Jyoti Vij, Director General of FICCI, has proposed several focus areas for the upcoming Union Budget 2026-27 to maintain India's economic momentum. Key recommendations include increasing the capital outlay for defense to 30%, establishing an Eastern India defense industrial corridor, and boosting the National Critical Mineral Mission (NCMM). The proposal also emphasizes deepening corporate bond markets, resolving tax disputes through a dual-track disposal system, and calibrating customs tariffs to address inverted duty structures. These measures aim to strengthen domestic growth levers while maintaining fiscal consolidation and encouraging private investment across various sectors.
- The budget should prioritize growth-enhancing productive capital expenditure and social sector spending.
- A dedicated fund for critical minerals recovery and tailings processing is suggested under the NCMM.
- To improve export competitiveness, the allocation for the RoDTEP scheme needs to be significantly raised.
Prime Minister Narendra Modi announced that nearly 44,000 start-ups registered in 2025, marking the highest annual addition since the Startup India mission's launch in 2016. Celebrating the scheme's 10th anniversary, the PM noted India's rise to the third-largest start-up ecosystem globally. The number of start-ups has grown from under 500 in 2014 to over 200,000 today, with nearly 125 unicorns. To further boost innovation, the government approved Fund of Funds 2.0 with a ₹10,000 crore corpus, focusing on deep tech areas like AI, machine learning, and quantum technologies to drive future economic growth.
- India is now the third-largest start-up ecosystem globally with over 200,000 registered entities.
- The Startup India mission, launched in 2016, aims to foster innovation and enable investment-driven growth.
- Fund of Funds 2.0 will specifically target deep tech sectors including aerospace, defense, and artificial intelligence.
Marine and space biotechnology are emerging as frontiers for India's scientific and economic growth. Marine biotech focuses on discovering bioactive compounds from deep-sea organisms for use in pharmaceuticals, food, and cosmetics. Space biotech, led by ISRO's microgravity experiments, studies biological systems in extreme environments to support long-duration human missions and develop new materials. With a vast coastline and growing space capabilities, India aims to position itself as a leader in biomanufacturing, though private sector participation remains in its nascent stages and requires more investment.
- India's 11,000 km coastline and Exclusive Economic Zone offer rich marine biodiversity for biomanufacturing.
- ISRO is conducting microgravity biology experiments on microbes, plants, and algae to study life-support regeneration.
- The Deep Ocean Mission and BioE3 policy are key government drivers for these futuristic sectors.
The International Labour Organization (ILO) in its 'World Employment and Social Trends 2026' report projects the global unemployment rate to stay at a historically low level of 4.9%. However, the report warns of rising numbers of 'working poor' and informal workers in low-income countries. About 284 million workers still live in extreme poverty, earning less than $3.00 a day. The report highlights that while headline numbers look positive, structural transformations, digital shifts, and trade uncertainties continue to challenge the quality of jobs and gender equality in the global workforce.
- 186 million people are projected to be unemployed globally this year despite the low percentage rate.
- Over two billion workers remain in informal employment, which is a persistent feature of the economic landscape.
- Extreme poverty among workers declined by only 3.1 percentage points between 2015 and 2025.
India is intensifying its 'minerals diplomacy' to secure critical minerals like lithium, cobalt, and rare earths, essential for the clean energy transition. New Delhi is pursuing bilateral and multilateral partnerships with resource-rich nations like Australia, Japan, and various African countries. The India-Australia Critical Minerals Investment Partnership has already identified five target projects. However, challenges remain, including China's dominance in the supply chain, US trade policy volatility, and the need for domestic midstream processing capabilities to reduce dependence on raw material exports and build long-term resilience.
- Critical minerals are vital for EV batteries, renewable energy infrastructure, and high-tech manufacturing.
- India is exploring joint ventures in Argentina through Khanij Bidesh India Limited (KABIL) with a ₹200 crore agreement.
- African nations like Namibia, Zambia, and Congo offer opportunities for lithium, rare earths, and copper exploration.
India is set to replace its outdated Consumer Price Index (CPI) dataset, which currently uses 2012 as the base year. The new series, starting February 2026, will use 2024 as the base year and incorporate updated weightages based on the Household Consumption Expenditure Survey 2023-24. The current 2012-based index fails to capture modern consumption patterns, leading to a gap between official inflation figures and the actual cost of living experienced by households. This update is crucial for more accurate policymaking and capturing the nuances of a diverse country like India.
- The 2012 base year is over a decade old and does not reflect current spending on services, technology, and subsidies.
- Official retail inflation for December 2025 stood at 1.33%, while household perceptions were significantly higher at 6.6%.
- The new index will incorporate updated weightages for various sub-sectors based on the latest consumption patterns.
India's retail inflation, measured by the Consumer Price Index (CPI), rose to a three-month high of 1.33% in December 2025. Despite the slight uptick, it remains significantly below the Reserve Bank of India's (RBI) lower comfort level of 2%. The low figure is attributed to a broad-based decline in price levels across various sectors. However, core inflation, which excludes volatile components like food and fuel, jumped to a 28-month high of 4.8%. While food and beverage prices saw a contraction, meat, oils, and fruits remained high, potentially exerting upward pressure in the coming months.
- Retail inflation reached 1.33% in December 2025, up from previous months but still below the RBI's 2% lower threshold.
- The RBI targets an inflation rate of 4%, with a comfort band of 2% above and below that target (2% to 6%).
- Core inflation, which excludes food, beverages, fuel, light, and transport fuels, rose significantly to 4.8%.
Prime Minister Narendra Modi, while inaugurating the Vibrant Gujarat Regional Conference in Rajkot, highlighted India's trajectory as the world's fastest-growing economy. He stated that India is on course to become the third-largest global economy. The PM emphasized the success of the Digital India initiative, noting India as the largest consumer of data and the leader in real-time digital payments via UPI. Additionally, he visited the Somnath temple, marking 1,000 years since Mahmud of Ghazni's attack in 1026, and noted the temple's resilience as a symbol of national pride and history.
- India is currently the world's fastest-growing economy and aims to become the third-largest globally.
- The country has transitioned from a mobile importer to the world's second-largest manufacturer of mobile handsets.
- India's first semiconductor fabrication facility is being established in Dholera, Gujarat.
The Tamil Nadu government has implemented the Tamil Nadu Assured Pension Scheme (TAPS) effective January 1, 2026. This scheme targets state government employees who entered service on or after January 1, 2003, and were previously under the Contributory Pension Scheme (CPS). Under TAPS, retirees are guaranteed a pension equal to 50% of their last-drawn basic pay and dearness allowance. Employees contribute 10% of their basic pay, while the government covers the remaining funding. The scheme also includes provisions for family pensions (60% of the pensioner's amount) and gratuity up to ₹25 lakh based on service tenure.
- TAPS provides an assured pension of 50% of the last-drawn basic pay plus dearness allowance for eligible retirees.
- It is mandatory for employees entering service from January 1, 2026, while existing CPS employees have an option to switch at retirement.
- Employees contribute 10% of their basic pay to the pension fund, with the government bearing the additional fund requirements.
Recent U.S. legislative moves, including the Russia Sanctions Bill and focus on Venezuelan oil assets, reflect growing anxieties over the eroding hegemony of the U.S. dollar. Major consumers like China and India have deepened non-dollar trading arrangements to circumvent sanctions. India has imported substantial Russian crude, accounting for over 20% of its war-period exports, sometimes paying in yuan. The global energy transition towards electric vehicles, led by China, further challenges the traditional dollar-centric financial order. Additionally, the BRICS nations are contemplating parallel currency arrangements, signaling a historic transition in the architecture of global trade and finance.
- The petrodollar system, which underpinned the dollar's global centrality since the late 20th century, is facing erosion due to geopolitical shifts.
- India has imported over 20% of its crude oil from Russia since 2022 using non-dollar settlement mechanisms.
- China's dominance in the EV ecosystem represents a structural challenge to the financial architectures that supported U.S. dominance for decades.
The Ministry of Textiles has signed Memorandums of Understanding (MoUs) with 15 states to launch the 'Textiles focused Research, Assessment, Monitoring, Planning And Start-Up' (Tex-RAMPS) scheme. The initiative aims to improve the quality, coverage, and timeliness of textile-related statistical products and research. Under the scheme, each participating state or Union Territory will receive an annual grant of ₹12 lakh. Furthermore, an additional grant of ₹1 lakh per year will be provided for each district to develop and execute specific district action plans for sectors like handlooms, handicrafts, and technical textiles.
- Tex-RAMPS focuses on integrated planning for key sectors including apparel and technical textiles.
- The scheme was launched during a national textile ministers' conference in Guwahati.
- It aims to build the credibility of textile data to support better policy-making and start-up ecosystems.
The rise of 10-minute delivery services has sparked a debate regarding worker safety, economic viability, and the necessity of such speed. While companies argue that consumer demand drives this model, labor unions highlight the immense pressure on delivery partners, leading to increased accident risks and lack of social security. NITI Aayog projects that the gig economy will employ 2.35 crore workers by 2029-30. However, current labor codes often exclude gig workers from essential benefits like minimum wage, regulated working hours, and insurance, treating them as "partners" rather than employees.
- The 10-minute delivery model is criticized for being a "competition for speed" rather than a consumer necessity.
- Gig workers often face "algorithmic management" where their livelihoods depend on opaque app ratings and automated blocks.
- There is a call for better regulatory frameworks to protect worker rights in a sector that provides essential entry-level jobs.
As the 16th Finance Commission (FC) begins its work, there is a growing debate on using Gross State Domestic Product (GSDP) as a primary indicator for central tax devolution. Currently, devolution relies heavily on population and income distance, which some high-performing states argue penalizes their efficiency. Proponents suggest GSDP is a reliable proxy for the actual accrual of central taxes at the state level, especially since GST is destination-based. Data shows a high correlation (0.91) between GSDP and GST collections, suggesting GSDP reflects a state's contribution to the national exchequer more accurately than current metrics.
- High-performing states like Karnataka, Maharashtra, and Tamil Nadu contribute disproportionately to central tax revenues but receive lower shares in devolution.
- The 15th FC's devolution formula showed a weak correlation (0.24) with actual tax collection shares.
- Using GSDP could balance the principles of rewarding contribution and ensuring equity.
The United Nations Department of Economic and Social Affairs (UN DESA) has projected India's economic growth at 7.2% for the current fiscal year. While slightly lower than the Indian government's estimate of 7.4%, the report highlights that robust domestic consumption and significant public investment in infrastructure will largely offset the negative impacts of higher US tariffs. The report notes that 18% of Indian exports are US-bound, making them vulnerable to trade policy changes. However, strong demand from other markets like Europe and West Asia, along with tax reforms, provides a buffer.
- India's growth is supported by gross fixed capital formation in physical and digital infrastructure.
- The Indian rupee faced depreciation pressures due to portfolio outflows and US tariff concerns but remains supported by strong economic performance.
- China's fixed asset investment saw a contraction due to property sector weakness, contrasting with India's expansion.
US President Donald Trump has approved legislation empowering him to levy tariffs up to 500% on countries, including India, China, and Brazil, that continue to purchase oil or uranium from Russia. This move aims to increase pressure on Russia by cutting off its primary funding sources for the conflict in Ukraine. The bipartisan bill has significant support in both the Senate and the House. US Ambassador-designate Sergio Gor emphasized that ending India's import of Russian oil is a top priority, noting that India had previously "zeroed out" imports from Iran and Venezuela under similar pressure.
- The bill allows the US President discretion to set tariff figures above the existing 25% penalty.
- It specifically targets oil and uranium imports from Russia to squeeze its war financing.
- India is a primary focus due to its significant intake of Russian crude since 2022.
India has made significant strides in meeting its Paris Agreement commitments, particularly in reducing emission intensity and expanding non-fossil fuel capacity. By 2023, emission intensity had decreased by approximately 36% from 2005 levels, meeting the 2030 target early. Non-fossil capacity reached 43% by 2023, on track for the 50% goal by 2030. However, challenges remain: absolute emissions continue to rise alongside GDP growth, and carbon sequestration through forest cover is lagging. The transition requires scaling battery storage, grid modernization, and addressing the continued reliance on coal for "baseload" electricity to ensure sustainable future growth.
- India committed to reducing emission intensity by 33-35% (later updated to 45%) by 2030 compared to 2005 levels.
- While intensity has dropped, India’s absolute greenhouse gas emissions were approximately 2,959 MtCO2e in 2020 and continue to grow.
- The 'forest sink' target of 2.5-3.0 billion tonnes of CO2 equivalent by 2030 faces hurdles due to definitions of 'forest cover' and slow sequestration progress.
The Tamil Nadu government has introduced the Tamil Nadu Assured Pension Scheme (TAPS), attempting to balance electoral promises with fiscal prudence. TAPS serves as a middle ground between the Old Pension Scheme (OPS) and the Contributory Pension Scheme (CPS). It assures pensioners 50% of their last drawn pay, similar to the Unified Pension Scheme (UPS) implemented for central government staff. While it retains employee contributions, it includes features like death-cum-retirement gratuity. This move aims to address employee demands for OPS restoration without pushing the state into a perilous financial position given its high debt-to-GSDP ratio.
- TAPS is a hybrid model blending elements of the Old Pension Scheme (OPS) and the Unified Pension Scheme (UPS).
- It guarantees 50% of the last drawn pay as pension while maintaining the employee contribution element of the CPS.
- The scheme includes a minimum assured payout regardless of service duration and a death-cum-retirement gratuity.
The Ministry of Heavy Industries (MHI) has proposed doubling the allocation for the Production Linked Incentive (PLI) scheme for automobiles and auto components to ₹5,800 crore for the upcoming financial year. The scheme, now in its third year, focuses on Zero Emission Vehicles (ZEVs) like battery electric and hydrogen fuel cell vehicles. Incentives are tied to achieving a Domestic Value Addition (DVA) of 50%. As manufacturing plants are now set up, the focus is shifting toward ramping up production, necessitating higher incentive payouts to eligible applicants.
- The PLI scheme for the auto sector incentivizes products with at least 50% Domestic Value Addition (DVA).
- The scheme is specifically targeted at Zero Emission Vehicles (ZEVs), including electric and hydrogen fuel cell vehicles.
- The total planned outlay for the auto PLI scheme is ₹25,938 crore over its duration.
Shashi Tharoor advocates for a 'right to disconnect' to protect Indian workers from the 'always-on' culture enabled by digital tools. According to the ILO, 51% of India's workforce works over 49 hours weekly, leading to severe mental health issues and burnout. Tharoor proposes amending the Occupational Safety, Health and Working Conditions Code, 2020, to ensure employees aren't penalized for ignoring work communications outside hours. While Kerala has local legislation, a national framework is needed to cover contractual and gig workers who are currently excluded from many labor protections.
- India has the second-highest percentage of employees working extended hours globally, according to the ILO.
- Work-related stress accounts for 10-12% of mental health cases in India per the National Mental Health Survey.
- The proposed Right to Disconnect Bill seeks to amend the Occupational Safety, Health and Working Conditions Code, 2020.
Parliament has passed the Sustainable Harnessing and Advancement of Nuclear Energy in India (SHANTI) Bill, 2025. The Bill ends the monopoly of the Nuclear Power Corporation of India Limited (NPCIL) by allowing private firms to own and operate nuclear plants, though NPCIL retains 51% control. It grants statutory status to the Atomic Energy Regulatory Board (AERB). The Bill introduces a liability cap for operators and establishes a nuclear liability fund. While aimed at achieving net-zero targets by 2070, critics argue it dilutes accountability and limits public access to information under the RTI Act.
- The SHANTI Bill allows up to 49% private participation in nuclear power generation and fuel cycle activities.
- The Atomic Energy Regulatory Board (AERB) is now a statutory body answerable to Parliament.
- A liability cap is set at ₹3,000 crore for large plants, with the government covering excess liability.
U.S. President Donald Trump claimed that India reduced its oil imports from Russia to 'make him happy' and secure a favorable trade deal. He threatened to impose 25% reciprocal tariffs if India continues its Russian oil purchases. Senator Lindsey Graham supported these claims, stating India's Ambassador requested relief from penalty tariffs during a meeting in December 2025. However, data indicates that while imports dipped between June and October 2025, they rose to a seven-month high in November. The Ministry of External Affairs has previously criticized unilateral U.S. sanctions as 'double standards' since the U.S. also purchases Russian resources.
- Trump claims PM Modi cut Russian oil imports to avoid 25% penalty tariffs and secure a trade deal.
- Senator Graham alleges the Indian Ambassador sought mediation to relieve these tariffs in late 2025.
- Trade negotiations between the U.S. and India have reportedly stalled despite temporary cuts in Russian oil imports.
Recent U.S. actions against Venezuela are unlikely to significantly impact India's energy security. Analysis shows that Venezuelan crude accounted for only 0.3% of India's total oil imports in the current financial year (up to November 2025). Since 2019, India has been steadily reducing its commercial engagement with Venezuela in response to U.S. sanctions. While Venezuela is an OPEC member with significant reserves, it currently produces a relatively small amount of crude compared to other global producers. Experts suggest that existing sanctions, geographical distance, and the heavy nature of Venezuelan crude already limit the trade relationship.
- Venezuelan oil imports constituted only 0.3% ($255.3 million) of India's total oil imports in the 2025-26 financial year up to November.
- India's oil imports from Venezuela peaked at $13 billion in 2013 but have drastically declined due to U.S. sanctions and commercial risks.
- Venezuela accounts for about 3.5% of OPEC's total oil exports and roughly 1% of global oil supplies, limiting its impact on global prices.
Data from the OECD reveal that India sustains annual economic losses equivalent to 0.4% of its GDP due to natural disasters. Between 1990 and 2024, India experienced a high frequency of hydrological disasters (floods and storms) and seismic events. The report highlights that Emerging Asia faces escalating threats, with an average of 100 disasters annually impacting 80 million people. Disaster risk finance has moved to the forefront of policy as the scale of economic loss escalates. India ranks second only to the Philippines in the World Risk Index among analyzed Asian economies, highlighting the need for enhanced adaptive capacity.
- India loses approximately 0.4% of its GDP annually to natural disasters, primarily driven by floods, storms, and tropical cyclones.
- Emerging Asia has averaged 100 disasters per year over the last decade, affecting nearly 80 million people and causing significant economic damage.
- The World Risk Index calculates risk based on a geometric mean of exposure and vulnerability (susceptibility, coping capacity, and adaptive capacity).
This article addresses the systemic devaluation of women's unpaid care work, which is essential for the functioning of families and the economy. A 2023 UN report indicates that globally, women spend 2.8 more hours than men on unpaid care. In India, the lack of a legal framework to recognize this labor persists, although judicial interventions like the Madras High Court's ruling in 2023 have begun to acknowledge a wife's contribution to family assets. The authors advocate for structural changes, including social security credits for unpaid care and a reconfiguration of gendered social relations to ensure women's full participation in the formal economy.
- Unpaid care work, including childcare and elder care, remains largely unacknowledged in national budgets and policy frameworks despite its critical economic role.
- The 'breadwinner' model of employment prioritizes formal labor, leading to the diversion of public resources away from social infrastructure like childcare.
- The Madras High Court recently ruled that a wife's domestic work entitles her to an equal share in property acquired during the marriage, recognizing her indirect contribution.