Shashi Tharoor argues that Kerala must transition from a 'Remittance Economy' to an 'Innovation Economy' to address its unique challenges. Despite high literacy and social indicators, Kerala faces an aging population and land scarcity. The article suggests leveraging Kerala's biodiversity for a 'Graphene Valley,' developing 'retirement villages' for global seniors, and utilizing the Vizhinjam International Seaport as a global logistics hub. By adopting high-value, low-footprint models like Dutch glasshouse farming and Singapore's logistics efficiency, Kerala can transform its constraints into competitive advantages in biotech, IT, and medical tourism.
- Kerala needs to pivot from relying on remittances (₹1.3 lakh crore annually) to high-tech innovation and value addition.
- The state should utilize its unique genetic pool for precision medicine and establish a 'Graphene Valley' for advanced materials.
- Vizhinjam Seaport must be developed into a comprehensive logistics and value-addition hub rather than just a transit point.
The Indian government has introduced a new GDP series with an updated base year of 2022-23, replacing the 2011-12 base. According to the second advance estimates, India's economic growth is projected at 7.6% for FY26, an upgrade from the 7.4% predicted earlier. While real GDP growth shows a stronger outlook driven by a 12.5% surge in manufacturing, nominal GDP has been revised downward for the 2023-26 period. This revision is expected to negatively impact fiscal metrics like the fiscal deficit-to-GDP and debt-to-GDP ratios. The services sector is also expected to quicken to 8.9% growth in FY26.
- The base year for GDP calculation has been updated from 2011-12 to 2022-23 to improve data representativeness.
- FY26 growth is pegged at 7.6%, largely driven by the secondary sector, specifically manufacturing and construction.
- Nominal GDP has been revised downward, which may lead to higher fiscal deficit-to-GDP ratios than previously estimated.
India is repositioning critical minerals as a core pillar of its industrial and energy security. The 2026 Budget reflects this shift by removing import duties on capital goods for processing and reducing duties on monazite sands. The government has launched the National Critical Mineral Mission (NCMM) with a ₹16,300 crore outlay to discover and process 30 identified minerals. To de-risk exploration, India is adopting an AI-first approach and leveraging international partnerships with the US, UK, and Australia. The goal is to build a domestic ecosystem for batteries, solar modules, and electric vehicles while ensuring technological sovereignty in a turbulent global market.
- The National Critical Mineral Mission (NCMM) targets 1,200 exploration projects by FY2031 to secure mineral supply chains.
- India has identified 30 critical minerals, including lithium and beryllium, which were previously classified as restricted atomic minerals.
- The strategy emphasizes 'AI-first' exploration, utilizing seismic AI tools like Mission Anveshan for hydrocarbon and mineral discovery.
This article examines income mobility in India between 2014 and 2025, drawing on data from the Consumer Pyramids Household Survey. It highlights a concerning trend where downward mobility—households slipping into lower income brackets—has nearly doubled, while upward mobility remains stagnant. The study reveals significant disparities across caste and religious lines, with Scheduled Castes (SC) and Muslim households facing the greatest hurdles in upward movement. Urban areas show slightly better mobility than rural ones, where nearly 29% of households are worse off than a decade ago. The findings suggest that despite headline growth, entrenched inequality and economic vulnerability persist, necessitating policies focused on social protection and employment-intensive sectors.
- Downward mobility in India increased from 14% in 2015 to 26.8% in 2025, indicating rising economic vulnerability.
- Upward mobility remains muted, particularly for Scheduled Castes and Muslim households, who face systemic barriers and discrimination.
- Rural areas have been hit harder by economic volatility compared to urban centers, with nearly 29% of rural households worse off than in 2014.
This article examines 'Agreements on Reciprocal Trade' (ARTs) introduced by the Trump administration, which differ from traditional Free Trade Agreements (FTAs). Unlike FTAs, ARTs are often not signed under WTO's GATT Article XXIV, making them legally suspicious under international law. These agreements frequently include 'America First' provisions, such as the power to impose unilateral tariffs or restrict data sovereignty. The U.S.-India trade deal and agreements with countries like Bangladesh are cited as examples. These deals represent a shift toward managed trade and bilateralism, potentially undermining the multilateral WTO framework.
- ARTs often bypass WTO rules on non-discrimination and the Most-Favoured-Nation (MFN) principle.
- These agreements allow the U.S. to maintain trade barriers while demanding concessions from partner nations.
- They often include clauses that restrict the domestic policy space and data sovereignty of the partner country.
Four years since the invasion began in February 2022, the Russia-Ukraine war continues to severely impact global and domestic economies. A World Bank report estimates Ukraine's post-war reconstruction cost at $558 billion. In both nations, essential food prices have skyrocketed; for instance, rice prices in Russia rose by 40% compared to 2022. Ukraine's GDP contracted by 30% in 2022, while Russia faces long-term stagnation due to sanctions. Defense spending has surged to over 20% of Ukraine's GDP and nearly 30% of Russia's total expenditure, leading to decreased allocations for social sectors like education and healthcare.
- Reconstruction costs for Ukraine are estimated at nearly three times its projected 2025 GDP.
- Inflation in Russia reached 14% in 2022 and remains volatile due to ongoing conflict and sanctions.
- Both countries have significantly diverted funds from social welfare and infrastructure to military spending.
India has shifted to a proactive trade strategy, pursuing comprehensive Free Trade Agreements (FTAs) with major economies like the UAE, Australia, and the UK. The goal is to increase total exports to $2 trillion by 2030, as outlined in the Foreign Trade Policy (FTP) 2023. These agreements aim to integrate Indian firms into global value chains, particularly in high-growth sectors like electronics and pharmaceuticals. The strategy emphasizes 'strategic autonomy' while reducing dependence on single geographies. Recent milestones include an interim agreement with the U.S. and ongoing negotiations for a historic FTA with the European Union.
- India aims for $2 trillion in total exports by 2030 under the Foreign Trade Policy 2023.
- FTAs are being utilized as strategic instruments for both economic growth and diplomatic influence.
- The strategy focuses on diversifying export destinations to ensure economic resilience against global shocks.
India's trade delegation recently postponed a trip to Washington intended to finalize an Interim Agreement with the U.S. This delay comes amid shifting geopolitical dynamics, including U.S. court rulings affecting President Trump's ability to levy tariffs. India aims to import $500 billion worth of energy, aircraft, and technology from the U.S. over the next five years. Simultaneously, India's imports of Russian crude oil have fallen to a 38-month low as of December 2025, with Russia's share dropping below 25%. The article analyzes the complex interplay between tariff threats, energy security, and international trade agreements.
- India has a target to import $500 billion in goods from the U.S., including energy and defense equipment.
- Russian crude oil imports to India hit a 38-month low in late 2025 due to various market and geopolitical pressures.
- U.S. legal experts suggest the President may lack executive authority to levy tariffs on India without Congressional backing.
At the India Energy Week 2026, Prime Minister Modi emphasized India's $500 billion investment opportunities in the energy sector, focusing on green hydrogen and its derivative, green ammonia. The Solar Energy Corporation of India (SECI) recently concluded a successful auction under the SIGHT programme, attracting 15 bidders. This auction model is seen as a global benchmark, achieving prices significantly lower than international standards. Green ammonia, produced by combining nitrogen with green hydrogen, is crucial for decarbonizing industries like fertilizers and marine fuel. The initiative aims to insulate India from global gas market volatility and currency risks.
- Green ammonia is produced by combining nitrogen with green hydrogen, serving as a clean alternative for fertilizers and fuel.
- SECI's auction under the SIGHT programme resulted in seven successful awardees for 7,24,000 tonnes of green ammonia.
- The discovered prices for green ammonia in India range between ₹49.75 and ₹64.74 per kg.
The AI Impact Summit in New Delhi highlighted India's position as a massive user base for Artificial Intelligence. During the summit, 89 countries signed a voluntary declaration to share knowledge on AI democratization. However, India faces challenges such as high infrastructure costs, specifically the rising price of GPUs, and a reliance on foreign capital. The article suggests that while India is a hub for model deployment, it must focus on training and fine-tuning to mitigate risks. It calls for the Global South to lead in building safety standards and tools to exercise leverage over Large Language Models (LLMs).
- India is currently the largest user base for AI technologies outside of the United States.
- A total of 89 countries have committed to a voluntary framework for sharing AI knowledge and democratization.
- High costs of Graphics Processing Units (GPUs) and electrical capacity are significant hurdles for domestic AI deployment.
India has updated its inflation index (CPI) with a new base year of 2024 to better reflect modern household spending. The revised basket re-organizes items into 12 distinct categories based on the COICOP 2018 classification. A significant shift is observed: the weight of food has declined, while housing and services (education, health, transport) now account for a larger share. This update, informed by the Household Consumption Expenditure Survey (HCES), allows the Reserve Bank of India (RBI) to more accurately distinguish between transitory food price shocks and persistent service-sector inflation, which is crucial for setting effective interest rates.
- The base year for CPI has been shifted from 2012 to 2024 to capture current consumption trends.
- The new index uses the Classification of Individual Consumption According to Purpose (COICOP) 2018 standards.
- Data shows that as incomes rise, the proportion of spending on food decreases while spending on services increases.
India has joined the Pax Silica alliance, a U.S.-led coalition focused on securing infrastructure for Artificial Intelligence (AI) and critical minerals. This strategic move aims to bolster domestic initiatives like IndiaAI and the National Critical Mineral Mission by securing raw materials and attracting investment. While the alliance offers a 'trusted ecosystem' and a shift away from China-centric supply chains, it poses risks of Chinese economic retaliation and rigid export controls. India must balance its preference for 'issue-based alignments' with the potential constraints of a formal technological bloc that could influence its domestic AI regulations and security standards.
- Pax Silica focuses on building secure technology networks for AI, semiconductors, and critical mineral processing.
- India provides significant engineering talent and assembly capacity, adding geopolitical weight to the coalition's efforts.
- The alliance aims to establish democratic governance standards for critical technologies to counter non-democratic influences.
The U.S. Supreme Court (SCOTUS) ruled 6-3 that President Donald Trump’s use of the International Emergency Economic Powers Act (IEEPA) to unilaterally impose tariffs was unlawful without clear congressional authorization. The court found that IEEPA does not grant the executive power to tax or regulate trade to such an extent. This ruling impacts various countries, including India, which faced a 50% tariff hike linked to its purchase of Russian oil. While some existing tariffs under other laws remain, the ruling establishes a significant check on executive overreach in trade policy, potentially easing pressure on bilateral trade negotiations.
- The ruling restricts the President's ability to use emergency powers for imposing unlimited tariffs without legislative oversight.
- The court emphasized the necessity of 'clear congressional authorization' for the executive to exercise taxation-like economic powers.
- India had been specifically targeted with high tariffs due to Washington's objections to New Delhi purchasing oil from Russia.
Prime Minister Narendra Modi and Brazilian President Luiz Inácio Lula da Silva met in New Delhi to strengthen bilateral ties. The two nations signed significant agreements focusing on rare earth and critical minerals, and steel mining, aimed at diversifying supply chains away from Chinese dominance. They set an ambitious bilateral trade target of $30 billion annually by 2030, up from the current $12-15 billion. The leaders also discussed the impact of U.S. tariff shifts and emphasized their roles as leading democracies of the Global South, advocating for multilateralism and a digital partnership for the future.
- India and Brazil signed a pioneering agreement focusing on renewable energy and critical minerals to diversify global supply chains.
- The bilateral trade target has been set at $30 billion per year by 2030, doubling current estimates.
- Both nations emphasized their identity as the two biggest democracies of the Global South and committed to defending multilateralism.
The U.S. Supreme Court recently struck down President Trump’s 'reciprocal tariffs' imposed under the International Emergency Economic Powers Act, citing an overstep of authority. In response, the Trump administration announced a temporary 150-day, 15% baseline tariff on all imports using Section 122 of the Trade Act of 1974. India's Commerce Ministry is studying the implications, especially as aluminium and steel exports to the U.S. have already seen a 66% decline due to previous Section 232 duties. The ruling potentially renders recent trade deals one-sided, prompting calls for India to re-examine its interim trade pact.
- The U.S. Supreme Court ruled that reciprocal tariffs exceeded presidential authority, leading to a new 15% baseline tariff under Section 122 of the Trade Act of 1974.
- India's steel and aluminium exports are significantly impacted, as they constitute the fourth-largest export group to the U.S.
- The suspension of 'de minimis' exemptions for low-value shipments further affects small Indian e-commerce exporters.
The AI Impact Summit held in India concluded with landmark investment commitments totaling $250 billion for AI infrastructure. IT Minister Ashwini Vaishnaw announced that the summit also secured $20 billion in deep tech venture commitments. A key outcome was the 'Delhi Declaration' for AI, signed by over 70 countries, including the U.S. and China, establishing a global framework for AI cooperation and safety. The summit marks a significant step for the IndiaAI Mission, aiming to elevate the country's capabilities in large language models and common compute infrastructure.
- The summit attracted over five lakh visitors and 400 exhibitors, demonstrating India's growing leadership in the global AI landscape.
- The Delhi Declaration signifies a rare consensus among major powers like the U.S. and China on AI governance.
- The investments will be directed toward building robust AI infrastructure and fostering a new level of safety in AI applications.
Iran's geopolitical significance is re-emerging as global powers navigate its nuclear program and regional influence. Following the U.S. withdrawal from the JCPOA in 2018, tensions rose, but recent diplomatic shifts suggest a potential for renewed negotiations. For India, Iran remains a vital partner for energy security and regional connectivity through the Chabahar Port, which provides access to Central Asia and Afghanistan. However, India must navigate complex dynamics, including U.S. sanctions and Iran's relations with Arab Gulf powers, while maintaining its strategic autonomy in West Asian policy.
- The JCPOA (2015) remains the primary framework for international negotiations regarding Iran's nuclear program.
- Chabahar Port is a critical Indian investment for connectivity to Central Asia, bypassing Pakistan.
- India must balance its strategic ties with Iran against pressure from U.S. sanctions and regional rivalries.
Following the April 2025 Pahalgam attack, India is focusing on tourism as a means to counter the terrorist ecosystem in Kashmir. The Union Budget 2026-27 outlines a plan for institutional capacity building and the development of ecologically sustainable mountain trails. By involving locals in paid civic roles like trail maintenance and waste management, the state aims to build trust and provide a path into the formal economy. Tourism fosters business ties and reduces isolation, incentivizing families to oppose terrorism. Shared environmental governance and civilian ownership of social stability are seen as key to long-term peace.
- Tourism policy in Kashmir is shifting toward predictable safety and tangible local benefits.
- The Union Budget 2026-27 emphasizes sustainable mountain trails and heritage site development.
- Local participation in forest protection and conflict mitigation can replace volunteerism with paid roles.
As India hosts the AI Impact Summit, there is a call for a human-centred AI that drives inclusive social justice. AI is expected to transform the world of work by enhancing productivity rather than just replacing jobs. India's e-Shram platform, which supports over 315 million informal workers, is a prime example of using technology for social protection. The Union Budget 2026-27 announced a High-Powered Committee to assess AI's impact on employment. To ensure equitable outcomes, India must focus on skilling, digital infrastructure, and international collaboration to bridge the AI access gap between high and low-income economies.
- AI could generate over three million new technology jobs in India by 2030 while reshaping ten million existing ones.
- The e-Shram platform serves as a digital backbone for social protection for 315 million informal workers.
- The Global Coalition for Social Justice, involving the ILO, aims to strengthen evidence-based AI policies.
Despite being the world's second-largest consumer and producer of tobacco, India's cigarette taxes account for only 53% of the retail price, far below the WHO's recommended 75%. While recent excise duty hikes increased prices, they haven't kept pace with inflation, making tobacco relatively affordable. Tobacco use kills approximately 1.35 million people annually in India. Experts highlight that the tobacco industry often interferes with policy-making to weaken control measures. Furthermore, the GST on beedis remains low at 18%, despite their high consumption among low-income groups, representing a missed opportunity for public health intervention.
- India's tobacco tax (53%) is significantly lower than the WHO benchmark of 75% of the retail price.
- Tobacco-related diseases cause 1.35 million deaths in India every year.
- The tobacco industry is accused of interfering with health-centric tax policies and decision-making.
According to the Global Energy Alliance for People and Planet (GEAPP), India needs to mobilize approximately $22 trillion, or $500 billion annually, to meet its Net Zero target by 2070. Achieving this requires a synchronized effort between government, private finance, and philanthropy. The GEAPP emphasizes the need for bankable projects to attract global investment and the alignment of Multilateral Development Banks (MDBs). At the Mumbai Climate Week, a national platform was unveiled to deploy $25 million for modernizing power distribution and integrating renewable energy, aiming to create proof-of-concept projects for larger investments.
- India's total financial requirement for Net Zero by 2070 is estimated at $22 trillion.
- Annual mobilization of $500 billion is necessary to transition the energy sector and integrate renewables.
- Multilateral Development Banks (MDBs) and private sector alignment are crucial for funding viability.
Prime Minister Narendra Modi and French President Emmanuel Macron virtually inaugurated India's first private-sector helicopter Final Assembly Line (FAL) in Kolar, Karnataka. A joint venture between Tata Advanced Systems and Airbus, the facility will manufacture the H125 helicopter. This marks the first time a private entity in India will handle the complete manufacturing, integration, and testing of a rotary-wing platform. The project, involving an investment exceeding ₹1,000 crore, aims to produce 500 light helicopters over the next 20 years for both domestic use and export to South Asia, enhancing India's defense manufacturing capabilities.
- The FAL is a collaboration between Tata Advanced Systems and Airbus for H125 helicopters.
- It is the first private-sector facility in India for helicopter manufacturing, integration, and testing.
- The facility is located in Vemagal, Kolar district, Karnataka, covering 17 acres.
Bio-based chemicals, produced from biological feedstocks like sugarcane and corn, offer a sustainable alternative to petrochemicals. India is well-positioned to scale this sector due to its large agricultural base and expertise in fermentation. The government has prioritized this area under the Department of Biotechnology’s BioE3 policy. While the India enzymes market is growing, it remains consolidated, with a few top players holding 75% of the market share. Challenges include the high cost of bio-based products compared to petrochemicals and the need for shared biomanufacturing infrastructure like biofoundries to reduce capital risk for firms.
- Bio-based chemicals include organic acids, bio-alcohols, and solvents used in diverse industries.
- India's BioE3 policy (Economy, Environment, and Employment) is the primary driver for this sector.
- The sector aims to reduce India's heavy import dependence on petrochemicals.
An interim trade agreement between India and the U.S. has raised concerns regarding its impact on key stakeholders, particularly farmers. While the U.S. will reduce tariffs on certain Indian industrial goods, India has made concessions on agricultural imports and committed to purchasing $500 billion in U.S. energy and tech products over five years. Critics argue the deal lacks explicit protections for sensitive agricultural products like cereals, unlike previous Indian FTAs. Furthermore, the agreement addresses long-standing Non-Tariff Barriers (NTBs), potentially opening Indian markets to Genetically Modified (GM) food products, raising questions about food security and sovereign decision-making.
- The deal involves India reducing tariffs on a wide range of U.S. food and agricultural products.
- A major commitment includes India purchasing $500 billion worth of U.S. goods, including aircraft and technology, over five years.
- There are concerns that the deal might allow the import of GM food products, which India has historically resisted.