI Governor’s Statement: April 8, 2026.

India has RBI-intervened market-determined exchange rates. Market participants know what it means. In all practical terms, intervention in the forex market has several dimensions, not just traditional buying and selling of currencies. 

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The RBI released its Payments Vision 2028 on March 27, setting out where it wants India's payments sector to be by December 2028. The headline theme is "E-payments for Everyone, Everywhere, Every time," supported by five goals: integrity, inclusion, innovation, institutionalisation, and internationalisation. They reflect a recognition that the next leg of growth will depend less on expanding access and more on strengthening confidence in the system.

India’s digital payments ecosystem has reached what can reasonably be described as structural maturity. The RBI’s Digital Payments Index, which tracks the extent of digitisation, stood at 516.76 as of September 2025. From a base of 100 in March 2018, the index took four years to reach 350, and then crossed 500 in just three and a half years. The pace of change is compounding, with transaction density rising sharply across use cases.

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The India Meteorological Department on Tuesday said the southwest monsoon for 2026 is likely to be below normal, with rainfall estimated at 92% of the long-period average, raising concerns over farm output and inflation.

“The 2026 southwest monsoon seasonal rainfall over the country as a whole is most likely to be below normal,” IMD said in its long-range forecast.

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Godrej Properties reported its strongest-ever operational performance in 2025-2026, with record bookings, collections, operating cash flow and business development.

Booking value rose 16% year-on-year to ₹341.7 billion, the highest ever reported by an Indian real estate developer. The company sold 17,515 units during the year, with a total area reaching 27.0 million sq ft.

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Larsen & Toubro's wholly owned subsidiary, L&T Realty Properties, has signed agreements to acquire 100% stake in International Green Scapes Limited (IGSL), the company said in a press release.

The acquisition will be completed for a cash consideration of ₹11.2 billion and is expected to close by April 15. IGSL operates in the real estate sector and had no turnover in 2024-2025.

The company said the acquisition will allow L&T Realty to leverage IGSL’s land bank to expand and strengthen its real estate development portfolio.

Post completion, IGSL will become a wholly owned subsidiary of L&T Realty Properties.

On April 6, India’s Prototype Fast Breeder Reactor went critical. This is a remarkable step forward for India’s energy security, towards the goal of relying on indigenously available thorium for power generation, and in the battle against climate change. It comes at the right time to defeat a major lobbying effort underway to persuade India to abandon its own technology for nuclear power generation and, instead, adopt a new, commercially unproven American technology to produce nuclear power.

No, the Prototype Fast Breeder Reactor, or PFBR, will not produce power from domestically available thorium. Rather, it will breed plutonium, making use, in part, of spent fuel from the conventional fission reactors. Once sufficient quantities of plutonium has been bred from breeder reactors, the stage would be set to use thorium inside the fission reactor to produce power, cutting off dependence on uranium imports for fuelling reactors.

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Tata Consultancy Services Limited reported an audited consolidated profit for the year of ₹137.8 billion for the three months ended March 31. According to a BSE filing dated April 12 the company generated ₹714.6 billion in total income. Revenue from operations reached ₹707.0 billion, representing a sequential increase from ₹670.9 billion in the December quarter. Other income for the March quarter stood at ₹7.6 billion.

Total expenses for the March quarter amounted to ₹530.9 billion, a figure the BSE filing stated reflects operational efficiency amid global IT spending pressures. Employee benefit expenses accounted for ₹401.4 billion, while the cost of equipment and software licences stood at ₹14.4 billion. The company recorded depreciation and amortisation expenses of ₹14.1 billion, finance costs of ₹2.7 billion, and other expenses totalling ₹98.4 billion. This resulted in a profit before exceptional items and tax of ₹183.6 billion.

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Sun Pharmaceutical Industries Limited clarified that a report claiming the company was in the final stages of a $12 billion Organon acquisition is speculative in nature. 

The company detailed its stance in a regulatory filing submitted to exchanges, responding directly to rumour verification communications from both stock exchanges.

The exchanges had sought verification regarding an article published by Moneycontrol captioned, "Sun Pharma slips nearly 4% after $12 billion Organon deal enters final stage," on April 10.

In the official response, Sun Pharmaceutical Industries stated that it possesses no material event or information requiring disclosure under Regulation 30 of the Listing Regulations.

Titan Company is India's largest branded lifestyle retailer, majority-owned by the Tata Group. Jewellery, sold through Tanishq, Mia, and CaratLane, generates roughly 85% of revenue. Watches runs the Titan, Fastrack, and Helios brands. EyeCare operates the Titan Eye Plus chain. The business model is retail-led, brand-driven, and heavily dependent on India's discretionary consumption cycle. Internationally, Titan operates Tanishq stores in North America and the GCC, and recently consolidated the Damas jewellery network in West Asia.

The setup for the last quarter of fiscal 2025-26 requires some context. When Titan's stock fell 6% after the June quarter, the problem was clear. As we had noted then, jewellery grew just 18% against Street expectations of 22-23%, buyers were trading down to lighter pieces, and the buyer base had gone flat. Gold price inflation had compressed affordability and stripped the company of pricing power on plain jewellery.

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India knows Bata. Every middle-class household has a pair somewhere — in memory, if not on the shoe rack. But in a market that now buys aspiration as readily as it buys footwear, being universally known isn't the same as being universally wanted. For consumers and investors alike, Bata's greatest asset has become its heaviest anchor.

Bata Group's CEO recently called India a "sleeping giant" and aims to double its India business, where it has been present for 100 years, in the next five years. The ambition is not in question, the structure is.

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The nearly two-decade-old MGNREGA, the world’s largest rural job guarantee programme, was officially replaced by the Viksit Bharat Guaranteed Rozgar and Aajeevika Mission – Gramin, or VB-GRAMG, through a parliamentary act in December 2025. Although the legislation envisaged rollout from the current financial year, there are no visible signs of the programme becoming operational yet. On the other hand, the war on Iran has begun to impact the Indian economy, creating a risk of an employment crisis in both rural and urban areas. Historically, MGNREGA served as a vital buffer during such economic shocks, but with that programme repealed and the new one not yet operational, that safety net is currently missing.

Satya N Mohanty, a former secretary in the Government of India and senior advisor on rural development at the erstwhile Planning Commission, spoke to Tracking Trends on the reasons behind the delay in rolling out the new plan and what could be at risk.

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When the Federal Reserve concludes its policy meeting, the choreography is almost austere — a statement, projections, and then the Chair steps up alone to face the press. The tone is clinical, the scope tightly policed, and the message disciplined around the mandate.

In Reserve Bank of India announcements, by contrast, the optics resemble a well-attended symposium. The Governor is flanked by senior officials, and the interaction with journalists often sprawls across monetary policy, financial regulation, liquidity management, and broader economic commentary. With the simultaneous release of a Statement on Developmental and Regulatory Policies, what should be a crisp monetary policy communication risks becoming a multi-theme briefing where the core signal is diluted.

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India’s rural economy is entering a phase of synchronised stress in 2026, where the risk of a below-normal monsoon is colliding with a sharp rise in agricultural input costs. The implications extend beyond farm output and incomes, touching rural demand, food inflation, and the broader macro balance.

Climate indicators are increasingly pointing to a shift toward El Nino conditions. According to the latest update from the National Oceanic and Atmospheric Administration, ENSO-neutral conditions are likely to persist through April–June, but El Niño is expected to emerge during May–July with a 61% probability and persist through the end of the year. There is also a meaningful probability of it turning into a "Super El Niño" in 2026.

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The high-stakes engagement between US and Iranian officials in Islamabad on Saturday was less a step toward resolution than a reflection of how far apart the two sides remain. While both camps chose to keep the channel nominally open, signals emerging from Washington and Iran suggest that the discussions may have stalled. 

Comments from US Vice President JD Vance indicate that key differences remain unresolved, and that the negotiating space may, in fact, have narrowed. Speaker of Iranian Parliament Mohd. Bagher Ghalibaf, who led the delegation from Tehran, said Iran’s “logic and ⁠principles” have been explained to the Americans, and “it’s time ⁠for them to decide whether they can ⁠earn our trust or not.”

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President Donald Trump said the United States would begin moving to block ships entering or leaving the Strait of Hormuz, sharply escalating tensions with Iran after talks between the two sides failed to resolve key differences.

In a social media post, Trump said the discussions had gone “well” on most issues, but not on the central issue of Iran’s nuclear programme.

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Preface: The following is written as an open letter to President Trump. You are not the addressee, but you are the intended reader. As you read, ask yourself: Which of these drivers am I seeing in real time? And what does this pattern tell me about when he is signalling versus simply venting?

Dear President Trump,

I am a psychologist who works with high-achieving executives under chronic pressure. I see what pressure does to people who are used to winning. From that vantage point, I offer this direct reflection on patterns of public communication, grounded in behavioural science rather than personal critique.

I've reflected on several widely discussed posts from high-stakes moments, geopolitical tensions, holidays, and symbolic days. I want to walk through them with you, not to criticise, but to understand what might be driving them from the inside:

Easter Sunday: “Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran… Open the F***in’ Strait, you crazy bastards, or you’ll be living in Hell – JUST WATCH!”

New Year’s Eve: “I wish them only the worst. May they rot in Hell.” (referring to political opponents)

Christmas Day: “Merry Christmas to all, including the radical left scum that is doing everything possible to destroy our Country…”

Let’s reflect here.

What did it feel like in your body when you hit "post"? What was the emotion right before your finger moved? What internal signal felt urgent enough to override any pause?

I'm not here to label you. I'm here to map the wiring. From the science of human behaviour, there are three possible underpinnings, and you can tell me if any resonate.

The first is protective anger used as fuel. When you sense weakness, disrespect, or threat (to America or to yourself), your system shifts into warrior mode. The profanity, the "rot in Hell," the "scum" label: these are fast, efficient signals of dominance. They deter and energise. They've delivered results before: leverage in negotiations, connection at rallies.

But is that same energy still serving you optimally in the role you're in now? Or has it become a campaign-era reflex operating in a presidency where the symbolic and diplomatic costs are different?

The second is the authenticity trap. You've often said, "I say what everyone else is thinking." That's core to your appeal. Psychologically, though, there can be a subtle blind spot: the equation that says filtering means weakness. So when the impulse hits, the follow-on thought is often, "If I soften this, I'm betraying who I am." That feeling is real. But is it always strategically sound when the arena is global and the stakes involve alignment, stability, and long-term leverage?

Underneath the bluntness lies a deeper drive: a refusal to be seen as soft — by history, by opponents, or by your base. That makes sense after the battles you've fought. Yet it creates a trade-off between the short-term impact of a viral, hard-hitting post and the longer-term imprint of presidential steadiness that many supporters now say they crave alongside the fight.

If I had to guess, the post is often doing two things at once. It pushes outward, signalling to allies and adversaries, but it also settles something inward — resolving the friction of being challenged, misread, or cornered. Yes, the words land on others, but they also close a loop inside.

The third underpinning is reduced response flexibility under sustained pressure. Chronic stress and repeated high-stakes exposure narrow the gap between emotional impulse and action, limiting the prefrontal cortex's capacity to select from a broader range of responses. What once felt like rapid, decisive action can become a narrower default, where escalation crowds out options such as strategic ambiguity or measured silence.

Signal Decay
These are not pathologies; they are observable human responses to intense, unrelenting demands. What is unusual is the scale at which they play out. When a president uses words like "scum" or "rot in Hell," it doesn't end with the sentence. It travels and lowers the threshold for how disagreement is expressed, not just in politics, but in everyday life. It tells people how far they can go. And once that line moves, it rarely moves back.

In an era when the US still sneezes and the world catches a cold, a president's unfiltered communication shapes more than domestic discourse. It sets a tone that echoes across borders, influencing how other leaders speak, how diplomats negotiate, how publics process conflict.

The standard for what counts as "strong" communication begins to bend. Precision gives way to volume. Finality replaces flexibility. And over time, it becomes harder for anyone in that position to do something different without it being read as weakness.

My concern, as a psychologist, is a specific blind spot: the automatic equation that strong language equals strength. At the presidential level, repeated unfiltered intensity systematically compresses the range of leverage the role is designed to exercise. When every challenge elicits maximum volume, the office's capacity for deliberate restraint, which signals control and forces calculation in others, is diminished. Contrast and unpredictability lose potency when the baseline is already elevated.

This equation can flip. Calibrated restraint often lands with greater force, precisely because it signals control.

If we were working on this together, I would stay with the moment before you hit "post" and ask: 

What outcome did you want to create, in that instant and in the days after?

What did you want the other side to do differently?

What did you want your own side to feel?

And then: did the words you chose create that shift or just mark the fact that you responded?

Those two are easy to confuse when response itself has become a form of control.

There are three observations for any leader reading this:

Distinguish venting from signalling. Venting resolves internal tension. Signalling aims to change behaviour. When intensity becomes the default, the two blur, even for the sender. Treat communication as background noise until it correlates with action.

Flattening of contrast erodes leverage. When every message arrives at maximum volume, opponents habituate. The only informational signal becomes sudden restraint — watch for it.

Calibrated restraint gains disproportionate power. Against constant escalation, deliberate calm forces calculation. Silence becomes a force multiplier.

Mr. President, I'm not asking you to become a different person. I'm asking you to remember that some of your most effective moments came from restraint, from leaving just enough unsaid that the other side had to calculate. That uncertainty was part of the leverage.

Lately, the language feels more absolute. It closes doors rather than narrowing them. When every message arrives at the same pitch, the pitch stops carrying meaning. People adjust, and no longer react the way they used to. The range of what you can do next shrinks.

When every reaction becomes a statement, and every statement carries the same intensity, contrast disappears. And without contrast, even strong signals begin to flatten. People hear them but no longer have to interpret them. When interpretation disappears, so does a certain kind of power, the kind that comes from making others pause, calculate, and adjust.

You care whether words are strong. I'm asking you to reflect on whether they still change the behaviour of the people who hear them.

When this term ends, what sentence do you want in history's opening paragraph about "Trump 2.0"? The toughest fighter ever seen, or the leader who restored American strength with both power and control?

The patterns are observable. The adjustments remain yours to make.
]]> https://www.basispointinsight.com/Story/power-and-profanity--what-leaders-reveal-when-they-stop-filtering_cea582835b6a.html Sun, 12 Apr 2026 07:55:00 GMT Kirti Tarang Pande is a psychologist, researcher, and brand strategist specialising in the intersection of mental health, societal resilience, and organisational behaviour.

In the ongoing geopolitical instability and geo-economic uncertainty centred in the Persian Gulf region, the stakes for the world, from an energy perspective, have seldom been higher.

The military conflict in the Persian Gulf region, which has led to the virtual closure of the critical Strait of Hormuz, has thrown the established supply chain of energy commodities out of gear. There is palpable apprehension that production outages and damage to key storage infrastructure will exert a far-reaching impact on global energy markets in the coming months.

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Bharti Airtel is injecting $290 million into its data-centre subsidiary Nxtra Data as part of a $1 billion round led by Alpha Wave Global and Carlyle, with Anchorage Capital writing a smaller cheque. The deal values Nxtra at nearly $3.1 billion post-closing. Airtel retains control through its wholly-owned subsidiary, currently at 75.96%.

The billion-dollar-question is whether Nxtra can earn its valuation in a field that is crowding very fast.

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In 2025, an estimated 59.3% of India's population aged 15 and older was part of its labour force, meaning almost six in every ten persons were either engaged in economic work or looking for some. But what about the other forty-odd percent? Why were they neither working nor looking for employment? Almost 40% of Indians in this age group translates to a staggering number of individuals, and understanding what kept them out of the labour force matters well beyond statistics.

The PLFS asks those outside the labour force what their primary reason for being so was. The question is posed only to this subset of respondents, not to everyone surveyed.

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Extreme heat during the agricultural growing season in rural India can have several deleterious effects. It can reduce crop yields. When temperatures rise significantly, agricultural productivity declines, lowering the quantity of food that farm households can consume from their own production.

While prior research has established that high temperatures reduce crop yields, the downstream effects on household diets and nutritional outcomes are less well understood. This issue is particularly salient in developing countries like India where many households rely on small farms both for income and for direct food consumption. Crop losses caused by extreme heat may therefore lead to increased undernutrition, with significant long-term consequences for health, human capital, psychological well-being, and labor productivity.

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India’s private-sector activity slowed to its weakest level in over three years in March, as persistent cost pressures and geopolitical risks dampened demand. The HSBC India Composite PMI fell to a 40-month low of 57.0 in March from 58.9 in February.

The India Services PMI declined to a 14-month low of 57.5 from 58.1, though it remained above its long-run average of 54.4. The moderation was driven by slower growth in new business. While services continued to outperform manufacturing, growth eased across both sectors.

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If you are among the rare few who play golf purely as a sport, you may safely return to your swing.

By the time people discover golf in middle age, it is rarely about the game. It is about standing next to the right person while appearing to do something else. Golf offers a peculiar luxury that most professional life does not. Time without agenda, conversation without minutes, and influence without declaration. It is not where deals are made. It is where resistance to deals quietly disappears.

Corporate India, being both ambitious and polite, has developed a refined vocabulary for this. Networking, relationship building, stakeholder alignment. These are respectable phrases. They sound procedural, almost necessary. What they do not mention is that some of the most consequential conversations happen before they are supposed to happen. Nobody writes down that by the time a matter reaches a boardroom, it has already developed a preference.

Golf is only the most elegant version of this arrangement. It allows two people to speak without appearing to negotiate. It replaces confrontation with familiarity and replaces argument with time. Walking between holes has a curious effect on disagreement. Nobody feels cornered. Nobody is being recorded. Yet positions soften, priorities shift, and conclusions begin to look inevitable.

This is not unique to golf. It is simply easier to observe there. The same logic operates in cricket boxes where conversations matter more than the match, in private clubs where access is the real membership benefit, and in international hospitality spaces where Indian hierarchies become strangely flexible once they leave Indian soil. There is a reason some of the most efficient networking in India does not happen in India. Distance makes people accessible in ways proximity does not.

Nothing here is illegal. That is precisely why it works so well.

There are no envelopes, no whispered conspiracies, no dramatic betrayals. What is exchanged is subtler and more durable. Access, time, attention, and the rare opportunity to be heard before others even know there is something to hear. Influence, in its most effective form, does not look like influence. It looks like conversation.

The system, therefore, does not need to be corrupt to be unequal. It only needs to be slightly tilted.

This tilt becomes visible only in middle age. Early in life, effort feels sufficient. You work harder, you perform better, you move ahead. It is a comforting model because it is partly true. But at some point, effort stops being decisive. Competence remains necessary, but familiarity begins to matter more. Trust becomes currency. Presence becomes leverage.

And presence, as it turns out, is not evenly available.

There is also the small matter of who pays for that presence. Golf, like most elegant systems, is sometimes not self-funded. Many of its most enthusiastic practitioners are not spending their own money. The company often is. Memberships, access, travel, weekends that arrive disguised as “engagement”. It is all quietly absorbed into the cost of doing business. And to be fair, many promoters and owners are not entirely uncomfortable with this arrangement. For them, it is a relatively small price to pay for something far more valuable than a well-struck drive. Access to rooms they cannot easily enter. Relationships they cannot organically build. Loyalty that does not appear in contracts but shows up when it matters. It is not misuse. It is investment. The return is not revenue. It is who answers your call first.

By the time professionals enter these circuits, they rarely question them. They adapt. They learn the rhythm, the pauses, the importance of being present when nothing official is happening. Influence, they discover, is less about what you say and more about when you are allowed to say it.

After a while, the system feels normal.

That is the most effective part of it.

Because once something feels normal, it no longer requires justification. It becomes culture. We tell ourselves that relationships matter, that business requires trust, that decisions cannot always be made in sterile rooms. All of this is correct. It is also incomplete. Because relationships do not merely build trust. They build advantage.

And advantage, repeated often enough, begins to resemble merit.

What is less acknowledged is how far that advantage travels. A conversation on a golf course does not remain on the golf course. It enters other rooms, other discussions, other decisions. It shapes outcomes that affect people who will never see those spaces, let alone participate in them. For many, the first sign of such influence is not the conversation itself, but the result that appears later, fully formed and neatly justified.

By the time the system becomes visible, it is already finished.

This is why the elegance of these circuits is so durable. The people within them are often not wrong in any obvious way. They are competent, experienced, and capable. They can meet every formal requirement placed before them. They can, with complete sincerity, claim fairness and professionalism. They tick all the boxes.

The difficulty is that the most decisive parts of the system often happen outside those boxes.

This creates a particularly refined form of inequality. Nothing is violated. Nothing is provable. Yet not everyone is playing the same game. Some are participating in conversations before others even know a conversation exists. Some are shaping outcomes before others are invited to discuss them.

This is not an accident. It is how power prefers to operate.

Formal systems are necessary, but they are also restrictive. They demand clarity, accountability, and documentation. Informal systems offer the opposite. They allow ambiguity, flexibility, and deniability. They create space for influence to move without resistance. It is therefore unsurprising that alignment happens where structure is weakest.

The discomfort lies in admitting that this is not a flaw in the system. It is the system.

Most professionals eventually accept this. Middle age is when idealism becomes practical. People stop asking whether the system is fair and begin learning how it works. They do not necessarily become cynical. They become efficient. They recognise that proximity matters, that familiarity reduces friction, that access opens doors that competence alone cannot.

And once they recognise this, they rarely step away from it.

To be fair, some people play golf for the sport. They are rare and slightly unfashionable. The rest play for the handicap, which has become a polite way of discussing one’s limitations in public. It is a useful system. It allows people to obsess over a number on the scorecard while keeping the more serious handicaps, the ones involving judgment and values, safely off it.

Golf, in the end, is not the issue. Nor is any other venue where power gathers politely. The issue is that we continue to pretend that these spaces are incidental, when in fact they are often decisive.

Nothing important is decided there.

It is simply made unnecessary to decide otherwise.
]]> https://www.basispointinsight.com/Story/sarci-sense--golf-is-not-a-sport--it-s-also-access_a3d0cae1cdd6.html Sat, 11 Apr 2026 04:28:00 GMT Dr. Srinath Sridharan is a Corporate Advisor & Independent Director on Corporate Boards. He is the author of ‘Family and Dhanda’.

Indian equities surged on Friday, snapping a six-week losing streak and posting their strongest weekly gain in over five years, as easing crude oil prices following a US-Iran ceasefire lifted sentiment. The Nifty 50 rose 1.16% to 24,050.50, while the BSE Sensex gained 1.20% to 77,550.25, with both indices climbing nearly 6% for the week. The sharp rally was supported by a 12% drop in Brent Crude prices this week, eased concerns around inflation, growth and corporate margins, although the fragile ceasefire continued to show signs of strain with renewed tensions in West Asia.

Broader markets outperformed significantly, with mid-cap and small-cap indices gaining 1.52% and 1.65% on the day, and rising 7.8% and 7.6% respectively for the week, as all 16 sectoral indices ended in positive territory. Among Nifty constituents, Asian Paints, Eicher Motors, Bajaj Auto and Shriram Finance led the gains. Sectorally, IT stocks outperformed, while auto, banking and financial services lagged relative to the broader rally.

Investor sentiment was further supported by a positive macro-outlook, with the Asian Development Bank raising India’s FY27 GDP growth forecast to 7.3%, citing reforms, improving trade dynamics with Europe and expected government spending boosts. While markets welcomed easing energy prices, participants remain cautious as geopolitical developments in West Asia continue to pose risks to the sustainability of the rally.

Top Movers of the Day

Axis Bank gained 2.4% to ₹1,351 as banking stocks rallied on improved sentiment; easing crude prices supported risk appetite.

SBI gained 2.4% to ₹1,066 tracking strength in PSU banks; sectoral rotation into financials supported buying.

Reliance Industries gained 1.5% to ₹1,350 as index heavyweights supported the rally; stable crude prices aided sentiment.

Shriram Finance gained 3.0% to ₹1,025 as NBFCs saw strong buying interest; improved liquidity outlook supported the sector.

InterGlobe Aviation gained 2.7% to ₹4,569 as aviation stocks recovered; easing crude prices improved margin outlook. 

Aditya Birla Real Estate gained 6.9% to ₹1,378.5 as realty stocks saw strong buying interest; improved sentiment and momentum buying supported the rally.

Coal India declined 6.0% to ₹427.5 as the company cut coal reserve prices in e-auctions; rising input costs added pressure on margins.

Sun Pharmaceutical declined 5.0% to ₹1,644 as investors booked profits amid reports of a $12 billion Organon acquisition; deal size raised concerns on capital allocation.

Eicher Motors gained 3.4% to ₹7,386.2 as auto stocks saw selective buying; continued demand resilience supported sentiment.

Allied Blenders and Distillers gained 10.0% to ₹513.2 after launching a new product under its ZOYA portfolio; product expansion boosted growth expectations.

Groww gained 5.0% to ₹196.9 as momentum buying continued; the stock extended gains after a sharp rally over the past few sessions.

RailTel Corporation of India gained 2.8% to ₹290.4 after receiving a ₹23.8 crore order; steady deal wins supported sentiment.

Futures & Options
Nifty April 2026 futures closed at 24,110, trading at a premium of 59.40 points to the spot Nifty 50 close of 24,050.60, indicating continued bullish positioning in the derivatives segment. The index gained 1.16% or 275.50 points in the cash market, supported by broad-based buying. Volatility declined sharply, with India VIX falling 7.72% to 18.85, signalling easing near-term risk perception amid improving sentiment. In the F&O segment, TCS, Infosys and HDFC Bank were the most actively traded stock futures, reflecting strong participation in index heavyweights. The April series is set to expire on 28 April 2026, with positioning likely to remain constructive as volatility cools and global cues stabilise.

Bonds  
India's government bond yields were largely stable on Friday, with a downward bias over the week, even as concerns around elevated oil prices and supply pressures persisted. The benchmark 6.48% 2035 bond yield eased to 6.9119% from 6.9601% in the previous session, marking its biggest weekly decline since February 2022. However, upside pressure on yields emerged after the RBI announced plans to drain liquidity through a ₹2 trillion seven-day variable rate reverse repo auction, pushing the 10-year yield briefly higher by around 4 basis points towards the 7% mark. The move signals a shift towards tightening liquidity conditions, with surplus banking system liquidity still elevated, keeping yields sensitive to policy actions despite the broader easing trend.

Forex 
Indian rupee ended marginally lower on the day but capped a second consecutive week of gains, supported by easing crude oil prices and unwinding of arbitrage positions. The currency settled at 92.7550 against the US dollar, down 0.1% for the day after a volatile session that saw it touch a three-week high of 92.4150. On a weekly basis, the rupee gained 0.4%, marking its strongest two-week performance in six months, as softer oil prices following the US-Iran ceasefire improved external balance outlook. However, intraday volatility reflects lingering caution, with global cues and geopolitical developments in West Asia continuing to influence currency movements.

Crypto
Crypto markets remained resilient with a mildly bullish bias, even as global uncertainty persisted around the fragile US-Iran ceasefire and elevated oil prices. Bitcoin held steady above the $71,000-mark, trading at $71,897, as strong support near $70,000 cushioned downside despite resistance around $73,000 limiting further upside. Ethereum edged up 0.54% to $2,191.86, while broader market sentiment remained positive, with the global crypto market capitalisation rising 1.26% to $2.44 trillion. Select altcoins outperformed, with Hyperliquid gaining over 5%, indicating continued risk appetite in pockets despite macro-driven volatility.

US Stock Futures
US stock futures edged lower on Friday, giving up some recent gains as investors remained cautious over the fragile two-week US-Iran ceasefire. Futures linked to the S&P 500 declined 0.15%, while Nasdaq-100 futures slipped 0.16% and Dow Jones Industrial Average futures fell 106 points, or 0.22%. The pullback reflects fading risk appetite after a strong rally, as markets reassess the sustainability of the truce and monitor developments in West Asia. Elevated oil prices and geopolitical uncertainty continue to cap upside, keeping investors in a cautious, wait-and-watch mode.

US Treasury Notes
Yields on US Treasury remained largely unchanged as investors awaited the release of key March CPI data, which could shape the near-term policy outlook. The benchmark 10-year Treasury yield held steady around 4.289%, while the 2-year yield edged slightly higher to 3.793%, reflecting cautious positioning ahead of the inflation print. Market sentiment remains finely balanced, with optimism from recent US-Iran ceasefire developments supporting risk assets, while rising crude oil prices near $100 per barrel are fuelling concerns of elevated inflation. This tug of war between easing geopolitical tensions and energy-driven price pressures is keeping bond market movements contained.

Top News

• ADB pegs India FY27 growth at 6.9% supported by reforms, trade deals
• India to push for reporting of offshore rupee trades despite resistance, sources say
• E-way bills hit record 140.6 million in March, up 13%, shows GSTN data
• India relaxes conditions for rice exports to some European countries
• India central bank's cash withdrawal plan pushes up bond yields, swap rates
• India's equity mutual fund inflows hit 8-month high in March as investors buy the dip
• India's Jio-BP does not plan to raise fuel prices, CEO says
• Dubai limits foreign flights until May 31, letters show, hitting Indian airlines hardest
• India's TCS falls as rare annual revenue drop dulls quarterly earnings beat, deal wins
• India must rethink reliance on West Asia after biggest energy shock: ONGC
• Domestic refiners splurge on Russian oil as sanctions threat begins to fade
• Lebanon fighting strains truce as US and Iran aim for first talks
• China will not tolerate independence for Taiwan, Xi tells island's opposition leader

Let’s start with a look at one of our immediate neighbours, Pakistan. It has no grand energy strategy, its grid is creaking, its utilities are broke. Yet, between 2021 and early 2026, Pakistan avoided over $12 billion in oil and gas imports, not through policy, but because households and businesses, fleeing the grid, installed rooftop solar at a furious pace. As the Iran war shut the Strait of Hormuz, distributed solar acted as an insurance policy.

India’s gas pipeline push is the opposite of this story. But there is a deeper problem that neither the pipeline push nor the Pakistan model helps solve.

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Dear Insighter,

Do you ever fall into those YouTube rabbit holes where someone dissects a film frame by frame and suddenly what felt straightforward becomes impossibly intricate? You watch Inception again and realise Cobb’s wedding ring only appears in dream sequences, or that the first letters of the characters quietly spell out something you missed entirely. Or you revisit The Shining and notice Kubrick’s obsessive placement of objects, like that yellow Volkswagen Beetle which was less a prop and more a petty argument with Stephen King. Even television does this, with Breaking Bad planting details seasons before they matter, or Game of Thrones bleeding colour and motif into scenes long before the violence arrives.

The best stories do not hide things randomly. They layer them and reward a second look.

That is exactly what the RBI’s latest policy feels like.

On the surface, the April Monetary Policy Committee meeting looked like a simple hold. Rates unchanged at 5.25%, stance retained, projections nudged. It is the kind of policy you would file under “as expected” and move on. But slow the frame down and there’s a completely different film playing underneath.

As BasisPoint Groupthink observes, the April statement marks a clear break from recent meetings, not in rate action but in operating doctrine. What had been a coherent, disinflation-led, growth-supportive policy arc since August has been overtaken by a supply shock the RBI did not engineer and cannot fully neutralise.

Here’s the hidden scene. From August to February, every MPC meeting built on the last. Inflation was falling faster than expected. Rate cuts in December felt earned. The system was in sequence. And then war disrupted the Strait of Hormuz, pushed crude above $100 a barrel, and reoriented global shipping costs.

The new projections say the quiet part plainly. GDP growth revised down to 6.9% for 2026–27 from 7.6% in the prior year. CPI inflation ticking up to 4.6%. But as Kalyan Ram notes, what has changed is not just the numbers; it is the framing. Policy is no longer organised around sequential normalisation, but around uncertainty itself. The central bank is not guiding markets towards a path; it is playing a Risk Management role.

Mridul Saggar invokes Brainard conservatism, the idea that when you enter a dark room, you take small steps. One does not know if the RBI governor checked Trump’s timeline at 5:30 AM on April 8 to find that Iran had been given a two-week reprieve, but the ceasefire that preceded the policy announcement by hours gave the MPC breathing room to stay put. As Saggar writes, relief can produce real effects through financial accelerators if the truce holds.

But holding should not be confused with resolution. Dhiraj Nim lays out why the pause is a comma, not a full stop. Energy prices remain structurally central to India’s inflation and external balance. The ceasefire eased near-term volatility; it does nothing for deeper risks along the Strait of Hormuz. Even under the RBI’s baseline, crude at $85 and dollar-rupee at 94, CPI traces what Nim calls an “A-shaped” path, peaking above 5% by late 2026 before a modest pullback. The RBI’s stress scenario places inflation at 5% under $95 crude. Markets have noticed: the one-year OIS had climbed nearly 90 basis points above pre-crisis levels before easing, yet still prices in two to three hikes through 2026–27.

The internal tension in the RBI's own communication hasn't escaped Dhananjay Sinha, who notes that the central bank has clearly mapped five transmission channels through which this supply shock converts into demand destruction: a wider current account deficit, margin compression, tighter financial conditions, weaker remittances and exports, and higher borrowing costs from global spillovers. Yet the growth projection of 6.9% does not fully reflect them.

Meanwhile, the rupee has been running its own subplot. Madhavankutty G invokes Black Wednesday as a reminder that there are moments when speculators can hold central banks to ransom. The breach of 95 triggered one of the most forceful FX interventions in at least two decades. But as Yield Scribe argues, the deeper shift is conceptual. With the RBI resetting its dollar-rupee assumption from 88 to 94 and oil from $70 to $85, policy is no longer anchored primarily on growth and inflation, but on external stability and the constraints the rupee now imposes.

As Accrued Interest writes, the intervention worked in the immediate term. But the manner of it has left a residue. India’s engagement with global capital rests on predictability. Abrupt barriers between onshore and offshore markets, even if temporary, do not simply correct positions; they raise questions about what the framework looks like next time.

That fluidity extends to the policy stance itself. As Aastha Gudwani notes, a great deal changed between April 6 and April 8. The Governor’s emphasis on uncertainty, and the first-ever explicit core CPI forecast at 4.4%, signal a central bank trying to manage expectations as much as outcomes, while quietly indicating that policy flexibility, not direction, is now the primary tool.

That brings us to a story that got lost in the noise: the RBI’s plan to issue fresh guidelines on bank boards. T. Bijoy Idicheriah connects this directly to the exit of HDFC Bank’s part-time non-executive chairman, Atanu Chakraborty, whose resignation triggered a sharp reaction. Governor Malhotra moved quickly to reassure markets, and the new guidelines draw a clear line: boards guide, management executes.

Idicheriah wrote, pre-policy, that in a crisis shaped as much by narrative as by numbers, silence is not neutrality; it is a gap. The RBI’s COVID-era playbook showed that presence itself lowers the cost of intervention. BasisPoint Groupthink made the same point ahead of this meeting: markets aren't just looking for reassurance, they are actually probing the RBI's reaction function.

The second thread is about the limits of any single instrument. Gaura Sen Gupta argues: when the shock is supply-driven and core inflation remains well behaved, with core-core at 3.3%, rate hikes do not solve the problem. Upasna Bhardwaj adds that any knee-jerk tightening would be counterproductive, with the RBI’s own core CPI forecast of 4.4% suggesting underlying pressures remain contained.  While a prolonged pause with repo at 5.25% is expected through 2026-27, the bias has shifted. What once hinted at easing now suggests the next move is more likely a hike than a cut, argue Team-QuantEco’s Shubhada Rao, Vivek Kumar, and Yuvika Singhal.

That’s the film-within-a-film problem. On screen: a hold, neutral stance, calm language. Beneath it: a central bank that has exited the growth cycle, reset its rupee and oil assumptions, introduced downside scenarios, shifted to optionality, and delivered an aggressive FX intervention. The Easter egg, as Abheek Barua frames it, is in the governor's own language: "the initial supply shock can potentially transform into a demand shock over the medium term."

The first read tells you what happened, the second tells you what actually changed.

Yours, in the subtext.

Phynix
]]> https://www.basispointinsight.com/Story/the-rbi-s-policy-has-a-plot-beneath-the-obvious-script_f5aa7781694c.html Fri, 10 Apr 2026 05:14:00 GMT Phynix is a seasoned journalist who revels in playful, unconventional narration, blending quirky storytelling with measured, precise editing. Her work embodies a dual mastery of creative flair and steadfast rigor.

When the Reserve Bank of India, in its latest Statement on Developmental and Regulatory Policies, announced that it would expand participation in the term money market to include NBFCs, AIFIs and other non-bank entities, the reaction was not enthusiasm but confusion. The intent was clearly articulated: deepen markets, improve liquidity, strengthen transmission. 

The method, however, is left to a latter-day comprehensive instruction.

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The RBI's latest monetary policy round is not merely a rate-setting exercise. Tucked within it are reform proposals across four areas: capital efficiency, ease of compliance, Board governance, and the rupee term money market, each pointing towards a more coherent, internally consistent regulatory architecture.

The first set of changes addresses a long-standing tension in how banks manage capital adequacy. Under current norms, banks may count quarterly earnings towards their CRAR, the measure of capital against risk-weighted assets, subject to two conditions: that earnings are net of expected dividend payouts, and that NPA growth remains in check. The RBI is now removing the NPA condition. This is sensible. With the Expected Credit Loss framework set to come into force within the year, retaining the NPA condition would amount to double-counting, provisioning for the same risk through two separate routes simultaneously.

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An earlier column, 'Safeguarding Financial Stability Amidst the West Asia Crisis', emphasised the need to recognise the emerging landscape as a multi-channel stress transmission mechanism requiring a calibrated regulatory and institutional response. This framing remains valid. Yet the sequential evolution now demands a deeper analytical shift, defined by the progressive reconstitution of risks within the financial system itself and beyond.

What begins as volatility in crude oil prices, exchange rates, or liquidity conditions is no longer confined to those parameters; it is absorbed and redistributed across borrower positions, financing structures, and organisational relationships, emerging over time as embedded fragility. This shift, from observable macro-financial disturbance to latent vulnerability, exposes a structural limitation in conventional risk assessment, which continues to rely on isolated shocks rather than evolving, interacting pressures.

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When the Reserve Bank of India's Monetary Policy Committee convened this week, the outcome was never really in doubt. The repo rate stayed put at 5.25%, with all six members voting unanimously for the status quo. The 'neutral' stance was also retained. On the surface, this was a non-event. However, underneath, tectonic plates have begun to shift—and it is this context that merits attention.

Consensus without complacency
The global backdrop has deteriorated sharply since March 2026. Disruptions in the Strait of Hormuz—one of the most critical maritime chokepoints for global energy trade—have sent energy prices surging and introduced an unprecedented degree of uncertainty into the global supply chain. Historically, there have been instances of energy price shock transmitting to non-energy commodities, with the magnitude of transmission averaging around 25%. Cumulatively, this will raise global inflationary pressures in the coming months. The inflationary pressures for India could be somewhat larger due to high import dependency on the Middle East countries for energy requirement, besides the impact coming from a weak currency.

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One of the cardinal principles of monetary policy is that when entering a dark room, policymakers move in small steps. Central bankers refer to this as Brainard conservatism, or the attenuation principle, articulated by William Brainard in his 1967 paper, “Uncertainty and the Effectiveness of Monetary Policy.”

The principle has been used by central banks to tighten monetary policy in small and sparse steps. This cautious approach is viewed as a risk management approach to policymaking. In the face of uncertainties, you don’t have to stay put, but you do what you think is right, and you temper what you are doing on consideration of uncertainty. When the MPC meets every two months, one doesn’t even have to change the policy rate each time, especially if there is parameter uncertainty or a lack of clarity on the new normal. This specially makes sense when the geopolitical and economic environment is hazy, and the extent of global spillovers is unclear.

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The April policy was the first Monetary Policy Committee meeting after the West Asia crisis. The policy was important from a guidance perspective and also provided the first glimpse of how the Reserve Bank of India viewed the crisis. The pause was expected, as it was too early to react to the crisis. The neutral stance was retained as it allowed the RBI flexibility to respond to both the upside risk to inflation and the downside risk to growth.

The tone of the policy was neutral, with the RBI not going out of its way to rule out rate hikes. This was indicated by the emphasis on both the upside risk to inflation and the downside risk to growth arising from elevated energy prices and supply-side shocks.

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Many analysts expect the Reserve Bank of India to hold its policy repo rate for an extended period. Yet the balance of risks is shifting. 

Financial markets are already pricing several rate hikes over the next 12 months — which may seem somewhat aggressive at this stage but is not entirely misplaced. Even if immediate tightening is not on the cards, risks are rising that sticky inflation pressures could emerge with a lag, eventually demanding policy action.

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As widely anticipated, the Reserve Bank of India’s MPC voted unanimously to hold the policy repo rate and retain a neutral stance. The positive surprise lay in the Governor’s communication, which leaned neutral‑to‑dovish, implicitly signaling the persistence of easy financial conditions in the foreseeable future. The emphasis on being proactive and pre‑emptive on liquidity, while ensuring surplus systemic liquidity, helped reinforce expectations that financial conditions will remain accommodative despite elevated uncertainty.

The announcement of a ceasefire on the day of the policy announcement proved timely, offering the MPC some breathing room to stay the course and helping cool markets that had begun to price in an aggressive policy reaction. The 1‑year overnight indexed swap had climbed to a peak of 6.37% in early April—nearly 90 basis points above pre‑West Asia crisis levels—implying expectations of at least 100 bps of cumulative tightening. Following the dovish pause, the 1‑year OIS has retraced sharply by around 35 bps to around 5.87%, though it continues to embed expectations of 2–3 rate hikes by the RBI in 2026-27.

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Zydus Lifesciences has received final approval from the US Food and Drug Administration for Dapagliflozin tablets in 5 mg and 10 mg strengths, the company said in a press release. 

The drug which is used to improve glycaemic control in adults with type 2 diabetes will be manufactured at the company’s SEZ facility in Ahmedabad.

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MUFG Bank has completed a ₹396.2 billion investment in Shriram Finance through a preferential allotment, marking one of the largest cross-border deals in India’s financial services sector, the company announced via a press release.

The bank subscribed to 471.1 million equity shares at ₹840.9 per share, following approval from Shriram Finance’s board on April 8. The transaction received all necessary regulatory clearances, including approval from the Competition Commission of India, the release said.

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Max Healthcare Institute Limited has approved the acquisition of a controlling 58.4% stake in Kalinga Hospital Ltd, which operates a 250-bed multi-specialty hospital in Bhubaneswar, the company said in a press release.

The company will enter into a share purchase agreement to complete the transaction, the release mentioned. Alongside the acquisition, the board has approved providing loans of up to ₹1.0 billion to support construction, renovation and equipment.

Max Healthcare has also approved issuing a corporate guarantee for refinancing existing external borrowings of $5.0 million, along with interest. To fund the acquisition, the company will raise up to ₹3.0 billion through external commercial borrowings in the form of a senior secured term loan.

Separately, the board approved the reappointment of Narayan K. Seshadri as a non-executive, non-independent director for a three-year term from May 16,2026 to May 15,2029, subject to shareholder approval.

The company will seek shareholder approval through a postal ballot.

The April MPC meeting was set against a precarious backdrop, just ahead of the deadline set by US President Trump for Iran. The ceasefire provided temporary relief, allowing the MPC to retain the status quo on policy rates and stance.

What stood out, however, was the projection of a relatively strong GDP estimate at 6.9% for 2026–27 and the introduction of a core CPI estimate of 4.4% for 2026–27. While inflation projections were raised and growth lowered, these adjustments were modest relative to the sharp reset in dollar/rupee and oil assumptions.

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Major disruptions, such as the West Asia crisis, that initially surface as supply shocks force central banks to ask a fundamental, almost philosophical question. Should the impact on the economy going forward be treated primarily as a process of demand destruction warranting monetary accommodation?  Should it, instead, be viewed principally as an inflation driver that demands tightening going forward?

The monetary policy statement on Wednesday was predictably somewhat noncommittal in its answer to the question. This was to be expected. After all, the policy announcement came a few hours after the reported ceasefire between Iran and the US, the durability of which remains uncertain. Besides, even if the ceasefire were to endure and morph into a permanent truce, the extent of the damage to both oil production facilities and related global supply chains needs to be assessed carefully before arriving at a definitive answer. One has to be patient and let the data flow in.

That said, if one parses the language of the governor’s policy statement and the forecasts for growth and inflation, one could argue that the RBI has communicated its priority. Demand destruction seems to be a larger concern for the RBI than the inflation risk.  To quote the governor’s speech, “Overall, the initial supply shock can potentially transform into a demand shock over the medium term.”

Besides, the governor’s unusually candid observations in the post-policy press conference that the real interest rate in the economy remains “high” at around 2% and that it is possible that policy rates remain low in the short to medium term seem to support the view that the Indian central bank is fretting more about growth deceleration than runaway inflation.

Are the central bank’s macro forecasts consistent with the dovishness that one senses in the text? That depends on how one reads the projections.

The central bank has projected a drop in the growth rate from 7.5% in 2025-26 to 6.9% in 2026-27, while inflation is projected at 4.6%.

One could say two things. For one, the RBI’s baseline projection for inflation leaves room for a hefty upside error that would still keep overall inflation well below the 6% ceiling of its mandated band. Second, the downside risk to growth that the RBI has flagged has a high chance of materialising. Growth could be closer to 6.5%. Should such a data mix actually emerge, a long pause, if not a rate cut, could well be possible.

In this context, the debut of core inflation as a variable that the RBI will forecast and subsequently publish alongside the MPC statement is noteworthy. The forecast for 2026-27 is 4.4%, with the qualification that, shorn of precious metals prices, it is likely to be even lower. This could mean the RBI’s reading of demand-led inflation, which core inflation represents, is fairly benign. An explicit discussion of the trajectory of core inflation enables the MPC and the RBI to better shape and control the narrative underpinning their rate decisions. This is particularly important in addressing policy dilemmas when supply shocks, such as a fuel price increase, raise headline inflation, but simultaneous demand compression keeps other prices low.

Currency Constraint
Coming to the rupee and the RBI’s recent actions to stem the rupee’s decline through off-market measures to curb speculation, one needs to remember a few things. While the RBI has always insisted that its sole interest lies in curbing excessive volatility, its actions have historically suggested it uses a floating target. Thus, intervention through dollar sales or indirect action tends to ramp up at specific exchange-rate levels. Over the past month, 93/$1 has emerged as a near-term target that the central bank has pulled out all the stops to protect.

It is possible to argue that a managed float works well for emerging markets, particularly one like India, which runs a significant current account deficit substantially funded by volatile portfolio flows. This, de facto, translates into a signal from the central bank, through its market or regulatory action, of a level or range of the exchange rate it finds compatible with the economy’s fundamentals.

Currently, the bulk of inflationary pressure stems almost solely from imported energy inflation. The first line of defence against this is to prevent dollar prices of energy from translating into higher rupee prices. Thus, intervention, both through the market and non-market regulation, is essential.

The rupee’s sharp fall is not a recent phenomenon, riding on the Gulf crisis. It has seen a continuous decline for over a year on the back of foreign investors selling and has severely underperformed most Asian peers in 2025 and 2026. The oil shock has simply added to the downward momentum.

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Even as the focus was on the monetary policy decisions on Wednesday, attention was also on the developments at HDFC Bank, following the exit of part-time non-executive chairman Atanu Chakraborty.

RBI Governor Sanjay Malhotra addressed this upfront, announcing in his statement that the central bank would issue comprehensive norms to ensure better utilisation of members' time on bank boards by revising and rationalising norms governing their scope. The RBI statement elaborated that this was intended to facilitate more focused, qualitative engagement on strategy and governance.

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A lot can change in a short period of time. And between April 6 and April 8, it did. When the MPC started their deliberations for the April meeting, the global backdrop was significantly worse than when they concluded their discussions this morning. The two-week ceasefire announced indeed offers a huge relief, easing the tense backdrop for monetary policy. 

Setting policy in such uncertain times (especially given the gravity and frequency of how quickly narratives change) is no easy task and required the RBI to rightly manage expectations.

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Wipro has won a multi-year strategic transformation deal from Singapore-based Olam Group, with the total contract value expected to exceed $1.0 billion, the company said in a press release.

The eight-year engagement includes a committed spend of $800.0 million and will see Wipro deliver end-to-end transformation services using its consulting-led and AI-powered capabilities, the release mentioned.

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Indian Railway Finance Corporation (IRFC) has started the new financial year with a ₹10.0 billion term loan disbursal to Maharashtra State Power Generation Company (MAHAGENCO), the company said in a press release.

The company said the loan has been fully sanctioned and disbursed, marking its first transaction for 2026-2027. The move follows its recent ₹128.4 billion loan agreement with Hindustan Urvarak & Rasayan Limited.

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Lodha Developers reported its best-ever quarterly pre-sales of ₹58.9 billion for January–March of 2025-2026, marking a 23% year-on-year increase.

For the full year, pre-sales stood at ₹205.3 billion, up 16% compared with 2024-2025. The company said March saw some deferral of sales due to geopolitical tensions linked to the Iran situation, resulting in pre-sales falling ₹4.7 billion short of guidance.

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Tata Steel reported its highest-ever annual crude steel production in India at 23.5 million tonnes for 2025-2026, driven by capacity ramp-up and steady demand across key segments.

India production rose 8% year-on-year, supported by the ramp-up at Kalinganagar, although partly impacted by a blast furnace shutdown at Jamshedpur. For January–March, production stood at 6.3 million tonnes, up 15% compared with the same period last year.

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Tata Motors reported a 25% year-on-year rise in total commercial vehicle sales to 132,465 units in the January–March quarter of 2025-2026, supported by a recovery in demand during the second half of the year.

Sales in March 2026 stood at 47,976 units, up 17% from 41,122 units a year earlier.

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India’s external financing outlook is expected to improve as strong foreign direct investment and easing outflows support overall capital flows, even as portfolio investments continue to respond to shifting global return expectations, Reserve Bank of India officials said.

Governor Sanjay Malhotra said foreign portfolio investment is inherently volatile and tends to follow short-term opportunities across markets rather than remain anchored to any one economy.

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The Reserve Bank of India’s latest policy communication marks a shift in tone from sequencing recovery to managing uncertainty. What had been a relatively stable macro configuration, with easing inflation and steady growth, has been unsettled by geopolitical disruptions that now sit at the centre of the policy framework. The numbers themselves are not surprising. The framing is.

GDP Growth is now projected at 6.9% for 2026-27, down from 7.6% in the previous year, while inflation is expected to rise to 4.6%. This is not merely a recalibration of forecasts. It is an acknowledgement that the growth-inflation trade-off has re-emerged after a period in which both variables were moving in a favourable direction. The trigger is external, but the implications are domestic and immediate.

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India’s remittance inflows are expected to remain stable despite the conflict in West Asia and could strengthen if post-war rebuilding boosts labour demand in the Gulf, Reserve Bank of India Deputy Governor Poonam Gupta said.

Gupta noted that India’s remittance base is broadly diversified, with the relative contribution from Gulf economies having declined over time. She added that this diversification is not only geographic but also reflects a wide skill mix among migrant workers, spanning low- and mid-skilled segments.

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The Reserve Bank of India’s April policy marks a clear shift in diagnosis, but not in projection. The central bank has moved away from a benign disinflationary narrative and acknowledged the risks emanating from an oil-led supply shock and geopolitical disruptions in West Asia. It has explicitly outlined how such shocks can transmit into domestic demand through the external account, financial conditions and corporate balance sheets. Yet its growth and inflation projections do not fully reflect that mechanism. The result is an internal tension, where risks are recognised but not fully embedded in the baseline.

At one level, the policy framework has adjusted. The RBI has retained the policy rate at 5.25% and maintained a neutral stance, signalling a preference for flexibility amid heightened uncertainty. The emphasis has shifted away from rate signalling toward managing volatility through liquidity operations, foreign exchange intervention and communication. This reflects a deeper reality as the economy is no longer being shaped solely by domestic inflation dynamics, but by an external constraint arising from higher oil prices, currency pressures and uncertain capital flows.

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The Sensex and the Nifty are soaring, energy-starved nations are heaving a huge sigh of relief, and the world order is getting reshaped. The US-Iran ceasefire for two weeks, if it holds, would mark the beginning of the end of the Anglo-Saxon hegemony over West Asia, which began 100 years ago after the fall of the Ottoman Empire. If X posts on China nudging Iran into accepting the ceasefire are true, a new petroyuan era is being heralded.

The first outcome of the US-Isreal combine’s war against Iran is the acceptance of the latter’s national leadership. All along, the US  and its commentators were referring to it as a rogue regime, not as a legitimate government of a sovereign nation. In a big turnaround, the White House statement signed by Trump and put out Tuesday night accepts the Iranian government’s legitimacy and the nation’s sovereignty: “We received a 10-point proposal from Iran and believe it is a workable basis on which to negotiate. Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two-week period will allow the agreement to be finalised and consummated.”

This is no victory or a desirable conclusion of operations for the US, because this ceasefire is akin to the imaginary scenario of George Bush negotiating with Saddam Hussein’s chosen successors after the US failed to land troops in Iraq. The US blueprint for the Iran war was obviously the occupation and takeover of Iraq’s oil reserves. Trump failed miserably in getting boots on the ground as Iran turned the US aggression into a regional war, bombing the American bases in the GCC countries and closing the Strait of Hormuz. Now, the US is negotiating to open the sea routes, which were free before Trump bombed Iran.

The ceasefire is a de facto acceptance of Iran’s control over the Strait of Hormuz. If Iran has already imposed a toll on Western vessels in Chinese yuan, as is being speculated, it would mean that petroyuan is replacing petrodollar, at least, in one major oil-selling nation. Iran, in fact, has already begun using the Chinese currency to sell oil. Even if the chokehold on Hormuz gets relieved as part of the ceasefire talks, Iran’s historic rights over the strait have been established as a principle, with the US agreeing to sit across the table and discuss the issue, after threatening to bomb that ancient civilisation into the Stone Age.

Sure, this could be termed an off-ramp for Trump. For an ill-thought-out, miserably executed and morally reprehensible misadventure that backfired badly, this was the only way out ––– retreat. The people of Iran, on the other hand, suffered immensely but without turning against their government or the armed forces, proving the Western narrative about an oppressive regime wrong. Whether Iran was helped behind the scenes by China and Russia will be known only in the course of time, if at all.

Regional Realignment
Israel is still pounding Lebanon, but it will have to back off from its plans to control the region as the US outpost in the Gulf. After all, the reputation of its famed “iron dome” and its all-knowing intelligence agencies is in tatters. Mossad didn’t know Iran’s capabilities to close the Strait of Hormuz, nor did it have a plan to open it for Western oil traffic. Now, it will have to lick its wounds and let Iran assume a much larger role than it had prior to the war. The statement on a possible “nuclear catastrophe” by the Russian foreign ministry in the context of the Israeli attack on the Bushehr nuclear power plant is the starting point for the winding down of the war. Again, proving Israeli calculations wrong.

If the use of radioactive weapons or the leakage of radiation from the nuclear plant was ever a part of the Israeli plan, then less said the better.

Saudi Arabia, the largest GCC nation, the world’s biggest oil exporter and the richest country in the region, would have to recalibrate its dependence on US hardware and military adventurism to remain peaceful and prosperous. It was at the receiving end of Iran’s game plan to turn the war into a global oil crisis by attacking US allies, bases and resources. US hardware not only failed to protect Saudi assets but turned them into an Iranian target. So, is the case with the UAE, one of the world’s biggest trading hubs. The war busted the image of the GCC nations as a safe destination for investment.

In this war without winners, Pakistan is the biggest gainer. But then this gain is only because it is the most trusted US ally among Islamic nations ––– rather an instrument ––– in its attempt to desperately find an exit route out of a dangerous cul-de-sac. Trump naming the Pak Army chief and its Prime Minister in the same breath as the chief interlocutors underlines their usefulness in his attempt to reach out to the Iranians. With the talks between Iran and the US set to begin on Friday in Islamabad, Pakistan, the stock has obviously gone up in the Western world.

In a fortnight, India would be marking the memory of the Pahalgam massacre. In one year, after the Pahalgam terror attack and the retaliatory Operation Sindoor against terror training centres deep inside Pakistan, the latter has grown close to the US as a consequential ally. The US is now a security guarantor for Pakistan, as it was in the Seventies. This is a reality that India has to accept and to contend with.

At least in the context of the Gulf crisis, India, with its nine million expatriate population and energy dependency, has a lot to gain. And it really does not matter who the interlocutor is. All that matters is peace; that Trump doesn’t outdo himself; that Israelis do not attempt mischief. This war has yet again taught the world a sad lesson ––– the bully only understands the language of violence.  

The April monetary policy statement marks a clear break from the trajectory of recent meetings. The earlier disinflation-led, growth-supportive policy setting under a neutral stance has been overtaken by developments arising from the West Asia conflict, forcing the Reserve Bank of India into a different policy regime.

From August to February, the framework was internally consistent. Inflation declined faster than expected, core pressures remained contained, and growth held up.

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The April monetary policy statement does not extend the trajectory of recent meetings and it marks a change in how the Reserve Bank of India describes the environment it is operating in. The difference is subtle in form but material in implication. 

The RBI governor’s language now reflects the instincts of a risk manager rather than those of a steward of a growth-boosting policy cycle.

The statement does not rely on a stable baseline to organise the outlook, and, instead, it lays out the sources of uncertainty with unusual explicitness. The global backdrop is framed through disruptions in energy prices, financial tightening and currency pressures, not as background conditions but as variables that can alter the domestic trajectory. Growth projections are dependent on how the conflict evolves. Inflation is discussed less in terms of its current prints and more in terms of the uncertainty around its forward path, including second-round effects and weather-related risks.

This differs from how the earlier phase was communicated.

Through much of the cycle, the narrative drew coherence from a sequence: inflation easing, space opening up, policy supporting growth. Even when the stance was formally neutral, the direction of travel was rarely in doubt. The April statement moves away from that structure. It acknowledges a trade-off explicitly and avoids suggesting a preferred path.

The identification of the shock as supply-driven is central to this change. Once that is established, the limits of policy become clearer. Rate action cannot address the source of the shock. It can only influence how the effects propagate. That introduces a degree of asymmetry into decision-making. Acting on inflation risks may reinforce the growth slowdown. Supporting growth may underestimate emerging price pressures. The statement does not attempt to resolve this tension. It places it at the centre of the policy problem.

That, in itself, marks a shift in communication.

The handling of current data reflects the same approach. Inflation remains below target, and core pressures are contained. Growth indicators continue to show resilience. Yet the statement does not lean on these as anchors. It treats them as provisional, subject to change as the shock works its way through the system. The emphasis remains on how the balance of risks could evolve rather than on where the economy stands today.

The policy decision follows from this framing. The pause is not presented as an extension of earlier logic around transmission or cumulative effects. It reflects the need to assess an evolving situation without prematurely committing to a direction. The neutral stance, correspondingly, is not used to imply balance within a cycle but as a holding position to retain flexibility in both directions.
Equally telling is what the statement does not do:

• It does not invoke policy space
• It does not signal the likelihood of the next move
• It does not attempt to anchor expectations around a central path

The emphasis is on vigilance and responsiveness to incoming information. This is a deliberate choice. It reduces the risk of policy being read as committed to a trajectory that may not hold.

For markets, this changes the nature of the signal. The communication shifts from indicating direction to outlining conditions. The central bank is not guiding expectations along a path but instead indicates how it will react as the environment changes.

In conditions where the shock is external, uncertain in duration, and uneven in transmission, the effectiveness of policy depends as much on how it is communicated as on the action itself. Overly precise signalling in such a setting can create expectations that the data may not sustain. A more conditional articulation, even if it offers less immediate clarity, is better aligned with the nature of the risk.

The April statement reflects that alignment.

It does not resolve the policy dilemma but makes it explicit.

It makes clear that policy is now being framed less to guide the cycle than to manage the risk.
]]> https://www.basispointinsight.com/Story/when-policy-turns-to-risk-management_246663ed3c7c.html Wed, 08 Apr 2026 08:09:13 GMT Kalyan Ram, a financial journalist, co-founded Cogencis and now leads BasisPoint Insight.

It is now well known that agricultural productivity in India is very low. Despite overall economic progress, agricultural productivity in India remains extremely low compared to developed countries, with output per worker only a small fraction of that in the United States. At the same time, there is substantial variation in agricultural productivity across Indian states, comparable to cross-country differences. This variation provides a unique opportunity to study how institutional differences, particularly in land markets, affect resource allocation and productivity in agriculture within a common national framework.

New research examines how distortions in land markets, particularly those arising from institutional differences across Indian states, affect agricultural productivity. Using detailed household-level panel data and a structural model, the researchers provide a comprehensive analysis of how barriers to land rental markets lead to inefficient allocation of land and lower aggregate productivity.

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We are living in a disruptive decade, having witnessed a series of catastrophic events over the last six years. Starting with the COVID-19  pandemic in early 2020, followed by the Russia-Ukraine conflict since early 2022 and the Israel-Hamas conflict in 2024, the world has gone through multiple crises.

In early 2025, US President Donald Trump’s indiscriminate imposition of trade tariffs further skewered the global trade order. Sanctions, protectionism, resource nationalism, counter-tariffs, disruption of established supply chains, price volatility, and inflation became the norm. Geopolitical instability and geo-economic uncertainty have combined, and their lingering effects are still visible in global trade and international relations.

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GLOBAL MOOD: Cautious Risk-On
Drivers: US-Iran Ceasefire Relief

Asian equity markets surged on Wednesday following a breakthrough agreement between the US, Iran and Israel on a two-week ceasefire aimed at enabling negotiations to end the war. The move by Donald Trump to delay planned strikes on Iranian infrastructure, alongside Iran’s decision to reopen the Strait of Hormuz temporarily, significantly eased immediate geopolitical risks. Regional markets responded strongly, with South Korea and Japan rallying over 5% and 4% respectively, while Australia gained more than 2%. 

TODAY’S WATCHLIST
 - RBI MPC Meeting Outcome
 - US FOMC Minutes

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In conditions where policy space is constrained and market volatility is driven by external shocks, communication becomes the central bank’s most immediate and scalable instrument. Its role is not to reassure, but to shape expectations, anchor narratives and sequence market reactions. When deployed strategically, communication can extend the effectiveness of interventions and reduce their cost. When it is absent or mistimed, it allows markets to construct their own narrative, often at odds with policy intent.

This distinction was tested and largely validated during the COVID-19 pandemic.

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Indian equity benchmarks ended higher on Tuesday, extending gains for a second straight session, as strength in IT stocks ahead of quarterly earnings supported the market, even as geopolitical tensions capped upside. The Nifty50 rose 0.68% to 23,123.65, while the BSE Sensex gained 0.69% to 74,616.58, with late-session buying helping indices recover sharply after a weak start. The Sensex rebounded nearly 1,300 points from intraday lows despite concerns around escalating tensions linked to Donald Trump’s stance on Iran and elevated crude oil prices.

Sectorally, IT stocks led the gains, with Wipro, Tata Consultancy Services and HCL Tech among the top performers, while metals also saw buying interest with Hindalco Industries advancing. Broader markets showed mixed trends, with mid-cap indices edging up 0.2% while small-caps slipped 0.1%, indicating selective participation. Among sectors, IT, metals and realty outperformed, whereas PSU banks declined the most after recent gains.

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Renewed pressure on the rupee and recent bold regulatory interventions in the forex market by the Reserve Bank of India have cemented expectations that the central bank won’t hesitate to act decisively to protect the currency, if needed. The big question: will the Monetary Policy Committee hike rates to defend the rupee to keep inflation in check? With inflation set to jump over the next couple of quarters and crude hovering near $100 per barrel, a rate hike of 25-50  basis points is a looming risk, but it is unlikely this week.

Rate hikes to shore up the currency are not new to the RBI’s playbook —  recall 2013, 2018 and 2022. It, however, has typically come along when inflation is running hot — 2013 and 2022—  or when risks of spillover effects are high.

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The Securities and Exchange Board of India has floated a consultation paper proposing the reintroduction of open-market buybacks through stock exchanges, a mechanism that the regulator itself discontinued on April 1, 2025, citing inequitable access for shareholders and a structural tax asymmetry that allowed some sellers to exit tax-free while others were shut out. Both concerns have now been addressed, SEBI says. 

The Finance Ministry attempted to address this by rewriting tax laws three times in under three years, with each rewrite creating a new distortion that the previous one failed to anticipate. The sequence is straightforward. Until September 2024, companies paid a flat buyback distribution tax at 20% under Section 115QA, with shareholders receiving proceeds entirely tax-free.

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The Reserve Bank of India's balance sheet does not usually invite close reading. It grows, reserves grow, and the two are assumed to move together. For most of the past decade, that assumption held. But it may be starting to fray.

Using RBI's Weekly Statistical Supplement data for the last reporting week of March each year, this author tracks the balance sheet from 2016 to 2026. Over this period, it has expanded from about ₹32 trillion to nearly ₹91 trillion. Foreign currency assets, the largest component, have increased from roughly ₹22 trillion to more than ₹52 trillion. At an aggregate level, this suggests the balance sheet has largely moved in line with India's foreign exchange reserves. Look closer, though, and a different story is emerging.

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The latest amendments to the Insolvency and Bankruptcy Code are welcome, for the most part. Further, the sterling work turned in by the Select Committee to which the bill had been referred after it was introduced must be recognised. It serves to blunt the edge of the conclusion that Parliament has ceased to serve any effective purpose after the arrival of brute majorities that have effectively transmuted MPs into ventriloquist’s dummies rather than voice of reason or conscience while considering the affairs of the nation.

The purpose of a Corporate Insolvency Resolution Process is to cure a company defaulting on servicing its loans of insolvency and get it back on its feet and running. In India, it has been treated as a recovery mechanism for lenders, rather than for corporate turnaround. According to the Insolvency and Bankruptcy Board of India, of the 8,833 applications for insolvency resolution admitted by the National Company Law Tribunal, 6,954 have been concluded, of which a whopping 42% have resulted in liquidation (Insolvency and Bankruptcy News, vol 37, October-December 2025).

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GLOBAL MOOD: Cautious Risk-on
Drivers: US-Iran Ceasefire Talks, US Deadline tensions

Asia-Pacific markets showed a tentative risk-on mood on Tuesday, tracking gains on Wall Street, as investors balanced hopes of a diplomatic resolution with persistent geopolitical risks. The Nikkei 225 and Kospi moved higher as markets responded to signals that negotiations between the US and Iran were ongoing.

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Recent reports that banks have approached the Reserve Bank of India seeking permission to spread out losses on their bond portfolios amidst rise in yields could well be dismissed as routine lobbying, were it not for what they reveal about our increasingly elastic relationship with financial discipline. The trigger, as always, is a sharp rise in yields, which mechanically translates into mark-to-market losses on government securities. The request, equally predictably, is to soften the blow by amortising these losses over time.

Unlike credit losses, which, once recognised, tend to linger on bank balance sheets due to regulatory norms, MTM losses are not necessarily permanent. Interest rates may well reverse course; yields could fall; and what appears as a loss today could morph into a gain tomorrow. In that sense, MTM volatility can feel transient, even unfair.

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Fertilisers are one of the three critical inputs for agricultural production and productivity. In agrarian economies, fertilisers have long been the ‘silent engine’ of food security.

Ongoing geopolitical tensions in West Asia and the resultant disruption to supply chains expose the vulnerability of fertiliser import-dependent countries, including India. Simply put, soil nutrients matter not just in quantity but also for strategic autonomy. 

This is not the first time. Four years ago, when the Russia-Ukraine conflict broke out and the Black Sea region faced a shipping blockade, supplies of fertilisers and other commodities from Russia were disrupted.

A handful of countries control the majority of global fertiliser exports. Russia and Belarus dominate potash exports, while China is a major exporter of urea and phosphate. When conflict or export restrictions occur in these regions, global food prices spike almost immediately. This was evident during the 2022-23 global food crisis.

Therefore, as the world’s second-largest consumer of fertilisers, India must treat reducing import dependence as a critical pillar of food security.

Nitrogen, phosphorus, and potassium (NPK) are key plant nutrients, and their balance is essential for soil health and crop growth. An often-cited optimal balance is around 4:2:1. Historically, however, there has been an imbalance due to excessive urea use. This degrades soil health over time.

Natural gas is the primary feedstock for producing nitrogen fertilisers such as urea, for which India’s import dependence is about 15%. The near-closure of the critical Strait of Hormuz, through which a significant share of global LNG shipments passes, has disrupted supply chains, delayed deliveries and pushed up costs.

India’s import dependence is about 60% for phosphorus (diammonium phosphate) and nearly 100% for potassium (muriate of potash).

From a food security perspective, fertilisers lie at the heart of the ‘food versus fuel’ debate of the past two decades. As part of the renewable energy push, biofuels are moving to the centre of energy security in this transition.

As more crops such as sugarcane, maize, and soybean are diverted to produce ethanol or biodiesel, demand for fertilisers rises. This could raise input costs for food crops, particularly for smallholders.

There is a need to intensify the promotion of Integrated Nutrient Management (INM) through the combined use of inorganic fertilisers and organic sources such as manure, compost, green manure, bio-fertilisers, and crop residue recycling. These help maintain soil health and reduce dependence on chemical fertilisers.

India must decisively move toward smarter, greener, indigenous fertilisers. Bio-fertilisers utilise microbes and fungi to help plants fix nitrogen naturally from the air or the soil. Nano fertilisers use nanotechnology to create slow-release nutrients that improve uptake efficiency.

Recovering phosphorus and nitrogen from livestock manure and human waste is also possible. Precision agriculture uses modern technology to apply optimal quantities of fertilisers and reduce waste.

It is critical that fertiliser security is recognised as a strategic imperative amid our existing triple challenges of land constraints, water shortage and climate change. High cropping intensity — across the Kharif, Rabi and summer seasons — rapidly depletes soil nutrients. This makes external replenishment in the form of fertilisers essential to ensure sustained output.  

India needs sustained growth to ensure food security for its growing population. The triumvirate of inputs – seeds, fertilisers and agro-chemicals – is central to this thesis. In an analogy drawn from Hindu mythology, these inputs resemble the Trimurti.
Seeds are Brahma, the creator; fertilisers are Vishnu, the sustainers; and agro-chemicals are Shiva, the destroyers of pests in crops. Together, they embody the crop life cycle.

Indian equity benchmarks erased early losses to close higher for a third consecutive session on Monday, as reports of a framework plan to end US-Iran hostilities lifted sentiment and pulled Brent crude back from $110 to $107 per barrel. The Nifty50 rose 1.12% or 255.15 points to 22,968.25, while the BSE Sensex added 1.07% or 787.30 points to 74,106.85, after both indices had fallen as much as 0.7% and 0.8% respectively during the day before reversing course on the ceasefire news. Reports indicated a two-staged deal was envisaged under the proposed Islamabad Accord, with a final ceasefire potentially arriving within 15 to 120 days alongside nuclear curbs and sanctions relief, though Iran rejected immediately reopening the Strait of Hormuz after President Trump threatened to rain "hell" on Tehran if a deal was not reached by Tuesday. Trent, SBI Life Insurance and Titan Company were the top gainers in the Nifty 50, while bank stocks provided strong support after several lenders reported robust March-quarter loan growth. Fifteen of the 16 major sectors rose on the day.

Broader markets outperformed the benchmarks, with the Nifty Midcap 100 and Nifty SmallCap 100 gaining 1.52% and 1.29% respectively, while the broader small-cap and mid-cap indices advanced 1.3% and 1.5%. Nifty Consumer Durables was the top-performing sectoral index, with Nifty PSU Bank and Nifty Bank also outperforming, while Nifty Oil and Gas underperformed as retreating crude prices weighed on energy stocks. Analysts cautioned that overall risk appetite remains fragile given persistent inflationary pressures and global trade uncertainty, with the RBI policy decision, US CPI data, crude trajectory and geopolitical developments all converging this week to keep markets firmly headline driven.

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The Reserve Bank of India’s recent curbs on currency trades by banks rank among the most forceful interventions in the foreign exchange market in at least two decades. While the central bank has, in the past, imposed limits on net open positions to curb speculation, the latest measures go much further in both scale and scope.

What distinguishes this episode is not merely the intent to stabilise the rupee, but the manner in which it has been pursued. By targeting onshore trades linked to offshore markets, the RBI has effectively forced an unwinding of an estimated $30 billion–$40 billion in arbitrage positions. These trades, built over time between onshore and offshore markets, far exceed the exposures targeted in earlier episodes such as 2011 or 2013.

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The Reserve Bank of India’s Monetary Policy Committee is expected to keep the repo rate and policy stance unchanged at its review on Wednesday, while retaining flexibility to respond to evolving global and domestic conditions. 

“The April policy comes at a time when it may be too early to react to the unfolding West Asia crisis. The RBI is expected to remain on pause, but communication will be key to keeping market expectations in check,” said Gaura Sengupta, Chief Economist at IDFC First Bank.

Polls conducted by various media organisations show a consensus on status quo in rates. Economists expect the rate-setting panel to wait for greater clarity on the impact of geopolitical developments before adjusting policy, even as recent data presents mixed signals on inflation and growth.

Crude oil prices have risen sharply, with India’s oil basket moving from around $62 per barrel in December to above $115 by late March. Given India’s dependence on imported energy, this increase has significant implications for inflation and the external balance. According to ICRA, “every 10% increase in crude oil prices could raise CPI inflation by 40–60 basis points, assuming full transmission to retail fuel prices.” The rating agency added that energy prices are unlikely to return to earlier levels in the near term, even if tensions ease.

Domestic inflation has remained within the RBI’s target range so far. Under the revised Consumer Price Index series, inflation rose to 3.2% in February from 2.7% in January, driven primarily by higher food and precious metal prices. However, economists expect the impact of higher oil prices to reflect in subsequent data. In its February policy, the RBI projected inflation at 4% and 4.2% for the first two quarters of 2026-27, and any revision in these forecasts will be closely tracked.

Growth conditions present a mixed picture. While domestic demand has shown resilience, higher energy prices and global uncertainty could weigh on consumption and investment. The RBI had projected GDP growth at 6.9% and 7.0% for the first two quarters of the current financial year. Economists expect the full-year growth forecast to be lower than that of 2025-26, factoring in the impact of external developments.

The external sector remains under pressure, with the rupee weakening by nearly 3% since the start of the year. Economists note that further pressure could emerge if crude prices remain elevated. The RBI has taken measures to support the currency, but its trajectory will depend largely on global factors, including capital flows and commodity prices.

Liquidity conditions have also shifted. SBI Research noted that surplus liquidity in the banking system has declined from ₹2.6 trillion in February to ₹1.7 trillion in March. “Given the current volatility in rupee and yields, we believe the liquidity should be modulated to ensure rupee also gets support,” the SBI report said. It added that the RBI should focus on market functioning and may consider tools such as Operation Twist to manage the yield curve and align market rates with the policy stance.

Overall, the MPC is likely to remain on pause while preserving flexibility in its policy approach. The stance is unlikely to shift towards tightening at this stage, but policymakers may adopt a cautious tone in response to global developments. Communication will be central to guiding expectations, with markets looking to the governor’s remarks and MPC minutes for signals on the future path of interest rates.
]]> https://www.basispointinsight.com/Story/rbi-likely-to-pause--guidance-key-amid-external-shocks_cb787dc62018.html Mon, 06 Apr 2026 09:43:00 GMT

As the Monetary Policy Committee meets this week, markets will look for direction on the rupee, capital flows, and the broader external balance. Journalists, too, will likely press Governor Sanjay Malhotra on the steep fall in the exchange rate and the seemingly aggressive measures the central bank has taken against banks’ trading positions. Yet the Governor is unlikely to engage on those fronts in any substantive way.

The more probable outcome is a policy that stays deliberately narrow, anchored to inflation and growth, and a communication strategy that reinforces that boundary.

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Penalties under income tax law deter non-compliance, protect revenue, and uphold the credibility of a self‑assessment regime, rather than merely to augment collections. The framework thus pairs income assessment with a connected penalty regime targeting under-reporting and misreporting.

Under the pre-Finance Act 2026 regime, proceedings followed a two-step sequence. The Assessing Officer first completed assessment/reassessment, determined total income and tax liability, and recorded satisfaction for penalty initiation. The case then shifted to the National Faceless Penalty Centre under the Faceless Penalty Scheme. A penalty unit issued a show-cause notice, granted hearings, including personal ones where allowed, and passed a separate, reasoned penalty order. Courts consistently viewed penalty as distinct from assessment, not a mere extension.

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As the Monetary Policy Committee meets this week, the conversation has settled on familiar terrain: capital flows, remittances, and the rupee’s trajectory. That framing is familiar, but it understates the problem. The Reserve Bank of India is no longer managing variables at the margins. It is being forced to reveal how its framework behaves under stress. 

The macro backdrop is not a standard cyclical slowdown. Pressures are building from the supply side, with cost-push inflation risks alongside a tightening of the external account. In such an environment, interest rates, liquidity, and foreign exchange operations are not separate levers. They constitute a combined balance sheet response.

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For Bharat Electronics Ltd, fiscal 2025-26 closed on largely pleasant lines: provisional turnover of ₹267.5 billion, up 16.2% year-on-year, with exports rising faster by 33.65% to $141.9 million. New orders of around ₹300 billion lifted the order book to roughly ₹740 billion. Shares climbed on April 1. The market was satisfied.

The more important number doesn't appear in the press release. Over three years, BEL's order book has held broadly stable — ₹716.5 billion to ₹759.3 billion — while revenue has moved steadily upward: ₹198.2 billion in 2023-24, ₹230.2 billion in 2024-25, ₹267.5 billion now. The backlog has not grown much. The conversion rate has.

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September 16, 1992, is Black Wednesday in British history. That day, the British Pound tumbled 5%, in what would be the beginning of a prolonged slide attributable to its peg to the Deutsche Mark; the fall was made worse due to the shorting of the Pound by billionaire investor George Soros. By the end of the year, the British Pound had lost 25%, even defying desperate rate hikes by the Bank of England. There are instances when speculators can hold even central banks to ransom. 

The incident would have rung a bell when the Indian rupee breached the psychological 95 to the greenback on March 30. The Reserve Bank of India couldn’t have waited any longer. It aggressively intervened, capping banks’ Net overnight open position limits to no more than $100 million, following it up with a clampdown on Non-Deliverable Forwards for residents and non-residents. Rupee did appreciate by 2% in a single day, though the fundamental factors driving it are extraneous over which there is little control.

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GLOBAL MOOD: Risk-Off
Drivers: Trump's Tuesday power plant ultimatum, US aircraft downed in Iran

Asian markets reflected a cautious risk-off bias despite selective gains, as geopolitical tensions kept investors on edge. Oil prices remained elevated, with Brent Crude and WTI Crude holding above $110 per barrel after Donald Trump issued an ultimatum to Iran to reopen the Strait of Hormuz or face attacks.

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Where does the Indian rupee stand amid sharply divergent assessments of its recent movements? 

First, the doomsday view may perhaps need to smell the coffee. It is necessary to consider the facts before turning oracular. Exchange rates are prone to noisy, idiosyncratic behaviour, replete with overshoots, short-lived spikes on either side, and irrational expectations, as markets try to front-run developments around them.

A realistic and informed assessment of the exchange rate, therefore, needs to evaluate it over a reasonable period of time, not at every opportunistic point in time, which provides fodder for sensational headlines. Underlying the 90-100 curtains call that measures depreciation over points of time, the reality is that during the financial year 2025-26 on an annual average basis, the rupee has depreciated by 4.3% from its annual average level a year ago.  

How does this compare with the history of its movements?

Over a 20-year period from 2007-08 to 2025-26, the rupee depreciated on average by 3.2%. Over a 10-year period from 2016-17 to 2025-26, the rupee depreciated by 2.9%. Over the last five years from 2021-22 to 2025-26, the rupee depreciated by 3.4%. The rupee’s depreciation during 2025-26 is in this ballpark range.

Moreover, even if a briefer period of time is considered for the assessment, say from February 27 or the day just before the US and Israel launched Operation Epic Fury against Iran, to March 30 or the closing day of onshore trading of the rupee for the financial year 2025-26, it can be observed that the rupee’s depreciation at 3.9% almost mirrored the US dollar’s appreciation by 3% which took down all currencies. To paraphrase Shakespeare from Julius Caesar, the fault, dear Brutus, lies not in us but in the US dollar! 

It would do well, therefore, not to mimic Chicken Little, the 2005 American animated science fiction comedy film produced by Walt Disney, to claim that the sky is falling, only to be ridiculed by the whole town.

The world is awash in giant tides of extreme uncertainty. There is a pervasive anxiety that with a shock and awe vision of foreign policy, brawny interventionism with a stress on business and oil, and focus on spectacular wins, humanity is being swept into an age of war. A fragile resilience and hedging against risks were the hallmarks of the global economy during the year gone by, as reflected in the IMF’s January 2026 World Economic Outlook update. 

Accommodative monetary and fiscal policies, buoyant stock markets (except in India) and AI euphoria offset high uncertainty not seen since the end of the Cold War, and tariffs with multiple feints and tactical retreats. 

Abrasive geopolitics threatens to upend all that, especially with the global hegemon’s ‘Donroe Doctrine’ becoming the “my way” agent provocateur and the main source of uncertainty. Each country is bracing up to face the worst in this spillover-swept global landscape. Neo-mercantilism with muscular industrial and trade policies; the reshaping of supply chains with risk first, not cost first; the slow disintegration of world trade into regionalism; multilateralism giving way to pluralism of convenience; and the complete undermining of financial and governance institutional architecture are all making the world a smaller and more dangerous place to be in than just a few years ago.

Pessimism has become widespread and persistent, and the global economy’s biggest constraint. Gold and silver have become the new fear gauges. It could be a crisis of confidence that is muting investment worldwide, raising the option value of waiting. It could also be the reason why fiscal discipline is being weakened.

Surfer’s Handbook
In this turbulent and uncertain world, how should India position itself? There is wisdom in perhaps taking a leaf out of a surfer’s handbook. When the sea is rough and the waves are tall and breaking, it is better to dive underneath the turbulence rather than trying to go over it. This allows the surfer to pass through the wave with less effort, conserve energy and avoid being pushed to the bottom of the sea.

To begin, financial prices need to adjust downwards to weather the gathering storm. For India, equities and bonds have adjusted; forward price-earnings multiples have reverted close to historical averages; corporate earnings corrections are bottoming out and steadying; and credit markets are slackening. 

The RBI has quietly put its shoulder to the wheel. Taking advantage of the rare negative inflation differential with major trading partners, the RBI has enabled a real effective depreciation of the rupee by over 7%, almost a tenth of which has accrued from the negative inflation differential. Given the size of its current account deficit and its net foreign assets position, this order of real depreciation appears apposite.

These price corrections will insulate India’s solid fundamentals. With incoming data, it is becoming increasingly clear that there is a post-pandemic upshift towards an 8% growth trajectory from 7% during 2002-19, on the back of stronger policy frameworks, resilient fundamentals and still ample buffers.

Unlike in deflationary China, domestic demand remains the mainstay of India’s growth. The genie of inflation is back in the bottle, even with food prices emerging out of deflation. Financial and corporate sector balance sheets are stronger than ever before. The public sector’s balance sheet is slowly mending, unlike in the rest of the world. The external sector is well-buffered, and payment pressures are modest.

In the final analysis, these fundamentals will determine the value of the rupee. Stability has been its leit motif, and this speaks for the nimble deftness of exchange rate management.

The RBI has a big stake in the stability of the rupee from the point of view of preserving sovereign financial stability. It must never back down from that calling, using all instruments at its command and in every shore where the rupee trades.

After all, it is the RBI that has to deal with the impossible trinity of fixed exchange rates, open capital account and independent monetary policy. The trinity is impossible when one seeks corner solutions. The RBI solves the trilemma by going for intermediate solutions: managed float; calibrated capital account liberalisation; and independent monetary policy focused on domestic objectives, while the stability of the exchange rate is assigned to foreign exchange interventions.

It must not flinch from expressing itself. Through its policy stance, information dissemination and market operations, the RBI informs the market about its view on the rupee. Market participants may do well to heed its voice for what it represents, backed as it is by formidable capacity and resolve to buffer the resilience of the Indian economy, as it navigates an unclear and unstable path into the future. 

This article is the concluding part of the six-part series on exchange-rate policy and financial stability by Dr Michael Debabrata Patra.

Part I set out the competing narratives on the rupee and the case for exchange-rate stability. Click here.
Part II examined why floating exchange rates have often amplified crises in emerging economies. Click here.
Part III examined how volatile capital flows, rather than trade fundamentals, now dominate currency movements and shape central bank behaviour. Click here.
Part IV set out a proposal for strengthening the RBI’s foreign exchange intervention toolkit and reserve strategy. Click here.
Part V assessed why the IMF’s evolving surveillance and labelling practices risk undermining exchange-rate stability rather than preserving it. Click here.
]]> https://www.basispointinsight.com/Story/taking-stock-of-the-rupee-in-an-uncertain-world_29f9e25207a1.html Mon, 06 Apr 2026 01:59:00 GMT Michael Patra is an economist, a career central banker, and a former RBI Deputy Governor who led monetary policy and helped shape India’s inflation targeting framework.

Dear Insighter,

Some mornings begin before consciousness fully arrives. A reflexive scroll, four minutes in, and you’ve already encountered three people who have written books, run marathons, launched startups, and still found time to post lucid threads on macroeconomics. Imposter syndrome is the polite label for what follows. The more honest description is a quiet suspicion that everyone else received a manual you somehow missed, that they are doing the work while you are merely performing it, and that the gap between what you project and what you know is wider than anyone has yet noticed.

This used to be a local feeling. You compared yourself to the room you were in. Now the room is infinite, and everyone in it appears to be thriving. You begin to wonder whether your progress is earned or incidental, whether your instincts are sharp or simply confident, whether what you’ve built is real or just held together by the benign inattention of others.

And then you turn to the news and encounter the opposite condition entirely.

Donald Trump, confronting an escalating conflict with Iran, posts a bizarre ultimatum. “Open the F****n’ Strait… or you’ll be living in Hell — JUST WATCH!” It is not merely the language that jars; it is the absence of hesitation. No second-guessing, no visible doubt, no sense that words at that level carry consequences beyond the immediate performance. If imposter syndrome is an excess of self-awareness, this is its inversion: certainty unburdened by reflection.

R. Gurumurthy’s reading of this moment situates it within a broader shift. The neoliberal promise that markets would regulate themselves has given way, gradually and then abruptly, to a system where state power is personalised and projected. The invisible hand has not disappeared so much as been replaced by something more direct, more forceful, and less accountable. The result is a world where neither democracy nor capitalism emerges intact, and where Francis Fukuyama’s “end of history” looks less like a conclusion and more like a pause that overstayed its welcome.

For India, this is no longer distant spectacle. As Smita Roy Trivedi and Abhiman Das outline, the economy is now caught in a tightening triple bind: rising crude, a weakening rupee, and widening external pressures converging at an awkward moment. Brent remains elevated, the rupee continues to weaken. The $4 trillion narrative, already quietly hedged, begins to look aspirational when adjusted for currency movement. In dollar terms, GDP has grown by only $0.69 trillion over four years—not the headline trajectory, but the more honest one.

Arvind Mayaram describes this not as a crisis fully formed but as one taking shape. The policy response has been active, yet largely defensive. Capex continues even as consolidation is signalled. The Reserve Bank intervenes, but selectively. Inflation is managed through a mix of monetary tightening and administrative measures. What is missing, as Mayaram puts it, is coherence: a clearly articulated hierarchy of priorities that signals intent rather than mere vigilance.

The RBI’s recent actions in currency markets illustrate both intent and its complications. As V. Thiagarajan reports, the central bank has effectively dismantled arbitrage channels between onshore and offshore rupee markets, restricting non-deliverable forwards and limiting derivative rebooking. The goal is to reduce speculative positioning. The consequence, as Quixotic Banker notes, is that risk is now managed by geography rather than exposure, introducing distortions that may quietly erode trust. Gurumurthy offers a counterpoint: if banks built directional positions while aware of underlying vulnerabilities, complaints about intervention ring hollow. Both arguments hold. The tension between stability and credibility remains unresolved.

That tension extends into monetary policy. Rajendra Paramanik and Unninarayanan Kurup describe the breakdown of the so-called “divine coincidence,” where controlling inflation also stabilised growth. With oil shocks, fertiliser disruptions, and capital volatility interacting simultaneously, the MPC faces a landscape where rate decisions alone cannot resolve underlying pressures. Aabhas Pandya adds that India has cushioned consumers from price signals, particularly in fuel, delaying behavioural adjustment. The risk is that the eventual correction arrives more sharply.

Anupam Sonal offers a framework for financial stability through the crisis: liquidity support, sharper supervision, stronger internal risk discipline. But he notes that the risk lies not in any single factor but in the interaction of multiple pressures across macroeconomic, financial, and operational domains.

TK Arun’s argument cuts through the noise. Expanding induction cooking requires more than subsidies; it demands infrastructure, certification capacity, and behavioural shifts. He also argues for prioritising domestic gas for fertiliser production. 

Parallel to these immediate concerns are deeper structural questions. Srinath Sridharan and Anand Venkatanarayanan point to the emerging contest over payment systems, where platforms like mBridge enable cross-border settlements outside the dollar system. If reserves can be frozen and banks excluded, then financial infrastructure itself becomes geopolitical terrain. India’s challenge is not simply to participate but to shape these systems before they harden.

A similar urgency appears in energy strategy. Sharmila Chavaly notes that investment choices today—between gas pipelines and grid capacity, between incremental fixes and systemic shifts—will define whether India evolves into what she calls an electrostate. China’s scale in storage, solar manufacturing, and grid integration underscores both the opportunity and the narrowing window.

Trade policy carries its own quieter risks. Surendar Singh points out that India’s new FTAs contain provisions that receive far less scrutiny than export projections. These clauses will shape constraints years from now, long after the celebratory headlines fade.

Meanwhile, K. Srinivasa Rao documents a rise in fraud amounts even as case counts fluctuate, suggesting deeper vulnerabilities. Rabi Mishra’s work on culture risk highlights where the failure often lies: not in formal controls, but in whether warning signs are escalated or absorbed. Mishra and Sridharan’s critique of independent directors reinforces this pattern. Independence exists, but within boundaries set by the very structures it is meant to check. The result is not overt failure, but managed compliance.

The Insolvency and Bankruptcy Code offers another lens. Nilanjan Banik notes recovery rates around 32% and resolution timelines far exceeding statutory limits. The architecture remains sound in theory, but repeated deviations erode confidence in practice. Reform Compass, examining AI in courtrooms, captures a related theme: tools can assist, but without disciplined oversight they introduce new forms of risk. Four fabricated precedents in a single case illustrate how quickly credibility can unravel.

Elsewhere, the signals are more mixed. Urban Company’s InstaHelp crosses a million bookings in a largely unorganised market, suggesting scale where none seemed obvious. Yet Krishnadevan V notes that market re-rating reflects uncertainty as much as optimism. He also writes about Unilever selling its global foods business, but HUL still carrying the complexity. The divergence reflects how differently the same category is being positioned across geographies. Sharmila Kantha’s review of industrial park schemes traces a familiar cycle of ambition outpacing execution, while Indra Chourasia’s case for tokenisation highlights opportunities that remain contingent on institutional follow-through.

And then there is the labour market. Female participation remains strikingly low, particularly in urban India. The constraints are not about capability but about safety, norms, and workplace design. The gap between rhetoric and reality persists.

Across these domains, the recurring theme is credibility. Systems function not only on design but on belief: that rules will hold, that signals matter, that institutions behave as intended. When that belief weakens, adjustment becomes more abrupt and more costly.

At its core, it is also a question of credibility, but directed inward. A doubt not about systems, but about one’s place within them. The sense that validation is external while uncertainty is internal, and that the two refuse to align. No amount of achievement fully resolves it, because the gap is perceptual.

The contrast with figures like Trump is stark. There is no visible gap, no hesitation. It is tempting, in moments of self-doubt, to envy that clarity. But what appears as confidence often masks something else entirely: an absence of constraint.

The world, after all, is full of people performing certainty they do not feel.

The strait, for now, remains partially open. And the rest of us, imposters or otherwise, continue anyway.

Until next time,

Phynix

Also Read

From Oil Shock to Fed Dilemma: How War Is Reshaping Markets by Manoj Rane: A conversation with Dr Bento Lobo on whether the war ends quickly or drags on, and what it means for oil, gold, equities, and the Fed's impossible choice.

Credit Cards Lose Their Skin, Not Their Relevance by Ganga Narayan Rath and Chirayu Sharma: As UPI absorbs low-ticket flows, credit cards are being disintermediated at the surface but entrenched beneath as embedded credit rails.

India's Liquidity Cycle May Not Be Driven by Policy Alone by Abhishek Dey: RBI policy isn't the only driver of liquidity; sharp swings in state government cash balances may also influence India's banking system liquidity cycle.

We May Not Like It, But We Need a Draupadi to Laugh at Us by Kirti Tarang Pande: Not to humiliate us but to puncture that dangerous moment when illusion starts feeling like certainty.

Sarci-Sense: Teens Are Parenting Their Parents Now by Srinath Sridharan: Adolescence is the stage when Indian parents are finally forced to unlearn control and relearn respect.

Who Said Yes? The Quiet Erosion of Consent in Everyday Life by Kalyani Srinath: When sharing becomes effortless, are we still asking who agreed, who is seen, and what remains private?

Why Iran Is Beating America by Brahma Chellaney: Iran has broken the "asymmetric cost" model that sustained the illusion of American invincibility.
]]> https://www.basispointinsight.com/Story/the-imposter--the-strongman--and-the-system-under-strain_5e9d2af35dcf.html Mon, 06 Apr 2026 01:30:00 GMT Phynix is a seasoned journalist who revels in playful, unconventional narration, blending quirky storytelling with measured, precise editing. Her work embodies a dual mastery of creative flair and steadfast rigor.

The integrated treasury of a bank operating in global markets manages open positions in each currency by netting long and short exposures, warehousing risk in each currency as a single netted exposure of foreign currency purchased or sold against its domestic currency general ledger across global markets. 

Rupee-Net Open Position, as a construct, is the net exposure in rupee against foreign currency and should, by its very logic, look at the rupee as a consolidated exposure across geographies, not as a collection of location-specific positions evaluated in isolation.

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India’s private-sector manufacturing activity slowed in March as elevated crude prices and geopolitical uncertainty dampened demand. The HSBC India Manufacturing PMI fell to 53.9 from 56.9 in February, marking a near four-year low and falling below the series’ long-run average of 54.2.

Growth in manufacturing moderated amid rising cost pressures and uncertainty, leading to slower expansion in new orders and output. Output growth eased to its weakest pace since mid-2022, while input cost pressures intensified to the highest level since August 2022. Despite higher input costs, firms raised factory-gate prices only modestly, pointing to margin compression.

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It has been a month since the conflict escalated in the West Asia, and the macroeconomic warning signals are already flashing. Disruptions to the movement of oil, gas and other critical inputs through the Strait of Hormuz have begun to ripple outward, and what they mean for India's current policy landscape warrants closer attention. 

As India's Monetary Policy Committee meets next week to decide the trajectory of interest rates, it finds itself at a crossroads, grappling with a confluence of shocks: a cost-push shock driven by rising oil prices, financial shocks stemming from capital outflows, and uncertainty-induced confidence shocks. This moment reflects the breakdown of the "divine coincidence" — described by Oliver Blanchard and Jordi Gali^[1] — where stabilising inflation no longer aligns with stabilising the welfare-relevant output gap.

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Infosys has announced the acquisition of Optimum Achieve Holdings, Inc., including its subsidiary Optimum Healthcare IT, LLC, in a move aimed at deepening its capabilities in healthcare digital transformation, according to a regulatory filing.

Optimum Healthcare IT is recognised as a Best in KLAS healthcare digital transformation and consulting firm, with a focus on helping provider organisations drive large-scale clinical and operational change. The acquisition adds new clients and relationships to Infosys' healthcare portfolio, expands its technology capabilities, and creates synergies across new buying centres within the provider segment.

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Vedanta is on course to break up into five separately listed companies in early April, founder and chairman Anil Agarwal has told the Financial Times. The five units will cover aluminium, zinc, oil and gas, steel, and power.

As per the report, Agarwal said the restructuring would give each new entity a "free hand to grow" as an independent business, in a conversation with FT. Vedanta, which carries an enterprise value of $37 billion, has been working toward the split for several years. The plan had faced opposition from the Indian government but cleared a legal challenge last year, paving the way for the demerger to proceed.

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InterGlobe Aviation Limited's board has appointed William Walsh as Chief Executive Officer of IndiGo, the company said in a press release. The announcement was made on March 31 and is subject to regulatory approvals. Walsh's term at IATA concludes on July 31 after which he is expected to join IndiGo within days.

Walsh brings one of the most decorated CVs in global aviation to the role. He began his career as a pilot before rising through the ranks at Aer Lingus, where he served as COO and then CEO between 2000 and 2005. He subsequently led British Airways as CEO from 2005 to 2011, before taking charge of IAG the holding company behind British Airways, Aer Lingus, Iberia, Level and Vueling from 2011 to 2020. He has headed IATA since then.

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Consent is something most people recognise when it is spelled out. It shows up in forms, signatures, checkboxes. Marriage needs it. Medical procedures require it. Financial and personal data are tied to it. The idea is straightforward. You agree before something is done in your name.

Outside those formal spaces, though, consent becomes less visible. Not absent, just blurred.

Think about how often lives are shared now. A quick photograph at a family lunch. A video from a school function. A moment that feels too nice not to post. It takes seconds. It feels harmless. Sometimes it even feels expected.

But somewhere in that ease sits a quiet question. Who really agreed to this?

Children appear in many of these moments. Their faces, their names, their small, unfiltered lives. Shared before they know what sharing means. A baby laughing, a child asleep, a teenager mid-expression, unaware. These are ordinary moments, the kind families have always held onto.
Only now they are not held. They are displayed.
Is that the same thing?

Perhaps it feels like an extension of old habits. Families have always shown photographs, told stories, laughed over memories. But those moments once had edges. A room, a gathering, a circle of familiarity. Now the edges are harder to see.
Where does a photograph go once it is out there? Who sees it, saves it, passes it on? Does it matter if we do not know?

And then there is time. A child grows up. Would they recognise themselves in what was shared? Would they have chosen the same moments?

There is no easy way to ask them in advance.

The same quiet assumptions appear elsewhere too. A workshop, a classroom, a casual group activity. Someone takes out a phone. A picture is taken, sometimes several. It is meant to capture energy, participation, a sense of community.
But does everyone in that frame know where it might end up?
It can feel awkward to ask. More awkward to refuse. No one wants to interrupt a moment that seems light, well intentioned. Courtesy steps in, and with it, silence.
Is that consent, or just compliance?

These are small moments. Easy to overlook. Yet they repeat often enough to shape a habit. The habit of sharing first, and thinking later, if at all.
At the same time, there is a growing urge to record almost everything. Meals, purchases, trips, ordinary afternoons dressed up as something to remember. Not always for a reason, just because it is possible.

Does recording a moment change it slightly? Does it make one step outside it, even briefly?

It is hard to say. But the shift is noticeable. Moments are not only lived, they are arranged, framed, sometimes improved before they are shown. There is a subtle awareness of being seen, even when no one is immediately watching.
And alongside all this visibility, something else feels quieter than it once did.
Concern.
Not the dramatic kind. Just the simple act of pausing for another person. Of asking a question and waiting for the answer. Of responding in a way that shows the information landed somewhere.

It is not always missing. But it can feel thinner.

A difficult piece of news shared in passing. A response that moves quickly to logistics, to planning, to the next step. Efficient, even helpful, but slightly distant.
Would it have taken much to add a moment of pause? A brief acknowledgment, a small note of care?
Maybe not. Yet it is often skipped.

Is it because people are busier, or just more distracted? Or has the constant flow of updates made each one feel lighter, easier to move past?
There is no clear answer. Only a sense that reactions have become quicker, and perhaps a little shallower.
Which brings things back, quietly, to consent again.

Not the formal version, but the everyday one. The kind that asks, without making a scene, is this mine to share? Is this someone else’s moment as much as mine? Would they mind, if they could see it the way I do?
And with children, the question sharpens. They do not yet have the space to answer. So the answer is given for them.

What does that mean over time?

A childhood once known only to a few now becomes something that can be revisited, searched, even judged by many. Does that change how it is remembered? Or how it might feel, later, to the person who lived it?
Perhaps the more difficult question is simpler. Is everything worth sharing?
Not in a moral sense. Just in a practical, human one.

Some things lose nothing by staying within a smaller circle. Some moments carry more meaning when they are not put on display. Not hidden, just held a little closer.

The same might be said for concern and courtesy. They are easy to overlook because they do not demand attention. They show up in small ways. A pause before responding. A question asked without rushing past the answer. A willingness to let someone else set the boundary.

None of this requires a rulebook.

It does not ask for silence or withdrawal. Only a slight shift in attention. A moment’s hesitation before sharing. A second thought before assuming. A brief pause before moving on.
Would that change much?
It might not feel like it, at first. These are small adjustments, almost invisible. But they shape how people experience one another. How much space they are given, how much care they feel, how much of themselves remains their own.

Consent, in this sense, is not just permission. It is awareness.
Concern is not just reaction. It is attention.
Courtesy is not just politeness. It is consideration.

None of them are difficult to understand. Perhaps the harder part is noticing when they quietly slip away.

And once noticed, deciding what to do differently.
]]> https://www.basispointinsight.com/Story/who-said-yes--the-quiet-erosion-of-consent-in-everyday-life_a0cb6020bf50.html Sat, 04 Apr 2026 08:39:08 GMT Kalyani Srinath, a food curator at www.sizzlingtastebuds.com, is a curious learner and a keen observer of life.

India's Insolvency and Bankruptcy Code, enacted in 2016, has reshaped the country's credit culture. Since its introduction, the IBC has facilitated the resolution of over ₹3.5 trillion in stressed assets, and in doing so, it has altered the calculus for borrowers, lenders, and investors alike. That is no small achievement. 

Yet the code is now navigating a more difficult terrain. Recovery rates hover at around 32%, average resolution timelines have stretched to over 653 days against a statutory ceiling of 330, and high-profile cases such as Jaiprakash Associates have generated prolonged litigation that cuts against the very predictability the IBC was designed to provide. With the government exploring IBC 2.0 to extend pre-packaged insolvency to MSMEs, the code stands at a genuine crossroads, and the choices made now will determine whether it fuels or risks India’s $5-trillion economy dream. 

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China, the world’s largest importer of oil and gas, has so far weathered the shock to global energy markets from the war in Iran with surprising resilience. It holds reserves of 1.4 billion barrels, has a grid that integrates renewables at scale, and has an industrial policy that has made it the world’s leading exporter of solar panels, batteries, and electric vehicles. Much of Asia is now trying to adopt this strategy, as energy security means reducing dependence on seaborne fossil fuels through electrification, storage, and building of systems, not just by buying and storing fuel.

Where does India stand in this picture? We have already established that the recent gas pipeline push is just doubling down on a strategy prepared in the mid-2000s. The energy scenario was different then, and the infrastructure being laid today risks becoming stranded in the medium term. In parallel, there is a huge backlog in the renewables sector as systems for offtake and transmission have not kept pace with increased generation capability.

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The Reserve Bank of India’s latest measures, prohibiting authorised dealers from offering non-deliverable rupee derivative contracts to both resident and non-resident users, capping net open positions at $100 million, and barring the rebooking of cancelled derivative contracts, are a clear and coordinated response to genuine market stress. 

The rupee has faced significant pressure through 2025–26, driven by capital outflows, elevated oil prices, and heightened global risk aversion. The intent to stabilise is unambiguous, and the speed and coordination of the regulatory response reflect institutional resolve.

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India’s gender imbalance is neither new nor subtle. Skewed sex ratios continue to favour boys, bringing with them consequences that extend beyond demography: a marriage market squeeze, rising trafficking risks, and deeper social strain.

Exciting new research develops a unified theoretical and empirical framework to explain persistent gender imbalances in India. It focuses on two well-known drivers of sex selection: son preference (the desire for male heirs) and daughter aversion (the economic disadvantage of having daughters in a dowry-based society). The central contribution of this research is to provide micro-foundations for the phenomenon of daughter aversion by examining the structure of the marriage market and demonstrating how marriage institutions, wealth, and fertility decisions interact to produce biased sex ratios.

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It has been four weeks since the US and Israel began large-scale air-strikes on Iran, the third major escalation in a series of post-pandemic interstate conflicts, and the economic fallout is already unmistakable. Rising energy prices, inflationary pressures, disrupted trade flows, and choppy financial markets are converging, with the most vulnerable sections of the global population likely to bear the brunt. What does this mean for India as it aspires to become a $30 trillion economy by 2047? We revisit GDP growth dynamics in light of these emerging realities.

First, crude prices are on the rise. India’s inflation remains obsessively sensitive to crude movements, as seen in Figure 1. Almost every episode of crude price escalation has triggered destabilising price increases domestically. For example, Brent Crude reached a high of $142.51 in March 2022 following the Russian invasion of Ukraine in October 2021. Indian CPI inflation jumped to a 95-month high of 7.8% in April 2022.

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Unilever has agreed to sell its global foods business to McCormick & Co. Its Indian arm, Hindustan Unilever, has clarified that it is not divesting any part of its foods portfolio.

At the global level, Unilever has made a clear choice about its strategic view of the foods category. In India, however, HUL has reiterated that foods remain “an important and attractive business” and that no divestment discussions are underway. The divergence reflects how differently the same category is being positioned across geographies.

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On March 18, the government announced the BHAVYA or Bharat Audyogik Vikas Yojna scheme with an allocation of ₹336.60 billion for developing 100 plug-and-play industrial parks across the country.

The announcement was followed up with a 238-page report from the National Industrial Corridor Development Corporation compiling the ‘overwhelming media traction nationwide’ in national and regional print. Digital, TV and social media platforms also seem to have been nudged to reiterate the benefits of the scheme, going by the tweets from prominent industry leaders.

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Indian equity benchmarks recovered from intraday losses of over 2% to close marginally higher on Thursday, rescued by a dramatic rupee surge following Reserve Bank of India action, though fading hopes of a swift end to the Iran war kept the weekly losing streak intact at six weeks, the longest in recent memory. The Nifty50 closed 0.15% or 33.70 points higher at 22,713.10, while the Sensex rose 0.25% or 182.23 points to 73,319.55, after the rupee climbed 1.8% against the dollar following its record low in the previous session.

For the holiday-shortened week, the Nifty and Sensex lost 0.5% and 0.4% respectively, as Brent crude rose to $109 per barrel after US President Trump vowed more aggressive strikes on Iran. India's manufacturing sector growth slowed to a near four-year low, while the government raised jet fuel and commercial LPG prices, heightening concerns that a prolonged energy shock could further squeeze growth and inflation in Asia's third-largest economy.

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Jubilant FoodWorks has renewed its master franchise agreement with Domino’s Pizza International Franchising Inc., securing exclusive rights to develop and operate Domino’s Pizza stores in India for another 15 years, the company said in a press release.

The agreement, signed on April 1, also includes an option to extend the India franchise by an additional 10 years.

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Indian Renewable Energy Development Agency Limited (IREDA) said its promoter, the Government of India, held a 17.8% equity stake in the company as of March 31, 2026, with no encumbrance created during the year.

The holding, through the Ministry of New and Renewable Energy, stood at 2,015.8 million shares at the end of 2025-26.

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India’s trade posture has shifted. For much of the post-liberalisation period, free trade agreements were approached cautiously. That instinct is now giving way to a more active push. Agreements with the UK, EU, Mauritius, UAE, and Oman have followed one another in quick succession, with a US deal also under discussion. According to the WTO, 69 regional trade agreements were implemented globally between 2020 and 2025, and India is now firmly part of that momentum.

The pivot is being read, mostly, as maturity. India has stopped sulking at the gates and is now engaging. The India-UK CETA and the India-EU FTA are held up as proof that the country can play the long game: market access, export diversification, value chain integration, all the things it was supposedly leaving on the table before. For textiles, gems and jewellery, leather, pharmaceuticals: real opportunities, genuinely.

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Culture. Systemically-encouraged behaviour ingrained into the DNA of a financial entity.

Culture in a financial institution is not a soft concept. It is the accumulated sediment of values, habits, and unspoken expectations that determine how people actually behave, as distinct from how policy manuals say they should.

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Indian Renewable Energy Development Agency Limited (IREDA) has signed an external commercial borrowing (ECB) facility agreement worth JPY 28.0 billion, equivalent to around $0.2 billion, with Sumitomo Mitsui Banking Corporation.

The agreement was executed on March 30 and includes a green shoe option of JPY 12.0 billion.

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Bank of Baroda has issued a clarification via a press release on a media report regarding a temporary restriction on handling government business in Madhya Pradesh, stating that the issue was resolved within 24 hours and has no material impact.

The bank said one of its branches received an email on March 26 requesting a fund transfer from a Madhya Pradesh government account, but the amount did not match the available balance. A revised request was received later the same day without an official letter.

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DLF has completed the transfer of its IT/ITeS SEZ undertaking and the sale of a land parcel to entities within the Srijan Group, closing a set of previously announced transactions, the company said in a press release.

On Monday the company transferred its SEZ property, including the building DLF TechPark II, to Makalu Builders LLP, the company said. The entity is part of Srijan Realty and its group companies.

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Indian banks could face renewed pressure on margins in 2026-27 as tighter liquidity conditions and elevated funding costs begin to weigh on profitability, even as their overall credit profiles remain stable, Fitch Ratings said in a note today.

The global rating agency expects that the Reserve Bank of India’s flexibility to inject liquidity into the banking system has narrowed in recent months, largely due to efforts to contain rupee volatility amid heightened geopolitical tensions. This shift, combined with persistent competition for deposits, could translate into higher funding costs and weaker margin performance across the sector.

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The late 20th century was supposed to be history’s quiet conclusion. With the Cold War ending in the symbolic collapse of the Berlin Wall, a confident intellectual consensus took hold: liberal democracy, coupled with market capitalism, had not only prevailed but had rendered ideological alternatives obsolete. It was this mood that animated Francis Fukuyama’s famous “end of history” thesis, which was not a claim that events would cease but that the contest over political and economic systems had, in essence, been settled.

Three decades later, that confidence appears not just premature but almost quaint.

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The war in West Asia has exposed, yet again, a fault line that policymakers should rethink. Energy flow today is a payment flow tomorrow, and both are subject to converging geo-political problems. Both energy and payments flows could be delayed, rerouted or blocked, not by market forces but by the architecture through which they must pass. In that architecture, lies a form of power that is now openly contested. mBridge, a multi central bank digital currency platform, sits at the centre of this contest.

What began as a technical pilot under the Bank for International Settlements has evolved into a strategic proposition. It offers real time, cross border settlement in local currencies on a shared ledger, without reliance on correspondent banking chains that ultimately clear through the dollar system managed via SWIFT. In effect, it eliminates the intermediaries a transaction must pass through for clearance, who could be coerced to not participate in the clearance mechanism because of political cycles.

Recent events have made it clear that dollar clearing is not neutral infrastructure, can be conditioned, constrained or withdrawn. Reserves can be frozen. Banks, Individuals and entities can be sanctioned resulting in civil death. It creates an uncomfortable truth for nations that their economic sovereignty is, in part, contingent on decisions taken elsewhere.

Projects like mBridge are an attempt to change that equation. It allows central banks to settle obligations directly with each other in digital representations of their own currencies, with immediate finality and can turn settlement from a multi-party problem to a P2P concern.

Seen from Tehran, the logic is not abstract. If Iran collects Hormuz-transit tolls or energy payments in yuan, the question is whether those funds can be settled and redeployed without touching a system that can be switched off. A platform like mBridge answers that by design.

This is the context in which the petro yuan narrative is gaining traction. It is not about replacing the dollar with another single currency, which needs an imperial empire to enforce. It is about creating optionality in both denomination and settlement. Energy exporters and importers want the ability to transact in currencies of their choice, or in baskets, and to do so with immediacy.

The United States’ reported discomfort with mBridge and pressure within multilateral forums reflect a clear concern. If settlement migrates to platforms outside dollar clearing, the reach of its financial sanctions is diluted. It could mean rebalancing of its own geopolitical and monetary power.

India today is present in this conversation, but only as an observer. The Reserve Bank of India is not part of the core group designing mBridge. There might be, understandably, be hesitation in New Delhi about deeper engagement with a platform where China has been an early proponent. That caution is neither misplaced nor avoidable. Financial infrastructure, once adopted, creates long term dependencies. Yet the strategic error would be to treat participation as endorsement. Absence unfortunately cedes influence. If India stays out, the architecture will still evolve, but without its voice on governance, standards and safeguards.

India should rightly continue to build its own digital currency architecture and domestic payment strengths. But in a world where financial power is increasingly embedded in shared networks, autonomy will not come from self-imposed isolation. It will come from being present in the design of global rails, ensuring that India is neither exposed to external veto nor excluded from shaping the rules that govern cross-border finance.

We have already encountered the limits of workaround solutions. The rupee-rouble trade mechanism, despite political backing, struggled in execution, in the face of potential secondary sanctions. Settlement became uneven. Large rupee balances accumulated with limited avenues for use. Without a robust and sovereign settlement layer, bilateral trade frameworks remain vulnerable to external veto.

The implication is straightforward. India cannot afford to be a late entrant to the design of new payment rails. The Reserve Bank of India has both the credibility and the competence to shape this architecture. Its record in managing financial risk is strong. Its leadership in building digital public infrastructure is globally acknowledged.

This also offers a chance to correct an enduring asymmetry. Systems such as SWIFT and regimes such as FATF have reflected the priorities of a narrow set of western economies. A shared platform with meaningful central bank participation allows for more balanced rule making. India’s regulatory philosophy, which has combined innovation with caution, deserves representation in that process.

The strategic dividend extends beyond payments. If cross border settlement in rupees becomes seamless and credible, it can deepen global demand for Indian government bonds. Investors today factor in not only currency risk but also settlement friction. A platform that reduces both can make rupee assets more accessible. Over time, this can support broader capital inflows, including into equities.

More fundamentally, engagement with mBridge is about reducing exposure in a world that is now multipolar and emergence of Iran as a pole with Russia and China. India’s economic and strategic interests span multiple geographies. Dependence on a single currency or clearing system constrains policy choices. Diversified settlement channels restore flexibility. They allow India to transact across geopolitical fault lines without importing those tensions into its financial system.

The systems that carry money are becoming as consequential as the currencies themselves. India can step in and ensure that no such system can evolve without its imprint.
]]> https://www.basispointinsight.com/Story/india-s-case-for-monetary-sovereignty-in-a-changing-order_aebf97c02f8f.html Thu, 02 Apr 2026 03:10:00 GMT Dr. Srinath Sridharan is a Corporate Advisor & Independent Director on Corporate Boards. He is the author of ‘Family and Dhanda’.

The Reserve Bank of India has drawn a clear line under the arbitrage-driven integration of the onshore and offshore dollar/rupee markets. In a set of directives issued on Wednesday, the central bank has effectively dismantled key channels through which price discovery flowed between the two segments, signalling a shift from market integration to control.

At the centre of the move is a prohibition on banks offering non-deliverable forward contracts involving the rupee to both residents and non-residents. Banks, or Authorised Dealers in the currency market, have also been barred from allowing the rebooking of cancelled foreign exchange derivative contracts, whether deliverable or non-deliverable. In addition, related party transactions in foreign exchange derivatives have been explicitly disallowed.

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GLOBAL MOOD: Risk-off
Drivers: Trump signals more attacks on Iran, NATO withdrawal threat rattles allies, pharma tariffs loom

Asian markets shifted back to a clear risk-off mood as initial gains faded following a hawkish address by US President Donald Trump on the Iran conflict. Investors turned cautious after Trump warned of intensified military action over the next two to three weeks, tempering earlier hopes of de-escalation. The Nikkei 225, Topix and Kospi all slipped into losses as geopolitical uncertainty deepened.

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Gross goods and services tax collection in March rose 8.8% year-on-year to ₹2 trillion, marking a 10-month high in monthly receipts. The increase was supported by stronger growth in revenues from imports compared with domestic transactions, according to the latest government data released today.

Gross GST revenue from imports rose 17.8% to ₹538.61 billion in March, while gross domestic revenue increased 5.9% to ₹1.46 trillion. The data indicates that the overall rise in collections was largely supported by import-linked taxes rather than domestic production and consumption.

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Indian equity benchmarks opened the new financial year on a positive note on Wednesday, snapping a two-day losing streak as US President Trump's remarks suggesting the Iran war could end soon pushed Brent crude down to $103 per barrel and sent shares climbing globally. The Nifty50 rose 1.56% or 348 points to 22,679.40, while the BSE Sensex added 1.65% or 1,186.77 points to 73,134.34, though both indices pared a significant portion of their intraday gains in the second half of the session as the initial euphoria over a potential end to US-Iran hostilities faded. while investors will closely watch President Trump's scheduled address on Thursday morning IST for a further update on the Iran situation. Fourteen of the 16 major sectors rose on the day.

Broader markets significantly outperformed the benchmarks, with the Nifty MidCap 100 gaining 2.24% and the Nifty SmallCap 100 surging 3.24%, as risk appetite returned more forcefully across smaller capitalisation stocks. Nifty PSU Bank was the top-performing sectoral index, followed by Nifty Chemicals and Nifty Media, while Nifty Healthcare and Nifty Pharma were the only sectoral indices to buck the trend and settle lower, as investors rotated out of defensives into more cyclical and beaten-down names on the back of the ceasefire optimism.

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After a long search for real-world blockchain or DLT applications in a highly regulated financial industry, central bank digital currencies, tokenised assets and stablecoins largely present a big potential for wider adoption. Especially, CBDC-based cross-border payments and tokenised assets appear of significant interest amongst global market infrastructure institutions and international regulatory standards-setting bodies. 

In the recent period, the Bank of International Settlement Innovation Hub, in collaboration with central banks, has tested tokenisation for asset settlement and cross‑border payments. Meridian Securities explored synchronisation between RTGS and tokenised securities settlements; Meridian FX explored synchronised settlement of foreign exchange transactions. The European Central Bank’s extensive DLT pilots tested wholesale securities settlement in central bank money on distributed ledgers and their interoperability.

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Artificial Intelligence has arrived in law with a familiar pitch: faster drafts, better research, less grind. It sounds appealing, especially in a profession where long hours are taken for granted. But law is not built for shortcuts. It runs on precision, on facts that can be verified, on arguments that can be defended line by line. A single misplaced comma or a misquoted precedent can alter the trajectory of an entire argument, and the danger of AI-generated fabrications is no longer a cautionary tale from some distant jurisdiction.

That is why the recent episode before the Supreme Court of India stands out. In Gummadi Usha Rani & Anr. v. Sure Mallikarjuna Rao & Anr. (Order dated Feb 27, 2026), a Trial Court relied on four precedents while dismissing an objection. None of them existed. They had been generated by AI.

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Fraud in banking no longer stays contained. It leaks into markets, damages reputations and erodes investor confidence. The impact rarely ends with the reported loss. 

What has changed is not just the frequency of fraud, but its ability to stay a step ahead of the systems meant to prevent it. Safeguards have improved, but so have the methods used to bypass them. Operational risk is no longer only about weak processes or faulty systems. It is about blind spots in behaviour, supervision and how seriously early warnings are taken.

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Last week began with a commitment to the past.

The Petroleum and Natural Gas Ministry announced a major expansion of India’s gas pipeline network. The push was framed in familiar terms: energy security, import substitution, a bridge fuel for the transition. The subtext was geopolitical: with global gas markets still volatile and wars reshaping supply chains, India would secure its own molecules, on its own terms.

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India’s banking system liquidity is usually explained through the Reserve Bank of India’s policy actions—repo rates, liquidity operations and open market interventions. But the central bank’s data from a recent period suggests that another variable may be moving alongside these conditions: the cash balances of state governments held with the central bank.

The RBI’s weekly statistical supplement provides two relevant datasets. The first is the RBI balance sheet, which reports deposits of the central and state governments. The second is the RBI’s liquidity operations data, which shows how much liquidity is being injected into or absorbed from the banking system.

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The evolution of credit cards in India is a story of transition from a prestigious status symbol to a strategic digital utility. Originally introduced in the late 1980s by foreign banks like Citibank and HSBC, credit cards were exclusive tools for the wealthy, often viewed as a "luxury badge." 

However, the entry of aggressive private sector giants such as HDFC Bank, ICICI Bank, and Axis Bank in the late 1990s democratised the instrument. Today, the market has matured into a high-stakes competition for customer acquisition, largely dominated by 3-4 major players who control nearly 80% of total spending.

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GLOBAL MOOD: Cautious Risk-On
Drivers: Trump signals two-week exit, deal not required for ceasefire, prime-time Iran address looms

Asia-Pacific markets reflected a strong risk-on mood on Wednesday as hopes of a de-escalation in the Iran war lifted global sentiment. Gains in the Kospi, Nikkei 225 and Topix tracked a sharp rebound on Wall Street after US President Donald Trump signalled the US could withdraw from the conflict within weeks. 

Reports that Washington was willing to end hostilities even if the Strait of Hormuz remained disrupted further improved sentiment. Optimism was also supported by unconfirmed signals from Iran’s leadership about a possible settlement, while investors awaited a White House address for clarity.

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India's platform economy spent a decade proving it could deliver food and groceries in minutes. It has yet to prove it can send a trusted stranger into your living room at the same speed. Urban Company has made that second problem look solvable — and then declined to show its working.

InstaHelp, the company's quick-service housekeeping vertical, crossed one million delivered bookings in March, with three days still left in the month. In February, it processed 840,000-850,000 orders and recorded 51,520 bookings on a single day. The service launched barely a year ago and operates in just five cities. No home-services platform in India has scaled this quickly.

The speed matters less than what it signals about the category. India's overall home services market is estimated at ₹5.1-5.2 trillion, with online penetration below 1% of net transaction value, according to Redseer Strategy Consultants.

The online segment alone, currently ₹41-43 billion, is projected to grow at 18-22% annually to roughly ₹85-88 billion by 2029-30. That is not a niche but a vast, unorganised labour market where digital platforms have barely made a dent. The real opportunity lies not in winning share but in converting informal demand into formal transactions, one booking at a time.

Blinkit's annualised net order value crossed ₹1 trillion in the December quarter, making quick-commerce grocery India's first established billion-dollar digital category. Eternal's quick-commerce arm reached EBITDA breakeven in October-December, reporting an adjusted profit of ₹40 million after years of heavy losses — requiring roughly 2,000 dark stores, a 30,000-SKU catalogue, and billions in cumulative investment.

InstaHelp is operating a structurally lighter model. It carries no inventory and runs no warehouses. Its supply is people, not products, and its 10-15 minute fulfilment promise depends on dense service professionals in micro-markets rather than cold chains and shelf space.

The gap between what Blinkit spent to reach breakeven and what InstaHelp will require tells us almost everything about why services, not shelves, could prove the more capital-efficient path to platform profitability. The caveat is that this advantage has yet to show up in the numbers.

InstaHelp's adjusted EBITDA loss widened to ₹610 million in the December quarter, from ₹440 million in the previous quarter. Urban Company is funding this burn with profits from its legacy services business, a cross-subsidy that works only as long as the new vertical's losses do not outpace the old vertical's surplus.

That 39% sequential widening in a single quarter is the wrong direction for a model whose structural advantage is supposed to make it cheaper to scale than a warehouse-based rival.

The company has also not disclosed gross service partner additions, churn, or the number of partners dedicated specifically to InstaHelp. Monetised hours per partner rose from 83 to 89 — higher utilisation could mean the micro-market model is working, or that supply is struggling to keep up with demand.

Urban Company, sitting on ₹21.36 billion in cash, has not disclosed how much it plans to deploy or over what time horizon.

Rivals are scaling aggressively. Snabbit processed 830,000 orders in February, up from 500,000 in December, and is reportedly raising $50-70 million. Pronto, about a year old, recently raised $25 million at a $100 million valuation.

With competitors raising capital and expanding quickly, the risk is straightforward. A price war could break out before anyone in the category figures out how to make money.

The counterweight is repeat behaviour. Housekeeping is not a once-a-month impulse purchase. Cleaning, dishwashing, laundry, and meal preparation are daily or near-daily needs that generate the high-frequency, habitual usage that quick-commerce grocery platforms spent years and billions trying to create.

Urban Company's mature services business grew revenue 33% year-on-year to ₹3.83 billion, demonstrating that the core can fund the experiment. But even excluding InstaHelp, India's consumer services margins slipped from 3.1% to 2.4% of net transaction value over the same period, despite 19% growth in the core business.

The engine funding the experiment is itself running tighter. A cross-subsidy works when neither side is under sustained pressure.

Urban Company listed at a 58% premium in September and briefly touched ₹201. The stock now trades around ₹118, roughly 15% above its ₹103 IPO price, after a March lock-in expiry released 66% of outstanding equity. The stock had already fallen 16% following the July-September results, before the lock-in expiry. The market has been re-rating the uncertainty, not merely absorbing supply.

If InstaHelp's booking momentum holds over the next two to three quarters while losses begin to narrow, the market may struggle to keep describing Urban Company as a mid-cap marketplace with an expensive experiment.

One million mopped floors a month sounds like a marketing milestone, until it starts to look like a business. Urban Company sits somewhere in between, and the market has yet to decide which it is.

(This column reflects the author’s personal views and is based on publicly available information. It is intended for general commentary and analytical purposes only and should not be construed as investment advice.)

It is welcome that the government is accelerating and scaling up its National Efficient Cooking Programme, launched in November 2024 by Energy Efficiency Services Ltd, which has a good track record of bringing down the retail price of LED lamps by placing very large orders for procurement. In the case of LEDs, some significant advances in manufacturing technology and processes in China aided and abetted EESL’s campaign to replace the bulk of incandescent lamps in India with far more energy-efficient LEDs at affordable prices.

However, it is not enough to bring down the price of induction stoves over time. Their numbers must increase in the short term, to help those without assured household cooking gas connections and outside the range of piped natural gas networks. Nor is it sufficient to increase availability of induction cooktops, so must the supply of cooking vessels made of materials that allow the magnetic field created by the induction cooktops to produce current inside the vessel walls, to heat up the vessel.

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Indian workplaces, particularly the organised sector, celebrated International Women’s Day this year, with their usual share of fanfare and fatigue. The first comes from the long distance travelled to reach a seat at the table. The second is the realisation that women remain invisible and unheard at the table. For many, indeed, the celebrations remain tokenistic; yet this tokenism serves a purpose by reminding us why the triumphs remain lost in translation. Three key questions arise: first, why is women’s share of the workforce so small? Second, why do the rungs remain broken as women attempt to climb the ladder? And finally, why does the glass ceiling remain intact?

The share of the pie in the total workforce remains small for Indian women: compared to its Asian peers, India’s labour force participation (LFP) is relatively low. Despite increases in LFP over the years, female labour force participation (Figure 1) in India stands at a dismal 34.4%. (World Bank, 2026). The latest data (Annual Report, PLFS, 2026, Highlights)  puts the figure at 22.2% for urban women (Jan-Dec 2025): this implies if we pick four adult women in urban India, three are not in the labour force.

These women, who have educational attainment and skills and therefore potential job opportunities, are simply not in the workforce.

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For years, the US economy has been the envy of developed and developing countries alike. Dynamic, productive, and investing heavily in the drivers of future prosperity, the United States has consistently achieved stronger growth than most of the rest of the world – and not by a small margin. But, as spillovers from the US-Israeli war against Iran materialize, concerns about the US economy’s prospects are becoming increasingly salient.

America’s recent economic record speaks for itself. While the US economy contracted sharply during the Great Recession that followed the 2008 global financial crisis, it still recorded average annual GDP growth of 1.48% in 2007-20, compared to only 0.59% for the eurozone, according to International Monetary Fund data. The COVID-19 pandemic produced another disruption, but it did not derail the US economy for long: a robust recovery meant that growth averaged 3.27% in 2021-25, again outpacing the eurozone (2.63%).

Higher productivity, ample risk capital, dynamic entrepreneurship, and, until recently, an expanding labor pool were the primary engines of this growth, which has been turbocharged in the last couple of years by massive investments in AI. Moreover, successive governments have pursued large fiscal stimulus, even though, with low unemployment, one would have expected them to run near-balanced budgets and limit the increase in national debt.

But growth headwinds might be emerging. The US Commerce Department recently halved its growth estimate for the fourth quarter of 2025, taking it from 1.4% to just 0.7%. Now, the household and corporate sectors are confronting spillovers from the Iran war, including higher energy and borrowing costs, which threaten to exacerbate existing financial fragilities and generate new ones.

To be sure, the US is in a stronger position to weather these impacts than most other economies, particularly those in Asia and Europe. Thanks to its energy independence, it avoids the specter of supply shortages now looming over Asia and parts of Europe. The US economy is also less exposed to the accelerating fragmentation of global trade, investment, and payment systems.

Moreover, while many countries are severely fiscally constrained, the US already has additional budgetary stimulus in the pipeline, owing to US President Donald Trump’s One Big Beautiful Bill Act. And, while the US Federal Reserve might slow down its pursuit of interest-rate cuts, it may be less inclined than the European Central Bank or the Bank of England to hike rates, as its “dual mandate” requires it to weigh employment as heavily as price stability.

Then there is the agility of America’s private sector, which has traditionally been able to adapt to changing conditions with impressive speed, playing both defense and offense better than almost anyone. The median US firm enters this period of high uncertainty with a relatively strong balance sheet. There is also a clear incentive to restructure quickly to harness the potential of AI and other exciting technological innovations.

But even if the US economy continues outperforming its peers, it will not necessarily remain insulated from the war’s adverse effects. Already, higher energy and borrowing costs are exacerbating the affordability pressures many Americans face, creating downside risks for jobs and consumption, and increasing the likelihood of a growth slowdown.

The US entered the Iran war with sticky inflation – we are in the sixth consecutive year of the Fed missing its 2% target. Now, higher energy prices are poised to lead to broader price hikes. What began as a surge at the pump – US gasoline prices rose by 30%, and diesel by 40%, in the first three weeks of the war – will soon be translated into higher costs for a wide range of goods, from semiconductors and fertilizers to airplane tickets.

Eventually, inflationary pressures could broaden further, as companies seek to pass higher input costs on to consumers. As cost-of-living pressures intensify, the negative social impact of America’s K-shaped economy – defined by high inequality of wealth and opportunity – will only grow.

Beyond inflation, the risk of financial instability is rising. We are already seeing tremors in private credit: funds limiting withdrawals, partial losses of bank financing, and mounting worries regarding some funds’ poor underwriting and valuation practices. Leverage in parts of the global bond market is a concern, especially in the midst of the ongoing sell-off, as are the excessive hype-driven financial flows into AI and AI-adjacent activities over the past year.

None of these risks appears systemically threatening on its own. But in a stagflationary context of high inflation and lower growth, they could coalesce, fueling a dynamic that significantly tightens financial conditions and exposes vulnerabilities in the US and global economies.

The last thing the Fed needs is to have to enter crisis-management mode. Not only is it facing an unusually bumpy leadership transition amid political threats to its independence; its position has also been undermined by a series of forecasting errors, poor communication, policy slippages, and a prolonged failure to pursue necessary operational reforms. These are hardly the ideal conditions under which to navigate complex interest-rate decisions or respond to market disruptions.

While much of the world braces for the fallout of the Iran war, the US might be tempted to tout its relative economic strengths, not least its energy independence. But what is true in relative terms is not necessarily true in absolute terms, and what is already true in absolute terms in the US today places the most vulnerable segments of the population at considerable risk. Against this backdrop, what the US needs from its policymakers is not hubris, but humility and decisive action aimed at protecting those who need it most.

© Project Syndicate 1995–2026
]]> https://www.basispointinsight.com/Story/america-should-beware-of-economic-hubris_73684bfa6bee.html Tue, 31 Mar 2026 04:35:00 GMT Mohamed A. El-Erian, President of Queens’ College at the University of Cambridge, is a professor at the Wharton School of the University of Pennsylvania, the author of The Only Game in Town: Central Banks, Instability, and Avoiding the Next Collapse.

Indian equity benchmarks logged their biggest monthly slump since March 2020 on Monday, the last session of fiscal year 2026, as the intensifying West Asia war drove crude oil above $115 per barrel and deepened growth worries for the world's third-largest crude importer. The Nifty50 dropped 2.14% or 488.20 points to a near one-year low of 22,331.40, while the BSE Sensex shed 2.22% or 1,635.67 points to 71,947.55, its lowest close in over two years. The benchmarks have lost more than 11% each in March and are down 5.1% and 7.1% respectively for financial year 2026.

The rupee breached 95 per dollar for the first time, falling to a record low of 95.21, despite the Reserve Bank of India tightened banks' net open position caps on rupee forex exposure to $100 million per day, effective 10 April, in an attempt to curb exchange rate volatility. Bajaj Finance, Shriram Finance and State Bank of India were among the top Nifty 50 losers.

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India is entering a phase of economic stress that is still forming but is increasingly difficult to ignore. It is not yet a full-blown crisis. But the underlying pressures—external and domestic—are beginning to align in ways that have historically proved destabilising.

The trigger this time is unmistakably external. Crude oil prices, now around $110 per barrel, are straining the macroeconomic balance of a country that imports over 85 per cent of its energy needs. The transmission is already visible. The rupee has weakened sharply, breaching ₹94 to the dollar. Imported inflation is building through fuel and input costs. Transport and logistics costs have risen, and in parts of the petrochemical value chain, particularly ancillary industries, production is beginning to contract under cost pressure.

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Tata Steel has infused $180.0 million, equivalent to ₹16.8 billion, into its wholly owned foreign subsidiary T Steel Holdings Pte Ltd through subscription to equity shares, the company said in a press release.

The company acquired 1.8 bln equity shares of face value $0.1008 each on March 24. Following the transaction, TSHP continues to remain a wholly owned subsidiary of Tata Steel.

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Larsen & Toubro’s water and effluent treatment business has secured a significant design-build-operate order from the Guwahati Metropolitan Drinking Water & Sewerage Board in Assam, the company said in a press release.

The project is aimed at delivering 24x7 water supply to households in South-East Guwahati and improving the reliability of the city’s water infrastructure.

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Larsen & Toubro’s step-down subsidiary SiliConch Systems has been amalgamated with L&T Semiconductor Technologies, a wholly owned subsidiary of the company, the company said in a press release.

The company said the merger has been approved by the Regional Director, Western Region, Ministry of Corporate Affairs, through an order dated March 13. The appointed date for the scheme is August 10.

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Jindal Steel and Power has completed the expansion of its Angul Integrated Steel Complex in Odisha to 12 million tonnes per annum, following the commissioning of the third basic oxygen furnace with a capacity of 3 MTPA, the company said in a press release.

The expansion includes operationalisation of BOF-2 and BOF-3, along with associated upstream and downstream facilities such as coke ovens and the cold rolling mill complex, enabling integrated operations and capacity ramp-up, the company said.

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The unfolding conflict in the West Asia must be viewed not as a remote geopolitical disturbance but as a multi-dimensional stress event with direct and indirect consequences for India’s financial system. Its significance lies in the simultaneity of risk vectors: energy supply uncertainty, disruption of critical maritime routes, currency volatility, tightening global liquidity, and elevated cyber threats. These forces interact and reinforce each other, transmitting through macroeconomic variables into bank balance sheets, market functioning, and ultimately, financial stability.

For India, the exposure is structural, not just incidental. Dependence on imported energy, sensitivity to capital flows, and integration with global financial markets create natural channels through which external shocks are internalised. While the banking system is stronger today, characterised by improved capital adequacy, better asset quality, and enhanced regulation, it is also more interconnected, thereby increasing both efficiency and vulnerability.

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Kalpataru Projects International along with its subsidiaries, has secured new orders worth around ₹44.4 billion in the transmission and distribution business, the company said in a press release.

The orders include a 400 kV transmission line and associated substations project in Africa, multiple transmission line projects in India, and a substation project in Sweden.

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Sun Pharmaceutical Industries will present 14 abstracts at the American Academy of Dermatology Annual Meeting 2026, scheduled from March 27 to March 31,in Denver, US, the company said in a press release.

The presentations span psoriasis, alopecia areata and acne, reinforcing its focus on dermatology and immunology and its commitment to advancing treatment outcomes, it added

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Vedanta has clarified via a press release, that its legal move before the National Company Law Appellate Tribunal regarding the insolvency proceedings of Jaiprakash Associates does not have any material impact on its operations or financial position.

The company said the matter relates to a legal proceeding initiated in its capacity as a stakeholder and is in line with applicable laws.

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The rupee is once again under pressure, and the debate has predictably split into two familiar camps viz., those who see policy overreach and those who see necessary restraint. The Reserve Bank of India’s move to tighten banks’ overnight open position limits sits at the centre of this tension. While some critics argue that such curbs distort price discovery, it is equally worth asking whether parts of the banking system have earned the right to complain.

In principle, a currency market functions through a delicate choreography of flows and intermediation. A dollar entering the system, say, for instance, through a foreign investor, does not remain with the initial authorised dealer bank. It moves through the interbank market, is matched with importers, or is temporarily warehoused by institutions willing to carry the position. This warehousing function is critical. At any given moment, demand and supply are rarely aligned, and banks bridge that gap by absorbing mismatches.

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Coal India has approved the disinvestment of up to 25% of its stake in subsidiary South Eastern Coalfields through a combination of an offer for sale and a fresh equity issue, , the company said in a release.

The board has also cleared a fresh issuance of equity shares of up to 10% of SECL's post-issue paid-up capital through an initial public offering or other permitted routes in the domestic market. Both moves are approved in principle, the release added.

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Astral’s wholly owned subsidiary, Al-Aziz Plastics, has received a patent from the Government of India for its invention titled “Multiport Water Outlet,” the company said in a release.

The patent has been granted for a period of 20 years starting November 2021, in line with the Patents Act, 1970, the release added.

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Independent directors were never meant to be decorative. They were conceived as a deliberate disruption to concentrated power, a structural insertion of distance and judgement into boardrooms dominated by promoters and executive authority. Their role was not to endorse consensus but to interrogate it, not to smooth decisions but to test them. At its core, the institution exists to ensure that shareholder interest is not quietly subsumed within promoter intent.

India has, over two decades, built an elaborate architecture around this idea. From Clause 49 to SEBI’s the listing regulations, the independent director has been placed at the centre of corporate governance. Board composition, audit oversight and risk supervision all hinge on their presence. The design is clear: independence is meant to be both a safeguard and a source of judgement.

This architecture emerged from necessity, not theory. Repeated governance failures exposed the vulnerabilities of a system defined by concentrated ownership and limited internal challenge. In a promoter-led structure, independent directors were meant to serve as counterweights, bringing expertise and detachment to decisions that might otherwise escape scrutiny.

Yet the institution, as practised, has drifted from its purpose. Independence exists, but often within boundaries that are neither codified nor acknowledged. What is presented as oversight often operates within limits set by those it is meant to oversee.

The question is no longer whether independent directors exist. It is whether they are allowed to matter.

Curated Dissent
It is time to discard a polite fiction. In many Indian boardrooms, independence is not exercised, it is curated. The process begins with selection. Independent directors are seldom chosen through a rigorous search for dissenting intellect or diverse judgement. They are more often drawn from networks of familiarity, comfort and alignment. The objective is stability, not challenge.

Once appointed, the boundaries of engagement are quickly understood. Agendas are constructed upstream. Information arrives filtered. Critical issues are framed in ways that narrow interpretation. Governance, in form, appears structured. In substance, it is often controlled.

Influence is rarely denied outright. It is managed. Committee assignments do not always reflect expertise. Those most capable of rigorous scrutiny may find themselves distanced from consequential deliberation.

Over time, behaviour adjusts. Independent directors recognise the cost of sustained friction. It is seldom explicit, but it is always real. Non-renewal, reduced influence or quiet exclusion are sufficient signals. Independence, in such settings, becomes calibrated rather than absolute.

Independent directors occupy an increasingly precarious position. They are held to rising standards of fiduciary and regulatory accountability, yet often operate without commensurate influence over outcomes. Liability is real; power is conditional. The doctrine of collective board responsibility, while sound in principle, can in practice dilute individual accountability and mask the absence of meaningful challenge. The longer-term consequence is corrosive: credible professionals grow reluctant to accept or continue in such roles, leaving boards either under-served or populated by those more willing to accommodate than to question.

Governance Theatre
The deeper concern is not visible conflict but its absence. Boards rarely record disagreement. Decisions reflect unanimity. Processes appear compliant and orderly. Yet this procedural clarity often conceals a more constrained reality.

Even where intent exists, independence is frequently undermined by information asymmetry. Access to management-curated material, rather than unfiltered insight, constrains the ability of independent directors to exercise informed judgement. Meanwhile, markets continue to treat their presence as a proxy for governance quality — a signalling assumption increasingly detached from operational reality. This divergence allows weak oversight to coexist with strong reputational signalling, reducing the discipline that market scrutiny is expected to impose.

Governance, in too many cases, has become performative. The presence of independent directors signals credibility, but presence is not power. When dissent is structurally discouraged, independence survives only as optics.

For shareholders, particularly minority investors, this is not a theoretical concern. The independent director is meant to function as their voice within the boardroom, yet outcomes suggest otherwise. Strategic decisions, capital allocation choices and episodes of governance stress rarely reflect visible resistance. The institution exists, but its ability to alter outcomes remains limited. The shift towards virtual board engagement has compounded this. Efficiency has improved, but depth has eroded. The informal exchanges that often precede meaningful challenge are harder to replicate digitally. What remains is a more transactional form of oversight, where deliberation risks being compressed into presentation.

Regulation cannot, by design, enforce behaviour. It cannot legislate for courage or detect its absence. The result is a system where compliance is visible, but conviction is not.

Reclaiming Independence
If the institution is to retain credibility, reform must move beyond rules to incentives. The responsibility begins with promoters and controlling shareholders. Boards that suppress dissent may move faster, but they also accumulate unexamined risk.

More fundamentally, shareholders must allow independence to express itself — and here the current system falters. Those who appoint independent directors often expect alignment, not challenge. Without this shift in expectation, regulatory refinement will remain cosmetic.

There is a case for making disagreement more visible. Without compromising confidentiality, boards can signal that debate exists. Even a limited acknowledgement of differing views can restore credibility to governance processes.

Independent directors themselves must confront the demands of the role. Independence is not a designation; it is a discipline. It requires persistence in questioning, willingness to dissent and, when necessary, the resolve to disengage. Attendance is not fulfilment of duty.

The uncomfortable question is whether there is genuine appetite for change. The current equilibrium serves too many interests. Promoters retain control while appearing compliant. Board members retain position, prestige and proximity without persistent friction. There is a shared complicity: boards, investors and the regulatory system recognise these constraints, yet choose to look past them as long as formal compliance is preserved.

This quiet acceptance is what sustains the status quo. Disrupting it may require rethinking how independent directors are appointed, evaluated and, where necessary, protected from the consequences of dissent. Until then, reform will remain performative, never substantive.

The WTO’s 14th Ministerial Conference, held in Yaoundé, Cameroon from March 26–29, ended without agreement on key issues, pushing decisions back to Geneva. Talks remained stuck on the e-commerce moratorium and institutional reform, with members agreeing to carry forward draft texts to the next General Council meeting.

Director-General Ngozi Okonjo-Iweala acknowledged members had come close to a deal, but conceded failure to reach consensus. “We are very close to a Yaoundé package… but we are not all the way there yet,” she said, adding that members would preserve draft outcomes, including decisions on WTO reform, electronic commerce, TRIPS non-violation complaints and an LDC package, as the basis for future negotiations in Geneva.

The outcome makes MC14 one of the most inconclusive ministerials in recent years, highlighting deep divisions over the future of the multilateral trading system.

E-Commerce
At the heart of the deadlock was the WTO’s moratorium on customs duties on electronic transmissions, in place since 1998. The US, supported by the EU and Japan, pushed for a long-term or permanent extension. India and other developing countries opposed this, arguing it would lock in revenue losses and limit policy space in a rapidly growing digital economy.

Brazil played a decisive role in blocking compromise proposals—including a four-year extension—citing lack of progress in agriculture talks. With no agreement, the moratorium lapsed for the first time in 26 years, opening the door for countries to impose tariffs on digital transmissions.

Most gains from waiving such duties accrue to top US tech firms, including Google and Meta. At the same time, the US is pushing to dilute the MFN principle on goods—effectively breaching WTO rules by imposing MFN+ tariffs across products, including agriculture. Yet for digital products, where its firms enjoy near-monopoly power, it is seeking binding commitments from all countries to permanently forgo customs duties, even in the future.

Brazil, India and other developing countries should call this out and expose those aligning with the US position. At MC14, the deadlock was driven by the U.S. insistence on a permanent moratorium—rather than the routine two-year extension—not by Brazil’s opposition.

TRIPS Safeguard
The failure to extend the e-commerce moratorium also led to the expiry of the safeguard against non-violation complaints under the TRIPS Agreement. Developing countries had relied on this safeguard to protect policy space, especially in areas like public health. Without it, even WTO-compliant measures—such as compulsory licensing—can be challenged by developed countries for affecting their expected commercial gains. For India, this increases the risk of disputes over its intellectual property rules, including provisions like Section 3(d) of its patent law.

Efforts to agree on a WTO reform roadmap also failed. A draft proposal to work toward reforms by 2028 could not gain consensus. The divide is clear: advanced economies want quicker decision-making and stricter rules, while developing countries want to protect policy flexibility and the consensus-based system. As a result, reform talks—like other issues—have been pushed back to Geneva with no immediate progress.

Plurilateral Path
The Investment Facilitation for Development Agreement, backed by most members, remains blocked due to India’s opposition. India argues that bringing such plurilateral deals into the WTO would weaken its multilateral nature and allow smaller groups to shape rules. India’s stance has helped safeguard the WTO’s core principle of consensus-based decision-making, preventing a shift toward fragmented, coalition-driven rule-making.

Meanwhile, 66 members moved ahead with a separate e-commerce deal outside the WTO, reflecting a growing shift toward rule-making outside the consensus system.

The breakdown was driven in part by frustration over stalled agriculture talks—a long-standing priority for developing countries. Brazil linked progress on e-commerce to movement on agriculture, making deadlock inevitable. This shows how unresolved old issues continue to block progress in newer areas like digital trade.

A More Consequential Breakdown
MC14 stands out not just for failing to deliver new agreements, but for letting existing pillars collapse. The closest precedent is MC11 (Buenos Aires, December 10–13, 2017), which ended without a declaration due to divisions over new rules, while an earlier breakdown at MC5 (Cancún, September 10–14, 2003) was triggered by disputes over new issues like investment and competition policy. But MC14 goes further—and worse.

It is the only ministerial where core moratoria, including those on e-commerce and TRIPS non-violation complaints, were allowed to expire. Unlike MC11, where the fight was over future rule-making, MC14 reflects a failure to even preserve the status quo. Unlike Cancún, where new issues caused the collapse, here unresolved legacy issues such as agriculture derailed progress in unrelated areas like e-commerce. The result is a more serious breakdown—not just stalled negotiations, but erosion of existing disciplines, exposing how deeply the WTO’s consensus-based system is now strained.

MC14 marks a turning point for the WTO—not because it failed to deliver new deals, but because it failed to preserve existing ones. The lapse of the e-commerce moratorium and TRIPS safeguard signals a deeper institutional drift, with old compromises breaking down. The divide is now structural: between those pushing coalition-driven rule-making and those defending consensus and policy space.

The distance from Delhi to Tehran may be measured in kilometres, but the economic transmission of the ongoing conflict is far more immediate. An extended disruption in West Asian energy flows has already unsettled global markets, with risks around the Strait of Hormuz keeping crude and gas supply expectations on edge. For a country that imports close to 90% of its crude requirement and a majority of its LPG, this is not a distant geopolitical episode but a live macro shock.

India’s initial response has been effective on the supply side. Diplomatic engagement has sought to ensure that critical shipping routes remain open. Procurement has adjusted, with increased sourcing from Russia and other channels. Logistical coordination across agencies has, for now, prevented visible shortages. These measures have insulated domestic availability at a time of elevated global uncertainty.

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Dear Insighter,

I stared at a blank screen for three hours this morning, which is probably how long it takes the average person to realise the rupee has quietly absorbed another shock they didn’t vote for, didn’t quite notice, and will eventually pay for anyway.

Writer’s block, it turns out, is a lot like exchange rate policy. You sit there hoping clarity will arrive on its own, that something external will unlock movement, while all along the adjustment is happening somewhere else, silently, incrementally, and almost always in a way that leaves you slightly worse off than before.

It’s not a lack of material (there’s far too much of it) but a lack of clarity about where the adjustment is actually landing. Because everywhere you look right now, across energy markets, currency policy, institutional credibility, and corporate governance, the pattern is the same. The shock is real, the response is visible, but the burden doesn’t stay where it starts. And when it keeps moving, you don’t get clarity by staring at it longer. You get it by changing the frame.

So let’s do that.

Welcome to the Strait of Hormuz, the world’s most consequential twenty-one miles of water. Highlights include breathtaking geopolitical tension, a thriving ecosystem of ceasefire rumours, and some of the most competitive crude oil pricing you’ll find anywhere, provided you are standing on the right side of it. The strait carries roughly one-fifth of the world’s crude oil and, at present, roughly one hundred percent of the world’s anxiety. Amenities include fragmented energy markets, a rupee under steady pressure, and inflation that hasn’t yet arrived but is very clearly packing its bags. Disclaimer: There are no refunds.

The travel brochure version of this crisis sounds more honest than the official one, because it cannot pretend that temporary explanations are sufficient for structural shifts. What Aabhas Pandya notes is that markets are still trading ceasefire optics rather than supply realities, treating what is increasingly a permanent fracture as though it were a temporary disruption. A pause in hostilities is not the same as normalised flows. A headline is not the same as a pipeline.

And as Yield Scribe observes, what is actually unfolding beneath the surface is something far more consequential. Energy markets are fragmenting not by supply, but by route. WTI near $100. Brent around $113. Dubai crude closer to $130. Oman near $160. A gap of $60 to $65 between benchmarks that, in theory, should not diverge this dramatically. The reason is not scarcit, but immobility. Geography has inserted itself back into pricing in a way markets had almost forgotten how to process.

The same barrel now carries a different value depending on which side of a strait it is located. That is not just a price shock, but a structural repricing of access. For India, which imports over 85% of its crude, access is a vulnerability.

G. Chandrashekhar writes that crude, crops, and currency are converging into a potent inflationary threat. Elevated crude implies fuel price increases likely as early as May, with pass-through effects across transportation, manufacturing, and logistics. The burden, as he notes, will not be evenly distributed. It will be regressive, falling most heavily on those least equipped to absorb it.

Dhananjay Sinha observes markets are still conditioned to treat geopolitical shocks as transient deviations from equilibrium. This one is not. The equilibrium itself is shifting: alliances are fragmenting and institutional anchors are weakening. And yet, as R. Gurumurthy notes, India’s policy response has been to manage the visibility of the shock rather than its source. Bond yields are being contained. Import costs are only partially transmitted. Fiscal signalling remains cautious but not contractionary. The visible edges of the problem are being softened, which means the adjustment has to go somewhere else.

It is going to the rupee.

Sakshi Gupta captures the policy contradiction. In a tariff-driven shock, a weaker rupee can act as a buffer, restoring competitiveness. In an energy-driven shock, that logic inverts. Each unit of depreciation raises the domestic cost of imports, widens the current account deficit, and adds to inflationary pressure. The currency stops cushioning the system and starts amplifying the shock.

Madhavi Arora quantifies what that amplification might look like. If Brent averages above $100, the current account deficit could breach 2.5% of GDP. The dollar-rupee could move toward 96. Bond yields could drift higher. Arvind Chari introduces an even more uncomfortable layer. The rupee has been among the worst-performing currencies since late 2024, weakening even in an environment where the dollar itself softened globally. His interpretation is difficult to ignore. India may be implicitly prioritising trade competitiveness over capital attraction. But global capital does not think in rupees. It thinks in dollars.

Which brings us, inevitably, to the question of policy response.

What should the RBI actually do? Gaura Sen Gupta argues for calibrated depreciation alongside continued liquidity support, not a sharp interest rate defence, not large-scale reserve drawdown. BasisPoint Groupthink goes a step further: two proposals from former central bankers, both sitting outside current orthodoxy, suggest the RBI could do more with its balance sheet than conventional tools allow.

Drawing also on Christine Lagarde's framework, the Groupthink argument is that the focus must shift from baseline forecasting to risk management: adjust liquidity to lean against emerging inflation pressures without committing prematurely to a rate cycle. V. Thiagarajan offers the necessary corrective to anyone tempted to treat reserve accumulation as the answer: reserves alone cannot substitute for credibility. Reputation and communication are earned gradually and lost quickly.

Michael Debabrata Patra adds a pointed institutional dimension. The IMF, he argues, has drifted from its foundational purpose of ensuring exchange-rate stability. Its selective scrutiny, particularly its reluctance to call out major economies, raises legitimate questions about its role. His suggestion that India consider withholding permission for certain IMF analyses reflects a broader shift, the gradual erosion of unquestioned institutional authority in a world that is becoming more openly transactional.

Rajesh Mahapatra writes that what appears to be a conflict over ideology or resources is increasingly a contest over control of the strait itself. Even if hostilities subside, the assumption of free and frictionless passage may not return. Instead, access could become conditional, priced, negotiated, and controlled. He adds in another piece that India must move beyond markets to secure supply through strategy, diversification, and calibrated statecraft.

Karan Mehrishi notes that this is the sharpest test yet of India’s multi-alignment strategy. Relationships with Israel, Iran, the UAE, the US, and others are now intersecting in ways that make passive balancing increasingly difficult. Rajesh Ramachandran offers a counterpoint: India may be better off not being drawn into mediation it cannot influence. But he also points to a missed opportunity, the absence of a principled stance on targeted assassinations.

Gold, meanwhile, is telling its own version of the story.

G. Chandrashekhar notes that current prices embed a significant war premium, perhaps $700 to $1,000 per ounce. When that premium unwinds, the correction could be sharp. V. Thiagarajan’s gold-oil ratio provides a useful interpretive lens. When gold rises without oil, it signals financial anxiety rather than real economic strength. That is where markets appear to be positioned today.

R. Gurumurthy adds a distinctly Indian complication. Gold ETFs, which promise efficiency, often fail to deliver it. Persistent gaps between NAV and market price reflect structural limitations in arbitrage and market depth. In India, gold is not just a commodity; it is a financial instrument shaped by the imperfections of the system around it.

Governance reveals a similar pattern of deferred adjustment.

Anupam Sonal frames the HDFC Bank episode as a test of institutional maturity rather than an isolated event. Krishnadevan V notes that accumulated equity in senior management creates not just alignment, but influence, influence that can complicate oversight. He also highlights that institutional investors, despite holding overwhelming ownership, exercised limited engagement when it mattered.

Srinath Sridharan argues that large NBFCs must be governed with the same discipline as banks if they are systemically important. Rabi N. Mishra warns that regulatory capability must keep pace with financial innovation or risk falling permanently behind.

Chandrika Soyantar adds a balance sheet dimension: Nifty-500 companies, excluding BFSI, are sitting on roughly ₹16 trillion in surplus cash, accumulated faster than revenue, with no clean instrument to return it without distorting ownership or resetting expectations.

Sangeeta Godbole shifts attention to the WTO, where new rulebooks are being written without India’s participation. Her argument is not about abandoning principle, but about recognising that absence has consequences. Sharmila Kantha offers a measured view on Chinese investment, openness without naivety. And Arvind Mayaram cuts through a recurring misconception. India’s problem is not institutional capacity, but incentive design — systems deliver what they are rewarded for.

Three hours of nothing. Not because there was nothing to say, but because there was no clear answer to a simpler question. Where does the adjustment land?

The rupee absorbs the pressure because rates cannot. The consumer absorbs it because prices cannot. Investors absorb it because governance does not. Institutions defer it because incentives allow them to.

The brochure, if it were fully honest, would end with a disclaimer (in very small print): conditions subject to change, adjustment unavoidable, burden unevenly distributed.

Until next time, still trying to keep up with where it’s all moving.

Phynix

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Blaming Yourself First is Empowerment, Not Masochism by Kirti Tarang Pande: When the next headline tries to push you into petrol-queue panic, ask what you actually decided, not what the market did.

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]]> https://www.basispointinsight.com/Story/a-system-that-adjusts-by-moving-the-pain-somewhere-else_27860b7b3626.html Mon, 30 Mar 2026 03:42:00 GMT Phynix is a seasoned journalist who revels in playful, unconventional narration, blending quirky storytelling with measured, precise editing. Her work embodies a dual mastery of creative flair and steadfast rigor.

GLOBAL MOOD: Extreme Risk-Off
Drivers: Iran warns of ground assault response, Islamabad talks last hope,

Asia-Pacific markets signalled a clear risk-off mood on Monday as the Middle East war entered its fifth week and widened after fresh missile attacks. Sharp falls in the Kospi, Nikkei 225 and Topix reflected rising geopolitical anxiety and oil-driven inflation risks.

The Bank of Japan signalling possible faster rate hikes added to pressure, while weak futures for the Hang Seng Index underscored fragile sentiment. Investors now await Jerome Powell’s speech and key macro data for direction.

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India’s private-sector activity slowed in March as rising energy costs and geopolitical tensions weakened sentiment. The HSBC Flash India Composite PMI fell to a three-and-a-half-year low of 56.5 from 58.9 in February.

Output growth eased across both manufacturing and services amid the energy shock. Softer domestic demand weighed on new orders, which grew at the slowest pace in more than three years, even as new export orders surged to a record high. Cost pressures intensified, though companies absorbed part of the increase by squeezing margins.

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In 2017, Shanghai Fosun Pharmaceutical Group struck a deal to buy a majority stake in India’s Gland Pharma, the biggest buy of a Chinese firm in India. By 2019, 17 of India’s 24 startup unicorns were backed by Chinese investors, with the value of investments multiplying 12 times in 4 years across sectors such as fintech, edtech and retail. In early 2020, red flags were raised as the People’s Bank of China appeared in the list of investors holding more than 1% stake in India’s storied HDFC Bank. As Covid restrictions started impacting Indian corporates, anxieties arose on possible hostile Chinese takeovers of leading Indian companies, including data-rich tech enterprises.

This sequence of events serves as the backdrop to the introduction of Press Note 3 of 2020 on April 17, 2020, which brought foreign direct investments in Indian companies by land-bordering countries under the prior government approval route. PN3 aimed to curb ‘opportunistic takeovers’ by foreign firms which were ‘beneficially owned’ by citizens of or entities present in land-bordering countries.

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Recent developments relating to the resignation of the Chairman of HDFC Bank have drawn attention less for any proven irregularity and more for what they reveal about the evolving nature of governance risk in large financial institutions. When a leadership change at the highest level of a systemically important bank occurs amid indications of internal divergence, the issue before the regulator is not confined to determining whether misconduct has occurred. The more relevant question is whether the internal framework of oversight, accountability, decision-making and above all, separation of duties, continues to function with the degree of coherence expected of an institution whose scale, interconnectedness, and market influence make it critical to financial stability.

Such episodes must be situated within the transition of the Indian financial system from rapid expansion to institutional consolidation and maturity. In earlier stages, supervisory concerns centred on capital adequacy, asset quality, liquidity and leverage. In more mature systems, vulnerabilities increasingly arise from governance processes, information flows, and the balance of authority between boards and executive management. The appropriate response from the regulator, therefore, can neither be episodic intervention nor passive observation, but continuous, forward-looking engagement focused on governance quality.

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India does not suffer from a shortage of laws; it suffers from a shortage of their lived reality. Incidents of circumventing the law through statutory loopholes aren’t one-off events; they are a reflection of intentional planning but reckless execution. Through watertight execution, we can streamline our legislative prowess for socio-legal harmony.

Today, the legislative space of our country is filled with numerous pending enactments that are well drafted, deliberated upon, assented to and enclosed in files, patiently awaiting implementation. In fact, “pending laws” have become a default shorthand for India’s legal system, whether for law students, educators, practitioners or laymen. However, the operational reality is socially experienced, yet institutionally overlooked.

We are not discussing the untruth. However, we are barely touching the tip of the iceberg. Incidents where offenders circumvent the law through statutory loopholes by using muscle or money power are commonplace. These are often potential landmark cases which demand reasoned decisions and executive scrutiny. The aftermath reflects eroded hope in the system, time and again.

More often than not, the problem does not lie in drafting. The Indian statute continuum does not suffer from the poverty of language; rather, it grapples with the poverty of enforcement. Even where textual gaps exist, they call for legislative refinement, not a collapse of execution. The core of this argument is that on-ground execution is needed: fast yet fair.

Administrative Hurdles

While emancipatory laws undoubtedly represent watershed moments for societal welfare, bureaucratic enforcement laxity can be attributed to several reasons, marking the conundrum between “legalese” and practicality. In countries like India, there is widespread enforcement deficit due to understaffed regulatory bodies and monitoring mechanisms, inadequate training for enforcement officials and weak inter-departmental coordination.

On plain sight, these seem like systemic issues that can be resolved overnight. But what we do not see, as laymen, is that many of the laws that come into force are “framework laws” (also known as “parent” legislation). This implies that real-world functionality is left to future “children”, substantiating rules, notifications and circulars. While framework laws chart out core details, on-ground functioning is possible only with executive foresight. Even when subordinate legislation arrives, it is often inconsistent with the parent statute, compromising implementation integrity.

In everyday life, we see this ouroboros very often: a widespread problem is resolved by a law, but implementation guidelines are delayed. When rules are finally notified, they are operationally hindered by execution deficits. Administrative infrastructure that exists on statutory paper is often never fully constituted in reality. This temporal (and temperamental) void between enactment and operationalisation dilutes legislation from a potential archetype-breaker into a mere sheet of paper. Socially, this gap affects the most vulnerable, the lower socio-economic strata.

Weakened Deterrence

This implementation issue is not limited to the legislative and executive alone. A closer view shows that the judicial system is involved as well. Prolonged litigation delays justice and weakens deterrence, even when the statute and its enforcement function coherently. The discussion on judicial backlogs often runs in circles, with little clarity on what would truly deliver timely justice.

Unwarranted procedural adjournments, slow investigation, and appeals that stretch across generations are both causes and consequences. These structural issues create a “minimal probability of punishment” environment, reducing deterrence and creating a breeding ground for non-compliance. As a result, even the best drafted statute loses normative authority when enforcement becomes temporally distant from violation.

Another identifiable reality is regulatory capture. While the dependency of regulators on their entities can be an asset, it can also result in a post-mortem approach to grievance redressal rather than a preventive one. Due to reliance on government budgetary allocations, regulators often struggle to resolve public grievances effectively. However, a shift towards preventive regulation can reduce institutional risk aversion and passive enforcement. This underscores the importance of a preventive approach nationwide.

Besides, enforcement infrastructure created by a parent statute often does not come to fruition. This is particularly visible in criminal practice. The law envisions and constitutes, on paper, new categories of offences, regulatory frameworks and authorities with overlapping jurisdiction. Yet the system continues with the same police strength, investigative resources and judicial capacity. This structural mismatch requires recalibration, lest enforcement power erode further.

The same pattern is visible in symbolic legislation. It is not rare to see laws passed after public outrage, or ambitious penal provisions celebrated despite incomplete enforcement. In such instances, law-making risks becoming performative rather than transformative. There is a need to recalibrate. India’s youth can be less cynical towards the law if enforcement becomes more consistent.

Accountability Deficit

The enforcement deficit does not end here. The legal system struggles with an institutional framework that diffuses its own accountability. Statutes distribute authority, in terms of lawmaking, regulatory compliance and punitive power, across numerous institutions such as governments and local authorities. While accountability is promised on paper, no single institution assumes true responsibility for enforcement. In essence, this is not a capacity deficit; it is a lack of clarity. It is a short-sighted problem and it is fixable.

Nonetheless, these causes can be traced to two underlying barriers. The first is the decentralised system. While Parliament enacts legislation to be implemented by states, some states grapple with limited funding, administrative capacity or political incentives. The result is a weakening of national intent at the grassroots level. At the same time, this also helps identify where course correction is needed, by leveraging the strengths of a federal system.

The second barrier stems from the sociocultural crossroads. When deeply entrenched social norms diverge from statutory norms, sustained enforcement requires greater institutional effort. This is possible only with the 3 Cs: clear laws, coordinated regulators and capacitated enforcers. When any one is absent, the system slips into darkness. An endeavour of this scale requires a multi-stakeholder approach.

India’s legal ambition is not in question; its administrative follow-through is. By leveraging institutional capacity and human capital, we can realise what the makers of the Constitution envisioned: the Indian democracy can truly be by, of, and for the people. It is time to align the law on paper with the law in action. 
]]> https://www.basispointinsight.com/Story/india-s-laws-don-t-falter-in-drafting--they-fail-in-delivery-_221401330a72.html Sat, 28 Mar 2026 06:49:09 GMT Ninupta is a policy researcher and a student of law.

The government will raise ₹8.2 trillion through gilts in the first half of the financial year 2026–27, accounting for 51% of its full-year borrowing programme. This is marginally lower than the 54% share seen in the first half of 2025–26, suggesting a deliberate attempt to avoid excessive pressure on the bond market in the early part of the year.

The April–September borrowing calendar also signals a slightly less front-loaded issuance pattern and a shift in maturity strategy. The total borrowing target for 2026–27 has also been revised lower from the initial budget estimate of ₹17.2 trillion to ₹16.09 trillion after a series of bond switch operations.

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Indian equity benchmarks declined for a fifth consecutive week on Friday, their longest losing streak in approximately eight months, as fraught West Asia ceasefire negotiations and elevated crude oil prices above $100 per barrel intensified foreign outflows and battered the rupee to a record low. The Nifty50 fell 2.09% or 486.85 points to 22,819.60, while the BSE Sensex slipped 2.25% or 1,690.25 points to 73,583.22, snapping a two-day recovery as mixed signals from the US and Iran over ongoing talks unnerved investors. India VIX spiked to 27.09, hovering at its highest since June 2024, as the rupee settled at a record low of 94.8125 per dollar, down 11% for the fiscal year while foreign portfolio outflows for the month reached a record $12.14 billion. President Trump extended his deadline for Iran to reopen the Strait of Hormuz by 10 days, threatening destruction of Iranian energy plants, while Tehran rejected the US 15-point settlement proposal as unfair.

Broader markets also fell sharply, with the Nifty Midcap 100 and Nifty SmallCap 100 declining 2.24% and 1.88% respectively, though both outperformed the benchmarks on the day. Weekly losses for small-caps and mid-caps stood at 0.6% and 1.4% respectively. Among sectors, Nifty PSU Bank was the worst performer, followed by Nifty Realty and Nifty Auto, while Nifty IT was the best-performing sectoral index with the least losses, continuing its role as a relative safe-haven in the current environment. For the week, both indices lost approximately 1.3% and have now declined about 9.5% each since the US-Israeli war on Iran began on 28 February.

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Pakistan’s role as a mediator in the West Asian crisis is being framed by the Indian Opposition as a diplomatic setback for the government. This is yet another example of the lack of bipartisan consensus on India’s foreign policy. The NDA government, however, must share some responsibility for the absence of a unified global front, as it has, for some time, used foreign policy measures as Prime Minister’s personal achievements to win domestic brownie points in national and local elections. However, India not being clubbed with Pakistan is neither an embarrassment nor an impediment to its regional aspirations.

Pakistan is a Western vassal; it is the last-born darling child of the British Empire. It was carved out of India not because of Mahatma Gandhi’s generosity nor Jawaharlal Nehru’s incompetence, but to safeguard the British Empire’s interests in West Asia. The last ADC to Viceroy Mountbatten, Narinder Sarila, in his book, The Shadow of the Great Game, has explained the process and the need for the creation of Pakistan, quoting colonial generals and politicians. The only difference is that the Western alliance is now led by the US. But Pakistan’s raison d’etre remains the same.

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Crude, crops and currency, the three Cs, are converging into a potent inflationary threat that policymakers can ill afford to underestimate.

This time, the spark is geopolitical. Four weeks into the conflict in the Persian Gulf, and there is still no real sense of where this is headed. The commentary is loud, but not especially useful. Markets, for their part, are not waiting for clarity. The damage to energy flows is already visible, and the consequences are beginning to show up in prices.

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The petroleum minister’s post on X, assuring that India has no fuel shortage and that consumers need not worry about prices, was meant to calm nerves.

That is fair in a crisis.

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Markets have responded to each turn in the conflict between the US and Iran with familiar reflexes, risk-off on escalation, relief rallies on talk of a pause. That pattern suggests markets are still conditioned to treat geopolitical shocks as transient events. The problem is that this shock is not cyclical but structural.

What is unfolding is not merely another West Asia flare-up, but a structural shift in the global order. The balance of economic and military power is shifting, alliances are fragmenting, and the institutional anchors of the post-World War II system are weakening. The current conflict has accelerated these dynamics.

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The Iran conflict is perhaps the biggest test yet for India’s multi-aligned foreign policy. And the space for passive balancing is narrowing fast.

Recently, Prime Minister Narendra Modi visited Israel and addressed the Knesset, receiving a warm welcome from Benjamin Netanyahu. India–Israel ties have long been strong, but the timing of their elevation to a ‘special strategic partnership’ stood out. Within days of his return, Israel, alongside US forces, launched attacks on Iran.

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The government’s decision to cut excise duty on petrol and diesel by ₹10 per litre each could result in an annualised fiscal hit of about ₹1.55 trillion, according to Emkay Global Financial Services, while helping to absorb a significant portion of the losses incurred by oil marketing companies.

The move, announced on Friday, is aimed at cushioning the impact of the global energy shock triggered by war in West Asia. Following the revision, excise duty on petrol has been reduced to ₹3 per litre, while diesel will now attracts zero excise duty.

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GLOBAL MOOD: Extreme Risk-Off
Drivers: Iran rejects US peace terms, Brent surges back to $108, Fed prices out 2026 cuts

Asia-Pacific markets moved firmly risk-off Friday after a sharp Wall Street selloff overnight, with investors unsettled by contradictory signals on a possible US-Iran truce.

President Donald Trump’s decision to delay strikes on Iran’s energy infrastructure briefly raised hopes of diplomacy, but Tehran’s denial of direct talks and rejection of US proposals kept uncertainty high. Rising oil prices above $108 and fresh warnings from Federal Reserve officials that the West Asia conflict could worsen inflation further dampened sentiment, triggering a broad shift away from risk assets across global markets.

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The Indian Rupee has been the worst-performing currency when compared to developed markets and emerging market peers since late 2024.

In 2025, the US dollar saw a large depreciation against global currencies, but in what surprised many investors, the Indian rupee weakened by close to 6% against the US dollar. This meant that the Indian Rupee fell by more than 10% against the Euro, British Pound, Swiss Franc, and even the Chinese Yuan.

With crude oil prices now approaching India’s pain threshold of $100/bbl, we are seeing renewed pressure on the rupee. There has been extensive commentary on the trajectory of the rupee, especially as capital inflows have weakened materially.

This raises a broader policy question: is India implicitly prioritising export competitiveness over capital attraction through its exchange-rate stance?

A recent observation by former RBI Deputy Governor Michael Patra that rupee tends to depreciate by 4–5% annually warrants closer scrutiny. His recent work on exchange-rate policy has been an important contribution to understanding the RBI’s external management framework, but this particular observation raises questions for policy consistency.

The Indian rupee does not, in fact, depreciate at 5% annually over the long term. The historical average depreciation against the US dollar is closer to 3%, even after accounting for the stronger-dollar cycle over the past decade.

Against this backdrop, an implicit acceptance of 4–5% annual depreciation appears difficult to justify, particularly when viewed through the lens of India’s inflation-targeting framework.

This is especially relevant given that Michael Debabrata Patra was closely associated with the adoption of inflation targeting, one of the most significant financial reforms in India.

The logic of targeting Consumer Price Inflation at 4% was to provide a clear nominal anchor, reduce volatility, and deliver positive real interest rates over the cycle. As inflation and interest rate differentials with advanced economies narrow, the implied equilibrium rate of currency depreciation should also moderate.

In principle, this would suggest that rupee depreciation need not exceed the inflation differential, roughly 2% when comparing India’s 4% CPI target with US core inflation near 2%.

Yet, policy signalling has not reflected this framework with sufficient clarity. Two possible explanations emerge.

One relates to the objective of building foreign exchange reserves towards $1 trillion, as articulated by Michael Debabrata Patra. This estimate broadly reflects coverage of short-term external debt of about $300 billion and foreign portfolio equity exposure of roughly $700 billion.

Given that reserve accumulation requires capital inflows to exceed the current account deficit, and that this condition has held for much of the past three decades, the RBI has built reserves through sustained market intervention. This raises the possibility that reserve accumulation has, at times, been accompanied by a tolerance for a weaker rupee than fundamentals would justify.

Exports Vs Capital

A second, more structural explanation lies in India’s long-standing preference for export competitiveness. The long-held belief in Indian policy circles is that a weaker Indian rupee will boost exports. If so, is this policy translating towards creating policy space for ‘annual depreciation of 4-5%?

This is not to suggest that the rupee cannot depreciate by 4–5% annually. Rather, the currency reflects the broader policy environment in which it operates, including the quality of inflation management by the RBI and the coherence of tax and regulatory frameworks set by the government.

Even if pursued as policy, a 5% annual depreciation offers no assurance of export gains. India’s non-oil goods exports, despite targeted incentives and currency weakness, have struggled to gain a meaningful global share.

However, a 5% annual depreciation is certain to dissuade foreign savings from being invested in the Indian economy.

India must decide what its priority is. Especially in today’s changed world.

The global backdrop has shifted materially from the past two decades. Trade openness is no longer a given, and export-led strategies face increasing constraints. India is unlikely to secure preferential access or sustained external demand to drive export growth.

Global capital, however, remains mobile and is actively seeking diversification. It is heavily concentrated in the US and constrained in its ability to deploy meaningfully in China and several other markets due to geopolitical and structural risks.

This creates a narrow but significant opportunity for countries that can offer scale, stability and policy credibility. India is among the few ‘friendly’ economies positioned to absorb large, long-term capital flows.

Yet, the domestic policy framework continues to impose frictions, through tax uncertainty, retrospective actions, and an uneven regulatory environment, which raise the cost of investing in India.

Even where investors are willing to look past these constraints to access the India opportunity, a policy tolerance for sustained currency depreciation further erodes returns, compounding the deterrent to long-term capital allocation.

Take the simple case of Indian public equities.

(This is only for representation)

For a global investor, returns are evaluated in dollar terms, not rupees. Once tax and currency depreciation are incorporated, headline returns compress sharply.

In fixed income, we have a 20% withholding tax on interest income. In infrastructure, certain investors have tax exemptions, but most are taxed.

Why should global investors accept this combination of tax drag and currency loss?

As a result, global capital has simply raised the return threshold it demands from India, both to offset tax frictions and to protect itself against expected currency weakness.

Since the reintroduction of capital gains tax in 2018, foreign portfolio investment in Indian equities has remained modest, cumulatively under $20 billion, despite India being a roughly $4 trillion market capitalisation and GDP economy.

The explanation is straightforward. Global investors do not look at rupee returns in isolation. They assess post-tax returns in dollar terms. A 5% annual rupee depreciation assumption materially erodes what may otherwise appear to be attractive local-market gains.

OECD nations follow residence based taxation. India needs to do the same and scrap capital gains tax on foreign investors.

If capital gains were to be scrapped to reduce the tax burden and a policy signal is sent to prioritise global capital over global trade, the required return on India allocations could fall by 3–4%.

In global investing, that is a meaningful shift. An improvement of 3–4% in expected annual returns can alter capital allocation decisions at scale and, over time, mean the difference between marginal flows and hundreds of billions of dollars in investment.

For an economy with India’s financing needs, this is not a secondary issue. It goes to the heart of whether policy intends to privilege export competitiveness through a weaker currency or attract long-term foreign capital through more stable returns.

* The views and opinions expressed in this article are personal and should not be construed to be those of Q India (UK) Ltd. 
]]> https://www.basispointinsight.com/Story/rupee-policy-must-shift-focus-from-trade-to-capital-flows_d8a1c366d5e0.html Thu, 26 Mar 2026 15:31:00 GMT Arvind Chari, Chief Investment Strategist at Q India (UK) Ltd, brings over two decades of experience in Indian macro and markets. He advises global investors across asset classes.

As India prepares for the upcoming 14th Ministerial Conference in Cameroon, the Joint Statement Initiatives at the WTO will take centre stage. These are plurilateral agreements currently in discussion, where all 164 WTO member countries need not join. Consensus of all member countries is not required. These club-like arrangements if accepted, will mark a fundamental shift in how and what trade rules will be set at WTO in coming years.  The US has put its full weight behind plurilaterals, which the EU backs and promotes.

India has opposed all such plurilaterals and does not participate in any of the ongoing negotiations. India must wargame the emergent WTO as it is being pushed into uncharted territory, and take clear-eyed decisions in self-interest.

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There is a reason concentration is so often mistaken for strength. It produces visible winners, clear hierarchies and the appearance of control. In politics, it offers decisiveness. In markets, it promises efficiency. In business, it rewards those who master scale before others can respond.

Yet concentrated systems carry a deeper vulnerability. They reduce the number of buffers available when stress arrives. The more power, capital and strategic capacity gather around a few dominant nodes, the greater the damage when one of those nodes falters. The modern world has not merely become riskier. It has become more tightly organised around fewer centres of gravity.

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The government has retained the medium-term inflation target at 4% for another five years with a tolerance band of 2% on either side, the finance ministry said in a gazette notification on Wednesday.

The move was widely expected as the Reserve Bank of India’s discussion paper in August on the forthcoming review of its flexible inflation targeting framework hinted at continuation of 4% target.

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India’s cities are under immediate strain.

Commutes are getting longer, roads more crowded, and the bus—still the backbone of urban transport—has quietly become the slowest way to get anywhere. At the same time, we are placing a lot of faith in metro rail to fix this. It will help, no doubt. But it will not arrive everywhere, and certainly not in time.

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Christine Lagarde, President of the European Central Bank, has set out an interesting framework today for how central banks should respond to the current energy shock, one that is less about reacting to prices and more about managing how those shocks spread through the economy. While the macroeconomic context varies across jurisdictions, the principles she outlined offer a useful guide for policymakers, including those at the Reserve Bank of India.

The first is a diagnostic discipline in which policymakers must assess the nature, size, and persistence of the shock before acting. Monetary policy cannot bring down energy prices, but it must judge when higher costs risk spilling into broader inflation through wages, margins and expectations.

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In 1992, Pope John Paul II issued a declaration acknowledging that it was wrong for theologians of the Church to have condemned Galileo for his heliocentric theory in the 17^th century. On 17 March, World Bank chief economist Indermit Gill reprised this act of sanctification of what had been condemned as apostasy, when he admitted that the Bank had been wrong in dismissing the industrial policies that had worked the East Asian miracles as a special case, unworthy of emulation by the rest of developing world. He was explaining the rationale for a new World Bank report, Industrial Policy for Development: Approaches in the 21^st century.

Subject to conditions of macroeconomic management, fiscal and governance capacity, developing countries can make use of surgical, but never blunt or sweeping, policies of state intervention to boost growth, said the economist, with a liberal helping of hemming and hawing, not entirely unexpected in a case of unforced recantation of dogma.

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Indian investors have long treated gold as the ultimate anchor — an asset immune to financial engineering, policy errors, and market theatrics. It is, in many ways, the anti-finance asset. Which makes the rise of gold and silver ETFs both inevitable and faintly ironic by wrapping the most ancient store of value in the most modern financial structure.

The promise was simple. Buy an ETF, and you own gold, without the inconvenience of storage, purity concerns, or making charges. Liquidity and price efficiency would do the rest. Except, in India, they often don’t.

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The West Asia crisis appears to be at a turning point, with early signs of de-escalation easing some pressure on crude oil prices. Even so, uncertainty around the extent of damage to oil and gas infrastructure suggests that supply normalisation may take time. The episode combines elements of both a price shock and a quantity shock, affecting not only energy imports but also chemicals and metals.

In such a setting, the central question is not the immediate adequacy of India’s external buffers, but how they evolve if disruptions persist. A sustained period of elevated crude prices, with the Indian basket averaging around $90 per barrel, would alter both the current account trajectory and the balance of payments dynamics.

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Indian equity benchmarks gained for a second consecutive session on Wednesday as prospects of a West Asia ceasefire pulled oil prices lower and eased concerns over growth in the world's third-largest crude importer. The Nifty50 rose 1.72% or 392.70 points to 23,306.45, while the BSE Sensex added 1.63% or 1,205 points to 75,273.45, taking the two-session recovery to 3.5%.

Global markets reacted positively to US President Trump's comments on Tuesday that Washington was making progress toward ending the war, though Iran's military stated no talks had taken place, keeping the situation fluid.

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For LG Electronics India, the April–June cooling season is the year’s most important revenue event. The company sells roughly a third of its air conditioners in that window. This year, with margins compressed and the first three quarters of 2025-26 delivering a 2.2% revenue decline, that quarter is carrying extra weight. Although March has thrown in an unwelcome wrinkle, January and February have already shown year-on-year improvement.

India’s largest room air conditioner brand by premium market share enters the season with normalised channel inventory, a 7–10% price hike already landed in January, and a management team that spent the better part of a recent plant visit in Pune telling analysts there is nothing to worry about.

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India wants to become a manufacturing powerhouse and an alternative to China. The political will is visible. The Make in India slogan did fire ambition. But the result: India’s share of manufacturing in GDP has fallen from 18% in 1979 to 13% in 2024, according to the World Bank. According to DGFASLI data, the number of working factories in 2005 was a little over 233,000. By 2013, and the count had grown to 292,010, a level at which it has broadly stagnated over the next decade. Employment in factories presents a slightly better picture, having grown from 10.6 million to 20 million, at a rate of 3.6% annually, but far below the nominal GDP growth rate of 10-12% over the same period. 

EPFO’s data presents an interesting picture. EPF contributing establishments have more than doubled to 767,000 over the last decade. EPF contributing members have reached 80 million, of which factory workers are only about 20 million — 25%. The number of non-manufacturing establishments is nearly twice the number of working factories. The formalisation story India is telling is overwhelmingly a services story, not a manufacturing story. The factory economy is, in fact, falling behind. These performance metrics exhibit a structural misalignment between manufacturing ambition and policymaking. They also show that industries thrive when government intervention is minimal: hence software and services went on to become our pride.

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US President Donald Trump said on Monday that Iran was interested in peace talks, adding that officials from both sides had held “very good and productive conversations” to end hostilities in the Middle East.

Iran denied the claim immediately, calling it “fake news” and a manoeuvre either to steady markets or to buy time ahead of further escalation. Nonetheless, markets around the world cheered the development, hoping that recent efforts by countries like Egypt, Turkey, and Pakistan to broker peace might pay off.

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The original articles of agreement of July 22, 1945, establishing the IMF enjoined it inter alia to promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive depreciation. Article IV, which is currently the raison d’être of the IMF’s surveillance of members, empowered the IMF in those halcyon post-World War II days with oversight of the Bretton Woods par values that determined the panoply of fixed exchange rates of the world in those times in terms of parity with the gold content of the US dollar ($35 per troy ounce). The IMF prescribed margins around par values for the purchase and sale of gold and bands for exchange rates. Members were obliged to collaborate with the IMF to fulfil its mandate: exchange stability.

That fundamental purpose of the IMF remains in letter to the present day. But much water has flown under the bridge. When the US repudiated gold convertibility of the US dollar in 1971, the IMF underwent an existential crisis. It lost its main moorings.

At a press conference at its headquarters in March 1978, when the watershed second amendment to its articles of agreement was fully ratified, an IMF official offered a brave face-saver of what the amendment meant for the institution: “It makes possible…a virtually full range of free choice for members as to the exchange rate system they will adopt. But it also gives the Fund powers of surveillance over the conduct of exchange rate policies by its members.” This translated into a world in which each member country would conduct an exchange rate policy of its choice consistent with exchange rate stability, maintaining orderliness in exchange rate arrangements and avoiding competitive depreciation. If the RBI’s conduct of exchange rate management today is evaluated against this precept, all the boxes would be ticked. Stability is the operative term. 

With regard to the definition of exchange rate arrangement, the IMF official clarified in the same press conference: “It is, of course, flexible; there is no precise formulation in the Articles.” With regard to the IMF’s surveillance, each member is required to notify the exchange arrangement it intends to apply in fulfilment of these obligations and any changes therein. This is referred to by the IMF as the de jure exchange rate arrangement of the member.

More recently, from 2009 and more virulently since 2020, the IMF staff has started labelling a member country’s exchange rate arrangement retroactively under a de facto classification based on “a backward-looking” approach that relies on past exchange rate movement and historical data from the first day of the year in which the decision of reclassification takes place, usually the past six months. According to the IMF’s annual report on exchange arrangements and exchange restrictions, the de facto classification is based on the analysis by its staff. It is not explicitly provided for in its Articles of Agreement and may differ from countries’ officially announced de jure arrangements.

So, is this a violation by overreach of the IMF’s surveillance function? What purpose does it serve? It has serious implications for exchange rate stability. By labelling mostly emerging and developing economies, and moving within a couple of years in labelling from managed float to stabilised arrangement to crawl-like arrangements in India’s case, it appears to be undermining the stability of the rupee, contrary to the fundamental purpose of the IMF. Labels, especially from the watchdog, are a succulent invitation to speculators to attack. There is already anecdotal evidence that since this labelling began, carry trade relating to the rupee has increased.

The Freudian slip of the IMF shows up in its India Article IV consultation report. Its real grouse is about the use of foreign exchange interventions, despite the fact that its 2012 Integrated Policy Framework recognises interventions as a legitimate part of the policy toolkit. In a world of large global spillovers, there cannot be any hierarchy or pecking order of policies to protect national macroeconomic stability.

In the face of destabilising forces, no policy instrument can be off the table or lined up in descending order of priority. Should India wait for conditions to turn dire before intervening? Really? The IMF’s own working paper on the Integrated Policy Framework and India concludes that the RBI has been intervening to cushion the impact of external shocks, smooth market volatility, preclude the emergence of disorderly market conditions and opportunistically replenish its reserves. The IMF’s schizophrenic view in the India Article IV report that exchange rate flexibility would absorb external shocks, reduce the need for costly reserve accumulation, encourage market development, strengthen incentives to hedge currency risk and help moderate liquidity fluctuations in the domestic financial system is a recipe for a currency crisis.

The IMF’s inability to call out the US dollar is glaring in contrast, in spite of well-telegraphed instances of engineered depreciations in the past, right up to the current tariff tirade. As stated earlier, the IMF’s perverse labelling actions stand out in the face of the US Treasury removing India from the currency manipulation watchlist and India’s stated position published in the IMF’s Article IV Consultations report that “the INR/USD exchange rate has been market determined without the targeting of any particular level…exchange rate movements largely reflected India’s favourable fundamentals, with interventions, if and when undertaken, aimed at containing excessive volatility.”

In the interests of market sensitivities, therefore, India should seriously consider withholding permission to the publication of backward-looking and short-horizon analyses by the IMF’s staff as opposed to the de jure positions required to be reported by member countries to the IMF in accordance with Article VIII of its Articles of Agreement. It is pertinent to note that the IMF’s biggest member in terms of voting power, the US, did not allow the publication of its Article IV consultations report till 2000. China, the second biggest member, did not allow the publication of its 2009 report and often held back publication in earlier years. In fact, no Article IV reviews were conducted in 2007 and 2008. End

This article is Part V of a six-part series on exchange-rate policy and financial stability by Dr Michael Debabrata Patra.

Part I set out the competing narratives on the rupee and the case for exchange-rate stability. Click here.
Part II examined why floating exchange rates have often amplified crises in emerging economies. Click here.
Part III examined how volatile capital flows, rather than trade fundamentals, now dominate currency movements and shape central bank behaviour. Click here.
Part IV set out a proposal for strengthening the RBI’s foreign exchange intervention toolkit and reserve strategy. Click here.

Part VI will bring the argument full circle, asking what India’s fundamentals imply for the rupee, stability and policy credibility in an uncertain world.
]]> https://www.basispointinsight.com/Story/quo-vadis-the-imf--_ce6fe1472bff.html Wed, 25 Mar 2026 05:08:00 GMT Michael Patra is an economist, a career central banker, and a former RBI Deputy Governor who led monetary policy and helped shape India’s inflation targeting framework.

GLOBAL MOOD: Risk-On
Drivers: Iran War De-escalation, Oil below $100

Asia-Pacific markets opened in a clear risk-on mood on Wednesday, supported by signs of possible de-escalation in the Middle East after Donald Trump said the United States and Iran were in negotiations.

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United States President Donald Trump today spoke with Prime Minister Narendra Modi on the evolving situation in West Asia, with a particular focus on keeping the Strait of Hormuz open, US Ambassador to India Sergio Gor said in a social media post.

“President Donald Trump just spoke with Prime Minister Modi. They discussed the ongoing situation in the Middle East, including the importance of keeping the Strait of Hormuz open,” Gor said in a post on X.

The call comes amid intensifying geopolitical tensions involving the US, Israel and Iran, with the conflict now entering its fourth week and increasingly disrupting global energy flows and trade routes.

"Received a call from President Trump and had a useful exchange of views on the situation in West Asia. India supports de-escalation and restoration of peace at the earliest. Ensuring that the Strait of Hormuz remains open, secure and accessible is essential for the whole world. We agreed to stay in touch regarding efforts towards peace and stability,"  Modi posted on X.

Earlier in the day, Modi, addressing the Rajya Sabha, said India was in continuous touch with global stakeholders, including the US, Iran, Israel and Gulf countries, to push for de-escalation and ensure the reopening of critical maritime corridors. He emphasised that attacks on commercial shipping and obstruction of international waterways such as the Strait of Hormuz were unacceptable, and reiterated India’s position in favour of dialogue and diplomacy.

The Prime Minister said the crisis could have prolonged economic consequences globally.

The Strait of Hormuz, through which a significant share of global oil, gas and fertiliser supplies transit, has emerged as a key pressure point in the conflict. Shipping disruptions in the region have already strained energy supply chains, raising concerns over inflation, trade flows and financial stability for import-dependent economies such as India.

The Prime Minister said the ongoing war has precipitated a severe global energy crisis with direct implications for India’s trade routes and supplies of essential commodities, including petrol, diesel, gas and fertilisers.

Modi said the government has been working to ensure continuity of energy supplies despite disruptions. He noted that India has diversified its energy imports over the past decade, expanding sourcing from 27 countries to 41, while also building strategic petroleum reserves exceeding 5.3 million tonnes, with plans to increase capacity further.

He also highlighted efforts to secure alternative supply routes and maintain steady inflows of crude oil, LPG and fertilisers through diplomatic engagement. “Ships carrying oil and gas from multiple sources have reached India in recent days, and efforts to ensure uninterrupted supply will continue,” he said.

The Prime Minister said the crisis could have prolonged economic consequences globally.
]]> https://www.basispointinsight.com/Story/trump-speaks-with-modi-on-west-asia--strait-of-hormuz_35d4c07a4d94.html Tue, 24 Mar 2026 13:34:00 GMT

The global economy is once again being shaped by conflict, with crude oil prices firming, capital flows turning selective, and dollar liquidity tightening. For India, these pressures do not yet constitute a crisis, but they do alter the operating environment. 

The rupee must absorb a steady external adjustment, bond markets are being asked to digest persistent supply, and monetary policy must navigate the familiar tension between inflation risks and currency stability. In such a setting, policy space becomes narrower, more constrained and contested, and more dependent on how existing instruments are deployed.

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Equity share indices ended sharply higher on the day, holding on to strong opening gains and signalling firm risk appetite across segments. The Sensex surged 1,372 points to close at 74,068, while the Nifty 50 climbed 400 points to 22,912, with both indices gaining close to 2%. Market breadth remained firmly positive, with the NSE advance–decline ratio at around 3:1.

Broader markets outperformed the frontline indices, underlining the strength of the rally. The mid-cap index jumped 1,369 points to 54,087, while the Nifty Bank index rose 1,168 points to 52,606, supported by buying in large financial stocks.

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Glenmark Pharmaceuticals has launched GLIPIQ, a semaglutide-based therapy for Type 2 diabetes management in India, positioning it as a more affordable entry point into the GLP-1 treatment segment, the company said in a press release. 

The company said high costs and complexity often delay adoption of injectable therapies. With GLIPIQ, it is looking to enable earlier treatment initiation across a wider patient base by lowering entry barriers.

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Elevated risks of wider energy supply disruptions from a prolonged Iran conflict are prompting a reset of India’s macro realities. The baseline now shifts to a more realistic, yet manageable, Brent average of $80 per barrel, with higher pressure in the first quarter. Accordingly, growth estimate is trimmed by 40 basis point to 6.6% for 2026-27, while inflation raised by 30 bps and the current account deficit by 40 bps to 4.3% and 1.7%, respectively.

A more adverse terms-of-trade shock, with Brent crude above $100 per barrel, could push the current account deficit beyond 2.5% of GDP and drive a balance of payments deficit of about $85 billion. The eventual growth, inflation and fiscal impact will largely hinge on how a sustained crude shock is distributed between oil marketing companies, the government and end consumers. With under-recoveries already exceeding about ₹3 trillion at current prices, the burden is likely to fall disproportionately on the government, implying a minimum fiscal cost of about 0.5% of GDP.

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If seven batsmen fall without many runs, the eighth will not save the team by swinging blindly; likewise, if $700 billion fails, $1 trillion will not succeed without a strategy. The absolute size of foreign exchange reserves alone cannot guarantee stability. What ultimately matters is credibility, communication, and reputation.

In recent times, there has been a perception that macroeconomic challenges can be addressed simply by continuously building foreign exchange reserves. At times, in emerging market economies, foreign exchange reserves have been treated as a de facto monetary anchor and increasingly used as a fiscal buffer. They are also, at times, deployed to mask underlying structural weaknesses, whether to resist currency appreciation or to slow depreciation.

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The temptation in markets is always to trade the headline.

In the current Middle East conflict, that headline has been shaped by political signalling, most recently through claims of a ceasefire. Yet for oil markets, and for economies such as India, the relevant question is not whether hostilities pause briefly. It is whether energy flows normalise.

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Tariffs are lifting Camlin Fine Sciences currently, but the company is quietly trying to become a very different business. The market appears to be pricing both stories at the same time. The reduction in US import duties on Indian vanillin from 50% to 25% has improved near-term realisations from approximately $12.50 per kg to roughly $14.50 in October-December. That is a significant improvement, but contingent on trade policy that has already moved twice in twelve months.

To understand the company properly, it helps to see what its products are and where they fit in. Camlin operates inside a segment of global food supply chains that attracts little investor attention despite being structurally indispensable in the food business.

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The gap between how fast financial innovation moves and how fast regulators can respond is widening. If supervisory technology — SupTech — does not keep pace with the digital transformation of finance, the tail will continue to wag the dog.

The risks of allowing that gap to grow were dramatically illustrated by the collapse of “Synapse”^[1], arguably the most disruptive event in the short history of FinTech. 

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Precious metals enjoyed a stellar run in 2025, with gold reaching a record high price of $4,550 a troy ounce at the end of the year, reflecting a meteoric 65 % price gain during the year, a spectacular performance by any reckoning.

Silver outperformed with price rising as much as 148%, the strongest annual increase since 1979. Not to be left behind, platinum rose 127%, the strongest rise since trading started in 1987, to reach $2490/oz, while palladium increased 77%, the strongest annual gain in 15 years, to trade at a 3-year high of just under $2000/oz.

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Banking regulators have been circling the same question since the 2008 financial crisis: how do you contain the risks posed by very large banks without throttling the system they underpin?

At the heart of this dilemma sit global systemically important banks, or G-SIBs. The choice is not new. Do you cut the largest down to size, or raise the rest to match them? Bismarck chose the latter, building systems that elevated the base. Marx argued for the opposite. Banking regulation now finds itself replaying that argument, with capital ratios instead of class.

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The rupee once again finds itself at the centre of a global shock. Over the past 18 months, it has had to absorb a succession of external headwinds, from tariff risks to AI-driven uncertainties. Now an energy-supply shock threatens to reprice India’s external balances and trigger a rotation in global portfolios—from oil importers towards oil exporters and safe-haven assets.

Since early 2025, the rupee has weakened by around 9%, with almost 3% of that move packed into the last few weeks. We are not unique: the rupee’s path broadly tracks other net oil importers such as the Korean won, Thai baht and Japanese yen. The common thread is higher crude and a stronger dollar.

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GLOBAL MOOD: Cautiously Risk-On
Drivers: Iran War De-escalation, EU–Australia trade deal, Oil below $100

Asian markets surged on Tuesday, reflecting a clear risk-on shift after signs of possible de-escalation in the Middle East conflict eased energy worries. Investor sentiment improved after the US delayed planned strikes on Iran’s energy facilities, triggering a sharp fall in oil prices and supporting regional equities.

Broader Asia-Pacific markets rose as traders priced in a reduced risk of supply disruptions. However, caution persists after Iran denied any talks with Washington, suggesting the improvement in sentiment may remain fragile.

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“The PMLA is a potent weapon. But like any weapon, if it is overused, it will lose its potency”

— Supreme Court judge Justice Ujjwal Bhuyan in a panel discussion on role of judiciary in Viksit Bharat

Indian Courts Begin to See the Impact of West Asia Crisis
It is not a new phenomenon anymore to see Indian courts flooded with petitions and lawsuits by the citizens and various groups for enforcement of their rights the moment there is a disturbance in status quo of any kind. The disruption to LPG supply in India because of the deteriorating geopolitical conditions in West Asia after US and Israel’s military offence in Iran is no exception to this rule.

Last week, various high courts, which are constitutional courts, dealt with different aspects of the reduced LPG supply, particularly for commercial use, in India. While one court disposed of the matter noting the government’s undertaking that it is taking all the necessary steps to assuage the situation, there were two others that proceeded with either passing orders or seeking government’s reply on the issues which are fundamentally administrative or under policy domain. 

This trend, however, is not new where the courts become the platform where distressed citizens seek executive action, accountability and of institutional redressal essentially for matters where the government has failed to arrest impact from trickling down. 

It’s not novel anymore for the courts to have to, on occasion, step in to fill gaps left by the policymakers that have immediate impact on the lives and livelihoods of the people. These systemic gaps in governance and policy will have to be addressed by someone after all and when the elected government shuts itself from public grievance, it’s the judiciary that provides that much needed institutional access. 

Key Rulings:

• Supreme Court holds that Air Force group insurance society is considered “state” under Article 12 of the Constitution of India
  

Courts: 

• CJI Surya Kant recuses himself from hearing a case concerning appointment of Election Commissioner
  

• Delhi High Court quashes look out circulars issued against media persons Dr. Pronnoy Roy and Radhika Roy
  

• Madras High Court directs arrest of a Panama-flagged ship MV Zhong Pengi You Yi at the Chennai port on a plea alleging that the owner of the vessel owes 2.6 million dollars to a Russian company for breaching a time charter agreement
  

• Supreme Court rejects a petition seeking probe into Reliance Industries’ Vantara over its wildlife imports
  

• Indian men’s cricket team coach Gautam Gambhir moves Delhi High Court for protection of his personality rights; Bombay High Court protects such rights of actor Shilpa Shetty and directs for taking down of her deepfake content
  

• Delhi High Court rejects plea by SpiceJet seeking attachment of assets of MD Ajay Singh instead of deposit of 14.4 billion rupees
  

•  A nine-judge constitution bench of the Supreme Court reserves its order on the issue of definition of “industry”
  

• Kerala High Court refuses to entertain a petition against BCCI challenging the use of name ‘Indian Premier League’  
  

• Andhra Pradesh High Court bars Confidence Petroleum from selling LPG to foreign markets in the wake of gas crisis in India at the back of the ongoing conflict in West Asia
  

• Karnataka High Court seeks response from the Centre and state governments on a petition by Bangalore Hotel Association seeking uninterrupted LPG supple to hotel and restaurant establishments
  

• The Nagpur bench of the Bombay High Court disposed of a petition relating to supply of LPG to dealerships after the centre assured the court that all possible steps are being taken
  

• Supreme Court upholds SEBI’s approval for WeWork’s IPO
  

Quasi Courts:

• Allahabad bench of the NCLT approves Adani’s resolution plan for Jaiprakash Associates, rejects objections raised by Vedanta
  

• Competition Commission of India rejects complaint against Rapido taxi aggregator service over use of private bikes 
  

Others:

• Government sets up a panel consisting former Attorney General for India KK Venugopal and retired Supreme Court judges Indu Malhotra and Aniruddha Bose to re-draft a chapter on judiciary for NCERT books
  

The Big Listings:

• Mar 23: Supreme Court to hear WhatsApp, Meta and CCI appeals in data sharing policy case 
  

• Mar 23: Supreme Court to hear PIL petition seeking tighter probe into Anil Ambani’s fraud allegations
  

• March 23: NCLAT to hear Vedanta’s appeal against approval for Adani’s resolution plan for Jaiprakash Associates
  

• Apr 7: Supreme Court constitution bench to hear Sabarimala temple reference case
  

• Apr 8: Delhi High Court to hear Indigo’s petition seeking 9 billion rupees in refund from customs over re-imports
  

• Apr 17: Securities Appellate Tribunal to hear appeal by Jane Street challenging SEBI’s move to allegedly refuse access to important documents to the firm in the case against it
  

• May 5: Supreme Court to hear challenge to Citizenship Amendment Act
  

• Jul 15: Delhi High Court to hear Apple Inc.’s plea against India’s competition law’s provisions on global turnover-based penalties on MNC
  

* The dates of hearing can change and a concrete list is prepared just a day before

Legal Moves: 

• Madhav Uppuluri moves on as Tata Motors General Counsel to join TCS
  

• Abhijeet Shinde made Head of legal at Muthoot group
  

• Vijayalakshmi Natarajan joins Lloyds Technology Centre as General Counsel
  

• Arijit Tiwari joins Ashurst as partner in Singapore
  

• Pranav Kumar Singh rejoins HSA Advocates and Partners
  

India’s economic vulnerability has often been framed in terms of fiscal limits, inflation risks, or external balances. The events unfolding around the Strait of Hormuz suggest a different, more structural constraint is now coming into focus, one that sits outside the traditional toolkit of macroeconomic management. 

Energy access, not just energy prices, is emerging as the defining variable.

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Gold’s rise has invited a familiar explanation: that investors are seeking safety amid geopolitical tension and monetary uncertainty. That story feels intuitive, yet it is incomplete. Gold rarely moves in isolation, and reading its trajectory without reference to crude oil risks missing what the market is actually pricing.

A simple, time-tested lens, the gold–oil ratio, offers a more grounded way to interpret this move. By comparing the price of one troy ounce of gold with that of a barrel of crude, the ratio acts less as a timing tool and more as a barometer of the macro regime investors believe they are in.

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Owning nearly 85% of a bank while behaving like a dispersed minority reflects an ownership structure that the market continues to misprice.

A resignation that hinted at ethical concerns erased roughly $7 billion in market value in a single session, only for the concerns to be withdrawn. That loss was borne by institutional investors who own the bank but did not prevent the episode. Foreign investors hold about 47.7%, domestic mutual funds 26.7%, insurance companies 7.2% and pension funds another 2.5% in a structure without a promoter. Control, in this case, is widely held but weakly exercised.

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Indian equity benchmarks slumped sharply on Monday, with the Nifty 50 and Sensex slipping into oversold territory as the West Asia conflict kept oil prices elevated and raised serious concerns over global growth. The Nifty50 fell 2.60% or 601.85 points to 22,512.65, while the BSE Sensex lost 2.46% or 1,836.57 points to 72,696.39, taking cumulative losses since the Iran war began on 28 February to 10.6% for both indices.

The combined market capitalisation of BSE-listed companies declined ₹14 trillion to ₹414.76 trillion. India VIX surged 17.17% to close at 26.73, touching an intraday high of 27.17, its highest level since early June 2024 reflecting the extreme anxiety gripping markets. Brent crude rose 2.37% to $108.73 per barrel on the Intercontinental Exchange after US President Trump warned he would obliterate Iran's power plants if the Strait of Hormuz was not reopened within 48 hours, with Iran retaliating by threatening to strike energy infrastructure across the region.

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US President Donald Trump has instructed the Pentagon to postpone military strikes against Iranian power plants and energy infrastructure for five days, signalling a possible diplomatic pause in a conflict that has escalated sharply in recent weeks, according to a post on Truth Social platform.

Trump said the United States and Iran had held “very good and productive conversations” over the past two days aimed at achieving a “complete and total resolution of our hostilities in the Middle East.” He added that the decision to delay the strikes was based on the “tenor and tone” of the ongoing discussions, which he said would continue throughout the week.

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As 2025-26 draws to a close, Nifty-500 companies, ex-BFSI, are sitting on roughly ₹16 trillion, or $175 billion, in surplus cash. That is close to the government’s annual borrowing programme and broadly in line with GST collections over nine months. What stands out is not just the scale, but the pace. Cash has accumulated faster than revenue.

Boards are left with a familiar problem and no clean solution. Holding cash drags return ratios. Deploying it into marginal projects risks eroding value. Dividends reset expectations that are hard to reverse. Buybacks alter ownership and reward those who exit. Preference shares come with tax friction. The standard toolkit works, but imprecisely.

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Lupin Manufacturing Solutions, a subsidiary of Lupin, has announced a strategic expansion of its manufacturing facility at Dabhasa, India, aimed at strengthening its CRDMO capabilities and scaling its peptide platform, the company said in a press release.

The expansion includes a new block to enhance existing infrastructure, along with additional specialised units and increased peptide manufacturing capacity, the release said. The company said the upgrade will support advanced development and flexible manufacturing, catering to complex therapeutics and rising global demand.

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It is tempting, in moments such as these, to reduce events to personality. Institutions rarely fail because of one person, but because structures that worked in one era quietly stop working in the next, and nobody notices until someone resigns.

A chairman’s exit at a private bank rarely disrupts business continuity. These organisations are designed to absorb change at the top. The balance sheet remains intact, operations proceed, and the market moves on. What tends to be overlooked is how such episodes unfold, and what they reveal about the way authority is exercised within the institution.

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Wars do not merely redraw borders; they reshape economic realities. The current geopolitical tensions, stretching energy markets, disrupting supply chains, and reinforcing a structurally stronger dollar, have done what crises invariably do: stripping away policy comfort and exposing underlying trade-offs. For India, the question is no longer whether adjustment is needed, but where it will be absorbed.

So far, the answer is increasingly clear. The adjustment is being outsourced to the rupee.

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Varun Beverages has completed the acquisition of 100% stake in South Africa-based Twizza Proprietary Limited through its subsidiary, The Beverage Company Proprietary Limited.

The company said the deal was executed at an enterprise value of ZAR 2,053.0 million, equivalent to ₹11.4 billion after adjustments. With this, Twizza has become a step-down subsidiary of Varun Beverages effective March 18.

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United Breweries Ltd has received environmental clearance for its proposed greenfield brewery project in Uttar Pradesh, the company said in a press release.

The company said the brewery will be set up at an industrial manufacturing and logistics cluster in Unnao, with a proposed capacity of 1.3 million hectolitres per annum.

India’s climate debate often begins with a familiar diagnosis: weak implementation, fragmented institutions, and limited state capacity. It is an intuitively appealing explanation. But it is also incomplete—and, in some ways, misleading.

Across sectors, the Indian state demonstrates the ability to design and execute complex programmes—whether in renewable energy expansion, disaster response, or infrastructure development. Yet when it comes to climate outcomes, these efforts often fail to add up. The problem is not that institutions do not act. It is that they act in ways that do not cohere.

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The fourth week of the Iran conflict has pushed crude oil prices higher and drawn predictable attention to Brent, yet that framing misses the more important shift underway, as this is not simply an oil price shock but a breakdown in the idea of a single global price.

Energy markets are beginning to fragment, with prices no longer set by a common equilibrium but by access, logistics and security, and the Strait of Hormuz emerging as the dividing line, where what can move through it, and what cannot, now shapes price formation as much as supply and demand. 

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A recent media report that the Reserve Bank of India is not considering any proposal to cap the tenure of top management in non-banking financial companies has reopened a question that the country will eventually have to confront with greater seriousness than our stock markets may prefer.

The immediate relief visible in certain NBFC counters may have satisfied their investors and PR punters for the time being. It does not resolve the underlying prudential question. On the contrary, it brings into sharper focus a governance asymmetry that is becoming harder to defend as India’s largest NBFCs acquire scale, reach and systemic relevance.

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Dear Insighter,

I’ve been thinking about 1Q84 again. I read it in junior college, far too young to fully understand what Murakami was doing, but completely unable to stop. Three volumes, a thousand pages, and somewhere in the middle of it, a second moon just… appears. Nobody explains it or pauses. The world looks the same. It just isn’t.

And it’s not just that. There’s a cult that may or may not be real, characters who seem to slip between timelines, and this constant sense that you’re only seeing part of what’s actually happening.

What I’d forgotten is how much of the book is really about belief. About the kinds of worlds people build for themselves, and the kinds of things they choose to follow.

You see versions of that everywhere now. A film franchise like Dhurandhar pulling people into theatres for four hours in a world supposedly addicted to 30-second clips. Entire communities forming around it, arguing over plotlines, rewatching, turning it into something larger than just a film.

Or something like the BTS homecoming in Seoul — people flying in from across the world for a free concert, learning the chants, the lyrics, the rituals. It starts to look less like fandom and more like participation in something shared and constructed. A kind of collective escape that people willingly step into.

And maybe that’s the point. Because outside of these pockets, the world feels like it’s coming apart in slower, harder-to-process ways. The US–Iran conflict was supposed to be over in a matter of hours, if you went by Donald Trump’s rhetoric. It’s now dragging into its fourth week, reshaping energy markets, alliances, and expectations in ways that don’t quite have a clean narrative yet.

And I haven’t really gone back to Murakami since 1Q84. Not because I didn’t like it;  more because it left behind a feeling I never quite managed to place. Which is probably why it came back to me this week. Going through everything, there was this odd sense that the world hadn’t changed in any obvious way, and yet something about it felt slightly off.

The most obvious place to see this is in India’s statistical reset. The new GDP and CPI series are being framed as technical revisions, but they function more like a recalibration of reality. As Sameer Narang and D. Tripati Rao point out, nominal GDP for 2022–23 now stands at ₹261 trillion rather than ₹269 trillion, and by 2024–25 the gap widens further to ₹345 trillion versus ₹357 trillion. Growth wasn’t as strong as we thought, and the fiscal math wasn’t as comfortable either. The old CPI had its own blind spots — too much food, too much noise, not enough of how India actually spends now.

G. Chandrashekhar adds, even the current crop estimates may be running ahead of reality. The government is projecting a record harvest, but on-ground signals like rising temperatures across key states, and patchy yields suggest the number could come in meaningfully lower. If that plays out, the consequences show up quickly. Food prices, procurement, buffer stocks, all start to look tighter than the headline suggests.

That reset would have been manageable on its own. It’s landing at a time when the outside world is anything but. As Gaura Sen Gupta writes, this isn’t just an oil price spike, it’s a supply risk sitting right on top of it. Over 80% of Asia’s energy flows through Hormuz. And under the new CPI, energy suddenly matters more. Same shock, bigger impact. The crisis has not necessarily intensified, but the lens through which we view it has sharpened, and that alone changes the policy response.

This is where R. Gurumurthy’s analysis of the Budget becomes more interesting. His argument is not about arithmetic but about signalling. A framework that pairs fiscal consolidation optics with an expanded borrowing programme ends up satisfying neither those looking for growth nor those seeking discipline. In a context where foreign portfolio flows are uncertain, the rupee remains under pressure, and private consumption is uneven, the state finds itself carrying a disproportionate share of the growth burden. His suggestion that India could deploy RBI contingency reserves, ease capital gains taxation, and reduce borrowing is less about stimulus in the conventional sense and more about communicating intent to markets that are trying to gauge how flexible policy can be under stress.

Stepping back further, TK Arun situates this within a broader geopolitical realignment that will outlast any immediate conflict. The reshaping of West Asia, the consolidation of Israel’s position, and the diminishing counterweights in the region all point to a longer-term shift in the global energy and political architecture. India doesn’t have the luxury of treating this as just an inflation problem. The exposure runs deeper. And it sits alongside something we don’t talk about enough — R&D spending at 0.65% of GDP. That number doesn’t just lag peers. It tells you how thin the long-term buffer really is.

In the middle of this, the Reserve Bank of India is attempting to maintain a sense of continuity. Michael Debabrata Patra’s case for building reserves toward the $1 trillion mark is consistent with that approach, emphasising buffers and preparedness in a volatile environment. The rupee’s gradual depreciation is framed not as a failure but as a managed adjustment, with the central bank stepping in to prevent disorder rather than to resist fundamentals. Yet, as Gurumurthy argues in a separate context, the very mechanisms that deliver this stability may also be altering the way markets signal risk. If bond yields are as much designed as discovered, they stop being clean signals. And once that happens, everything priced off them carries a bit of that distortion.

The Yield Scribe piece gets at this in a sarcastic piece without saying it directly. Oil moves up, yields move down. Foreign investors exit, but nothing really breaks. Domestic money just… shows up. The index holds, even when the underlying pieces don’t quite line up. It’s funny when you read it. Slightly less funny when you sit with it. Because a market that absorbs everything smoothly also stops telling you where the stress actually is.

Rajesh Kumar pulls together MPI, SDG and food data and you realise how misleading the aggregate story can be. Bihar at 33.8% multidimensional poverty, Kerala and Goa below 1%. And it’s not really a welfare problem anymore. The transfers exist. What’s missing is the harder, slower stuff: schools that work, healthcare that holds up, local industry that actually compounds. We tend to talk about these states as laggards on the same curve. They’re not.

Akshi Chawla’s examination of the labour market adds another layer to this picture. While headline unemployment has moderated, women’s labour force participation remains significantly below global averages, pointing to a constraint that is both social and economic. For a country that talks endlessly about its demographic dividend, that gap isn’t a footnote.

Corporate India has its own version of this disconnect.

Take the HDFC Bank episode. A resignation letter hints at something, the stock reacts immediately, and even when the claims are walked back within a day, the damage doesn’t quite reverse. The signal travels faster than the correction. And once it’s out there, it tends to stick. As Krishnadevan V notes, reputational damage does not come with a reset button. And yet, the disruption itself never really escalated. As T. Bijoy Idicheriah writes, the episode was contained as quickly as it surfaced — helped in no small part by explicit RBI reassurance and the bank’s underlying operational stability.

Idicheriah observes in his piece on REPCO Bank, Indian finance already has its own version of this gap. An institution that isn’t legally a bank, but still gets to call itself one. A legacy exception that has survived even as regulation around it has tightened.

A different kind of identity question is playing out at Jaguar, writes Krishnadevan. The company’s decision to halt production, reposition itself as an all-electric brand, and target a new customer segment represents a strategic shift of unusual scale. With revenues declining sharply and profitability under pressure, the transition is being attempted from a position of vulnerability rather than strength. Given Jaguar’s significant contribution to Tata Motors’ passenger vehicle business, the stakes extend beyond a single brand and into the broader architecture of the group.

In other sectors, ambition is running up against balance sheet realities. India’s naval expansion plans are substantial, but the financial capacity of domestic shipyards remains limited relative to global peers.

At the same time, something quieter is happening on the capital side. Family offices are no longer a fringe idea. As Srinath Sridharan points out, they’ve moved from being loose pools of capital to something far more structured. The question isn’t whether they matter anymore. It’s how they’re run.

Further afield, Sharmila Chavaly’s analysis of post-war reconstruction offers a sobering counterpoint to the idea that capital can simply flow in to rebuild what conflict destroys. The gap between pledged and actual funding in countries like Syria highlights a deeper issue, where the focus on large, visible infrastructure projects often overlooks the less tangible elements that determine whether people return and rebuild their lives.

Arup Mitra’s examination of West Bengal provides a domestic parallel to this theme. Long stretches of political stability, across very different regimes, and yet the economy never quite found its engine. Not in industry, not in services. The drift isn’t dramatic, which is why it’s easy to miss.

Nothing looks broken in an obvious way. The data still comes out, policy still responds, markets still hold up. But if you spend enough time with it, there’s this faint sense that things aren’t lining up as neatly as they used to. Something about the sky feels different.

Until next time, maybe a fever dream is better than the crude reality.

Also Read:

Are We Facing an AI Nightmare? by Raghuram Rajan: AI-doom scenarios are going viral because there are no easy public-policy responses to the problem of large-scale but not universal technological unemployment.

Pessimistic Winner and Disciplined Hope by Kirti Tarang Pande: Prepare as if the world will break. Lead as if it won't. That single integration separates survivors from builders.

Papa, Don't Preach, Please Just Listen by Kalyani Srinath: Love, logic, and loud silences in today's parent-child equation—somewhere along the way, "I'm just saying this for your good" started sounding a lot like "I don't trust you."

America's Permanent Tariff Uncertainty Will Drive Up Costs by Pinelopi Koujianou G: The US Supreme Court's rejection of the Trump administration's legal justification for tariffs has created a patchwork of temporary measures that will introduce three additional costs.

Is the Private Credit Boom Going Bust? by Brian Judge: Since 2008, private credit has expanded into a $3.5 trillion industry, but as cracks begin to appear, the risks embedded in a system built on opaque valuations are becoming harder to ignore.
]]> https://www.basispointinsight.com/Story/when-optimism-replaces-policy-and-markets-stop-signalling_313b065e71e5.html Mon, 23 Mar 2026 02:32:00 GMT Phynix is a seasoned journalist who revels in playful, unconventional narration, blending quirky storytelling with measured, precise editing. Her work embodies a dual mastery of creative flair and steadfast rigor.

GLOBAL MOOD: Extreme Risk-Off
Drivers: Trump's 48-hour Hormuz ultimatum, Brent hits four-year high

 Asian markets tumbled on Monday, signalling a sharp risk-off mood as the Middle East conflict entered its fourth week and geopolitical tensions escalated dramatically.

Investor sentiment weakened after the US warned Iran it would target power plants if the Strait of Hormuz is not reopened, while Tehran threatened retaliation against regional energy infrastructure.

The heightened rhetoric pushed investors toward safety, triggering steep losses across Japan, South Korea and other regional markets. With the risk of prolonged energy disruptions rising, markets are increasingly pricing in higher oil prices and a deeper global growth shock.

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India’s wholesale price inflation rose to an 11-month high of 2.13% in February, driven by higher fuel and power costs as well as firm manufactured product prices. Inflation stood at 1.81% in January and 2.45% a year earlier. On a sequential basis, the Wholesale Price Index rose 0.3%, led by a 1.2% increase in fuel and power and a 0.5% increase in manufactured products. Food inflation edged up to a nine-month high of 1.85%, largely reflecting statistical effect of a low base.

Core WPI inflation inched up to 3.3% from 3.2% a month earlier.

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India’s financial system contains a few institutions that do not fit neatly into conventional categories. Few illustrate that better than REPCO Bank, an entity that carries the word “bank” in its name even though it is not, in legal terms, a bank.

Repatriates Co-operative Finance and Development Bank Ltd was established in 1969 to meet the financial needs of repatriates from Sri Lanka and Burma. It emerged from a specific historical context and was designed for a narrowly defined constituency.

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Indian equity benchmarks climbed on Friday as investors sought bargains following the previous session's sharp selloff, though gains were capped in the final hour after reports of fresh exchanges of strikes between Iran and Israel resurfaced energy supply worries. The Nifty50 rose 0.49% or 112.35 points to 23,114.50, while the BSE Sensex gained 0.44% or 325.72 points to 74,532.96, with both indices settling well off their day's highs as Brent crude prices spiked late in the session. The rupee breached the 93 per dollar mark for the first time, hitting a fresh all-time low, adding to the macroeconomic pressure on Asia's third-largest economy. Bloomberg reported that oil markets' seaborne buffer is declining rapidly due to the continued West Asia war, raising the prospect of a more severe supply crunch ahead.

Broader markets also pared a significant portion of intraday gains, with the Nifty Midcap 100 closing 0.67% higher and the Nifty SmallCap 100 edging up just 0.09%, while small-caps ended the week down 1.1% and mid-caps posted a marginal weekly gain of 0.2%. Among sectors, Nifty Pharma and Nifty PSU Bank were the top gainers, while Nifty Realty declined 1% to lead losses among peers, with Nifty Financial Services and Nifty Media also underperforming. The weekly scorecard remained deeply in the red for most segments of the market, with investors bracing for continued volatility as the West Asia conflict showed no meaningful signs of de-escalation heading into the weekend.

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United Breweries Ltd has received environmental clearance for its proposed greenfield brewery project in Uttar Pradesh, the company said in a press release.

The clearance has been granted by the State Environment Impact Assessment Authority under the Environmental Impact Assessment Notification, 2006, subject to certain conditions, the release mentioned.

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Zydus Lifesciences Ltd has entered into a licensing and supply agreement with Torrent Pharmaceuticals Ltd to co-market semaglutide injection in India, the company said in a press release.

Under the agreement, Zydus will manufacture and supply the product, while Torrent Pharma will have semi-exclusive rights to market it in India under the brand name Sembolic. Zydus will market the drug under its own brands Semaglyn, Mashema and Alterme, the release said.

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Alkem Laboratories Ltd has received the board’s approval to invest ₹5.3 Billion in Ujjain, Madhya Pradesh, to set up a greenfield formulations manufacturing facility, the company said in a press release

The company said the land, measuring about 30 acres, has been allotted by DMIC Vikram Udyogpuri Ltd in the industrial area at Ujjain and the investment will be undertaken in a phased manner.

The facility will be used for manufacturing formulations as part of the company’s expansion plans.

Manappuram Finance Ltd has received all required approvals from the Reserve Bank of India for Bain Capital to acquire joint control in the company and its subsidiaries, the company said in a press release to the exchanges.

The approvals cover indirect change in control and management of subsidiaries including Asirvad Micro Finance Ltd and Manappuram Home Finance Ltd, following the proposed investment by Bain Capital affiliates, the company said in its release.

The company said the approvals mark a key milestone for Bain Capital’s planned investment of about ₹43.85 billion in Manappuram Finance, along with the open offer under takeover regulations.

Manappuram Finance said it expects to complete the capital infusion by March 31, while the open offer will be executed as per regulatory timelines.

Upon completion and depending on open offer subscription, Bain Capital is expected to hold between 18.0% and 41.7% stake in the company on a fully diluted basis. Existing promoters are expected to hold about 28.9%.

The company said Bain Capital will be classified as a promoter and will jointly control the business along with existing promoters. The boards of Manappuram Finance and its key subsidiaries will also be reconstituted to include Bain Capital nominees.

Axis Bank Ltd’s board has approved a proposal to infuse ₹15 Billion into its wholly owned subsidiary, Axis Finance Ltd, through a rights issue, the company said in a press release.

The investment will be made in one or more tranches on or before March 31. The bank said the proposed capital infusion has received approval from the Reserve Bank of India, with the regulator’s clearance dated March 10.

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India's private hospital sector has spent the better part of a decade competing on expansion. New cities, new floors, new beds.

Apollo Hospitals Enterprise Ltd is making a different argument. The bet is that high-acuity medicine compounds faster than volume. The planned demerger of its pharmacy and digital health business will force investors to confront that argument directly.

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Israeli Prime Minister Benjamin Netanyahu has agreed to hold off further attacks on Iran’s energy infrastructure following an intervention from US President Donald Trump, marking the first visible sign of divergence in the US-Israel approach to the conflict.

“At the request of President Trump, Israel will hold off on any further attacks on the offshore gas field,” Netanyahu said, hours after Trump disclosed that he had urged restraint.

 “I told him, ‘Don’t do that’, and he won’t do that,” Trump said in a March 19 briefing.

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Atanu Chakraborty spent a distinguished career in the Indian Administrative Service, including as economic affairs secretary, working on India’s macroeconomic policy and financial sector architecture with institutional discipline and administrative depth. He would have known, better than most bureaucrats who have crossed over to boardrooms, that words spoken from positions of authority carry consequence, and timing carries even more. This makes his abrupt resignation as part-time chairman of HDFC Bank this week not just puzzling but also disruptive in impact.

Consider the sequence. He resigns with immediate effect. His letter, vague enough to insinuate, yet specific enough to trigger concern, speaks of "happenings and practices" over two years being incongruent with his "values and ethics."

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GLOBAL MOOD: Risk-Off
Drivers: Ras Laffan LNG hub struck, global central banks pivot to hikes, oil above $107

Asian markets mostly declined on Friday, reflecting a strong risk-off mood as the Iran war triggered fresh volatility across global assets. Investor sentiment weakened after Tehran struck Qatar’s largest gas facility, raising fears of prolonged disruption to global energy supplies. 

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Last night, HDFC Bank management was in an unenviable position after former bureaucrat Atanu Chakraborty resigned prematurely as part-time chairman with a letter that said little but left a lot to imagination.

But, within less than 12 hours of the disclosure that was sent to exchanges on Wednesday, the bank addressed investors and analysts over a call, and effectively said that Chakraborty had not provided any details on the reasons behind his sudden exit. It helped that the call was led by the interim chairman, Keki Mistry, in the presence of top management and also former Reserve Bank of India official Lily Vadera.

It is also clear that HDFC Bank was constantly engaged with the RBI throughout the period between the receipt of the letter dated March 17 from Chakraborty. By the time the bank made the disclosure, it had already received the RBI’s approval for Mistry to take charge as interim chairman for three months.

Noting the importance of HDFC Bank’s position as a large domestic systemically important bank, the RBI also issued a statement that explicitly states that “there are no material concerns on record as regards its conduct or governance”, while mentioning that it would continue to engage with the management. Such explicit regulatory signalling, especially for a systemically important bank, serves as a stabilising device for markets and limits the scope for governance concerns to morph into funding or confidence risks.

Chakraborty’s issues with the management have been an open secret, and Mistry alluded to it on the call briefly. Market commentary and industry conversations have highlighted friction over the chairman’s involvement in executive matters, including interactions with operational teams that fall outside the usual board remit.

The RBI’s rules are clear that while the board of directors is supreme, at an executive level, the buck stops with the executives of the bank, led by the managing director and chief executive officer. Tensions of this nature, between board oversight and executive autonomy, are not unusual, but they become material only when they impair decision-making or raise questions of governance failure.

There is little evidence of either at this stage.

Board Friction
It is clear that Chakraborty and the management have had a fallout.

Such divergences, while not uncommon, take on greater significance in banking when articulated through public communication that leaves room for interpretation. For Chakraborty to exit with vague comments such as “certain happenings and practices within the bank” over two years not being in “congruence with my personal values and ethics” is a communication choice that introduces avoidable ambiguity without establishing a case for governance lapses. Explaining his exit, Chakraborty has already spoken to television channel NDTV Profit and ruled out any wrongdoing at the bank, and instead said that his “ideologies” didn’t match with the organisation.

The timing of Chakraborty’s letter is also notable because the bank is set to take a view on whether to renominate its current managing director and chief executive officer, Sashidhar Jagdishan, for a new term. Not only Jagdishan, but it also has a spillover impact on other possible candidates for the top role, from within the bank, such as deputy managing director Kaizad Bharucha.

Over the last six years, Jagdishan has overseen the merger of the parent Housing Development Finance Corp with HDFC Bank, which was a mammoth exercise. He has also managed to prevent any untoward accidents after the exit of the founder chief executive, Aditya Puri, after a 26-year term.

It is important to remember that the same management team and board approved an extension for Chakraborty’s term as chairman of the bank two years ago, even though the differences were common knowledge. The absence of formal escalation through board or regulatory channels over this period weakens the case that the issues cited now amount to substantive governance concerns.

Mistry and Chakraborty’s subsequent statements make it clear that the issue may be more of a personal issue than one linked to corporate governance or any wrongdoing.

Even as the bank has been forced to go on the defensive and do damage control, Chakraborty’s statement led to the stock falling to a 52-week low.

It is notable that despite strong capitalisation and stable operating performance, investor reaction has been driven by uncertainty around leadership continuity and governance signalling rather than any deterioration in business metrics.

What markets will watch next is straightforward: clarity on leadership succession and the bank’s ability to deliver steady earnings without operational disruption. As long as these anchors hold, the episode is likely to remain contained rather than evolve into a broader confidence event. 
]]> https://www.basispointinsight.com/Story/hdfc-bank-chairman-exit---contained-disruption_3c8f89d95ef0.html Thu, 19 Mar 2026 12:46:52 GMT T. Bijoy Idicheriah is a senior central banking journalist and communications strategist with extensive experience analysing monetary policy, financial regulation and banking governance. He previously served as a consultant to the Reserve Bank of India.

Indian equity benchmarks slumped sharply on Thursday in their worst session since June 2024, as a governance shock at HDFC Bank and a dramatic surge in crude prices following fresh attacks on West Asia energy facilities wiped out all gains accumulated over the previous three sessions. The Nifty50 fell 2.89% to 23,002.15, while the BSE Sensex lost 2.87% to settle at 74,504.27, as sentiment collapsed through the session. India VIX surged 21.79% to settle at 22.80, its sharpest single-session spike in weeks, signalling that near-term uncertainty is likely to remain elevated. The catalyst for the crude surge was particularly alarming, brent crudespiked 11% to $119.50 per barrel during market hours after reports emerged that Saudi Arabia had halted oil loading at the port of Yanbu following drone strikes on Samref refineries and fires at several Aramco facilities, dramatically escalating the scope of the West Asia conflict beyond Iran.