New Zealand Prime Minister Christopher Luxon expressed confidence in strengthening ties with India, emphasizing economic, defense, security, and people-to-people connections. He highlighted the global geopolitical shift from a rules-based to a power-based system, advocating for India and New Zealand to jointly remake the case for a rules-based international order. Luxon noted New Zealand's welcoming stance towards Indian immigrants, viewing it as an opportunity amidst growing anti-immigrant sentiments in other Western democracies, and stressed the importance of a broader and deeper relationship between the two countries.
- New Zealand Prime Minister Christopher Luxon advocates for India and NZ to jointly promote a rules-based global system.
- Bilateral ties between India and New Zealand are strengthening across economic, defense, security, and people-to-people pillars.
- Luxon noted a global shift from a rules-based to a power-based system, necessitating a joint effort from like-minded countries.
An analysis by the Centre for Research on Energy and Clean Air (CREA) projects that El Niño conditions will significantly strain India's power system. Weaker wind and hydropower output, combined with rising demand for air conditioning, could create a generation gap of nearly 18 TWh over the next year. This shortfall, though less than 1% of total annual output, is likely to be filled by a surge in coal-fired power, leading to an estimated 17 million tonnes of carbon dioxide emissions. CREA urges faster adoption of batteries and grid upgrades to meet future demand surges with clean energy, criticizing the curtailment of solar and wind power in 2025-26.
- El Niño conditions are projected to strain India's power system, leading to weaker wind and hydropower output.
- A generation gap of nearly 18 TWh is anticipated over the next year due to reduced renewable output and increased demand for air conditioning.
- This shortfall is likely to be met by a surge in coal-fired power, potentially releasing 17 million tonnes of carbon dioxide.
Union Cooperation Minister Amit Shah announced that a cooperative life insurance company will soon be established to boost the growth of cooperatives in India. Speaking on the fifth Foundation Day of the Ministry, Shah stated that the Cooperation Ministry has revitalized the cooperative movement, which was "neglected" during the Congress rule. He highlighted the expansion of cooperatives beyond traditional sectors like dairy and sugar, citing Bharat Taxi's success. Shah also mentioned initiatives like creating a database of the sector, establishing Tribhuvan Sahkari University in Anand, Gujarat, and transferring/inaugurating numerous grain godowns to bring transparency and professionalism.
- A cooperative life insurance company will be established soon to promote the growth of cooperatives in India.
- Union Cooperation Minister Amit Shah stated that the Ministry has revitalized the cooperative movement.
- Cooperatives are expanding beyond traditional sectors, with examples like Bharat Taxi's success in ride-hailing.
A potential 'super' El Niño and weak monsoon rainfall, with a 40% deficit in June and "below normal" forecast for July, threaten India's economy. A poor monsoon could reduce agricultural output, depress rural incomes, fuel food inflation, and slow GDP growth. CRISIL projects maize acreage decline and potential shifts to pulses, while the RBI warns of an adverse impact on growth-inflation outlook. Past El Niño years (1972, 1982, 2009, 2015) saw significant agricultural output contractions and double-digit inflation. Experts urge India to 'drought-proof' its economy through investments in irrigation, drought-resistant crops, and risk-reduction measures.
- A weak monsoon, exacerbated by El Niño conditions, threatens India's economy through reduced agricultural output, lower rural incomes, and increased food inflation.
- The India Meteorological Department (IMD) forecasts "below normal" rainfall for July, following a 40% deficit in June.
- Past El Niño years, such as 1972, 1982, 2009, and 2015, led to significant agricultural contractions and high inflation.
Tamil Nadu Chief Minister C. Joseph Vijay has urged Prime Minister Narendra Modi to reconsider a proposed amendment to the National Food Security Act, 2013. The amendment seeks to convert the existing household-based entitlement of 35 kg foodgrains per month under Antyodaya Anna Yojana (AAY) to a per capita benefit of 7 kg per person, with an overall ceiling of 35 kg per household. CM Vijay argues this change would diminish food security for nearly 70 lakh vulnerable citizens in Tamil Nadu, particularly penalizing states with smaller families and reducing foodgrains for the poorest households.
- Tamil Nadu CM C. Joseph Vijay opposes the proposed amendment to the National Food Security Act, 2013.
- The amendment would change AAY entitlement from 35 kg per household to 7 kg per person, capped at 35 kg per household.
- CM Vijay argues this would reduce food security for nearly 70 lakh vulnerable citizens in Tamil Nadu.
The Union Consumer Affairs Department has increased the procurement price of onions by 13% to ₹2,125 per quintal for the Price Stabilisation Buffer. This move aims to boost procurement and ensure better returns for farmers, coming amid rising retail prices and farmer complaints about unremunerative prices. NAFED and NCCF are procuring onions from various states. Despite production estimates of 307.37 lakh metric tonnes for 2025-26, the government anticipates prices to inch up due to normal seasonality and speculative buying, though current stock levels are adequate.
- The Union Consumer Affairs Department increased the onion procurement price by 13% to ₹2,125 per quintal for the Price Stabilisation Buffer.
- The hike aims to provide better returns to onion farmers and strengthen buffer procurement efforts.
- NAFED and NCCF are responsible for procuring onions from various states.
Prime Minister Narendra Modi inaugurated the CG Semi Outsourced Semiconductor Assembly and Test facility at Sanand in Gujarat. He emphasized that semiconductor clusters are emerging across India, which will generate significant employment opportunities. This inauguration aligns with India's broader push to establish a robust domestic semiconductor ecosystem, crucial for technological self-reliance and economic growth. The government aims to foster a strong manufacturing base for semiconductors to reduce reliance on imports and boost indigenous capabilities in high-tech industries.
- Prime Minister Modi inaugurated a semiconductor assembly and test facility in Sanand, Gujarat.
- The establishment of semiconductor clusters across India is expected to create large-scale employment opportunities.
- This initiative is part of India's broader strategy to build a robust domestic semiconductor ecosystem.
Prime Minister Narendra Modi stated that India successfully managed the challenges of the West Asia conflict through effective assessment, strategic decision-making, and leveraging domestic resources and strong diplomatic ties. The country avoided fuel rationing, ensured cooking gas supplies, and shielded consumers and farmers from global price spikes, with state-run oil marketing firms (OMCs) absorbing losses. Modi credited domestic refineries for increasing LPG production, highlighting India's position as the world's fourth-largest refiner, with plans for further expansion. He made these remarks during the inauguration of the HPCL Rajasthan Refinery Ltd. (HRRL) in Balotra.
- PM Modi asserted that India effectively managed the West Asia crisis through strategic decisions and leveraging domestic resources and diplomatic ties.
- The government prevented fuel rationing and ensured cooking gas supplies, shielding consumers from price hikes.
- State-run oil marketing firms (OMCs) bore the financial losses to maintain stable prices.
India's Ambassador to China, Vikram Doraiswami, stated that increased Chinese investment in India would benefit both the economy and broader bilateral ties. He also advocated for greater Indian exports to China, particularly in pharmaceuticals, where India is globally competitive. Despite a political freeze since 2020, bilateral trade has expanded, though it remains lopsided with a significant deficit. Efforts to normalize relations are underway following a meeting between PM Modi and President Xi Jinping in October 2024, after disengagement along the Line of Actual Control (LAC).
- India's Ambassador to China, Vikram Doraiswami, emphasized the benefits of increased Chinese investment for India's economy and bilateral relations.
- He also called for greater Indian exports to China, especially in competitive sectors like pharmaceuticals.
- Despite a political freeze since 2020, bilateral trade has grown, but India faces a substantial trade deficit with China.
Prime Minister Narendra Modi and Japanese counterpart Sanae Takaichi emphasized a "free and rules-based Indo-Pacific" as a common priority during Takaichi's first visit to India. Both leaders stressed the need for strategic cooperation, with Takaichi stating the two countries are "perfectly aligned." India and Japan agreed on co-development projects in defence, including a naval radio antenna, and will jointly develop technologies for maritime security and regional peace. An economic session saw Indian and Japanese companies sign 129 MoUs on technology, investment, and AI. Japan is also set to invest $1 trillion across various Indian states.
- India and Japan consider a "free and rules-based Indo-Pacific" a shared priority and are committed to strategic cooperation.
- The two nations have initiated their first defence co-development agreement, focusing on a naval radio antenna.
- Joint efforts will be made to develop technologies for maintaining maritime security and regional peace.
An analysis by The Hindu reveals that States' expenditure under the new Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025, could increase nearly six-fold, from ₹7,700 crore in 2024-25 to at least ₹51,000 crore in 2026-27. This significant shift in financial burden from the Centre to States is a major concern, as the new scheme changes the funding pattern from roughly 90:10 (Centre:State) under MGNREGA to a 60:40 ratio for most categories. The Centre's interim allocation of ₹95,692.31 crore for 2026-27 does not specify State contributions or how past dues will be settled, raising concerns about financial implications for states.
- States' expenditure under the new VB-G RAM G Act is projected to increase nearly six-fold by 2026-27.
- The new scheme shifts a significant financial burden from the Centre to the States, changing the funding pattern from 90:10 to 60:40 for most categories.
- The Centre's interim allocation for 2026-27 does not clarify State contributions or how past dues will be settled.
India has made significant progress in its energy transition, achieving near-universal household electrification and expanding renewable energy. However, to meet 2047 energy self-reliance and 2070 net-zero goals, an integrated approach is crucial. An INSA policy brief proposes a four-pillar framework: adequacy (reliable, diversified supplies), access (equitable services), affordability (economically viable transition), and appropriate sustainability (aligned with developmental priorities). This framework emphasizes greater coordination across diverse energy resources and technologies, viewing the entire energy system as an integrated whole to build a resilient, affordable, and sustainable energy future.
- India needs a unified policy architecture to achieve its energy self-reliance by 2047 and net-zero emissions by 2070 goals.
- An INSA policy brief proposes a four-pillar framework: adequacy, access, affordability, and appropriate sustainability.
- The framework advocates for reliable and diversified energy supplies, equitable energy services, economically viable transition, and sustainability aligned with India's context.
India's energy security relies on reducing dependence on disrupted resources, as demonstrated by the refining sector's flexibility during the Strait of Hormuz crisis in 2026. The article argues that similar discipline is needed for coal chemistry to produce domestic molecules like Dimethyl Ether (DME) from coal gasification. DME, chemically similar to LPG, can be blended into existing cylinders, reducing LPG imports and saving foreign exchange. The Union Cabinet has approved a ₹37,500 crore scheme to promote coal and lignite gasification, targeting 100 million tonnes annually by 2030, highlighting the strategic importance of indigenous capability.
- India's energy security can be enhanced by developing indigenous coal chemistry capabilities.
- Producing Dimethyl Ether (DME) from coal gasification can reduce reliance on imported LPG.
- DME can be blended into existing LPG infrastructure without needing new distribution networks.
The World Bank Group (WBG) has indicated it will drop its funding target for climate-centric projects, following strong disapproval from the U.S. administration, its largest shareholder. The WBG will retire its 45% climate co-benefits target and 35% target in the Climate Change Action Plan (CCAP), shifting focus from inputs to outcomes. The U.S. argues the WBG should prioritize its core mission of poverty reduction and economic growth, claiming climate finance targets breed inefficiency. This decision could impact climate-focused projects in developing countries, including India, which has several ongoing initiatives with the WBG.
- The World Bank Group is abandoning its climate finance funding targets due to U.S. disapproval.
- The WBG will retire its 45% climate co-benefits target and 35% CCAP target, focusing instead on development impact.
- The U.S., as the largest shareholder, believes the WBG should prioritize poverty reduction and economic growth over climate targets.
The Centre has fixed a floor wage of ₹300 per day under the new Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025, which replaced the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This move has increased wage rates for 21 States and Union Territories that previously paid less than ₹300. While some states saw significant hikes, others had minimal increases. Critics, including former Rural Development Minister Jairam Ramesh, argue the wages are "unjustifiably low" and fall short of the ₹375 per day recommended by the Dr. Anoop Satpathy Expert Committee in 2019.
- The new VB-G RAM G Act, 2025, establishes a national floor wage of ₹300 per day, replacing MGNREGA.
- This change has led to increased wage rates for 21 States and Union Territories that previously paid below ₹300.
- Critics argue the new wage is insufficient, citing the Dr. Anoop Satpathy Expert Committee's 2019 recommendation of ₹375 per day.
Indian State governments, particularly Kerala and Tamil Nadu, face fiscal stress due to a mismatch between development aspirations and limited fiscal capacity. While States bear most public spending on social and economic sectors, their ability to raise taxes is limited, with the Union government holding more tax-raising power. Deficits, financed through market borrowings, lead to high interest burdens, further tightening State finances. Kerala, despite good own-tax revenue mobilization, allocates only 10% of its resources to capital expenditure, with a significant portion going to salaries, pensions, and interest payments. The article suggests that States need better fiscal structures to access domestic savings at lower costs for development projects, drawing parallels with China's local government financing model.
- State governments experience fiscal stress due to high expenditure on social/economic sectors and limited tax-raising powers compared to the Union government.
- Deficits are financed by market borrowings, leading to high interest payments that further strain State budgets.
- Kerala, despite strong own-tax revenue, allocates only 10% to capital expenditure, with significant portions for salaries, pensions, and interest.
The Employees Provident Fund Organisation (EPFO) is undertaking a "planned database consolidation and upgradation of software applications" through the Centralised IT-Enabled System (CITES) project. This initiative aims to modernize service delivery via automation, creating a single national database to replace over 120 decentralized ones. The upgrade will allow any PF office to process member requests, enable online services like KYC updates, and provide a unified digital interface for members to access all their PF details. This is expected to improve operational efficiency, transparency, and reduce physical visits and claim rejections, ensuring seamless services for subscribers.
- EPFO is implementing the Centralised IT-Enabled System (CITES) project for database consolidation and software upgrade.
- The goal is to modernize service delivery through automation and create a single national database, replacing over 120 decentralized systems.
- The upgrade will enable members to access all services online, approach any PF office, and view a unified digital interface for their details.
India's industrial growth figures show a quick bounce-back post-West Asia crisis, with the Index of Industrial Production (IIP) hitting a five-month high of 5.1% in May 2026. However, the data raise concerns about the composition of growth, with conflicting views on whether it's driven by domestic consumption or export growth. The Ministry of Statistics and Programme Implementation (MoSPI) changed its methodology, switching from Wholesale Price Index to Producer Price Index as a deflator, which was implemented belatedly and unsystematically. This change, along with discrepancies between IIP and the Index of Eight Core Sectors, raises questions about the accuracy and consistency of industrial growth measurement, suggesting the economy remains vulnerable to world events.
- India's IIP showed robust growth in May 2026 (5.1%), indicating a quick recovery post-West Asia crisis.
- Concerns exist regarding the growth's composition, with debate over whether domestic consumption or exports are the primary drivers.
- MoSPI changed its IIP methodology, adopting the Producer Price Index as a deflator, but the belated and unsystematic implementation is questioned.
Global governments are increasingly shaping AI policy around national advantage, with the US restricting AI model access and Europe investing in AI compute. India, as a large IT services economy, faces a strategic dilemma: leverage foreign AI models for productivity while reducing technological dependence. India's R&D spending on AI is low compared to global leaders. The article advocates for a whole-of-government approach to deepen backward linkages to frontier AI and strengthen forward linkages to global markets for Indian products and services. It also calls for the Indian tech ecosystem to enhance quality and innovation and build domestic AI capability, ensuring India remains integrated globally while reducing strategic vulnerabilities.
- Governments globally are implementing sovereign AI policies to secure national advantage, influencing access and development.
- India must leverage global AI for economic growth while simultaneously reducing strategic technological dependence.
- India's R&D spending on AI is significantly lower than leading global players, necessitating strategic linkages and government support.
Net remittances from the Gulf region to India surged to $16 billion in April 2026, marking a 70% increase over the corresponding period of the previous year, despite ongoing geopolitical tensions in West Asia. This resilience, highlighted in the Union Finance Ministry's latest Monthly Economic Review, is consistent with trends observed during previous crises like the COVID-19 pandemic, where remittance inflows remained robust. The report emphasizes that remittances are among the most stable components of external financing, remaining insulated from market volatility and geopolitical uncertainty, and are relatively acyclical compared to other capital flows. Risks could emerge if prolonged war-like situations severely hamper working conditions in West Asia.
- Net remittances from Gulf countries to India increased by 70% to $16 billion in April 2026, despite the West Asia crisis.
- The Union Finance Ministry's report highlights the resilience of remittances, consistent with trends observed during previous crises.
- Remittances are considered stable and acyclical components of external financing, unlike portfolio or debt flows.
The article explains the persistent delays in finalizing a comprehensive Bilateral Trade Agreement (BTA) and an interim trade deal between India and the U.S., originally planned for 2025 and 2026, respectively. Key sticking points include India's reluctance to open its agricultural and dairy sectors, its Russian oil imports, and shifting U.S. tariff policies. The U.S. Supreme Court invalidated the reciprocal tariff system, further complicating negotiations. Recent Section 301 investigations by the USTR into excess manufacturing capacity and forced-labor-related imports from several countries, including India, have added more uncertainty, potentially leading to further tariffs. Both sides continue non-tariff negotiations, with India insisting on a comparative tariff advantage.
- The planned India-U.S. Bilateral Trade Agreement (BTA) and an interim trade deal have been significantly delayed.
- Major disagreements include India's stance on agricultural and dairy market access and its imports of Russian oil.
- U.S. tariff policies and legal challenges, including a Supreme Court invalidation of the reciprocal tariff system, have disrupted negotiations.
The Reserve Bank of India (RBI) has issued new rules to protect customers from scam transactions, amending its 2017 circular. Effective January 1, 2027, the revised framework expands compensation eligibility to include fraud caused by coercion, stolen credentials, or negligence by a bank/third-party, not just unauthorized transactions. Customers can claim up to ₹25,000 for losses up to ₹50,000, once in a lifetime, with 85% paid by RBI and the rest by banks. The reporting timeline for third-party hacks has been extended to five days. The changes aim to address sophisticated fraud attempts and acknowledge customer vulnerability, though the framework does not explicitly cover scams above ₹50,000.
- RBI has amended rules for scam compensation, expanding customer protection for fraudulent electronic banking transactions (EBTs).
- The new rules cover fraud due to coercion, stolen credentials, or bank/third-party negligence, effective January 1, 2027.
- Customers can claim up to ₹25,000 compensation for losses up to ₹50,000, with 85% paid by RBI and the remainder by banks.
States are opposing the new Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G), set to replace MGNREGA from July 1. The new scheme shifts from a demand-driven to a supply-driven framework with capped allocations based on "objective parameters" determined by the Union government. While it increases guaranteed workdays from 100 to 125, it significantly raises the financial burden on States from 10% to 40% of total expenditure. States also object to the Union government's power to notify rural areas for implementation and the provision for a "blackout period" during peak agricultural seasons. Concerns include delays in wage clearance and disproportionate power to the Centre in fund distribution.
- The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) will replace MGNREGA from July 1.
- The new scheme shifts from a demand-driven to a supply-driven framework, with allocations capped by the Union government.
- States oppose the increased financial burden, as their share of total expenditure rises from 10% to 40%.
The article argues that Artificial Intelligence (AI) offers India a transformative opportunity similar to the 1991 liberalisation, potentially leading to a "Bharat rate of growth" of 8% and beyond. It advocates for making AI tokens free, funded by reallocating existing subsidies, and building a robust AI infrastructure through public-private partnerships. The author emphasizes the need for India to host large language models on sovereign infrastructure, diversify compute hardware away from a single vendor, and implement a National AI Token Policy within 24 months. This strategy aims to replicate India's digital public infrastructure successes in the AI domain, leveraging its talent and favorable policies to become a global AI leader.
- AI presents a transformative opportunity for India to achieve a "Bharat rate of growth" (8%+) similar to the post-1991 liberalisation era.
- The author proposes making AI tokens free, initially for top R&D institutions and schools, funded by reallocating existing subsidies.
- India should build a sovereign AI compute framework through public-private partnerships with hyperscalers like AWS, Google, and Microsoft.