Tag: India

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Counterpoint

India’s defence is strong — but not yet deep enough

The next war will not wait for India to complete a tender. It may begin with algorithms scanning satellite images, hackers probing electricity networks and inexpensive drones searching for radars, ammunition depots and command posts.

Precision missiles will follow. Electronic warfare will attempt to blind sensors and corrupt navigation signals, while fabricated videos and automated propaganda seek to confuse the public.

Mass drone warfare has already moved from military theory to battlefield routine. Ukraine and West Asia have shown how relatively cheap unmanned systems can locate artillery, strike armour, harass ships and force an opponent to expend costly missiles. Artificial intelligence increasingly helps identify targets, fuse intelligence, plan logistics and coordinate swarms.

India faces an especially unforgiving strategic landscape: a volatile, nuclear-armed Pakistan to the west; a much larger and technologically formidable China along the northern and eastern frontier; and an Indian Ocean increasingly frequented by extra-regional navies.

The true test of readiness, therefore, extends beyond winning a sharp exchange. India must be capable of sustaining a multi-domain conflict while keeping its ports, power grids, communications, transport networks and economy functioning.

Operation Sindoor offered India its clearest recent preview of technology-intensive warfare.

On the night of 7-8 May 2025, Pakistan attempted to attack military targets across northern and western India with drones and missiles. According to the government’s official account of the operation, India’s Integrated Counter-Unmanned Aerial Systems Grid and layered air defences neutralised the attacks.

Legacy Pechora and OSA-AK systems operated alongside low-level air-defence guns, indigenous Akash missiles, electronic-warfare equipment and newer counter-drone weapons. The Indian Air Force’s Integrated Air Command and Control System connected sensors and shooters across a wide area.

India also used loitering munitions and precision weapons offensively. Its electronic-warfare capabilities helped penetrate or suppress Pakistani defences. Later, the Defence Ministry said the Air Force’s IACCS had worked with the Army’s Akashteer and the Navy’s Trigun to create a unified operational picture.

That performance should inspire confidence but not complacency. A short, controlled confrontation cannot fully simulate a prolonged war involving sustained missile attacks, satellite disruption, cyber sabotage, mounting equipment losses and interrupted foreign supplies.

India has built a formidable first punch and a credible shield. It must now build greater depth behind both.

One of the urgent revisions India needs is to accept that drones are ammunition, not equipment. India’s armed forces have clearly recognised the unmanned revolution. The Air Force’s Mehar Baba competition produced a ₹300-crore order for an Indian swarm-drone system, while the Army had manufactured 819 drones internally by early 2026. The Army has also committed to giving every soldier drone-related training by 2027.

Yet scale changes everything.

India recorded 791 drone intrusions along its international border in 2025, mainly in Punjab and Rajasthan; 237 were neutralised, according to PRS Legislative Research’s defence analysis. Wartime swarms would present a far more demanding challenge.

India needs reconnaissance drones, one-way attack drones, electronic-warfare drones, high-altitude logistics drones, naval unmanned aircraft, unmanned surface vessels and underwater systems in very large numbers. Procurement must treat many of these platforms as rapidly evolving, expendable munitions — not as aircraft expected to remain unchanged for 20 years.

Counter-drone economics matter just as much. Firing a sophisticated surface-to-air missile at every inexpensive quadcopter would soon become unaffordable. India requires layers of jammers, spoofers, automatic cannon, interceptor drones, micro-missiles and directed-energy weapons, reserving costly missiles for the threats that justify them.

Domestic assembly alone will not provide genuine security. Motors, batteries, thermal cameras, secure communication modules, navigation systems, chips and electronic components must remain available when foreign suppliers restrict exports or global supply chains seize up.

Artificial Intelligence must move from demonstrations to doctrine. Indeed, AI should become the nervous system of the armed forces, not another procurement category.

India possesses abundant software talent and has begun developing AI-enabled surveillance, autonomous systems, predictive maintenance and decision-support tools. The Armed Forces’ 2025 technology roadmap explicitly identifies AI, autonomy, hypersonic weapons, space, cyber capabilities and networked warfare as priorities.

The harder task involves deployment at scale. A useful military AI system must work at the edge, with weak connectivity, under electronic attack and amid deliberate deception. It must distinguish a tank from a decoy, recognise manipulated intelligence and continue operating when cloud access disappears.

India should concentrate on five immediate applications: multi-sensor intelligence fusion; drone and counter-drone coordination; cyber-threat detection; predictive maintenance; and logistics forecasting. A common defence-data architecture would allow the three services to train and operate compatible systems without dissolving necessary security boundaries.

Command responsibility must remain unambiguous. AI may recommend, prioritise and warn, but a human chain of accountability should govern lethal decisions. Speed cannot become an excuse for opacity.

Further, India’s air power needs numbers as well as sophistication. The Indian Air Force retired its final MiG-21s in September 2025, leaving it with about 29 fighter squadrons against an authorised strength of 42. Tejas represents a major indigenous achievement, but production delays have widened the gap between retirement and replacement.

India cannot indefinitely compensate for insufficient mass with the quality of its Rafales, upgraded Sukhoi-30MKIs and advanced missiles. Even an exceptional aircraft can fly only one mission at a time. Attrition, maintenance and the demands of two geographically separated fronts quickly consume available strength.

Fighter induction must accelerate, but fighters alone will not solve the problem. India also requires more airborne early-warning aircraft, aerial refuellers, long-range weapons, hardened shelters, rapid runway-repair units, realistic decoys and large stocks of precision munitions. Manned-unmanned teaming should allow fighters to send cheaper autonomous aircraft ahead as sensors, jammers or weapons carriers.

Off India’s long coastline, the undersea contest may decide who rules the waters of the Indian Ocean, the Arabian Sea and the Bay of Bengal. India’s Navy remains the region’s strongest indigenous naval force. Its shipyards now build aircraft carriers, destroyers, frigates, submarines and anti-submarine vessels. Yet the maritime balance is moving quickly.

India operated 137 ships and submarines in 2025, but 53 per cent of its vessels were more than 15 years old. Fifty-eight ships were under construction and another 62 had received approval. China, meanwhile, has been commissioning more than 15 naval vessels annually and regularly sending submarines into the Indian Ocean, according to a parliamentary assessment summarised by PRS.

India needs faster submarine construction, including conventional boats with air-independent propulsion and nuclear-powered attack submarines. It also needs stronger seabed surveillance, maritime patrol aircraft, anti-submarine helicopters, underwater drones, mine-countermeasure vessels and replenishment ships.

The debate over another aircraft carrier should not crowd out these less glamorous capabilities. An adversary’s submarines, long-range missiles and unmanned systems may pose a greater daily threat to sea lanes than its carrier fleet.

Diego Garcia deserves perspective. The atoll hosts a British-American facility that provides logistical support to US forces in the Indian Ocean and Persian Gulf. It is not a Chinese or Pakistani base, and India’s expanding strategic partnership with the United States makes it inaccurate to describe the installation as inherently hostile.

Its existence nevertheless demonstrates the decisive value of distant logistics hubs. Governments and alignments can change. Friends can turn enemies overnight. India must strengthen the Andaman and Nicobar Islands, Lakshadweep, coastal airfields, protected fuel storage and overseas access arrangements so that no external power can dominate its maritime lifelines.

China poses the more direct long-term basing concern. It already operates a military support base in Djibouti, and the US Department of Defense assesses that Beijing has considered additional military access in countries including Pakistan, Bangladesh, Myanmar and Sri Lanka.

Beside the women, men and conventional war machines, a new crop of combatants is fighting today’s battles — satellites, cyber networks and defence manufacturing units.

Modern forces cannot shoot accurately if they cannot see or communicate. India has dedicated military satellites, strong launch capabilities and proven anti-satellite technology. During Operation Sindoor, the ISRO chairman said at least 10 satellites were working continuously for national security.

A small number of valuable satellites, however, can become attractive targets. India needs proliferated constellations, protected communications, rapid replacement launches, alternatives to satellite navigation and the ability to combine military, commercial and allied imagery.

Cyber defence must extend beyond military networks. A successful attack on ports, railways, banks, telecommunications or the electricity grid could slow mobilisation without striking a single military formation. Regular national exercises should test how civilian and military systems operate under simultaneous cyberattack, misinformation and communications failure.

Industrial resilience presents an equally important challenge. India’s defence exports reached a record ₹38,424 crore in 2025-26, rising almost 63 per cent in one year. Indigenous missiles, radars, artillery, naval vessels and electronic systems represent genuine advances.

At the same time, SIPRI ranked India as the world’s second-largest arms importer during 2021-25, accounting for 8.2 per cent of global imports. Russia still supplied 40 per cent of those imports, although India has diversified towards France, Israel and the United States.

An Indian label on a platform means little if its engine, seeker, transmission, semiconductor or critical material becomes unavailable during a crisis. Self-reliance must be measured by the ability to repair, replenish and modify equipment without foreign permission.

Military factories and defence manufacturing lines must also possess surge capacity. A country prepared for 10 days of combat may not remain prepared after 100. India should maintain rotating war reserves, multiple qualified suppliers for critical components and production lines that can expand quickly. Long-term orders would give private companies a commercial reason to invest in capacity before an emergency.

The 2026-27 defence allocation reached a record ₹7.85 lakh crore, including ₹2.19 lakh crore under the capital head. Yet the total amounts to about 2 per cent of GDP, below the 3 per cent recommended by a parliamentary committee.

Only 29 per cent of defence expenditure goes towards capital outlay, against a previously recommended 40 per cent. Defence research accounts for an estimated 3.7 per cent of expenditure, down from 4.7 per cent in 2014-15. India’s own Defence Ministry has sought a gradual increase in R&D spending towards 10 per cent over the next decade.

More money will not automatically create readiness. Stable priorities, competitive development, realistic testing and faster decisions matter just as much. India’s procurement system must accept iterative improvement instead of waiting endlessly for a perfect indigenous system—or importing one after domestic delays become intolerable.

Jointness completes the equation. Operation Sindoor showed what integrated sensors and command networks can achieve. The next step must connect planning, logistics, airspace management, cyber operations, intelligence and long-range targeting across all three services. Organisational boundaries cannot be allowed to slow a kill chain that operates in seconds.

So, is India ready?

India can defend vital targets, impose serious costs and respond with precision. Few adversaries could treat its military power lightly. But prolonged, simultaneous conflict across two land fronts and the Indian Ocean—conducted under cyberattack, satellite disruption and supply-chain pressure—would expose important shortages.

Five priorities demand urgency: expendable drones and economical counter-drone systems; greater combat-air mass and its supporting enablers; undersea and anti-submarine power; resilient space and cyber networks; and an indigenous industrial base capable of replenishing losses at wartime speed.

India has fashioned an increasingly sharp spear. It now needs a much larger quiver, a more resilient shield and the industrial workshop capable of replacing both while the battle continues.

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Technology

Airtel replaces ₹299 pack with costlier recharges

Bharti Airtel has removed four prepaid recharge plans from its portfolio, including the widely used ₹299 pack, giving customers fewer low-cost choices and potentially paving the way for higher revenue per user.

The telecom company discontinued the ₹299, ₹579, ₹619 and ₹649 prepaid plans from August 12. The changes have triggered fresh speculation about a wider Airtel tariff hike, although the company has not announced any blanket increase in prepaid prices.

The ₹299 recharge has attracted the most attention because it was a popular entry-level plan offering daily data. It provided 1.5GB of data per day, unlimited calling and 100 SMS messages per day for 28 days.

With that option gone, customers wanting a similar daily-data plan are being pushed towards the ₹349 pack. The replacement costs ₹50 more, translating into a 16% increase at that price point. The ₹349 plan, however, offers 2GB of daily data, giving customers more data for the higher price.

The change means Airtel has effectively increased the minimum amount some customers need to spend for an unlimited calling plan with daily data.

But the company has not removed all affordable recharge options. The ₹199 and ₹219 plans remain available, although they provide smaller total data allowances rather than the daily-data structure that made the ₹299 pack attractive to many users. Customers who use mobile data heavily may therefore find the ₹349 plan more relevant.

The withdrawal of the four plans is also important from an investor perspective. Average revenue per user, or ARPU, is one of the most closely watched indicators for telecom companies because it shows how much revenue an operator generates from each subscriber.

JM Financial expects Airtel’s wireless ARPU to rise by around 2% as a result of the latest plan changes. The brokerage estimates that about 10% of subscribers could shift to plans costing approximately ₹50 more. Such migration would allow Airtel to earn more from its existing customer base without necessarily adding a large number of new subscribers.

The brokerage’s assessment highlights the larger significance of Airtel’s decision. The company is not simply removing a few recharge plans; it is attempting to reshape its prepaid pricing strategy.

Telecom companies have increasingly focused on monetising data consumption as smartphone users consume more streaming video, social media and other online services. At the same time, operators need higher returns to fund investments in 5G networks and other infrastructure.

Airtel’s approach could also become a template for the wider industry. If customers accept higher-priced alternatives without significantly switching operators, rivals such as Reliance Jio and Vodafone Idea could have greater room to rationalise their own prepaid plans.

However, analysts caution that the latest Airtel move should not automatically be described as a full-fledged tariff hike. India Today reported that the operator has made changes to selected plans rather than increasing prices across its entire prepaid portfolio.

There are also reports that the availability of some Airtel plans differs between telecom circles. This means customers may see different recharge options depending on their location and mobile number. Airtel’s own recharge platform allows users to check the plans available to them before making a payment.

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Beyond

India’s ethanol push crosses 800 cr litres

India’s ethanol programme has crossed a significant milestone, with cumulative supplies exceeding 800 crore litres during Ethanol Supply Year (ESY) 2025-26. The latest data from the All India Distillers’ Association (AIDA) also shows a clear change in the country’s ethanol supply mix, with grain-based feedstocks taking a much larger role than sugarcane.

The milestone comes as India pushes ahead with its ethanol blending programme, aimed at reducing dependence on imported crude oil, improving energy security and creating an additional market for agricultural produce. But the industry is now confronting a different problem: ensuring that the rapidly expanding ethanol supply is matched by sufficient demand.

According to AIDA data, ethanol supplies during July stood at 93 crore litres, taking cumulative supplies for ESY 2025-26 beyond the 800-crore-litre mark. Grain-based ethanol accounted for about 71 crore litres, or 76% of July supplies. The share was higher than the approximately 73% recorded in June, even though total monthly supplies were lower in July.

The shift is important because ethanol production in India has traditionally been closely linked to the sugar industry. Increasing use of grains means the country is building a more diversified feedstock base, reducing its dependence on sugarcane and giving distilleries greater flexibility in sourcing raw material.

Maize and surplus Food Corporation of India (FCI) grains have emerged as important contributors to this transition. Data reported from AIDA shows that maize and surplus FCI grains each contributed around 30 crore litres to July’s grain-based ethanol supplies.

This change also comes at a time when the economics of sugar and ethanol are shifting. India is dealing with concerns over sugar availability and prices after weaker rainfall in key producing states. The government is considering changes to the use of sugarcane for ethanol in the next supply year, potentially encouraging greater use of maize and rice-based feedstocks instead.

The development could make grain-based ethanol even more important for the country’s E20 blending target. India has already moved towards petrol containing up to 20% ethanol, creating a large and assured market for biofuel producers. The broader objective is to replace a portion of petrol consumption with domestically produced ethanol.

The expansion of grain-based ethanol also has implications for farmers. Maize has become an increasingly important feedstock, creating an additional source of demand beyond traditional uses such as animal feed and food processing. A diversified ethanol market can therefore provide farmers with another avenue to sell their produce.

However, higher production capacity by itself does not guarantee that the industry will remain profitable. The next challenge is demand. As ethanol availability rises, oil marketing companies and other potential users need to absorb the additional volumes. The Times of India report highlights this emerging gap between the industry’s ability to produce ethanol and the pace at which demand is developing.

That issue could become more important as India continues adding distillation capacity. If production grows faster than procurement and blending requirements, producers could face pressure on utilisation levels and margins. For the government, maintaining a predictable procurement framework will therefore be important to keep investment flowing into the sector.

The changing feedstock pattern also offers some protection against supply shocks. In June, grain-based ethanol accounted for roughly 75% of supplies, with 75 crore litres supplied from grains out of total monthly supplies of 103 crore litres. By July, grain-based supplies remained dominant at 71 crore litres out of 93 crore litres.

Earlier AIDA data had already shown the growing importance of grains. By June, cumulative ethanol supplies had reached 717 crore litres, against contracted volumes of 1,048 crore litres. Grain-based ethanol accounted for 480 crore litres, or nearly 67% of total supplies at that stage, while sugarcane-based sources contributed 238 crore litres.

The numbers indicate how quickly India’s ethanol supply chain has evolved. Maize has moved to the centre of the biofuel ecosystem, while surplus food grains and sugar-based feedstocks continue to provide additional sources.

For the government, the programme serves several objectives at once. Higher ethanol blending can help reduce petrol imports, strengthen energy security and support agricultural markets. For sugar mills and distilleries, ethanol offers an alternative revenue stream, while grain-based production creates demand for crops such as maize.

The 800-crore-litre milestone therefore represents more than a production figure. It shows that India has built significant capacity to supply ethanol at scale. The bigger test now is whether consumption, blending and procurement can keep pace with that capacity.

 

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Technology

Chinese phone brands lose ground in India

India’s smartphone market took a sharp hit in the April-June quarter of 2026 as a global memory chip shortage pushed up handset prices and weakened demand, particularly among budget-conscious consumers. Smartphone shipments in the country fell 11.1% year-on-year to 33.2 million units in the second quarter, according to the latest data from the International Data Corporation (IDC).

The downturn has been particularly painful for Chinese smartphone brands, which have traditionally relied on affordable and feature-rich devices to build a strong presence in India. Vivo, Oppo, Xiaomi and Realme all reported shipment declines during the quarter, while Samsung and Apple managed to hold their ground and increase their market shares.

The numbers show how quickly rising component costs are changing India’s smartphone market. IDC said the average selling price (ASP) of smartphones in India climbed 14.4% year-on-year to a record $315, or roughly ₹30,000, in Q2 2026. Higher memory costs have made it increasingly difficult for manufacturers to keep prices low while protecting their profit margins.

That pressure has been felt most strongly at the bottom end of the market. Smartphones priced below $100 saw shipments plunge 74.3% year-on-year, with their share of the overall market falling from 15.6% to just 4.5%. Manufacturers have reduced model launches and channel support in this segment as low prices have become harder to sustain amid expensive components.

For years, Chinese companies built their Indian businesses around precisely this part of the market. Their ability to offer large displays, better cameras and other features at competitive prices helped brands such as Vivo, Oppo, Xiaomi and Realme become household names. But the current memory shortage has weakened that advantage because the room to absorb higher costs or offer aggressive discounts has narrowed considerably.

Vivo remained India’s largest smartphone brand in Q2 with an 18.4% market share, down from 19% a year earlier. Its shipments declined by about 14% year-on-year. Oppo, which ranked third, recorded an 8.5% decline, while Xiaomi’s shipments dropped 10%. Realme suffered a larger 14.2% fall.

The sharper declines were visible among some Chinese sub-brands. Vivo’s iQOO recorded the steepest fall among the leading brands, with shipments dropping 61% year-on-year. Xiaomi’s Poco shipments fell 12.3%, while OnePlus recorded a smaller 2.5% decline. Motorola, which is not a Chinese brand, also saw shipments fall 8.9%.

Samsung, meanwhile, gained ground in a shrinking market. Its shipments grew 0.4%, but its market share increased from 14.5% in Q2 last year to 16.4% this year. Samsung’s broad portfolio and scale have helped it absorb some of the impact of rising component costs while continuing to serve different price segments.

Apple also strengthened its position. Its shipments increased about 0.7%, while its market share rose from 7.5% to 8.5%. The company remained constrained by supply shortages affecting the iPhone 15, iPhone 16 and iPhone 17 series, but demand for premium devices remained more resilient than demand at the entry level. The iPhone 17 was the highest-shipped smartphone model in India during the first half of 2026, according to IDC.

The shift suggests that India‘s smartphone consumers are gradually moving up the price ladder, even as overall volumes decline. The $400-$600 segment grew 60.3% year-on-year, with its market share almost doubling from 4.8% to 8.6%. Meanwhile, the $100-$200 mass-budget segment remained the largest category, accounting for 46.8% of the market and recording broadly flat shipments.

There was also an unusual revival in demand for 4G smartphones. As entry-level 5G devices became more expensive, some manufacturers brought back or extended 4G models to give consumers cheaper options. The share of 4G smartphones rose to 11.1%. IDC, however, expects this to be a temporary development as existing inventories run out and consumers are pushed towards more expensive 5G models.

The change in consumer behaviour is also visible in sales channels. Online smartphone shipments fell 19.8% year-on-year, with their share dropping from 46.4% to 41.9%. Online platforms traditionally depend heavily on discounts and promotional offers, but weaker discounts have made them less attractive to price-sensitive buyers. Offline shipments were comparatively resilient, declining only 3.6% as brands leaned more heavily on physical retail networks.

The weakness is not limited to one quarter. India’s smartphone shipments during the first six months of 2026 fell 7.9% year-on-year to 64.2 million units, the lowest first-half volume in five years. Interestingly, the market’s overall value still increased 3.6%, reflecting the rise in average selling prices and the growing contribution of premium smartphones.

The upcoming festive season could therefore be a crucial test for smartphone manufacturers. Traditionally, brands use festive discounts, exchange offers and financing schemes to encourage upgrades. This year, however, higher component costs are leaving manufacturers and retailers with less room for aggressive price cuts.

 

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Beyond

Airport Operators can own airlines, centre clarifies

The Centre has clarified that there is no government policy that generally prevents airport operators from owning or running scheduled airlines, potentially opening a new route for investment in India’s aviation sector. However, existing contractual restrictions at some airports could still prevent operators from taking significant stakes in airlines without obtaining a waiver.

The clarification came from the Ministry of Civil Aviation amid growing attention on the relationship between airport operators and airline ownership. The government said airport operators are not barred under a blanket policy from holding substantial equity in airlines or operating scheduled carriers.

The distinction is important because restrictions can arise not from a central aviation policy but from individual agreements signed when airports were handed over for private operation under public-private partnership arrangements.

The Airports Authority of India has received a request seeking a waiver from such contractual restrictions. The request relates to provisions that can restrict airport operators from holding stakes in airlines or entering the airline business. The Ministry of Civil Aviation has not yet taken a final decision on the request.

The development could have wider implications for India’s aviation industry, where airport infrastructure and airline operations have traditionally remained separate businesses in several major markets. Allowing greater cross-holding could encourage large airport operators to explore airline investments, partnerships or even the launch of their own carriers.

For passengers, the change could eventually bring more airline choices and potentially greater competition. But it also raises questions about conflicts of interest because an airport operator that owns an airline could have influence over infrastructure, airport charges, slots, passenger facilities and other services used by competing carriers.

These concerns are particularly relevant at busy airports where landing capacity and terminal infrastructure are limited. Airlines compete not only on fares and routes but also for access to airport slots, parking bays, gates and other facilities. An airport operator with an airline interest could therefore face scrutiny over whether competing carriers receive equal treatment.

The government’s latest clarification does not mean that airport operators can immediately start or acquire airlines without restrictions. Any operator covered by a specific contractual agreement would still have to comply with those terms unless the relevant restriction is formally relaxed or waived.

This distinction between policy and contract is at the heart of the current issue. While there is no broad government prohibition on airport-airline ownership, contractual clauses in some airport concession arrangements can impose limits on cross-holding.

The waiver request before the Airports Authority of India is therefore significant. A decision to relax such restrictions could establish an important precedent for airport operators seeking to expand into passenger aviation.

India’s airport sector has undergone major changes over the past decade, with private companies taking a larger role in developing and operating airports. The country has also seen strong growth in domestic air travel, increasing the commercial importance of airport infrastructure and airline networks.

The airline market, meanwhile, is going through its own period of consolidation and expansion. The recent changes in the industry have increased attention on competition, capacity and the need for more carriers. Any move that allows airport operators to enter the airline business could alter the competitive landscape further.

For airport companies, owning an airline could create opportunities to integrate different parts of the aviation business. A group operating both airports and airlines could coordinate schedules, route development, passenger services and infrastructure investment more closely.

There could also be commercial advantages. An airline owned by an airport operator could potentially help increase traffic at its airports by developing new routes and adding capacity on underserved sectors. Higher passenger traffic, in turn, could benefit airport revenues from aeronautical and non-aeronautical activities.

However, regulators would need to ensure that such integration does not weaken competition. Rival airlines would need transparent access to airport infrastructure and commercially important facilities. Rules governing airport charges, slots and other services would become even more important if an airport operator also became an airline owner.

The issue also comes at a time when policymakers are looking for ways to strengthen competition in Indian aviation. A market dominated by a small number of large airlines can create concerns about fares, capacity and consumer choice, particularly when disruptions affect a major carrier.

Allowing new players backed by airport operators could provide additional capital to the sector. It could also attract companies with experience in large-scale infrastructure, logistics and passenger services into airline operations.

However, the government has not approved a general relaxation of airport-airline cross-holding restrictions. The immediate issue is whether existing contractual provisions can be waived in specific cases.

The decision will be closely watched by the aviation industry because it could determine how easily airport operators can enter India’s airline market.

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Beyond

FSSAI seizes 18,000 Diageo liquor boxes in Bengaluru

The Food Safety and Standards Authority of India (FSSAI) has seized around 18,000 boxes of liquor bottles from a United Spirits facility in Bengaluru, citing concerns over mandatory markings on bottles made with recycled plastic.

The action affects products from several Diageo India brands, including DSP Black Deluxe Whisky, Smirnoff Zesty Lime Triple Distilled Flavoured Vodka and VAT 69 blended Scotch whisky. The seized products and related plastic material have been valued at about $1.6 million, according to government documents.

The seizure followed an inspection at the United Spirits facility in Bengaluru last week. Officials found that certain plastic bottles carried markings indicating that they were made from polyethylene terephthalate, or PET, but did not display the required symbol identifying recycled PET that meets food-grade standards.

PET is a widely used plastic for packaging beverages and other consumer products. Recycled PET, commonly known as rPET, can be used in packaging when it meets prescribed safety and quality requirements. The labelling requirements are intended to help establish that packaging materials comply with food-contact standards.

The issue in the Bengaluru inspection was therefore related to packaging compliance and labelling rather than an allegation that the liquor itself was contaminated. FSSAI treated the missing markings as a food-safety and misbranding concern and ordered the affected products to be taken off the market pending further directions.

United Spirits, which operates Diageo’s business in India, has said the bottles were sourced from a recycler approved by FSSAI and that the required tests had been conducted by suppliers. The company has maintained that its products are safe for consumption and is engaging with the regulator over the matter.

The development has brought renewed attention to the importance of packaging regulations in India’s food and beverage industry. While consumers usually focus on ingredients, quality and product labels, regulators also monitor the materials that come into contact with food and beverages.

The FSSAI action is particularly significant because the affected bottles are smaller plastic packs, generally used for liquor sold in quantities such as 180 millilitres. Most larger bottles used by Diageo are made of glass, meaning the regulatory action is concentrated on a specific category of packaging.

The seizure also comes amid increased scrutiny of the alcoholic beverages sector. Regulators have recently taken action over product labelling, claims about maturation and the use of artificial flavours in certain alcoholic drinks.

That wider enforcement campaign has placed Indian Made Foreign Liquor, or IMFL, brands under closer examination. IMFL refers to spirits manufactured in India that are based on internationally recognised categories such as whisky, vodka, rum and gin.

The latest action highlights how compliance requirements extend beyond the contents of a bottle. Companies must also meet rules covering packaging materials, labelling, manufacturing processes and claims made on products.

The episode adds to a period of increased regulatory attention. The company is one of the biggest international spirits businesses operating in the country, with brands across whisky, vodka, rum and other categories.

Diageo has identified India as an important growth market. United Spirits reported revenue of roughly $3 billion from India in the financial year ended March 2026, underlining the country’s significance to the company’s global business.

The financial impact of the latest seizure could extend beyond the value of the products placed under regulatory hold. Depending on the final findings, the company may need to address packaging, labelling or distribution issues before affected products can return to the market.

The seizure does not mean that all Diageo products have been declared unsafe. The regulatory action concerns specific products and packaging identified during the Bengaluru inspection. The company has also stated that the affected bottles came from an approved recycler and underwent testing.

The case now depends on the regulator’s assessment and any further directions issued to United Spirits. Additional testing, documentation or corrective measures could be required before the affected stock is released.

Recycled PET has become increasingly important as businesses face pressure to reduce plastic waste and improve packaging sustainability. At the same time, food-contact packaging must meet strict safety standards because materials can potentially affect the products they contain if they are not properly manufactured or processed.

That makes accurate labelling an important part of the regulatory framework. Markings allow authorities and other stakeholders to identify the type and intended use of packaging material and determine whether it complies with applicable standards.

The development is also likely to keep attention on packaging compliance across India‘s alcohol industry. With regulators increasing inspections and enforcement, manufacturers and distributors may face greater scrutiny of both product claims and packaging practices.

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Beyond

India crosses 300 GW clean energy mark

India has crossed the 300 GW mark in installed non-fossil fuel-based electricity generation capacity, marking a significant step in its clean energy transition. The country’s total non-fossil capacity reached 300.50 GW as of July 31, 2026, putting India beyond 60 per cent of its target of having 500 GW of non-fossil power capacity by 2030.

The milestone highlights the rapid expansion of renewable energy in India, particularly solar power and wind energy. Solar has emerged as the main engine of the country’s clean energy growth, supported by rising investments, large-scale projects and government policies aimed at expanding renewable generation.

According to the latest capacity figures, solar power accounts for 164.59 GW of India’s installed non-fossil capacity. Wind power contributes 58.14 GW, while large and small hydro projects together account for 57.24 GW. Bio-power contributes another 11.75 GW, while nuclear power accounts for 8.78 GW. Together, these sources have taken total non-fossil installed capacity to 300.50 GW.

The achievement is particularly notable because India‘s clean energy capacity has expanded rapidly over the past decade. Solar capacity, for example, has grown from only about 2.8 GW in 2014 to nearly 165 GW now. Wind power capacity has also increased substantially, reaching more than 58 GW from around 21 GW in 2014.

The pace of additions has accelerated in recent years. During 2025-26, India added a record 55.29 GW of non-fossil fuel-based electricity capacity. Solar power accounted for about 44.6 GW of those additions, while wind contributed around 6 GW. The figures underline how strongly solar energy is driving India’s renewable energy expansion.

The 300 GW milestone also brings India closer to its broader 2030 energy ambitions. The government has set a target of 500 GW of non-fossil fuel-based installed electricity capacity by 2030. With 300.50 GW already installed, the country has completed more than three-fifths of that target.

This means India now needs to add roughly 200 GW of additional non-fossil capacity over the next few years to reach the 500 GW goal. The scale of the remaining requirement is substantial, but the recent pace of capacity additions provides some indication of the momentum behind the clean energy push.

The expansion is not limited to solar and wind. Hydropower continues to form an important part of India’s non-fossil electricity mix because it can provide relatively flexible generation and support grid stability. Nuclear power, although smaller in installed capacity, is also expected to play a role in the country’s longer-term low-carbon electricity strategy.

India’s clean energy transition is being driven by several objectives at the same time. Increasing renewable energy capacity can help reduce dependence on fossil fuels, improve energy security and support efforts to lower carbon emissions. For a country with rapidly growing electricity demand, expanding domestic sources such as solar, wind and hydropower is also important for meeting future power requirements.

The shift is taking place as India’s electricity demand continues to rise alongside economic growth, industrial expansion and greater electrification. The challenge for policymakers is therefore not simply to add renewable capacity, but also to ensure that the electricity grid can absorb and distribute growing volumes of variable renewable power.

Solar and wind generation can fluctuate depending on weather conditions and the time of day. This makes transmission infrastructure, battery storage, pumped hydro storage and other grid-balancing solutions increasingly important as India’s renewable energy share rises.

The Central Electricity Authority’s longer-term planning also points to a much larger role for non-fossil sources. Its National Generation Adequacy Plan projects that India’s installed power capacity could reach about 1,121 GW by 2035-36, with non-fossil sources accounting for around 70 per cent of the total. The plan includes substantial growth in solar, wind, large hydro, nuclear and energy storage.

Solar manufacturing is another important part of the clean energy story. India’s rapidly expanding solar installations have increased demand for photovoltaic modules, cells and other components. The government is also looking to strengthen domestic manufacturing, including efforts to develop polysilicon capacity and reduce vulnerabilities in the solar supply chain.

For the renewable energy industry, the crossing of the 300 GW mark is therefore more than a numerical milestone. It reflects a broader transformation in India’s power sector, where renewable sources are becoming increasingly central to future capacity planning.

At the same time, reaching 500 GW by 2030 will require sustained investment and faster project execution. Land availability, transmission connectivity, financing, equipment supply and integration of renewable power into the grid will remain important issues.

The next phase of India’s energy transition is likely to focus increasingly on combining renewable generation with storage and stronger transmission networks. This will help ensure that the country’s growing solar and wind capacity can translate into reliable electricity supply throughout the day.

India’s crossing of 300 GW of non-fossil capacity marks a significant point in that journey. With solar power leading the expansion and wind, hydro and nuclear providing additional support, the country has now moved beyond 60 per cent of its 2030 non-fossil capacity goal. The challenge ahead will be to maintain this momentum while building the infrastructure needed for a more renewable-heavy power system.

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RBI likely to hold repo rate amid inflation risks

The Reserve Bank of India (RBI) is widely expected to keep the repo rate unchanged at its upcoming monetary policy review, as policymakers balance relatively comfortable domestic inflation with rising risks from global price pressures. The decision comes at a time when several major central banks are reassessing their interest-rate paths as inflation risks remain persistent.

The RBI’s Monetary Policy Committee (MPC) is scheduled to announce its latest policy decision this week. Market participants are largely expecting the central bank to maintain the repo rate at 5.50%, following the sizeable rate cuts delivered earlier this year.

The focus, however, is likely to be less on the rate decision itself and more on the RBI’s assessment of inflation, growth and the changing global economic environment. A pause would allow policymakers to assess how earlier rate reductions are affecting borrowing costs, demand and economic activity before deciding whether further easing is appropriate.

India’s inflation picture has provided the RBI with some room to support economic growth. Consumer price inflation has remained relatively contained compared with the levels seen in recent years. However, policymakers are becoming increasingly cautious about risks that could push prices higher in the months ahead.

Global developments are a major part of that concern. Higher energy prices, geopolitical tensions, currency movements and changes in trade policies can quickly feed into domestic inflation. Any sustained increase in crude oil prices, in particular, could raise transportation and production costs across the Indian economy.

The Indian rupee is another factor the central bank will be watching closely. A weaker rupee can make imported commodities, including crude oil, more expensive. That can create additional inflationary pressure at a time when the RBI is trying to keep price growth firmly under control.

The global interest-rate environment has also become more complicated. While India has moved towards lower borrowing costs, some overseas central banks are facing renewed inflation concerns and may have to maintain or even tighten monetary policy. This divergence can influence capital flows, bond yields and currency markets.

For the RBI, the challenge is to support economic growth without creating conditions that could reignite inflation. Lower interest rates generally encourage borrowing and investment by reducing the cost of loans. They can also support consumption by making home, vehicle and personal loans more affordable.

At the same time, keeping rates too low for too long can create demand-side pressure and make it harder to respond if inflation begins to rise. The central bank therefore has to balance growth with its mandate of maintaining price stability.

The banking and financial markets will also be watching the RBI’s liquidity stance and its comments on financial conditions. While the repo rate is the headline policy tool, liquidity management plays an important role in determining how quickly changes in monetary policy reach borrowers and businesses.

For households, an unchanged repo rate would mean no immediate policy-driven change in floating-rate loans. Borrowers with home loans linked to external benchmarks such as the repo rate would therefore not see another automatic reduction in their lending rates simply because of the latest policy review.

For businesses, the picture is slightly broader. Companies have benefited from lower financing costs as interest rates have eased, but investment decisions depend on more than borrowing costs. Demand conditions, input prices, exports, global trade and consumer confidence will also influence corporate spending.

The RBI is also expected to remain attentive to food inflation. Although headline inflation may appear comfortable, sudden increases in food prices can affect household budgets and influence inflation expectations. Weather conditions, crop output and supply disruptions can therefore remain important variables for the central bank.

The policy decision comes at a crucial point for India’s economy. Growth remains relatively resilient, but policymakers are operating in an uncertain global environment. Geopolitical tensions, shifting trade relationships and volatile commodity markets have made the outlook harder to predict.

A pause in the repo rate would give the RBI time to evaluate these developments without committing itself to either further rate cuts or a tightening cycle. The central bank could retain flexibility to respond if inflation moves sharply in either direction.

Economists and investors will therefore pay close attention to the language used by the MPC rather than simply the rate announcement. Any indication that the RBI is becoming more concerned about inflation could influence bond yields, equity markets and the rupee. On the other hand, a more growth-friendly tone could revive expectations of future rate cuts.

The decision will also matter for financial markets because investors are increasingly comparing India’s monetary-policy direction with that of major global economies. If overseas central banks remain cautious or turn more hawkish while the RBI keeps rates steady, interest-rate differentials could become an important factor for foreign investment flows.

For now, the broad expectation is that the RBI will stay on hold and allow previous policy measures to work through the economy. The central bank’s next moves will depend heavily on the inflation trajectory, domestic growth momentum and the risks emerging from the global economy.

The message from the policy review is therefore likely to be one of caution. With inflation risks still visible despite a relatively benign domestic price environment, the RBI may prefer to wait for clearer evidence before making another move on interest rates.

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Industrial output in India surges 7.3% in June

India’s industrial sector delivered a strong performance in June, with factory output growing at its fastest pace in nearly two years. According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), the Index of Industrial Production (IIP) expanded 7.3% year-on-year in June, marking a sharp improvement from the revised 5% growth recorded in May. It is also significantly higher than the 2.2% growth seen in June last year, reflecting broad-based strength across key sectors of the economy.

The June reading is the highest industrial growth rate in 22 months, signalling that manufacturing activity is gaining momentum despite continued uncertainty in the global economy. The latest numbers suggest domestic demand remains healthy, businesses are investing in expanding capacity, and government-led infrastructure spending continues to support industrial activity.

The biggest contributor to the robust growth was the manufacturing sector, which accounts for nearly four-fifths of the country’s industrial output. Manufacturing production rose 7.8%, indicating increased factory activity across several industries. The improvement points to stronger demand for consumer products, machinery, transport equipment and other manufactured goods.

The electricity sector also recorded impressive growth of 10.6%, supported by higher power consumption from industries, businesses and households. Increased electricity generation often reflects expanding economic activity, as factories require more energy to meet rising production levels.

Meanwhile, the mining sector posted a modest 1% increase, recovering from a contraction in the previous month. Though mining growth remained slower than the other sectors, it added positively to the overall industrial performance.

Another encouraging indicator was the strong rise in capital goods production, which climbed 14.2% during June. Capital goods include machinery and equipment used to produce other goods and services. Economists closely watch this category because it reflects fresh investments by companies. Rising capital goods output generally indicates that businesses are confident enough to expand production capacity, creating a stronger foundation for future economic growth.

Consumer demand also remained healthy during the month. Production of consumer durables, such as home appliances, electronic goods and automobiles, grew 7.7%, suggesting households continue to spend despite inflationary pressures. Better income prospects, easier access to credit and improving consumer confidence have supported demand for these products.

The June data exceeded market expectations. Most economists had projected industrial production to grow by around 5.7%, making the actual outcome a positive surprise. Analysts believe stronger domestic demand, improved manufacturing activity and sustained public investment helped drive the better-than-expected performance.

Government spending on infrastructure continues to play an important role in supporting industrial growth. Investments in roads, railways, airports, housing and other public projects have increased demand for steel, cement, machinery and construction materials. This has created opportunities for manufacturers and suppliers across multiple industries.

The latest industrial production figures also reflect the impact of policy measures aimed at strengthening India’s manufacturing base. Programmes such as the Production Linked Incentive (PLI) scheme have encouraged companies to expand production in sectors including electronics, pharmaceuticals, automobiles and renewable energy equipment. These initiatives are gradually contributing to higher factory output and investment.

June’s figures were released under the revised IIP series, which now uses 2022-23 as the base year instead of 2011-12. The revised methodology also shifts from wholesale prices to producer prices, providing a more accurate picture of industrial activity in line with international statistical standards. Officials believe the updated framework better reflects the current structure of India’s economy.

The encouraging June performance also lifted industrial growth for the first quarter of the current financial year. During the April-June period, industrial production expanded 5.8%, compared with 3.4% in the corresponding quarter last year. The improvement suggests the economy has begun FY2026-27 on a stronger footing.

Despite the positive trend, economists remain cautious about potential risks. Global trade tensions, volatile crude oil prices, geopolitical uncertainties and disruptions caused by extreme weather could affect manufacturing activity in the coming months. Export-oriented industries may also face challenges if demand weakens in major international markets.

However, India’s industrial sector continues to benefit from relatively strong domestic consumption, improving investment activity and supportive government policies. The combination of higher factory output, rising capital expenditure and stronger electricity generation indicates that economic activity remains resilient.

Analysts believe sustaining this momentum will depend on continued infrastructure investment, stable inflation, adequate availability of raw materials and supportive financial conditions. If these factors remain favourable, manufacturing is expected to remain one of the key drivers of India’s economic growth during the current financial year.

The June industrial production numbers reinforce confidence that India’s economy continues to expand steadily. With manufacturing leading the recovery, investment gathering pace and domestic demand holding firm, the industrial sector appears well positioned to support broader economic growth in the months ahead.

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India, UK seal CETA

India and the United Kingdom have signed the Comprehensive Economic and Trade Agreement (CETA), marking a major milestone in their economic partnership. The landmark pact is expected to increase bilateral trade, attract fresh investments and create new opportunities for businesses and workers in both countries.

The agreement aims to raise two-way trade to nearly $100 billion by 2030, with officials and industry leaders describing it as one of India’s most significant bilateral trade deals in recent years. It is expected to reduce trade barriers, improve market access and make it easier for companies to do business across both markets.

For Indian exporters, the deal opens duty-free or lower-duty access to the UK for products including textiles, garments, leather goods, engineering products, auto components, marine products, gems and jewellery. These labour-intensive sectors are expected to benefit from stronger demand, potentially leading to higher production and more employment.

Indian consumers, meanwhile, are likely to see lower prices on a range of premium British products as import duties are reduced in phases. Items such as Scotch whisky, gin, luxury cars, chocolates, cosmetics and selected consumer goods are expected to become more affordable over time.

The agreement is also expected to encourage British companies to invest more in India. Sectors such as manufacturing, financial services, clean energy, technology and innovation are likely to attract greater investment as the pact provides businesses with improved certainty and a more predictable trade environment.

Trade experts say the agreement goes beyond tariff reductions. It includes measures to simplify customs procedures, improve regulatory cooperation and strengthen supply chains, making it easier for businesses—especially small and medium enterprises—to expand into new markets.

For millions of people, the impact could be felt in everyday life. Export-oriented industries may create more jobs, consumers could enjoy a wider choice of products at competitive prices, and businesses may find it easier to collaborate across borders.

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