India and Canada are opening a new chapter in their bilateral relations, focusing on economic cooperation, technological collaboration, energy security, and people-to-people connectivity. Recent visits by Canadian Prime Minister Mark Carney and India's Commerce and Industry Minister Piyush Goyal highlight a renewed commitment to finalize a Comprehensive Economic Partnership Agreement (CEPA) by end of 2026 and achieve $50 billion in bilateral trade by 2030. India's growing economy and Canada's expertise in natural resources, clean energy, and innovation create mutual opportunities. The Indian diaspora serves as a vital link, and Canadian pension funds are investing significantly in India's growth story, reinforcing trust and long-term commercial confidence.
- India and Canada are committed to deepening bilateral cooperation across economic, technological, energy, and people-to-people sectors.
- Both nations aim to finalize a Comprehensive Economic Partnership Agreement (CEPA) by the end of 2026.
- A target of $50 billion in bilateral trade has been set for 2030.
The National Family Health Survey (NFHS-6) for 2023-24 indicates a significant increase in C-section deliveries, obesity, and diabetes across Maharashtra, with urban areas showing higher incidences. Institutional births reached 96.4%, but C-sections rose to 33.6% from 25.4% in 2019-21, with private hospitals reporting higher rates (48.5%). Obesity increased among women (23.5% to 31.1%) and men (24.7% to 32.8%). Diabetes also saw a jump, affecting 16% of women and 17.7% of men. Improvements were noted in children's health, with reduced stunting and wasting, and improved vaccination coverage.
- NFHS-6 data for 2023-24 shows an increase in C-section deliveries, obesity, and diabetes in Maharashtra.
- C-section deliveries rose to 33.6%, with private hospitals accounting for a higher share.
- Obesity rates increased significantly for both women (31.1%) and men (32.8%).
The RBI's Annual Report 2025-26 projects the Indian economy to remain resilient in 2026-27, despite a challenging external environment marked by elevated energy and commodity prices, rising logistics costs, and geopolitical risks. The report attributes this resilience to India's strong macroeconomic fundamentals, robust domestic demand, and a stable policy environment, with relatively lower dependence on exports for growth. Globally, geopolitical risks, particularly the West Asia conflict, have re-emerged as a dominant drag on global growth and inflation forecasts, with the IMF projecting global economic growth at 3.1% in 2026.
- The RBI forecasts the Indian economy to remain resilient in 2026-27 despite global challenges.
- Key factors supporting India's resilience include strong macroeconomic fundamentals, robust domestic demand, and a stable policy environment.
- India's growth is less dependent on exports, providing a buffer against global trade uncertainties.
The Reserve Bank of India's (RBI) annual report for 2025-26 shows a Balance of Payments (BoP) deficit of $30.8 billion, a more than six-fold increase from the previous year. This deficit, entirely covered by drawing down foreign exchange reserves, is primarily due to a sharp fall in net foreign investments and a widening current account deficit (CAD). While the merchandise trade deficit decreased, the services surplus shrank more significantly, leading to an overall wider CAD of $30.2 billion. The capital account surplus also drastically reduced, exacerbated by Indians parking funds abroad and foreign portfolio investors pulling out $4.3 billion.
- India recorded a Balance of Payments (BoP) deficit of $30.8 billion in 2025-26, a significant increase from the previous year's deficit.
- The deficit was primarily caused by a sharp decline in net foreign investments and a widening current account deficit (CAD).
- The services trade surplus shrank more than the merchandise trade deficit decreased, contributing to the wider CAD.
U.S. Ambassador to India, Sergio Gor, announced that an interim trade agreement between India and the United States is expected to be finalized "over the next few weeks and months." Speaking at IIT, Mr. Gor highlighted India's alignment with "trusted ecosystems and resilient supply chains." He noted the significant growth in bilateral trade, from $20 billion to $220 billion in goods and services over two decades, attributing it to deeper engagement and stronger economic integration. A U.S. delegation is expected in India next week to continue trade talks, signaling progress in strengthening economic ties.
- The U.S. Ambassador to India, Sergio Gor, announced that an interim trade agreement between India and the U.S. is nearing finalization.
- The deal is expected to be signed "over the next few weeks and months."
- India is aligning with "trusted ecosystems and resilient supply chains," according to the Ambassador.
Ningbo, a port city in China's Zhejiang province, has become a key hub for the country's green industrial push, particularly in Electric Vehicles (EVs). The Zeekr factory, part of Geely Auto Group, exemplifies this with its automated production and emphasis on energy efficiency. Zhejiang province leads China in green metrics, having invested billions in overhauling polluting industries and enforcing stricter emission standards. China's dominance in EV manufacturing, batteries, and critical minerals gives it a "complete supply chain" advantage, making it a global leader in green technologies. While this offers affordable green transformation to the Global South, it raises concerns for European industries facing intense Chinese competition.
- Ningbo, Zhejiang province, is a central hub for China's green industrial transformation, especially in Electric Vehicles (EVs).
- Factories like Zeekr (part of Geely Auto Group) demonstrate advanced manufacturing, automation, and energy efficiency.
- Zhejiang province has invested billions in environmental upgrades, leading to significant improvements in air and water quality.
The India Meteorological Department (IMD) has lowered its 2026 southwest monsoon forecast to 90% of the Long Period Average (LPA), down from 92% projected in April. The IMD also acknowledged that the monsoon's arrival in Kerala would be delayed beyond the predicted May 26, now "likely arrive" in the first week of June. This rainfall downgrade places India's principal water source firmly into "below-normal" territory, raising the probability of a "deficient" monsoon (rain under 90% of LPA) to 60%. This situation entrenches fears of a potential drought.
- The IMD has revised down its 2026 southwest monsoon forecast to 90% of the Long Period Average (LPA).
- The onset date for the monsoon in Kerala has been pushed to the first week of June, missing the initial May 26 prediction.
- The forecast indicates a "below-normal" monsoon, with a 60% probability of a "deficient" monsoon.
India's critical national infrastructure faces increasing vulnerability due to digital transformation, IoT, and AI, which, while enhancing efficiency, also expand the risk of remote disruptions and cyberattacks. The article highlights the 'IT, OT, and IoT' triad, where a compromised IoT layer can manipulate physical processes. It emphasizes the need for robust critical infrastructure security beyond conventional cybersecurity, particularly focusing on trusted devices and secure supply chains. The author calls for stricter policy enforcement, rigorous certification, preference for indigenous technologies, and continuous vigilance across government and industry to protect national security and economic stability. The question is not whether to adopt connected technologies, but how to deploy them securely.
- Digital transformation and IoT increase the vulnerability of India's critical national infrastructure to cyber threats.
- The IT, OT, and IoT triad creates new risks, as compromised IoT can manipulate physical processes.
- Robust critical infrastructure security must extend beyond traditional cybersecurity to include trusted devices and secure supply chains.
India's energy strategy requires a price correction due to global energy shocks, particularly from tensions in the Strait of Hormuz. While the government has shielded consumers through state intervention, supply diversification, and public sector oil companies absorbing costs, this approach is economically unsustainable long-term. Oil Marketing Companies (OMCs) are under severe financial stress, selling fuel below market-linked costs. The article argues that India's economy remains structurally vulnerable to imported fossil fuels. A calibrated, gradual increase in petroleum prices is suggested to reduce the fiscal burden, stabilize OMCs, encourage efficient consumption, and prepare the public for prolonged energy uncertainty.
- Global energy shocks, particularly from the Strait of Hormuz, necessitate a price correction in India's energy strategy.
- The current strategy of shielding consumers through state intervention and OMC absorption of costs is unsustainable.
- Oil Marketing Companies (OMCs) are facing significant financial stress due to selling fuel below market prices.
US Secretary of State Marco Rubio's four-day visit to India aimed to mend bilateral ties, which had been strained by issues such as US tariffs, visa restrictions, sanctions on India's energy procurement, and critical remarks by President Trump. India faced immense economic worries due to regional conflicts and the Hormuz Strait blockade. Despite hopes for significant repair, the visit yielded few notable outcomes beyond a critical minerals cooperation agreement. The article suggests that the US failed to acknowledge India's concerns, but the upcoming Modi-Trump meeting at the G-7 Summit in France offers another opportunity to address these frayed relations, particularly in economic, energy, and regional security domains.
- US Secretary of State Marco Rubio's visit aimed to repair strained India-US bilateral ties.
- Key issues causing strain included US tariffs, visa restrictions, and sanctions on India's energy procurement.
- India faced significant economic and energy security concerns due to regional conflicts and the Hormuz Strait blockade.
The Quad grouping pledged to enhance cooperation in maritime and energy domains at the 11th Quad Foreign Ministers' Meeting. Key initiatives launched include the Indo-Pacific Maritime Surveillance Collaboration and the expansion of the Indo-Pacific Maritime Domain Awareness, providing near real-time commercial maritime data. These measures respond to challenges in the Persian Gulf and South China Sea, emphasizing freedom of navigation in critical waterways like the Strait of Hormuz. India will host the next 'Quad at Sea mission,' and the grouping also announced the Quad Initiative on Indo-Pacific Energy Security and the Quad Ports of the Future Partnership.
- Quad nations pledged enhanced cooperation in maritime and energy security.
- New initiatives include Indo-Pacific Maritime Surveillance Collaboration and expanded Maritime Domain Awareness.
- The context for these plans includes tensions in the Persian Gulf and South China Sea, with an emphasis on freedom of navigation.
India and the United States have firmed up a framework for cooperation to ensure steady supplies of critical minerals and rare earth elements. This initiative, launched on the sidelines of the 11th Quad Foreign Ministers' Meeting, aims to deepen collaboration across the supply chain, including mining, processing, recycling, and investments. It seeks to strengthen resilient and diversified supply chains, addressing growing concerns over China's export controls. A separate Quad framework also mobilizes around $20 billion in support for critical mineral supply chains. The US is mobilizing over $30 billion in resources to secure critical supply chains, highlighting a shared strategic priority.
- India and the U.S. have established a framework for cooperation on critical minerals and rare earth elements.
- The initiative aims to secure and diversify supply chains, reducing dependence on countries like China.
- The Quad nations have also signed a separate framework to mobilize significant financial support for critical mineral supply chains.
The Indian rupee has been sharply depreciating against the U.S. dollar, crossing 96 in May this year. This decline is primarily attributed to India's persistent merchandise trade deficit, significant Foreign Portfolio Investment (FPI) outflows driven by global geopolitical tensions and higher U.S. interest rates. A falling rupee increases import costs, particularly for oil, and impacts the overall economy. The Reserve Bank of India (RBI) intervenes by selling dollars from its forex reserves to stabilize the rupee, but ongoing global uncertainties pose severe challenges. The article emphasizes the need to regulate speculative capital outflows and reduce dependence on oil imports to strengthen the rupee.
- The Indian rupee has significantly depreciated against the U.S. dollar, primarily due to persistent merchandise trade deficits and FPI outflows.
- FPI outflows are driven by global geopolitical tensions and higher interest rates in the U.S., leading to a reduced demand for the rupee.
- A falling rupee increases the cost of imports, especially oil, negatively impacting the Indian economy.
The Indian mobile market, particularly the sub ₹10,000-₹15,000 phone segment, is severely impacted by a global semiconductor shortage, termed 'memflation'. This inflation is driven by skyrocketing prices of memory chips (DRAM and NAND) as manufacturing capacities are increasingly diverted to produce high-bandwidth memory (HBM) for AI infrastructure, which offers higher margins. India is highly vulnerable due to its heavy reliance on electronic component imports and price-sensitive consumer base. Industry experts predict that the market will remain tight through 2026-2027, with premium phone production being prioritized over entry-level devices, making affordable smartphones increasingly difficult to sustain profitably.
- The Indian mobile market is experiencing 'memflation' due to a severe global shortage and rising prices of memory chips.
- Manufacturing capacities are being diverted from conventional DRAM and NAND to high-bandwidth memory (HBM) for AI infrastructure due to higher demand and margins.
- India is particularly vulnerable due to its heavy reliance on electronic component imports and a price-sensitive consumer base.
Andhra Pradesh has proposed new incentives for families to have three or more children, a departure from traditional family planning policies. The state's TFR has dropped to 1.5, well below the national average. The incentives include cash payments, free education, and extended maternity leave. However, the article argues that such incentives are unlikely to significantly increase fertility and could inadvertently keep poorer women out of the workforce, especially without robust social infrastructure like universal childcare. It raises concerns about the potential for economically vulnerable families to increase in size without adequate long-term support, exacerbating existing ecological and social challenges.
- Andhra Pradesh is offering incentives for families to have more children, including cash payments and educational support.
- The state's Total Fertility Rate (TFR) has fallen significantly to 1.5, below the national average.
- These incentives are unlikely to lead to sustained increases in fertility, based on evidence from India and globally.
India is undergoing a significant demographic transition, moving from a 'population explosion' to an ageing population, as evidenced by the latest SRS bulletin (2024). The Total Fertility Rate (TFR) has dropped to 1.9, below the replacement level of 2.1, and the birth rate has fallen from 21 in 2014 to 18.3 in 2024. While India currently enjoys a demographic dividend with a median age of 29.2 years, this will eventually disappear. The article highlights the need for policy reassessment to address the needs of a greying nation, including better healthcare access, education, and addressing regional disparities in child survival and infant mortality rates.
- India's Total Fertility Rate (TFR) has fallen to 1.9, below the replacement level of 2.1, indicating a significant demographic shift.
- The country is transitioning from a young, expanding population to an ageing one, which will eventually lead to the disappearance of the demographic dividend.
- Factors like urbanisation, better education, and access to contraception contribute to the decline in fertility rates.
The article highlights the progress and challenges in the India-Australia Comprehensive Economic Cooperation and Trade Agreement (CECTA/ECTA). It notes that while India has achieved 90% tariff-free trade, significant non-tariff barriers and issues in specific sectors like agriculture, education, and critical minerals persist. The article emphasizes the need for deeper engagement, addressing regulatory hurdles, and fostering trust to unlock the full potential of the bilateral relationship. It suggests that both countries need to move beyond traditional trade to collaborate on strategic areas like clean energy, education, and critical minerals, ensuring a more robust and mutually beneficial partnership.
- The India-Australia CECTA has significantly boosted trade, with India achieving nearly 90% tariff-free trade.
- Despite progress, non-tariff barriers and regulatory hurdles continue to impede deeper economic integration.
- Key sectors for cooperation include clean energy, education, critical minerals, and agriculture.
The article discusses the critical role of the Finance Commission (FC) in determining fiscal transfers from the Union to States, highlighting the complexities of ensuring both vertical and horizontal equity. It notes that while vertical transfers have increased, horizontal equity remains a challenge due to varying fiscal capacities and needs among states. The 16th FC faces the task of balancing these aspects, especially with the cessation of GST compensation and the need for a new framework for revenue sharing. The piece emphasizes the importance of a holistic approach to ensure states can meet their developmental goals without excessive reliance on discretionary grants.
- The Finance Commission plays a crucial role in ensuring fiscal federalism by determining the distribution of Union tax revenues between the Centre and States.
- Horizontal equity, which aims to reduce disparities among states, remains a significant challenge despite increased vertical transfers.
- The 16th Finance Commission is tasked with addressing the cessation of GST compensation and developing a new framework for fiscal transfers.
China launched its Hainan Free Trade Port (FTP) initiative on December 18, 2025, aiming to transform the tropical island into a global business hub with zero tariffs, low personal taxes, and simplified trade flows. The initiative, unveiled in June 2020, implements "freer access at the first line, regulated access at the second line, and free flow within the island," removing tariff barriers for easier imports. This has attracted numerous foreign-invested enterprises, expanded tariff-free product categories, and boosted tourism through visa-free entry for 86 countries and duty-free shopping, positioning Hainan as a "new frontier of opening up" and a competitor to Hong Kong.
- China's Hainan Free Trade Port (FTP) initiative was officially launched on December 18, 2025.
- The FTP aims to create an economic hub with zero tariffs, low personal taxes, and simplified trade and data flows.
- It involves island-wide special customs operations, removing tariff barriers for goods entering the island.
Japanese Foreign Minister Toshimitsu Motegi asserted the Quad's continued relevance as a "vital framework" for countries sharing fundamental values and strategic interests, despite concerns about its diminishing importance. He indicated that cooperation on critical minerals for green energy and high technology would be a top agenda item for the upcoming Quadrilateral Foreign Ministers' Meeting in New Delhi. The meeting is expected to address conflicts in West Asia, the Strait of Hormuz blockade, and U.S. President Trump's visit to China, while also setting the agenda for the Quad Summit.
- Japanese Foreign Minister Toshimitsu Motegi emphasized the Quad's importance as a "vital framework" for shared values and strategic interests.
- Critical minerals cooperation for green energy and high technology is a key agenda item for the Quad meeting.
- The Quad meeting will discuss regional and global situations, including West Asia conflicts and the Strait of Hormuz blockade.
U.S. Secretary of State Marco Rubio and External Affairs Minister S. Jaishankar emphasized the need for safe and unimpeded maritime commerce, particularly in the context of disruptions caused by the U.S.-Israel war on Iran and Iran's actions in the Strait of Hormuz. Rubio clarified that U.S. "tactical" relations with other countries would not undermine its strategic partnership with India. U.S. President Donald Trump also spoke via phone, calling PM Modi a "great friend" and assuring India of 100% U.S. support. Bilateral discussions included energy, bilateral trade, and visa issues for skilled Indian workers.
- U.S. Secretary of State Marco Rubio and EAM S. Jaishankar highlighted the shared interest in ensuring safe and unimpeded maritime commerce.
- Rubio stated that U.S. tactical relations with other nations would not compromise its strategic alliance with India.
- The U.S. accused Iran of blocking the Strait of Hormuz and sponsoring proxy terror groups.
The Indian rupee depreciated by 16 paise to close at a fresh lifetime low of 96.86 against the U.S. dollar. This fall was primarily driven by elevated global crude prices and inflation worries stemming from the West Asia crisis. The rupee opened at 96.89, touched a record low of 96.95, and settled at 96.86. The previous session saw a 50 paise tumble. Factors contributing to the rupee's weakness include a strong dollar and surging U.S. treasury yields, with 30-year yields rising to a two-decade high and 10-year yields to a 16-month high, leading to global market sell-offs.
- The Indian rupee hit a fresh lifetime low of 96.86 against the U.S. dollar.
- Elevated global crude prices and the West Asia crisis are stoking inflation worries, contributing to the depreciation.
- A strong U.S. dollar and surging U.S. treasury yields are also major factors.
Rules for the new rural employment guarantee scheme, "Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin)," are expected to be released by July 1. The Centre informed a parliamentary standing committee that 25 states have already allocated funds for the program. The scheme aims to ensure equitable distribution of resources and will introduce new smart job cards with a face-recognition feature for transparency. The Central government will determine the state-wise normative allocation of funds based on objective parameters, replacing existing job cards with new ones. This initiative seeks to improve accountability and streamline benefits for rural employment.
- New rules for the "Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin)" scheme are set to be released by July 1.
- The scheme aims to provide rural employment guarantees and ensure equitable resource distribution.
- New smart job cards with face-recognition features will be issued to enhance transparency and accountability.
An analysis of India's justice system budgets across 11 high-GDP states reveals a disproportionate allocation towards policing (over 80% of justice-related funds) compared to the judiciary, prisons, and legal aid. This indicates a system focused on enforcement and surveillance rather than access, adjudication, or rehabilitation. The judiciary receives less than 1% of state budgets despite high caseloads, and legal aid, crucial for marginalized individuals, is severely underfunded, leading to limited reach and inadequate representation. The report highlights the need for recalibration of budget priorities to align with constitutional mandates for an accessible and people-centred justice system.
- India's justice system budget is heavily skewed towards policing, receiving over 80% of funds.
- The judiciary and legal aid are significantly underfunded, hindering access to justice.
- This reflects a system prioritizing enforcement and surveillance over adjudication and rehabilitation.