The Hi-Tech Behind India’s Diagnostic Giants’ Premium Valuations

By Dev Chadrasekhar

For most of its history, the Indian diagnostics business has spoken a simple language. Patients fell ill, doctors prescribed tests, and laboratories collected, processed and reported results as fast and as cheaply as they could. 

The vocabulary was operational: collection centres, turnaround time, sample logistics, network density, cost per test. It was a commodity processing business, and it competed on cost.

Listen to the same companies today, and the vocabulary has changed. 

The investor communications from Dr Lal PathLabs, Metropolis Healthcare, Vijaya Diagnostic Centre and the newly listed Suraksha Diagnostic are full of a different set of words: genomics (reading a patient's genes), next-generation sequencing, AI-assisted pathology, liquid biopsy, molecular oncology and pharmacogenomics.

Dr Lal's executive chairman, Arvind Lal, has called the shift a move "from disease detection to disease prediction". 

Each of these is a distinct technology with its own economics, and together they describe an industry trying to climb out of the commodity tier into one where capability, not cost, decides the contest. It is worth taking them one at a time.

The New Toolkit 

Genomics is the furthest along. Genomics reads the DNA itself, looking for the mutations that cause or predict disease. 

Delhi-based Dr Lal has built the deepest pipeline through its Genevolve division, now around five years old, which offers more than 160 genomic tests spanning cancer, inherited disorders, neurological conditions and reproductive health, supported by four reference laboratories and roughly 3,000 prescribing clinicians.

Metropolis, the Mumbai-headquartered chain, got there by acquisition rather than construction, buying the oncology speciality laboratory Core Diagnostics, where cancer-gene testing already contributes about a quarter of high-end revenue, alongside a library of more than 40,000 stored and catalogued patient samples.

Suraksha, based in Kolkata, launched a dedicated genomics vertical in July 2025, committing Rs 22 crore upfront and a further Rs 46 crore over two years, and Vijaya intends to enter with a new automated laboratory in Hyderabad. Between them, the four cover the country — Dr Lal in the north, Metropolis in the west, Vijaya in the south and Suraksha in the east.

A clinical sequencing menu takes years to validate, which is what makes a head start in it durable in a way a head start in routine pathology never was.

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Air India And IndiGo Chase Demand With Simpler, Cheaper Fares

By Manish Pant

What?

India's airlines are cutting fares to lure back passengers after higher ticket prices and capacity constraints slowed travel demand in one of the world's fastest-growing aviation markets.

Major scheduled carriers have responded with discounted fare categories that remove bundled services and lower ticket prices by as much as 8%, betting that cheaper entry-level fares will encourage price-sensitive travellers to return.

Air India introduced a new 'Basic' fare option in Economy Class on select domestic routes. Within days, IndiGo followed with 'IndiGo Lite' fares for Economy Class customers across direct domestic and international flights.

The move comes after domestic passenger traffic weakened earlier this year as higher airfares and reduced capacity weighed on demand.

Why? 

India reported a dip in passenger traffic in April when domestic passengers fell 4% to 13.82 million from 14.32 million a year earlier. Newly redeveloped airports such as Prayagraj, Shirdi, Kalaburagi, Kushinagar and Pakyong have even reported no-flight days after several years.

Seasonality has also added to the pressure.  

Jyoti Mayal, director at the New Delhi-based travel services provider, New Airways Travels, said, "July to September is always a lean season, so airlines are stimulating demand. Discounted fares today are less about generosity and more about strategy."

Capacity constraints have also been significant

Jainam Shah, aviation analyst at the Mumbai-headquartered brokerage, Equirus Securities, said that the slowdown has been driven largely by supply-side constraints rather than weak demand. 

"Higher fuel prices, airspace restrictions and aircraft availability issues forced airlines to prioritise profitability over capacity growth by reducing frequencies on loss-making routes and passing on part of the higher costs through fare increases."

What Next? 

The easing of tensions is now helping international operations recover.

"International traffic already showed a sharp sequential improvement in June, with year-on-year declines narrowing significantly. This suggests that underlying demand remains healthy and passengers are returning as operational disruptions ease," said Shah.

Domestic traffic is also showing signs of recovery. DGCA data released on July 7 showed airlines carried 15.39 million passengers in May, up from 13.82 million in April, about a 10% month-on-month increase.

Air India CEO Search Continues

Air India Chairman N Chandrasekaran is setting up an interim committee of senior executives, including himself and former civil aviation official Pradeep Singh Kharola, to oversee the airline while a successor to CEO Campbell Wilson is finalised, Reuters reported.

The panel aims to ensure continuity at Air India, while Chandrasekaran's extension as Tata Sons chairman is pending. Wilson's notice period reportedly ends September 30.

Catch Up Quick: Commercial head Nipun Aggarwal and Singapore Airlines executive Vinod Kannan are frontrunners for the role.

However, Aggarwal's potential appointment has reportedly drawn opposition from Tata Trusts Chairman Noel Tata, according to a Financial Times report.

Setting: Air India, majority-owned by Tata Sons with Singapore Airlines holding 25%, posted a combined loss exceeding $2 billion last fiscal year with its budget subsidiary Air India Express. The airline faces intense scrutiny following safety lapses, last year's fatal Dreamliner crash, Pakistan's airspace ban, and rising costs from the West Asia conflict.

Monsoon Likely to Slow Crop Sowing

Below-average rainfall is expected across India's western and southern regions over the next fortnight, potentially slowing the sowing of cotton, soybeans and corn, two senior weather officials told Reuters.

Context: The Madden-Julian Oscillation is unlikely to be favourable over the next fortnight, and chances of any low-pressure system developing during this period are also low, said SD Sanap, a scientist with the India Meteorological Department, adding that Maharashtra, Karnataka, Telangana, Andhra Pradesh and Kerala are likely to receive below-average rainfall.

India received 39.8% below-average rainfall in June, with the IMD also forecasting below-average rainfall for July. Heavy rain in the first eight days of July shrank the country's rainfall deficit to 15.2%, but the deficit is expected to widen again as the monsoon enters a break. Farmers have planted 35 million hectares as of July 5, down 21% from a year earlier, farm ministry data showed.

Forecast: Farm minister Shivraj Singh Chouhan advised farmers to cultivate short-duration and low-water-intensive crops such as corn, pearl millet and green gram to minimise the impact of delayed rainfall.

Corporate Revenue Grows At Fastest Pace

India's corporate revenue is estimated to have grown 11–11.5% in the first quarter ended June 30, 2026, the fastest pace in two years, despite supply disruptions and higher input costs caused by the West Asia conflict, according to a Crisil Intelligence analysis of over 400 companies across 47 sectors.

By The Numbers: Unlike recent quarters where volume drove growth, pricing was the primary driver this time, contributing more to revenue growth than volume in sectors such as aluminium, steel, cement, airlines, fertilisers and gems and jewellery.

Primary aluminium revenue surged 51–53% on-year, automobile sector revenue grew 22–24%, pharmaceuticals grew around 12%, telecom services rose 10–11% and FMCG grew 6–7%. IT services revenue grew about 5%, primarily driven by favourable currency movements.

Fast Facts: Profitability was subdued, with aggregate EBITDA margin contracting 75–100 basis points on-year as companies could pass on only part of the cost increases. Airlines saw an estimated 1,000 basis point decline in EBITDA margin, while tyres saw a 200–300 basis point decline.

Sectors with stronger pass-through mechanisms such as power generation, telecom and hospitals were better positioned to protect margins.

No Tax On Imports

The Centre has scrapped basic customs duty on several key components used to manufacture mobile phones and other electronic devices, reducing import costs as India looks to strengthen its position as a global electronics manufacturing hub.

Fast Facts: The government has removed the 5% or 7.5% basic customs duty on components used in products such as smartphone camera modules, USB cables and wired headsets. Separately, it has extended customs duty concessions on machinery and components used to manufacture lithium-ion batteries, display modules and other electronics until March 31, 2029.

Origin: The move aims to lower production costs, attract fresh investment and make electronics manufactured in India more competitive. It will likely benefit companies including Apple suppliers, Samsung, Xiaomi and contract manufacturers. The policy also signals a shift towards lowering tariffs on imported inputs that are not yet produced domestically, while continuing to encourage local value addition and the expansion of India's electronics exports.

Another Scorching June

The world has recorded its second-hottest June on record, while Western Europe experienced its hottest June ever, according to the EU's Copernicus Climate Change Service. 

Global temperatures were 1.39°C above pre-industrial levels, and average sea surface temperatures reached a record high for June, highlighting the continuing pace of global warming.

Impact: The extreme heat had deadly consequences. The heatwave fuelled wildfires, disrupted transport, forced school closures and strained power systems across parts of Europe. Scientists have also linked the extreme temperatures to thousands of excess deaths across the region.

The Lead: The findings echo a growing concern in India, one of the countries most vulnerable to extreme heat. 

Much of north and central India endured repeated heatwave spells before the southwest monsoon arrived, with temperatures crossing 45°C in several regions. Rising temperatures are also taking a toll on India's workforce. Research from the University of Chicago finds that productivity in Indian manufacturing falls by 2% to 4% for every 1°C rise on hotter days, with sustained heat also increasing worker absenteeism.

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What Signals Are The Markets Really Looking For?

On Episode 923 of The Core Report, financial journalist Govindraj Ethiraj talks to Tejashree Joshi, Head - Environmental Sustainability at Godrej Enterprises Group as well as G Chokkalingam, Founder of Equinomics Research.

• What Signals Are The Markets Really Looking For?

• How India Inc Revenue Grew 11% + In The Latest Quarter And What Drove It?

• How Are Manufacturers Responding To Extreme Climate Situations, From Heatwaves To Heavy Rainfall

• India To Prepare For Peak Demand Of 300 GW Next Year, From Around 270 GW This Year

Why India's FMCG Majors Are Buying Their Way Into Nutraceuticals 

By Pritha Pahari

What?

India's largest consumer goods companies are acquiring nutraceutical brands instead of building their own. In June, Honasa Consumer bought a 58% stake in Fluence Pharma, a dermatology-led hair and skin supplements company, for about Rs 135 crore, with plans to acquire the rest over five to seven years.

Earlier this year, Hindustan Unilever bought the remaining 49% of OZiva for Rs 824 crore, and Marico picked up a majority stake in plant protein brand Cosmix.

USV Pharma has invested in Wellbeing Nutrition, and L'Oréal is in talks to acquire Innovist. India's nutraceutical market is worth about $30 billion and is expected to cross $55 billion by 2030, growing at roughly 10.5% annually. Functional foods and beverages, including protein products, make up close to 70% of the market.

Why?

Building a nutraceutical brand from scratch takes years of product development, consumer education and trust-building, according to Renu Bisht of Commercify360 and DatumIntell. Large companies typically only enter a category once they can see a path to a business worth at least Rs 1,000 crore, and by then a D2C brand has usually already reached meaningful scale on its own.

Buying that brand is faster than replicating it. As Bisht put it, "Give them one product, and they'll get it into ten lakh stores in a day." FMCG companies bring distribution, offline retail relationships, modern trade and quick commerce that most D2C nutrition brands lack.

Pharma companies have been slower to move because nutraceuticals often require separate manufacturing lines and regulatory processes that don't fit their existing operations, so they tend to expand only into categories close to what they already make.

What Next?

Early results are mixed. OZiva's revenue grew to around Rs 480 crore by 2025, growing about 130% annually, which led to HUL's full buyout. Marico's digital-first portfolio, including Plix, True Elements, Beardo and Just Herbs, is approaching Rs 900 crore in combined revenue.

Fluence, by contrast, is a smaller, credibility-led business built through dermatologist recommendations, and Honasa's challenge will be scaling it without damaging that trust. Emami's acquisition of The Man's Company, which later slipped into losses, shows how that can go wrong.

Experts expect FMCG companies to keep waiting for D2C brands to prove demand before acquiring them and applying national distribution, rather than trying to build new categories internally. As consumer expert Rohit Bhatiani said, "I don't think this is a passing trend. I think big FMCG companies are investing in the future."

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Rs 28.4

That was the cost of a home-cooked vegetarian thali in June, up 5% year-on-year, according to Crisil Intelligence's monthly food plate cost indicator. Elevated prices of tomato, onion, vegetable oil and LPG kept costs high, despite a decline in potato prices.

The Lead: Tomato prices surged 31% on-year to Rs 42 per kg, driven by delayed and lower summer crop planting amid high February-March temperatures. Onion prices rose 2% as costlier stored rabi stocks entered the market, while vegetable oil and LPG cylinder prices climbed 10% each due to supply disruptions from the West Asia conflict.

Flashpoint: A non-vegetarian thali cost Rs 58.2, up 6% on-year, driven by a 7% rise in broiler prices, roughly half the total cost, as extreme summer heat raised bird mortality, slowed weight gain and discouraged fresh chick placements.

India Seeks Safe Tanker Passage

India is seeking safe passage for nine tankers stranded in the Persian Gulf and is considering talks with Iran, as renewed attacks threaten the fragile ceasefire in West Asia, Bloomberg reported.

New Delhi is also contacting Iranian authorities over the safety of Indian seafarers, after several were killed in June strikes. At least one supertanker reversed course near Oman on Wednesday despite some vessels continuing to transit.

Overview: The tensions stem from US president Donald Trump declaring the US-Iran interim ceasefire "over" after Iran struck US bases in Bahrain and Kuwait and downed a US drone, retaliating for American strikes on Iranian targets.

Trump called Iran's leaders "sick people" and dismissed further talks, though he did not repeat this at the NATO summit itself, Reuters reported. He also reportedly threatened to strike Iran's civilian infrastructure and seize Kharg Island, home to key oil facilities, sharply raising the stakes of the conflict.

Catch Up Quick: The renewed hostilities rattled markets, as Brent crude jumped over 5% to around $78.48 a barrel, its highest since June 22, while bond markets tumbled on inflation fears.

War Echoes, Benchmarks Tumble

The Nifty50 slid 2.12% to 23,882.05, and the Sensex dropped 2.15% to 76,503.6, their biggest one-day loss in three months, after Trump remarked on Iran at the NATO summit in Ankara, Turkey. The Indian rupee also dropped 0.62% to 95.5550 against the dollar. 

Context: Trump’s statement reignited fears of a wider conflict in the Middle East, sending crude oil prices higher and weighing on investor sentiment. As oil climbed, global equity markets also fell, with investors moving away from riskier assets.

Critical Moment: The sell-off interrupted what had been a steady recovery for Indian equities in recent weeks. The decline also underscored India's vulnerability to rising oil prices. As the world's third-largest crude importer, India faces the prospect of higher import bills, stickier inflation, and pressure on corporate earnings whenever geopolitical tensions push up energy costs.

Blue Tokai Eyes 800 Stores

Specialty coffee chain Blue Tokai plans to more than triple its store count from 240 to 800 by fiscal year 2030, opening around 120 stores this year alone, as it bets on India's underpenetrated café market, Bloomberg reported.

By the Numbers: Blue Tokai expects revenue to grow over 50% to Rs 8 billion ($93.9 million) this financial year, after a near sevenfold surge over the past four years.

The chain, backed by Verlinvest, is expanding into newer cities including Ahmedabad and Lucknow, plans to open its first international store in Dubai next week, and eyes an IPO within five to seven years. It expects to turn profitable by March 2028.

India's café market, valued at $425 million in 2025, is projected to grow to $1.15 billion by 2034, per IMARC Group.

The Shift: Blue Tokai's growth contrasts with Starbucks India's more cautious pace. Tata Starbucks operates over 500 stores but posted a net loss of Rs 135.7 crore on revenue of Rs 1,277 crore in FY25, with losses widening from Rs 82.16 crore the previous year.

It has also tempered its store addition pace, opening 58 net new stores in FY25, down from earlier targets, amid high operating costs and rising competition from domestic chains.

Semaglutide Loses Steam

Indian sales of generic weight-loss drug semaglutide lost momentum just months after a strong launch, suggesting the market may be settling after an initial rush.

By the Numbers: Sales jumped 58.4% in April after multiple Indian drugmakers launched cheaper versions following the drug's patent expiry. But growth slowed to 12.1% in May and 2.3% in June, according to Pharmarack data cited by Bloomberg.

Origin: Analysts said early demand came from patients who had delayed treatment until prices fell. Now, high out-of-pocket costs, long-term treatment needs and patient drop-offs appear to be weighing on demand.

"All eligible patients have been onboarded on to this drug, and fewer newer patients are starting this therapy," Sheetal Sapale, vice-president, commercial at Pharmarack, told Bloomberg.

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Markets Recalculate Impact As Trump Signals End Of Truce

On Episode 922 of The Core Report, financial journalist Govindraj Ethiraj talks to Raja Lahiri, Partner at Grant Thornton Bharat, as well as Nicolas Ziv, Lead Specialist, Transport Sector Resilience at Coalition for Disaster Resilience Infrastructure (CDRI).

• Markets Recalculate Impact As Trump Signals End Of Truce

• The RBI Wants A Cryptocurrency Policy That Leans Towards Prohibition

• It’s Pharmaceuticals And Cricket All The Way In The Mega Deals Of The Last Quarter

• The Growing Importance Of Disaster Resilience In General And The Importance Of Airports In Specific

• DeepSeek Wants To Build Its Own Chip

India’s IT Bellwether TCS Paints An AI Future Its Books Don't Show

By Dev Chandrasekhar

What?

During the yearly AGM, TCS chairman N Chandrasekaran spoke a lot about AI. He said AI wasn’t a threat, but the biggest opportunity in the company’s history. 

AI, he said, is not a threat to TCS; it is the biggest opportunity in the company’s history. 

By 2028 to 2030, all of TCS’s revenue will have an AI component; and the day is not far when the company will have as many AI agents as it has employees — which today means 5,84,000 of each.

Asked about jobs, the chairman was firm: “There is no downsizing of staff; that’s not planned at all.” 

But the company’s own annual report raises questions about flat dollar revenue, the economics of large-scale AI adoption, a capital-intensive strategic pivot, and whether its plans are keeping pace with its promises.

Why? 

Revenue rose 4.6% year-on-year to Rs 2,67,021 crore in FY26. Sounds healthy, until you notice the rupee fell from 85.44 to 93.92 against the dollar during the year, a 10% slide. 

For Indian IT, which bills its clients in dollars but reports in rupees, a sliding rupee flatters the numbers. 

Reported revenue and margins swell without a single new dollar of business being won, growth that lives in the exchange rate rather than in the order book. 

In dollars, TCS’s revenue stood still at about $30 billion. The celebrated 25% operating margin, the best in four years, also leaned on the weak rupee. 

The chairman admitted as much in the Q&A, saying the currency gave “a net benefit on the top line and the margin line”. 

TCS's AI business is now running at a pace of $2.3 billion a year, up from $1.5 billion two quarters earlier, a fast clip, but still only about 8% of total revenue. The chairman expects it to double every year. But it is still only about 8% of total revenue. 

Which begs the harder question of how much of it is new money and how much is old work with a new label? 

Clients buy AI to spend less on IT services; therefore, AI revenue can grow impressively while total revenue goes nowhere. In dollar terms, that is exactly what just happened. 

The workforce story has the same problem. 

Why Does It Matter? 

is the bellwether of India’s largest services export industry, the business model that built a middle class on the simple trade of Indian talent at global prices. 

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Rs 7.60 lakh crore

That's the annual turnover of the Indian auto component industry in FY26, up 12.7% year-on-year, according to the Automotive Component Manufacturers Association of India (ACMA).

Growth was driven by higher vehicle production, sustained investment in capacity and technology, and steady exports. The sector has more than doubled in the last five years, growing at a 17% CAGR.

The Lead: Exports rose 5% to Rs 2.12 lakh crore, led by Europe, while imports grew faster, up 13%, to Rs 2.24 lakh crore, with China, Japan and Germany the top sourcing markets, keeping the segment in a trade deficit.

Future: ACMA President Vikrampati Singhania said the outlook remains positive on domestic demand, FTAs and global sourcing, though rare earth magnet availability, logistics costs and raw material volatility need continued attention.

Trump Warns Iran

A Qatari LNG tanker was struck near the Strait of Hormuz on Tuesday, the latest attack to test a fragile US-Iran ceasefire, as US President Donald Trump warned Washington would either reach a deal with Iran or "finish the job," Reuters reported.

Context: The Al Rekayyat, owned by Qatar's state shipping company Nakilat, was hit about 8 nautical miles east of Limah, Oman, in what security consultancy EOS Risk Group classified as a drone or missile strike, triggering a fire, Bloomberg reported. It is the first Qatari LNG tanker attacked since the West Asia war began. A second LNG tanker, Al Areesh, appeared to turn back before reaching the strait after news of the strike.

European gas prices rose as much as 6%, and Brent crude ticked higher. Of 25 ships transiting Hormuz on Monday, only three used the US-managed Omani route with transponders on, Kpler data showed.

Forecast: US-Iran talks remain suspended during funeral ceremonies for Supreme Leader Ali Khamenei, killed on the first day of the war in late February, with burial scheduled for July 9. Iran's security council called Trump's threats "delusional," with officials saying Tehran would not respond to the "language of threats," Reuters reported.

FPIs Return To Bank Stocks

Foreign portfolio investors (FPIs) bought $1.54 billion of Indian banking stocks in the second half of June, the sector's biggest fortnightly inflow in 14 months, Reuters reported.

Context: Overall FPI inflows into equities marked a turnaround after four months of selling and record outflows earlier this year, when investors favoured AI- and chip-related stocks in Taiwan and South Korea.

The rebound follows policy support, as the Reserve Bank of India, India’s central bank, extended a subsidised forex swap facility for banks' overseas borrowings, while the government scrapped capital gains tax for FPIs and removed the 20% tax on interest income, effective April 2026. Bank stocks gained 6.1% in June, leading the Nifty 50's 1.4% rise, with HDFC Bank up 7.2%.

Setting: "The worst of the FPI selling is over," Abhay Laijawala of Lighthouse Canton told Reuters, citing steady bank earnings as a potential trigger for further Nifty gains.

India's Eastward Bet

India and Indonesia signed a series of strategic agreements, deepening cooperation in defence, maritime security and critical minerals during Prime Minister Narendra Modi's visit to Jakarta. 

Fast Facts: Indonesia will procure India's indigenous BrahMos cruise missile system and Astra air-to-air missiles, while the two countries will jointly develop Sabang Port near the strategically important Strait of Malacca. They also agreed to collaborate on critical minerals, industrial supply chains and Indonesia-specific electronic voting machines.

The Scoop: "Growing trust between India and Indonesia is strengthening our defence, security and maritime cooperation," Modi said after talks with Indonesian President Prabowo Subianto.

Calling the relationship one of "growing strategic importance", he said the Comprehensive Strategic Partnership forged in 2018 was "taking a new flight today". The defence agreements also strengthen India's position as an emerging arms exporter in Southeast Asia.

Trent Shares Slide

Trent's shares fell 12.4% on Tuesday, wiping out Rs 147.88 billion ($1.56 billion) in market capitalisation in its steepest single-day drop in over a year, after first-quarter sales growth came in below expectations, Reuters reported.

By The Numbers: Trent's standalone revenue rose 19% in the June quarter, below street expectations and Citi's estimate of 23%.

The company added 250 new stores, including Westside and Zudio, in fiscal 2026 and another 20 in the first quarter. Same-store sales slowed to low single digits, while revenue per square foot declined despite a weak base.

Trent currently trades at a price-to-earnings ratio of 102.1x, compared to Shoppers Stop at 72.7x and Aditya Birla Lifestyle Brands at 69x.

Forecast: Analyst Aishvarya Dadheech of Fident Asset Management noted that Zudio's growth had started normalising, creating market doubts about the company's momentum, adding that growth and valuations were not in sync.

Citi said it remained cautious due to weak productivity trends, rising competition and the impact of rapid store expansion.

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Foreign Portfolio Investors Are Returning To Indian Markets

On Episode 921 of The Core Report, financial journalist Govindraj Ethiraj talks to Ajay Bagga, Veteran Market Analyst as well as Radhika Rao, Senior Economist and Executive Director at DBS Bank.

• Foreign Portfolio Investors Are Returning To Indian Markets, One Trade At A Time

• The Trend Shifts Within Indian Markets As Financial Stocks Lead The Pack

• How Low Oil Prices And Other Positive Macro Signals Could Help The Economy

• Nato Meet Kicks Off In Turkey 

• India To Supply Missiles To Indonesia And Partner For A Port

Honda Bets On Imports And SUVs To Rebuild Its India Presence

By Shobha Mathur 

What? 

Clearly, Honda Cars India is at a crossroads. After nearly two and a half decades in the country, the Japanese carmaker’s portfolio had shrunk to just three models until a few months ago. But in May, Honda signalled a shift in strategy, unveiling the premium hybrid SUV ZR-V for the Indian market alongside a refreshed version of its long-serving City sedan.

The move reflects Honda’s broader push to revive its position in India through a two-pronged strategy of bringing back premium global models while building a pipeline of mass-market SUVs and electric vehicles for the domestic market.

Honda had also announced more launches during the Japan Mobility Show 2025. 

President and CEO Toshihiro Mibe had said during the event that the company had an aggressive growth map for India. “We are planning to launch 10 or more models by 2030.” 

For the SUVs, which have become mainstream in India, “our plan is for seven models by 2030,” he elaborated. Mass-market SUVs and mid-size cars customised for the Indian market will start launching from 2028 onwards.

The ZR-V hybrid, which will compete with models such as the Skoda Kodiaq, Jeep Meridian and Volkswagen Tiguan R-Line, is set to begin deliveries from July after its launch.

Why Now? 

Despite its limited offerings, Honda has retained a loyal customer base in India, helped by its product quality and service network. 

But its market share has slid from 2% in FY24 to 1.3% in FY26 in the passenger vehicle market, with sales down 6% to 61,943 units YoY in FY26. This has dropped its ranking to the eighth slot in the pecking order from the seventh position in FY25. 

Now, with its new game plan of maintaining a mix of both mass and premium, it has even floated its in-house captive financing arm to provide liquidity to customers. 

Puneet Gupta, director-automotive at S&P Global Mobility, said that since Honda’s sales and market share are under pressure, the automaker has to create some excitement in the market with new product launches. 

It will be difficult to manufacture new models in India that cannot be localised if economies of scale don’t justify that kind of volume. 

“Completely built units won't transform Honda's market share in India, but they can elevate the brand, attract enthusiasts and reinforce Honda's premium and technology credentials,” said Vivek Sharma, director, India -automotive, GlobalData.

The Indian market has evolved significantly over the past few years, with a growing base of affluent consumers willing to pay a premium for differentiated products and global nameplates.

The premium imported models will also allow the company to test consumer response to niche segments without committing to large-scale localisation investments.

The carmaker, however, wants to maintain its predominant play in petrol and strong hybrids, where its City sedan is a frontrunner in addition to battery electric vehicles.  

Globally, Honda plans to launch 13 next-generation hybrid models between 2027 and 2031 and is targeting annual hybrid sales of 2.2-2.3 million units by 2030, underlining the strategic importance of the technology.

Sharma felt India would likely receive a select portfolio rather than a large influx of global products. “The real test will be whether Indian consumers are willing to pay a premium for that technology proposition.”

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25.57 lakh units

That is how many vehicles were sold in India last month, a 22% jump over the 21 lakh units sold in June 2025, according to data from the Federation of Automobile Dealers Associations (FADA).

Overview: Passenger vehicles (PVs) led the growth, rising 29% to 4.1 lakh units, followed by two-wheelers at 18.28 lakh units, up 21%. Tractors grew 25%, while commercial vehicles and three-wheelers rose 17% and 16%, respectively.

FADA noted that alternative-fuel PVs, including CNG, hybrids and EVs, crossed 40% share for the first time, though it urged OEMs to calibrate dispatches through the seasonally weak July window.

Future: President CS Vigneshwar said dealer sentiment stays constructive, with 51.24% dealers expecting growth in July, banking on monsoon recovery, Kharif sowing progress, and easing crude prices after the West Asia ceasefire. FADA called the outlook "cautiously optimistic" ahead of the festive season.

India's Coal Exit At Risk

A potential super El Niño risks straining India's power grid more than any other country's. Rising AC demand, combined with lower hydro and wind output, could cause an 18 terawatt-hour deficit over the year starting July, the largest among 110 nations studied, according to a new report by the Centre for Research on Energy and Clean Air (CREA). This is likely to be met by increased coal generation.

Critical Moment: Coal still supplies over 70% of India's electricity, with its share forecast to drop to 64% by 2027. With El Niño occurring on a two-to-seven-year cycle, India's ability to meet or exceed its solar and storage targets remains the key metric for grid resilience.

The Core earlier reported how El Niño and the West Asia war could together trigger inflationary pressures across the economy.

Setting: CREA director Nandikesh Sivalingam said battery storage and grid upgrades must be accelerated so new demand is met by clean energy rather than coal.

Adani America Relief

The US Department of Justice (DOJ) has urged a federal court to dismiss its criminal case against the Adani Group, arguing that the alleged bribery scheme had only a limited connection to the United States and should not have been prosecuted there. 

Catch Up Quick: The filing marks a sharp reversal from the Biden administration's 2024 indictment, which accused Gautam Adani and other executives of paying about $265 million in bribes to secure solar power contracts in India while misleading US investors during fundraising. The DOJ now says the alleged conduct primarily involved Indian companies, Indian officials and projects in India, making the US jurisdiction too limited to justify prosecution. 

Pivot: It also argued that the case had little chance of securing convictions and did not align with the department's current enforcement priorities. The judge has yet to formally dismiss the charges, but the move signals a significant shift in the Trump administration's approach to overseas anti-corruption cases.

Fewer Deals, More Value

India Inc did fewer deals in the second quarter of 2026, but spent far more on them. A small group of large overseas acquisitions pushed the combined value of mergers, acquisitions and private equity transactions to $36.3 billion, more than double the previous quarter, even as the number of transactions fell 18 per cent to 565, according to Grant Thornton Bharat's Q2 2026 Dealtracker.

Fast Facts: M&A activity drove the quarter with 240 deals worth US $27.9 billion, the highest quarterly M&A value since Q2 2022, led by five billion-dollar cross-border transactions, with outbound deals accounting for 84% of total M&A value.

Sun Pharmaceutical's $11.8 billion acquisition of Organon & Co. was the largest deal and the biggest overseas acquisition by an Indian pharmaceutical company. Private equity moderated to 325 deals worth $8.4 billion, with four new unicorns, Skyroot Aerospace, Square Yards Consulting, Sarvam AI and KreditBee, emerging during the quarter.

By The Numbers: Pharma, Healthcare and Biotech led sector values at US $13.7 billion. IPO activity softened to 11 listings raising US $1.1 billion, while 16 QIP (Qualified Institutional Placement) issuances raised US $2.3 billion.

Record Office Demand

India's office market recorded its strongest-ever first half, with companies leasing 45.5 million sqft of office space in H1 2026, driven by a record 24.6 million sqft leased in the April-June quarter, according to CBRE's India Office Figures Q2 2026 report.

Fast Facts: Developers are also building more. New office supply reached a record 21 million sqft in Q2 and 32 million sqft in the first half of the year. Bengaluru, Delhi-NCR and Mumbai led leasing activity, while Bengaluru, Pune and Ahmedabad added the most new office space.

Global Capability Centres (GCCs), which are offshore offices set up by multinational companies, remained the biggest occupiers, accounting for 43% of all leasing in H1. Meanwhile, flexible workspace operators such as WeWork and Awfis leased the most office space in Q2, ahead of technology companies and banks and financial services firms (BFSI).

How We Got Here: Demand for office space has remained resilient even as global economic uncertainty persists. As The Core has also reported before, multinational companies continue to expand their India operations, particularly through GCCs, making them one of the biggest drivers of commercial real estate demand.

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Good morning.

This week’s interviews return to an old business question: what makes something travel?

For Sharad Malhotra, the answer lies in channels, product credibility and local manufacturing reach, as Nippon Paint looks at a market where both homes and industrial users are asking for more specialised products. For Imtiaz Ali, it was the audience. His film gathered strength because viewers trusted it enough to recommend it to others.

Both conversations point to the same larger idea: growth does not come only from having a large market. It comes from understanding how that market actually behaves.

WEEKEND EDITION

The Paint Market’s New Coat

Why has one of India’s quietest consumer-industrial sectors suddenly become so crowded?

In this episode of Weekend Edition, Govindraj Ethiraj speaks with Sharad Malhotra of Nippon Paint India, about why India’s ₹80,000-crore paint industry is drawing large business houses, private capital and new capacity.

The answer lies in the gap between what India consumes today and what it could consume as incomes, housing, infrastructure and manufacturing expand. Malhotra points out that India’s per capita paint use is still only a fraction of developed markets, while the industry remains heavily tilted towards decorative paints.

For Nippon, that creates two opportunities at once: build a wider consumer brand across India, and use its industrial coatings strength in areas such as automobiles, railways, wood coatings and specialised surfaces. Growth, therefore, depends on products, factories, channel partners and localised supply chains moving together.

Key Insight

India’s paint opportunity is not just larger volumes, but a shift towards products that solve for heat, durability, odour, hygiene and speed.

THE CORE QUIZ

THE MEDIA ROOM

When The Audience Takes Over The Release

Can audiences become a film’s most powerful distribution channel?

In this episode of The Media Room, Vanita Kohli-Khandekar speaks with Imtiaz Ali about Main Wapas Aunga, its unusual theatrical momentum, and what it reveals about film marketing in a post-COVID media environment.

The conversation moves beyond the idea of a sleeper hit. Ali says the team did not fully know how to promote the film, and that audiences effectively rescued it by bringing others to theatres. For him, marketing is not only a media-buying exercise but also an emotional function. In a world of fragmented feeds and “media bubbles”, the people who follow stars online are not always the people who buy tickets.

Key Insight

Theatrical success may now depend less on opening-day noise and more on whether a film creates enough shared feeling for audiences to become its distribution network.

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Dear Reader,

Purujit, a 25-year-old who works in tech, told me that she uses AI for both professional and personal things.

"I use it to unpack what's happening. It helps me structure my thoughts and think through my reaction to a situation," she said.

She's far from alone. A recent Youth Ki Awaaz survey found that 57% of young Indians are now using AI tools like ChatGPT to process emotions, navigate relationships and seek advice.

Psychologists say they're seeing this in their clinics too.

"I've had patients come in and say, 'ChatGPT told me I have bipolar disorder' or 'It told me I have ADHD'," said Dr Medhavi Sood, a clinical psychologist.

Purujit says she likes talking to AI because, for starters, it's free and available 24x7. You can have endless conversations with a chatbot.

But she's also clear that it isn't a replacement for a therapist or real-life relationships.

"There's a lot more nuance when you talk to a real human," she told me.

And experts warn that these tools can come with significant risks.

"The problem with using chatbots for therapy is that they are inherently sycophantic," said Sriya Sridhar, a researcher at IIT Madras who studies AI companionship. "They continually validate beliefs, even when those beliefs are wrong, because they want you to stay on the platform."

And then there's privacy.

Archis Chowdhury, a reporter at BOOM who has reported on AI and mental health, pointed out that conversations with ChatGPT don't come with the same confidentiality protections as conversations with a therapist.

“What if you’re a queer person living in a country where that’s not legal? What if you’re a journalist who shares their dislike for your state? It sounds dystopian but this kind of surveillance is real,” he said.

So, can AI really be your therapist?

That's what we explore in this week's episode of The Signal Brief.

You can find The Signal Brief on YouTube, Spotify, and Apple Podcasts.

Thank you once again for listening and supporting us. We’d love to hear from you; write to us at feedback@thecore.in or find us on Instagram or X at @thesignaldotco.

Best,
Kudrat
on behalf of The Core

THE CORE POLL

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India’s Private Capex Is Turning Out To Be An Adani-Ambani Show

By Dev Chandrasekhar

Read on their own, the Reliance Industries 49th AGM speech and the Adani Group’s 34th AGM speech are pre-commitment documents for the FY27 to FY30 capital plans of two listed empires. Read together, they describe a change in Indian corporate finance: private capex has stopped being a sum of many firms and become a story about two of them. Both chairmen made the share claim themselves. 

Gautam Adani told shareholders his Rs 1.53 lakh crore of new investment was more than 30% of India’s total new private capex for the year. Mukesh Ambani said Reliance had contributed almost a third of the capital invested by India’s top 50 listed firms over five years.

Both claims need a haircut. The Rs 1.53 lakh crore is Adani’s own ‘new investment’ figure; the group’s actual FY26 capex is higher, about Rs 1.76 lakh crore. And his 30% assumes total private capex of around Rs 5 lakh crore, less than half the Rs 11.44 lakh crore the National Statistical Office estimates for FY26. 

Measured against that official base, Adani alone is closer to 15% than 30, and no single group reaches a third. 

Taken together, though, the two are harder to wave away. Adani’s Rs 1.76 lakh crore and Reliance’s Rs 1.44 lakh crore add up to Rs 3.2 lakh crore, about 28% of all private capex in the country.

That’s a share no other Indian promoter-driven private group comes near.

Why No One Else Is Matching Them

The plain reason is access to capital at scale. Adani’s borrowing cost has fallen on rating upgrades, and Reliance can recycle telecom equity through the largest listing in Indian history. Neither option is open to the others. The Birlas, Mahindras, JSW, L&T and Bharti are all investing, but at a fraction of the Rs 1.5 lakh crore a year each of these two now sustains. 

The chosen categories help too: nuclear, satellite spectrum, port concessions and gigawatt-scale grid links need either a balance sheet that can carry regulatory uncertainty or the relationships to manage it, and both groups generate enough cash from their core assets to fund each new bet from within.

Tata is the one group that comes close on spend, with a five-year run-rate above Rs 1 lakh crore a year, but it is built differently. It is held through a philanthropic trust and run by professional managers across listed companies that each have their own boards. 

Adani, Reliance and JSW are promoter-controlled, one family setting the capital plan; Adani and Reliance simply do it at the largest scale. So even where Tata’s capex nears theirs, no single promoter is making the call. The worry here is promoter concentration, not size on its own.

Concentration of this scale creates exposures India’s macro setup is not calibrated for. Stress at either group would travel through banks, mutual funds, insurers, pension money and a base of more than 100 million retail demat accounts.

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Rs 74,781 crore

That is how much loss oil marketing companies suffered up to June 30, for selling petrol, diesel and LPG below cost, owing to the West Asia war that started on February 28, Union Petroleum Minister Hardeep Singh Puri said Thursday.

Context: India was among the countries most exposed to the global oil shock during the war, given that it imports nearly 90% of its crude and about 50% of its gas requirements, with more than half of its crude coming from the region. As the Strait of Hormuz was disrupted, refiners were forced to lean heavily on record Russian oil imports and seek newer sources.

Meanwhile, to recoup some of the losses driven by higher crude costs from the war, state-owned fuel retailers, which control 90% of the market, raised petrol and diesel prices four times in May.

What’s Next: Oil prices have now fallen to their lowest levels since March, amid optimism over US-Iran talks. However, Puri said companies are still processing costlier crude bought two months earlier, largely in April and May, when prices remained elevated.

He added that while crude has been moderating since late June, any cut would depend on prices staying low in the coming weeks.

India, Japan Deepen Ties

India and Japan agreed to deepen cooperation on energy, technology and defence during Japanese Prime Minister Sanae Takaichi's first official visit to New Delhi, as the nations seek to reduce dependence on China and build resilient supply chains.

Modi and Takaichi signed agreements on energy security, AI and metals, with Takaichi citing the need to counter "weaponisation of the economy" through stronger supply chains. Modi, calling Takaichi his "younger sister," said technology would be a key pillar of the partnership.

Overview: The leaders unveiled an energy resilience dialogue on oil stockpiles, alongside talks on nuclear and green hydrogen. On defence, India and Japan will jointly produce advanced naval sensors for the first time, reinforcing Tokyo's Indo-Pacific strategy.

Catch Up Quick: Modi said 120 business agreements were reached over the past year, with Japan pledging ¥10 trillion ($62 billion) in investment over a decade in India. The two leaders also inaugurated Maruti Suzuki's fourth manufacturing plant, in Haryana via video conferencing.

FSSAI Notices to Energy Drink Makers

At least six energy drink makers, including the Indian unit of Red Bull, have received notices from India's food regulator over allegedly misleading claims, as authorities move to tighten regulations of a fast-growing category, Bloomberg reported.

Fast Facts: The Food Safety and Standards Authority of India (FSSAI) said brands including Red Bull, PepsiCo's Adrenaline Rush, Monster Energy, Reliance's Campa Energy Drink and Hell Energy were making functional or therapeutic claims such as "vitalizes body and mind" or "boosts energy levels" not permitted under Indian law.

FSSAI noted that India has not notified any standards for energy drinks. Most energy drinks typically contain caffeine, taurine, B vitamins and sugar or sweeteners. Other brands active in India's energy drinks market include Coca-Cola's Burn, Rockstar and Paper Boat Swing.

Background: India's energy drinks market was valued at $1.5 billion in 2025 and is projected to reach $2.9 billion by 2034, driven by a large youth population, rising fitness culture and longer working hours. FSSAI has stepped up enforcement in recent years, and the absence of notified standards for energy drinks has left the category in a regulatory grey area.

FPIs Stay Bearish

Foreign Portfolio Investors (FPIs) pulled out Rs 49,340 crore from Indian equities in June, extending their selling streak and bringing total outflows this year to over Rs 2.7 lakh crore, according to data from the National Securities Depository Limited (NSDL).

How We Got Here: The outflows come despite a broader rally in Indian markets and reflect caution among overseas investors towards emerging markets. Analysts say rich valuations in Indian equities, particularly compared with other Asian markets, have prompted foreign investors to book profits and shift capital elsewhere. Uncertainty around global interest rates, geopolitical tensions and mixed corporate earnings expectations has also weighed on sentiment.

Pivot: However, analysts said the selling does not necessarily signal weakening confidence in India's long-term growth story. Domestic institutional investors continue to cushion the impact of foreign selling, while overseas investors remain interested in Indian debt markets.

Justice Meets AI

The Supreme Court set aside orders passed by the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) in an insolvency case after finding that the tribunals had relied on fake and AI-hallucinated legal citations. The case involved insolvency proceedings against Essel Infraprojects Ltd, where the NCLT cited several non-existent judgments and attributed fabricated passages to genuine Supreme Court rulings.

How We Got Here: A bench of Justices Pamidighantam Sri Narasimha and Alok Aradhe ruled that courts cannot sustain decisions based on fake precedents because they "subvert the rule of law.” The bench restored the insolvency application to the National Company Law Tribunal for fresh consideration.

The Turning Point: "It is necessary for Courts to adopt a zero-tolerance mode for producing, citing or using AI-generated precedents without verification," the bench said. The Supreme Court also directed the Bar Council of India to frame guidelines and disciplinary norms to prevent lawyers from submitting hallucinated AI-generated material before courts.

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Falling Oil Prices Lift Markets Again

On Episode 917 of The Core Report, financial journalist Govindraj Ethiraj talks to Puneet Pal, Head - Fixed Income at PGIM India Mutual Fund as well as Sanjay Lazar, Aviation Expert.

• Falling Oil Prices Lift Markets Again

• How Are India’s Fixed Income Markets Responding To Rising Bond Flows?

• Indigo Launches A Lite No Cabin Baggage Fare, Will This Work In A Market Like India?

• Meta Wants To Offer Cloud Infrastructure Like AWS And Azure

• Another Deep Seek Like AI Model Is Here

Adani And UltraTech’s Entry Raises Stakes for India’s Cable Makers

By Amritha Pillay

What?

India’s cable and wire makers are entering a period of change. More than a year after two large conglomerates announced plans to enter the business, it is now show time for new entrants UltraTech Cement and Kutch Copper.

The timing is notable. The industry is coming off several years of strong growth, driven by power, railways and real estate, and is expected to become a Rs 1.2 trillion market by the end of the current financial year. 

Demand remains robust, and companies continue to invest aggressively in capacity. But as new entrants prepare to enter the market, industry executives and analysts expect competition to increase.

The impact on profitability, according to them, is likely to remain limited for now. What may gradually come under pressure, however, is the pricing power that incumbents have enjoyed.

Why So? 

Industry analysts are estimating a near 20% increase in capacity by the end of FY27, including both incumbent expansions and additions from new entrants. That exceeds the expected 10% growth in volumes during the same period.

The mismatch does not immediately point to a profitability shock. New businesses require time to stabilise and build distribution channels. 

Industry executives and analysts point out that the competitive impact may be narrower than market reactions initially suggested.

One reason is the distinction between wires and cables.

Mohit Makhija, senior director at Crisil, said that the wires business contributes only around a quarter of the broader cables and wires industry.

He added, “Although the capacities are expected to be commissioned during fiscal 2027, players will require time to establish distribution channels and brand presence limiting the impact this fiscal.”

Building distribution networks and creating brand presence can take time, limiting the speed at which new entrants gain market share.

Executives at Apar Industries expressed a similar view in discussions with analysts.

They expect UltraTech and Kutch Copper to initially focus on wires and light-duty cable products.

“To some extent, you may lose a percentage or so in EBITDA here or there. But the overall size of the pie will continue to grow,” the executive added.

What Next? 

Competition, however, is not the only challenge confronting manufacturers.

The cable and wire industry is also navigating cost pressures arising from the West Asia conflict.

According to a Crisil report, copper and aluminium prices rose 22-27%, while prices of polyvinyl chloride (PVC), another important raw material, increased by around 12% over the previous fiscal year.

These increases led to expectations of price hikes as manufacturers attempted to pass on higher costs to customers.

Some of these pressures have eased after the announcement of a peace deal, although supply-side concerns could continue.

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34,467 units

That is how many electric vehicles (EVs) Tata Motors sold in the first quarter of fiscal year 2026-27, more than double the 16,231 units sold in the same quarter last year. The figure includes both domestic and export volumes.

Shailesh Chandra, MD and CEO at Tata Motors Passenger Vehicles (PVs), said the company's "leadership in electric mobility further strengthened during the quarter, with EV volumes more than doubling to record 112% growth YoY."

By The Numbers: In total domestic PV sales, Tata took the second spot with 1.80 lakh units during the quarter, while Mahindra & Mahindra ranked third with 1.74 lakh units. Market leader Maruti Suzuki clocked sales of 5.25 lakh units.

Setting: Maruti's Senior Executive Officer (Marketing & Sales) Partho Banerjee attributed the company's outperformance to strong rural and urban demand, record CNG sales, improving SUV volumes and a recovery in the entry-level car segment, alongside lower dealer inventory.

Going forward, price increases owing to the West Asia conflict and evolving monsoon conditions are being seen as potential headwinds.

IndiGo Rolls Out 'Lite' Fare

Amid rising jet fuel prices, airlines' biggest expense, pushed up by the Iran war, alongside airspace closures and intensifying competition, Indian carriers are looking for ways to cut ticket prices. One such strategy is unbundling services, and IndiGo has now joined rival Air India in adopting this approach.

The Lead: IndiGo announced on Wednesday the launch of ‘IndiGo Lite,’ an entry-level fare for economy passengers travelling with only cabin baggage. This follows Air India's introduction last month of a basic economy fare excluding complimentary meals, aimed at ‘price-conscious travellers.’

Overview: The new fare offers a lower base price, a free auto-assigned seat, and a 7-kilogram cabin bag allowance. It applies across IndiGo's domestic and international routes, bookable via direct channels from July 1, with travel eligible from July 15.

Squeezed on costs, carriers are increasingly stripping fares to essentials, letting passengers pay only for what they use.

India-Russia Gasoline Trade

Russia has reportedly begun seaborne imports of gasoline from India to address fuel shortages caused by Ukrainian drone strikes on its energy infrastructure, according to a Reuters report.

Context: About 28% of Russia's refining capacity was offline as of June 20, after Ukrainian drones struck refineries across the country, including Moscow's main refinery on June 18. Russia, once a major petroleum products exporter, has banned gasoline and jet fuel exports for months.

Kremlin spokesman Dmitry Peskov confirmed Russia is negotiating fuel imports with several countries, with Indian refiners among the few capable of filling the gap, though shipments would take weeks to arrive by sea.

Fast Facts: At least 60,000 metric tons of gasoline have been dispatched from India to Russia, with two tankers carrying parcels of 30,000 to 40,000 tons each. Russia plans to import 4 lakh tons of gasoline monthly from various countries.

India's crude oil imports from Russia hit a record high in June, with Russian oil accounting for more than half of India's overall imports, up from 36.5% in May, Kpler data showed. India received about 2.70 million barrels per day of Russian oil in June, preliminary data from Kpler and LSEG showed.

India Manufacturing PMI Slows

India's private sector manufacturing activity expanded at its slowest pace in three months in June, as growth in international sales, purchasing activity, employment and output moderated, a private survey showed on Wednesday.

By The Numbers: HSBC's India Manufacturing PMI, compiled by S&P Global, fell to 54.2 in June from 55 in May, also coming in below the flash estimate of 54.5 released last month. The index stayed above the 50-mark separating expansion from contraction, extending the sector's growth streak to 56 consecutive months.

Except for March, rates of increase in both output and new orders were the weakest in four years, with some firms citing subdued client appetite and fierce market competition. Growth in international demand slowed to its weakest level in 39 months as European sales softened. Input cost pressures eased, recording the slowest rise since February, though prices of chemicals, electronic items, gas, metals, petroleum products, plastics, rubber and wood remained elevated.

Forecast: HSBC's chief India economist, Pranjul Bhandari, said the moderation suggests demand cooled slightly after an earlier surge linked to the Middle East conflict, with international sales recording their weakest increase since March 2023.

RBI Sounds Cyber Alarm

The Reserve Bank of India (RBI) has flagged AI-driven cyberattacks as the most significant near-term threat facing banks and non-banking financial companies (NBFCs). In its latest Financial Stability Report, the central bank said that rapid advances in artificial intelligence have enabled cybercriminals to launch more sophisticated and large-scale attacks.

Catch Up Quick: The RBI noted that attackers are increasingly using AI to create convincing phishing emails, deepfakes and voice clones, making fraud harder to detect. Financial institutions also face growing risks from their dependence on third-party technology providers and cloud infrastructure, which could amplify disruptions across the financial system if compromised.

Outcome: While banks have strengthened cybersecurity measures, the RBI said institutions must further improve cyber resilience, incident response and employee awareness. The report highlighted the need for stronger governance frameworks as financial firms adopt AI tools more widely, warning that emerging technologies could create fresh vulnerabilities alongside operational efficiencies.

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Are FPIs Getting Ready To Return To Indian Markets?

On Episode 916 of The Core Report, financial journalist Govindraj Ethiraj talks to Anindya Banerjee, Senior VP and Head of Research for Currency and Commodities at Kotak Securities as well as Sohrab Bararia, Partner, Indirect Tax at Grant Thornton Bharat.

• Are FPIs Getting Ready To Return To Indian Markets?

• Where And How Could The INR Land In Coming Months?

• Nine Years Of GST, The Unfinished Agenda

• Oil Flows Could Go Into Oversupply Soon, Says Goldman Sachs

• Tiktok’s $39 Billion Data Centre Is Coming Up In Brazil

India's Tyre Industry Braces For Margin Pain Despite Demand Hope

By Shubhangi Bhatia

What?

India's tyre makers are caught in a margin squeeze even as demand holds firm. A sharp 20% surge in raw material costs over just four to five months, triggered by the West Asia conflict pushing crude past $100 a barrel and weakening the rupee, forced multiple rounds of price hikes across the industry.

Sanjeev Aggarwal, CFO of JK Tyre, told The Core that unlike past cycles driven mainly by natural rubber, this is a "multi-dimensional impact," with nearly every input, including synthetic rubber, carbon black, processing oils, and fabric, rising in tandem.

The clearest sign of strain is that fleet operators, faced with steeper prices, are choosing to retread old tyres rather than buy new ones, a stopgap that's denting replacement demand in the near term even as OEM orders hold steady. It is a small shift, but a telling one.

Industry experts suggest earlier rounds of cost volatility in the sector were largely driven by sentiment, but this time the pressure is showing up as an actual, physical squeeze on supply chains.

Why?

Crude derivatives make up 60-70% of tyre input costs, and even natural rubber, which is not directly crude-linked, tracks oil indirectly since it's globally substitutable with synthetic rubber. Moreover, India imports 35-45% of its natural rubber, leaving domestic prices exposed to global swings regardless of local supply.

Pass-through to customers is slow and uneven, as OEM pricing is indexed on a lag, while replacement pricing has no fixed schedule, letting competitive pressure delay relief indefinitely.

The same conflict also disrupted exports. CEAT's West Asia sales were "practically zero" in Q4, while Apollo reported similar export hits tied to logistics and energy uncertainty in Europe.

Why It Matters

Crude has cooled to around $72 a barrel, and Hemal Thakkar of Crisil Intelligence told The Core that "beyond Q1 the margins will only get better" since tyre makers won't roll back prices even as costs ease.

But the industry has been here before. In 2022-23, raw material costs spiked over 40%, and it took five to six quarters of margin pain to recover. So is this cycle really shorter, or just starting?

With JK Tyre betting on premiumisation, Apollo on scale, and replacement demand showing cracks through retreading, the real test is which strategy, and which company, survives the gap before prices catch up. That story plays out differently across the boardroom than it does on the shop floor.

Apple’s Starlink Update Sparks Huge Earning Opportunity

Apple just secretly added Starlink satellite support to iPhones through iOS 18.3.

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^{Please read the offering circular and related risks at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A+ Offering.}

^{Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.}

^{The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.}

2.70 million barrels per day

That's how much oil India received from Russia in June, a record high, as refiners snapped up discounted Russian crude to offset supply disruptions from the Strait of Hormuz closure during the Iran war, Reuters reported.

This marked a sharp jump from roughly 2 million bpd in May. Russia now supplies over half of India's total crude imports, which held steady at 4.9 million bpd.

The Shift: The supply shock has prompted India's state refiners to reduce reliance on West Asian long-term contracts, favouring spot purchases and diversified trading arrangements instead, Bloomberg reported.

The Lead: During the crisis, Indian officials engaged in intense diplomacy with Gulf nations and Iran to secure energy flows. India is now exploring new suppliers like Guyana, Brazil, and the US, while planning expanded strategic reserves covering a month's demand.

Adani-MSC $1.4 Bn Port Deal

Switzerland's Mediterranean Shipping Company (MSC) Group will acquire a 49% stake in Adani Ports' Vizhinjam port for $1.4 billion, in what it said is the largest foreign private investment in India's domestic port infrastructure. MSC, the world's largest container shipping company, will make the investment through its unit Terminal Investment.

Overview: Vizhinjam port has a capacity of 1.6 million TEUs and is one of India's few natural deep-water ports. Located about 10 nautical miles from the busy East-West shipping route, it offers a significant geographic advantage connecting Europe, the Persian Gulf, and the Far East.

Adani Ports said the partnership is expected to boost cargo volumes and accelerate ramp-up at the Kerala-based port, though the transaction remains subject to regulatory approvals.

The investment reflects the company's broader strategy of deepening ties with global port operators to drive traffic and fast-track capacity expansion at Vizhinjam, one of its key growth hubs.

Setting: This marks Adani Ports' third partnership with MSC, following earlier joint ventures at its Mundra and Ennore ports.

RBI on Financial Stability

India’s central bank, the RBI, will remain alert to evolving external and domestic risks even though the Indian economy and financial system have shown notable resilience against significant shocks, Governor Sanjay Malhotra said on Tuesday in the foreword to the RBI's half-yearly Financial Stability Report.

Fast Facts: Malhotra said strong growth, low inflation, healthy balance sheets, and ample buffers had helped preserve macro-financial stability, and noted banks and non-banking financial institutions remain sound, backed by strong capital and liquidity positions, healthy profitability, low non-performing assets, and robust credit growth.

Stress tests showed financial institutions are well-positioned to withstand adverse shocks, and markets have functioned in an orderly manner despite global volatility, the report said.

Forecast: Malhotra flagged rising external shock risks from geopolitical conflicts and fragmentation, alongside AI-driven technological disruption, saying global financial stability risks remain elevated and the near-term outlook is uncertain.

He warned that inflationary pressures could push major central banks toward a hawkish stance, tightening global financial conditions, while high public debt, bond market fragilities, stretched valuations, and leveraged non-bank financial intermediaries could amplify future shocks.

The Great Dry Spell

India recorded its fifth driest June since 1901, with monsoon rainfall falling nearly 40% below the long-term average, according to weather department data. 

By the Numbers: The country received just 99.5 mm of rainfall during the month, against the normal 165.3 mm, making June 2026 the driest June in more than a decade. The delayed advance of the southwest monsoon slowed the sowing of key summer crops such as rice, corn, cotton and soybeans, raising concerns about farm output and rural incomes. 

Impact: The rainfall shortfall also intensified heat across northern India, with temperatures crossing 42 degrees Celsius in several areas.

As The Core recently reported, nearly half of India's farmland still depends on rainfall, leaving rural incomes highly vulnerable to prolonged monsoon disruptions and weather shocks. As well, Govindraj Ethiraj argues in his column The Take, that India can no longer treat water shortages as episodic events. Instead, policymakers and consumers may need to adapt to an era of persistent resource scarcity.

iPhone Secrets Exposed

Hackers have exposed Apple's tightly guarded iPhone supply chain after leaking sensitive files stolen from Indian supplier Tata Electronics. Reuters reported that ransomware group World Leaks posted documents on the dark web containing supplier lists, component details and photographs linked to Apple's upcoming iPhone 18 Pro models.

The Lead: The leaked files identify companies supplying key parts, including batteries, cameras and circuit board components. They also reveal internal code names and carry Apple's confidential markings. The hackers also leaked photographs from drop tests conducted at Tata facilities in India.

The Shift: Apple does not publicly disclose which suppliers make specific components, making the breach particularly sensitive. The breach comes as Apple accelerates its manufacturing expansion in India. Industry estimates suggest India will produce about 26% of global iPhones this year.

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Gold Prices Are Falling Even As Stock Markets Are Muted

On Episode 915 of The Core Report, financial journalist Govindraj Ethiraj talks to Rajiv Mitra, Food and Dairy industry Expert as well as Puneet Gupta, Director, India & ASEAN Automotive Market at S&P Global Mobility.

• Gold Prices Are Falling Even As Stock Markets Are Muted

• India Records Driest June In 10 Years Even As June Monsoons Are At 39% Of LPA

• Deutsche Bank Exits India Retail And Wealth Business

• Can Delhi’s EV Policy Be Taken To Other Cities And States?

• Global Air Traffic Was Down 2.2% In May With Middle East Falling Nearly 25%

• The World Is Talking About Proteins, What Are The India Opportunities?

India’s Shift To Untested VB-G RAM G Could Strip Vital Rural Safety Net

By Prasanna Mohanty

Even as El Niño threatens India’s rural economy, with cumulative rainfall running 43% below normal as of June 28, a key income support programme for rural workers is being phased out. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) will be replaced from July 1 by the Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Grameen), or VB-G RAM G.

The transition is already affecting rural employment. Person-days generated under MGNREGS in the first quarter of FY27, as of June 25, fell 49.5% from the same period a year earlier.

The decline comes during the peak demand period for rural jobs, after the rabi harvest and before kharif sowing gathers pace. The reduction in work generation has sharply cut incomes for workers who have relied on the programme for nearly two decades since it was introduced in 2005.

Although the VB-G RAM G is scheduled to begin on July 1, it faces several uncertainties. 

Why? 

It requires states to notify a mandatory 60-day no-work period, of which 15-20 days are expected to coincide with ongoing kharif sowing. The no work period has been mandated to ensure agricultural labour is available during peak sowing and harvesting seasons.

The mandatory approval of new schemes by gram panchayats remains incomplete in many places. Unlike MGNREGS, which guaranteed work on demand as a legal entitlement, VB-G RAM G functions as a centrally sponsored scheme where job availability depends on allocations from the Centre.

Some states appear better prepared than others. Rajasthan, which has been among the stronger performers in implementing MGNREGS and conducting social audits, said it is ready.

Grassroots activists believe that we’re not as prepared as we should be, especially because it’s an El Niño year. 

Mukesh Goswami, an MGNREGS activist from Rajasthan’s Rajsamand district, said there was little clarity among officials at panchayat, block and district levels.

“When we speak with them, they say there is no direction from the state government yet and that they have been instructed not to accept work applications or issue muster rolls from June 15 onwards”, he told The Core.

He said schemes planned under the new programme are yet to be presented or approved by gram panchayats in several districts. In Jharkhand, concerns are similar.

Why Does It Matter? 

The MGNREGS has successfully operated in India for 20 years and has been among the larger employment programmes in rural India. 

The scale of the slowdown this quarter has been significant.

In the first quarter of FY27, as of June 25, work generation fell by 502.6 million person-days compared with the same period a year earlier.  

Chakradhar Buddha, a Vishakhapatnam-based rural development researcher and co-founder of LibTech India, told The Core, “Given that the El Niño threat was foreseen for months, the Centre should have had the good sense of deferring VB-G RAM G and continuing with the MGNREGS to avoid the inevitable transitional pangs and help farmers and other rural workers in their time of distress.”

Apple’s Starlink Update Sparks Huge Earning Opportunity

Apple just secretly added Starlink satellite support to iPhones through iOS 18.3.

One of the biggest potential winners? Mode Mobile.

Mode’s EarnPhone already reaches 490M+ users that have earned over $1B, and that’s before global satellite coverage. With SpaceX eliminating "dead zones," Mode's earning technology can now reach billions more in unbanked and rural populations worldwide.

Their global expansion is perfectly timed, and investors like you still have a chance to invest in their pre-IPO offering at $0.52/share.

With their recent 32,481% revenue growth and newly reserved Nasdaq ticker, Mode is one step closer to a potential IPO.

Tap into a $1T opportunity — invest now at just $0.52/share and get up to 20% bonus.

^{Please read the offering circular and related risks at invest.modemobile.com. This is a paid advertisement for Mode Mobile’s Regulation A+ Offering.}

^{Mode Mobile recently received their ticker reservation with Nasdaq ($MODE), indicating an intent to IPO in the next 24 months. An intent to IPO is no guarantee that an actual IPO will occur.}

^{The Deloitte rankings are based on submitted applications and public company database research, with winners selected based on their fiscal-year revenue growth percentage over a three-year period.}

90,715

That's how many housing units homebuyers purchased across India's top seven cities in the April to June quarter, according to property consultant ANAROCK. 

This was a 6% fall from a year earlier as the conflict in West Asia, global economic uncertainty, supply chain disruptions and concerns over the IT sector weighed on buyer sentiment.

Breakdown: The report said that the Mumbai Metropolitan Region and Bengaluru remained the top-performing markets, together accounting for nearly half of all housing sales during the quarter.

Despite weaker demand, developers launched more homes across the top seven cities, with new supply rising 7% year-on-year, signalling confidence in a demand recovery.

The Big Picture: Quarterly housing sales fell to their lowest level since the first quarter of 2023. Most cities reported lower sales as geopolitical tensions and economic uncertainty prompted many prospective buyers to postpone purchases.

"The housing market is becoming more balanced as supply catches up with demand, with premium housing, GCC hubs and infrastructure-led corridors driving demand. However, geopolitical tensions in West Asia and uncertainty in the IT/ITeS sector are prompting buyers to take a wait-and-watch approach, said Anuj Puri, Chairman of ANAROCK Group.

India Industrial Output

India's industrial output grew 5.1 % year-on-year in May 2026, according to quick estimates released by the Ministry of Statistics and Programme Implementation (MoSPI) on Monday, with manufacturing and electricity and gas supply driving the expansion.

Fast Facts: The Index of Industrial Production (IIP) stood at 122.7 in May 2026, up from 116.7 a year earlier, data showed. Manufacturing, the index's largest component, grew 5%, while electricity and gas supply rose 9.9% and water supply, sewerage and waste management grew 5.5%. Mining and quarrying contracted 1.6%.

Within manufacturing, 16 of 23 industry groups posted positive growth, led by motor vehicles, trailers and semi-trailers (up 14.5%), electrical equipment (up 20.8%), and basic metals (up 4.6%).

The Shift: MoSPI said it had adopted the Output Producer Price Index as the deflator for the new IIP series (base year 2022-23), replacing the Wholesale Price Index for item groups making up 36.02% of the index's total weight.

Apple Challenges CCI Antitrust Findings

Apple has hit back at India's antitrust investigators, the Competition Commission of India (CCI), accusing it of copying claims made by rival companies instead of doing its own proper investigation, Reuters reported.

The CCI had earlier found that Apple broke competition laws by controlling how apps and payments work on iPhones. Apple says it's actually a “minuscule player” in India, with less than 6% of the smartphone market.

Overview: Apple also claims the investigators copied data from a separate case in Europe, even though India's market is different. It further says it was never given a chance to explain its side in person, something Google was allowed to do in a similar case.

Setup: The CCI says Apple has been delaying the case for over two years ​by not submitting responses to the investigation ⁠findings.

All the parties in the case will meet for a closed-door hearing on July 21, and if found guilty, Apple could potentially face a fine that could run into millions of dollars.

The Battle Over Scrap

India has urged the European Union to exempt it from planned restrictions on metal scrap exports, warning that the curbs could undermine gains from the recently concluded India-EU free trade agreement. 

The EU plans to tighten controls on exports of steel and aluminium scrap to non-OECD countries, including India, as it seeks to retain more recyclable material for its own industries and climate goals.

Flashpoint: But, India relies heavily on imported scrap as a cheaper and more energy-efficient raw material for steel and aluminium production. In 2025, India imported 366,000 tonnes of aluminium scrap from the EU, making it the bloc's largest buyer. Industry executives say the proposed restrictions could raise input costs, disrupt supplies and hurt India's manufacturing sector.

Impact: New Delhi has asked Brussels to provide relief from the measures during ongoing discussions on implementing the trade pact, arguing that unrestricted scrap flows remain crucial for both industry and decarbonisation efforts.

Delhi’s Aggressive EV Gambit

New Delhi has finalised a new electric vehicle (EV) policy worth Rs 15,000 crore over four years, aimed at tackling the city's severe air pollution. Car owners scrapping vehicles bought before April 2020 for an EV will get up to Rs 1 lakh incentive. Battery EVs priced up to Rs 30 lakh will be exempt from road tax and registration fees, charges that typically amount to 4%-10% of a car's price.

The Lead: Electric two-wheeler buyers will receive a Rs 30,000 incentive in the first year, tapering to Rs 10,000 by the third year. From April 2028, Delhi will stop registering new petrol and other non-electric two-wheelers. The policy also funds 32,000 EV charging points, though hybrid vehicles are excluded.

Setting: Set to take effect July 1, the policy is expected to benefit EV makers including Tata Motors, Mahindra & Mahindra, TVS Motor, Bajaj Auto and Ather Energy.

Tarun Mehta, Co-founder & CEO, Ather Energy said the policy marks one of the most significant city-level pushes for electrification in India.

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Stocks Fall Again Because Of Monsoon Concerns

On Episode 914 of The Core Report, financial journalist Govindraj Ethiraj talks to Rahul Matthan, Founding Partner of Trilegal. We also feature bites from our recent Weekend Edition featuring Rajani Sinha of CareEdge Ratings, Somashekhar Vemuri of Crisil Ratings and Manas Majumdar of PwC.

• Stocks Fall Again Because Of Monsoon Concerns Even As Rains Pick Up.

• Electricity Consumption Spike Drives Up Industrial Output.

• Most NRI Deposits Into New Schemes Expected From The Gulf Region.

• Why India Needs A Single Destination For Its Multiple Laws And Rules.

• Residential Sales Dropped 6% In Q2 2026 As Uncertainty Rules.

Good morning.

In India’s economy, where does power actually sit between a trend and its outcome?

The Weekend Edition explores that the benefit of lower crude prices is shaped by taxes, oil company recoveries, inventories and the rupee. Rakesh Vyas points to lending as the link between savings, consumption and CapEx, making credit one of the main control points for future growth. Madhur Singhal shows how, in insurance, the policy may come from the insurer but the relationship often belongs to the agent.

The larger question is not just where growth is visible, but who controls its flow: the state, the lender, the intermediary, the company or the customer.

WEEKEND EDITION

What Lower Oil Prices Mean For India

As crude prices ease after weeks of West Asia uncertainty, how much relief can India really expect?

In this episode of Weekend Edition, Govindraj Ethiraj speaks with Rajani Sinha of CareEdge Group, Somasekhar Vemuri of CRISIL Ratings and Manas Majumdar of PwC India, who examine what lower oil and gas prices mean for India’s economy, companies and energy supply chains. The fall in crude is a clear macro positive for growth, inflation, government finances and the current account, but the guests caution that the relief may be fragile if geopolitical risks return or countries begin rebuilding depleted inventories.

India has, however, built resilience. India’s corporate balance sheets are stronger, supply chains have diversified and the current account is being supported by services exports and remittances. But pump price cuts may be delayed, CapEx remains selective and the focus could now shift from oil uncertainty to monsoon risk.

Key Insight

A weak monsoon may not hurt headline growth as sharply as before, but it can still test rural incomes, food inflation and consumption sentiment.

SPECIAL EDITION

India’s Insurance Market Has Scale But Lacks Stickiness

Why do Indian policyholders switch insurers so easily, yet remain loyal to the person selling them the policy?

In this episode of the Special Edition, Govindraj Ethiraj speaks with Madhur Singhal of Praxis Global Alliance, who explains why India’s general insurance market is still controlled less by insurer brands and more by agents, dealers and intermediaries. Consumers may buy policies from large, familiar companies, but the relationship is often owned by the person who explains the product, handles the renewal and promises support during a claim, making trust more important than price alone.

The result is a market where insurers underwrite risk but often lack direct visibility into the customer. This limits their ability to price policies better, cross-sell relevant products, build loyalty programmes or use data for more personalised insurance. He further talks about health insurance, and how it lacks simple, timely guidance on exclusions, room limits, hospital networks and claim conditions before renewal.

Key Insight

For insurance to grow, consumers need products they can understand before they need to claim.

The Three Forces Driving India's Next Bull Market

As markets move to a new phase, where will the next wave of returns come from?

In this episode of Special Edition, Govindraj Ethiraj speaks with Rakesh Vyas of Quest Investment Managers who takes a bottom-up view of Indian equities, arguing that despite macro risks such as oil, geopolitics and currency pressure, several long-term domestic themes remain intact, that are, financialisation, rising consumer spending, and energy infrastructure.

The common thread across these themes is lending: which will fund CapEx, support consumption and deepen the formal financial system. With earnings improving and expectations now more measured, Vyas believes India's domestic strengths remain intact despite global uncertainty.

Key Insight

With valuations fairly priced, investors should not expect broad market re-rating. Returns will depend on identifying companies that can deliver durable earnings growth.

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THE TEAM

✍️ Zinal Dedhia, Kudrat Wadhwa | ✂️ Rohini Chatterji | 📹️ Manjoosha | 🎧 Joshua Thomas

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Dear Reader,

Arif, a 39-year-old video producer, told me about an uncomfortable experience he had while using BlaBlaCar, a French intercity ride-sharing platform. 

He had booked a ride from a small town in Uttar Pradesh to Delhi. 

When the car arrived though, things didn't match up. The driver wasn't the same person listed on the app. The car was overcrowded. He was even asked to pay extra. And when he tried to complain, he struggled to get a response from the company. 

Most of Arif's other experiences on the platform have been alright. Still, he says he doesn’t recommend the service.

"I'd only recommend it to a young man travelling alone. For women and other travellers, I'd hesitate," he told me.

I haven't used BlaBlaCar. 

Even taking an Uber alone late at night can feel unsettling. With Blablacar, you're sharing a tight space with the same strangers, for hours. A quick search online throws up enough horror stories to make anyone think twice.

And yet, BlaBlaCar is growing in India. Moreover, carpooling itself is back in conversation, as it often happens whenever fuel prices rise or pollution reaches alarming levels. 

On paper, it seems obvious.

But despite repeated pushes, carpooling hasn’t become mainstream in India.

Safety is one reason. Convenience is another.

Take Raja Chatterjee, a Mumbai-based media professional. He carpooled for years through WhatsApp groups and says it helped him save money. What’s more, he even made friends through it.

But soon, he switched carpooling for Cityflo buses–a service he uses to date. 

Cityflo is more expensive, but he chose it over carpooling because it’s much more convenient. No more hunting for rides. No uncertainty about whether someone on his route would be travelling that day.

That gets to the heart of the issue. 

Carpooling offers benefits to society: less congestion, lower emissions and reduced fuel consumption. But for individuals, the calculation can look vastly different.

This week on The Signal Brief, I tried to answer a simple question: If carpooling makes so much sense, why don't more Indians do it? Tune in to the episode to hear from consumers, industry people and experts. 

You can find The Signal Brief on YouTube, Spotify, and Apple Podcasts.

Thank you once again for listening and supporting us. We’d love to hear from you; write to us at feedback@thecore.in or find us on Instagram or X at @thesignaldotco.

Best,
Kudrat
on behalf of The Core

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Why New Infrastructure Won’t Fix Mumbai’s Power Grid Problem

By Dev Chandrasekhar

When the lights went out in Mumbai last week, the usual explanations rolled out. Cables are eighty years old. Not enough power is generated inside the city. No batteries to save daytime solar for the evening rush. Versova residents slept on the beach. For a city that has spent decades trading on the assurance of round-the-clock supply, the spectacle was new.

The 2022 committee set up under the state Chief Secretary to fix Mumbai's grid was reminded that it exists. BEST pulled out its Rs 6,000 crore plan to replace ageing wires. The new Kudus–Aarey power line, switched on in April this year, was held up as proof that the city is finally taking the problem seriously.

All of this is true. None of it is the actual problem.

Mumbai is India’s only metropolis where four rival utilities carve up the same footprint without a central commander. Until the city establishes a single, unified system operator to steer real-time crises and anchor massive clean-energy contracts, billions in infrastructure spending will do little to prevent the next grid collapse.

Too Many Cooks 

Mumbai is unusual. Most large cities are served by one power company. Tokyo has TEPCO. Singapore has SP Group. New York has Con Edison. Seoul has KEPCO. Bengaluru has BESCOM, Chennai has TANGEDCO, Kolkata has CESC, and Hyderabad has TSSPDCL. 

Mumbai has four. BEST serves the old island city. Tata Power and Adani Electricity hold parallel licences for the western and central suburbs, where both companies maintain their own networks for the same households. Maharashtra State Electricity Distribution Co Ltd (MSEDCL) covers the periphery. Each buys its own power. Each manages its own customers. Each looks after its own wires.

Delhi has multiple discoms too, but each runs its own demarcated zone — Mumbai is the only Indian city where two licensees serve the same household.

In practice, this means no one person's job is to keep Mumbai's lights on. Each of the four companies handles its own patch. When the city's peak demand hit 4,608 megawatts on June 8 this year, a record, it was managed by four separate control rooms running their own playbooks. There is no captain of the ship.

This is the gap that no new cable or substation can fill.

On paper, and largely in practice, Mumbai already has an islanding scheme, set up in 1981 by Tata Power. Standby charges paid by the city's discoms to MSEDCL for backup capacity sit as a line item in every tariff order.

Since embedded generation inside the city is more expensive to run than rural baseload, Mumbai’s consumers pay a premium per unit over the rest of Maharashtra precisely to fund this insurance, and the spread shows up on every monthly bill.

Neither held up in October 2020, leading to a massive blackout. When the cascade hit, Mumbai's embedded generation came in at 1,394 megawatts against a demand of over 2,800 megawatts.

This matters more than it sounds, because the next big question, India's shift to round-the-clock clean power, runs into the same wall.

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$13 billion

That's how much American tech and e-commerce giant Amazon plans to invest in India by 2030 to expand its artificial intelligence and cloud infrastructure.

Amazon CEO Andy Jassy, who is currently in India, said, "As we grow Amazon in India, our business priorities continue to align with India’s priorities of democratizing access to AI, digitising small businesses, creating jobs, and enabling exports."

Context: This investment will be on top of its planned $35 billion funding announced in December 2025. This will take its total investment in India to $48 billion by 2030.

Fast Facts: Amazon says this will help expand its cloud and AI infrastructure in two regions — Mumbai and Hyderabad. "Both AWS Regions enable customers to securely store their data within India and give them access to the world’s most advanced AI and cloud technology, including high-performance Trainium chips and AWS’s leading inference engine Amazon Bedrock," the announcement said.

India-Iran Energy Talks

India's Oil Minister Hardeep Puri met Iran's Petroleum Minister Mohsen Paknejad on Thursday, saying he explored energy cooperation and that India remained committed to energy security through dialogue.

Fast Facts: Oil prices fell to pre-war levels the same day as flows through the Strait of Hormuz neared normal, even as Iran's Revolutionary Guards reportedly warned vessels to stick to Tehran-designated routes, rejecting new shipping lanes.

Brent crude dropped below $72.48 a barrel, while WTI hovered below $70.

The Shift: US Secretary of State Marco Rubio, touring the Gulf to build support for a preliminary Iran deal, said Washington would act if Iran threatened the strait, while ruling out shipping tolls, Reuters reported.

But Where’s The US Trade Deal?

Even as negotiations have dragged on for months, Commerce Minister Piyush Goyal said in London on Thursday that India and the United States are nearing a trade deal.

Context: Talks concluded this week in New Delhi between Goyal and US Trade Representative Jamieson Greer, days after Trump and Modi called an agreement "very close" at the G7 summit. Both sides described seeking a "balanced" deal, though neither confirmed whether key differences had narrowed.

The Core earlier noted how the commercial rationale of the deal collapsed once Washington's offer to cut tariffs from 25% to 18% was nullified, even as Indian capital outflows continue, raising questions over why New Delhi is still chasing the deal at all.

Setup: India had insisted it must secure a competitive edge over rival exporting nations before signing. Washington's Section 301 probe into India remained the key obstacle, with New Delhi demanding its termination and assurances against future probes before finalising the pact.

Controlled Damage?

The West Asia war is on hold, and the Strait of Hormuz has reopened. This is good news for India's industries. According to rating agency Crisil, the US-Iran truce could ease pressure on India Inc’s profitability this fiscal, with the hit to operating margins now expected at around 100 basis points instead of the 200 basis points feared earlier.

Trigger: Crisil estimates that if the ceasefire holds, two-thirds of the 34 sectors it assessed will see minimal disruption, with crude prices softening and gas supplies gradually normalising. “The recent sharp correction in crude oil prices and likely normalisation of gas supplies are beneficial for India Inc as that would ease cost pressures meaningfully,” said Subodh Rai, managing director of Crisil Ratings.

Context: Airlines, ceramics, speciality chemicals, flexible packaging, polyester textiles and diamond polishing remain the most exposed sectors, facing margin pressure from higher input costs and supply disruptions.

However, Crisil expects no sector to suffer a severe hit to revenue or profitability. Oil marketing companies and fertiliser makers are likely to be among the biggest beneficiaries of easing energy costs, though risks remain from a fragile US-Iran agreement and a potential El Niño-driven hit to rural demand.

China-Linked Investment To Get A Nod

India is set to approve a $370 million investment from Horse Powertrain, a hybrid-engine venture backed by China's Geely and France's Renault, marking one of the biggest Chinese-linked manufacturing investments in years, Bloomberg reported.

The last major Chinese auto investment came in 2017, when SAIC bought General Motors’ plant to launch MG Motor, later restructured under Indian ownership.

Overview: The deal lets Horse invest in Renault's Indian operations to build hybrid powertrains, starting at its Chennai plant, for Renault and Nissan cars sold locally. It would be among the first approvals since India eased March rules on investment from bordering nations, aimed chiefly at China.

Setup: Horse, formed in 2024 by Geely and Renault, with Saudi Aramco holding a stake, runs 18 plants globally. "We are expecting a formal decision soon," the company told Bloomberg.

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Does Amazon Have A Real Shot At Shaking Up Quick Commerce?

By Pritha Pahari

What?

Amazon CEO Andy Jassy is visiting India for the first time since succeeding founder Jeff Bezos in 2021. This comes as Amazon is making an attempt at quick commerce in India through Amazon Now, its 10-to-15-minute delivery service. He is in Mumbai and is expected to meet senior government officials and industry leaders, with a meeting with Prime Minister Narendra Modi also possible.

The company had tried something similar before with Amazon Food, which it shut down in December 2022 after onboarding around 3,000 restaurant partners, including McDonald's and Domino's, without making a dent in the Zomato-Swiggy duopoly. "Amazon has the capital. Blinkit, Zepto, and Instamart still have the execution advantage,” said analyst Sandeep Abhange.

This time, the plan is bigger. Amazon Now started as a small pilot in Whitefield, Bengaluru, in early 2025 with just four dark stores. It has since expanded to Delhi and Mumbai, with plans to cross 300 dark stores across the three cities by the end of 2025, backed by a Rs 2,000 crore investment in fulfilment, sortation, and delivery infrastructure.

It's entering a market that's already crowded. Blinkit has around 2,100 dark stores and roughly 48% market share. Zepto runs more than 1,100 dark stores across 66 cities. Swiggy Instamart has 1,100-1,200 dark stores and holds a 23-25% share. Together, these three control well over 90% of the market.

Why?

Quick commerce isn't restaurant delivery. It's an extension of retail, and that's an area where Amazon already has years of experience in India. It has supplier relationships, warehousing, and last-mile logistics already built for its core marketplace business. Most quick commerce platforms spend their early years convincing FMCG and grocery brands to list with them. Amazon has largely skipped that step.

There's also a defensive angle. Quick commerce has been pulling customers away from Amazon's regular marketplace, especially in long-tail categories. Getting into the space is partly about winning back shoppers it's already lost.

Amazon's biggest asset here is its Prime customer base, a high-income group that already overlaps heavily with quick commerce users.

What's next?

Scaling up will be expensive and slow. Abhange estimates Amazon could need $1.5-2 billion and 3-4 years just to build a network comparable to what Blinkit and Zepto already have. Density matters more than size in this business; a dark store only works if there's enough order volume nearby, and incumbents have spent 4-5 years fine-tuning that at the neighbourhood level.

Amazon also has timing working against it in another way. Blinkit has already reached EBITDA breakeven, and Zepto is moving toward profitability ahead of its IPO. The market it's entering isn't burning cash the way it once was.

A top-four spot looks achievable. Cracking the top three will take longer.

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$3.4 trillion

That's the combined value of India's 500 most valuable companies, according to the 2025 Burgundy Private Hurun India 500 list released by Axis Bank's Burgundy Private and Hurun India, now in its fifth year.

By The Numbers: To make the list this year, a company needed a valuation of at least Rs 10,230 crore (about $1.1 billion), up 7% from last year's cutoff. There were 95 new entrants worth Rs18.45 lakh crore combined, the highest number since the list began.

Reliance Industries held on to the No. 1 spot for a fifth straight year. Bharti Airtel moved into the top tier, adding Rs 7.6 lakh crore in value since 2021. Sarvam AI became the first Indian-made large language model company to join the list.

Fast Facts: Cricket got a mention too: five IPL franchises, Kolkata Knight Riders, Chennai Super Kings, Royal Challengers Bengaluru, Rajasthan Royals and Punjab Kings, appeared on the list for the first time, a sign that cricket teams are now being valued like regular companies.

The list is also spreading beyond the big metros. Smaller cities like Rajkot, Bikaner, Kumbakonam and Rajnandgaon all had companies featured this year, and the list now spans 50 cities across 18 states. Together, these 500 companies employ 8.9 million people and paid Rs 3.23 lakh crore in taxes.

Oil Tanker Rates Soar

A shortage of available ships in the Persian Gulf has pushed shipping costs to their highest level this year. South Korean company Sinokor has provisionally booked a vessel to carry oil from the Gulf to India at 897% of the freight benchmark, Bloomberg reported. No dates, buyers or ports were specified, though.

Overview: Sinokor, which has expanded aggressively in the tanker market, has remained active through the war and recently offered very large crude carriers (VLCCs) to load Iraqi crude, signalling confidence in passage through the Strait of Hormuz despite constrained traffic.

Setup: Following an interim Iran-US deal, shipowners are sending more vessels back to the Gulf, as roughly 65 empty VLCCs could reach the region within a week.

Meanwhile, a Reuters report said three tankers carrying 5 million barrels of oil were already leaving the strait on Wednesday, with two headed to Asia. The easing of tensions is freeing up oil that had been stuck in the region.

No Deal in Sight

Talks between India and the US concluded in New Delhi, but with no clear word on whether a trade deal is any closer. Commerce Minister Piyush Goyal said discussions with US Trade Representative Jamieson Greer had wrapped up, without saying if the two sides had closed the gaps still blocking an interim agreement.

Both governments said they want a "balanced" agreement with real gains for businesses, farmers, workers and consumers, covering market access, digital trade, supply chains and non-tariff barriers.

Context: Greer's trip came days after US President Trump told Prime Minister Modi at the G7 summit that a deal was "very close." India has been more cautious, wanting better terms than rival countries before signing, and assurances that it won't face Section 301 investigations once the deal is signed.

How We Got Here: In February, India and the US agreed to cut tariffs on Indian goods from 50% to 18%. But the US Supreme Court then ruled that Trump's broad tariff powers, the same ones used to set those rates, were illegal, leaving it unclear if the deal could actually be enforced. Around the same time, the US opened separate Section 301 investigations into India and other countries over issues like forced labour and excess capacity, which India wants dropped through negotiation, not one-sided action.

India Weighs New Pilot Licence

An Indian government panel has proposed a new pilot licence that would shift more training to simulators, cutting real aircraft flying time to 100-120 hours from the current 200-hour minimum, Reuters reported.

The Multi-Crew Pilot Licence, used globally by carriers like Qatar Airways and easyJet, aims to build a steadier pipeline of junior pilots as airlines expand fleets amid shortages.

Catch Up Quick: The draft, prepared by a committee including IndiGo and Air India representatives, says greater simulator use could lower operational risk without compromising rigor. IndiGo has backed the proposal; the airline has just 7.6 pilots per narrowbody jet, below the global average of 10.

Last year, The Core reported how this pilot training overhaul may not solve India’s pilot crunch.

Setup: Flight-training organisations have pushed back, urging a 150-hour minimum, warning reduced real-flying time could weaken cadets' hands-on skills in emergencies, a concern the draft itself acknowledges.

China's EV Tech Sneaks In

Though India has largely barred Chinese automakers since the 2020 border clash, their EV technology is gaining ground through supply deals. Tata Motors will use Chery's platform to build premium EVs, structured as a tech-free supply arrangement to navigate political sensitivities, while Uno Minda has a powertrain joint venture with China's Inovance.

Analysts told Reuters that the partnership is "inevitable" if India wants a bigger manufacturing role.

Setting: JSW Motor has a similar Chery tie-up, reportedly paying roughly $209 million upfront plus royalties to adapt its platforms, targeting 300,000 vehicle sales by 2030.

Critical Moment: However, not all deals survive. Beijing's 2025 export curbs forced Amara Raja to scrap its battery-technology licensing pact with Gotion, pushing it toward in-house R&D instead.

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Oil Prices Fall Below Pre War Levels As Optimism Rises

On Episode 910 of The Core Report, financial journalist Govindraj Ethiraj talks to Jitendra Gohil, CIO - Listed Equities at Bajaj Alternate Investment Management Limited as well as Soumya Mohanty, MD & Chief Client & Solutions Officer, South Asia at Kantar.

• Oil Prices Fall Below Pre War Levels As Optimism Rises

• How South Korean Supertankers Are Ruling The Persian Gulf

• Shaping Market Strategies Based On Geopolitical Moves

• India’s Most Creatively Effective Brands Include Oldies Taj Mahal Tea And Tata Salt

• India Is Using More Domestic Coal Instead Of Imported

India's FMCG Giants Face A Cautious Consumer Mood Shift

By Katya Naidu

What? 

Indian household budgets have been stress-tested many times over in the last few months, because of which they’re now becoming more careful about where and how they spend. Rising LPG prices, higher fuel costs and persistent inflation are beginning to reshape consumption patterns, creating a new challenge for FMCG companies already grappling with rising input costs.

Even as supply-side worries around LPG have eased, households remain under pressure. LPG prices rose sharply by Rs 89 per cylinder, followed by increases in diesel and petrol prices, further tightening household budgets. 

The sector, directly linked to everyday spending, is expected to see slower growth amid inflationary pressures and the looming threat of El Niño.

The El Niño phenomenon is marked by unusually warm surface waters in the Pacific Ocean. This temperature spike causes trade winds to weaken or change direction, which ultimately disrupts rainfall patterns across Southeast Asia.

Indian households have increasingly shifted to batch-cooking, skipping a few cooking occasions, and cutting down on snacks or special dishes prepared at home, a Worldpanel by Numerator survey found. 

“Notably, eating out or ordering in does not get a meaningful boost, which is a clear indication that the response to LPG stress is not aspirational substitution, but constrained optimisation – doing less with less, within the home,” the Worldpanel report said. 

Why Does It Matter 

The moderation in spending appears sharper in categories that consumers can defer.

The chocolates and confectionery segment, for example, grew only 0.9% in the January-March quarter of 2026 compared with 9.2% a year earlier. Growth improved to 5% in April but moderated to 4.1% in May. Home care, meanwhile, contracted by 6.5% and 3.7% in April and May, respectively, according to Bizom data.

These trends are beginning to affect distribution channels as well.

“Overall, kiranas appeared more cautious towards the end of the quarter, prioritising high-rotation and essential categories while limiting exposure to slower-moving discretionary segments,” said a Bizom JFM quarterly report.

FMCG companies are simultaneously dealing with rising cost pressures. Like households, their challenges are broad-based. A weaker rupee has increased the landed cost of imported products such as packaging materials, chemicals, fragrances and edible oil derivatives.

Higher crude oil prices have increased freight, packaging and energy-linked costs, while edible oil volatility has affected categories including packaged foods, bakery products, snacks, soaps and personal care.

“Industry data indicates that large FMCG companies have already implemented price increases of around 4–5%, while also reducing pack sizes in select categories to protect important Rs 10 and Rs 20 price points. The risk is clear. If companies over-index on price hikes, volumes may weaken. If they over-index on grammage reduction, consumers may experience shrinkflation fatigue,” Avinash Chandani, partner at Deloitte India, told The Core.

Shrinkflation refers to companies reducing the quantity of products in a packet while keeping prices unchanged.

Despite the double-edged pressures of rising costs and lower spending power, India is not yet in the throes of a consumption slowdown but an “affordability re-architecture”, Chandani believes.

“Indian households are still consuming, but they are becoming far more deliberate about what they buy, where they buy it, how frequently they buy it, which pack size they choose, and which occasions they are willing to spend on,” he added.

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57.4

That's HSBC's flash India Composite Purchasing Managers' Index (PMI), which reflects India’s private sector growth compiled by S&P Global for June, down from May's 59.3.

Context: A PMI reading above 50.0 signals expansion, so India's private sector is still growing but at its slowest pace in three months. The services PMI slid to a 17-month low of 57.3 (from 59.8), while manufacturing eased to a three-month low of 54.5 (from 55.0).

Overall, new orders, the key demand gauge, grew at their weakest pace since March, with firms citing competitive pressures and gas shortages. Exports were mixed, with services seeing slightly faster international sales growth, while manufacturers posted their weakest rise in new export orders since March 2023.

This survey-based softness lines up with India's eight core infrastructure sectors, which make up 40.27% of the IIP, growing just 0.5% in May, a seven-month low, down from 1.8% in April.

How We Got Here: Softer demand is persistent through hiring and pricing. Employment rose only marginally in June, the weakest in the current six-month expansion streak. Cost pressures eased for a third straight month to their lowest since January, and business confidence slipped below its long-run average, with sentiment among goods producers at its weakest in nearly four years.

Trump Jr’s Undisclosed Adani Meeting

Billionaire Gautam Adani reportedly met businessman and US President’s son Donald Trump Jr in an undisclosed meeting in Ahmedabad last November, as the billionaire's lawyers were working to kill his federal bribery indictment, and as Adani tripled his US investment pledge to $30 billion, according to a Bloomberg exclusive.

Context: The meeting, during a trip Trump Jr. took for a wedding and wildlife tour, came roughly a year after the Department of Justice (DOJ) accused Adani and his nephew Sagar of a $250 million bribery scheme in India.

Adani's younger son, Jeet Adani, separately met Trump Jr. at Mar-a-Lago last year. A person close to Trump Jr said the case never came up in either meeting; a spokesperson said: "Don had zero to do with DOJ's actions."

In May, the DOJ moved to drop the charges, days after Adani and Sagar paid $18 million to settle an SEC fraud case, and Adani Enterprises paid $275 million to resolve a Treasury sanctions probe, both without admitting wrongdoing.

Why now: Senators Elizabeth Warren and Richard Blumenthal are pressing the DOJ on whether Adani's investment pledge swayed the decision. The DOJ denies it, while Adani's net worth has since rebounded to $120.3 billion.

Telegram Under Fresh Scrutiny

Telegram has come under fresh scrutiny in India after the Home Ministry's cybercrime watchdog, the Indian Cybercrime Coordination Centre (I4C), alleged in a court submission that the platform was being used to share child sexual abuse material and perpetrate cyber fraud, Reuters reported.

The findings formed part of the government's defence of a week-long ban imposed after the National Eligibility cum Entrance Test - Undergraduate (NEET-UG), a major medical entrance exam paper, was allegedly leaked through the messaging platform.

Overview: The government’s report said Telegram's privacy features, including allowing users to interact without revealing phone numbers, make identity detection difficult and are being exploited by cybercriminals.

Setup: India has received more than 6.88 lakh complaints since 2023 alleging Telegram was used for cyber fraud, resulting in estimated losses of $750 million, according to the report.

Trade Deal Talks Advance

The United States (US) is focused on securing a fair and reciprocal trade deal with India that expands market access for American exporters and benefits both countries, the US Embassy in India said on Tuesday. The remarks come a day after the Commerce and Industry Minister Piyush Goyal said India is seeking a tariff advantage over competing Asian economies.

US Trade Representative Jamieson Greer met Goyal in New Delhi as the two sides stepped up efforts to conclude an interim trade agreement.

Fast Facts: The talks come amid uncertainty over the implementation of a trade framework announced in February after the US Supreme Court struck down President Donald Trump's global tariff regime. India has reportedly sought the closure of ongoing US Section 301 investigations and wants assurances against future tariff actions.

Setting: Despite the outstanding issues, both sides are pushing to finalise a deal following last week's meeting between Prime Minister Narendra Modi and Trump.

Bank Deposit Mix Shifts

India's banking sector deposits rose 13.5% year-on-year to about Rs 262 trillion in FY26, supported by liquidity measures and tax-related benefits. However, credit growth continued to outpace deposit mobilisation, keeping the system-level credit-deposit ratio above 81%, according to a Crisil Intelligence report.

Fast Facts: Deposit composition continued to shift towards term deposits, whose share rose to 61% from 58% in FY19, while the current and savings accounts (CASA) ratio fell to 39% from 42%.

Household deposits remained the largest funding source, but their share declined, reflecting growing allocation of savings to alternative investment avenues and increasing participation by institutional depositors.

Future: Banks are expected to focus on rural and semi-urban markets, where CASA ratios remain significantly higher than in metropolitan centres.

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Did A Big IPO Break The Market Just Now?

On Episode 909 of The Core Report, financial journalist Govindraj Ethiraj talks to Ajay Srivastava, Founder at the Global Trade Research Initiative (GTRI) as well as Deepak Ballani, Director General at the Indian Sugar and Bio-Energy Manufacturers Association (ISMA).

• Did A Big IPO Break The Market Just Now?

• Oil Prices Continue To Slide Downwards As Talks Progress

• India’s Banking Sector Saw Higher Credit Growth Than Deposit Growth In Fiscal 2026

• What Are The Real Options Ahead Of India On The US-India Trade Deal?

• Results Of A IIT-Delhi Led Study On Flex Fuel Compatibility For Ethanol Fuel Is Out. What Does It Say?

The Rs 15 Lakh Crore Mystery Inside Rajesh Exports' Global Revenue Machine

By Sudarshan Bhandari and Nimish Maheshwari

What? 

For years, Rajesh Exports looked like one of India's greatest corporate success stories.

The Bengaluru-based company built its reputation as a global gold powerhouse, processing and exporting precious metals at a scale few Indian firms could match.

After it acquired Swiss refiner Valcambi in 2015, Rajesh Exports became an international player with ambitions stretching across the global bullion trade.

The numbers appeared to keep up with this narrative.

Between FY21 and FY26, Rajesh Exports reported annual consolidated revenue ranging from Rs 2.4 lakh crore to nearly Rs 7.8 lakh crore. At its peak, the company was reporting sales larger than many of India's most recognised industrial groups.

However, repeated non-compliance, as The Core had reported in January 2024, and a complaint filed months later, made regulators look at the company more critically.

Who were the customers behind all that revenue?

A 109-page interim order issued by SEBI said that roughly Rs 15.15 lakh crore of revenue reported through overseas subsidiaries over five financial years could not be reconciled with the audited financial statements of the Swiss business that sat at the heart of Rajesh Exports' global operations.

The company has denied all wrongdoing and said it will cooperate with a fresh forensic audit.

How Did We Get Here?

The acquisition of Swiss refiner Valcambi in 2015, one of the world's largest precious-metals refiners, gave Rajesh Exports a global footprint and an explanation for the extraordinary scale of revenue it would subsequently report.

By FY25, more than 98% of Rajesh Exports' consolidated revenue was being attributed to overseas subsidiaries. The Indian parent company itself remained relatively small, generating only a fraction of the group's reported turnover.

That structure was unusual but not necessarily problematic. The problem emerged when regulators attempted to verify the underlying business activity.

Valcambi's Swiss financial statements reportedly showed only processing income — the fees earned from refining precious metals for customers. The revenue reflected in those audited accounts was tiny compared with the enormous trading revenue appearing in Rajesh Exports' consolidated statements.

SEBI alleged that Rajesh Exports had access to Valcambi's audited financial statements but, for consolidation, relied on unaudited figures recorded by Global Gold Refineries instead.

The company has disputed the regulator's conclusions, but the discrepancy is so large that it transformed what might have been an accounting dispute into a governance crisis.

Why Does It Matter?

Once the discrepancy appeared, investigators moved to the obvious next step.

They sought customer-wise and vendor-wise information that could establish where the reported revenue originated.

According to the order, those details were not provided despite repeated requests.

Rajesh Exports argued that Swiss confidentiality obligations and data-protection laws restricted the sharing of certain information. SEBI examined those arguments and concluded they did not prevent the disclosure of corporate financial records required for regulatory verification.

As investigators dug deeper, other issues surfaced.

The entire episode raises larger questions on governance. How did this happen without being detected earlier?

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0.5%

That’s how much India's eight core infrastructure sectors grew in May, a seven-month low, down sharply from 1.2% growth a year earlier, according to government data released Monday, Business Standard reported.

The Lead: The May reading marked a slowdown from April's 1.8% growth. The eight core industries account for 40.27% of the weight of items in the Index of Industrial Production.

The decline was driven mainly by the energy sector: coal production fell 9.3%, crude oil output declined 4.6%, natural gas output fell 4.9%, and refinery products output dropped 8.7%. Fertiliser output also slipped 0.9% in May due to a raw-material crunch tied to the conflict in West Asia.

Forecast: Cement and steel bucked the trend, growing 8.4% and 5% respectively, aided by government infrastructure spending on highways, ports and railways, while electricity generation rose 8.7% on summer demand. Cumulative core sector growth for April-May stood at 1.1% year-on-year, suggesting a soft start to the fiscal year even as construction-linked industries held firm and energy output remained the weak link.

US-India Trade Talks Resume

India is pushing for a tariff advantage over regional rivals, Commerce Minister Piyush Goyal said Monday, as Washington's top trade negotiator prepares to land in New Delhi this week.

Setup: Goyal said negotiations are taking longer than expected because of the tariff currently imposed on Indian goods, even as New Delhi continues to seek preferential market access and a "comparative advantage" over competitors like Vietnam. He said he'd be "happy" to finalise a deal before July 24, when Washington's temporary 10% tariff on trading partners expires.

What’s Next: US Trade Representative Jamieson Greer will visit India on Tuesday for two days of talks, with New Delhi pushing for tariff terms better than regional peers as both sides try to seal a deal and mend strained ties, Reuters reported.

India is also seeking guarantees against fresh tariffs once a deal is signed, wary of further threats if talks stall, a government official said. Greer's office said the talks aim at "fair, balanced, and reciprocal trade," as both sides race to close a pact before the temporary tariff window closes.

India’s Sugar Export Era Pauses

India is unlikely to have a meaningful sugar export surplus for at least the next three seasons as weather risks and rising ethanol production squeeze domestic supplies, Reuters reported.

Trigger: Trade executives and industry officials told Reuters that as an emerging El Niño pattern threatens sugarcane yields, the government’s ethanol blending programme is diverting more cane away from sugar production. The combination is expected to leave little surplus for overseas markets.

Context: Once the world’s second-largest sugar exporter, India accounted for roughly 10% of global shipments, exporting an average 6.8 million tonnes annually through 2022-23. After allowing exports of only about 800,000 tonnes this season, New Delhi has barred further shipments until September-end.

The prolonged absence of Indian sugar could tighten global supplies and support prices, particularly as major producers such as Brazil and Thailand also face weather-related production risks.

Monsoon Revival Lifts Hopes

India's monsoon has regained momentum after stalling over western India for nearly two weeks, with rains set to push into central regions this week, aiding crop sowing and easing heat, weather officials said, according to a Reuters report.

Catch Up Quick: Maharashtra, Telangana, Chhattisgarh and Karnataka are now covered, and Mumbai is expected to receive rains within two days; the city had earlier rationed water to construction sites and cut industrial use by a fifth as reservoirs declined.

Forecast: Conditions are turning favourable for the monsoon to advance into central Maharashtra, Chhattisgarh, Telangana and Odisha, with rains strengthening over the west coast from next week. Still, June rainfall remains 42% below normal, among the weakest starts in years, comparable to 2019 and 2023, QuantEco Research noted.

With El Niño expected to strengthen through the season, reservoirs at 27.7% capacity and kharif sowing down 3.9% YoY, QuantEco projects near-flat FY27 agriculture GVA growth (0-1%) and FY27 CPI inflation at 5.1%, citing the asymmetric inflationary impact of rainfall deficits, partly offset by lower crude oil prices.

Recovery Still Out Of Reach

India's IT industry won't find relief soon. Accenture’s latest results suggest the demand recovery that many in IT services were waiting for remains elusive, said a note from Kotak Institutional Equities. Revenue growth landed at the midpoint of guidance, FY2026 guidance was trimmed to 3-4% from 4-5%, and bookings weakened, signalling that spending caution remains entrenched. Commentary on AI adoption was positive, but the optimism hasn't been reflected meaningfully in numbers.

Context: Fresh headwinds compounded the pressure. The West Asia conflict disrupted demand and delayed client decisions, while discretionary spending remained weak across sectors. Managed services bookings also deteriorated sharply, with book-to-bill slipping below 1x in the third quarter of FY26 — often seen as an indicator of softer demand ahead.

What Next? For Indian IT firms, the read-through remains difficult. Kotak Institutional Equities said Accenture’s results offer few positive cues as companies continue to grapple with slowing discretionary spending and AI-led disruption. Its aggressive acquisition push and expansion into the mid-market could also suggest confidence that a quick recovery remains limited.

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Lessons From The World’s Biggest IPO

On Episode 908 of The Core Report, financial journalist Govindraj Ethiraj talks to Garima Kapoor, Economist & Deputy Head of Research at Elara Securities (India) as well as Piyush Pandey, Senior Vice President, Lead Analyst-Institutional Equities for IT, Telecom, Internet and Power at Centrum India.

• Lessons From The World’s Biggest IPO

• Monsoons Have Now Recovered And Is Advancing, Says The IMD

• Near Term Risks For The Rupee Are Fading But There Are Longer Term Issues

• Where Do Analysts See Value In The Telecom Business Stack?

• Alan Greenspan, The Man Behind The Famous Irrational Exuberance Term Has Died

Good morning.

This week’s proceedings of US-Iran deal were another reminder that global stability can change overnight; the more useful question for India is what it can strengthen at home.

Ketan Dalal and Sudhir Kapadia examine why foreign investors still hesitate despite India’s large market. Renu Kohli explains why the rupee’s movement cannot be read only through oil, war or reserves. Gauri Shankar Nagabhushanam explains why real estate is no longer just a property story, but an institutional capital story.

The larger focus this week is durability: capital that stays, customers who trust, creators who endure and assets that compound.

WEEKEND EDITION

India’s FDI Problem Is No Longer About Open Doors

If India is open to foreign investment on paper, why is long-term capital still not flowing in at the scale the economy needs?

In this episode of Weekend Edition, Govindraj Ethiraj speaks with Ketan Dalal of Katalyst Advisors and Sudhir Kapadia, Ex- National Tax Leader, EY India about what is holding back foreign direct investment into India. They point out that investors still face harder operational questions: land, logistics, power costs, industrial clusters, dispute resolution, tax certainty, and the ability to run a business without constant friction. India’s FDI challenge is not only about attracting dollars. It is about creating the conditions in which serious investors can build, operate, expand, and stay.

They exclaim that India should not try to solve the FDI problem in a vague, all-purpose way. A sector-led approach may work better, including sectors of semiconductors, green energy, AI-linked infrastructure, manufacturing, auto, and other areas, where India can realistically become part of global value chains.

Key Insight

Foreign companies may first ask what more they can do domestically before looking abroad; meaning India has to work harder to attract investment.

SPECIAL EDITION

Why Banks Cannot Afford Bad Customer Experience Anymore

Why does banking still feel complicated when almost every other consumer service has become frictionless?

In this episode of the Special Edition, Govindraj Ethiraj speaks with Pratik Shah of EY India, who explains that in banking, products, pricing, and offers are now easy to copy. What is harder to replicate is how a bank treats a customer across the full journey: onboarding, servicing, complaints, closures, branches, apps, chatbots, and call centres.

However, Pratik also points out that digital banking does not render physical branches as irrelevant; as they still matter for trust, deposits, complex services, MSMEs, and older customers. Therefore, for banks, the real propeller of growth is making both digital and physical channels work as one system.

Key Insight

The next banking advantage may come from empathy at scale, where data, AI, and organisation design help banks anticipate customer needs before complaints arise.

REITs And The New Real Estate Playbook

Behind India's office parks and data centres lies a quieter financial story: the rise of professionally managed real estate.

In this episode of Special Edition, Govindraj Ethiraj speaks with Gauri Shankar Nagabhushanam of CapitaLand India Trust, about REITs, commercial real estate, data centres, logistics parks, and the institutionalisation of India’s property market. REIT’s purpose is not aggressive expansion, but to pool investor money into income-generating assets, collect rent from tenants, and distribute most of that income to unit holders.

The conversation also shows how India’s institutional real estate market is changing. Data centres have become a major growth area as cloud, AI, and digital infrastructure expand. CapitaLand’s own bet is not to abandon steady assets like IT parks, but to balance them with newer assets.

Key Insight

In real estate, disciplined entry at the right price, time and structure matters more than aggressive expansion.

THE CORE QUIZ

THE MEDIA ROOM

When Everyone Is A Creator, Who Becomes The Filter?

In an age of endless content, is creation still the scarce skill, or is curation becoming more valuable?

In this episode of The Media Room, Vanita Kohli-Khandekar speaks with Roshan Abbas of Kommune, about the changing economics of creativity, live performance, nostalgia, AI, and the creator economy. The conversation asks what happens when audiences are flooded with content, attention is fragmented, and everyone is under pressure to produce constantly.

Abbas pushes back against the idea that more technology automatically means better creativity. He says that creators need feedback, rehearsal, curation, and human flaws as much as they need tools.

Key Insight

AI may reduce the cost of making content, but it increases the premium on taste, trust, and human imperfection.

HOW INDIA’S ECONOMY WORKS

The Rupee’s Reserve Problem

Can a country have enough foreign exchange reserves and still remain vulnerable to a currency shock?

In this episode of How India’s Economy Works, Puja Mehra speaks with economist Renu Kohli about why the recent weakness in the rupee reflects deeper structural issues rather than just short-term market volatility.

The conversation explores India's dependence on foreign capital, the slowdown in FDI, rising geopolitical risks, and why large reserves alone cannot offset persistent weaknesses in the balance of payments. Moreover, while the RBI can smooth currency movements and buy time through spot and forward market operations, it cannot replace durable capital inflows or solve structural external imbalances.

Why This Matters

India faces a challenge of attracting long-term investment and building an external account driven by exports and productive investment.

MESSAGE FROM OUR SPONSOR

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The index's top ten stocks make up nearly 40% of its total value as of Q226. All have some connection to AI.

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