Business

beyond-tariffs-how-ftas-are-reshaping-indias-premium-liquor-scene

Sat Mar 28 17:29:41 IST 2026

JAMES BOND WALKS into an upscale bar in Delhi and orders his signature drink. “Three measures of Gordon’s gin, one of vodka, half a measure of Kina Lillet,” he says. The martini arrives. He takes a sip. Perfect. Then comes the bill—and the price leaves him shaken, not stirred.

“Imported spirits, sir,” the bartender explains.

For decades, that explanation has defined India’s wine-and-spirits market. Import tariffs of around 150 per cent—along with state-level taxes, distribution fees and other levies—meant foreign labels like Gordon’s sold at three to four times the international price. That kept them firmly to the luxury market, turning Bond’s vesper martini into a prohibitively expensive indulgence.

Until a few years ago, this high tariff wall also shielded domestic distillers from serious competition. The result: cheap liquor dominated the market, while the development of an Indian palate for finer spirits remained limited.

This protectionist cocktail, however, is about to be decisively diluted.

The reason is India’s renewed affinity for free-trade agreements (FTAs). Since 2021, the country has signed eight such deals. Two of the most important agreements will begin to reshape the market this year.

Under the Comprehensive Economic and Trade Agreement signed with the UK last July, tariffs on British spirits will be significantly reduced starting this April. A similar trade pact with the European Union, concluded in January and expected to be implemented later this year, will ease duties on 95 per cent of traded goods, including European wine and spirits.

These agreements could usher in changes in the domestic market that go well beyond cheaper martinis.

Some domestic players—like Paul P. John, who owns the Paul John label of whiskies—are upbeat. “For Indian producers,” he said, “this is a chance to step up with confidence, and compete on merit rather than protection.” He told THE WEEK that the FTAs would “refine competition” rather than dilute it. “That ultimately benefits the consumer,” he said.

Mokksh Sani, who runs Mumbai’s largest premium liquor retail chain Living Liquidz believes the EU and the UK deals—along with the framework trade agreement with the US announced last month—could become “a structural turning point” for the domestic market. “Duty rationalisation, if implemented progressively, could make imported Scotch, European wines and American bourbons more accessible,” he said. “This would accelerate premiumisation and expand legal consumption channels.”

Premiumisation—the shift of consumers towards higher-quality, higher-priced products instead of cheaper mass-market ones—has already been a defining market trend. Industry reports show the overall alcoholic drinks market in India, which includes beer, wine, spirits and ready-to-drink beverages like seltzers and carbonated wine, grew 7 per cent in the first half of 2025. The premium segment grew faster, at 8 per cent.

Data from more than 60 Living Liquidz stores reflect this shift, says Sani. “We rely heavily on data analytics to identify micro-market trends early, whether it is the surge in agave spirits, craft gins, or evolving whisky preferences,” he said. “Premium whiskies continue to dominate, with consumers increasingly trading up for better blends and more refined profiles. In select stores, premium and super-premium categories now contribute upwards of 40 per cent of the overall revenue mix.”

One consequence of premiumisation is that Indian spirits have, in recent years, significantly improved their reputation in foreign markets. Terroir-led rums like Camikara have outperformed well-regarded Caribbean and Latin American labels, while single malts like Indri, Paul John and Amrut have been winning international awards and blind tastings.

With premium Indian labels continuing to capture a higher share of the domestic market—partly driven by pride in Indian products—market analysts believe the chances of FTA concessions eroding the gains by Indian spirits to be slim.

According to John, consumers are no longer choosing between Indian and imported spirits “in binary terms”. “They are building a repertoire,” he said. “Brands that are disciplined about quality, and honest about what they stand for, will continue to grow, regardless of origin.”

Indian labels have also been focusing intensely on differentiated and experiential offerings—from artisanal vodka to colour-changing gins.

Sanchit Agarwal and Nidhi Kedia, cofounders of Nisaki Gin—a rice-based craft gin whose botanical mix causes it to change colour depending on the pH value of mixers—said the FTAs would push domestic producers to “sharpen quality, scale and storytelling”. But they also see an opportunity in the growing global curiosity about modern Indian brands. “With the right positioning,” Agarwal said, “this is an opportunity to export not just products, but also creativity and craftsmanship.”

Kedia believes there is growing appetite in the UK, the EU and the US markets for “craft and origin-led” spirits. The FTAs, she said, make distribution partnerships abroad far more viable.

“The opportunity lies in access,” said Anand Virmani, cofounder and master distiller at Nao Spirits & Beverages, a craft-spirits startup known for gins such as Greater Than and Hapusa. He expects the FTAs to make it easier for Indian labels to enter markets like the UK and the US.

“Outside India, the premium spirits space is already crowded, so differentiation becomes critical,” he said. “That’s where Indian spirits have an advantage; we are bringing something genuinely new in terms of ingredients, flavour profiles and stories.”

That distinctiveness is drawing global attention. In a landmark deal last July, the world’s largest spirits company, Diageo, acquired a majority stake in Nao Spirits for Rs130 crore, adding the startup to its extensive portfolio of premium labels that includes brands such as Gordon’s.

Virmani said the partnership will help Nao scale up and navigate India’s notoriously complex alcohol market, where states and Union territories maintain their own excise policies governing taxation, licensing, production and distribution.

“Doing business across multiple states today means navigating very different rules, structures and processes in each one,” he said. “That adds complexity and slows growth for everyone in the industry.”

According to Paul John, this regulatory fragmentation could ultimately shape how FTA concessions play out in practice. “In this area,” he said, “the domestic brands have a strategic advantage, as legacy players and the new imported brands will have a long road to cover.”

Sani agrees that tariff cuts alone will not translate into cheaper bottles on store-shelves overnight. “Execution will depend heavily on state policies,” he said.

Sani also owns Cartel Bros, a company that imports spirits and launches them in the domestic market while also building Indian labels. “For companies like ours, which operate both in imports and domestic brand building, the FTAs present a dual opportunity,” he said. “While we distribute and retail international labels, we also strengthen Indian-origin brands like The Glenjourneys, The Glenwalk, and Shelter 6.”

With India’s alcohol market witnessing a boom—it is projected to become the world’s fifth-largest by 2031—even prospective trade agreements are being watched closely by craft producers abroad.

“Indian consumers today are increasingly savvy,” said Thomas Vinod Xavier, cofounder of Cochin Distilleries Inc, a Toronto-based “diaspora spirits” startup known for labels such as Vanchaki vodka.

Xavier believes FTAs—including the prospective economic partnership agreement with Canada—could trigger what he calls a “reverse diaspora renaissance” in the Indian alcohol market. “For niche overseas craft labels like ours with deep Indian roots,” he said, “this is the moment when the market truly opens up—when we can bring the best of Canadian craftsmanship back to the motherland.”

As trade agreements chip away at long-standing protectionist walls, the Indian liquor market may enter a new phase—one defined less by tariffs and more by taste. A widening range of global spirits may also leave a lasting cultural shift: a generation of consumers learning to compare provenance, flavour and craftsmanship across borders. “A more informed consumer is good for everyone,” Virmani said.

For Indian distillers, the FTAs may ultimately mean something more significant than lower tariffs and higher export opportunities. It could mean more opportunities to compete with the world’s best.

“We are,” John said, “securing a seat at the table.”

evolution-of-gold-loans-from-cultural-asset-to-accessible-credit

Sat Mar 21 17:46:42 IST 2026

Indian households are estimated to hold more than 25,000 tonnes of gold—a reserve that has, for generations, functioned as a cultural asset and a financial buffer. In times of need, families have traditionally turned to their gold jewellery to raise funds. Today, that age-old practice has been formalised into a fast-growing, tightly regulated credit segment, with gold loans emerging as one of the most accessible and efficient borrowing options in India.

The transformation of the gold loan market has been driven largely by regulatory oversight from the Reserve Bank of India. Unlike in the past, when informal lending dominated the space, the sector now operates under clearly defined rules governing gold valuation, purity assessment, loan-to-value (LTV) ratios, storage and auction procedures. This has significantly improved transparency and safety, making borrowers more comfortable about pledging their gold.

As a result, the stigma once associated with gold loans has steadily faded. Borrowers today increasingly view gold loans not as a distress option, but as a smart financial tool for short-term liquidity. This shift in perception, combined with structural changes in the financial ecosystem, has set the stage for strong growth in the segment.

One of the most important drivers of this expansion is the sustained rise in gold prices. Since gold loans are secured against the market value of the pledged asset, higher prices directly translate into higher borrowing capacity. Customers can now access larger loan amounts against the same quantity of gold, leading to a rise in average ticket sizes.

“The increase in gold prices has a direct impact on loan eligibility, enabling customers to unlock greater liquidity without pledging additional jewellery,” said George Alexander Muthoot, managing director of Muthoot Finance.

This dynamic has made gold loans particularly attractive at a time when households and small businesses are seeking quick, reliable sources of credit. Unlike unsecured loans, which have come under tighter regulatory scrutiny, gold loans offer a secured alternative with lower risk for lenders and faster access for borrowers.

The simplicity of the gold loan process is another key factor behind its popularity. Borrowers are required to complete basic KYC formalities and pledge their gold jewellery, which is then assessed for purity and net weight in their presence. After deducting the weight of embedded stones or other materials, the lender determines the eligible loan amount based on prevailing gold prices and RBI-mandated LTV ratios.

Once sanctioned, the loan is typically disbursed quickly—often within hours—making it an ideal option for urgent financial needs. This ease of access has expanded the customer base beyond traditional rural and semi-urban borrowers to include urban households, entrepreneurs and even high net worth individuals.

“The process is straightforward, requires minimal documentation and ensures quick disbursement, which makes it especially useful during emergencies,” Muthoot said.

Gold loans are no longer limited to household consumption needs. Increasingly, small business owners, traders and self-employed individuals are using them to meet working capital requirements. This broader adoption reflects the growing integration of gold loans into India’s formal credit ecosystem.

At the core of gold lending is the RBI’s LTV framework, which determines how much borrowers can receive against their gold. Currently, lenders can offer up to 85 per cent of the gold’s value for loans up to Rs2.5 lakh, 80 per cent for loans between Rs2.5 lakh and Rs5 lakh, and 75 per cent for loans above Rs5 lakh. These caps are designed to balance borrower access with lender risk, especially in a market where gold prices can be volatile.

There are also limits on the quantity and type of gold that can be pledged. Borrowers can typically pledge up to 1kg of gold jewellery, while gold coins are capped at 50g and must be of 22-carat purity or higher.

For lenders, gold loans are an attractive business due to their secured nature and relatively low default risk. Non-banking financial companies (NBFCs), which dominate the segment, raise funds from banks or through market instruments such as bonds, and lend against gold at a margin. Banks, on the other hand, benefit from access to low-cost deposits, giving them a funding advantage.

In the event of a default, lenders can recover dues by auctioning the pledged gold. However, this is typically a last resort.

Gold loans surged by 128.8 per cent year-on-year in January, driven by elevated gold prices and regulatory curbs on unsecured retail lending. The average loan size currently ranges between Rs50,000 and Rs2 lakh, indicating widespread adoption among middle-income households.

Interest rates for gold loans are relatively competitive, starting at around 11.5 per cent per annum, or roughly 1 per cent a month. Borrowers can choose from a variety of schemes with flexible repayment options, including bullet repayment plans where both principal and interest are paid at the end of the tenure.

Typically structured as short-term loans with tenures of up to 12 months, gold loans offer significant flexibility. Borrowers can repay at any point during the tenure and redeem their pledged gold, making it a convenient option for managing temporary cash flow mismatches.

Security of the pledged asset is a critical aspect of the gold loan business. Lenders invest heavily in infrastructure to ensure the safety of customer gold, including strong room storage, surveillance systems, controlled access mechanisms and insurance coverage. Many companies employ multi-layered security frameworks to build trust and reassure customers.

As the market matures, technology is also playing a growing role. Digital platforms now allow customers to initiate loan requests, check eligibility and even manage repayments online, further enhancing convenience and accessibility.

With gold prices expected to stay firm, regulatory support in place and demand for quick liquidity rising, the segment is well positioned for sustained growth. More importantly, the changing perception of gold loans—from a last-resort option to a mainstream financial product—signals a deeper shift in how Indian households manage their wealth.

revolutionising-cross-border-payments-indias-pa-cb-framework-explained

Sat Mar 21 17:43:07 IST 2026

Cross-border fund transfers have undergone a decisive transformation of late. What was once a complex, time-consuming process reserved for large corporates has now expanded rapidly to include SMEs, small businesses and individual users. Today, sending money abroad is more accessible, secure and efficient.

At the heart of this shift lies regulation. Cross-border transactions under the Payment Aggregator–Cross Border (PA-CB) framework are now governed by one of the most rigorous oversight regimes in India. Introduced by the Reserve Bank of India in October 2023, the framework mandates that all such transactions be routed through licensed PA-CB entities. Fewer than 25 players have been authorised so far, underlining the high entry threshold.

Each transaction is subject to stringent compliance requirements: full KYC checks, FEMA purpose-code tagging, real-time reporting into RBI’s IDPMS and EDPMS systems, and mandatory data localisation. The bar is set high enough that even global payment networks such as Mastercard and American Express have faced regulatory scrutiny and penalties for lapses in compliance.

This tightening of norms has not stifled growth—in fact, quite the opposite. Cross-border e-commerce already accounts for roughly 10 per cent of India’s total e-commerce market, and demand continues to expand rapidly.

“India receives around $130 billion in remittances annually. But the real story is outbound flows,” said Arjun Zacharia, CEO of EximPe. “As MSMEs source from China, students pay tuition fee abroad, and companies subscribe to global SaaS platforms, a structurally large base of cross-border demand has emerged. Increasingly, users expect these payments to behave like instant domestic UPI transactions rather than slow SWIFT wires.”

This expectation is reshaping the ecosystem. The rise of UPI, now live in multiple countries, signals a broader shift away from legacy systems towards low-cost, real-time infrastructure. Cross-border volumes on such rails are growing rapidly.

Security and compliance remain central to this evolution. PA-CBs must adhere to global standards such as PCI-DSS and PCI-SSF, widely considered benchmarks in payment security. The RBI also mandates annual system audits by CERT-In empanelled auditors, alongside biannual vulnerability assessments and penetration testing.

Customer funds are ring-fenced in non-interest-bearing escrow accounts, maintained with Authorised Dealer Category-I banks. Separate accounts are required for inward and outward transactions, eliminating any risk of co-mingling. For instance, payment aggregators such as Cashfree Payments partner with institutions like JPMorgan Payments, Yes Bank and RBL Bank to maintain these structures.

The contrast with the past is stark. Foreign merchants entering India once faced a maze of regulatory hurdles—lengthy onboarding timelines, complex FEMA compliance, customs requirements and opaque foreign exchange processes. Even after clearing these barriers, low payment success rates remained a challenge.

The PA-CB framework has erased much of this friction. “Compliance is now largely automated, onboarding is faster, and foreign merchants can offer payment methods such as UPI and RuPay,” said Reeju Datta, co-founder of Cashfree Payments. “Transparent exchange rates and the absence of hidden fees have also improved trust.”

For Indian businesses, the benefits are equally significant. Instead of relying on costly SWIFT transfers or traditional banking channels, they can now access global markets more efficiently. Multi-currency accounts and localised checkout options have reduced costs and improved customer experience on both sides of the transaction.

Transparency has emerged as a key differentiator. “Fluctuating exchange rates and hidden convenience fees eroded trust at the moment of payment,” said Datta. “PA-CBs ensure full pricing clarity. Indian customers pay in INR, international customers transact in their local currency, and FX conversion happens seamlessly in the background.”

The regulatory guardrails are equally robust. PA-CBs are prohibited from facilitating payments for goods or services not permitted under FEMA or the Foreign Trade Policy. All entities must register with the Financial Intelligence Unit–India and conduct due diligence on merchants. There is also a cap of 25 lakh per transaction, limiting the risk of large-scale misuse.

Technology is playing a crucial role in risk mitigation. Platforms such as Cashfree Payments deploy AI and machine learning tools to assign real-time risk scores to transactions—flagging, blocking or processing them based on predefined parameters.

Cross-border payments are increasingly beginning to feel like domestic transactions. An Indian student paying fees to a UK university, for instance, can now scan a QR code and complete the transaction in seconds via UPI. Behind the scenes, currency conversion, compliance checks and regulatory reporting are handled automatically. For global merchants, access to India’s vast consumer base no longer requires setting up local entities or navigating complex regulations—the PA-CB layer abstracts that complexity.

The next frontier could be what industry insiders call “agentic commerce”—where AI systems autonomously initiate and execute transactions within predefined regulatory frameworks. As digital commerce becomes increasingly automated, cross-border payment rails will need to operate at machine speed.

India is positioning itself at the centre of this evolution. UPI’s international expansion is accelerating, with plans to reach more countries in the coming years. Meanwhile, initiatives such as the BIS-led Project Nexus aim to connect instant payment systems across multiple countries, creating a multilateral real-time network.

In effect, India is no longer just a participant in global payments—it is becoming an exporter of infrastructure.

The implications are profound. As transaction sizes shrink and volumes rise, legacy banking systems become less efficient, while technology-driven models gain ground. Over time, the distinction between domestic and cross-border payments may blur entirely.

“In a few years, an Indian student paying tuition abroad or an SME sourcing globally won’t think of it as a cross-border transaction at all,” said Zacharia. “It will simply feel like a payment.”

That shift—from friction to familiarity—may well define the next phase of India’s digital economy.

reimagining-india-nordic-collaboration-through-sea-skills-and-science

Sat Feb 14 15:27:57 IST 2026

Beyond the European Union’s formal framework, member states often organise themselves into sub-regional groupings, shaped by shared history and geography—the Nordic bloc is a prominent example. Since the first India–Nordic Summit in 2018, ties have deepened, but many opportunities remain underexplored.

Traditional sectors such as IT and pharmaceuticals continue to dominate, overshadowing areas like the blue economy, shipbuilding, maritime safety, fisheries, health and education—sectors that align closely with Nordic expertise and India’s geographic, demographic and economic realities.

Long coastlines, ports, fishing communities and maritime heritage are common to the Nordic countries—Denmark, Sweden, Norway, Finland and Iceland—and the south Indian states of Tamil Nadu, Kerala, Karnataka and Andhra Pradesh. Both regions are working to build innovative, export-oriented economies by focusing on the development of rich human capital. All these make them natural partners for collaboration.

BLUE ECONOMY

For India, with nearly 11,000km of coastline, harnessing the blue economy is both an economic essentiality and a geopolitical necessity. On both counts, the Nordic countries have deep experience in creating human resources that can sustainably and safely capitalise on the marine sector through continuous innovation.

As India seeks to become a pivotal player in the blue economy, Nordic partnerships can assist in creating strong ecosystems. For example, Denmark’s marine spatial planning system, which integrates most of these elements into a single digital framework, reduces regulatory uncertainty and accelerates investment. Similar models could guide coastal states in improving coordination, cutting delays and enhancing regulatory clarity.

MARITIME SAFETY AND SEAMANSHIP

Nordic countries lead in training, safety standards, vessel design and rescue systems, while south India—home to major ports and a large seafaring workforce—needs stronger frameworks. Integrating Nordic safety technologies and training standards into initiatives such as Sagarmala and the PM Matsya Sampada Yojana would improve safety outcomes while professionalising India’s maritime workforce and boosting the global employability of Indian seafarers. Further collaboration could include joint academies, advanced navigation and emergency protocols, leading to downstream benefits for trade, insurance and port efficiency.

SUSTAINABLE FISHING AND ENERGY

Fishing supports millions of livelihoods across south India but faces increasing pressure from overfishing, climate change, safety risks and declining stocks. Nordic countries have successfully shifted to science-based, regulated and technology-driven fisheries. Cooperation on stock monitoring, low-impact gear, cold-chain value addition and export traceability using AI could improve safety, incomes and access to EU markets, while creating scalable opportunities for Nordic technology exports and long-term maritime partnerships.

India’s first national geothermal energy policy opens new avenues for collaboration with Iceland, a global leader in geothermal technologies. Joint R&D in the Himalayan and Deccan regions could combine Indian scale with Icelandic expertise in an area aligned with Iceland’s innovation and Nordic cooperation agenda.

EDUCATION AND SKILLS

Nordic education systems consistently rank among the world’s best, marked by high public investment, equity of access and strong learning outcomes. Their strength lies in a two-fold approach: first, an emphasis on critical thinking, vocational excellence and applied research, with learning prioritised over rote performance or grades; and second, a holistic focus on the physical and psychological well-being of students, recognising that educational excellence is inseparable from overall human development.

With south India already possessing a strong educational infrastructure that produces a large pool of engineers, technicians and skilled workers, the Nordic education model can add significant value. Key opportunities include joint degree programmes in maritime studies, ocean sciences and sustainability; vocational training in shipbuilding, logistics, fisheries and port operations; research collaboration between Nordic universities and south Indian institutions; and digital learning platforms tailored to coastal and rural communities.

A ROLE FOR SUBNATIONAL DIPLOMACY

One important takeaway from the EU–India Summit is the rising importance of subnational diplomacy. South Indian states increasingly engage directly with foreign partners, and Nordic countries—accustomed to decentralised governance—are well positioned to engage at the state and city level rather than only through national governments. State-to-state MoUs, port-to-port cooperation and university-to-university partnerships can often move faster and produce more tangible outcomes than top-down agreements.

LOOKING AHEAD

Effective collaboration requires platforms that make idea-sharing and innovation ecosystems visible and accessible to both Indian and Nordic stakeholders. One such initiative, now in its third edition, is the Sweden–India Innovation Bridge programme, conceived by Robin Sukhia, secretary general of the Swedish India Business Council.

It connects CEOs, founders, investors and academics from Sweden and India, showcasing India’s strengths in R&D, AI and global capability centres. Through deeper engagement with India’s innovation ecosystem, it enhances the agility, scalability and cost-efficiency of Swedish companies.

As EU–India relations mature, the next phase of engagement must go beyond headline sectors and large corporations. The Nordic–south Indian partnership has the potential to demonstrate how sustainability, safety, education and inclusive growth can be integrated into economic cooperation.

Mehta and Uniyal serve as adviser and general secretary, respectively, of the Nordic Council of Indian Diaspora.

why-market-volatility-could-be-the-best-entry-point-for-long-term-investors

Sat Feb 14 15:13:00 IST 2026

Stock market pundits have long maintained that volatility is an investor’s best friend, as it creates liquidity and allows buyers to acquire quality stocks at favourable prices. In recent months, Indian capital markets have been reeling under bouts of turbulence driven by global geopolitical tensions, inflationary concerns, sustained selling by foreign portfolio investors (FPIs), the pressures of earnings season, and narratives around elevated valuations.

Such phases are not unprecedented. Over the past two decades, markets have weathered repeated disruptions and have continued to reward patient investors. History suggests that those who invested during uncertain times often generated significant returns, largely because markets ultimately remain tethered to earnings and valuations and tend to correct themselves sooner rather than later.

Investing in capital markets remains safe in the current scenario, provided investors temper expectations of quick returns and accept volatility as part of the journey. “In fact, volatility gives access to stocks which you otherwise cannot dream to acquire,” said Kishor Ostwal, CMD, CNI Infoxchange Pvt. Limited.

According to Ostwal, FPIs currently have around 72 per cent exposure concentrated in five sectors—financials, oil and gas, FMCG, health care and IT. A prudent strategy, he said, may be to tread cautiously in these areas where selling pressure could persist, even though overall FPI exposure has now fallen below 15 per cent. By contrast, sectors such as metals, mining, infrastructure, chemicals, defence, public sector companies, railways and artificial intelligence have relatively limited FPI exposure. The declines in these stocks, therefore, may be driven more by sentiment than by fundamentals, implying that they could rebound faster once confidence returns. “Risk-reward works only in difficult times; hence the current scenario is good for risk takers. Equity is all about taking risk. One should check the growth of the company, price-earnings ratio and enterprise value, which mitigate the risk of buying an expensive stock. Focus should be on value buying rather than buying on news,” said Ostwal.

Volatile phases often trigger aggressive selling, leading to lower valuations and creating entry opportunities. However, caution remains essential. Investors are advised to steer clear of high-volume stocks, companies with concentrated ownership, and those where promoters frequently appear on television channels promoting their businesses. Impulsive buying driven by headlines can be particularly risky in unsettled markets, as such narratives rarely hold up under pressure. Similarly, purchasing stocks immediately after strong results may not always be wise, given that large investors sometimes use positive announcements as an opportunity to exit.

Typically, investors who select well-researched stocks target returns of 25 to 40 per cent. Those willing to settle for more moderate gains—around 15 per cent—may prefer mutual funds, where professional fund managers oversee allocation decisions and risk management.

Analysts observe that Indian equities have delivered double-digit returns in 2025 despite global headwinds and record foreign institutional investor outflows. Markets have drawn support from fiscal stimulus measures—including tax cuts and GST 2.0—along with rate reductions by the Reserve Bank of India and robust inflows from domestic institutional investors, all of which have helped absorb shocks.

“We expect polarised performance from the Indian markets. Our internal study shows that within NSE 500 companies, in the 14-month period till May 31, 2024, weaker quality and slow-growth companies delivered significantly higher returns compared with those with good quality and high growth. However, this is changing. Since June 2024, the market has been rewarding high-growth and high-quality companies, and punishing low-quality and low-growth companies,” said Abhishek Tiwari, CEO, PGIM India Asset Management.

He expects the high-growth, high-quality segment to outperform, while companies lacking either attribute may surrender the excess gains built up in FY24. Long-term data, he emphasises, consistently shows that growth supported by quality offers the strongest probability of constructing a winning portfolio. “We also believe that depending on risk profiles and goal horizons, mixing products like Balanced Advantage Funds, Multi Asset Allocation Funds and assets like precious metals, REITs and InvITs can be a booster to investment portfolios,” he added.

In the current climate, safety is as much a function of time as it is of timing. While markets have recently undergone both price and time corrections, historical evidence indicates that such periods of gloom often represent the most attractive entry points for long-term wealth creation. Investing tends to be safest for those with a three-to-five-year horizon and no immediate liquidity needs. At prevailing levels, the risk-reward balance appears to tilt in favour of patient investors capable of looking beyond short-term noise.

“The primary safeguard against market turbulence is a well-structured portfolio tailored to your specific risk profile and existing holdings. Diversification across various market caps—large, mid and small—acts as a natural shock absorber. More important, investors should pivot towards ‘quality’ by sticking to companies that demonstrate a clear earnings tailwind despite macroeconomic headwinds. Focusing on businesses with robust cash flows and visible growth ensures that your capital is anchored in fundamental value rather than speculative momentum,” said Prabhakar Kudva, director and principal officer of portfolio management services at Samvitti Capital.

Kudva adds that investors must recognise volatility not as a flaw in the system but as an inherent feature of equity markets. “Higher returns are essentially the reward for enduring the ‘lumpiness’ of market performance,” he said. “The key to navigating this is matching the nature of your money with the nature of the asset; only long-term funds—money not required for at least three years—should be deployed in equities. By aligning your risk profile with a disciplined, long-term approach, you turn volatility from a threat into a tool for compounding.”

explained-how-indias-love-for-gold-is-evolving

Sat Feb 14 15:09:09 IST 2026

Of late, conversations across financial markets have increasingly centred on a dilemma: digital or physical gold—which is the better choice? The debate reflects a broader shift in how Indians perceive gold, long regarded a financial safeguard as well as a cultural symbol. While the traditional allure of jewellery and coins remains, the emergence of digital gold has introduced a new layer of convenience that is steadily reshaping investment behaviour.

The discussion around digital gold positions it as an evolution in the country’s relationship with the precious metal. At its core, digital gold promises accessibility and simplicity. Investors can purchase gold in extremely small denominations through a completely paperless process, without the usual concerns surrounding storage and safety. From a practical standpoint, it addresses several longstanding pain points associated with physical ownership. Yet, many gold-obsessed Indians continue to prefer tangible assets, reinforcing the enduring emotional bond.

Digital gold enables investors to buy, sell and hold the asset electronically, with every purchase backed by an equivalent quantity of physical gold stored securely in insured vaults. If an investor buys digital gold worth Rs500, for instance, the issuer ensures that the corresponding amount of physical gold is held on their behalf. This structure removes anxieties around purity and safekeeping while offering transparency and convenience. In India, digital gold is typically offered through regulated providers and made accessible via trusted financial platforms, lending an additional layer of credibility.

“Digital gold is seeing a significant surge in adoption, particularly among Gen Z and millennial investors who value fractional ownership and the ability to buy gold for as little as Rs1,” said Prabhakar Kudva, director and principal officer of portfolio management services at Samvitti Capital. “In a culture historically obsessed with physical possession, the shift towards digital is a structural change. While traditionalists still value the tangibility of jewellery, digital platforms are steadily capturing market share by solving the problems of purity and liquidity, making it a staple for the modern, tech-savvy Indian saver.”

Market observers note that digital gold fundamentally removes the friction traditionally associated with owning gold. “The ability to buy and sell instantly allows investors to respond quickly to changing market conditions, something that is not possible with physical gold. Fractional ownership, low entry barriers and SIP options have also shifted gold from being largely an occasion-led purchase to a more regular, investment-oriented asset. Importantly, investors still retain the option to redeem their holdings in physical form if they choose,” said Pankaj Gadgil, head, digital platforms and payments strategy, Aditya Birla Capital.

Today’s digital-native customer is comfortable accessing traditional assets through financial applications, making digital gold a natural extension of that trust. “Over the past year, rising gold prices and supportive market sentiment have driven greater participation and awareness. That said, there is still a need for investor education. Digital gold remains a market-linked investment, and traditional buyers transitioning from physical gold need clarity on risks and price volatility. Among newer investors, however, the low-ticket size, ease of transacting and liquidity make digital gold an increasingly popular choice,” said Gadgil.

Yet digital gold has not achieved mass adoption in the truest sense. Awareness and understanding remain significant hurdles. “Despite the convenience, digital gold in India has not yet reached mass adoption,” said Colin Shah, managing director, Kama Jewellery. “One of the biggest challenges is awareness and better understanding. Many consumers still do not fully understand how digital gold works, who holds the underlying gold, how it is stored, and what happens when they want to convert it into physical form. The trust factor plays a very big role in gold purchases in India, because Indians love to see the gold, and that trust has traditionally been built through physical presence, legacy jewellers, and seeing and touching the product.”

Regulation is another important consideration. Although digital gold platforms typically collaborate with vaulting and bullion companies, the segment is still evolving in terms of regulatory clarity. This naturally makes some investors cautious, particularly those accustomed to buying physical gold as a long-term value or for cultural and familial purposes.

Indeed, physical gold continues to carry immense emotional weight in India. The metal is deeply intertwined with weddings, festivals and generational wealth, often transcending its role as a mere financial instrument. For many households, gold signifies security, prosperity and tradition—qualities that a digital ledger cannot entirely replicate. As a result, digital gold currently functions more as a financial product than as a replacement for jewellery or physical ownership.

“Looking ahead, digital gold and physical gold will co-exist rather than compete,” said Shah. “Digital gold is a great choice for disciplined, small-ticket investors and those who appreciate convenience. Physical gold will continue to be relevant for its emotional, long-term investment and cultural significance. As trust, transparency and regulatory environments improve, digital gold will grow, but it will only complement traditional gold purchases in India.”

is-budget-2026-nirmala-sitharamans-most-visionary-one-yet

Sun Feb 08 11:01:59 IST 2026

Almost seven years and eight budgets later, Finance Minister Nirmala Sitharaman knows what inexperienced runners learn the hard way: the flashy sprint at the start gets headlines, but marathons are won with disciplined pacing, strategic nutrition and the unglamorous work of logging base miles.

On a Sunday, Sitharaman, without poetry or fireworks, asked Indians to attempt something even harder—run an ultra marathon, a 21-year race for a developed nation in 2047. In her 85-minute speech, she laid down the framework that requires sprinting on some fronts (creative industries, AVGC labs in schools, service sector) while marathoning on others (semiconductors, rare earths).

After navigating a pandemic, inflation and now global fragmentation, she has learnt what this kind of race requires—building on strengths while maintaining discipline. “Sometimes boring budgets are good,” said Dharmakirti Joshi, chief economist at CRISIL. “Whatever growth momentum is there, it is more about sustaining that… The government is still committing capital spending from the budget, which means it will remain an important player in the investment story. Investment is about raising potential.”

The Economic Survey warned of a global economy sliding to managed disorder, with politicised trade and fragmented supply chains producing shocks “worse than the 2008 financial crisis”. The survey, helmed by the chief economic adviser to the government, V. Anantha Nageswaran, said while better placed than many economies, India must prioritise domestic growth and shock absorption. “India must run a marathon and sprint simultaneously, or run a marathon as if it were a sprint,” it put it bluntly.

“As India navigates the dual imperatives of growth and macroeconomic stability, this budget strikes a chord of cautious optimism,” said Lekha Chakraborty, professor at the National Institute of Public Finance and Policy. “By allocating significant resources to semiconductors and rare earths, the government is 'sprinting' towards strategic autonomy, while maintaining a steady 'marathon' of fiscal consolidation.”

Against this backdrop, India has negotiated trade deals with the US and the European Union, helping the manufacturing push gain immediate access to overseas markets. “The big push to manufacturing sector is very important. This will enable domestic manufacturing to benefit from various trade deals,” said Gopal Krishna Agarwal, spokesperson for the BJP.

The budget marked a strategic shift toward new-age sectors such as semiconductors, artificial intelligence, and the creator economy to enhance global standing.

The launch of India Semiconductor Mission (ISM) 2.0 aims to design full stack Indian IP and fortify supply chains. Coupled with doubling the outlay to Rs40,000 crore for the Electronics Components Manufacturing Scheme (ECMS), this aims to enhance India’s position in global supply chains.

In running terms, this is VO2 max training. ISM 2.0 focuses on building the entire ecosystem over 10-15 years. “Focus on sunrise sectors like semiconductors, rare earth metals, data centres, nuclear energy, and biopharma will give big boost to Indian economy,” said Agarwal.

The budget promises tax holidays till 2047 for foreign cloud service providers using data centres in India. American and European tech companies need serious commitment before relocating facilities.

Dedicated rare earth corridors in Odisha, Kerala, Andhra Pradesh and Tamil Nadu will promote mining, processing and manufacturing. Currently, China controls 70 per cent of global rare earth mining. The corridors signal a commitment to building the entire value chain. The budget exempts basic customs duty on import of capital goods required for processing critical minerals and full exemption for 25 critical minerals. This benefits space, defence, telecommunications and renewable energy.

This coincides with External Affairs Minister S. Jaishankar’s visit to the US for the first Critical Minerals Ministerial to formalise bilateral cooperation and remove over-dependence on China.

THE ORANGE ECONOMY

Moving beyond chips, Sitharaman introduced the Orange Economy—cultural and creative industries like arts, gaming, and fashion. The animation, visual effects, gaming and comics (AVGC) sector is projected to require 2 million professionals by 2030.

The budget envisages setting up AVGC content creator labs in 15,000 secondary schools and 500 colleges. “Globally, the Orange Economy generates $2.3 trillion in revenues—3 per cent of GDP—and 30 million jobs,” said Chakraborty. “The budget signals a strategic pivot toward the Orange Economy as a jobs engine.”

The budget also announced a new National Institute of Design in eastern India. “This enhances creative outputs rankings, fostering human capital for a projected $50 billion media and entertainment sector by 2029."

When Sitharaman raised Securities Transaction Tax on futures trading to 0.05 per cent, she addressed concerns of youth losing money to ‘gambling.’ Joshi argued these nudges targeted growth and employment. “Services are employment-intensive. The Orange Economy generates jobs,” he said. Sitharaman also announced reviving 200 legacy industrial clusters for manufacturing.

BUILDING ON STRENGTH

When preparing for marathon, put more effort in what you are already doing right. Defence spending hit Rs7.85 lakh crore—15 per cent of total expenditure. Biopharma SHAKTI got Rs10,000 crore to build clinical trial sites and domestic biologics production.

The budget announced Bharat-VISTAAR, a multilingual AI tool integrating AgriStack portals with agricultural practices for millions of farmers.

Seven high-speed rail corridors were announced as "growth connectors"—Mumbai-Pune, Pune-Hyderabad, Hyderabad-Bengaluru, Delhi-Varanasi, among others. Twenty new National Waterways will slash logistics costs by 20-30 per cent, starting with NW-5 in Odisha.

The Rs10,000 crore SME Growth Fund will back small businesses. The Rs5,000 crore per City Economic Region is reform-linked—states must improve business environments to receive funds.

THE HARDEST MILE

Sitharaman scaled public capital expenditure to Rs12.2 lakh crore while maintaining fiscal consolidation. Fiscal deficit: 4.3 per cent of GDP for FY27. Debt-to-GDP: 55.6 per cent. Real GDP growth: projected over 7 per cent.

“The fiscal deficit target of 4.3 per cent and in long term to 3 per cent underscore commitment to macroeconomic stability,” said Chakraborty. “However, the real test lies in navigating geopolitical risks. Can India harness its demographic dividend while adapting to AI?”

“Increasing infrastructure spending, while focusing on reducing debt to GDP ratio show how efficiently government finances are being managed,” said Agarwal.

While the budget kept allocations for social sectors intact, there were no populist giveaways to the middle class or to states going to polls. “This budget focuses on long-term vision and shuns populist policies,” said Agarwal.

The Economic Survey’s running metaphor guided the budget, but the terrain remains uncertain. Anxieties on job creation and critical supply chains precede the finish line. As Chakraborty said, “Investing in human capital will be crucial in determining India's growth story to be one of sustainable progress.”

budget-2026-a-blueprint-for-indias-self-reliance-viksit-bharat-2047

Sat Feb 07 12:35:31 IST 2026

BUDGET 2026 REFLECTS a series of strategic steps the government has taken over the past 12 years. These measures aim to reduce strategic dependence on other nations, enhance the ease of living for people and achieve economic, digital and technological sovereignty to reach the ultimate goal of an “Atmanirbhar and Viksit Bharat 2047”.

The ongoing plan to improve the ease of living for people is reflected in this budget through targeted initiatives and enhanced allocations to the health, education and skilling sectors. An allocation of Rs1,06,530 crore to the health sector aims to develop a domestic biopharma ecosystem to tackle rising non-communicable diseases (such as cancer, diabetes, autoimmune disorders, and rare diseases). It further strengthens the care ecosystem by expanding emergency and trauma care capacity in district hospitals by 50 per cent, training 1.5 lakh multiskilled health workers, scaling the Ayush ecosystem and addressing mental health challenges. Additionally, duty exemptions on drugs for cancer and rare diseases seek to improve affordability, alongside continued support for flagship schemes like Ayushman Bharat and PM-JAY.

The ongoing AI and Semiconductor Mission has received a booster dose of Rs76,000 crore, alongside long-term tax incentives for data centres. The focus remains on localising the storage of national data assets, expanding domestic production of electronic components and semiconductor equipment, and developing full-stack Indian intellectual property. Recognising the use of AI in development of research-driven innovation and its possible impact on employment growth, the budget proposes a research driven innovation ecosystem platform, such as ‘Bharat VISTAAR’, to deploy multilingual AI in agriculture & rural advisory services besides the setting up of a high-power committee to examine the impact of AI on employment and skilling of AI compatible workforce. To connect education with employment, the budget highlights the ‘orange economy’ by supporting the Indian Institute of Creative Technology, Mumbai, to set up content creator labs across 15,000 secondary schools and 500 colleges. These efforts are aimed towards building digital sovereignty for the country.

The government maintains that domestic, reliable and affordable access to critical minerals—especially rare earth elements—is vital for sovereignty and security. These minerals are essential for multiple strategic sectors—from clean energy and electric vehicles to medical devices and digital infrastructure, including AI servers, smartphones, semiconductor, satellites and optical fibre networks, as well as defence systems such as fighter jets and RADAR. Following mining reforms initiated in 2015, the government identified 30 critical minerals necessary for spurring domestic manufacturing and strategic requirements and set up Critical Mineral Mission with an outlay of Rs34,300 crore to exploit substantial domestic critical mineral reserves (fifth largest reserve of rare earth elements). The budget aims to develop a rare earth mineral corridor across Odisha, Kerala, Andhra Pradesh and Tamil Nadu for creating a complete ecosystem of mining, processing, skilling, research and value-added manufacturing. To facilitate this, the government has scrapped basic customs duty on monazite, exempted imported capital goods for mineral processing from duty and allowed tax deductions for exploration expenditure. These efforts are designed to secure supply chains and reduce dependence on hostile economies.

The government has been taking several steps to encourage both foreign and domestic investments in high-tech industries and infrastructure—which are core components of economic sovereignty—to augment the country’s industrial capability. The budget has highlighted continuous focus on ease of doing business which is reflected in 350 reforms undertaken by the government, rationalisation of labour law and quality standard and compliance and simplification of direct tax and GST. The budget proposes simplification, clarity, certainty in tax laws, structural customs reform and trust-based tax regime.

To augment industrial capability, the budget reaffirms a commitment to infrastructure by raising public capital expenditure to Rs12.2 lakh crore. This investment focuses on roads, railways (including dedicated freight and high-speed corridors), aviation and shipping, including 20 new national waterways linking mineral-rich regions with industrial corridors and ports, water, oil & gas, power, renewable energy and telecom sectors. The budget stipulates customs duty exemptions for components used in manufacturing civilian aircraft, biogas distribution, and renewable energy inputs. To push industrial self-reliance, a new scheme for Construction and Infrastructure Equipment (CIE), with an outlay of Rs200 crore, will strengthen the manufacturing of high-value machinery such as tunnel-boring equipment for building metros and high-altitude roads. Furthermore, Rs10,000 crore has been allocated over five years to bolster domestic container manufacturing and expand capacity of Indian ship building to reduce import burden and develop a robust supply chain in the maritime sector.

The government posits that high-tech industrial growth must not come at the cost of the environment. Having achieved the target of 50 per cent clean energy share in 2025—five years ahead of schedule—the budget announces Rs20,000 crore for carbon capture and storage technology. It also extends customs duty exemptions for nuclear power projects until 2035 and for capital goods used in manufacturing Lithium-ion cells. Finally, the budget proposes removing basic customs duty on the import of Sodium Antimonate used in solar glass manufacturing to further support the renewable sector.

Therefore, while ensuring there is continuity in fiscal management, this year’s budget has a clear focus on long-term priorities, building resilience and capacity and equipping the youth.

The author is member of the Economic Advisory Council to Prime Minister Narendra Modi.

us-india-trade-deal-tariffs-slashed-but-whats-hidden-in-fine-print

Sat Feb 07 12:30:20 IST 2026

For those who are thrilled by the announcement of a trade deal between India and the US, there is one name to remember.

South Korea.

Last year, America’s eastern Asian ally was overjoyed when President Donald Trump worked out a trade deal with it in return for measures like raising the number of American cars that could be exported there and Korea’s dismantling of tariff and non-tariff barriers.

Then, disaster stuck. Last month, without any notice, Trump threw a tantrum and said he was raising tariffs on Seoul, alleging that the country was taking too long to ratify his deal. Last heard, the Koreans were scampering to Washington to figure out what had gone wrong.

They say the proof of the pudding is in the eating. For the just-announced US-India deal, this could be doubly so. First, beyond Trump’s exuberant declaration that tariffs would be dropped from 50 per cent to just 18 per cent for merchandising exports, the details are still to be worked out.

And of course, the full bilateral trade agreement (BTA) is still in the works. This is just a preliminary step to get the vexing tariff issue out of the way.

Yet, for all practical purposes, Prime Minister Narendra Modi and his team seemed to have finally managed to wrench out of the vexing situation the nation was caught in. The US was India’s biggest trading partner, and, more than that, there was a lot at stake. Being the world’s most valuable market, it was too important to be lost, no matter what brave face you put forward by signing deals with the likes of the EU and the UK.

That is why it has been a cause of celebration, despite the fact that the fine print was yet to be revealed. Soon after Trump and Modi revealed the ‘good news’ on social media, businesses went on a celebratory mode. The Gujarat GIFT Nifty surged 800 points overnight, and the Bombay Sensex also rallied the following day.

ITC chairman Sanjiv Puri called the deal symbolic of “India’s confidence and ascent in the global economic order”, while Bharti Airtel chief Sunil Mittal said the “flurry of FTAs is an affirmation of India’s role at the centre of global frameworks, aimed at building resilient international trade patterns”.

There is more to it than meets the eye. While exporters to the US did suffer in the last few months when tariff was raised to 50 per cent, a deal being struck was always never about returning to the status quo. This is because trade with the US has been at the centre of India’s new strategy of becoming a manufacturing powerhouse, attracting international investment by offering itself as an alternative to China. Despite an Apple here or a Micron there, that plan had not only not really taken off, but it was in imminent danger of a crash with sky-high US tariffs.

This is simply because of the lure and value of the American domestic market and any global manufacturer would have been reticent to set up a manufacturing plant in India if products made here did not have competitive tariffs in the US market.

That is a bullet Modi has dodged for now, but that is not the only one.

India is not exactly at the forefront of the AI and semiconductor revolution. Huge funding is being diverted into these sectors and going majorly to a clutch of nations in East Asia. India was handicapped in aiming for investors in this sector because of the US uncertainty. But the AI Impact Summit, scheduled for later in February, could set the stage for a renewed and updated push in this crucial realm.

But worry points remain. Trump did mention ‘agricultural’ in his statement, and while most experts do not believe sensitive areas like dairy and GM crops have been opened up, it was enough for a political storm, both within and outside Parliament.

The fine print of the deal will be crucial, as is the effective implementation in letter and spirit. “For India in particular, we have to ensure that our customs enforcement does not prevent us from getting the full benefits of the deal by causing unnecessary delays and disputes at the border,” said economist Rahul Ahluwalia, founder of the think-tank Foundation for Economic Development (FED). “We also have to reform regulations and institutions so that the local business ecosystem is competitive enough to take away market share from competitor countries like China, Vietnam and Bangladesh in the EU and the US markets. Only then will we achieve the full growth potential that these deals give us.”

He has a point. To attract international businesses to set up shop in India, thereby bringing in their valuable foreign investment into the country, India needs an attractive tariff regime with other countries. And while trade pacts with the Europeans, the British and even New Zealand was pushed through with that in mind, the big ticket was always going to be US and the tariff you had vis-a-vis your rivals in the neighbourhood who were angling for the same foreign investment. Bangladesh, for instance, has acquired a prowess in textiles, and Vietnam has proved itself to be a better alternative to China than India when it comes to electronics.

But now, with a tariff rate of 18 per cent, India has regained its advantageous position, compared to the 20 per cent that Bangladesh, Vietnam and Sri Lanka have got. The Philippines has 19 per cent. And it is imperative that India does not lose this momentum.

While Trump has gleefully declared that India has stopped buying Russian oil, the reality is a tad different. Last summer, 40 per cent of India’s oil imports were from Russia. While that came down to 25 per cent in December, it still forms the biggest chunk and it is not clear how quickly India will bring it down. And also, how much of an extra cost it will incur by moving to alternatives, including oil from the US and from its recently captured wells in Venezuela, as Trump has so helpfully suggested.

How Indian businesses will take advantage of the reduced tariffs and a comprehensive BTA in the works would be keenly watched. The worst affected and large sectors could be first off the ground. “Although this reduction will enhance price competitiveness of Indian exports as soon as the lower tariffs come into play, the immediate set of benefit is likely to go to export-heavy sectors such as textiles, apparel, auto components and engineering goods,” said Krishan Arora, partner and India Investment Roadmap Leader, Grant Thornton Bharat.

While both countries work out the nitty gritty of rates and exemptions, the bigger question is about how many newer areas and expansion of businesses that Indian traders can venture forth and conquer. It is no knockout victory yet, with many more rounds to go before the podium.

this-is-trumps-most-ambitious-deal-mark-linscott

Sat Feb 07 12:25:51 IST 2026

Interview/ Mark Linscott, former trade negotiator with the Trump administration & senior adviser, US-India Strategic Partnership Forum

Q/ How would you describe this deal?

My perspective is a very positive one. I think it was really important that it happened. It probably took too long to get done. But it was clear that the two leaders had to engage directly on it for it to get done. It’s a huge deal for both of them. Overall, I think both sides did quite well.

India ended up with a pretty good deal. A lower tariff than what is applied to every other country in Asia, with the exception of Singapore, which has a trade deficit with the US.

Q/ What are the interesting features that will help both sides?

From the US side, it is elimination of a lot of tariffs. And again, we’ve got to wait to see the details. President Trump claimed that he got zero tariffs pretty much across the board. I don’t think that’s the case. But he got the best deal that India has ever offered on tariffs, and probably better than what was agreed with the EU. That can be beneficial in many sectors, from chemicals to industrial machinery to electronics, engineering goods and med tech.

There will be meaningful results on agriculture as well, not the sensitive issues like dairy, GM crops, corn or soybean, but some other important products that were a little less sensitive for India to open up on.

What has really not been done yet is the services sector, and particularly digital. I think that’s coming down the road.

On the Indian side, I have to start with textiles and apparel. The US market is huge. A 50 per cent tariff was clearly causing a lot of pain. It is good that it got fixed before things got any worse. (Coming to) other labour-intensive industry (like) marine exports, frozen shrimp etc, it seems like the government had done a very good job of trying to find some replacement markets while the 50 per cent tariff was in place. But it’s hard. So I think there can be resumption of that trade at a tariff that makes it still possible to export. We will see how it plays out. But I think this truly could be a win-win.

Q/ We are yet too see the full bilateral treaty agreement (BTA).

It is only the first step towards a comprehensive BTA. So, once they complete the finalising of the legal text for this first phase (of the) agreement, they move on to the next phase. It will be a process. But it is really important that this is an aspiration of a comprehensive agreement versus a lot of the agreements on reciprocal trade that the Trump administration is doing with other countries. This is the most ambitious negotiation of all of those that the Trump administration has been working on.

Q/ There is always some uncertainty with President Trump.

With President Trump, anything is possible. South Korea is a really good example of that. The UK is feeling the heat as well. We had the situation with Greenland and eight European countries. It is going to be unpredictable going forward. But the US and India have a strong vested interest in making this work.

indias-waterways-revival-how-iwdc-is-charting-a-course-for-economic-prosperity

Sat Jan 31 15:46:57 IST 2026

For centuries, vessels from distant lands thronged Kochi to load goods for overseas markets. European powers later fought to control the port for the same reason. But, as colonial administrators, and later governments in independent India, focused increasingly on roads and railways, rivers and inland waterways slipped into neglect. Kochi’s once-thriving inland waterways shared the fate.

That trajectory is now changing. India’s inland waterways and maritime domains are undergoing a transformative phase, and Kochi—true to its historical role—recently hosted the third meeting of the Inland Waterways Development Council (IWDC). The meeting concluded with a comprehensive roadmap to expand the country’s inland water transport network and deepen Centre–state coordination to unlock the economic potential of India’s rivers.

Notably, this marks the 40th year of the establishment of the Inland Waterways Authority of India (IWAI)—the regulatory body for national waterways—and India’s first national waterway, the Ganga–Bhagirathi–Hooghly river system. Interestingly, in the first three decades of IWAI’s existence, only five national waterways were declared, and there was little governmental support to reclaim waterways as key elements of trade and transport. Change began in 2016, when the first Narendra Modi government declared 106 new national waterways in one go. The establishment of the IWDC in 2023 gave real momentum for transformation.

In 2013–14, only three national waterways were operational. By 2024–25, the number had risen to 32, and by 2027, it is anticipated to rise to 76. Cargo movement has increased by 706 per cent since 2013, and budgetary allocation has grown sixfold. “As Prime Minister Narendra Modi has often noted, ‘rivers should not only carry water; they must carry prosperity,’” said Union Minister for Ports, Shipping and Waterways Sarbananda Sonowal, who chaired the meeting.

The IWDC has been meeting annually since 2024. The first meeting on National Waterway-1 (the Ganga) in Kolkata was followed by the second in 2025 on National Waterway-2 (the Brahmaputra) in Kaziranga. Kochi was chosen as the third venue, as it lies on National Waterway-3.

A key sentiment at the third meeting was the recognition that the success of inland waterways ultimately depended on state governments. “That is why cooperative federalism lies at the heart of our strategy,” said the Union minister. The day-long meeting was attended by senior ministers from six states and bureaucrats from several others, along with Vijay Kumar, secretary, Union ministry for ports, shipping and waterways; Sunil Paliwal, chairperson, IWAI; Sunil Kumar Singh, vice chairman, IWAI; and industry representatives and experts.

The meeting reviewed goals set during previous IWDC sessions, along with an assessment of state-level concerns. Detailed analyses were presented on the status and action taken on over 45 projects requiring Centre–state coordination, ranging from physical infrastructure development and feasibility studies to vessel and pontoon procurement and river cruise tourism initiatives.

Projects worth over Rs1,500 crore were identified to accelerate green mobility, strengthen multimodal logistics, and promote river-led economic development. Foundation stones were laid for projects exceeding Rs150 crore, including river cruise jetties in Kerala, Gujarat, Karnataka, Odisha and Telangana.

Asset procurement worth more than Rs465 crore was also announced. This includes survey vessels in Kerala; Ro-Pax berthing jetties in Bihar, Jharkhand and West Bengal; floating pontoons and quick-opening mechanisms in Uttar Pradesh, Bihar and West Bengal; hybrid survey vessels; amphibian and cutter suction dredgers; and tug-barge units.

Several digital initiatives for inland waterways were also discussed, including the Cargo Data Portal (CAR-D Portal), a centralised database capturing cargo and cruise movement data; NauDarshika, a digital tool for river navigation and related services; and the IWAI Vessel Tracker for real-time vessel monitoring and safety.

The council was also briefed on major new projects worth over Rs900 crore, including a slipway facility at Kochi; construction of 110 jetties across Odisha (25) and the northeast (85); implementation of the National River Traffic and Navigation System in Maharashtra; a Rs70-crore cruise terminal at Uzan Bazar Ghat in Guwahati; and a Rs144-crore approach road connectivity project to the Bogibeel River Port in Dibrugarh.

There was special emphasis on the northeast. The government plans to develop 85 jetties across the region with an investment exceeding Rs500 crore, strengthening regional logistics integration. “Inland waterways will not only bring the northeast closer to national markets, but also unlock its role as a gateway for growth, prosperity and regional integration,” said Sonowal.

Notably, among the six state ministers who participated in IWDC 3.0, two were from the northeast: K.G. Kenye, minister of power and parliamentary affairs, Nagaland; and Ojing Tasing, minister of rural development, Arunachal Pradesh.

A special session on the Kochi Water Metro—India’s first and Asia’s largest integrated water transport system, jointly funded by the Kerala government and the German funding agency KfW—was also held during the meeting. An IWAI-commissioned feasibility study for urban water transport systems modelled on the Kochi Water Metro is currently under way in 18 cities across nine states and three Union territories.

indias-economy-is-resilient-but-can-2026-budget-sustain-the-momentum

Sat Jan 24 16:28:05 IST 2026

THE YEAR 2025 was marked by global crises that affected India’s exports, increased defence requirements, and heightened investor risk perceptions. A volatile neighbourhood, with domestic problems in Myanmar, Bangladesh, Pakistan, Nepal, Afghanistan, and Iran, also affects India in various ways, including the reliability of oil supplies and trade dislocations. Domestically, revenue softness, sticky food inflation, and high debt servicing posed challenges to achieving fiscal targets.

Despite these challenges, the Indian economy demonstrated remarkable resilience, with GDP growth reaching 8.2 per cent in the second quarter and advance estimates indicating an average growth of around 7.9 per cent through 2025. Record levels of inflation control, exceptional growth in the services sector, robust consumer spending following GST reform, the government’s capex push, and the acceleration in the manufacturing and electronics boom were the main drivers that kept India on a high-growth trajectory.

Nonetheless, the average forecast for economic growth in FY 26-27 is around 6.4 per cent, compared with 7.1 per cent in FY 25-26. Although this 0.7 per cent drop is modest, further disruptions to trade due to wars, sanctions, and higher tariffs cannot be ruled out. Despite the challenges and associated risks, the Budget is the government’s opportunity to implement measures that enhance confidence and investment in India, thereby counterbalancing negative external factors and bolstering domestic growth and employment.

As an underlying theme, we suggest a ‘leaning against the wind’ approach. This should include a disciplined fiscal response and impactful regulatory reforms. The current situation does not warrant fiscal stimulus in the form of increased government spending or lower taxes. The Budget should enhance fiscal discipline by compressing expenditure and increasing revenue, thereby reducing the fiscal deficit. This will give the Reserve Bank room to cut interest rates amid lower inflation, stimulating private investment. Further, the government must monitor and prevent fiscally fragile states from becoming problematic. The 16th Finance Commission can provide these states with a supportive hand, based on a committed set of reforms that ensure future fiscal discipline.

The forecast for nominal economic growth for FY 26-27 is about 10 per cent. However, given the revenue softness in the current year, achieving the targets for FY 25-26 will require considerable effort from tax administrators; the current tax buoyancy of 0.32 for H1 of FY 25-26 would need to be pushed much higher for FY 26-27. A conservative fiscal policy would, therefore, imply a cap on expenditure increases of less than 10 per cent, providing sufficient room for a lower fiscal deficit. However, much of the expenditure increase will have to be earmarked for defence.

Without a major fiscal stimulus to boost demand, the government needs to focus on regulatory reforms to improve India’s business environment. This Budget should provide a time-bound action plan for major reforms across key sectors of the economy, including financial services, capital markets, urban development, infrastructure, real estate, and the environment. It would be appropriate to lay out the roadmap for a single GST in this Budget, providing the long-term clarity and predictability that investors yearn for.

With 46 per cent of the workforce, agriculture contributes only 16 per cent to GDP. Its share of exports is just 13 per cent. There is immense potential to be unlocked through modern value chains and processing. A prosperous rural economy calls for an urgent reinvention of the systems that attract investment, raise productivity to global standards, integrate markets, boost exports, and drive the sector to double-digit growth through policy and ownership reforms that build on technology and supply-chain reinvention.

Economic sovereignty today is intertwined with energy security. Over the past decade, India has been inching closer to achieving that goal by resolving chronic issues in coal production. Looking ahead, current geopolitics indicate that the world oil market will remain unpredictable in the near term. Hence, moving forward, India needs to reduce its dependence on oil by promoting EVs and renewable energy options.

Conversely, issues relating to natural gas are within our reach. Natural gas is not being extracted in large volumes in India due to policy gaps, leading to large-scale imports. As a result, the domestic price of natural gas is much higher ($4.70 per MMBtu in Q3 2025) than in the US ($3.81) or China ($2.72). Despite holding estimated reserves of about 1,370 billion cubic metres, India still imports about 45 per cent of its current requirements. While the Petroleum and Natural Gas Rules 2025 aim to address issues related to exploration licensing and investment, careful monitoring of their implementation and the resolution of encountered challenges are required.

In the power sector, India has built the required generation capacity and harnessed renewable energy to the point that it now contributes more than 51 per cent of installed capacity. However, the sector’s growth is hampered by the lack of a national electricity market, resulting in low investment in transmission grids and battery storage capacity. This Budget can bring renewed focus to investment in transmission infrastructure, continued momentum in renewables and storage, and competition in the distribution sector.

Can policy boost growth and create wealth? Yes, in three ways. First, by unlocking state-owned natural resources. Second, by leading innovation on both the supply and demand sides. “Import, copy, adapt, and invent” is a step-wise evolution documented by the World Bank. This evolution requires policies for free trade, contract enforcement, dispute resolution, free entry and exit, liquidation, equity, venture capital, R&D, habitat, infrastructure, and the environment.

Third, the sum of policies is greater than its parts. Policy is the basis for designing systems and institutions, including markets. Public policy cuts across disciplines, departments, and markets. Hence, it requires a meta-organisation that only the government can design, create, and manage. This can be done in every city and state.

A combination of conservative fiscal and tight monetary policy is required to shore up confidence, spur investment and employment, and provide Indian firms with a low-risk domestic environment, thereby enhancing their competitiveness. This “Goldilocks moment” is the most opportune time to start the virtuous cycle of fiscal discipline, growth, and higher revenues.

The authors were chief secretaries of Punjab.

union-budget-2026-can-nirmala-sitharaman-overcome-us-tariffs-and-ai-wave

Fri Jan 23 19:00:01 IST 2026

All dressed up and nowhere to go? Nirmala Sitharaman will nod her head at that.

After more than half a decade of reforms, the finance minister will still be desperately applying a fresh coat of make-up to make the Indian economy party-ready when she presents the Union Budget on February 1. And therein lies a tale of how critical this juncture is in the Indian economy’s coming-of-age story.

India’s GDP growth rate in the first part of this year was above 8 per cent, with the financial system remaining robust, and consumption, manufacturing, and exports showing some spurts. Yet, Sitharaman is in that unenviable position of waiting to see if the footwear will fit.

"India enters Budget 2026 with robust macro fundamentals, with the GDP projected to grow around 7.4 per cent. Yet the translation of growth into jobs and real household income remains uneven across states and regions," said Vishwanathan Iyer, senior associate professor at Great Lakes Institute of Management, Chennai.

It really shouldn’t have been this way. The government had unleashed a series of reforms over the past few years in its gallop towards a $5 trillion economy—and the subsequent goalpost of 'Viksit Bharat' by 2047—such as corporate tax cuts in 2019, production-linked incentives (PLI) to attract investment in crucial manufacturing sectors, structural reforms during the pandemic, and a mega capital expenditure on infrastructure in the following years. The income tax cuts and GST rationalisations last year, intended to speed up consumer spending, rounded off this supposed Ashwamedha.

But the animal spirits have been a bit on the subdued side.

"Corporate profits as a share of GDP have risen, but real wage growth has not kept pace, especially outside formal sectors," said Iyer. "Private consumption, which accounts for nearly 60 per cent of GDP, has lagged output, reflecting weak income transmission at the household level. In labour-surplus states, a large informal workforce with low productivity further dampens consumption demand."

This should not have been the case. "There have been a bunch of structural reforms that should have ideally had the economy booming by this time," said Ashi Anand, CEO & founder of IME Capital, an investment firm. "But you aren't really seeing that, with the exception of a few segments. Apart from that, consumption is still very weak."

Two whammies in the recent past, neither of which was in the control of the Modi government, threaten to be spoilers of its efforts. First, the tariff war President Donald Trump unleashed on the world; the tremors of which hitting India the hardest. Even China, which many had thought was America’s primary target, has reached a sort of understanding, while India has been the Cinderella left waiting for the glass slipper of a trade deal to fit.

The tariffs (upwards of 50 per cent) have made Indian merchandise exports to the US pretty much unviable. And let’s not even go into the ‘Sanctioning Russia Bill’ pending with US lawmakers, which will put those importing from Russia at risk of 500 per cent tariffs. Or, God forbid, Trump starts targeting India’s golden geese—services, pharmaceuticals, and electronics—which have been exempt from tariffs so far.

While there is hope of a trade deal being worked out, the worry is that the further it is delayed, the worse the prospects for Indian exporters. Business once lost and replaced by others is difficult to win back. The bigger, long-term worry for the economy is that for all the incentives and sops, India’s hopes of being a manufacturing base for global biggies will take a beating if goods produced in the country are tariffed at an unfavourable rate in the US, the world’s largest consumer market.

The second factor is the fear of being left out of the AI party. No, we are not talking about jobs or skilling, but the global sweepstakes that AI and deep tech have become on the investment side—a reason India seems to have lost out on the investment spree in the past year or so.

"India is really not positioned to benefit from the AI value chain from the investment perspective, with up to $1 trillion being invested in this space every year," said Anand. "That is also the reason why the deluge of foreign investment coming into India that the country saw in the post-Covid years has now virtually trickled to a halt, while countries ahead in AI technology, like South Korea and Taiwan, have outperformed in foreign investment."

There is a bigger concern. As AI evolves, its biggest impact will be on making services more productive. That is to say, for example, one programmer will be able to do the work of ten. For India, with its predominant strength in services and its demographic dividend of having the world’s biggest set of work-ready young people, this is not good news.

So what answers can Sitharaman come up with?

S. Ravi, economist and former chairman of the Bombay Stock Exchange, is emphatic on what the government can do: better and easier credit for small businesses, reserving smaller government tenders for Indian MSMEs, and further TDS reduction and GST rationalisation. "Look at sustenance in mitigating the global risk. That will be the first step," he said. And if these have all been tried before, Ravi has an addendum: "Implementation has not been effective. There is still work to be done."

The room for manoeuvring is not that limited when it comes to external factors like Trump’s tariffs or the AI wave. Experts THE WEEK talked to say there is an opportunity in the crisis, whereby the government can go in for a complete cleansing of the bureaucratic complexity India’s customs duty structure is mired in.

"The only thing that is within our control is improving the business climate and environment within India. Luckily, it appears that the Indian government is also aware of it," said Rahul Ahluwalia, CEO and founder of the policy think-tank Foundation for Economic Development (FED), and formerly with NITI Aayog. "We need to really double down and commit to big reform, bite the bullet on things that might even seem radical, like dropping all tariffs down to a low rate. Signal that you will stick to that for a long time."

A start was made in the last Budget, even before Trump went on the rampage, and it will be interesting to watch how much further down the reform road Sitharaman dares to venture this time. There is an escape route in arguing that an EU trade deal is ready and that the US one will be too, soon—so it might just be easier to offer another relief package for exporters and be done with it. Will she take the road less travelled?

While it is a given that the government will continue its heavy investment in areas like defence, it will be crucial to see how Sitharaman progresses with catalysing job growth. It will have to be two-pronged: ensure there is enough investment into research and development in AI and other deep tech to make India an innovative hub, and simultaneously push for private investment in job-intensive manufacturing.

There is an added urgency to this. India’s demographic dividend will soon turn into a burden, with population growth dropping below replacement levels three years ago. This means the workforce is at a peak right now, and providing them with productive jobs that add to national wealth is imperative.

"The world is on the brink of a technological upgrade, with AI and robotics. For India to succeed in this ever-changing dynamic world, innovation is a must," said Kirti Sharma, associate professor at Great Lakes, Gurgaon. "Reviving private investment would also make us more innovation-driven."

"It's a do-or-die kind of moment for India right now," said Ahluwalia. Modi and Sitharaman know it only too well. The question is, will they tailor this Budget to ensure India gets a seat at the high table?

consumers-trust-our-authenticity-appaji-cs-nadagouda-ksdl-chairman

Fri Jan 23 18:55:00 IST 2026

Interview/ Appaji C.S. Nadagouda chairman, KSDL

APPAJI C.S. NADAGOUDA is the chairman of Karnataka Soaps and Detergents Limited (KSDL), the company that manufactures the Mysore Sandal Soap. A Congress MLA from Muddebihal constituency, Nadagouda, since taking over as chairman, has pushed for a range of new initiatives and innovations in the government-owned firm.

Edited excerpts from an interview:

Q/ Tell us about the rich legacy that Mysore Sandal Soap carries.

A/ Mysore Sandal has a legacy that is more than a century old. It is our responsibility to carry forward the vision of our predecessors and imbibe the culture they established. This legacy was shaped by Maharaja Krishnaraja Wadiyar, Sir M. Visvesvaraya and others who were instrumental in bringing Mysore Sandal to life. Their intention was to spread the fragrance of Mysore sandalwood across the world in the form of a soap.

The factory was initially set up in Mysuru and later shifted to Bengaluru in the 1950s. Around the same time, it came under the ownership of the government of Karnataka. The uncompromising quality of the soap and its traditional method of marketing set it apart, and consumers came to trust its authenticity.

Much like ayurveda, sandalwood oil has long been regarded as medicinal. The Maharaja of Mysore believed that its fragrance and benefits should reach even the poorest. That philosophy continues to guide us. We have never compromised on this principle. While we could have opted for synthetic ingredients to enhance fragrance, we have consciously avoided them and continue to use only natural ingredients.

Q/ What changes have you introduced after taking over as chairman?

A/ When the managing director, Prashanth P.K.M., and I took charge, our focus was on becoming more competitive and future-ready. While soaps remain our core product, we are now diversifying into categories such as hand wash, liquid soaps, detergents and dishwashing liquids.

At present, these products are available mainly in Karnataka, but we plan to scale up production and expand to other parts of the country. Mysore Sandal users are extremely loyal; those who use our soap rarely switch brands because they trust it as a natural product. We do not use animal-based ingredients, harsh chemicals or synthetic substances in any of our products.

Q/ How do you plan to further popularise Mysore Sandal?

A/ We have been aggressively expanding our presence through e-commerce, which has particularly helped us reach younger consumers. The response has been very encouraging. In FY 2024–25, revenue from the e-commerce segment stood at Rs 360 crore.

We are also strengthening our digital marketing strategy and offering a wider range of products online. This segment will remain a key growth driver for us.

Q/ What about international markets?

A/ We are actively targeting international markets as well and are keen to establish a strong presence overseas. Currently, we are focusing on markets such as the US and the UAE.

Q/ Are there challenges in procuring sandalwood for your products?

A/ Yes, there has been a decline in the availability of sandalwood trees in recent years. In 2025, we managed to procure around 1,500kg from various sources, including farmers and tenders in states like Maharashtra.

Large-scale sandalwood farming is rare today; most farmers grow it on relatively small plots, often not exceeding 10 acres. Climate change has also affected sandalwood growth in regions such as Mysuru, Shivamogga and the Western Ghats. Sandalwood is a hardy species, and its growth depends heavily on soil and climatic conditions. In the Western Ghats, it may mature in about 15 years, while in regions like Vijayapura, Kalaburagi or parts of Telangana, it can take up to 20 years.

Q/ How do you maintain consistency and quality across products?

A/ We are extremely particular about raw materials and follow stringent quality checks through institutions such as the Institute of Wood Science and Technology and independent third-party laboratories. Quality is non-negotiable for us.

Until last year, we sourced patchouli oil—a key fragrance ingredient—from Indonesia and Malaysia. Due to heavy rains, production there was affected and prices shot up. However, we managed to secure supplies from existing stocks through our contacts. Each soap contains a blend of 13 to 14 different oils. The formulation is highly complex and closely guarded. In fact, even the MD and I are not privy to the exact formula.

Q/ How have you expanded your distribution network pan-India?

A/ Among FMCG companies in India, our growth (at 14 to 15 per cent annually) has been one of the highest. Earlier, we had around 400–500 distributors across India; today, that number has crossed 1,200 and we aim to double it.

Our products are now available even in far-flung regions such as Nagaland. To improve efficiency, we have created regional distribution hubs across states like Uttar Pradesh, Madhya Pradesh, Gujarat and Karnataka. This approach ensures quicker supply and better market reach. The last three years have been exceptionally strong, and I am confident 2026 will be even better.

after-a-tough-2025-more-trouble-ahead-for-small-cap-stocks

Sat Jan 17 15:14:07 IST 2026

If you are a stock market investor betting big on small-caps, 2025 would have left you a little poorer than the previous year. While large-cap indices also endured volatility, they have hit fresh lifetime highs in recent weeks.

Small-caps, however, are still trailing—and it is no surprise. Looking at returns over the past year, the NSE Nifty 50 has gained 10 per cent. By contrast, the Nifty Smallcap 250 index declined by 6 per cent, and the Microcap 250 fell by 10 per cent.

Investors have generally been unsettled by continued geopolitical tensions, the 50 per cent import tariffs imposed by the US and tepid corporate earnings growth. This combination fuelled stock market volatility throughout the year. However, small-caps were also coming off the back of stellar returns in previous years. For instance, in 2024, the NSE Smallcap 250 index surged by 25 per cent, following a massive 46 per cent jump in 2023. This sharp outperformance caused valuations to surge well ahead of historical averages, leading to a loss of investor appetite in 2025 and a steeper correction than that seen in large-caps.

While this correction has reduced some of the ‘froth’, market experts remain cautious as they have yet to find valuation comfort. Between March 2020 and September 2024, the Nifty 250 Smallcap index rose by 500 per cent—with even sharper gains in stocks beyond the Nifty 500—while the Nifty 50 grew at just over 200 per cent, noted Nitin Jain, fund manager at UTI Management Company.

“Valuations in large-cap are in the fair value zone now; small-cap is still a bit on the expensive side. So, valuations are not cheap as such, even after this correction,” he said.

Kunal Vora, head of India Equity Research at BNP Paribas, echoed the sentiments. “We have seen euphoria in mid- and small-caps over the last five to six years. So, just looking at where they were in September 2024 and where they are right now does not make sense,” said Vora.

He pointed out that on a three-to-five-year basis, small-cap stocks had not only seen price appreciation, but their valuation multiples had also escalated—rising, for example, from 20 times to 60 times. A correction back to 40 times did not necessarily mean they had suddenly become cheap. “In any market, you will have stocks which will be reasonably valued. But, as a basket, it is not that just because they have corrected from the peak, they are screaming buys to us,” Vora said.

Where are the markets headed in 2026?

The trajectory will depend on many factors. Corporate earnings have been tepid for several quarters, though some analysts feel they may have bottomed out, suggesting a recovery could be in sight. This remains a key metric to watch, although any recovery may yet be uneven.

“We have seen several quarters of earnings downgrades after certain expectations were set following two or three very good years. We think earnings are bottoming out now. In the second quarter, we started seeing earnings upgrades in a few companies. Going forward, more companies will report stable earnings or an improving trajectory in terms of earnings growth. So, in terms of earnings, 2026 looks much better compared to 2025. The base is also much more favourable,” said Jain.

A major sentiment booster for equity markets this year would be the potential signing of a bilateral trade deal between India and the US. There have been multiple rounds of discussions, and while a deal appears close, it is yet to be finalised. Similarly, a trade deal between India and the EU is also on the horizon and is expected to be completed this year.

While India is not a major exporter, and there are no major export-dependent listed sectors that will be directly impacted, certain sectors such as gems and jewellery, fisheries and textiles have been hit hard by the US tariffs. As these sectors are labour-intensive, they have an indirect bearing on the economy and the markets.

Crucially, trade tensions have weighed on foreign institutional investors (FIIs), who have pulled out of Indian stock markets in massive volumes over the last year. Some of these outflows have been offset by strong domestic retail inflows. The completion of trade deals, especially with the US, would provide a significant boost to FII sentiment.

On the domestic front, the economy appears to be on a stable footing. Inflation has declined considerably, and GST cuts—alongside previously announced income tax relief—have helped boost consumption. The Reserve Bank of India also cut interest rates by 125 basis points as the focus shifted toward stimulating growth amid low inflation.

Gaurav Mehta, head of SIF (Equity) at SBI Mutual Fund, is also bullish on equities at the start of 2026. “On our valuation measures, which track equity valuations as a spread to government bond yields, the correction in equity indexes as well as the drop in bond yields led to valuations moving back towards historical medians. This combination led to our asset allocation framework moving to a 60 per cent equity allocation on a scale of 0–100 per cent, versus 20 per cent entering 2025, suggesting a move to a neutral versus a significant underweight stance. Going into 2026, that allocation stays unchanged,” he said. However, he also expects “leadership” to remain with large-caps, which could increase market polarisation.

“Small-cap valuations remain the most stretched across the curve, with the small/large forward price-to-earnings at 1.25 times, far above the long-term average of 0.9 times and close to previous peaks—signalling that recent performance has been dominated by multiple expansion rather than earnings delivery,” according to analysts at Equirus Securities.

They warned that small-caps remain the most vulnerable to mean reversion should earnings revisions soften or domestic flows weaken.

should-you-invest-in-silver-now-why-analysts-are-urging-caution

Sat Jan 17 15:09:15 IST 2026

In 2025, precious metals massively outperformed equities. While gold gained more than 75 per cent, it was silver that outshined everything else, surging more than 170 per cent, and the rally has continued unabated in 2026. Continued geopolitical tensions and trade-related uncertainties, fuelled by the US administration’s levy of steep tariffs on imports from many countries, led to strong investor demand for precious metals. However, silver’s performance was boosted by dual tailwinds. First, the rising investment appetite amid global uncertainties, and second, industrial use cases driving demand.

These factors drove silver prices from around $29 an ounce at the start of 2025 to more than $80 at the end of the year. On January 12, 2026, silver hit a new all-time high of $84.50. In the domestic market, it went up to Rs2.63 lakh per kilo before retreating to around Rs2.62 lakh. At the start of 2025, it was priced at Rs93,500. Demand for silver has been rising over the past few years as it is used in solar panels, electric vehicles, semiconductors and data centres, among other areas. However, silver supply has not kept pace with this increasing demand.

Silver demand rose by around 24 per cent, from 929 million ounces in 2020 to an estimated 1,148 million ounces in 2025, according to The Silver Institute. In contrast, silver supply during the same period rose by only around 6 per cent, from 974 million ounces to an estimated 1,031 million ounces. Starting this year, China announced tighter control over silver exports, which further drove prices up. China has not imposed a blanket ban on the export of silver; but, under tighter controls, only 44 companies are allowed to export silver in 2026 and 2027. This is one of several measures China has taken over the past two years to curb exports of minerals it deems critical for its industries.

The structural supply tightness underpinned the silver rally, with global silver demand exceeding supply for the fifth consecutive year, said analysts at Motilal Oswal Financial Services. Industrial demand was the second highest on record, driven by solar photovoltaics, electrification, electric vehicles, grid infrastructure and emerging technology applications. James Steel, chief precious metals analyst at HSBC, said that silver prices were “fundamentally overvalued”. He expected demand conditions to remain volatile “with likely upside spikes until near-term tightness is alleviated”. HSBC’s average price forecast for 2026 stands at $68.25, falling to $57 in 2027.

Exchange-traded funds (ETFs) are accumulating at a robust pace and may continue to do so, feels Steel. But, “industrial demand is weakening as price-related resistance lowers purchases,” he noted. He also pointed to rising recycling levels, as high prices, as well as greater electronic, environmental and other recovery efforts boost supply.

The supply and demand mismatch drove up prices, which in turn fuelled investment demand for silver. In the domestic market, the combined assets under management of gold and silver ETFs topped Rs2 lakh crore in December, up from around Rs57,000 crore at the beginning of 2025. Those who had invested at the start of the year would now be sitting on massive gains. However, it may not be wise to think that silver will continue to go up and deliver similar astronomical returns going ahead.

Historically, there have been several instances where silver rallies have been followed by a crash. In fact, silver made hardly any gains for years. It surged to around $40 an ounce in 1980 but then slumped back to $10. Silver topped $50 an ounce in 2011, but that rally, too, fizzled out. It was only in 2025 that it crossed those levels again. One must ask: is this time different, considering the strong industrial use cases driving demand?

According to Motilal Oswal, gold and silver are expected to retain their strategic relevance in early 2026, supported by continued investor demand, limited mine supply growth and relatively inelastic scrap flows. The continued physical market tightness will then continue to reinforce the role of precious metals in long-term investor portfolios. “Commodities are transitioning from momentum-driven trades to strategically allocated assets. While volatility is likely to remain a feature of the market, structural demand, currency dynamics and policy uncertainty continue to reinforce the role of commodities—particularly precious metals—as core portfolio hedges in an increasingly fragmented global macro environment,” said Navneet Damani, head of research, commodities, at Motilal Oswal.

Private wealth management firm Client Associates is advising clients against taking fresh positions on silver at current levels, noting that the “risk-reward balance is presently unfavourable.” While analysts generally remain positive on silver’s long-term demand trends, consolidation in the near term could very well be possible given the magnitude of the rally.

According to fund managers at Tata Mutual Fund, while the strong demand outlook and supply worries are supporting fundamentals for silver’s bullish trend, they believe “profit booking, portfolio rebalancing and revision in demand supply figures” could trigger price correction. “At current levels, investors may remain cautious with the fresh investment and may look to invest in silver through staggered mode considering the volatile nature of the commodity,” they said.

In 2026, the metal’s trajectory will likely depend on whether the industrial “super-cycle” can provide a high enough floor to prevent the historical boom-and-bust patterns of the past. For now, silver remains the focal point of the commodities world, balancing on a fine line between genuine scarcity and speculative fever.

family-business-succession-ambani-bajaj-tata-how-young-scions-are-redefining-indian-business

Sat Jan 10 16:14:39 IST 2026

THE AMBANI SIBLINGS

(children of Reliance Industries chairman Mukesh Ambani)

In 1931, when the British still ruled the subcontinent, Jamnalal Bajaj established India’s first sugar mill—Hindusthan Sugar Mills, the entity that would evolve into Bajaj Hindusthan Sugar. Over decades, the group expanded into energy and consumer care, becoming a household name with brands such as Bajaj Almond Drops Hair Oil.

Now, nine decades later, history is being made again at the company. Anandamayi Bajaj, the fifth-generation scion of the founder, has joined the business. She is the first woman in the family to step into the Bajaj Group’s operational fold.

The 22-year-old graduate in Financial Economics and Mathematics from Columbia University is currently on the ground, travelling across the group’s sugar factories in Uttar Pradesh. For now, she is working closely with the leadership teams of Bajaj Energy, Bajaj Consumer and Bajaj Hindusthan Sugar to master the nitty-gritty of the business. “I recognise that I am stepping into a space built by generations of hard work, and I feel responsible for carrying that legacy forward in a meaningful way,” said Anandamayi.

Her entry marks a cultural shift in a group with roots in a traditional Marwari family. Kushagra Bajaj, chairman of the group and Anandamayi’s father, insists that the old ways are gone. “In earlier times, the girl wouldn’t get anything or get only a little bit. The business would have to be taken care of by the boys,” Kushagra said. “That differentiation, at least in my eyes, is no longer there. It has to work on meritocracy, on capability. If she has fire in her belly, why not give her a chance?”

Anandamayi is aware that her every move will be watched. “Even though I feel supported and included, I know I must prove myself through results, effort and continuous learning,” she said. “I want to demonstrate that opportunity and responsibility must go hand-in-hand, especially in a family-led business.”

Her goal is to blend agility with the group’s deep-seated values. “I am understanding our businesses deeply, from grassroots operations to boardroom decision-making. I am identifying opportunities for modernisation, whether in technology adoption, consumer engagement or operational efficiency. I am exploring new business avenues that strengthen India’s economic future where technology, sustainability, and evolving consumer aspirations intersect,” she said.

Kushagra describes his daughter as a patient listener who grasps concepts quickly, and someone who does not lose her cool. Anandamayi’s vision is clear. “I want to lead with a style that balances speed with stability, innovation with integrity, and risk-taking with accountability,” she said. “I want to build businesses that contribute meaningfully to the nation, especially in future-ready industries.”

While Anandamayi learns the ropes, another scion is already redirecting a legacy giant. Avantika Saraogi is driving Balrampur Chini Mills. the second-largest sugar manufacturer in India, towards a sustainable future. The spark was lit when Avantika, daughter of Vivek Saraogi, chairman and MD of the company, saw a PET-like bottle printed with the words “made from sugarcane”. It was a revelation: a familiar crop could become a future-ready material. This insight led to the creation of Balrampur Bioyug.

“Balrampur may be a leading sugar company, but I felt our next growth engine had to create value beyond the traditional sugar cycle,” she said.

The company is investing Rs2,850 crore to set up an 80,000-tonnes-per-annum Polylactic Acid (PLA) manufacturing facility near its Kumbhi sugar factory. Expected to be completed by mid-2026, it will be India’s first industrial-scale bioplastics plant. “Our plan for Balrampur Bioyug is to scale PLA as a viable, domestic alternative to single-use plastic, because India’s plastic challenge needs urgent and scalable solutions,” said Avantika.

Convincing the family to undertake such a big transition required a solid case. “I showed how we could leverage our existing strengths in sugarcane processing by deriving yet another high-value product from the same sugarcane stick; we could enhance overall utility, improve financial returns, and deliver greater value to our farmer community,” she said.

Across the corporate landscape, the quarter-century of economic growth has necessitated a new breed of leadership. “The past quarter-century has witnessed unprecedented economic growth that required several more business leaders in these families,” said Kavil Ramachandran, professor and senior adviser at the Thomas Schmidheiny Centre for Family Enterprise, ISB.

A prime example is the transition at Piramal Group. In September, Ajay Piramal paved the way for his son Anand to take charge as chairman of Piramal Finance. While Ajay built his fortune in pharmaceuticals, Anand is carving his niche in financial services.

Since joining in 2019, Anand has led Piramal Finance’s Rs34,250 crore acquisition of DHFL—the largest resolution under the Insolvency and Bankruptcy Code—and pivoted the company from wholesale real estate lending to a retail-focused powerhouse. “In the last five-six years, we have created a business with 16,000 employees, 520 branches, Rs75,000 crore in terms of loan disbursements, and it has been the fastest growing large retail NBFC in the country,” said Anand.

Anand’s philosophy is rooted in democratisation. He recalls a sari shop owner near Bengaluru who was denied a loan by others because his house fell between municipal limits. Piramal Finance stepped in, and the business thrived.

“Profit is like oxygen of growth. But, just like the purpose of a human being is not just to inhale the oxygen, but to make a difference, the purpose of a business is not just to make money, but do something bigger,” Anand reflected. “Today, 80 million Indians have small businesses and only 10-15 per cent have access to modern finance. We would like to give this same opportunity to small business owners across the country.”

Simultaneously, the pharmaceutical vertical is being shepherded by Ajay’s daughter Nandini, who is chairperson of Piramal Pharma. She is targeting ambitious growth. “Our FY2030 aspiration is to become a $2 billion revenue company with a 25 per cent EBITDA margin,” she said.

The most visible shift in India Inc. is perhaps occurring within Mukesh Ambani’s Reliance empire. Mukesh’s daughter Isha (Anand Piramal’s wife), along with her brothers Akash and Anant, has taken centrestage at Reliance Industries Limited (RIL), India’s largest company.

Isha runs Reliance Retail, India’s largest network with over 19,340 stores. She is now taking the fight to FMCG giants like Hindustan Unilever and Nestle through Reliance Consumer Products. “We know the Indian consumer better than anyone. Our unmatched insights are drawn from scientific data mining—from billions of real transactions, across every state, every income segment and every lifestyle pattern,” said Isha. “India’s consumer market is a $2 trillion high-growth opportunity. For the first time, rural markets, consisting of 900 million consumers, are driving 65 per cent of the FMCG growth.”

Mukesh, speaking at the Reliance AGM, endorsed the trio’s readiness. “Fully embedded in operations and decision-making, they are shaping our businesses with energy, conviction, and clarity of purpose,” he said.

Meanwhile, Tata Group is witnessing its own subtle succession. Neville Tata, the 32-year-old son of the group’s chair Noel Tata, was recently inducted into the board of Sir Dorabji Tata Trusts. Neville has proved his mettle in the retail trenches with Trent, specifically with the spectacular success of Zudio.

With a model akin to a ‘budget Zara’, Zudio has revolutionised Indian fast fashion. Its revenues top $1 billion and it has around 800 stores. Neville’s leadership has helped Trent capture the aspirational, price-conscious youth market.

In Kolkata, Shashwat Goenka, scion of the RP-Sanjiv Goenka Group, is balancing heritage with reinvention. Having taken charge of Spencer’s Retail at just 23, he is now vice-chairman of the group, driving a massive push into renewable energy and FMCG. “Our business, over 220 years, has been a journey of constant reinvention,” he said. “It is really about reinventing yourself literally on an annual basis.”

The group is pivoting CESC, its power utility, towards green energy. By FY2029, it aims to set up 3,200 MW of hybrid renewable capacity.

Shashwat is also sharpening the focus on the retail front. Unlike Reliance’s pan-India blitz, he is doubling down on regional strongholds for Spencer’s and expanding the gourmet chain Nature’s Basket and the snacking brand Too Yumm. “It’s a multi-pronged strategy,” he said. “We are betting on different sectors of consumption.”

The young leaders are far more tuned into technology and comfortable in the use of it than their predecessors, said Sonu Bhasin, family business historian. “This knowledge of the use of technology will go a long way in the inheritors being successful,” she said. “The challenges will, however, emerge from the lack of experience, for which they can lean on the old experienced hands in the business.”

But, the path for these inheritors is also paved with challenges that their predecessors never faced.

“Turbulence in all the various components of the external environment has made it more challenging for any business to develop a strategy,” said Ramachandran. “With greater staff turnover and the disappearance of loyalty to any organisation, business management is becoming further challenging.”

And succession is not just inheritance, it is more about preparation. “The way you reduce risk of the company for the shareholders is by appointing the right successors and preparing them to be able to take over,” said Nirmalya Kumar, Lee Kong Chian Professor of Marketing at Singapore Management University.

He noted a shift in management dynamics. “Internal loyalties shift once kids take over,” he said. “There will be managers or senior executives who are aligned to a way of working when the father is around. The sons or daughters may come with different ideas.”

Interestingly, not every scion chooses the operational route. Rishabh Mariwala, son of Marico chairman Harsh Mariwala, founded Sharrp Ventures. “I grew up assuming I would join my father’s business, until I realised I wanted a life with more autonomy and pace,” said Rishabh. He stepped aside, allowing CEO Saugata Gupta to lead Marico, and focused on investing in startups like Nykaa and Mamaearth.

“I took the leap and became an entrepreneur, joining my mother who had a hobby of soap making,” said Rishabh. In 2015, he started his own brand, but sold that just before the 2020 Covid pandemic to focus completely on investing. “Those early years shaped everything I know about resilience, uncertainty and the quiet realities of building from scratch,” he said.

Whether they are building bioplastic plants, democratising finance, or investing in the next unicorn, India’s next-gen leaders are united by a common thread. As Kushagra Bajaj put it, success ultimately comes down to the grind: “For the new and interesting things to happen, you have to go to office and do the boring stuff for 330 days.”

i-did-not-fit-in-with-marico-rishabh-mariwala

Sun Jan 11 21:52:56 IST 2026

Interview/ Rishabh Mariwala, founder and managing partner, Sharrp Ventures

Q/ Generally, in business families, children take over the top job when the father decides to step back. It has been different at Marico. Tell us more about the reasoning behind this decision.

When my father started Marico, he moved from a family-owned and operated business to creating a professional organisation. While he was the CEO, I worked in Kaya (Marico’s chain of skin clinics) between 2007 and 2010. That is when I sensed the organisation’s culture, and I realised I did not fit in. We were working in silos; within marketing, we performed specific functions with limited clarity on roles. My father was clear that he wanted a professional organisation. Consequently, my sister and I decided to chart our own paths. Leaving in my 20s was a huge decision; I wanted autonomy, and to take risks.

I took the leap and became an entrepreneur, joining my mother’s soap-making hobby. I started selling soaps from a small 2,000-sqft shed in Sewri, Mumbai. I learned the ropes of doing business in this country and how critical the consumer is. In 2015, I built my own brand, Pure Scents.

Later, I became interested in impact investing. In 2020, I sold my brand to focus fully on investing. I asked my father why we ploughed all our earnings back into Marico. Initially, he pushed back, but eventually, he let me try. We scored big on our first few investments in early-stage businesses like Nykaa and Honasa (Mamaearth).

Q/ How has the investing journey panned out?

We have invested in some 40 companies and 18 funds. We have our venture capital, which invests directly into companies, and a public market portfolio. Earlier, we were sector-agnostic, investing in hardware, clinical testing, and edtech. In 2020, we decided to invest in what we understand: consumer businesses.

As a family office, we have the opportunity to invest across stages. Venture capital funds often cannot do this because they have limited time horizons—they must exit to return money to investors. We, however, have long-term patient capital.

Q/ But some consumer businesses will be in direct competition with Marico. What is the strategy there?

We have clear guardrails regarding investing. For example, we won’t invest in the hair oil business. Beyond that, the positionings are different. The opportunity set is so large that even if we invest in something similar, it won’t eat into Marico’s market share.

renewables-are-a-core-pillar-of-rpsg-growth-shashwat-goenka

Sat Jan 10 16:03:50 IST 2026

Interview/ Shashwat Goenka, vice chairman, RP-Sanjiv Goenka Group

Q/ You started your journey at RPSG with retail and then moved into FMCG as well. How are those businesses growing?

At Spencer’s Retail, we took a series of strategic steps: the acquisition of Nature’s Basket, the launch of Jiffy (quick commerce platform), and key operational and cost-efficiency initiatives. My focus is now expanding across other growth segments within the group, including technology, chemicals, renewable energy and FMCG.

In FMCG, demand from youth demographics, urbanisation and digital discovery continue to propel growth. Accessibility to consumers has become easier with the boom in D2C and e-commerce, and the ubiquity of mobile phones. It has levelled the playing field; that is why we are seeing so many startups emerging in the consumer space.

Our growth engines—food, personal care, and herbal wellness—ride different demand curves, and we expect that to continue. We will continue to drive insight-led innovation, disciplined pricing and channel designs that remain pertinent to our customers.

Q/ How do you see the renewable energy story evolving?

India’s renewable story is moving from rapid capacity creation to integrated, execution-led growth. As tender sizes increase and policy frameworks mature, the focus is shifting towards hybrid and firm dispatchable renewable energy (FDRE) models that can deliver reliable power at scale.

For us, renewables are a core pillar of the group’s growth. We are building a significant portfolio with a clear roadmap to scale further through wind-solar hybrid, FDRE, and battery storage-linked projects. We are also investing in setting up a solar manufacturing value chain.

Q/ As global supply chains reset and India pushes to become a manufacturing hub, how do you see the macro shift shaping the chemicals sector in India?

The global chemicals market is currently valued at $4.7 trillion, with India commanding just over 4 per cent. While the opportunity is huge, the real growth story lies in speciality chemicals that are custom-formulated for specific applications. Through PCBL Chemical, we are building scale in speciality chemicals and performance materials. With the acquisition of Aquapharm, we are broadening our product portfolio and global reach, while Nanovace will prepare us to meet the demand for future-facing EV battery chemicals.

Q/ How is Firstsource adapting to the huge technological changes happening in services businesses?

Our strategy moves beyond conventional outsourcing by embedding AI, automation and analytics into core operations, enabling smarter, outcome-driven workflows. We have made strategic investments in platforms like AppliedAI and Lyzr.ai to build enterprise-ready AI capabilities.

opportunity-and-responsibility-must-go-hand-in-hand-anandamayi-bajaj

Sat Jan 10 16:00:58 IST 2026

Interview/ Anandamayi Bajaj, general manager, group strategy, Bajaj Group

Q/ You are the first woman to be given responsibilities from the promoter family in Bajaj Group. How do you see this?

I recognise that I am stepping into a space built by generations of hard work, and I feel responsible for carrying that legacy forward in a meaningful way. Although I feel supported and included, I understand that I must prove myself through results, effort, and continuous learning. I want to demonstrate that opportunity and responsibility must go hand-in-hand, especially in a family-led business.

I am excited to bring a new perspective, one shaped by my education, my global exposure, and my generation’s way of thinking. My goal is to infuse fresh energy and agility into the business while also respecting the deep values that have shaped Bajaj’s culture.

Q/ Where do you see yourself in the future?

Currently, I am understanding our businesses deeply, from grassroots operations to boardroom decision-making. I am identifying opportunities for modernisation, whether in technology adoption, consumer engagement or operational efficiency. I am also exploring new business avenues that strengthen India’s economic future, where technology, sustainability and evolving consumer aspirations intersect.

I want to help the group become more global and more digital. I aim to lead with a style that balances speed with stability, innovation with integrity, and risk-taking with accountability. I want to build businesses that contribute meaningfully to the nation, especially in future-ready industries. And I want to strengthen a culture where young talent and women can see truly limitless possibilities.

Q/ Bajaj is a diversified business group with interests in sugar, ethanol, power and FMCG. What excites you about these sectors?

What excites me most is not a particular business but how each one requires a completely different way of thinking. In our consumer businesses, it’s all about understanding evolving preferences and creating products that people genuinely want. In energy and sugar, it’s strategic thinking, building future-ready capabilities that support India’s growth, while also driving operational excellence and efficiency at scale. This variety keeps me energised. It challenges me to approach every problem with a fresh perspective.

our-focus-is-to-replace-conventional-plastics-avantika-saraogi

Sat Jan 10 15:58:00 IST 2026

Interview/ Avantika Saraogi, executive director, Balrampur Chini Mills

Q/ Balrampur is a leading sugar mill in the country. But you chose a different path of sustainability via Balrampur Bioyug.

We believe sugarcane is a renewable resource, and PLA (Polylactic Acid, a biodegradable, thermoplastic polyester made from sugarcane and a sustainable alternative to petroleum plastics) aligns perfectly with that belief. It is plant-based, low-carbon and compostable. By locating India’s first industrial-scale PLA facility next to our sugar complex, we gain operational efficiencies. Our focus is to create a reliable domestic supply to replace conventional plastics. Bioyug is our commitment to enabling India’s transition away from fossil-fuel single-use plastics.

Q/ You come from a traditional business family. How did you convince family members in the business on what you wanted to do and how it was the future?

I grew up where every major decision was grounded in long-term vision. My task was to demonstrate how PLA aligns with our history of progressive diversification. I realised how transformative PLA could be for the Indian market—both environmentally and economically.

I explained how India’s dependence on traditional plastics must be reduced and how PLA offers a sustainable alternative. Crucially, I showed how we could leverage existing strengths: deriving a high-value product from the same sugarcane stick enhances utility and delivers greater value to our farmers. Once they understood the scale and strategic fit, the alignment was natural. This mirrors the vision behind my father’s expansion into ethanol—innovation anticipating future needs.

Q/ How do you intend to scale Bioyug over time?

Our plan is to scale PLA as a viable domestic alternative because India’s plastic challenge needs urgent solutions. The country produces over 5 million tonnes of single-use plastic waste annually. As industries seek sustainable options, demand for PLA will rise.

We will begin manufacturing with 80,000 tonnes per annum. India’s first industrial-scale PLA plant is designed to anchor a circular bio-economy. Today, the Indian PLA market is small, but the potential is vast—the straw market alone exceeds 1,00,000 tonnes. Our focus is to build early demand and a scalable ecosystem.

Q/ What kind of investment will this business see?

The investment reflects our conviction in sustainable materials. We are investing Rs2,850 crore in phases to set up an 80,000-tonnes-per-annum PLA plant. This marks one of the largest diversification moves in our history, positioning us beyond the traditional sugar-ethanol cycle.

As we scale production and build awareness, we expect Balrampur Bioyug to become a sizeable contributor to BCML’s growth. It is a strategic, future-oriented pillar at the forefront of India’s bio-based materials revolution.

no-amount-of-money-can-change-our-mission-jimmy-wales-co-founder-of-wikipedia

Sat Dec 20 19:40:59 IST 2025

Interview/ Jimmy Wales, co-founder of Wikipedia

Jimmy Wales could have been a billionaire. Few people in history have had so certain a shot at that status and decided against taking it. But Wales had another target in sight and he took the shot, with a fair amount of accuracy. Wikipedia, which he co-founded 25 years ago, is one of the most visited websites in the world, with millions of people relying on it as a primary source of information. And he remains steadfast to its mission—to provide free, accurate knowledge to anyone, anywhere.

It has not been easy. And it has become tougher of late, thanks to misinformation campaigns, biased reporting and the rise of social media. What is at stake are not just facts but also the idea of trust. That might be the reason Wales is exploring the theme in his new book, The Seven Rules of Trust.

In an interview with THE WEEK, he discusses how Wikipedia ensures the health of its community, the tools needed to manage misinformation, and the vital role volunteers play in keeping Wikipedia neutral and reliable. He also reflects on the role of artificial intelligence, and how emerging technologies could be harnessed to support the community while maintaining the platform’s core values. Excerpts:

Q/ Many people trust Wikipedia, despite knowing that it can be edited by anyone. How do you explain this paradox?

I think the trust people have in Wikipedia comes from long-term experience of using it. Even though people may not fully understand how it works, they can see the results. You go to almost any topic in the world, no matter how obscure, and there is this great information available, with sources you can click through and check. One of the ways we have built trust, despite the obvious imperfections, is through Wikipedia’s transparency. You can see the sources and the material, read the debates, and review all past versions of the pages. But, of course, in order to continue earning that trust, we need to maintain our efforts and ensure that the quality of the content remains as high as possible.

Q/ One important theme in your new book was the idea of trust repair. What has been the most significant trust repair moment in Wikipedia’s history, and what did you learn from it?

I would say that early on, we had a serious error in a biography of a well-known journalist. He contacted me, and I had it fixed within 10 minutes. However, he then went on to write a scathing editorial in the USA Today, which led to a lot of bad press. It was not the kind of attention we wanted. What we did in response was to implement our BLP (Biography of Living Persons) policy, which states that any negative statement in the biography of a living person must be backed by a source. If there is no source, it should be removed. That was a significant change that came about because we knew we needed to be trustworthy.

Q/ The volunteer-driven model of Wikipedia is still somewhat unique. It is a great strength, but it is also a big challenge. What reforms and innovations do you think are needed to keep this community healthy and robust?

Thinking about community health, as we call it, is at the heart of everything we do. We hold local meetups and events worldwide to get to know people. We have our annual conferences where top volunteers discuss best practices and the core values of Wikipedia. We also have local chapters around the world, working on partnerships with galleries, libraries, archives, and museums. All of this is really important because Wikipedia thrives when we have a community committed to its core values: quality, neutrality, and integrity.

Of course, we must also ensure that volunteers have the necessary tools to block trolls and keep the environment under control so that it is not overrun by misinformation. So, it is not really about reform but about continuing to be vigilant and doing what needs to be done.

Q/ All artificial intelligence models train on Wikipedia. How would you describe your relationship with them?

It is an interesting situation. All major AI models are trained on Wikipedia, and one of the issues we face is that they are constantly crawling our servers. Ideally, we would like them to use our enterprise product and pay a fee, which would ease the load on our servers and also benefit them. That is something we are working on. Google is a great customer, but we would like others to become customers, too.

One of the interesting things about large language models is that when people first encounter them, they find them amazing. But the more you use them, the more you realise the hallucination problem is quite significant. This is especially true for obscure topics, and Wikipedia is full of such topics. So, the technology is not yet capable of writing Wikipedia articles to our standards.

That said, we do see potential for AI to assist the community, perhaps in tasks like vetting, reviewing, or making suggestions. In those contexts, it does not need to be perfect—it just needs to be useful. So, there are definitely some exciting opportunities.

Q/ Misinformation is a big challenge now. In such a polarised information environment, how challenging is it to maintain neutrality and reliability?

It has always been a challenge. You have to be thoughtful and mindful of it. But, as it turns out, there is still a lot of really great journalism out there, and scientific research is moving forward as strongly as ever. I think a lot of the noise we hear comes from social media. The rest of the world is not as polluted as some might think. Sure, we have seen a rise in partisan media, which is problematic, but even then, you can work with that. You can always make sure you have seen both sides of the story and approach things with a balanced view. It is always a challenge, but you always have to take it seriously.

Q/ Does Wikipedia have systemic biases? Your co-founder has said it has a left-liberal bias.

It is hard to say. Certainly, as human beings living in a particular era, I am sure there are areas where we are getting things wrong. Whenever we hear criticisms of bias, we need to take them seriously. We should ask ourselves: What are we missing? What should we add? What is going on? Because if we just dismiss concerns, that is not the right attitude. We need to be open and encourage people to help us improve.

In many areas of Wikipedia, there is a lot of work to be done—some of it around bias, and some around simply completing the work and adding more information. But the idea that Wikipedia has been taken over by “woke radicals” is just not true. That does not describe what is going on at all.

That said, it is true that Wikipedia often reflects mainstream media, and mainstream media does have biases. We all need to grapple with that and ask: What voices in society are we not hearing? What ideas have been neglected or unfairly treated? Wikipedia is part of that larger discourse, and I think it is healthy for society.

Q/ How sustainable is the current funding model for Wikipedia in the long term?

We think it is sustainable. We have been doing this for almost 25 years, and we are coming up to the 25th anniversary of Wikipedia. The vast majority of our funding comes from small donors, which is something we are very proud of. This means we are not dependent on government funding or a few billionaires who might introduce bias or their own agendas. As long as people continue to love Wikipedia and are willing to support us, we will be fine.

We run the Wikimedia Foundation in a financially conservative manner, always trying to be careful with money and build up reserves each year. One of the chapters in the book discusses the virtue of independence, which is crucial to us. Having a stable financial footing means we can resist external pressures. For example, when a journalist from The New York Post tweeted at Elon Musk, suggesting that he buy Wikipedia, I just tweeted back: “Not for sale.” No amount of money can change our mission.

Q/ In a developing country like India, Wikipedia plays an important role in knowledge access. How do you recognise this?

This is really important to us. We are excited about growing the community in India and having more editors there. It is vital for us to ensure that people have access to free knowledge, especially in developing countries where information can be more difficult to access.

Q/ If you were to start Wikipedia from scratch now, in this era of social media and AI, what would you do differently?

I don’t think I would do anything differently. I am actually quite happy with how Wikipedia has turned out. The model works. While social media is interesting, it does not really affect Wikipedia directly. AI might provide us with some interesting tools, but it does not change the values or goals of Wikipedia. So I would not change much.

Q/ You emphasise transparency as a building block of trust. What does transparency look like for a large online platform? Where do you think today’s tech giants fall short?

One of the problems with existing online platforms, especially social media, is that moderation decisions are often not transparent. It is difficult to understand why certain content is removed or why specific accounts are banned. This lack of transparency fuels concerns about bias and discrimination against certain groups or ideas.

I would like to see more transparency in how these decisions are made. A radical approach could be to give more control to the community rather than the company. One thing I like about Twitter these days is the community notes feature, where people can fact-check and link sources. However, I would like to see more transparency about how it works behind the scenes and how they reach their conclusions.

Allowing users to rate and fact-check content is a good thing.

Q/ People are increasingly relying on algorithms they don’t understand at all, including chatbots. How do you see these rules applying to AI systems?

I think they do apply very well. AI companies need to take trust seriously if they want long-term success.

THE SEVEN RULES OF TRUST: WHY IT IS TODAY’S MOST ESSENTIAL SUPERPOWER

By Jimmy Wales

Published by Bloomsbury

Price Rs699 Pages 352

from-matsya-6000-to-carlsberg-ridge-inside-indias-ambitious-deep-ocean-mission

Sat Dec 20 18:02:49 IST 2025

Imagine a vault so vast that it stretches across underwater mountains, built by nature over thousands—sometimes millions—of years. A vault packed with gold, silver, copper, cobalt and rare earth elements that power everything from smartphones to satellites. Now, imagine India being handed the keys to explore some of the richest parts of this vault.

That moment has already materialised.

In September, India took a decisive leap into the global race for deep-ocean minerals by signing a landmark 15-year agreement with the International Seabed Authority (ISA). The signing, held at Prithvi Bhawan, the ministry of earth sciences headquarters in Delhi, during the visit of ISA Secretary-General Leticia Carvalho, gives India exclusive rights to explore 10,000sqkm in the Carlsberg Ridge—a 3,000-km-long underwater mountain chain in the Indian Ocean. It is believed that the area holds polymetallic sulphides (PMS), which are deposits rich in precious and industrially vital metals.

The Carlsberg Ridge lies closer to India than other ridge systems, a fact that will help reduce operational costs. “The Carlsberg Ridge exploration rights give India access to a scientifically promising area known for active hydrothermal vents and PMS deposits,” said Manasa Ranjan Behera, professor of ocean engineering at the Indian Institute of Technology Bombay. “This region may contain high-value metals needed for India’s future manufacturing and clean-energy sectors. In addition, the exploration allows Indian scientists and engineers to advance research on seafloor geology, hydrothermal circulation, and unique deep-sea ecosystems, strengthening India’s position as a leading ocean science nation.”

The Carlsberg Ridge agreement places India in a unique position. It already holds a 75,000sqkm polymetallic nodule (PMN) exploration contract in the Central Indian Ocean Basin. It is expected that by utilising 10 per cent of the PMN reserve, the country can meet its energy requirements for the next 100 years. India also has a 10,000sqkm PMS contract on the Central and Southwest Indian Ridges. With the new agreement, India becomes the first country with two PMS exploration contracts and the holder of the largest PMS exploration area globally.

“Ocean water naturally contains tiny amounts of metals,” said defence and space analyst Girish Linganna. “Over millions of years, these metals slowly settle and stick to rocky surfaces on seamounts, forming hard, black crusts that look like thick paint layers. These crusts are incredibly rich in cobalt, nickel, copper and rare earth elements—metals that are absolutely crucial for modern technology.”

Understanding how these underwater riches form is like watching nature’s own incredible manufacturing process. Deep beneath the ocean floor, the earth’s interior is extremely hot. When seawater seeps down through cracks in the seafloor, it gets heated to temperatures over 400 degrees Celsius—hot enough to melt lead. This super-heated water dissolves metals from rocks deep inside the earth, creating a mineral-rich soup. When this metal-loaded hot water shoots up through underwater vents (like geysers), it meets the freezing cold ocean water above. Just like how steam becomes water droplets when it hits cold air, these dissolved metals instantly solidify and fall around the vents, creating chimney-like structures over thousands of years. These chimneys are packed with valuable metals—it is like nature building its own treasure towers.

India’s deep-ocean programme spans advanced technology development. As per a representative of the MoES under the Deep Ocean Mission, India is working on developing advanced technologies. Apart from the human submersible MATSYA-6000 and the deep-sea mining machine VARAHA, this includes seabed mapping tools and marine biotechnology platforms. Together, these efforts enable India not only to identify resources but also to develop the capability required to access them sustainably.

The 15-year work plan under the ISA covers seafloor mapping, water-column surveys and initial geological sampling. Over the middle period, more detailed surveys and high-resolution mapping and environmental baseline studies will be undertaken to understand the mineral deposits and the biological communities around hydrothermal vents. The final phase may focus on development of prototype deep-sea technologies, assessing environmental impact and evaluating future mining feasibility.

“The plan involves the development and testing of autonomous, remotely operated vehicles, specialised sampling tools and prototype extraction systems to eventually support future commercial mining decisions,” said Behera. “The data generated over this period will be critical for assessing the technical feasibility, economic viability, and environmental sustainability of any potential exploitation activities.”

However, it is not an easy task. Major challenges include extreme depths (over 2,000m), rugged terrain and high temperature near hydrothermal vents. Operations would also be made technologically demanding for high-quality environmental data because vent ecosystems contain rare and sensitive species—so, exploration must be cautious and responsible. Additionally, high capital investment requirements and volatile global mineral markets present major economic uncertainties.

Detailing the nature of the task ahead, Prof Sunil Kumar Singh, director, CSIR-National Institute of Oceanography told THE WEEK: “It requires high-resolution bathymetric, geophysical and geochemical mapping of the ridge system, using ocean research vessels, remotely operated and autonomous underwater vehicles and a large number of in situ mineralogical, chemical and biological measurements.”

He added that it took the CSIR-NIO almost four decades to conclusively explore 1.5 lakh sqkm in the Central Indian Ocean; the total area of the Indian Ocean is about 71 million sqkm.

But, despite the challenges, the long-term strategic value of the effort makes it a high-priority national endeavour.

“Ocean mining holds tremendous future potential for the world,” said Lt Gen C.A. Krishnan, former deputy chief of the Army staff and an expert on rare earth minerals. “However, we need to wait till appropriate technologies are available for extracting mineral resources from such depths economically. Also, we need to remember that even on land, the lead time required—from the time of discovery of a mineral deposit to mining it—is about 12 to 15 years. Considering the need for elaborate exploration and its low success rate, the lead time required for exploration from the ocean will only be significantly higher. The success rate would be much lower and the investment required for exploration much much higher.”

Krishnan added that high-grade gold deposits on land occur at about 8-19 grams per tonne, whereas ocean concentrations are extremely low, making extraction a massive challenge. “Imagine the huge quantity of ocean bed soggy sand that needs to be scooped out for extraction,” he said. “The ocean waters are estimated to contain about 20 million tonnes of gold dissolved in it. But the extremely dilute concentration makes it a totally uneconomical source. So what is more important at the moment is to be part of formulation of appropriate international legal frameworks for ocean mining rights and also to invest in R&D and forge alliances and partnerships with friendly countries.”

Many institutions support India’s programme. The MoES leads policy direction and coordination with ISA. The National Centre for Polar and Ocean Research spearheads scientific operations on the Carlsberg Ridge. The National Institute of Ocean Technology develops deep-sea vehicles and submersibles, while the CSIR-NIO and Geological Survey of India conduct seabed geological studies and resource estimation. The Indian Space Research Organisation provides remote sensing, navigation and communication support. IITs and universities contribute research in ocean engineering, robotics, ecology and law of the sea.

For India, these efforts are already yielding results. Parliament records show India has demonstrated collection of over 100kg of cobalt-rich polymetallic nodules from 1,173m depth in the Andaman Sea in 2024. Two active hydrothermal vent fields have been identified in the Central Indian Ocean and biodiversity surveys have discovered 23 new deep-sea species. These achievements, along with the development of MATSYA-6000—capable of reaching 6,000m depth—and the VARAHA, place India among the global leaders in deep-ocean exploration.

Experts note that the global race for deep-sea minerals is growing. China, Japan, France and several Pacific states are exploring resources, but no country has begun commercial extraction in international waters. “This shows that while the global potential is significant, the world is still in the exploration and technology-development stage,” said Behera. “The future of this industry will depend on balancing mineral demand with environmental protection and international regulations. With rising global demand for strategic minerals and increasing pressure to diversify supply chains beyond limited land-based reserves, the global potential of deep-sea resource development is substantial, positioning it as an emerging frontier in the blue economy and resource security landscape.”

Sustained engagement in deep-ocean exploration offers India enhanced resource security, reduced import dependence, domestic high-tech industry growth, specialised workforce development and leadership in international ocean governance. “The initiative is also likely to promote scientific innovation, strengthen marine research infrastructure, generate specialised workforce development and bolster India’s leadership role in international ocean governance,” said Behera. “If pursued responsibly with strong environmental safeguards and evidence-based decision-making, deep-ocean exploration could become a transformative pillar of India’s blue economy and long-term sustainable development strategy.”

the-real-cost-of-us-tariffs-how-indias-exports-are-taking-a-major-hit

Sat Dec 20 17:30:52 IST 2025

India’s exports to the US, its biggest trading partner, plummeted by 37 per cent from May to October. This was the clearest indication yet that President Donald Trump’s punitive tariffs, amounting to 50 per cent on most goods from India, are now beginning to bite.

By some estimates, 1.35 lakh jobs have been lost in the gems and jewellery sector, one of the biggest segments in India’s exports to the US, while 1.5 lakh textile and garment sector workers are now out of a job. The impact could be greater when you consider more export-oriented sectors, like seafood and marine products, which employ about 3 crore Indians.

However, there is good news and bad news.

For all the impact of the US tariffs on exports, India’s economy seems to retain its glow—GDP growth in the July-September period was 8.2 per cent, with projections for the whole financial year now being raised by the Reserve Bank to upwards of 7 per cent. This will help India retain its position as the world’s fastest-growing major economy.

But, there is bad news—and worse—waiting in the wings. While the fall in India’s export volumes to the US was expected, what is alarming is the fall of exports in areas that have not been impacted by the punitive duties.

“There is this question of higher tariffs, but the bigger uncertainty comes from the fact that there is no deal,” said Ajay Chhibber, visiting scholar at the Institute of International Economic Policy at George Washington University. “Importers may be sourcing from other places now, thinking that with India, the situation remains very uncertain.”

Experts cite two likely scenarios for this drop: one, many exporters might have exported goods in bulk ahead of the tariffs kicking in. The second one is the worrisome bit—buyers in the US, who were till now sourcing from India, are now looking to other countries to source the same items, because the uncertainty over India could well mean that Trump could expand his tariffs to more areas. For instance, medicines and mobile phones are exempt currently, and so are services. The worry is that if progress is slow for the full-scale Bilateral Trade Agreement (BTA) and the Indian economy shows no signs of flinching, Trump could well expand the ‘coverage’ of his tariff tantrums.

The fact that there is even worse news stems from the reality that the arduous road India is taking to the US trade deal has been strewn with policy zig-zags on a daily basis—and they come with real-world costs. Those are not easy to overcome with just two signatures and a handshake, or a bear hug.

Reality bites

“After the tariffs were imposed, we have not received even a single order,” said Suresh Mathew, managing director of Nilex Exim Pvt Ltd, which sends packaged food items to the Asian diaspora. About 40 per cent of its exports were to the US. The company has reduced production and staff size.

When Trump started the whole tariff issue, India initially was better off with fewer duties than its rivals and was expected to walk off with a deal at the earliest. However, in reality, while even the likes of China hit on some sort of deal, India’s negotiations got stuck on the contentious topic of GM produce and opening the domestic market for American agriculture and dairy.

Meanwhile, rivals like Vietnam, Bangladesh, Sri Lanka, and the Philippines, who had all started off in April with tariffs higher than India’s, worked out deals which made them a much more attractive source for US buyers—at tariffs of 19 per cent (for the Philippines) and 20 per cent (for others).

Why trade with the US matters

India, on its part, has maintained decorum after each prickly Trump dump on Truth Social, even while exploring alternative options. The trade talks with the likes of the European Union (EU) were suddenly put on priority with a flurry of high-profile visits. The 27-member EU, with its purchasing power and size, is perhaps the only market comparable to the US. The recent G20 Summit saw India sew up a trilateral with Canada and Australia, and a broader agreement on furthering trade and business ties. The commerce ministry’s calendar is now chock-a-block with trade talks ranging from Oman (on the verge of completion) to Chile (the fourth round of talks) set for this month.

But make no mistake, the US market is like no other. “We are trying to explore new territories. Europe is one. India is now looking at South America with new eyes, and the Export Promotion Council did a roadshow in Australia recently. But the problem is that the US always had, and has, high volumes and currently there aren’t a lot of alternatives to replace it,” said Ankit Jaipuria, co-founder of ZYOD, which exports apparel to 40 countries.

The numbers speak for themselves. The US is India’s largest trading partner—the bilateral trade was around $130 billion in 2024-25. The US accounts for 17 per cent of India’s merchandise exports. More importantly, many labour-intensive sectors have strong exposure to the US market. A drop in this trade is bad for India, and not just in monetary terms, as the job losses could well become a political and sociological problem.

Four months into the high tariffs, the collateral damage is acute. Sectors like gems and jewellery reported a 30 per cent fall in October. The textiles and garments industry has already lost out on the lucrative Christmas shopping season, and they are now on the verge of losing summer orders worth $2 billion.

“The share of the US in India’s textile export basket declined to 28 per cent in September, a notable drop from the 36 per cent range seen till August,” said Miren Lodha, senior director of Crisil Intelligence, the analytics arm of Crisil. “Additionally, other key sectors such as electrical machinery and equipment, as well as marine products, have experienced a decline in exports.”

And it will take more than an interim trade deal to set matters right.

The next best thing

For the moment, many exporters are covered since many of them sent consignments in advance, anticipating a tariff onslaught. Apple, for instance, airlifted 600 tonnes of iPhones on five chartered planes from India to the US.

But the days ahead will be tough to navigate. “The business model itself has changed,” said Jaipuria. “On the demand front, it will never go back.”

This spectrum of impact will depend on the strategy exporters adopt. Some have cut staff and shut down manufacturing plants, and for many of them going back to pre-tariff status will be tougher, as deals will have to be renegotiated and labour will have to be re-recruited.

Some others have absorbed the tariffs within their cost, which, despite eating into their margin, helps them maintain their supply agreements. Some large players with better negotiating power have even gone in for renegotiation of contracts. However, they are in the minority, with most US buyers shifting from a Free on Board (FOB) model (once the consignment is on the ship it becomes their responsibility), to a Delivery Duty Paid (DDP) model (the exporter takes care of all the financial logistics, including the additional burden).

There are some biggies who have set in motion efforts to shift their operations to countries with lower tariffs. Some garment makers are eyeing Bangladesh and Sri Lanka, but this is something only big players can pull off. And the job losses within India will still remain.

“The biggest challenge is lack of predictability,” said Ravi Saxena, CEO and founder of the home appliances brand Wonderchef, which exports to many countries including the US. “Without clarity on future tariff structures, exporters are hesitant to commit to long-term pricing or capacity expansion. Some have sought government support through easier credit and liquidity to manage the short-term disruption.”

The great Indian rope trick

The government did announce schemes worth Rs45,000 crore in mid-November to support the struggling exporters. This will offer some relief for sure, but the work for the Indian exporter is now well cut out. There will be deals to be re-negotiated, and they should make an effort to spread out to other markets.

The worst news relates to ‘Viksit Bharat’, and India’s ambitions of becoming a global manufacturing hub.

“Now, investors will be more wary of investing in India, because India’s position is quite uncertain, at least in the US sphere,” said Chhibber. “And until there is a good trade deal, and even after that, people wonder whether India-US relations will ever go back to where they were. We don’t know. But that could potentially have an impact on chip manufacturers or other products where people who were thinking of coming to India to set up manufacturing may now be wary. That is a bigger worry.”

*************************************************

If Trump shifts attention to services, there might be a lot of collateral damage

By K. Sunil Thomas

Interview/ Subhash Chandra Garg, former finance secretary

Q/ What is the long-term damage a few months of high US tariffs could do to the Indian economy?

Failure to do a trade deal with the US is a long-term lost opportunity. We could have gotten out of our blinkered mindset on agriculture trade. We could have allowed much higher purchases of corn at low prices, at zero tariff, to build alternative supply lines for petrol. We could have allowed the purchase of soybean oil to reduce dependence on palm oil imports. Similar for poultry and dairy. This would have got us good deals on textiles, fisheries, gems and jewellery, and other exports of our strength and advantage.

Q/ Some economists say it is not just a trade issue, but something that will have a domino effect on jobs and consumption. How true is that?

Immigration and services are our big strengths. Americans are feeling the heat on this front, and as Trump sees increasingly diminishing returns from merchandise tariffs, his administration is shifting attention to services—both those provided by Indian immigrants in the US and by GCCs (Global Capability Centres) and other companies from India. We have to be very watchful there. There might be a lot of collateral damage.

Q/ The government has been talking about self-reliance, domestic manufacturing, and the potential of the domestic market to tide over any drop in GDP growth due to a drop in exports. How realistic is this?

This is a blinkered and myopic thought. Especially in an age where, in the most dynamic sectors—computers, chips, solar, batteries, electric vehicles—we have an enormous technology disadvantage and huge import dependence.

Q/ The GST rationalisation was prompted partly by this thought process. Has it worked? Is it enough?

No, look at the domestic GST growth even after all the GST rate cuts. There is large negative GST growth. GST forgone requires multiples of volume growth to make up the loss. That is impossible.

Q/ The rupee’s value against the dollar has rapidly fallen this year. What is the role of tariff pressure in this?

Three reasons, in my opinion. First, in addition to the failure to strike a deal with the US, we are perennially negotiating without concluding with most others. We are one of the least trade-integrated nations. Second, we have no economically justifiable foreign investment strategy for the new industrial economy products in the absence of an investment treaty with the US and China. Third, despite India being a major current account deficit country, the RBI has bought a lot of gold, which is illiquid foreign currency. Unless we address this, our structural weakness will persist.

after-2025s-setback-is-the-indian-stock-market-poised-for-bull-run-next-year

Sat Dec 20 16:02:23 IST 2025

For stock market investors who have ridden the wave of an unyielding bull run since the pandemic-induced crash of March 2020, the year 2025 has served as a sobering reality check. It has been defined by a stark decoupling of Indian equities from their global peers, driven largely by geopolitical friction and a harsh protectionist turn in US trade policy.

As the year draws to a close, however, a confluence of monetary easing, fiscal support and renewed domestic demand suggests that the worst may be over.

Year-to-date, the headline numbers for India’s large-cap indices suggest a deceptively calm market. As of December 16, the benchmark BSE Sensex has risen close to 8 per cent, while the NSE Nifty50 has posted gains of 9 per cent, even hitting fresh highs in December.

These figures mask the significant pain felt in the broader markets. The mid-cap and small-cap segments—often the darlings of retail investors—have remained under immense pressure. The mid-cap index is down around 1 per cent year-to-date, while the small-cap index has suffered a much sharper 9 per cent decline.

This performance stands in stark contrast to the euphoria witnessed elsewhere in Asia and the west. South Korea’s Kospi index has surged by over 66 per cent, while Hong Kong’s Hang Seng index has gained over 28 per cent year-to-date. Among major developed markets, Japan’s Nikkei 225 gained more than 25 per cent, and in the US, the S&P 500 is up 16 per cent. The Nasdaq has risen close to 20 per cent, fuelled by continuing investor euphoria surrounding artificial intelligence stocks.

A primary reason for India’s underperformance was the relentless selling by foreign investors. Until December 15, Foreign Portfolio Investors (FPIs) had withdrawn over Rs1.61 lakh crore from the Indian equity market. This massive outflow sharply contradicts the uptick in FPI investments seen in 2024 (Rs427 crore).

However, the Indian market displayed remarkable resilience due to the deepening maturity of the domestic investor base. While Foreign Institutional Investors (FIIs) were aggressive sellers, domestic investors continued to pour funds into the market. This domestic support was channelled primarily through mutual funds. Aided by robust equity inflows—with close to Rs30,000 crore entering the market a month via systematic investment plans alone—the mutual fund industry’s assets have swelled, providing a cushion that prevented a precipitous market crash.

There were several challenges that worried investors. The 50 per cent tariffs imposed by the US placed Indian exporters at a significant competitive disadvantage. Labour-intensive sectors were among the hardest hit, specifically gems and jewellery, fisheries, and textiles. Furthermore, the prevailing uncertainty regarding the conclusion of bilateral talks and the signing of a definitive India-US trade deal weighed heavily on investor sentiment and delayed private sector capital expenditure.

Simultaneously, global uncertainties led to a slowdown in technology spending, impacting the demand for India’s software exporters. Domestically, the economy faced a demand slump, particularly in urban markets. This weighed heavily on consumer-facing companies.

Recognising the strain, the government announced sizeable income tax relief, largely benefitting the middle class. This was followed by a Goods and Services Tax (GST) rate cut in September covering a wide range of goods, which has begun to provide a lift to consumption figures.

The most significant catalyst for the markets, however, has been the dramatic shift in monetary policy. A significant drop in Consumer Price Index (CPI) inflation allowed the Monetary Policy Committee to slash the benchmark repo rate by a massive 125 basis points, bringing it down to 5.25 per cent from 6.50 per cent.

These measures have collectively brightened the outlook as the economy heads into 2026. Furthermore, the anticipated wage increase for government employees, following the implementation of the 8th Pay Commission in 2026, is expected to provide another substantial boost to the consumer economy.

Financial institutions are increasingly bullish on India’s prospects. Nomura has projected that the Nifty50 will touch 29,300 by the end of 2026, an upside of around 13 per cent from current levels. Emkay Global Financial Services holds a similar view, pegging the Nifty50 at 29,000. HSBC is even more optimistic, forecasting the Sensex to touch 94,000 by the end of next year—an 11 per cent rise.

“The worst of the earnings downgrades seems to be behind us and recent results have boosted our confidence in the growth outlook,” said Prerna Garg, associate, equity strategy at HSBC. She said the underperformance of 2025 had corrected expensive valuations and India’s premium over other emerging markets were returning to “normal levels”.

Analysts, however, caution that near-term volatility may persist, particularly given the unresolved narrative around US tariffs. “India’s medium-term outlook remains remarkably resilient. Despite near-term volatility, the alignment of softer rates, improving consumption and stable policy direction creates a strong foundation for the country’s multi-year growth cycle,” said Nirav Sheth, CEO, institutional equities, Emkay Global.

With India’s valuation premium moderating and the corporate earnings outlook improving, there is a growing consensus that the foreign capital may return. “With the good macros, earnings recovery and low cost of capital, markets next year should be better,” said Neelesh Surana, chief investment officer at Mirae Asset Investment Managers (India). He said the full impact of the GST rate cuts was expected to play out through 2026.

However, Surana sounded a note of caution regarding the geopolitical landscape. While the high tariffs might not derail the overall India growth story, the three impacted sectors—textiles, seafood, and gems and jewellery—are labour-intensive. Any major delay in a trade deal could have a second-level impact on employment and the broader economy.

Looking ahead, experts recommend a selective approach. Saion Mukherjee, head of India equity research at Nomura, said FII flows could improve at the margin in 2026, particularly if there is a moderation in the global rally. He urged investors to avoid “narrative-driven” sectors where there is a risk of no returns or significant correction. “We prefer segments/stocks where expectations run low and there is a reasonable possibility of prospects improving or concerns easing,” he said.

HSBC’s Garg favoured sectors driven by domestic demand. She pointed out that financials stood out for their steady growth. On the other hand, consumer discretionary, including autos, is expected to benefit from lower rates.

As 2026 approaches, the Indian market appears to be transitioning from a period of correction and consolidation to one of renewed opportunity, underpinned by a potent mix of policy support and earnings recovery.

high-sip-stoppage-ratio-why-staying-invested-matters

Sat Dec 20 15:57:08 IST 2025

Indians have traditionally been conservative savers, preferring to park the bulk of their money in low-risk bank deposits. Then came the Association of Mutual Funds of India (AMFI) with its ubiquitous campaign: Mutual Funds Sahi Hain.

Time and again, television commercials and newspaper advertisements reinforced the message that mutual funds are the optimal vehicle for long-term financial planning and retirement. It clicked. Today, some Rs29,000 crore flow into the mutual fund industry every month via systematic investment plans (SIPs) alone.

In November 2025, SIP contributions reached Rs29,445 crore—a seven-fold increase from the Rs3,884 crore recorded in November 2016. Retail interest, particularly in equity schemes, has surged. According to AMFI data, 4.66 crore new SIPs were registered between April and November 2025.

This influx is occurring despite significant market turbulence. Since October 2024, equity markets have been extremely volatile; while the benchmark BSE Sensex and NSE Nifty 50 touched record highs, the broader mid-cap and small-cap indices delivered negative returns in 2025.

A worrying trend lies beneath the headline growth numbers. Even as the SIP book expands, the ‘SIP stoppage ratio’ remains stubbornly high. This metric compares the number of SIPs discontinued (or matured) against new registrations in a specific month.

In November, while 57.14 lakh new SIPs were registered, 43.18 lakh were discontinued or matured. This translates to a stoppage ratio of approximately 75.5 per cent. The trend is consistent; October saw a similar ratio, and in September, it hovered just above 76 per cent. If this ratio were to breach 100, it would signal a contraction.

Despite this churn, the industry remains robust. Venkat Chalasani, CEO of AMFI, noted that the industry’s assets under management (AUM) crossed the Rs80 lakh crore mark in November. “SIP assets rose to Rs16.53 lakh crore, now contributing to one-fifth of the industry’s total AUM, indicating that investors remain committed to disciplined, long-term investing,” he said.

Financial planners, however, argue that commitment is exactly what is lacking for many. Mutual fund investing is a long-term game, yet data suggests many Indians are exiting before the benefits materialise.

A 2023 survey by Axis Mutual Fund revealed that 48.7 per cent of equity investors stay invested for two years or less. Another 22.2 per cent exit within just one to two years. A separate study indicated that only 11 per cent of SIP accounts remain active for more than five years.

The result is a disparity in wealth creation: while the markets have grown multi-fold, investors who redeemed early or switched frequently settled for significantly lower returns.

Ankit Patel, co-founder and partner at the wealth management firm Arunasset, attributes the high churn partly to the rise of direct equity investors. “Around 40 per cent of SIP accounts today are in direct mode, and nearly 47 per cent of the industry’s AUM sits there. Hard data suggests that a disproportionate share of SIP closures, shorter holding periods, and portfolio churn originates from this segment,” he said.

Experts point out that while onboarding has become digital and seamless, investors often lack the necessary ‘hand-holding’ during periods of lacklustre returns. “In volatile phases, numbers by themselves rarely persuade investors to stay put,” Patel said. “Investing is as much about managing emotions as it is about managing money. What ultimately matters is discipline and reassurance. When that support is missing, many investors respond to short-term market noise, discontinue SIPs prematurely, and end up hurting their own long-term outcomes.”

Compounding this issue is the industry’s tendency to launch new schemes constantly, which, coupled with changing market outlooks, often nudges investors to churn their portfolios unnecessarily.

An analysis by FundsIndia of actively managed diversified equity funds with a 15-year history offers a reality check. It showed that funds which outperformed the market over the long term still underperformed 39 per cent of the time over a one-year period. Even over a three-to-five-year horizon, these top funds underperformed one-third of the time.

Jiral Mehta, senior manager of research at FundsIndia, advised a minimum investment horizon of seven years. “Longer timeframes allow enough time for recovery from large market falls,” she said. “Historically, a seven-plus year timeframe helps you minimise your odds of negative returns—there were no occurrences in the last 25 years—and increases your odds of better returns of over 10 per cent CAGR.”

Patel agreed, emphasising that compounding is heavily “back-loaded”. “For the first few years, the numbers barely move. If you simply stay put, the curve finally starts to bend in your favour. Exit in year two or three, and you have gone through the stress but walked out before the payoff,” he said.

To maximise wealth, Mehta suggested investors should not only stay the course but also increase their SIP amount annually. “Even a small increase every year can make a huge difference to your final portfolio value over the long run,” she noted.

Investors must accept that even the best actively managed funds will endure temporary periods of underperformance. Typically, these lulls are followed by phases of sharp outperformance that more than compensate for the wait—provided the investor is still there to reap the reward.

indias-dpdp-rules-2025-a-deep-dive-into-the-new-data-privacy-law

Sat Dec 20 15:52:09 IST 2025

EACH TIME YOU check your bank balance, book a delivery slot or upload a photograph, a trail of personal information moves across servers. For years, India debated how that data should be handled and that gap has now begun to close. The government has notified the Digital Personal Data Protection Rules 2025, which transform the broad promise of the Digital Personal Data Protection Act into obligations that companies must follow and a framework the state can enforce. A statutory Data Protection Board now has the authority to examine breaches and impose penalties.

This move completes the structure created by the Act of 2023, which followed the Supreme Court’s recognition of privacy as a fundamental right in the Puttaswamy judgment in 2017. But some gaps remain. For example, the benchmark for “verifiably safe” under section 9(5) is still missing. The new rules define the practical steps that govern everyday interactions. They specify what a consent notice must contain, how long logs must be preserved and how soon a breach must be reported. They set out duties for firms that handle large volumes of personal data and clarify how the state may process information while delivering public services.

The rollout takes place in phases. The Data Protection Board and some procedural provisions take effect immediately. A new class of intermediaries called consent managers will start applying for registration after one year. These entities allow users to manage permissions across different platforms. The rest of the framework, including notice requirements, security safeguards, breach reporting, retention norms, rules for children’s data, cross-border data transfer conditions and obligations for significant data fiduciaries (large entities handling substantial, sensitive data), becomes binding 18 months after notification.

The clearest shift for users will be in how online services seek consent and respond to user requests. Consent notices must now be short and written in plain language. They must explain what data is collected, why it is collected and which services depend on that use. They must also offer simple ways to withdraw consent, request access to data, correct it or seek deletion once the data is no longer needed.

This change will touch every major online service. If a breach occurs, companies must inform affected users without delay and notify the Data Protection Board within 72 hours. Children receive particular attention. Anyone under 18 must have verifiable parental consent to access many online services. The new rules permit identity and age checks through existing documents and Digital Locker credentials. Parents may track a child’s location in specific circumstances, which the rules treat as narrow exceptions within the broader protection for children’s data.

Two concerns will shape how this new regime settles into real use. The first relates to artificial intelligence. AI systems rely on large volumes of information, much of which is scraped from public sources. The law allows an exemption for publicly available personal data, but the scope of this category is uncertain. Companies cannot assume that data visible online is exempt from consent. They must determine whether the individual made that information public herself or whether a third party published it under another legal mandate. Information shared by an employer, an online platform or a news outlet may appear public but may not meet the conditions required for exemption, which makes it difficult for AI developers to train or fine-tune AI models in India for Indian users.

The second issue relates to users who depend on intermediaries for transactions. Many people still rely on travel agents, ticketing platforms or service providers who complete bookings on their behalf. The new rules do not yet explain how valid consent should be captured when the user is not the person entering information into the system. All third party service providers such as gifting and matchmaking platforms would be adversely affected because of the lack of additional grounds of processing, since they will have no legal basis to process the data of non-users that has been supplied by users of such platforms.

For businesses, the new rules make privacy a core obligation and governance issue. Every data fiduciary must adopt basic security practices such as encryption or masking and regular monitoring. Data retention now has fixed standards and some logs must be kept for at least one year. Large platforms such as social media, gaming and e-commerce services must delete inactive user data after three years and give a 48-hour advance notice to affected users.

Companies must also create processes for handling user rights requests and reporting every breach, regardless of the perceived harm. For many mid-sized Indian firms, these requirements will demand new technology, new training and a more structured internal workflow. The clearer framework may, however, reduce uncertainty and help companies demonstrate trustworthiness in domestic and global markets.

Significant data fiduciaries face higher scrutiny. They must carry out yearly data protection impact assessments, undergo regular audits, appoint senior officers responsible for compliance and ensure that their systems do not undermine user rights.

India now has a functioning privacy system that defines rights, obligations and penalties that can go up to Rs250 crore for serious failures. Consent rules are clearer and breach reporting has strict timelines. This sets in motion a phase in which courts and regulators will define the limits of what the law permits. The choices made in this period will determine whether the framework becomes a genuine safeguard or a set of procedures that companies follow without meaningful protection for individuals.

Rizvi is founding director of The Dialogue, a public policy think tank. Sharma is a senior research associate with The Dialogue.

flexicap-investing-a-smart-approach-with-long-term-potential

Sat Dec 13 12:57:28 IST 2025

INVESTING IN THE markets over the past 12-14 months has been tricky, with volatility being quite high and frontline Indian indices still in the red over this period, underperforming most Asian and advanced economies.

However, the domestic macroeconomic environment is fairly positive despite trade tariffs and geopolitical escalations. India’s GDP growth for FY26 is expected to be 6.5 per cent. According to the RBI, inflation is modest and interest rates are set to get lower, fiscal deficit is under control and tax collection is healthy.

Recent GST and income tax cuts would give further impetus to consumption. Government infrastructure spending is back on track after a lull. Corporate earnings growth has revived significantly.

The only discomfort comes from valuations that are not cheap from an overall broader market perspective.

Taking the flexicap route to investing would work well in the current environment. Such investing would ensure a measured allocation across large, mid and small cap companies depending on a host of factors. This approach also ensures portfolio diversification in investing across broader markets.

Why flexicap investing works

As indicated earlier, market valuations are not inexpensive currently. But they do hover around neutral levels.

Recent increases in capacity utilisation of companies (75.8 per cent; seasonally adjusted figure as of Q1 2025-26 according to RBI) suggests a favourable business cycle at play.

Market triggers may be positive or negative due to a host of factors such as FPI flows, trade tariff negotiations, geopolitical escalations, interest rate action from Central banks and so on.

Investor sentiments are neutral and in general dependent on news flow.

Since flexicap investing takes exposure across market caps, these factors can help understand volatility and make suitable portfolio moves.

If the market factors are negative, a higher large cap exposure would help bring stability to the portfolio. Large caps are better-placed to tackle volatility and manage risks.

When the triggers are positive, mid and small caps swing into action. In an upmarket, mid and small cap stocks could deliver strong returns, with the possibility of several companies even re-rating sharply.

Overall, the large, mid and small cap blend helps one gain from all types of markets with suitable risk management.

Taking the right approach

Making flexicap investing work requires taking a systematic approach and following a rigorous process.

The investment approach must follow a mix of top-down and bottom-up styles to identify opportunities in companies across market capitalisation.

A top-down approach is used predominantly in the large cap space and takes into account factors such as economic indicators, policy response, growth, inflation, global macros and future project pipeline.

The bottom-up approach is suited for selecting stocks in the mid and small cap spaces. So, growth outlook, size of addressable opportunities for companies, management performance, return ratios and valuations are considered important.

While the investment approach lays the broad contours, stock selection will be done on the basis of macros, company fundamentals, valuations and long-term growth prospects. Macros include current account status, fiscal deficit, GDP growth, credit growth, inflation, tax collections, capacity utilisation and corporate profitability.

The writer is the director of KCFS Investments Private Limited.

the-art-of-shifting-gears-in-investing

Sat Dec 13 12:52:23 IST 2025

IN THE HIGH-OCTANE world of Formula 1 racing, where split-second decisions can mean the difference between victory and a fiery wreck, Sonny Hayes, a grizzled veteran portrayed by Brad Pitt in the 2025 film F1, embodies a philosophy that resonates far beyond the track. “Hope is not a strategy,” Hayes growls in one memorable scene, dismissing a teammate’s starry-eyed optimism. It’s a line that could just as easily apply to the capricious arena of equity markets, where blind faith in a single stock or a sector often leads investors straight into the gravel trap. Enter the flexicap fund: a nimble investment vehicle designed not for rigid adherence to one lane, but for the artful dance of adaptation, much like Hayes piloting his car through a chicane of unpredictable conditions.

Markets, like Grand Prix circuits, are perpetually in flux. One year, the behemoths dominate the leaderboard. The next, it’s the mid caps or the small caps that surge ahead. No segment holds the pole position indefinitely. A flexicap fund, unfettered by capitalisation constraints, navigates this volatility with the precision of a seasoned driver. It can allocate assets across large, mid, and small cap stocks in any ratio the fund manager deems optimal, responding to the market’s ever-shifting winds.

Large caps provide the ballast, the kind of stability that Hayes might liken to “slow is smooth, smooth is fast”, emphasising controlled momentum over reckless speed. These large giants weather economic storms with their deep moats and predictable dividends. Mid and small caps, conversely, promise the adrenaline rush of higher growth, but they come with the inherent risks in the form of sharper volatility, liquidity squeezes and the occasional spinout from external shocks. The flexicap’s genius lies in its hybrid vigour, blending these elements into a portfolio that pursues growth without sacrificing safety.

Why does this flexibility matter in the Indian equity landscape? Our market is akin to the veritable Monaco circuit—twisty, influenced by policy hairpin turns, global macroeconomic gusts, liquidity floods and the herd mentality of investors. A fixed-allocation fund, tethered to one cap size, risks missing the overtaking opportunities or barreling into overvalued hazards. Flexicap managers, however, can downshift to large caps during overheated or turbulent phases, when valuations warrant caution, or accelerate into mid and small caps when bargains emerge in recovery’s early laps.

Allocation decisions in these funds mirror Hayes’s pursuit of that elusive “moment in the car where everything goes quiet”; a transcendent state of clarity amid chaos. Managers employ a dual-lens approach: top-down, scanning the horizon for economic indicators, interest rate curves, and sectoral tailwinds; bottom-up, dissecting individual companies for earnings traction, leadership calibre, and price-to-value ratios. In bull markets verging on euphoria, the tilt might favour large caps’ defensive posture. In nascent upswings, mid and small caps get the green light for their growth octane.

For long-term players, the perks are manifold. First, diversification scatters risk across the capitalisation spectrum, avoiding the pitfalls of overconcentration. Second, dynamic allocation adapts seamlessly to market cycles, turning potential headwinds into slipstreams. Third, it obviates the need for investors to time their own shifts. Fourth, over extended horizons, equities have historically outpaced inflation, compounding wealth like compound interest on a podium finish. As Hayes reflects, “Sometimes when you lose, you win,” suggesting that strategic retreats in one segment can fuel triumphs elsewhere, fostering resilience and sustained returns.

Underpinning it all is relentless research. Performance metrics bear this out. For the period ended November 3, 2025, flexicap funds averaged 16.2 per cent over three years, 19.6 per cent over five, and 13.7 per cent over 10, per value research—figures that outshine many rigid counterparts in choppy markets.

No wonder their popularity has accelerated. By September 2025, over 40 flexicap schemes managed more than 5 lakh crore, making up about 15 per cent of equity assets under management, eclipsing most categories save sectoral ones, according to AMFI data. With over two crore investor folios, they’ve become the go-to for those craving liquidity and risk modulation without the constraints of pure-play small or mid cap funds.

In the end, investing, like racing, rewards patience and precision. Flexicap funds embody this ethos, shifting gears not for spectacle, but for the quiet thrill of compounding victories over time.

The writer is an investment strategist. 90-10 Financial Planners Pvt Ltd

how-indigos-meltdown-exposed-indias-aviation-crisis

Sat Dec 13 12:48:20 IST 2025

DECEMBER 7 WAS supposed to be special for Indian aviation. The world’s fastest growing domestic airline market was all set to mark World Civil Aviation Day with events, seminars and awareness campaigns about the importance of civil aviation to a nation’s social and economic development.

Instead, it turned out to be an on-ground demo of aviation’s importance, as market leader IndiGo upended the industry.

In the first week of December, 5.9 lakh tickets were cancelled and lakhs of passengers were stuck in airports, unable to go home, to work, to that all important meeting or interview, or to have a last look at someone beloved. In a viral clip on social media, a couple attended their wedding reception online, because their flight was cancelled. An entrepreneur said the Goa hotel he booked for a Rs7-crore destination wedding was empty because guests were stuck at airports across the country.

IndiGo attributed the chaos to “multitude of… unforeseen operational challenges”, though its reluctance to adhere to the government’s new flight duty time limitations (FDTL) was soon called out as the real culprit. The rules were notified about two years ago, reducing pilot working hours to international safety standards. It meant all airlines would have to recruit more pilots. But Indigo, which operates six of every 10 domestic flights, apparently decided to flex its marketshare muscle rather than recruit more pilots which would have hiked its operational expenses. The result? A nation in upheaval.

“The government would set an example with very, very strict action (against IndiGo) once the probe is complete,” Aviation Minister K. Ram Mohan Naidu told Parliament. A show-cause notice has been issued to the airline by the authorities and the Parliamentary Standing Committee on Aviation has summoned IndiGo’s bosses next week. There are talks of hefty penalties as well.

And then what? Business as usual until the next ‘turbulence’?

“The IndiGo mayhem holds a lesson for the government and regulators,” said Captain G.R. Gopinath, who founded India’s first low-cost carrier, Air Deccan. “A country cannot grow robustly with duopolies, or effective monopolies in any sector. If we had a dozen low-cost airlines, a catastrophe of the scale of IndiGo crippling India would not have happened.”

TIME FOR ‘BABY INDIGOS’?

“The government as a policymaker needs to see that the sector is operating in a fair and a competitive manner and in compliance with rules and regulations,” said Sidharath Kapur, aviation expert and the former CEO of Adani Airports and GMR Airports. “Now, if one of the players is not adhering to it because it thinks that it is too big, and too big to fail, or too big to meet those regulations, then the government needs to take action. The breakup of Indigo is a very, very critical issue which the government needs to look at.”

Indigo was praised till last week for the tight ship it was running. It made handsome profit (around Rs7,000 crore in FY25) when all rivals bled. Now, the same people are calling for corrective action, including a possible breaking down of the airline into smaller ones.

It is not that the government cannot, considering that mobility is an essential service. The past few days were proof enough to show how universal and crucial air travel has become for Indians, with about 35 crore people flying a year.

There is a recently updated Competition Act as well as robust anti-trust laws in place. And there have been actions in controlling market dominance. For instance, the order of the National Payments Corporation of India to market leaders PhonePe and Google Pay to bring down their dominant marketshare down to 30 per cent. It means authorities can show resolve to ensure market fairness, if needed.

In the telecom sector, too, the government stepped in recently to ensure that operator Vi (formerly Vodafone-Idea) did not go under, infusing around Rs16,000 crore to pick up 33 per cent stake in the Birla-run company. It was increased to nearly half the shareholding earlier this year.

The most famous instance of a government intervening to protect the market and customer interest was the breaking up of AT&T, America’s telecom hegemony, in the 1980s. Through actions initiated by the US Justice Department, AT&T was broken up into seven smaller companies, eventually helping to lower cost to consumers and hasten innovation.

“The government can dictate that, on competitive grounds, you need to split up your airline—which it can very well do at this stage. Similarly it can tighten the regulations,” said Kapur. The government has slashed IndiGo’s winter schedule by 10 per cent.

THE MORE THE MERRIER

The flight chaos of the past one week impacted both fliers and the government—people for the trouble they were thrown into, and the government, for the arm-twisting it was subjected to.

The case for corrective action comes from the sheer dominance IndiGo has on India’s civil aviation. While the pre-liberalisation era of domestic aviation, dominated by Indian Airlines, was characterised by indifference in service, the free market era seems to be more symbolised by one player’s domination than any scenario of vibrant competition paving the way for good service and high customer satisfaction.

In fact, nowhere in the free market world does an airline have the kind of dominance that IndiGo has in India. In the US, the world’s biggest aviation market, American Airlines holds less than a quarter of the market, with the top four together accounting for just 75 per cent of the market. In comparison, 92 per cent of India’s aviation market is shared between just two players—IndiGo and Air India.

Of course, it is neither IndiGo’s nor the government’s fault, but a combination of systemic failures. Players like Kingfisher, Jet Airways and recently Go First (GoAir) had to shut shop due to reasons ranging from alleged embezzlement, money laundering, to increase in costs (mainly fuel), to pandemic woes. Among the other national players, SpiceJet has forever been in survival mode, while Akasa, for all its ‘slow and steady’ performance, does face immense financial pressure.

“The government is in no way responsible for Indigo becoming a dominant carrier. But it can address this issue of dominance by looking at it from a competition eye and restricting slots in major metros for IndiGo so that some other carriers achieve better capacity market shares,” said Kapur. “Or more drastic, they need to look at breaking up IndiGo.”

The big question now is whether Naidu and the authorities will be satisfied with applying band-aid on the public anger with token penalties and slap-on-the-wrist actions, or will they use this opportunity to get down deep into the systemic issues plaguing an essential service.

from-indigo-to-jio-how-duopolies-are-hurting-consumers

Sat Dec 13 12:40:47 IST 2025

THE GREAT PROMISE of free market economics, especially when liberalisation took root in India in the 1990s, was that competition will lead to better service, competitive costs and protection of customer interests. That may not be the case, according to the Herfindahl-Hirschman Index, or HHI, an international standard used by American and European competition regulators to assess the robustness of free markets.

HHI is calculated by squaring the market share of each firm and summing the resulting numbers. It approaches zero when a market is occupied by a large number of firms of relatively equal size and reaches its maximum of 10,000 points when a market is controlled by a single firm. This comes especially handy in developed countries when competition regulators have to evaluate big ticket mergers and decide whether a new, bigger entity means too much market domination.

The HHI in Indian aviation is double the threshold internationally accepted for being ‘highly concentrated’, and after the IndiGo fiasco, we all know how terrible that can be for the customer.

But the worrisome factor is that the market concentration has increased over the past decade not just in aviation, but in many other sectors in the country.

In the telecom sector, there are consistent worries over market dominance, after Reliance Jio came out of nowhere and took pole position in the late 2010s. The financial troubles of Vi (the Vodafone-Idea joint entity that provides nationwide service), which went from bad to worse after the Supreme Court verdict to make telecom operators pay up aggregated dues, continues, even though the government stepped in to save the company from shutting shop. Despite that, telecom services in India have virtually become a two-horse race between Jio and Airtel.

The scenario is similar in sectors like cement, iron, steel and automobiles, where the HHI is abnormal. In passenger cars, Maruti Suzuki has a market share of around 40 per cent. Maruti’s marketshare used to be well above 50 per cent till recently, but the advent of electric cars changed that.

Similarly, in two-wheelers, Hero currently holds a market share of around 30 per cent. Again, it used to be 38 per cent just a few years ago.

The situation is worse in the digital economy, where one or two dominant players straddle the ecosystem. In e-commerce, Flipkart and Amazon hold a major chunk of the market. In food delivery, Zomato holds about 58 per cent of the market, and Swiggy, virtually the only other player in the scene, controls most of the rest.

The story of mobility is a classic example of what competition can do to the market. When Rapido came in as a dark horse and stole the thunder from Ola and Uber, which had dominated the market for long, it led to fares coming down and improved income for drivers.

how-gst-cuts-and-a-young-population-are-reviving-indias-economy

Sat Dec 06 12:01:12 IST 2025

Just ahead of this year’s Navratri, the Union government overhauled the goods and services tax regime. The automobile sector, which was struggling with low demand and unsold inventory, was the biggest gainer from the move, as the GST rate on small passenger cars—sub-four-metre models with engines up to 1,200cc—was slashed from 28 per cent (plus additional cess) to 18 per cent. The GST on two-wheelers up to 350cc, commercial goods vehicles and buses was reduced to 18 per cent from 28 per cent. The GST reduction also covered several consumer goods. Items of daily necessity, leather products, footwear, handicrafts and many food products saw their tax rates cut from 12 or 18 per cent to just 5 per cent. For several food items, the GST was reduced to nil.

Consumer demand had been subdued over the past few quarters, and urban consumption had taken a clear hit. The government hoped that reducing GST rates, alongside earlier income tax cuts and the Reserve Bank of India’s (RBI) interest rate reductions, would revive consumer demand.

If festive season sales are any indication, those efforts appear to be paying off. Overall automotive retail sales were up 40.5 per cent year-on-year in October 2025, from 28.63 lakh units to 40.24 lakh units, according to the Federation of Automobile Dealers Associations (FADA). Most passenger vehicle manufacturers have reported strong growth this season. Maruti Suzuki’s domestic wholesales in October rose nearly 10 per cent and they were up 20 per cent in November. Tata Motors saw its domestic passenger vehicle sales surge 27 per cent in October and 22 per cent in November.

“It shows that the government is aware of what is happening in the industry, especially in the small car sector—how it has affected a large portion of the middle class and the overall impact on manufacturing and employment,” said R.C. Bhargava, chairman of Maruti Suzuki. He described the GST cut as a “timely” move that has changed consumer sentiment. “People now feel that the government has really done something to make safe, convenient transport affordable for a much larger section of the population,” he said.

Industry executives believe this is not a short-term spike. “This is not about what happened this week or this season. This will echo for a long time to come—not only for the automobile industry but across sectors. People’s appetite to shop has increased. This is not only due to GST reforms but also because of the earlier income tax cuts,” said C.S. Vigneshwar, president of the Federation of Automobile Dealers Associations.

The revival follows a sluggish period—between April and September 2025, passenger vehicle retail sales rose just 3.7 per cent, and two-wheeler sales were up 3.1 per cent, according to FADA data.

Fast-moving consumer goods (FMCG) companies, too, had experienced slowing demand. Hindustan Unilever (HUL), maker of Surf detergent and Red Label tea, reported just 2 per cent volume growth between April and September. Godrej Consumer Products saw 3 per cent growth in the July–September quarter. Urban demand had remained weak, with many consumers postponing purchases, awaiting the GST cuts.

Industry executives are now optimistic that lower prices will leave more disposable income in consumers’ hands. “FMCG consumption has benefited from net disposable income and improved consumer sentiment. Both these elements will be supported by this GST transformation. This will augur well for consumption. We’ve already had monetary easing and direct tax benefits. Inflation, including food inflation, has come down meaningfully, and this GST change adds to improving macro conditions,” said Ritesh Tiwari, former chief financial officer of HUL and currently the global head of M&A and treasury, Unilever Plc.

The pick-up in consumer demand is reflected in GST collections. Despite the rate cuts, overall GST collection in October rose 4.6 per cent to Rs1.96 lakh crore from Rs1.87 lakh crore a year earlier. November GST collections came in at Rs1.70 lakh crore, up 1 per cent from Rs1.69 lakh crore a year ago.

“Evidence from earlier GST rate changes—in July 2018 and October 2019—suggests that rationalisation does not weaken revenue collections. It typically leads to a temporary adjustment phase followed by stronger inflows,” said Soumya Kanti Ghosh, member of the 16th Finance Commission and group chief economic adviser at the State Bank of India. He said the rationalisation should be viewed as a structural reform—simplifying the tax system, reducing compliance burdens and encouraging voluntary compliance, thereby widening the tax base.

Digital transactions also mirrored rising consumption. Unified Payments Interface (UPI) transactions hit a record 20.7 billion in October, up 3.6 per cent month-on-month. In value terms, UPI transactions worth Rs27.28 lakh crore were recorded, a 9.5 per cent increase over September. During the three days of Dhanteras and Diwali, average daily UPI volumes touched 736.9 million.

Retailers, too, had reason to cheer. “We recorded nearly a 20 per cent increase in footfall across our malls this festive season. Categories such as beauty, jewellery, home décor and entertainment performed well, while our luxury portfolio saw 14 per cent growth,” said Pushpa Bector, senior executive director and business head at DLF Retail. “This steady rise reflects improving consumer confidence and a renewed appetite for experiential retail.”

According to the Confederation of All India Traders (CAIT), Diwali sales alone touched Rs5.4 lakh crore in goods and Rs65,000 crore in services—a 25 per cent rise over last year. About 72 per cent of surveyed traders attributed the higher volumes to reduced GST on daily-use items, footwear, garments, confectionery, home décor and consumer durables.

India’s economy grew 6.5 per cent in 2024–25—the slowest in four years, though still the fastest among major economies. Global factors, including heightened geopolitical tensions, contributed to this slowdown.

Donald Trump’s tariff war resulted in India’s exports to the US—the country’s largest export market—falling 37.5 per cent between May and September 2025, according to the Global Trade Research Initiative. The exports dropped from $8.8 billion to $5.5 billion during the period.

The uncertainty has also slowed software services exports, with speculation that the US may introduce an “outsourcing tax”. Economists say this makes robust domestic demand critical for sustaining growth.

While global headwinds persist, the domestic consumption push—fuelled by GST and tax cuts—is expected to offset much of the impact. Reflecting this optimism, the RBI raised its GDP growth forecast for 2024–25 to 6.8 per cent from 6.5 per cent. The International Monetary Fund (IMF), too, revised India’s forecast upward to 6.6 per cent. In fact, GDP grew at a much faster 8.2 per cent in the July-September quarter.

Chief Economic Adviser V. Anantha Nageswaran noted that the direct tax relief announced in the budget, simplification of tax processes and GST rate cuts together have lifted GDP growth prospects to around 7 per cent in real terms. “When we wrote the Economic Survey in February, we expected 6.3–6.8 per cent growth. Then, when tariff developments hit us, we thought it might fall to 6 per cent. But timely policy measures have placed us in a comfortable position,” he said end of October.

Inflation has cooled sharply. Consumer price inflation fell from 5.49 per cent in September 2024 to 1.54 per cent in September 2025 and further to 0.25 per cent in October—aided by lower food prices and GST cuts. Lower inflation could lift consumer confidence and spur spending.

The benign inflation outlook, coupled with the US Federal Reserve’s recent rate cuts, gives the RBI room to ease policy further. That could further encourage big-ticket purchases.

Economists at Bank of Baroda estimate total festive and wedding-related consumption this year could reach Rs12–14 lakh crore. “While there are external challenges due to tariffs, India remains a consumption-driven economy, insulated from global headwinds. The recent GST changes are a major positive for consumption growth,” they said.

Their analysis shows that in the October–December 2025 quarter, the food and grocery segment recorded sales growth of 14 per cent. Clothing and footwear spending is projected at Rs2.8–3 lakh crore, and the automobile and electronics sectors could each see spending of Rs1.5–2 lakh crore. Weddings could contribute an estimated Rs6.5 lakh crore, with around 46 lakh ceremonies expected this season, according to CAIT.

With consumption now on the upswing, economists believe the government can moderate its capital expenditure. “Growth drivers are likely to shift from public expenditure towards private consumption, complemented by a gradual revival in private capex during the second half, helped by GST and income tax cuts as well as monetary easing,” said Christopher Wiegand, group head, economics and data, DMI Finance.

However, questions remain about the sustainability of this consumption wave once festive enthusiasm fades. “If you look at big-ticket items like automobiles, there has been a significant price drop. The GST cut is not going to reverse, so the lower prices will persist next year as well. Some impact will spill over into the next year,” said Dharmakirti Joshi, chief economist at Crisil.

India’s expanding middle class will be the biggest beneficiary of these measures. As the number of affluent Indians rises, discretionary spending will increase, making India one of the world’s largest consumer markets.

According to Franklin Templeton Asset Management, India’s private consumption has doubled to $2.1 trillion in 2024 from $1 trillion in 2013, outpacing China, the US and Germany. Between 2024 and 2030, India’s nominal GDP is projected to grow at 11 per cent annually, reaching $7.3 trillion. Consumption is expected to contribute 60 per cent of that growth, making India the world’s third-largest consumer market by 2026.

With over 700 million Gen Z and millennial consumers, India has the largest young cohort globally. Franklin Templeton estimates that the number of affluent Indians earning over $10,000 annually will exceed 100 million by 2027, creating vast opportunities for premium and luxury products across categories—from automobiles and electronics to fashion, travel and wellness.

Consumer goods makers are already seeing rapid growth in their premium segments and are scaling up offerings—from soap bars to high-end skincare. “By enhancing affordability, the reforms are expected to boost disposable incomes, uplift consumer sentiment and unlock meaningful opportunities for premiumisation across categories,” said Priya Nair, MD and CEO of HUL.

Franklin Templeton estimates that premium haircare and body wash products have grown at 15–16 per cent annually over the past decade—twice the pace of mass-market categories. A similar trend is visible in electronics and appliances, where premium products are expected to grow at 13 per cent annually through 2029, compared to 7 per cent for the volume (mass) market. “Premiumisation is set to play a pivotal role in India’s evolving consumer landscape, driven by rising disposable incomes, shifting preferences and a growing middle class. The luxury goods market is projected to grow 20 per cent annually, reaching $200 billion by 2030,” it noted.

This, analysts say, marks a structural reset powered by a young, aspirational population. Yet, sustaining it will depend on the creation of high-quality jobs. “To sustain this over the long term, you need higher employment opportunities and rising household incomes,” said Crisil’s Joshi. “Greater per capita income and more jobs will mean a larger share of the population participating in the growth process.”

Retail automotive sales jumped 40.5% YoY in October 2025 — from 28.63 lakh to 40.24 lakh units

October 2025 GST collections rose 4.6% YoY to Rs1.96 lakh crore; November up 1% to Rs1.70 lakh crore

Total Diwali sales hit Rs5.4 lakh crore in goods (+25% YoY)

October 2025 saw 20.7 billion UPI transactions (+3.6% MoM), worth Rs27.28 lakh crore (+9.5% MoM)

gst-reforms-what-the-new-two-rate-system-means-for-your-business

Fri Nov 28 16:33:11 IST 2025

GOODS AND SERVICES Tax (GST), introduced in 2017, underwent its most comprehensive overhaul this September, with the GST Council announcing sweeping changes to the tax framework.

The revamp introduced a largely two-rate system of 5 per cent and 18 per cent, along with a special 40 per cent levy on certain luxury and sin goods. Numerous essential items were fully exempted. The earlier 12 per cent and 28 per cent slabs were removed, and the compensation cess—imposed to offset states’ revenue losses following the shift from value-added taxes to GST—was also discontinued.

While the primary aim of the overhaul was to stimulate consumption and provide relief to ordinary people, the reforms also emphasised ease of doing business, especially for small traders and entrepreneurs. Businesses stand to gain not only from increased consumer demand driven by lower prices but also from simplified compliance. The Council also sought to address persistent challenges such as the inverted duty structure, where the tax on raw materials exceeded that on finished products.

To explain these developments, THE WEEK organised a GST outreach event on November 22 in Chennai. The programme was supported by ARS Steel as associate sponsor. A team of officials from the GST and Customs departments, led by S. Nasser Khan, IRS, commissioner, customs and GST, gave detailed presentations on the changes, their benefits for traders and businesses, common compliance mistakes and how audits can be avoided through proper filings.

“It has been a very structural reform in terms of reducing the number of slabs, towards simplification. Moving goods from 5 per cent, 12 per cent, 18 per cent or 28 per cent to zero rate has been a major initiative. In total, 66 items had moved to the exempt category,” Khan noted.

Calling it a major opportunity for industry, Khan urged businesses to study the revised rates to explore diversification, new product portfolios and fresh consumer segments.

Khan also highlighted measures aimed at easing compliance for small businesses. “A small taxpayer issuing B2B invoices with a taxable value of up to Rs2.5 lakh a month will receive automatic registration within three days of applying,” he said.

Further proposals aim to ease compliance for businesses operating solely through e-commerce platforms. Presently, operating in multiple states requires registration and physical offices everywhere. The government has proposed a simplified registration process to eliminate this logistical burden.

S. Sridhar, assistant commissioner, CGST, and R. Nallasivam, superintendent, CGST, made a presentation on due diligence in GST compliance, outlining a five-point audit mandate: correct declaration of value, accurate tax payment, proper filing and claiming of refunds, legitimate input tax credit (ITC) and adherence to compliance procedures.

CGST superintendents Ravindra Kumar, Dipu Mahato and Prabhat Ranjan explained how to reduce audit observations, emphasising the common issue of ITC mismatches between GSTR-2B and GSTR-3B. They also clarified filing requirements for goods sent for job work.

Officials engaged with traders, small business owners, industry association members and students, addressing queries and clarifying doubts.

indias-mutual-funds-sector-a-dynamic-phase-of-growth-and-new-entrants

Sat Nov 22 18:20:11 IST 2025

If you ask a financial planner for that one big change post Covid-19, the likely answer would be financialisation of savings. As investors started seeking better returns on investment, equities gained massive traction.

In January 2020, the average assets under management (AAUM) of the mutual funds industry stood at Rs28.18 lakh crore. AUM of equity and hybrid schemes together was close to Rs11.50 lakh crore. Cut to October 2025. The AAUM of mutual funds stood at Rs79.79 lakh crore, with AUM of equity and hybrid schemes at nearly Rs46 lakh crore.

While existing players have scaled up with multiple new schemes to attract the new and particularly risk-taking investors, over half a dozen new asset management companies have started operations in the past year or so. The Wealth Company debuted with four active new fund offers (NFOs) in October, raising close to Rs2,000 crore. Angel One had AAUM of Rs364 crore in the July-September quarter, Capitalmind had Rs69 crore, and Unifi MF had Rs1,196 crore, according to data from the Association of Mutual Funds in India (AMFI). Jio BlackRock AMC had Rs12,890 crore in average AUM, after having raised Rs17,800 crore through its debut new fund offers.

Several others are in various stages of launching their mutual fund operations. Deepak Shenoy-backed Capitalmind launched its first NFO this September while Nuvama Wealth Management received SEBI approval in October to launch its own mutual fund.

The Indian financial service space is evolving into a dynamic phase, says Madhu Lunawat, founder, MD and CEO of The Wealth Company. “Greater participation by new players ultimately benefits investors,” she says. “Competition drives innovation, enhances transparency, improves service quality and broadens product choices. This expansion ensures customers gain access to better designed products that suit their risk-return profiles.”

On the one hand, the overall economic growth and demographics are strong and retail participation, which is at a low base, is rapidly increasing, says Sid Swaminathan, MD and CEO of Jio BlackRock. “Just the sheer number of companies you are seeing in public markets is robust,” he says. “The liquidity in these names is also increasing. So, you are seeing much more variety and robustness coming in.”

The mutual fund industry is still dominated by the top ten players—including SBI MF, ICICI Prudential AMC, HDFC AMC, Kotak Mahindra AMC and Aditya Birla Sun Life AMC—which account for around 75 per cent of the industry AUMs. However, the market is growing and people from smaller towns are also investing. This growing pie presents new opportunities, say fund houses.

According to AMFI, assets from B30 (beyond top 30) markets have increased from Rs12.59 lakh crore in September 2024 to Rs14.50 lakh crore in September 2025. Notably, 86 per cent of the assets from B30 locations were in equity schemes as of September 2025, compared with 55 per cent in the top 30 locations.

“True growth lies in empowering investors in tier 2 and tier 3 cities with the same quality of products and advice as their metro counterparts,” says Lunawat. “With our network of over 110 cities and over 450 franchise partners, we are building awareness, education, and access points.”

IndusInd International Holdings (IIHL), which is looking to become a global financial services major by 2030, recently picked up a 60 per cent stake in Invesco Asset Management India. “This is the most opportune time, where India, on the back of rising income levels and favourable demographics, offers enormous investment prospects to all Indians,” says IIHL chairman Ashok Hinduja.

Meanwhile, Shriram Asset Management, in which South Africa’s Sanlam Group picked up a 23 per cent stake this year, also sees significant opportunities in emerging geographies, especially where the Shriram group already enjoys deep customer relationships, says Kartik Jain, MD and CEO, Shriram AMC.

“By leveraging digital platforms, partner distributors and the larger Shriram ecosystem, we aim to widen access and bring long-term investment solutions to a much broader base of Indian investors,” he says.

Data and tech are also a big focus for Jio BlackRock, where it has introduced BlackRock’s investment analytics and risk management platform Aladdin, which allows it to innovate and manufacture funds at scale.

For The Wealth Company, the edge comes from the group’s strong private equity foundations, where due diligence, promoter intent evaluation, forensic checks and sectoral insights form the core of decision-making, says Lunawat.

why-financial-planning-patience-are-key-to-long-term-wealth-in-india

Sat Nov 22 18:16:07 IST 2025

In the past decade, especially post-pandemic, the number of Indians investing has risen considerably. In October, 30 lakh new demat accounts were opened, with the total hitting a record 21 crore. Many more are investing in mutual funds, with more than Rs29,000 crore coming into the equity market via systematic investment plans (SIP) alone. Many are buying gold, picking up bonds and also exploring alternative assets.

Sachin Jain, managing partner at Scripbox, notes that investors have sensed the need to diversify beyond traditional instruments like fixed deposits.

“Markets have expanded as awareness has improved, which has been aided by digitisation and the introduction of new players that have brought the product distribution to a new level,” he says.

Yet, data suggests that many Indians aren’t doing enough. The Indian Wealth Survey published earlier this year by Marcellus Investment Managers in collaboration with Dun and Bradstreet showed 43 per cent of HNI respondents were saving less than 20 per cent of their post-tax income. Only a third had more than 20 per cent equity allocation and 14 per cent didn’t maintain any emergency funds.

Another study by YouGov and Edelweiss Life Insurance highlighted that, despite 94 per cent of respondents engaging in some form of financial planning, 64 per cent relied on credit to meet short-term expenses, while 49 per cent dipped into savings.

This is where financial planning becomes crucial. “Once you have clarity about your future goals, financial planning will assist you in creating a structured approach to achieve them. It brings peace of mind, knowing that your aspirations are backed by a sound financial strategy,” says Jain.

Financial planning brings discipline and commitment to the process of investing, says Roopa Shankar, director, Vithadwaitha financial services. “Not only will it help in managing liquidity requirements better, but it will also help in the right choice of assets and better risk management,” she says.

Experts say that one should invest in liquid funds when the time horizon is short, or pick equity schemes if looking at long-term goals. The growing SIP book is a reflection of the financial planning approach of many Indians, says Shankar. However, even today, less than 10 per cent of people invest in equity, she adds.

Financial planners say it is important to invest across asset classes to minimise risk and pick certain asset classes like equity to maximise returns. One also needs to give investments time to compound over time. For instance, if you invest Rs1 lakh in an equity mutual fund and keep it for five years, assuming it grows at 12 per cent CAGR, it would be over Rs1.76 lakh in five years. But, if you stayed invested for 15 years, it would grow to Rs5.47 lakh.

Rule of 72

If you divide 72 by the rate of interest you are earning, it will tell you the time your corpus will take to double, says Jain. So, if your rate of interest is 12 per cent, then your corpus will typically double in six years. But do note that markets are not linear and there are ups and downs. Interest rates also fluctuate. Therefore, investments need time.

Shankar says financial planning is more important in today’s unpredictable job market. “It is important to bucket your short-, medium- and long-term commitments and requirements. It is also essential to review your investments on a regular basis to adjust your changing needs,” she says.

An analysis by Shankar shows that if you had started a Rs10,000 per month SIP in a large-cap or a broad equity fund, and the best fund delivered a 15 per cent CAGR return over a 30-year period, your investment value would have grown to Rs4 crore. Even taking the worst fund, which delivered 9 per cent CAGR return, the value of your SIP would have grown to more than Rs1.20 crore.

“The Indian investor has realised that he needs to diversify across asset classes,” says Shankar. “While equity funds have been the preferred choice for aggressive investors, hybrid funds (which invest in equity, debt and commodities and thus help manage volatility) are gaining importance, which reiterates the fact that investors have also learnt to manage risks.”

This year, when gold prices were surging, strong inflows were seen in gold ETF (exchange traded funds) and gold mutual funds. Last quarter, while equity markets were volatile, hybrid funds saw strong inflows, a signal of how investors have increasingly started to plan and manage their investments.

we-are-testing-a-reels-first-home-screen-in-india-arun-srinivas-meta-india

Sat Nov 08 12:16:51 IST 2025

Interview/ Arun Srinivas, managing director and country head, Meta India

Q/ uite unlike the platform buzzing with non-stop Reels and viral dashboards, Arun Srinivas comes across as warm and easygoing. As managing director and country head of Meta India, Arun has spent years observing how millions of people use their phones to share small pieces of their lives. When he opens Instagram, he laughs at how familiar it feels. “It’s mostly travel, fitness and lately a lot of festive shopping,” he says. “The joy is in discovery—finding something you weren’t looking for but instantly connect with.”

That simple joy, he adds, captures India’s digital rhythm today: curious, expressive and endlessly inventive. And nowhere is that spirit more visible than in the creator economy. With one of the largest creator communities in the world, India is helping shape how short video, language diversity and AI are redefining expression online.

In an exclusive interview with THE WEEK, Arun talks about India’s growing digital confidence, evolution of creators and why India often gets early access to features. Excerpts:

Q/ How do you see India’s role evolving within Meta’s global vision, both as a growth market and a hub for innovation?

A/ India is at the heart of [the] journey [forward], not only because of its scale but because it represents one of the world’s fastest-growing and most creative digital communities. It’s where new ideas and innovation are shaping how people connect and express themselves online.

AI has been part of Meta’s evolution for a long time. When Facebook first introduced the News Feed, it marked the beginning of algorithm-driven personalisation. Over the years, that has evolved into advanced AI technology that powers almost every part of the experience.

Today, AI helps creators craft stronger stories, makes discovery more meaningful and enables businesses to connect with audiences more effectively. This transformation is most visible in India; people are using technology in deeply personal and imaginative ways. With millions of active creators across regions and languages, India continues to define the next chapter of digital expression for Meta and the wider world.

Q/ How is Meta supporting the more original, purposeful wave of Indian creators?

A/ We build around what creators do. Gen Z and Gen Alpha grew up on their phones; they process things faster and expect relevance. That’s why short video, especially Reels, has become how India talks. Our role is to keep giving creators the tools and insights to tell stories their way—from discovery and reach to monetisation.

India leads the world in video adoption and Reels is at the centre of this shift. Five years since its launch, it has become the country’s leading short-form video platform—shaping culture, driving engagement and creating real impact.

Q/ India often gets early access to features–Reels updates, Threads, experiments. Why?

A/ Because India reflects the world. We have the most creators, the most languages and one of the most diverse mixes of audiences anywhere.

We’re currently testing a Reels-first home screen in India because that’s where most people go first anyway. We’re also experimenting with AI-powered dubbing that can match the speaker’s lip movements. It helps cross language barriers. We’re investing in language access so ideas travel further.

Q/ How are you supporting income opportunities?

A/ Local voices are the heartbeat of India’s internet. Our Creator Marketplace is built to turn that into real opportunity. It connects brands and creators by category and region—beauty, travel, food and more. A skincare brand, for instance, can filter for creators in humid Chennai or dry Delhi, see who they’ve worked with, find similar creators, review past posts and DM them directly to collaborate or licence.

The aim is twofold: more reach in more languages, and more paid work. As we scale the Marketplace to millions of creators, we expect the flywheel to strengthen. Brands find better matches, creators earn more consistently and the audience get content that feels local and authentic.

Q/ What’s next for the creator economy?

A/ The next phase of the creator economy will be about depth rather than scale. The next chapter will belong to creators who stay purposeful, authentic and deeply rooted in their communities.

Q/ Platforms such as YouTube Shorts, Snapchat Spotlight and home-grown apps are all competing. What keeps Reels distinct?

A/ Reels is where India talks about everything—cricket, fashion, travel, food and culture. It has become the country’s digital town square.

Reels brings creativity and discovery together. According to Meta’s Online Video Consumption of Digital India Study (2025), 80 per cent of people discover new brands on Meta platforms, and 97 per cent watch short videos daily, making Reels their most-used space for both entertainment and exploration.

Whether it’s a small-town creator sharing a local recipe or a fan reacting to a big match, Reels gives everyone a platform. Its strong sense of community, ease of creation and opportunity for discovery make it stand out in a crowded short-video landscape.

Q/ Every major platform is experimenting with AI and short video. What gives Meta an advantage?

A/ The scale of its community and how seamlessly AI enhances people’s experiences. From helping Reels surface the right videos to connecting businesses with the right audiences, AI keeps our platforms personal and relevant. India’s comfort with technology and its huge creator community make it the perfect place to see this innovation grow.

World over, our Llama models are already being used in secure settings for tasks that need speed and accuracy. We work with partners such as AWS and Snowflake to keep that technology safe and private. We also share these tools with trusted partners under strong safeguards. For us, progress means being creative and responsible at the same time—that balance defines Meta’s approach.

why-india-love-affair-with-gold-continues-despite-record-surge

Sat Oct 25 11:46:14 IST 2025

Each year on Dhanteras, the first day of the five-day Diwali festival, Prashant buys a small quantity of gold—10 grams until recently, and just 5 grams this year—as a token of good fortune and an investment for his daughter’s wedding. He refuses to break the tradition despite the prohibitive prices. “Gold prices have been going up every year, and I feel they’ll rise more. It’s difficult to buy large quantities, so I pick up small amounts whenever I can,” he says.

Prashant’s sentiment is shared by millions of Indians who see gold as more than a metal—it is security, legacy and auspiciousness rolled into one. Even at all-time highs, the country’s fascination with gold shows no sign of fading.

Over the past year, gold prices have been on an unprecedented gallop. In the domestic market, they hit Rs1,34,800 for 10 grams on October 17, after notching 48 all-time highs in 2025 alone. Internationally, gold broke past $4,300 an ounce earlier this month—up more than 50 per cent since January. It was the strongest annual performance since 1979, when prices more than doubled.

It has been a remarkable run. The jump from $3,500 to $4,000 an ounce took just 36 days, whereas earlier $500 increments typically took three years. In India, the surge is sharper—nearly 66 per cent in a year till Diwali—amplified by the rupee’s 3.8 per cent depreciation against the dollar.

The price shock has not stopped festive buying. Jewellers say customers are purchasing smaller quantities but spending more overall. “While we expect around 20–25 per cent value growth in jewellery sales compared to last year, there has been a 12–15 per cent dip in volumes. Buyers are prioritising design and emotional value over quantity,” says Suvankar Sen, managing director and CEO of Senco Gold and Diamonds.

Pankaj Arora, national president of the All India Jewellers and Goldsmith Federation, says gold and silver trade around Dhanteras alone likely exceeded Rs60,000 crore, with Delhi’s bullion market clocking Rs10,000 crore in sale—a 25 per cent rise year-on-year.

And the wedding season remains immune to price shocks. “Families with weddings planned for 2026 are buying early to lock in current prices before they rise further,” says an official at the All India Gem and Jewellery Domestic Council.

India’s gold imports—which meet most of the domestic demand—jumped 77 per cent month-on-month in September to $9.16 billion, a ten-month high. In volume terms, imports surged to 104 tonnes, up from 65 tonnes in August, according to the World Gold Council.

A cocktail of factors has driven gold’s record rally in 2025. Geopolitical tensions—from the Russia-Ukraine war to the conflict in the Middle East—have stoked uncertainty. Trade wars have added fuel. President Donald Trump’s 100 per cent tariffs on Chinese imports on top of the existing 30 per cent duties and China’s export curbs on rare earth metals have further rattled markets.

Meanwhile, the US government’s debt has crossed $37 trillion, prompting expectations that the Federal Reserve will continue cutting interest rates after its September 25-basis-point reduction. Lower real yields have made gold more attractive.

“Exacerbated geopolitical tensions, and the ongoing rate easing by the Fed, along with a weakening dollar, has acted as a trigger for uptick in gold,” says Upasana Chachra, chief India economist at Morgan Stanley.

N.S. Ramaswamy, head of commodities at Ventura Securities, says “every pullback is being met with aggressive buying”. In fact, domestic gold has even been trading at a sustained premium to international prices, says Kavita Chacko, research head, India, at the World Gold Council.

The frenzy has spilled beyond jewellery counters into the investment market. Gold exchange-traded funds (ETFs) in India saw Rs8,363 crore inflows in September, nearly four times August’s figure. Between January and September 2025, total inflows touched Rs19,830 crore, a 169 per cent jump year-on-year. The AUM of gold ETFs rose to Rs90,136 crore, more than double the previous year’s figure. This Diwali, jewellers also reported a sharp rise in purchases of gold bars and coins, as consumers bet on further price increases.

“Gold and silver coins continue to see exceptional demand, often exceeding supply in some locations,” said Ramesh Kalyanaraman, executive director of Kalyan Jewellers. Demand was so strong that Kalyan Jewellers made gold and silver coins available on online marketplaces and quick commerce platforms to make them accessible.

“Gold is not only a hedge against inflation and currency depreciation but also aids in portfolio diversification,” says Chachra.

It’s not just investors who are hoarding gold. Central banks worldwide have been steadily increasing their holdings as part of a broader move to diversify away from the US dollar. In August 2025, they added 19 tonnes to reserves, up from 11 tonnes in July.

Gold serves as a hedge against currency devaluation and geopolitical shocks. “Perhaps gold prices now are showing the kind of movement that oil once did—a barometer of global uncertainty,” said RBI Governor Sanjay Malhotra at a recent conclave.

The RBI added 0.2 tonnes in September, taking its total reserves to 880.2 tonnes. Though its 2025 purchases are modest, the share of gold in India’s foreign exchange reserves has risen from 9 per cent to 14 per cent, mainly due to valuation gains.

Globally, the US remains the largest holder with 8,133 tonnes, followed by Germany, Italy, France and China. According to Goldman Sachs, central banks—especially in emerging markets—have increased their gold purchases fivefold since 2022, when Russia’s foreign reserves were frozen. “We view this as a structural shift in reserve management, likely to continue for at least three more years,” says Lina Thomas, research analyst at Goldman Sachs.

India’s love affair with gold runs deep, and it has been rewarding. According to Morgan Stanley, Indian households now hold $3.8 trillion worth of gold, amounting to roughly 34,600 tonnes.

“Gold provides a buffer in the household balance sheet,” says Chachra. With inflation easing and the RBI cutting rates by 100 basis points this year, disposable incomes have risen. “The stock of gold holdings provides a positive wealth effect,” she says.

After three years of double-digit returns, analysts still see room for upside. Goldman Sachs predicts $4,900 an ounce by December 2026; HSBC expects $5,000.

“Gold’s stellar rally reflects a confluence of macro shifts—fiscal uncertainty, a softer dollar and strategic diversification by central banks. Asia is emerging as the epicentre of this new monetary alignment,” says Manav Modi, commodities analyst at Motilal Oswal Financial Services.

Modi expects domestic prices to range between Rs1,28,500 and Rs1,35,000 for 10 grams, assuming the rupee stays near 89 against the dollar, while Axis Direct analysts forecast a potential climb to Rs1,50,000 by next Diwali. They believe the de-dollarisation trend and any fresh money printing in the US could push gold even higher.

But not everyone is euphoric. John Higgins, chief markets economist at Capital Economics, wrote that price of gold had “arguably risen far above fair value.”

As such historical data shows that gold bull phases are often followed by long flat or even negative periods. For instance, gold prices stagnated for years after 2013.

Inderbir Singh Jolly, CEO of PL Wealth Management, also cautions: “Investors should buy thoughtfully, balance ritual with risk,” and focus on liquidity and asset allocation, not emotional impulse.

At the retail level, consumers are adapting. Jewellers report a clear shift towards lightweight and lower-carat jewellery, balancing sentiment with affordability. “We are seeing customers move to 18-carat, 14-carat and even 9-carat options to keep the joy of gifting alive without stretching household budgets,” says Sen of Senco Gold.

Eshwar Surana, managing director of Raj Diamonds, says there is a rising demand for diamond-studded jewellery with minimal gold content. “This festive season has been exceptionally strong, with around 20 per cent higher demand than last year,” he says.

The trend has boosted jewellers’ balance sheets. Titan reported 19 per cent year-on-year jewellery growth in the July–September quarter, while Kalyan Jewellers posted a 31 per cent revenue rise, fuelled by weddings and festive sales.

“Despite record prices, consumers view volatility as an opportunity to reinvest—whether through gold coins or by upgrading jewellery,” says Ajoy Chawla, CEO of Titan’s jewellery division.

India’s appetite for gold is enormous, but it still imports nearly all of it. Imports in 2024 totalled 724 tonnes, worth $52 billion—up 21 per cent in value despite lower volumes. To ease dependence, jewellers are encouraging gold recycling and exchange schemes.

The World Gold Council estimates recycling has climbed from 30–35 per cent to about 50 per cent in recent months.

Muthoot Exim, part of the Muthoot Pappachan Group, has been a pioneer. “Around 30,000 tonnes of gold lie idle in households. If even a fraction is recycled, it can cut imports and support the economy,” says CEO Keyur Shah.

The gold loan business is another big winner. With prices soaring, the same amount of gold fetches more credit. “If someone wanted Rs2 lakh earlier, he needed two chains. Now, one is enough,” explains George Alexander Muthoot, managing director of Muthoot Finance, India’s largest gold loan company.

Once seen as a last resort, gold loans are now used by farmers and small businesses for working capital. “Gold loans are helping drive economic growth,” says Muthoot.

According to credit ratings firm ICRA, gold loans grew at 26 per cent CAGR over financial years 2024 and 2025, reaching Rs11.8 lakh crore in March 2025. The market is expected to touch Rs15 lakh crore by March 2026, and Rs18 lakh crore the following year.

While the tonnage of gold pledged grew modestly, rising prices have turbocharged asset values. “We foresee NBFC gold loan assets under management expanding 30–35 per cent this financial year, given elevated gold prices and slower growth in unsecured lending,” says A.M. Karthik, senior vice-president at ICRA.

As Jolly of PL Wealth Management sums up: “Gold is no longer just an auspicious adornment—it’s a core strategic asset.” But the wise investor, experts add, will balance devotion with diversification.

Golden ‘opportunity’

IN JULY 2024, the government slashed import duty on gold to 6 per cent from 15 per cent—a 60 per cent decrease. It was hailed as a masterstroke—making legal imports more affordable would remove the need for smuggling. The plan was working, with the Central Board of Indirect Taxes and Customs chairman confirming in February that there was a significant reduction in gold smuggling.

However, the price last year (end of July) was Rs69,820 per 10g of 24 carat gold; this year, on October 21, it hit Rs1,30,580—an 87.1 per cent increase. The price in Dubai on the same day was around Rs1,24,700. The price difference is close to Rs6 lakh per kg and tax evasion (6 per cent duty plus 3 per cent local tax) can yield at least an additional Rs11 lakh per kg. If 50 per cent of this is directed towards operational costs, smugglers can still make a profit of more than Rs11.5 lakh per kg. No wonder then that there has been a rise in smuggling cases recently.

But, smuggling is not the only issue related to surging gold prices. According to an analysis by News9Live, there is a strong correlation (0.84) between gold price and linked crime. The analysis also said chain snatchings were up 75 per cent and gold-targeted bank heists up 500 per cent since 2020, as gold price increased 155.54 per cent (October 21, 2020-October 21, 2025). In 2024, Bengaluru saw a 20 per cent rise in domestic-help theft cases, involving a number of large hauls worth crores.

even-the-rich-are-taking-gold-loans-george-alexander-muthoot

Sat Oct 25 11:34:01 IST 2025

Interview/ George Alexander Muthoot, managing director, Muthoot Finance

Q/ Gold loans are seeing good traction. How do you see the trend?

A/ There are many people who want a gold loan because they are not getting loans from elsewhere. The regulator and the banks have been quite strict on unsecured lending. Personal loans, other than the salaried personal loans, are difficult to get today. Microfinance also has had some problems. And, lending by fintech players has come down.

So, overall, there is a lack of credit availability in the market, especially in the lower levels. People are now increasingly using gold as a collateral. Gold loans are given only against household ornaments, not against bullion or biscuits. People are using it as a quick and easy means for finance. There is lot more visibility than earlier now because gold prices are also going up. The earlier stigma that gold loan was a desperate loan has gone away. People have realised that they have a valuable asset with them, which can be easily monetised.

Q/ So gold, which was otherwise lying idle in lockers, is now a productive asset?

A/ People need money. Farmers need money. A shopkeeper needs money to purchase goods. Businessmen need money to tide over immediate needs. In gold loans, typically the average tenure is only four months. Although we give it for one year, you are free to repay it at any time and you are charged interest only on the actual number of days. So, people take a loan and when they get the money, they quickly repay it because they want the ornaments back. Around 98 per cent customers take it back in one year.

Q/ What is the scope of growth in this business?

A/ About 50-60 years ago, only the south Indian finance companies and banks were giving gold loans. When we went to north India 40 years ago, people did not know the concept of organised gold loan. We faced a lot of challenges. People were reluctant. We ran campaigns, saying what is lying in your locker will be safe in our locker. Eventually, we were able to convince people.

Today, even those in the upper layer of society, not just the lower middle class or the poor, are using gold for a quick bridge finance.

The gold [in the households] is estimated to be about 25,000 tonnes, and the organised market is only 3,000 tonnes. Our company has about 200 tonnes. People have gold with them; they should start using it. Gradually it will come out.

Q/ What’s your outlook on gold prices?

A/ With the uncertainties in the international market, gold prices will remain elevated for some more time.

current-world-scenario-strongly-favours-gold-sachin-jain

Sat Oct 25 11:30:16 IST 2025

Interview/ Sachin Jain, regional CEO, India, World Gold Council

Q/ Gold prices have seen an unprecedented rise. What has been the overall sentiment in the market this Diwali?

A/ The consumer has been obsessed with gold and with the returns he has been getting. We have witnessed a nominal drop in the volume. But from value perspective, this Diwali was perhaps one of the best we have seen. Consumers have got a strong value for gold this year. From that perspective, it only reflects the confidence consumers have on this category.

We have also witnessed recycling going up. It has crossed about 50 per cent; it used to be between 30-35 per cent. We believe it is a good thing because consumers are still staying in the category.

Q/ Do you think gold is no longer a sleepy asset?

A/ What has happened in the past few decades is gold transformation. Now, there have been four or five different areas of consumption. Earlier central banks were net sellers. Now, central banks have been a very important trigger. That’s one segment. Of course, jewellery is a large one. But financial demand surpassed this. With the hedge funds, ETFs, with all of these areas, the consumption has crossed about 40 per cent. And lastly, gold is now getting used for technology. All the AI-led fast microchips are using gold. Those use cases are almost permanent and will continue to grow.

Q/ What is driving central banks’ appetite for gold?

A/ Geopolitics is a permanent shift right now. And most countries that were putting the reserves in the US treasury and the dollar are converting it into gold. The reserves which were in the dollar-based treasuries were about 73 per cent; it has come down to 55 per cent.

Q/ What are the evolving trends that you have picked up from the market?

A/ What we witnessed is that chain stores and bigger players are doing much better than small independent jewellers, which is a clear indication of the confidence that people want to have on transparency. ETF has seen a strong rise. Start of the year, we were at 57 tonnes. Right now, we have crossed 88 tonnes. The eventual number of bar and coin investment would have seen a significant uptick this year.

Q/ We have seen gold going through downturns or long flat periods.

A/ That is of course a scenario, but we think it’s a bleak possibility. Because to make that scenario happen, Donald Trump, Xi Jinping and Vladimir Putin and everybody else have to become best friends. And there should be no war. The current world scenario is strongly in favour of gold, and that’s not a short-term situation.

ratan-tatas-legacy-tested-the-growing-rift-within-tata-trusts-tata-sons

Sat Oct 18 12:40:43 IST 2025

THE FIRST ANNIVERSARY of Ratan Tata’s death cast a reflective shadow over Tata Group, the conglomerate he transformed into a global powerhouse through bold acquisitions like Tetley Tea and Jaguar Land Rover. Beyond business, Ratan Tata’s legacy as chairman of Tata Trusts reshaped Indian philanthropy. Yet, a year on, Tata Trusts, which hold a 66 per cent stake in Tata Sons—the holding company of Tata Group—are grappling with internal divisions.

The fault lines are seemingly on the nomination of members to the Tata Sons board. Two factions have emerged: one aligned with Noel Tata, Ratan’s half-brother who succeeded him as chairman of Tata Trusts, and another led by trustee Mehli Mistry, a cousin of former Tata Sons chairman the late Cyrus Mistry.

The Trust’s board comprises distinguished figures. Of them, Venu Srinivasan, chairman emeritus of TVS Motor, and former defence secretary Vijay Singh are reportedly with Noel Tata. Senior lawyer Darius Khambata, philanthropist Jehangir H.C. Jehangir and Pramit Jhaveri, former CEO of Citi India, are likely with Mehli Mistry.

A significant point of contention was related to the reappointment of Vijay Singh as nominee director at Tata Sons. The 77-year-old Singh reportedly resigned from Tata Sons board after facing opposition from a few trustees to his reappointment. Such discord is unprecedented for a group known for its cohesion. The Tata Sons board now includes executive chairman N. Chandrasekaran, Noel Tata, Venu Srinivasan, independent directors Harish Manwani and Anita George, and group CFO Saurabh Agrawal.

The rift even reached New Delhi, with Tata representatives, including Chandrasekaran and Noel Tata, meeting Home Minister Amit Shah, reportedly in the presence of Finance Minister Nirmala Sitharaman. While no official details of the discussions have been disclosed, sources suggest the ministers urged the trustees to resolve their differences amicably to safeguard the group’s stability. As the holding company of a conglomerate spanning aviation, defence, consumer goods, retail, software services, and semiconductors, Tata Sons is a cornerstone of India’s economy, likely prompting this high-level intervention.

Beyond boardroom disputes, a more pressing issue looms: the potential listing of Tata Sons. Under the Reserve Bank of India’s scale-based regulations, non-banking financial companies (NBFCs) classified as upper-tier entities must list on stock exchanges. Tata Sons, identified as one of 15 such entities, had a listing deadline of September 30, 2025. Despite surrendering its NBFC licence in 2024 and reducing its net debt from Rs20,642 crore in March 2023 to a cash-positive Rs2,680 crore by March 2024, Tata Sons remains classified as a core investment company. The RBI has yet to clarify its stance on Tata Sons’ listing obligations.

Tata Trusts’ 66 per cent stake grants it significant influence over Tata Sons and, by extension, the broader group. A public listing could dilute this control by introducing external shareholders. The group has made representations to the RBI to remain private, leveraging its strengthened financial position, including dividend income and share buybacks used to repay debts in 2023-24. However, Shapoorji Pallonji (SP) Group, which holds an 18.37 per cent stake in Tata Sons, strongly advocates for a listing. Burdened with an estimated Rs60,000 crore in debt, SP Group sees listing as a means to unlock value and facilitate an exit to reduce its financial strain.

The relationship between the Tatas and SP Group, cordial for generations, soured after the 2016 ousting of Cyrus Mistry as Tata Sons chairman. Cyrus Mistry’s death in a car crash in 2022 added a tragic note to the saga. Shapoorji Mistry, Cyrus’s brother who leads SP Group, has argued that public listing is not just a financial necessity but a “moral and social imperative” that would benefit over 1.2 crore indirect shareholders of listed Tata companies. “A transparent and publicly accountable Tata Sons would pave the way for a robust and equitable dividend policy, thereby ensuring sustained inflows to the Trusts,” he said.

Many experts echo this view. Akshat Khetan, founder of AU Corporate Advisory and Legal Services, believes listing would diversify shareholding and bring fresh perspectives without compromising the Tata brand. “Wherever necessary, there are ways and means to reinforce and protect the Tata brand, and the board as well as the trusts would take care of it,” he said.

Shriram Subramanian, founder of InGovern Research Services, said that a listing could reduce the Trusts’ influence but empower Tata Sons board. However, he cautions that should unresolved issues escalate, then its impact will have to be closely watched out for. “SP Group clearly wants an exit, and they have issued statements that Tata Sons should list. But to say it is a moral issue is not right. Listing is not the only solution for those seeking an exit,” said a person who has worked with the Tata Group.

Despite the RBI’s silence, sources indicate the Tatas may have convinced the regulator to allow Tata Sons to remain private, with clarity expected by year-end. The trustees and Tata Sons board have historically aligned on maintaining private status, though recent divisions cast a doubt on this consensus. If the RBI permits Tata Sons to stay private, it must still address the SP Group’s exit demands, possibly through a negotiated buyback or other financial arrangements.

Market observers and legal experts remain optimistic that the rift will not disrupt operations of Tata Sons or its many companies. The Trusts’ recent backing of Chandrasekaran, whose tenure as chairman was extended for another five years, signals confidence in his leadership. Since taking over in 2017, Chandrasekaran has steered the group through challenges like the Covid-19 pandemic, overseen the acquisition and restructuring of Air India, and driven Tata Motors’s demerger. Under his watch, reports ICRS, Tata Sons’s net worth has soared from Rs43,252 crore in 2018 to nearly Rs1.5 lakh crore in 2025, with profit after tax rising from Rs2,680 crore in 2019-20 to Rs26,232 crore in 2024-25.

“As of now, Tata Sons will continue to function independently, and there is no impact on the operating companies,” Subramanian said. Market experts hope the tensions don’t escalate and end up influencing strategic decisions. A Tata Trusts meeting on October 10, a day after Ratan Tata’s death anniversary, was reportedly cordial. “It is very important for the group and for the nation that the issues are resolved permanently and immediately,” Khetan said. “They will need to sit together and think from a bigger group perspective.”

how-the-new-nps-reforms-benefit-young-investors

Sat Oct 18 12:36:51 IST 2025

India boasts a burgeoning middle class and a substantial private sector workforce. Private sector workers lack retirement provisions beyond the provident fund, and rely largely on personal savings and investments. With this in mind, the government launched the National Pension System (NPS) in 2004.

Under NPS, subscribers select a pension fund and invest in a diversified basket of equity funds, corporate bonds, government securities, and more until age 60, building a substantial retirement corpus while enjoying tax savings.

In early October 2025, the combined assets under management for NPS and Atal Pension Yojana exceeded Rs16 lakh crore, with subscribers surpassing nine crore. NPS has undergone a significant revamp with various enhancements aimed at accelerating its uptake.

On October 1 2025, the International Day of Older Persons as well as NPS Diwas, the Pension Fund Regulatory and Development Authority (PFRDA) rolled out a Multiple Scheme Framework for non-government sector subscribers. A key shift allows subscribers, uniquely identified by their Permanent Account Number (PAN), to hold and manage multiple schemes within NPS at each Central Record-keeping Agency (CRA).

This marks a major departure from the previous structure, where subscribers were limited to a single investment choice per tier and one CRA. “By enabling multiple schemes under one PAN identity, the framework removes constraints on diversification and provides subscribers with greater scope for aligning their investments with evolving retirement and wealth-building goals,” the PFRDA said.

Another pivotal change permits pension funds to design schemes tailored to specific subscriber profiles. This could include dedicated schemes for corporates with employer co-contributions, self-employed professionals, and even digital economy or platform-based workers. Each scheme must offer moderate and high-risk variants, with pension funds optionally introducing a low-risk option.

Crucially, equity allocation can now reach 100 per cent in the high-risk category. “For subscribers, the Multiple Scheme Framework represents a major expansion of choice and personalisation. It enables them to balance conservative and aggressive strategies within the same Permanent Retirement Account Number (PRAN), plan for different life stages with tailored schemes, and access transparent, low-cost retirement savings products,” said the PFRDA.

This also creates opportunities for pension funds through product innovation and market growth, allowing them to cater to diverse groups and compete on performance and service quality.

These reforms are transformative, particularly for those with long investment horizons or a higher risk appetite, who can now allocate their entire corpus to equities. It was previously capped at 75 per cent.

The overhaul makes NPS more dynamic and user-friendly, especially for young investors seeking greater control, said Kurian Jose, CEO of Tata Pension Fund Management. It aligns NPS with global pension products offering lifecycle-based or high-equity strategies. “Allowing an option to invest in funds providing 100 per cent equity exposure under the new framework may offer a strong incentive for younger investors who appreciate long-term compounding and can tolerate short-term volatility. For a 25- or 30-year-old, full equity exposure could significantly enhance retirement corpus growth over decades, while regulatory safeguards ensure prudent management and transparency,” said Jose.

Additional changes include a 15-year vesting period for new funds under the framework. Existing scheme subscribers can exit only at 60; but under the new rules, someone starting at 30 could remain invested until 60 or opt to exit after 15 years at age 45.

Proposals under review include permitting lump-sum withdrawals of up to 80 per cent of the accumulated corpus (up from 60 per cent), with the mandatory annuity portion potentially reduced from 40 per cent to 20 per cent. If approved, these would further benefit subscribers, fund managers say.

Currently, 40 per cent must be invested in annuities, limiting liquidity upon withdrawal; higher withdrawals would enhance attractiveness. “NPS plays a vital role in retirement planning and corpus building,” agreed Sachin Jain, managing partner at Scripbox.

However, despite 100 per cent equity now being permissible, caution is advised against diving in headfirst. Equity markets can experience severe volatility, including years of negative or subdued returns. While equities reward over the long term, a balanced mix of equity and debt funds—offering lower risk and steadier returns—is preferable for those averse to high volatility.

“A classic approach would be a blended allocation,” said Jain. He noted that many lag in assessing risk profiles, knowledge, awareness and familiarity. “The biggest enemy for equity investors is volatility,” he said. “A 100 per cent allocation would amplify this significantly. Historically, blended allocations have reduced risk substantially without much compromise on returns.”

why-indian-bonds-are-now-more-attractive-than-fds-for-stable-returns

Sat Oct 18 12:31:53 IST 2025

India’s financial landscape has undergone significant transformation in recent years, with equity investing gaining immense popularity. However, conservative retail investors, wary of the volatility of stocks, have traditionally favoured safer options like bank fixed deposits (FDs), Public Provident Fund (PPF) or small savings schemes. These avenues, while secure, often yield modest returns. Meanwhile, India’s bond market, valued at approximately Rs238 lakh crore as of March 31, 2025, has largely been the domain of corporations and large institutions. For retail investors, the bond market has historically seemed complex and inaccessible. However, recent developments are reshaping this narrative, making bonds an increasingly viable option for individual investors seeking stable returns.

The shift began with concerted efforts to raise awareness about debt instruments. Mutual funds have played a role in promoting debt funds, which pool investments into bonds and other fixed-income securities. More significantly, the Reserve Bank of India has taken bold steps to democratise bond investing through its RBI Retail Direct platform, launched to enable retail investors to directly purchase government securities. This initiative has lowered entry barriers, with minimum investments as low as Rs1,000. Additionally, the emergence of SEBI-registered bond platforms like Jiraaf, Indiabonds and Bondbazaar has simplified the process of buying and selling bonds, mirroring the ease of stock trading apps. These platforms provide user-friendly interfaces, detailed insights, and access to a range of bonds, making them attractive to retail investors.

Bonds come in various forms, each with distinct characteristics. Government securities, issued by the Central or state governments, are considered low-risk due to their sovereign backing. As of March 31, 2025, the Central government has Rs108 lakh crore in outstanding government securities, while state development loans account for Rs63.15 lakh crore. Corporate bonds, issued by companies to raise debt, carry slightly higher risk but offer potentially higher returns. Investors essentially lend money to the issuer, receiving fixed interest payments, known as coupon rates, typically paid annually or semi-annually. The corporate bond market, valued at Rs53.64 lakh crore, constitutes about 22.5 per cent of India’s total bond market.

Bonds vary not only by issuer but also by maturity and credit rating. Maturities can range from a few months to several decades, allowing investors to align investments with their financial goals. Credit ratings, such as AAA for top-rated bonds, indicate the issuer’s creditworthiness. Higher-rated bonds are safer but offer lower coupon rates, while lower-rated bonds may provide higher yields to compensate for increased risk. For those overwhelmed by these choices, debt mutual funds offer a simpler alternative, managed by professionals who select and diversify bond investments. Alternatively, SEBI-regulated platforms provide tools to help investors understand and select bonds tailored to their risk appetite and financial objectives.

Saurav Ghosh, co-founder of Jiraaf, highlighted the growing appeal of bonds: “Investors are beginning to see bonds not just as an institutional product but as a practical wealth-building tool for individuals. The RBI’s move to lower the minimum investment to Rs1,000 has made bond investing far more accessible.” He notes steady adoption across metropolitan and tier-II cities, driven by investors seeking predictable returns and better post-tax yields than FDs. For instance, platforms like Jiraaf allow investments starting at Rs1,000 for corporate bonds. Bondbazaar allows investment in government securities at just Rs100.

The allure of bonds has grown in 2025, particularly as the RBI has reduced its policy repo rate by 100 basis points (1 per cent), prompting banks to lower FD rates to around 6.0–6.5 per cent. In contrast, bonds offer returns of 9.5–10 per cent, according to Suresh Darak, founder of Bondbazaar. “Earlier, if FD rates were 7–8 per cent, bonds offered 2–3 per cent higher returns. Now, the gap has widened, making bonds more attractive,” he said. This shift is particularly relevant as equity markets have underperformed in 2025 compared to the robust returns of the previous four years. Bonds, with their lower volatility and predictable income, provide a compelling alternative for risk-averse investors.

“People made good money in bonds over the last two years. The more they understand bonds, the more they invest,” said Darak. Unlike equities, bonds offer defined maturities and lower risk, making them an ideal middle ground. “Bonds provide predictable income with lower volatility, unlike the uncertainty of equities,” said Ghosh. This stability is particularly appealing for conservative investors looking to diversify their portfolios beyond traditional FDs and savings schemes.

Investing in bonds, however, requires careful consideration. Not all bonds are equal, and selecting the right ones involves assessing maturities and credit ratings. Darak advises diversification to mitigate risk: “If you have Rs10 lakh to invest, spread it across bonds from ten different companies. Choose durations based on bond quality—three to five years for AA-rated bonds, but 12 to 15 months for lower-rated ones.” This approach balances risk and reward, ensuring a well-rounded portfolio. Additionally, experts recommend bond laddering, a strategy where investors buy bonds with staggered maturities. For example, a portfolio might include bonds maturing in one to five years. As the one-year bond matures, the principal is reinvested in a new five-year bond, maintaining a cycle of liquidity and returns.

Despite the growing accessibility, the bond market remains complex for many retail investors. Unlike institutions with dedicated credit and operations teams, individual investors often lack the expertise to assess risks or navigate market conditions. SEBI-registered platforms address this gap by simplifying bond discovery and purchase processes, offering insights into credit ratings, yields and market trends. However, Darak pointed out the challenges: “For institutions, it is easy—they have teams to assess risk and execute orders. For retail investors, it is a different ball game.” Education and guidance are crucial to help investors make informed decisions.

India’s bond market, while vast, sees limited retail participation, estimated at just 0.1 per cent of the total market. Yet, the potential for growth is significant. Darak predicts that online bond platforms could see portfolio growth of 50–100 per cent over the next five years as awareness and adoption increase. Ghosh shares this optimism, anticipating that bonds will become a mainstream asset class for Indian households. The combination of RBI’s initiatives, declining FD rates, and the rise of digital platforms is creating a fertile ground for retail bond investing.

For conservative investors, bonds offer a compelling alternative to traditional savings instruments. With yields outpacing FDs and lower risk than equities, they provide a balanced option for wealth creation. Platforms like Jiraaf and Bondbazaar are making it easy to enter this market, while strategies like diversification and bond laddering help manage risks. As India’s bond market continues to evolve, retail investors have the opportunity to participate in a once-exclusive domain, building wealth with greater confidence and predictability.

navigating-market-volatility-a-guide-to-conglomerate-investments

Sat Oct 18 12:24:01 IST 2025

INVESTING IN THE markets has been challenging in the past one year and more so in recent months. While local cues in terms of GDP growth, indirect tax reforms and lower inflation have been supportive, global factors and their impact on the economy and corporate earnings appear adverse.

Trade tariffs, greater push to regionalisation, rising yields and a general global slowdown due to factors such as supply chain disruptions as well as geopolitical tensions are affecting domestic companies, especially exporters.

Volatility may well be the norm in the markets in the near to medium term.

Given this background, investing in proven conglomerates—business groups with operations in many industries—may be a suitable move given the diversification they provide.

Conglomerates tend to have deep pockets, captive financing arms, economies of scale, lower cost of capital and the ability to have operational integration, giving them considerable advantages and business resilience. Also, as corporate earnings decelerate, it may be safer to stick to conglomerates as they tend to enjoy more stable cashflows.

Given that conglomerates span all market capitalisations, they lend themselves to a flexicap investment approach.

Smooth sailing with conglomerates

The first key reason for investing in well-entrenched business groups or conglomerates is the financial strength they enjoy due to the deep pockets they have develop over the decades. This gives them the ability to expand outside their current operations and explore entry to sunrise sectors such as semiconductors, renewable energy, electric vehicles and the like.

A large balance sheet with high operating cashflows ensures that these business groups are able to fund their own capex (an entry barrier) and strengthen their presence in key markets.

Conglomerates, due to their deep pockets, are able take advantage of weak business/economic cycles by engaging in mergers and acquisitions, consolidation, government divestment, National Company Law Tribunal restructuring and so on.

The second key advantage with conglomerates is their low cost of capital. For example, conglomerates in the hospitality, jewellery, pharmaceuticals, real estate and power businesses enjoy high AA+ or AAA credit ratings and thus pay lower interest rates on debt. Non-conglomerate companies in the same industries have lower credit ratings.

The third key factor that is in favour for large business groups is their ability to have their own captive financing arms. There are examples in the automotive, housing and retail spaces of large captive conglomerate financing. This captive financing ensures control over funding terms, cost advantages and customer conversion.

The fourth beneficial factor for large business groups is their ability to integrate their operations. They have the ability to have forward, backward or adjacent business integration based on their requirements. An end-to-end value chain offering becomes possible.

Finally, the fifth favourable aspect of conglomerates is their economies of scale. This allows them to work at lower costs, higher efficiency and deliver on quality.

A large customer base allowing cross-selling opportunities, ability to retain top talent, strong technology tie-ups, shared infrastructure and resources leading to cost reductions and better utilisation rates, and the chance to participate in public-private partnerships are advantages that economies of scale give.

Their diverse revenue stream and resilience give conglomerates the ability to survive even when business cycles are adverse.

Now is the time

The year-on-year growth in sales and net profits of BSE 500 companies in September 2024, December 2024 and March 2025 quarters have been in single digits.

It may thus be smarter to consider investing in conglomerates as they tend to have larger and stabler cashflows.

Conglomerate Investing via Mutual Funds

For lay investors, investing directly in conglomerates can be challenging, as it demands detailed knowledge about companies, sectors, business segments, financials and ongoing developments. Conglomerate themed mutual funds simplify this by offering exposure to such companies through a professionally managed portfolio. Accordingly, investors may consider the ICICI Prudential Conglomerate Fund.

The writer is Managing Partner of Investory Asset Services.

sridhar-vembus-vision-how-zoho-transformed-tenkasi-into-rural-tech-hub

Sat Oct 11 17:53:23 IST 2025

TENKASI

In the summer of 2020, as the Covid-19 pandemic gripped the world, locking down cities and upending lives, Ananthan Arunachalam of Kadayam Perumbathur, in Tamil Nadu’s Tenkasi district, faced no such turmoil. While many in the IT sector struggled with job losses and the challenges of working from home, Ananthan, 26, rode his motorbike just five kilometres to his workplace at Zoho Corporation, a software company nestled in the rural heartland. He didn’t even need a mask—his village’s isolation shielded him from the virus’s reach. For him, life during the pandemic was not a challenge but an opportunity.

Born into an agricultural family, Ananthan never imagined a career in information technology. He studied in a Tamil-medium school in Tenkasi. Terms like coding and artificial intelligence were alien to him. His ambition was to become a mechanical engineer and work for an automobile company. But when Zoho Corporation, a home-grown tech giant, visited his college for a placement drive, Ananthan was drawn to its vibrant logo and was encouraged by his teachers and friends. His aptitude for logical reasoning and problem-solving shone through in Zoho’s written test and interview, and he was offered a job at its Mathalamparai office, just behind the scenic Courtallam Falls. Stepping into Zoho’s rural office, just a 15-minute bike ride from his house, Ananthan could not help but marvel at how a tech company could thrive in a village setting. Today, he is a senior coding analyst, a testament to the transformative power of opportunity.

Zoho’s presence in Tenkasi owes much to its founder Sridhar Vembu, whose vision to nurture rural talent has redefined what a tech hub can be. When Vembu first proposed moving operations to rural areas, sceptics were concerned about the availability of talent in such places. “The talent is already there,” he responded. “We just have to nurture it.” Starting with a modest thatched-roof shed in Mathalamparai in 2011 with just six employees, Zoho’s rural experiment has grown into a sprawling corporate office blending tradition and innovation.

Now employing 1,200 people, from teenagers to seasoned professionals, the Mathalamparai office is the cornerstone of Vembu’s hub-and-spoke model. Over the past 15 years, this approach has spawned some 100 Zoho offices in tier-two cities, towns and villages across India, employing more than 3,000 people. In 2025, Vembu’s mission remains clear: unlock rural talent, drive research and development, and prove that India’s future lies in its villages.

Mathalamparai, in the Western Ghats, is an unlikely setting for a tech revolution. The air on the campus carries the fragrance of flowers and rain, and a Chettinad-style building houses the modern corporate office. Inside, stone pillars lead to a vast space filled with hundreds of cubicles, where young men and women work in focused silence.

The Zoho School is a learning hub where employees, guided by mentor-like colleagues, delve into coding, AI tools and analytics. Nearby, a campus crèche supports working parents, while a steel staircase adorned with Athangudi tiles leads to a dining hall filled with the clink of plates and soothing music. “You need not necessarily be in a metro to run or work for a software company,” Vembu told THE WEEK in 2021, during the height of the pandemic. “My idea of moving to the village was to give the employees peace of mind and also boost the local economy.”

Zoho’s arrival has transformed Tenkasi, a town whose name translates to ‘Kashi of the south’, into a district buzzing with socioeconomic progress. Once a sleepy town reliant on paddy cultivation and timber imports, Tenkasi saw little economic activity outside the tourist season from July to September, when visitors flocked to the Courtallam Falls and the Kasi Viswanathar temple. Zoho’s recruitment strategy focuses on local talent, identifying potential from schools and colleges within the district. “There are many advantages to being in rural regions. It is cost-effective, and rural talents are excellent,” says Rakeeb Mohamed Mubeen, who leads Zoho’s 1,200 software developers in Tenkasi. “We hire students from rural government schools and polytechnics, train them, and nurture them. Given time, they do wonders.”

Rakeeb, who joined Vembu’s vision in 2011, recalls working in a makeshift shed near his hometown, Tirunelveli. Meetings under trees in serene surroundings have given way to a seven-acre campus that has reshaped Tenkasi’s landscape and lifestyle.

Since Zoho established its rural office in 2011, Tenkasi—part of Tirunelveli until it became a separate district in 2019—has undergone a remarkable transformation. The presence of a tech giant has drawn young talent, reducing the need for urban migration. Zoho doesn’t recruit from elite institutions like the Indian Institutes of Technology; instead, it targets students from second- and third-tier colleges and its own Zoho University, which trains high school graduates on the job. “We don’t look at board exam marks or competitive tests,” said Rakeeb. “We test math and analytical skills, offer a year’s coaching, and then provide on-the-job training in coding, testing or quality assurance.”

For C. Preethika, 19, from Vallam, Zoho’s Rs10,000 monthly stipend has transformed her family’s fortunes. Her mother, who was a beedi roller, and her father, a cab driver with seasonal work, struggled to support the family. When Preethika’s teacher encouraged her to take Zoho’s aptitude test, she seized the opportunity. Now a student at Zoho School, she learns coding and analytics. “I am able to support my family now,” she says. “In two years, my earnings will grow, and I can do more for them.”

Zoho’s impact extends beyond its employees. Ganesamoorthy Subramaniam, 42, of Nannagaram, has seen his life change dramatically. He and his wife Sudha rise at 4am to harvest tomatoes and vegetables from their two-acre farm, supplementing their stock with produce from Tirunelveli. By 6am, they deliver 50 to 75 kilos of fresh vegetables to Zoho, earning Rs20,000 a day. Once an aspiring singer in Chennai, Ganesamoorthy returned to Tenkasi after his father’s death to continue the family’s vegetable business. Zoho’s presence has expanded his enterprise. His eldest daughter now pursues an IT engineering degree, confident she can find work in Tenkasi. Though Ganesamoorthy still performs with local orchestras, his family prefers the stability of their thriving business.

The ripple effects of Zoho’s presence are evident across Tenkasi. Real estate prices and rentals have surged. “The purchasing power of youngsters has gone up since Zoho arrived,” says Selva Ganesh, head of CREDAI’s Tirunelveli chapter. Ananthan and his brother, also a Zoho employee, have built a three-storey house in Kadayam Perumbathu, a symbol of their success. “We were able to build such a big house in our hometown only because of Sridhar and his vision,” said Ananthan.

Similarly, Dilip Kumar Singh, once a software engineer in Chennai, returned to Tenkasi to revive his family’s sweet shop, Nellai Lala Kadai, next to the Kasi Viswanathar temple. His business flourished supplying snacks to Zoho employees. “My life has transitioned from being a software engineer to a businessman,” he says.

Zoho’s technological contributions are as impressive as its socioeconomic impact. Its AI assistant, Zia, powers tools like Zoho Learn, Zoho Mail, Zoho CRM and Zoho Creator, enhancing productivity with features like automated email generation and data insights. Often dubbed the ‘Microsoft of India’, Zoho offers an integrated suite of tools for CRM, finance, HR, analytics and more, designed for small businesses but scalable for larger enterprises. Its messaging app, Arattai, rivals WhatsApp, while Zoho Show has become a world-class presentation tool. “The success is because of Sridhar’s vision and mission,” says Rakeeb. “He is a symbol of self-reliance, simplicity and rural empowerment.”

From a single rural office in 2011, Zoho now operates 15 such centres across India’s hinterland, each employing hundreds. “Almost anywhere in India, within a 30 km radius, there are at least 0.5 million people,” Vembu told THE WEEK in 2021. By tapping into this population density, Zoho has not only created high-paying jobs but also reduced petty crime and fostered social cohesion in regions once marred by caste tensions.

With a literacy rate above 80 per cent and a growing urban population, Tenkasi’s elevation to district status in 2019 is a testament to Zoho’s transformative presence. As Vembu’s vision continues to unfold, Tenkasi stands as a beacon of what rural India can achieve when talent is nurtured and opportunity is brought home.

can-mukesh-ambanis-jio-financial-services-disrupt-indias-finance-sector

Fri Oct 10 10:44:47 IST 2025

The annual general meetings of Reliance Industries have always been a lot more than formalities. They are orchestrated events where Mukesh Ambani, India’s richest man and Reliance’s chairman, outlines his bold, new ambitions. The 2016 AGM is still remembered as a watershed moment, where Ambani announced the launch of Jio’s 4G services, offering free lifetime voice calls and dirt-cheap data. The move upended India’s telecom sector. Millions of customers left their carriers for Jio, and in three years it became India’s largest telecom operator. Today, Jio has around 500 million subscribers, and is preparing for a mega stock market listing.

Even as Jio was building scale, Ambani was quietly preparing for his next big disruption. In August 2023, Reliance demerged its financial arm into a separate listed entity, Jio Financial Services (JFS). Over the past year the business has been expanding rapidly, with ambitions spanning asset management, credit, insurance and payments.

Ambani is not known for half measures. Reliance operates the world’s largest single-location refinery in Jamnagar in Gujarat, runs India’s biggest retail chain, and has made ambitious moves in the fast-moving consumer goods sector with plans to challenge the likes of Hindustan Unilever and ITC. The question now is whether Jio Financial Services can deliver an encore of Jio’s telecom success in the complex financial sector.

The opportunity is enormous. India’s banking industry alone is projected to generate $465 billion in net interest income by 2025. The mutual funds industry has expanded six-fold in the past decade; its assets under management rising from Rs12.55 lakh crore in 2015 to more than Rs75 lakh crore in August 2025. The number of retail investors continues to rise sharply, with record inflows into systematic investment plans each month. Insurance penetration is inching upward, as more households embrace financial products. Reliance sees this as fertile ground.

True to form, Ambani has not ventured into the financial services sector on his own. Reliance is partnering with global giants to gain credibility, expertise and speed. In asset management it has tied up with BlackRock, the world’s largest investment manager with over $12 trillion in assets. Their 50:50 joint venture, Jio BlackRock, has received approval from regulators to manage funds and advise clients. It has also secured a broking licence. The leadership team includes BlackRock veterans—Sid Swaminathan, who headed international index equity at the American firm, now serves as chief executive of Jio BlackRock Asset Management, while Marc Pilgrem, formerly responsible for specialist clients in Europe, the Middle East and Africa, leads Jio BlackRock Investment Managers.

The joint venture wasted little time in making an impact. Its fixed-income products collected nearly Rs18,000 crore in assets, instantly ranking it among the top 15 asset managers by debt assets under management. Equity offerings have begun with passive index funds, and an active flexi-cap scheme. The venture is drawing on BlackRock’s renowned Aladdin platform, a data and analytics system that supports end-to-end investment management.

“Our partnership with BlackRock is set to redefine investing in India,” said Hitesh Sethia, chief executive of Jio Financial Services. “Aladdin allows Jio BlackRock to manufacture high-quality funds at scale. These funds are then distributed widely through JFS’s expansive network that covers millions of Indians.”

Insurance is another area of rapid movement. JFS has a reinsurance joint venture with Allianz and has signed agreements to launch joint ventures in both general and life insurance. Its broking arm already works with 34 insurers and collected premiums of Rs900 crore in 2024–25. The company is also aggressively building its credit book. Assets under management in Jio Credit jumped from just Rs173 crore in 2023–24 to Rs11,665 crore in the first quarter of 2025–26. Jio Payments Bank, which saw deposits rise by 21 per cent to Rs358 crore in the June quarter, has expanded its CASA (current and savings account) base to 2.58 million customers. Reliance recently acquired SBI’s stake in the bank, taking full ownership.

With mutual funds, credit, insurance and payments all scaling simultaneously, JFS is preparing to enter broking and wealth management. It aims to tap the surge of retail investors opening demat accounts in India—41 million were added in 2024–25 alone, bringing the total to 192 million. Systematic investment plans now contribute more than Rs28,000 crore in monthly inflows, with retail investors holding nearly Rs44 lakh crore in assets. JFS believes its technology-driven platform and distribution reach can help capture a significant portion of this growth.

JFS is still a small player. In 2024–25 it posted a net profit of Rs1,613 crore on revenues of Rs2,079 crore, marginally higher than the previous year. By comparison, Aditya Birla Capital earned over Rs3,332 crore on revenues of about Rs40,600 crore, while Bajaj Finserv posted profits of nearly Rs9,000 crore on revenues exceeding Rs1.3 lakh crore. Analysts argue that Reliance’s strategy is about long-term positioning rather than short-term numbers.

“JFS is well-positioned to capitalise on India’s accelerating digital adoption and financial inclusion journey,” said Ishank Gupta of Deven Choksey Research. “The management’s emphasis on product depth, distribution reach, data intelligence and talent will continue to drive synergies across the platform.”

The broader industry dynamics are favourable. Mutual fund assets reached over Rs75 lakh crore in August 2025, with equity schemes recording positive inflows for 54 consecutive months. Systematic investment plans remain the backbone of retail participation, and insurance penetration, while modest at around 4 per cent of GDP compared with a global average of 7 per cent, is rising steadily. Household savings are shifting away from gold and real estate towards financial assets.

But Reliance will not have the market to itself. More than half a dozen new mutual fund firms have entered the market in 2024 and 2025, including Angel One, Capitalmind and The Wealth Company. Fintechs such as Zerodha and Groww have launched their own asset management arms, and PhonePe has entered stockbroking. Foreign players are also returning—South Africa’s Sanlam recently took a 23 per cent stake in Shriram Asset Management as co-promoter.

The growth runway is still long. India’s mutual fund penetration touched an all-time high of 19.9 per cent of GDP, according to AMFI (Association of Mutual Funds in India), but it remains low compared with the global average of 67 per cent. “Retail participation is at an all-time high, with mutual fund folios crossing 24.89 crore and SIP assets under management touching Rs15.18 lakh crore,” said a top executive of a mutual fund house. “These numbers highlight not just the depth of the market but also the vast untapped potential that lies ahead—particularly in tier 2 and tier 3 cities where awareness and adoption of financial products are rising rapidly.”

But competition will be fierce. “There are platform players like the online discount brokers and then there are advisers. Jio could eat into the share of platform businesses, but not the advisers,” said a Bengaluru-based wealth manager, cautioning that “no one player has an inherent advantage in India. Everyone has a market; as long as they do a good job, they will be successful.”

What Reliance does have, however, is a distribution network unlike any other. Between Jio’s half a billion telecom customers and Reliance Retail’s nationwide reach, the group already touches the daily lives of more Indians than any bank or fintech. Its Jio Finance and MyJio apps are designed to act as entry points for financial services, supported by a technology stack that uses artificial intelligence and advanced analytics. Sethia said the company was “in a unique position to democratise financial services for India, combining the trust of a financial institution with the agility of a technology company.”

At the helm of JFS is K.V. Kamath, one of India’s most respected bankers, who led ICICI Bank during its most expansive years and later served as the founding president of the New Development Bank. Addressing shareholders at the recent AGM, Kamath said: “FY25 was a transformative year for your company, characterised by significant investments in our core: people, processes, products and technology. In FY26, I am confident that we will capitalise on this strong foundation to bring intuitive and innovative products and services to Indians at scale.”

Reliance’s evolution over the past two decades has been defined by reinvention. From petrochemicals to retail to telecom, Ambani has shown a willingness to take bold bets and a determination to dominate. Financial services present a different kind of challenge: one that demands trust, regulatory compliance and resilience in addition to scale. Margins are thinner, risks more complex, and customer loyalty hard to win. Yet, Reliance possesses advantages few can match: financial muscle, a vast, captive customer base and powerful global partners. If it can execute with patience and discipline, Jio Financial Services could become the next pillar of Ambani’s empire.

we-are-bringing-global-best-practices-to-india-sid-swaminathan-interview

Sat Oct 04 15:52:10 IST 2025

Interview/ Sid Swaminathan, MD and CEO, Jio BlackRock Mutual Fund

Q\ India has some 50 mutual funds now. What is BlackRock bringing to the table?

A\ Our value proposition is how we differentiate ourselves. How we provide something that is unique at the right price point. As an asset manager, we want to cater to the entire spectrum of investors. That is why we started with cash funds, which predominantly cater to corporate treasuries and the institutional sector.

Then we started with core building blocks—the five index funds that we launched. These are the kind of exposures that make a lot of sense for an individual to start building the portfolio of investments. We would like to take them to a more advanced state of that journey, rather than a single stock or a single trade.

We are bringing global best practices to India. Most active funds now are human-driven. It’s a fundamental look at analysing securities; it’s a fund manager plus a team of analysts that take the call. [Our] strategy turns it around on its head. It uses a lot of data, and over the years we have developed robust data sets on many stocks. In India alone, there are more than 400 data points on around 1,000 stocks. Then we have a lot of technology. Aladdin gives us the ability to process all of this data into insights that can then be used by our fund managers.

The differentiating factor here is how the combination of data, technology and the human being is working in a unique ecosystem, and that’s what the systematic process is about, and that’s what we are bringing to India.

Q\ In India, the top eight or ten fund houses have the lion’s share of the assets under management. Do you think your processes and products will help you beat them?

A\ We believe that this market has tremendous room to grow. I see this industry getting to two to three times in the next five to seven years. It is not necessarily about capturing the market share of the existing Rs75 plus trillion; it is about how we get that to Rs150-200 trillion, and how much of that do we want to get over the next year.

We believe there is space for everyone, and we want to help grow the market, and then participate in the growth. That’s how we view competition.

Q\ Despite the equity industry growth, India remains a savers’ market. How will you convert these savers into investors?

A\ Education and trust are super important. The industry is already doing a fantastic job of education. The ‘Mutual funds sahi hain’ campaign is fantastic. We obviously want to contribute and increase to those efforts along with the industry, and hopefully bring our own lens to it. Our messaging could be slightly different. Given that we are BlackRock, global perspectives can be brought in.

As people get more aware of the benefits of investing versus just saving, you can start seeing these transitions. Our initial launch, which was in cash funds, primarily used by institutions, had 67,000 retail participants. It is a sign that this education is working, the trust is building. But we need to do more.

human-ai-financial-advisors-wealth-management

Sat Sep 20 17:19:34 IST 2025

Today, much of the information we need is at our fingertips. Want to know about a new product or destination? Just ask Google Gemini and an answer appears in seconds. Need help drafting the perfect e-mail or polishing a CV? ChatGPT is ready. Look around, and artificial intelligence is increasingly woven into daily life. Even a simple interaction with your bank may begin with an AI-powered chatbot.

The shift is not just visible in consumer services. In August, AI platform Perplexity launched free access to financial data on Indian stock exchanges and listed companies. Earlier in the year, Paytm integrated Perplexity’s AI-powered search into its app. Paytm founder and CEO Vijay Shekhar Sharma said the move would make financial services more seamless and accessible.

But the big question lingers: Can AI move beyond data support to become your personal wealth manager?

Traditionally, wealth management involves trained professionals or registered investment advisers (RIAs) who tailor plans to a client’s goals—where to invest, how much, for how long—and provide guidance through ups and downs. AI can process vast amounts of data and generate insights, but can it truly replace human advisers?

“AI can certainly support you with insights, simulations, and nudges around retirement planning and personal finance,” said Harsh Gahlaut, co-founder and CEO of FinEdge. But planning is not just about numbers. “It’s also about aligning money with life goals, managing emotions during volatile times, and building conviction to stay invested for the long term. That’s where the human element is irreplaceable,” he said.

For Kamal Kishore, former Tata Digital executive and now chief AI and technology officer at Centricity WealthTech, AI is already reshaping the industry. “AI is moving wealth management from being periodic and reactive to real-time and personalised. It’s no longer a back-office experiment but the core engine of strategy, decision-making and client engagement,” he said.

Centricity runs a technology-enabled platform that supports investment professionals in managing client portfolios. “Today’s AI models can analyse investor goals, risk profiles, and live market signals to create dynamic, individualised portfolios. AI forecasts market trends and client behaviour, enabling proactive portfolio shifts rather than reactive responses,” said Kishore.

Yet he draws a clear line. “The technology has matured to seamlessly complement existing advisory workflows, not replace them,” he said. “AI can act like an analyst but not yet an adviser.”

What AI excels at is heavy lifting: research, consolidating fragmented data, building a holistic view of a client’s finances, and rebalancing portfolios in real time. This frees human advisers to focus on complex strategies and relationship building.

“AI brings the breadth—speed, data and scale. Humans bring the depth—judgment, empathy and trust,” said Kishore.

That division may be why younger investors appear more open to AI support. According to the World Economic Forum’s Global Retail Investor Outlook, 41 per cent of Gen Z and millennial respondents said they would allow an AI assistant to manage investments, compared with 29 per cent of Gen X and just 14 per cent of baby boomers. In India, trust in AI is particularly high: 62 per cent said they would share financial information with AI systems, ahead of China (53 per cent), Singapore (35 per cent), the US (29 per cent) and the UK (22 per cent).

More than half of investors in India, China and the UAE were open to delegating portfolio allocation and decision-making to AI-enabled assistants, the same report found. But risks remain.

A survey by Intuit Credit Karma found that 66 per cent of Americans who had used generative AI had also sought financial advice from it. Among Gen Z and millennials, the figure jumped to 82 per cent. Crucially, more than half of those who acted on AI-based advice said they made a poor financial decision or mistake.

“Financial planners and investment managers play a pivotal role in guiding clients through uncertainty, managing behavioural biases, and nurturing trust,” said Gahlaut. FinEdge uses a hybrid approach with its Dreams into Action platform, blending AI tools with human expertise. The AI provides predictive analytics and flags when an investor may be veering off course. Human advisers then step in with contextual and empathetic guidance to keep clients anchored to their goals.

Other firms are following similar paths. Mirae Asset Investment Managers (India) is exploring AI integration to reduce time spent on repetitive data tasks, freeing up teams for deeper analysis. “In areas such as thematic investing, AI has the potential to support the identification of emerging themes, link company revenues to those themes, and improve the overall efficiency of monitoring,” said Nishant Pradhan, chief AI officer at Mirae.

Yet Pradhan is clear that AI is not a replacement. “AI can act as a supportive adviser by analysing personal finance data, suggesting asset allocation, and continuously monitoring investments. However, financial planning is not just about calculations; it is also about understanding human emotions, life goals and unique circumstances. That is where human advisers still play a critical role.”

The experts also stress caution. While AI brings speed and scalability, it cannot fully anticipate unpredictable market movements. “Markets can be unpredictable, and AI models are only as good as the data they are trained on,” warned Pradhan.

Also, with sensitive financial data at stake, firms must embed safeguards. Kishore of Centricity emphasised the importance of a “responsible AI framework” that ensures privacy, explainability and human oversight. “Every AI output must be auditable and trusted,” he said.

AI may also miss cultural, emotional or personal factors that shape investment decisions—elements that no algorithm can yet capture fully.

The wealth management sector is clearly moving towards deeper AI adoption. For investors, this could mean faster insights, real-time adjustments, and more personalised strategies. For advisers, it means more efficient workflows and sharper tools.

But the consensus is firm: the best outcomes lie in partnership. AI may provide the breadth—processing endless streams of data—but humans bring the depth: empathy, conviction and the ability to steer clients through volatility.

AI can support the journey, but financial planning is about people. Trust, guidance and emotional anchoring will always require a human adviser.

gold-equities-investment-strategy-portfolio-balance-gold-stocks

Sat Sep 20 17:16:47 IST 2025

For over 18 months, gold prices have surged on the back of geopolitical tensions and trade-related uncertainties, and the rally shows little sign of cooling. On September 16, gold futures on the MCX with October expiry hit a life high of Rs1,10,574 per 10 gram, while December contracts traded as high as Rs1,11,637. In global markets, prices touched a record $3,697.70 an ounce.

So far, in 2025, 24-carat gold has surged 43 per cent in India, making it the standout asset class. By contrast, the BSE Sensex is up just 5.4 per cent. Looking further back to the start of 2024, gold has risen over 75 per cent, compared with 14 per cent of the Sensex.

Several factors are fuelling the rally. Geopolitical risks from the Russia-Ukraine war and conflict in the Middle East have pushed investors towards safe-haven assets. US tariffs have heightened trade tensions and concerns about global growth. Central banks, wary of uncertainties, have also been building gold reserves at a rapid pace. Expectations that the US Federal Reserve will cut interest rates have added to momentum.

“Geopolitical risks are adding to safe haven demand. Ongoing tariff disputes and political uncertainties between US President Donald Trump and the Federal Reserve are fuelling concerns about the Fed’s independence and the broader policy path. These cross currents are keeping investors anchored to gold as a hedge,” said Chintan Mehta, CEO, Abans Financial Services.

The rally has sparked strong investment demand. Gold exchange-traded funds (ETFs) in India saw net inflows of Rs2,189 crore in August 2025. Between January and August, inflows reached Rs11,467 crore, almost double that of the inflow during the same period in 2024 (Rs6,134.67 crore), according to data from the Association of Mutual Funds in India.

Globally, the trend is similar. According to the World Gold Council, gold ETFs saw inflows of 397 tonnes between January and June 2025.

Meanwhile, equities have struggled. Foreign institutional investors have sold close to Rs1.41 lakh crore worth of Indian equities this year till September 15, adding to volatility and dampening returns.

The contrast has left many investors wondering if they should raise their gold allocations, even at the cost of trimming equities.

“In the near term, gold offers defensive comfort in an uncertain macro environment, while equities remain the better long-term wealth creator once earnings visibility improves,” said Rajul Kothari, partner at Capital League Private Wealth Management.

Gold, however, is cyclical. Its bear phases can be prolonged. From around $1,600 an ounce in 2013, it remained subdued for years, only reclaiming that level in 2020 during the Covid-19 pandemic. In India, prices averaged Rs29,600 per 10 gram in 2013 and were nearly flat by 2017, averaging Rs29,667.50.

Given the massive run-up already, analysts see scope for near-term consolidation. “The upside from here may be more measured compared to the past year, but as long as uncertainty persists, gold will retain its safe-haven appeal,” said Kothari, who expects a modest correction of 2-5 per cent to around $3,500–3,600 an ounce.

At home, analysts highlight positive drivers for equities. Inflation has cooled, and recent GST cuts are expected to boost consumption and business growth. Emkay Global Financial Services has set a target of 28,000 for the NSE Nifty50 by September 2026, an 11 per cent upside from its 16 September close of 25,239.10. “As growth prospects become clearer and risk appetite returns, there could be some movement from gold to equity,” said Ram Medury, founder and CEO of Maxiom Wealth. “The positive macro outlook suggests that while gold may ease as risk sentiment improves, the Nifty50 is positioned to perform well in the medium term, benefiting from a revival in corporate earnings and improved investor confidence.”

History suggests that while gold shines in crises, equities outperform over full market cycles. During the 2008 financial crisis and again in 2020 amid the pandemic, gold outperformed as markets plunged. Yet equities rebounded and ultimately delivered stronger long-term growth. “Gold excels as crisis insurance, while equities remain the primary wealth-creation asset in the long run,” said Medury.

Kothari pointed out that the BSE Sensex has delivered annualised returns of around 12–14 per cent over the long term, compared with 8–9 per cent for gold. “Gold has shone particularly in times of crisis or global stress, but equities have been the more consistent driver of long-term wealth. The lesson for investors is clear—gold is an essential diversifier and a hedge, but equities remain the growth engine of portfolios,” she stressed.

The standard advice is to keep 5–10 per cent of a portfolio in gold. In the current climate of geopolitical risk and volatile currencies, Kothari believes allocations at the higher end, closer to 10 per cent, make sense. “But going materially overweight would mean sacrificing the long-term growth that equities provide,” she cautioned.

Medury echoed this, noting that while the usual recommendation is 5–10 per cent, there is now “a strong case” to maintain or slightly increase exposure, particularly for risk-averse investors.

Gold’s rally has been spectacular, but experts warn against overexposure. It remains a hedge and safe haven, especially in turbulent times. Equities, despite short-term volatility, continue to offer stronger long-term returns. For investors, the strategy is clear: strike a balance.

thematic-investing-a-method-for-focused-wealth-building

Sat Sep 20 17:12:06 IST 2025

IN THE dynamic investment environment, investors are perpetually searching for methods that can potentially yield better returns while aligning with their own convictions, interests, or perceptions of the future. One such strategy that is gaining growing popularity in India is thematic investing. Unlike traditional investment approaches that are mainly rooted in market capitalisation, sector exposure, or replication of indexes, thematic investing is founded on innovative concepts, trends, or long-term structural shifts expected to drive growth.

Understanding thematic investing

Thematic investing involves identifying and investing in companies, industries, or sectors that are associated with a particular theme. The themes are generally based on important trends or macroeconomic changes, including technological revolution, demographic change, urbanisation, the use of renewable energy, or changes in consumer attitudes.

For example, if an individual believes India’s focus on clean energy will increase significantly over the next decade, they can invest in solar energy firms, electric vehicle manufacturers, battery makers, or green infrastructure firms.

Why thematic investing works well for Indian investors

India’s growth story is underpinned by a mix of demographic advantages, government reforms and domestic consumption. Thematic investing offers a way to take advantage of these drivers more directly than through generalised investment. Certain reasons why thematic investing is preferable for Indian investors:

Focused growth opportunities – By focusing on particular trends, investors can potentially enjoy higher growth rates in those sectors

Alignment with individual beliefs – Investors may invest in themes close to their heart, e.g., renewable energy, empowerment of women, or digitalisation

Long-term focus – Thematic strategies tend to be associated with structural trends that unfold over a period of years and therefore are well suited for long-term wealth generation

Opportunities and threats

While thematic investing is lucrative, it is not risk-free. Since investment is made in one area, it might prove to be more risky than a diversified portfolio. If the theme selected performs poorly or encounters unexpected setbacks, returns can be impacted negatively. Moreover, themes mature slowly, so patience is necessary. For instance, the theme of electric vehicles could be huge in India, but it would take years for broad-based adoption because of infrastructure and affordability limitations. Investors thus need to expect medium- to long-term time frames with potential intermediate volatility.

Best practices for thematic investors

Investors should do the following to practice thematic investing successfully. Firstly, know the drivers of the theme, the regulatory landscape, and the growth opportunity and regardless of the theme’s underlying strength, do not overpay for the stocks. Keep an eye out for events that may impact the theme, like policy shifts or technological upsets.

Thirdly, instead of putting all money into a single theme, diversify across several strong themes. Further, remember that themes can take years to achieve their complete potential, so short-term movements in the market should not influence your decisions.

Thematic investing via mutual funds

For those who want to invest in themes without choosing individual stocks, thematic mutual funds or funds-of-funds are an easy way out. The funds collect money from investors and invest in a basket of companies belonging to a particular theme/themes.

The benefits of thematic mutual funds or funds of funds are:

Professional management – Fund managers with experience carry out research and pick appropriate stocks within the theme

Diversification within the theme – The fund owns several stocks adhering to the theme, minimising the effect of any one stock’s bad performance

Accessibility – Investors can begin with relatively small sums through systematic investment plans (SIPs)

Taxation – Investing in thematic fund of funds is tax efficient. Gains made on capital gains made after a holding period of 24 months is taxed at 12.5 per cent.

But investors must not forget that thematic funds have the same risks as direct thematic investment, such as possible underperformance if the theme does not work out as anticipated. Hence, it makes sense to put just a portion of one’s portfolio in thematic funds and hold the balance in more diversified investments.

Whether undertaken directly through individual stocks or indirectly through thematic mutual funds or funds-of-funds, thematic investing enables investors to voice their beliefs and potentially gain higher long-term returns. Yet, as with all investments, the outcome is subject to the quality of selection, monitoring, and the maintenance of a rigorous, long-term mindset.

The writer is founder, Safebridge Investment Services Private Limited

riding-the-waves-of-change-understanding-thematic-investing

Sat Sep 20 17:09:01 IST 2025

IN THE world of investing, trends are more than just buzzwords—they’re signals of where capital, innovation, and human behaviour are heading. Thematic investing, a strategy gaining traction among retail and institutional investors alike, taps into these signals. It enables one to align their portfolio with transformative shifts shaping our economies, societies, and technologies. But like all investment strategies, it carries both promise and pitfalls.

At its core, thematic investing involves placing bets on broad, structural changes rather than specific sectors. These changes can be demographic, such as ageing populations; technological, like artificial intelligence or electric vehicles; environmental, including clean energy or water scarcity; or socio-economic, such as the rise of the middle class or the shift to digital consumption.

Rather than spreading investments across every sector, thematic investors focus on narratives that will play out over the long term. For instance, if one believes that renewable energy is set to transform the global power landscape, such investors may choose a mix of solar panel manufacturers, wind energy firms, battery storage providers and hydrogen technology players, regardless of which traditional sectors they fall under. While thematic and sector investing may appear similar on the surface, they are not the same. A theme consists of several related sectors.

Thematic investing is gaining popularity for good reason. The world is changing fast—whether it’s climate change, artificial intelligence or digital disruption, investors are realising that these structural shifts won’t wait for the economy to catch up. Thematic strategies allow people to tap into these megatrends early and ride the wave. What makes them especially appealing is their story-driven nature. Themes like clean energy or sustainable agriculture resonate with a generation that wants both profit and purpose. These ideas are easy to grasp and emotionally engaging. On top of that, access has become far easier. Thanks to mutual funds, ETFs and fund-of-funds, thematic investing is no longer just for the experts; it’s now available to everyday investors in various options.

The biggest reason for the popularity of thematic investing is its ability to provide focused exposure to high-growth areas. Over the last decade, investors who identified and acted on trends such as cloud computing, renewable energy or e-commerce have often outperformed broader market benchmarks. In a market environment where average performance is often diluted by diversification, thematic investing allows portfolios to lean toward concentration on high-return opportunities. It also adds a layer of diversification, especially when themes span different sectors.

Thematic investing carries some risks. Timing is tricky, as not all themes are mature, and some may be short-lived. The dotcom bubble showed how even strong ideas can lead to losses if entered at the wrong time. Concentration is another risk; themes can soar in bull markets but fall hard when sentiment shifts. A narrow bet like healthcare or energy may lag if macro conditions change. Without a clear plan, emotional decisions and poor exits can hurt long-term returns. Tax impact from frequent switches is another factor investors must manage carefully.

For those considering thematic investing, there are a few ground rules worth following. Invest only in themes you understand and can commit to for a reasonable time frame. Jumping in for a few months and expecting outsized returns is not a sound approach. Patience is essential. Keep your thematic exposure as a satellite holding, an addition to your core diversified portfolio, not a replacement for it. Most importantly, review your themes periodically. The world evolves, and so must your portfolio. What looked promising two years ago might not hold the same promise today.

For investors seeking thematic exposure, choosing a dedicated fund or a fund-of-funds (FoF) can offer a streamlined and professionally managed approach, addressing the complexities often associated with individual stock selection. The ICICI Prudential Thematic Advantage Fund (FoF) exemplifies this convenient option.

It is an FoF scheme that aims to invest in emerging opportunities across sectors and themes. As of July 30, 2025, this FoF scheme delivered a one-year return of 8.23 per cent. Over the longer term, it has shown strong performance with a CAGR returns of 20.68 per cent over three years and an impressive 26.08 per cent over five years.

The writer is Chief Sherpa, Finsherpa Investments Private Limited