India's 'neighbourhood first' and 'Act East' policies are under severe strain due to escalating conflicts in West Asia, particularly involving the US, Israel, and Iran. The Red Sea crisis has significantly disrupted global trade routes, directly impacting India's energy security and economic interests. The editorial highlights India's delicate diplomatic balancing act, as it strives to maintain strong ties with all regional parties while consistently advocating for de-escalation and a two-state solution. The country's priorities include protecting its vast diaspora in the Gulf, securing vital trade routes, and ensuring regional stability amidst complex geopolitical shifts and humanitarian crises.
- India's foreign policy initiatives are significantly challenged by the escalating conflicts in West Asia.
- The Red Sea crisis has severely impacted India's trade, energy security, and overall economic interests.
- India is maintaining a delicate diplomatic balance, engaging with all parties while advocating for peace and a two-state solution.
India's National Statistical Office (NSO) has released a revised GDP series with 2022-23 as the base year, after an 11-year gap. The new series indicates a 3-4% reduction in the absolute size of GDP compared to the 2011-12 series. It also shows changes in the production structure, with increased shares for agriculture and industry, and a decline in the services sector. The non-financial private corporate sector's share has decreased, while the household/informal sector's share has risen. This revision is seen as a welcome correction to previous overestimations, though further methodological details are awaited to fully assess its veracity.
- The NSO released a revised GDP series with 2022-23 as the new base year, replacing the 2011-12 series.
- The new series shows a 3-4% reduction in India's absolute GDP size compared to previous estimates.
- Structural changes include increased shares for agriculture and industry, and a decreased share for the services sector.
The ongoing conflict in West Asia has severely impacted India's Liquefied Petroleum Gas (LPG) supply, highlighting the nation's heavy import dependence. India imports about 60% of its LPG, with 90% routed through the Strait of Hormuz, primarily from Qatar, UAE, and Kuwait. This dependence, coupled with limited strategic storage capacity (less than two days of consumption), makes India vulnerable to supply disruptions and price hikes. The government has responded by directing domestic refiners to maximize LPG production for household consumers and cutting LPG subsidy allocation. LPG consumption has surged due to schemes like PMUY, increasing active consumers to 33 crore.
- India is heavily dependent on LPG imports, with approximately 60% of its requirement sourced from West Asia via the Strait of Hormuz.
- The nation's strategic LPG storage capacity is critically low, holding less than two days of consumption.
- The government has mandated domestic oil refiners to maximize LPG production and prioritize household consumers to mitigate supply disruptions.
Iran has escalated its campaign in West Asia by attacking commercial ships in the Persian Gulf and targeting Dubai International Airport and financial institutions. This comes amidst rising global energy concerns and American-Israeli airstrikes on Iran. A Thai cargo ship, Mayuree Naree, bound for India, was hit in the Strait of Hormuz, leaving three crew members missing. India's MEA deplored the attacks, emphasizing the danger to commercial shipping and civilian lives. Iran also warned of targeting West Asia's financial institutions. The International Energy Agency plans to release 400 million barrels of oil from reserves to manage price jumps, the largest such release ever.
- Iran has intensified attacks on commercial shipping and critical infrastructure in West Asia, including Dubai Airport and financial institutions.
- A Thai cargo ship, Mayuree Naree, en route to Kandla, India, was struck in the Strait of Hormuz, resulting in three missing crew members.
- India's Ministry of External Affairs condemned the attacks, highlighting the threat to commercial shipping and Indian citizens.
Iran has intensified attacks on economic targets and U.S. missions across West Asia, with U.S. President Trump warning against talks. Drones and missiles struck oil facilities and U.S. embassies in Saudi Arabia, Kuwait, and UAE. Concurrently, Israel has bombarded targets in Iran and expanded operations against Hezbollah in Lebanon. The conflict has led to the closure of the Strait of Hormuz, a critical chokepoint for global oil trade, causing oil prices to surge and impacting global energy security, particularly for major importers like China and India. The U.S. State Department has ordered evacuations from several Gulf nations.
- Iran has escalated attacks on economic infrastructure and U.S. missions in West Asia, leading to a regional conflict.
- Israel has simultaneously conducted bombardments in Iran and expanded operations against Hezbollah in Lebanon.
- The conflict has resulted in the closure of the Strait of Hormuz, a critical chokepoint for global oil trade, causing oil price surges.
To reach net-zero emissions by 2070, India must decarbonize its steel sector, a major industrial polluter. The Ministry of Steel has identified 14 task forces to create a roadmap for low-carbon production. While 'green steel' carries a price premium, its impact on large infrastructure project costs is estimated at only 5.5%. The article suggests using public procurement as a lever, leveraging the 'Green Star' rating system and 'Made in India' QR codes for verification. Aligning Production Linked Incentives (PLI) with green hydrogen missions is crucial for scaling industry response and bypassing international carbon tariffs.
- Steel remains one of India's largest industrial sources of CO2 emissions, making its decarbonization vital for climate goals.
- A 'Green Steel Taxonomy' with a 3 to 5-star rating system has been introduced to rank steel by emission intensity.
- International examples like Japan's Green Purchasing framework and California's Buy Clean model offer templates for green procurement.
Budget 2026 introduces shifts to deepen India's corporate bond market, aiming to reduce the burden on commercial banks for long-term infrastructure financing. Currently, Indian banks carry 60-65% of all non-financial corporate debt, creating a maturity mismatch as they use short-term deposits to fund long-term projects. The budget proposes market-making frameworks, total-return swaps, and an Infrastructure Risk Guarantee Fund. By expanding the bond market, the government hopes to distribute long-term credit risk across institutional investors, making the financial system more resilient to shocks and freeing up bank credit for small and medium enterprises.
- India's corporate bond market is less than 15% of GDP, significantly lower than the US (80%) or China (30%).
- Banks face 'maturity transformation' risks by funding 15-20 year infrastructure projects with short-term deposits.
- The government has injected over ₹3.2 lakh crore into public sector banks since 2017 to manage bad loans and stabilize the system.
The government’s updated ‘Urban Challenge Fund’ aims to make Urban Local Bodies (ULBs) more self-reliant by encouraging market-linked infrastructure development. The Centre will cover 25% of project costs if cities raise 50% through bonds, loans, or Public-Private Partnerships (PPPs). However, many Indian cities lack the administrative capacity and credible accounting systems to borrow effectively. There are concerns that shifting focus to monetizable assets might sideline essential services for weaker sections. The article emphasizes that fixing the political economy of local taxes and ensuring minimum service guarantees are prerequisites for successful fiscal devolution and sustainable urban growth.
- The Urban Challenge Fund promotes 'market-linked, reform-driven, and outcome-oriented' urban infrastructure development.
- ULBs struggle with chronic underutilization of funds in schemes like AMRUT, Swachh Bharat, and Smart Cities Mission.
- Fiscal powers have not been properly devolved to ULBs, making them heavily dependent on State-level transfers and grants.
State-run Coal India has signed a Memorandum of Understanding (MoU) with the Chhattisgarh Mineral Development Corporation (CMDC) for the exploration and exploitation of critical minerals. This follows Coal India's recent acquisition of graphite and vanadium blocks via auctions. The move is part of a broader national strategy to secure domestic supplies of critical minerals, which are essential for high-tech and green energy applications. Global supply chain disruptions and trade wars have made domestic exploration a policy imperative for India to ensure resource security and technological self-reliance.
- Coal India is diversifying its portfolio beyond coal into critical minerals like lithium, graphite, and vanadium.
- The partnership with state corporations like CMDC facilitates exploration in mineral-rich regions of central India.
- Securing critical minerals is vital for India's energy transition, electric vehicle industry, and high-tech manufacturing.
Around 10 Indian marine and saline fish varieties are seeking certification from the Marine Stewardship Council (MSC). This move is intended to counter potential trade restrictions and higher tariffs from the U.S. and to access affluent markets in Europe and Japan that prioritize sustainably sourced seafood. The Pradhan Mantri Matsya Sampada Yojana (PMMSY) will subsidize the certification process, which is conducted by third-party auditors. MSC certification ensures that fishing practices are ecologically sustainable and helps maintain steady income for fishing communities while opening new international market avenues.
- MSC certification is expected to increase fisheries sector revenue by 30% and open new international markets.
- The certification is based on FAO's Code of Conduct for Responsible Fishing and guidelines for eco-labelling.
- PMMSY plays a crucial role in supporting fishermen through the auditing and certification process.
The Public Accounts Committee (PAC) of Parliament has recommended significant reforms to toll collection on national highways, advocating for an end to "perpetual tolling" once capital and maintenance costs are recovered. The PAC expressed concern that current practices allow indefinite collection regardless of road quality or user affordability. It proposed establishing an independent regulatory authority for transparency in toll determination and collection, and suggested reimbursements for users during construction. Despite FASTags, traffic bottlenecks persist due to malfunctioning scanners. The Ministry of Road Transport and Highways acknowledged the concerns and initiated a comprehensive study with NITI Aayog to revise the user fee determination framework, considering factors like vehicle operating cost and user willingness to pay.
- The Public Accounts Committee (PAC) recommends ending perpetual toll collection on national highways after capital and maintenance costs are recovered.
- The PAC called for an independent regulatory authority to ensure transparency and fairness in toll determination, collection, and regulation.
- It highlighted issues with FASTags, including persistent traffic bottlenecks due to malfunctioning scanners.
India's unemployment rate declined to 5.2% in July from 5.6% in June, according to the Periodic Labour Force Survey (PLFS) released by the Ministry of Statistics and Programme Implementation. The Labour Force Participation Rate (LFPR) for women marginally increased to 25.5% in July, while for men it stood at 57.4%. The Worker Population Ratio (WPR), which measures the proportion of employed persons, rose to 52% nationally, an increase of 0.8 percentage points from June. Notably, the WPR in rural areas for persons aged 15 and above was 54.4%, indicating significant rural employment growth, while urban WPR was 47%.
- India's unemployment rate decreased to 5.2% in July from 5.6% in June.
- The Labour Force Participation Rate (LFPR) for women saw a marginal increase to 25.5%.
- The Worker Population Ratio (WPR), indicating the proportion of employed persons, increased to 52% nationally.
The Union government has launched the Pradhan Mantri Viksit Bharat Rojgar Yojana portal, a scheme aimed at generating 3.5 crore jobs. Labour Minister Mansukh Mandaviya encouraged first-time employees and employers to utilize the scheme's benefits. The scheme covers both employers and first-time employees, allowing beneficiaries to avail incentives by registering on the portal or uploading their Universal Account Number (UAN) via the UMANG application. Part A of the scheme is designed for first-time employees, while Part B caters to employers, facilitating job creation and employment opportunities across the country.
- The Union government launched the Pradhan Mantri Viksit Bharat Rojgar Yojana portal.
- The scheme aims to generate 3.5 crore jobs.
- Both first-time employees and employers are covered under the scheme.
Global chronic undernourishment is declining, with 673 million people undernourished in 2024, down from 688 million in 2023, marking a reversal from COVID-19 increases. India has been pivotal in this progress, driven by policy investments in food security, digital technology, and improved service delivery. The prevalence of undernourishment in India decreased from 14.3% (2020-22) to 12% (2022-24), meaning 30 million fewer people living with hunger. This success is largely attributed to the transformed Public Distribution System (PDS) through digitalization and Aadhaar-enabled targeting. However, challenges remain in nutrition, with healthy diets unaffordable for over 60% of the population, necessitating agrifood system transformation and continued investment in digital tools and women-led enterprises.
- Global chronic undernourishment has decreased, with India significantly contributing to this positive trend.
- India's prevalence of undernourishment declined from 14.3% to 12% between 2020-22 and 2022-24, reducing the number of hungry people by 30 million.
- The transformation of India's Public Distribution System (PDS) through digitalization and Aadhaar-enabled targeting is central to this achievement.
Sam Altman, CEO of OpenAI, is described as a "disruptor-in-chief" for his pivotal role in shaping the artificial intelligence (AI) and broader tech landscape. His leadership at OpenAI, particularly with the development of ChatGPT, has accelerated AI's integration into daily life and industry. Altman's vision extends beyond AI, encompassing ventures in nuclear fusion and longevity, reflecting his ambition to tackle humanity's biggest challenges. His influence highlights the rapid advancements and transformative potential of AI, alongside the ethical and societal questions it raises.
- Sam Altman, CEO of OpenAI, is a "disruptor-in-chief" in AI and tech.
- His leadership, especially with ChatGPT, has accelerated AI's integration into daily life.
- Altman's vision includes ventures in nuclear fusion and longevity.
Artificial Intelligence (AI) is fundamentally reshaping India's infotech sector, presenting both immense opportunities and significant challenges. AI is driving innovation in areas like automation, data analytics, and customer service, leading to increased efficiency and new business models. However, it also necessitates upskilling the workforce, addressing ethical concerns, and ensuring robust data governance. India's IT industry is adapting by investing in AI research, developing specialized talent, and integrating AI solutions across various domains to maintain its global competitiveness.
- AI is fundamentally reshaping India's infotech sector, creating opportunities and challenges.
- It drives innovation in automation, data analytics, and customer service, enhancing efficiency.
- Challenges include workforce upskilling, ethical concerns, and robust data governance.
India's stance on continuing to purchase Russian oil amidst U.S. pressure remains firm, with officials indicating that India will prioritize its energy security and national interests. Despite Western sanctions on Russia, India has significantly increased its oil imports from Moscow, benefiting from discounted prices. While the U.S. has expressed concerns, it has largely adopted a pragmatic approach, recognizing India's energy needs. India emphasizes that its purchases are market-driven and crucial for its economy, asserting its sovereign right to make independent foreign policy decisions.
- India maintains its stance on purchasing Russian oil despite U.S. pressure.
- India prioritizes energy security and national interests, benefiting from discounted prices.
- The U.S. has adopted a pragmatic approach, acknowledging India's energy needs.
The second phase of expansion for the Vizhinjam International Seaport in Kerala is expected to commence next month. This phase will involve developing additional berths, container yards, and enhancing cargo handling capabilities to accommodate larger vessels. The expansion is crucial for transforming Vizhinjam into a major transshipment hub, boosting trade, and creating employment opportunities. It aligns with India's maritime vision to strengthen its port infrastructure and enhance its position in global shipping routes.
- Phase Two expansion of Vizhinjam International Seaport in Kerala expected next month.
- The expansion involves additional berths, container yards, and enhanced cargo handling.
- It aims to transform Vizhinjam into a major transshipment hub.
ICICI Bank has significantly increased the minimum average monthly balance requirement for new savings accounts to ₹50,000, a fivefold jump from the previous ₹10,000. This change applies to new accounts opened from August 1. The move aims to attract high-value customers and potentially reduce operational costs associated with smaller accounts. While it might deter some potential customers, it aligns with the bank's strategy to optimize its customer base and improve profitability.
- ICICI Bank hiked the minimum average monthly balance for new savings accounts to ₹50,000.
- This is a fivefold increase from the previous ₹10,000.
- The change applies to new accounts opened from August 1.
The government is considering rolling out a ₹2,250 crore export promotion mission to boost India's outbound trade. The mission aims to support various sectors, enhance competitiveness, and explore new markets. It will likely involve incentives, infrastructure development, and capacity building for exporters. This initiative is crucial for achieving India's ambitious export targets and integrating further into global value chains, contributing to economic growth and job creation.
- Government plans a ₹2,250 crore export promotion mission.
- The mission aims to boost India's outbound trade and enhance competitiveness.
- It will likely involve incentives, infrastructure, and capacity building for exporters.
An official indicated that a Free Trade Agreement (FTA) between India and the European Free Trade Association (EFTA) is expected to be announced soon. The EFTA comprises Switzerland, Norway, Iceland, and Liechtenstein. The agreement aims to boost trade and investment between India and these countries by reducing tariffs and non-tariff barriers. This FTA is part of India's broader strategy to expand its economic partnerships globally and enhance its export competitiveness.
- India-EFTA Free Trade Agreement (FTA) is expected to be announced soon.
- EFTA comprises Switzerland, Norway, Iceland, and Liechtenstein.
- The agreement aims to boost trade and investment by reducing barriers.
The SBI Chairman stated that the direct impact of potential higher tariffs by the U.S. on Indian goods is likely to be limited, as India's exports to the U.S. are diversified and not heavily concentrated in specific sectors that might be targeted. While acknowledging the challenges of global trade protectionism, he expressed confidence in India's economic resilience and its ability to navigate such trade barriers. The statement underscores the importance of diversifying export markets and products to mitigate risks from trade disputes.
- SBI Chairman believes U.S. higher tariffs on Indian goods will have limited direct impact.
- India's exports to the U.S. are diversified, reducing concentration risk.
- India's economic resilience is expected to help navigate trade barriers.
Saudi Aramco is reportedly in advanced talks to acquire a 20% stake in Bharat Petroleum Corporation Limited's (BPCL) Bina refinery in Madhya Pradesh. This potential investment signifies a strategic partnership between the two energy giants, aiming to enhance India's refining capacity and secure crude oil supplies. The deal, if finalized, would strengthen India's energy security and attract significant foreign investment into its oil and gas sector. It also reflects Saudi Aramco's strategy to expand its downstream presence globally.
- Saudi Aramco is in advanced talks to acquire a 20% stake in BPCL's Bina refinery.
- The investment aims to enhance India's refining capacity and secure crude oil supplies.
- The deal would strengthen India's energy security and attract foreign investment.
The Supreme Court has affirmed that Public Sector Undertakings (PSUs) are a "good public material resource" and their assets should be utilized for public good. The court emphasized that the government, as the owner, has the right to decide on the utilization of PSU assets, including their sale or transfer, provided it serves public interest. This ruling clarifies the government's prerogative over PSUs while underscoring their role as public assets. It has implications for disinvestment policies and the management of state-owned enterprises.
- Supreme Court affirmed PSUs as "good public material resource."
- Government has the right to decide on PSU asset utilization for public good.
- The ruling clarifies government's prerogative over PSUs as public assets.