U.S.-Israel attacks on Iran, dubbed "Operation Epic Fury," have escalated into a regional war, with Iran retaliating by targeting U.S. bases and threatening to close the Strait of Hormuz. This has caused a massive ripple effect on global energy security, leading to a surge in oil prices (Brent crude to $78.31/barrel, up 12% in a week) and suspension of LNG production in Qatar. The Strait of Hormuz, a critical chokepoint for 20% of global oil exports and 31% of seaborne crude flows, if closed, would severely impact major importers like China and India. China, heavily reliant on West Asian oil and Iran's cheap crude, faces significant energy security pressure, while India claims sufficient crude oil stocks for 25 days.
- The U.S.-Israel attacks on Iran have triggered a regional war, with Iran retaliating against U.S. bases and threatening the Strait of Hormuz.
- The conflict has severely impacted global energy security, causing Brent crude oil prices to surge by 12% in a week.
- The potential closure of the Strait of Hormuz, a vital chokepoint for 20% of global oil exports, poses a major threat to global fuel trade.
India's corporate R&D intensity stagnates at 0.23% of GDP, significantly below global peers, due to firms' risk aversion and lack of information in capital markets. This undervalues innovation, leading to underproduction and a lack of mechanisms to filter out low-quality projects. A Mandatory R&D and Technology Disclosure Standard under SEBI's LODR Regulations is proposed to correct this. Such disclosures, covering R&D expenditure, patent activity, workforce composition, Technology Readiness Level, and innovation turnover, would reduce information asymmetry, lower capital costs, strengthen market discipline, and improve innovation productivity, ultimately fostering a more robust innovation ecosystem.
- India's R&D intensity is low (0.23% of GDP) due to information asymmetry and undervaluation of innovation in capital markets.
- A mandatory R&D and Technology Disclosure Standard is proposed under SEBI's LODR Regulations to address this issue.
- The standard would require disclosure of five key innovation metrics, including R&D expenditure, patent activity, and Technology Readiness Level (TRL).
India's Defence Acquisition Council cleared the procurement of 114 Rafale fighter jets from Dassault Aviation, valued at ₹3.25 lakh crore. While France committed to 'technology transfer', reports suggest restrictions on sharing critical source codes for electronic warfare and radar systems, limiting India's autonomy in customising and integrating indigenous weapons. This raises concerns about India's 'Make in India' goal and its pursuit of strategic autonomy, which is measured by domestic value-add, control over mission software, and freedom for upgrades. The article emphasizes that true geoeconomic asset is proprietary design architecture and software-defined warfare means source codes determine autonomy, highlighting the importance of owning the code for India's ascent in the defence hierarchy.
- India's Defence Acquisition Council approved the procurement of 114 Rafale fighter jets from Dassault Aviation.
- Concerns exist regarding the extent of technology transfer, specifically the sharing of critical source codes, which could limit India's strategic autonomy.
- True strategic autonomy in defence is measured by domestic value-add, control over mission software, and freedom to integrate indigenous weapons.
The Defence Ministry has signed contracts worth ₹5,083 crore to significantly boost India's maritime security capabilities. This includes the acquisition of six Advanced Light Helicopters (ALH Mk-III) for the Indian Coast Guard from Hindustan Aeronautics Ltd. (HAL) for ₹2,901 crore, promoting indigenous manufacturing. Additionally, Shtil surface-to-air vertical launch missiles will be procured for the Indian Navy from Russia's JSC Rosoboronexport for ₹2,182 crore. These acquisitions, aligned with the 'Aatmanirbhar Bharat' initiative, aim to enhance air defence capabilities, protect artificial islands and offshore installations, and generate employment, while reinforcing India's strategic defence partnership with Russia.
- India's Defence Ministry has signed contracts worth ₹5,083 crore to enhance maritime security.
- The deal includes six ALH Mk-III helicopters for the Indian Coast Guard from HAL, promoting indigenous manufacturing.
- Shtil surface-to-air missiles will be acquired from Russia for the Indian Navy to bolster air defence capabilities.
The escalating U.S.-Israel attacks on Iran and Iran's retaliatory actions, including targeting U.S. bases and closing the Strait of Hormuz, have severely impacted global energy security. The closure of the Strait, a critical chokepoint for 31% of seaborne crude flows, caused Brent crude oil prices to soar by 12% to $78.31. This escalation has disrupted oil and LNG production in the Gulf, posing a significant threat to major importers like China and India. China, heavily reliant on West Asian oil and facing disruptions from other discounted sources, is particularly vulnerable despite having strategic reserves. India also faces potential detrimental effects if the closure persists.
- Escalating U.S.-Israel attacks on Iran and Iranian retaliation have led to a major regional conflict.
- Iran's closure of the Strait of Hormuz, a vital chokepoint, has caused global oil prices to surge.
- The conflict threatens global energy security, particularly for major crude oil importers like China and India.
India's corporate R&D intensity, at just 0.23% of GDP, lags global peers due to information asymmetry and undervaluation of innovation in capital markets. To address this, a mandatory R&D and Technology Disclosure Standard is proposed under SEBI's LODR Regulations. This standard would require listed entities to disclose innovation metrics across five critical dimensions: R&D expenditure, patent activity, technology workforce composition, Technology Readiness Level (TRL) status, and innovation turnover. Such disclosures are expected to reduce information asymmetry, lower capital costs, strengthen market discipline, improve innovation productivity, and act as a non-distortionary policy instrument, fostering a more robust innovation ecosystem in India.
- India's corporate R&D intensity is significantly lower than global peers, partly due to a lack of transparent information in capital markets.
- A mandatory R&D and Technology Disclosure Standard is proposed under SEBI's LODR Regulations to address this information asymmetry.
- The standard would require disclosure of five key innovation metrics: R&D expenditure, patent activity, technology workforce, TRL status, and innovation turnover.
Following the rationalization of the GST framework into a two-tiered structure of 5% and 18% in September 2025, gross collections reached ₹1.83 lakh crore in February 2026. However, a critical vulnerability has emerged: a 17% spike in import IGST collections. This rise is driven by India's heavy reliance on imports for semiconductors, crude oil, and metals, coupled with a weakening rupee. Import IGST now constitutes roughly 27% of gross GST collections. Experts warn that rising input costs due to higher import taxes could nullify the price relief intended by the GST rationalization for consumers.
- GST was rationalized into a simplified two-tier structure (5% and 18%) in September 2025 to boost consumption.
- Gross GST collections for February 2026 stood at ₹1.83 lakh crore, an 8.1% year-on-year increase.
- Import IGST has risen to 27% of total collections, indicating a growing dependence on import-led revenues over domestic demand.
The Indian government has updated the base year for Gross Domestic Product (GDP) and Gross Value Added (GVA) data to 2022-23 from the previous 2011-12. This long-overdue revision incorporates more accurate data sources, such as the Annual Survey of Unincorporated Sector Enterprises (ASUSE) and Periodic Labour Force Survey (PLFS), replacing outdated extrapolations. The new series adopts the 'double-deflator' approach to better account for inflation in intermediate and final products. While the new series predicts a 7.6% growth for FY26, the absolute size of the economy is estimated to be 3.3% smaller than previously projected.
- The GDP base year has been shifted from 2011-12 to 2022-23 to improve statistical accuracy and representativeness.
- The new methodology uses the 'double-deflator' approach to separate inflation effects on intermediate and final goods.
- Data from GST and PLFS are now integrated into the national accounts for a more robust picture of the informal and consumer sectors.
India's Index of Industrial Production (IIP) growth slowed to 4.8% in January 2026, down from a 26-month high of 8% in December 2025. This broad-based slowdown affected manufacturing, mining, and electricity sectors. The manufacturing sector, a key component of the index, saw its growth decelerate to 4.8% from 8.4% in the previous month. However, the infrastructure and construction goods sector showed resilience, with growth quickening to 13.7%, the highest since August 2023. Analysts attribute the overall slowdown to a high base effect and cooling consumer demand in specific segments.
- The IIP growth rate dropped to 4.8% in January 2026, marking a three-month low for industrial activity.
- Manufacturing growth slowed significantly to 4.8% compared to 8.4% in December 2025.
- Infrastructure and construction goods were the only sectors showing accelerated growth, reaching 13.7%.
Prime Minister Narendra Modi and Canadian Prime Minister Mark Carney signed a landmark $1.9 billion, 10-year uranium supply deal for Indian nuclear power reactors. This agreement marks a significant step in resetting bilateral ties that were strained following the killing of activist Hardeep Singh Nijjar. Beyond energy, the two nations agreed to conclude the Comprehensive Economic Partnership Agreement (CEPA) within the year and established a Strategic Energy Partnership covering renewable energy and critical technologies. Canada also announced its decision to join the India-led International Solar Alliance (ISA) and the Global Biofuel Alliance as a member.
- The 10-year uranium deal is valued at $1.9 billion and aims to fuel India's growing nuclear energy sector.
- Both nations have committed to finalizing the Comprehensive Economic Partnership Agreement (CEPA) by the end of 2025 to double bilateral trade.
- Canada has officially joined the International Solar Alliance (ISA) and the Global Biofuel Alliance, supporting India's green energy initiatives.
Tensions in West Asia have escalated significantly as Iran and its allied groups launched missile strikes against Israel, Arab states, and U.S. military targets. The conflict has expanded to several fronts, resulting in casualties and the downing of multiple aircraft, including American F-15E Strike Eagles. In response, oil prices have surged by over 8%, hovering around $80 a barrel. The situation is further complicated by reports of Iran potentially shutting down the Strait of Hormuz, a critical maritime passage for global energy supplies. India is monitoring the situation closely, placing warships on standby for humanitarian operations under Operation Sankalp.
- Iran's strikes targeted U.S. assets, Israel, and Gulf Arab states in response to previous attacks on its territory and nuclear facilities.
- Global oil prices spiked significantly due to fears of supply disruptions in the Strait of Hormuz, which handles one-fifth of global oil.
- The conflict has led to the death of Iranian Supreme Leader Ayatollah Ali Khamenei and his wife following strikes in Tehran.
The 2026-27 Union Budget announced a 'Coconut Promotion Scheme' to rejuvenate old gardens and expand cultivation. However, experts argue that the focus must shift from mere productivity to climate-resilient sustainability. India is the world's largest producer and consumer of coconuts, but the industry faces threats from rising temperatures and diseases like root wilt. The article suggests that the Coconut Development Board (CDB) should prioritize developing drought-tolerant genotypes and fostering farmer producer organisations (FPOs) rather than just distributing seedlings. It also highlights the failure of previous cluster development programs due to high investment barriers and lack of institutional voice for farmers.
- The 'Coconut Promotion Scheme' aims to rejuvenate non-productive gardens and establish new plantations.
- Climate change poses a significant threat, with projections suggesting temperatures in coconut-growing regions could rise by 1.6-2.1°C by 2050.
- Sustainability requires the development of climate-resilient, salt-tolerant, and disease-resistant coconut varieties.
India's Gross Goods and Services Tax (GST) collection reached over ₹1.83 lakh crore in February 2026, marking an 8.1% year-on-year increase. This growth was driven by higher revenues from imports (up 17.2%) and improved domestic sales. Despite the overall increase, some major states like Tamil Nadu and Madhya Pradesh reported negative growth. The government recently rationalized GST rates, slashing them on 375 items and merging four tax slabs (5%, 12%, 18%, 28%) into two primary slabs of 5% and 18%, with a 40% slab for luxury and tobacco products.
- Total gross GST collection for February 2026 stood at ₹1.83 lakh crore, compared to ₹1.69 lakh crore in February 2025.
- Import revenue saw a significant jump of 17.2%, contributing heavily to the overall collection increase.
- The GST council has simplified the tax structure by merging the 12% and 18% slabs into a single 18% slab.
SEBI is enhancing market surveillance using Artificial Intelligence (AI) to identify fraud and manipulation. Key initiatives include 'SEBI Check,' a tool for investors to verify registered intermediaries, and AI-powered educational tools in multiple languages. The regulator is cracking down on 'finfluencers' promising unrealistic returns and is working on deepening the corporate bonds market. Additionally, SEBI is exploring the rejuvenation of agri-commodities markets through specialized working groups. A committee under Chief Economic Adviser V. Anantha Nageswaran is also studying the impact of regulations to make policy-writing more scientific and data-driven.
- SEBI is integrating AI to enhance market surveillance and identify fraudulent brokers or traders.
- The 'SEBI Check' tool allows investors to verify the credentials of financial intermediaries before investing.
- The regulator is taking strict action against unregistered investment advisors and 'finfluencers' on social media platforms.
India's demographic dividend is projected to end by 2040, making vocational training reforms urgent. Currently, only 1.3% of Indian students are in vocational streams, far below European and Chinese standards. The article criticizes the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) for poor outcomes, citing a 2025 CAG report that found high rates of invalid trainees and low placement. It proposes shifting from supply-driven to demand-driven models using 'skill vouchers' and 'skill levies' (Reimbursable Industry Contribution), similar to successful models in Singapore and South Korea, to ensure industry ownership and sustainable funding for the workforce.
- India's demographic dividend window is closing, with projections suggesting it will end by 2040.
- A 2025 CAG report on PMKVY revealed that 94.5% of bank accounts were invalid and only 41% of trainees achieved placement.
- The National Education Policy (NEP) aims for 50% of learners to have exposure to vocational education by 2025.
The 16th Finance Commission faces the complex task of balancing vertical and horizontal tax devolution. While the 14th Finance Commission increased the states' share to 42%, the 15th reduced it to 41% following Jammu and Kashmir's reorganization. A major concern is the Centre's increasing reliance on non-shareable cesses and surcharges, which reduces the effective divisible pool for states. The 16th Commission has introduced a new horizontal criterion based on GSDP share to reward economic efficiency. However, critics argue this may disadvantage less developed states and emphasize the need for Article 275 grants to equalize critical services like health and education.
- The 16th Finance Commission has maintained the vertical devolution share to states at 41%.
- The increasing use of cesses and surcharges by the Centre effectively lowers the actual revenue share transferred to states.
- A new horizontal devolution criterion uses a state's share in national GSDP to reflect and reward economic efficiency.
The prospects of an interim trade agreement between India and the U.S. have become uncertain after the U.S. Supreme Court struck down tariffs implemented under the International Emergency Economic Powers Act of 1977. The court ruled that the President requires congressional approval for such levies. This decision complicates the removal of 'reciprocal tariffs' that were part of the proposed deal. While Indian officials were prepared to finalize the agreement in Washington, the visit has been postponed to evaluate the legal implications. The U.S. administration maintains that it expects partners to stand by signed deals despite the judicial setback.
- The U.S. Supreme Court ruled that the President cannot unilaterally levy certain tariffs without congressional approval, affecting the 'reciprocal tariffs' strategy.
- The proposed interim deal aimed to reduce reciprocal tariffs on various goods, including aluminium and steel, which currently face a 50% tariff.
- India has postponed the visit of its chief negotiator to Washington to assess the impact of the court's ruling on the legality of the proposed agreement.
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.