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12.29 crore.

That’s how many credit cards were floating around India by July 2026, per a CareEdge Ratings note. The base grew 10.1% year on year, the fastest in 15 months.

Sounds like a boom, right? But there’s a twist.

Spending on those cards grew just 7.4% in the same window. Banks are handing out plastic faster than people are using it.

The Gap That’s Doing All the Talking

In July 2026, Indians spent ₹2.09 lakh crore on credit cards. That’s a healthy number, the highest monthly spend since March, and it’s backed by real consumption. GST collections grew 15.4% year on year that month, the strongest pace in 14 months. Car sales were up 26%.

So people aren’t broke. They’re spending.

But 12.7 lakh new cards got added that month alone. Card growth outran spend growth. Do that math over a year and you get a shrinking pie per card.

Per-card spending actually fell 2.4% year on year, down to ₹16,976. Not because anyone cut back. Because the denominator (the number of cards) grew faster than the numerator (the amount spent).

Think of it like a WhatsApp group that suddenly added 50 new people. Total messages go up, messages per person went down.

Wait, Wasn’t This Supposed to Slow Down?

Between FY21 and FY24, unsecured personal loans and credit card growth ran at a scorching 22-25% CAGR. Card outstanding growth touched 34.2% in November 2023 alone. HDFC Bank, freed from an RBI embargo in 2021, was issuing 4 lakh cards in a single month just to catch up.

That was a frenzy of issuance. Banks were sprinting for market share, rewards programs everywhere, sign-up bonuses stacked on sign-up bonuses.

Today’s 10.1% growth is the fastest in over a year. And it’s still less than a third of the 2023 peak.

So when this report says issuance is “outpacing” utilisation, it’s outpacing a much calmer version of itself. The post-COVID hype cycle is over. What’s left is a slower, more deliberate expansion. Just one that’s still faster than usage is catching up to.

Are People Actually Using Their Cards Less?

Short answer: not really.

Aggregate spend rose 7.8% for April-July FY27 compared to the same period a year ago. Online spending was still the majority channel at 63.5% of all card spend. E-commerce spend grew a healthy 7.2%. Offline spending grew 7.6%.

Nobody’s pulling back. What’s actually happening is dilution.

Most of the new cards being issued are going to first-time and tier-2/tier-3 customers, often through public sector banks. Non-SBI PSBs grew their card base by 15.5% year on year, nearly double SBI’s own 7.1%. A lot of this is powered by RuPay credit cards linked to UPI, a format that’s exploded since NPCI data showed 75 crore UPI-RuPay transactions by October 2024.

A first-time cardholder in a tier-3 city doesn’t start swiping big on day one. They take months, sometimes years, to build spending habits, trust the product, and increase their ticket sizes. Banks call this the “activation lag.” It drags the average down even though nobody in the system is spending less.

There’s a second force too. UPI itself is eating small-ticket transactions that might once have gone on a card. The report notes UPI continues to constrain card usage in lower-ticket transactions. So even existing cardholders are routing their ₹200 chai and samosa spends through UPI, not plastic.

What About Credit Limits? Are Banks Being Generous?

Regulation runs the show here. In November 2023, the RBI slapped a higher risk weight on unsecured consumer credit, pushing it from 100% to 125%. Credit card receivables got hit too. Translation? For every rupee of card exposure, banks had to set aside more capital.

By 2025, the RBI started easing up. It cut risk weights back to 100% for personal loans. It also rolled back the hike on bank lending to NBFCs.

But credit card receivables? Still stuck at 125%.

That’s not an accident. The RBI is telling banks, in effect, to go ahead and lend more broadly, but stay cautious specifically on cards.

So what do banks do when the regulator makes it expensive to grow anyone’s individual credit line? They don’t stop growing. They just change how they grow.

Instead of raising limits aggressively on existing customers, and eating the capital cost per account, banks are adding new accounts with modest starting limits. More customers, smaller average exposure each. It’s the same instinct that makes an airline add more flights with smaller planes instead of one giant one. Spread the risk, don’t concentrate it.

That’s exactly the pattern in this data. Card count up 10.1%. Spend up only 7.4%. Total credit “offered” to the system is rising, but it’s rising through the front door of new accounts, not through generous limit hikes to people who already have a card.

Who’s Winning This Race

Private banks still dominate spending, with 72.1% market share, but they’re down from 75.4% a year ago. Public sector banks have gained 267 basis points over the same period, and crucially, that’s not just an SBI story anymore. Non-SBI PSBs grew spending 24% year on year. That’s more than double the industry average.

Foreign banks are doing the opposite of everyone else. Their card base actually shrank 6.5%. But their per-card spend hit ₹23,216, the highest of any bank group, up almost 19% year on year. They’ve quietly decided that chasing volume isn’t worth it. Better to have fewer, richer customers than millions of dormant cards.

Three very different strategies, running in the same market, at the same time.

The Takeaway

None of this looks like the runaway credit boom regulators worried about in 2023. It also doesn’t look like Indians falling out of love with credit cards.

What it actually looks like is India’s credit card story maturing past its land-grab phase. Cards are reaching people who never had one before, RuPay and UPI are quietly rewiring how small payments happen, and regulation is nudging banks toward caution on individual exposure even as the overall market keeps widening.

The real test comes over the next few months. Festive season spending typically pulls per-card usage up. If newly issued cards start converting into real, repeated spend once the discounts and offers hit, this gap closes on its own.

If it doesn’t, and issuance keeps racing ahead of usage quarter after quarter, that’s a different story. One about how many of those 12.29 crore cards are actually sitting unused in someone’s wallet.

Which one plays out probably says more about the Indian consumer than it does about any bank.

Until that happens, ReadOn!

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$428.3 billion.

That’s how much global tech companies borrowed in bonds in 2025, up from roughly $150 billion just two years earlier. We’re talking giants like Nvidia, Meta, Amazon, and many more!!

Umm, what? Aren’t these the same companies sitting on mountains of cash?

Turns out, not enough cash. Not for this.

Let’s find out what’s going on.

From cash machines to borrowers

For years, the AI story was simple. Microsoft, Google, Amazon and Meta spend on chips and data centres. Nvidia, Broadcom, TSMC and Micron collect that spending. Investors buy both ends of the trade and everyone’s happy.

The Big Four are now expected to spend a combined $725 billion to $730 billion on capex in 2026, up about 77% from roughly $410 billion in 2025. Amazon alone is guiding toward $200-$220 billion. That’s more than the annual GDP of countries like Portugal or New Zealand, spent by one company, in one year, mostly on GPUs and data centre shells.

Here’s the thing. Even Big Tech’s famous cash piles can’t fully fund that anymore. So they’re doing what any company running out of spare cash does. They’re borrowing. A lot.

That’s why credit markets, not stock prices, are where the first cracks are showing.

The GPU problem nobody wants to say out loud

Bonds are being issued for 10 to 20 years. GPUs are obsolete in 3 to 5.

So a cloud company is borrowing money for two decades to buy equipment that needs replacing every few years. It’s like taking a 20 year home loan to buy a smartphone.

This mismatch is exactly why State Street’s research team frames the AI cycle as shifting from an earnings story to a balance sheet story. It’s no longer just about who grows fastest. It’s about who can actually afford the loan.

Not every layer of the AI value chain carries this risk equally, though. Chipmakers like Nvidia are flush, reporting FY2026 free cash flow of $96.7 billion against just $6 billion in equipment purchases. The real stress sits one layer down, with “neoclouds” like CoreWeave and Oracle, companies that lease out GPU capacity but carry heavy debt and uncertain utilisation.

That stress already shows up in prices. As of late July, CoreWeave’s five year credit default swaps traded above 700 basis points, versus 50 to 85 basis points for mega-cap tech. Translation: the bond market thinks CoreWeave is roughly ten times riskier to lend to than Microsoft.

That’s not all. A growing chunk of this buildout doesn’t even show up on balance sheets. Through leases and special purpose vehicles, what the Bank for International Settlements calls “shadow borrowing”, companies are moving risk off their books. Sound familiar? It’s a page borrowed from the pre-2008 securitisation playbook, minus the mortgages.

Paying yourself and calling it demand

So, how much of “AI demand” is actually real, and how much is the ecosystem paying itself?

Hyperscaler cash funds neocloud capacity. That capacity trains models for OpenAI, Anthropic and others. Those same AI labs are simultaneously among the biggest customers buying that infrastructure. It’s a circle, and SSGA’s researchers flag it as a real thing to watch, even while stressing it isn’t proof of a bubble by itself.

If that circle ever needs to shrink, say because cheaper AI services eventually squeeze margins, the pain doesn’t spread evenly. It lands hardest on the already-leveraged neoclouds and the still-unprofitable model developers first.

There’s a secret macro thread here too. For decades, Japan has exported cheap savings to the world, helping keep global borrowing costs low. As the Bank of Japan normalises policy and domestic Japanese yields become more attractive, that pool of patient capital may get pickier about funding America’s AI buildout. That’s one more reason the “cost of money” question isn’t going away soon.

From Boston to Bengaluru

India is more than a bystander here. We’re running our own, smaller version of the same bet.

Cumulative investment commitments into India’s data centre sector have already crossed $126 billion, with CBRE projecting that could climb toward $180 billion by the end of 2026. The Ministry of Electronics and IT expects AI-led digital infrastructure to eventually catalyse up to $200 billion in investment.

Why though? Because India wants a slice of the same buildout, and it’s using policy to lower the cost of capital, exactly the lever SSGA’s whole thesis revolves around. Budget 2026-27 introduced a 20 year tax holiday, running until 2047, for foreign cloud providers using Indian data centres, alongside a friendlier tax regime for the entities operating them.

There’s a second, less obvious way India rides this wave. Global Capability Centres, the offshore hubs multinationals use to run AI, engineering and analytics work, now number more than 2,100 in India, generating close to $100 billion in annual revenue. If financing pressure forces hyperscalers and AI labs to get leaner, GCCs doing that AI engineering work from Bengaluru and Hyderabad are a cheaper way for MNCs to keep building, without another data centre’s worth of capex.

That’s the upside case. The downside is just as direct. India’s data centre boom is leveraged to the same hyperscaler capex cycle SSGA is describing. If Layer 2 and Layer 4 financing stress eventually forces Microsoft, Google or Amazon to slow down, the ripple reaches Mumbai, Chennai and Hyderabad with a lag, not a firewall.

The Takeaway

So, is this a bubble? Not quite.

SSGA is deliberately careful not to call this a bubble. Neither should we. The technology usually does deliver, eventually. Railways, canals and fibre optic cables all overbuilt first and paid off for society later, even when the investors funding the boom took a beating along the way.

The real question was never how much gets spent. It’s whether that spending converts into returns that can actually cover the financing bill.

India is now writing tax breaks and pouring capital into betting that it will. That’s worth remembering, the next time your feed tells you AI capex is unstoppable: even Amazon and Microsoft are borrowing to keep up. What happens if the bill comes due before the returns do?

Until we find out, ReadOn

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It took India 67 years to build its first $2 trillion of GDP. It took one decade to add the next $2 trillion.

Equirus, the investment bank, now wants the next twelve years to add sixteen more. Its new India Growth Series report lays out twenty specific reforms meant to take India from roughly $3.7tn today to $20tn by 2036.

That’s a 5.5x jump.

Here’s the twist though. The reforms are only half the plan. The other half depends on something India’s currency isn’t currently doing.

The math behind the dare

To hit $20tn, India needs to grow at about 18% a year in dollar terms. That’s well above India’s own historical trend of 10 to 11%.

Equirus points to China as proof it’s been done before. China grew at roughly 18% a year in dollar terms for eleven straight years off a similar base.

Except China’s dollar growth has stalled hard since then. Its GDP was $18.3tn in 2023 and $20.85tn in 2026, just a few percent a year, nowhere close to 18%. A strong dollar and a weakening yuan ate most of China’s real growth before it ever showed up in the GDP number.

That’s the exact risk sitting inside India’s own plan.

Because dollar GDP isn’t just about how fast the economy grows in rupees. It’s about what the rupee is worth when you convert it. Grow the rupee economy at 14% and let the currency stay flat, and you land at roughly $14tn, not $20tn. You only get to $20tn if the rupee also appreciates by 3-3.6% every year for a decade.

Right now, it’s moving the other way. The IMF’s April 2026 World Economic Outlook pegged India’s nominal GDP at $3.92tn, and the government told Parliament that India had actually slipped to the sixth-largest economy in the world, behind the UK and Japan. Not because India grew slower. India is still the fastest-growing major economy at 6.5-7.6% real growth. It slipped because the rupee depreciated roughly 11% against the dollar over the past year.

So the plan needs the rupee to flip from depreciating to appreciating. That’s the real bet.

The reforms that are supposed to make it happen

Equirus doesn’t just say “grow faster.” It lays out twenty concrete levers across five buckets: the real economy, capital markets, human capital, services, and governance. Here are a few worth knowing.

Cold storage, taxed into existence. India grows 355 million tonnes of fruit and vegetables a year and loses about 50 million tonnes of it, worth roughly $18.5bn, because only 4% of produce travels on a cold chain, against 80-85% in the US. The fix is a ten-year tax holiday to pull private capital into cold storage, the same playbook used for the PLI scheme.

Fuel, finally under GST. Right now fuel sits outside GST, so excise and state VAT stack on top of each other. On a ₹97 litre, about ₹24 of that is tax on tax. Folding fuel into GST could knock the price down by roughly 19% and free up an estimated ₹5.5 lakh crore economy-wide. It would cost the centre about ₹1.6 lakh crore a year in excise, which is the trade-off nobody in government wants to make first.

The Railways, taken public. Indian Railways spends about ₹2.8 lakh crore a year, almost entirely taxpayer funded. Listing it, Equirus argues, could value it at roughly $500bn and pull in real foreign capital, since listed Indian companies typically see about 15% foreign ownership. That’s forex flowing in, which is exactly the kind of thing that supports a currency.

A sovereign fund, Temasek style. The government sits on about $249bn of equity spread across public sector companies, run piecemeal by different ministries. Pool it into one vehicle, list the vehicle instead of the underlying companies, and sell a small slice each year. Temasek turned a S$354 million seed in 1974 into roughly S$521bn today. India has never tried anything like it at this scale.

India’s services superpower, scaled up. India already hosts over 1,800 Global Capability Centres, about half of all GCCs on the planet, employing 2.16 million people. Getting to 5,000 could mean 20-25 million jobs. What’s holding it back isn’t demand, it’s fragmented state-level regulation and slow transfer-pricing approvals.

Mayors, actually elected. Indian cities run on a split between an elected mayor and an appointed commissioner, with nobody fully accountable for either. A directly elected strong mayor, the way London or New York does it, is the cheapest reform on the list. It needs a state law change and nothing else.

There are fourteen more, covering everything from scrapping advance tax to cutting withholding tax to a threefold jump in the clean air budget. Equirus’s own math says the package pays for itself 2.3 times over in year one, mostly because several of the “costs” aren’t real losses, they’re just tax collected a few months later than before.

The Takeaway

So, will it work?

Here’s the honest answer. Most of these twenty reforms are things India can actually do. They don’t need new money so much as a change in law or political will, and several genuinely cost the exchequer next to nothing.

But even if every single one lands exactly as described, the plan only gets India to about $14tn on rupee growth alone. The other $6tn needs the currency to cooperate for a decade straight, and right now the currency is moving in the opposite direction.

That’s not a reason to write the plan off. A rupee that’s depreciating because of a temporary dollar squeeze and a GDP-series revision is a very different animal from a rupee in structural decline. If the reforms genuinely improve India’s trade balance and pull in more foreign capital, they could be exactly what turns that around.

But it does mean the real story here isn’t the twenty reforms. It’s whether India’s currency spends the next decade working with the growth story or quietly cancelling it out. That’s the number worth actually watching, long before 2036 rolls around.

Until then, ReadOn!

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14 centimetres.

That’s how low the water at Kaub, a small town on the Rhine, dropped in early August 2026. It’s the lowest reading since records began in 1880.

Not the lowest since 2018. Not the lowest this decade.

The lowest ever measured.

And unlike the last big drought, this one arrived early. In 2018, the Rhine bottomed out in late October. This year, it broke the record in the first week of August, with the driest months of the year still ahead.

A river running low sounds like a weather story. It isn’t just that. It’s a balance sheet story too.

Let’s find out how.

Why Kaub, specifically

The Rhine runs from the Swiss Alps to the North Sea, cutting straight through Germany’s industrial belt. And Kaub sits at its shallowest, rockiest stretch, which makes it the choke point every barge captain watches.

Below a certain depth at Kaub, ships simply can’t load fully. They have to skim the surface instead, carrying a fraction of their usual cargo or risk running aground.

That threshold is 78 centimetres. Kaub has been sitting at roughly a third of that for weeks.

So what happens to a barge that would normally carry 2,000 tonnes of coal or naphtha? It carries a few hundred instead. Or it doesn’t sail at all.

Multiply that across hundreds of barges a day, carrying everything from diesel and heating oil to grain and cocoa, and you start to see the shape of the problem.

This has happened before. It’s worse this time.

Rewind to 2018. The last time the Rhine hit record lows, Germany’s industry lost about €2.5 billion, according to a scientist at the Commission for the Protection of the Rhine. Deutsche Bank separately estimated the disruption shaved 0.2 percentage points off German GDP that year.

You might think that’s a small number. Except Germany’s entire GDP growth in a normal year is often not much bigger than that.

This year, Commerzbank’s senior economist estimates that if the water stays critically low through mid-September, it could shave 0.35 percentage points off Germany’s GDP this quarter alone. And the same economist doesn’t expect a real recovery before October.

Who’s actually feeling this

Chemical major BASF has its main Ludwigshafen site sitting right on the Rhine, south of Kaub. That’s not a coincidence. Chemical plants are built next to rivers because they need barge access to move raw materials in and finished products out, cheaply, at scale.

Learning from 2018, BASF built a custom low-water tanker, the Stolt Ludwigshafen, designed to keep moving cargo even when the Kaub gauge reads just 30 centimetres. One ship, though, can only do so much.

Evonik Industries, another chemicals heavyweight, said it’s shifting a chunk of its freight to rail and road to work around the river. Utility EnBW, which normally ships in coal from Rotterdam, estimated the disruption will cost it a low double-digit-million-euro hit to earnings.

There’s a catch with rail and road, though. One barge carrying grain does the job of roughly 40 trucks. Rail and road capacity in Europe is already tight. You can’t just swap modes and expect the same cost or speed.

So companies are paying more, moving less, and hoping for rain.

Why should someone in India care about a river in Germany?

Fair question. Here’s why.

Germany isn’t just Europe’s largest economy. It’s one of India’s biggest trading partners in Europe, particularly in chemicals. India imported over $20 billion worth of miscellaneous chemical products from Germany in 2024, and exported over $11 billion worth the other way. Add organic chemicals, and Indian exports to Germany alone cross $11 billion more.

A lot of that trade depends on German chemical plants running at normal capacity. When BASF or Evonik throttles production because barges can’t move, the ripple doesn’t stop at the German border. It touches every Indian company that imports German specialty chemicals, pharma intermediates, or industrial inputs, and every Indian exporter feeding raw material into German supply chains that are now running slower and costlier than usual.

It’s a reminder that “geopolitics” isn’t limited to wars and tariffs only. It’s also a factor of rainfall and other weather and climatic phenomena.

The Takeaway

This isn’t a one-off anymore.

The Rhine hit record lows in 2018. It came close again in 2022. Now it’s broken its own record in 2026, months earlier in the year than last time.

Zoom out further and it’s not just the Rhine. The Danube has battled similar extreme conditions this year. The Panama Canal has restricted transits during past droughts. Waterways that global trade quietly assumed would always be there are turning out to be far more fragile than pipelines or ports.

For investors and businesses, that’s a new kind of risk to price in, one that doesn’t show up on a balance sheet until the water drops.

So here’s the open question. As droughts like this become less of a once-in-twenty-years event and more of a recurring one, do companies like BASF keep building custom ships and rerouting trucks each time? Or does someone, somewhere, start rethinking whether it makes sense to build an industrial economy on the banks of a river that increasingly can’t be relied on?

Until we find out, ReadOn!

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76.2 billion.

That’s how many chickens were raised globally for meat in 2023, up from 48.3 billion in 2006, according to data cited by the Financial Times. In 2022, chicken overtook pork to become the most produced meat on the planet.

Nobody threw it a party. But they should have.

Because somewhere between the paper bucket in an American drive-through and the biryani on your plate, chicken pulled off something no other protein has managed. It became the thing almost everyone defaults to, no matter their income, religion, or geography.

An interesting way to look at chicken would be a lot like a reserve currency. The dollar isn’t loved. It’s just the thing everyone trusts when the alternatives get complicated. Chicken is doing the same job on your dinner table.

Let’s see what’s cooking!

The bird nobody bet on

For most of the last century, chicken wasn’t even trying to win this race. Beef had status. Pork had scale, especially across China and Europe. Chicken was, honestly, a side character.

Chicken wasn’t originally a meat business at all. Farmers kept birds for eggs, and meat was almost an afterthought, sold off as spent hens or spare young males (that’s literally where the phrase “spring chicken” comes from). In 19th century America, chicken could cost more than beef.

Then refrigeration happened. Railways happened. Cities grew. By the 1930s, supermarkets began engineering chicken into a mass-market product, standardised, chilled, and cheap. Postwar “Chicken of Tomorrow” contests pushed breeders to build a bird for retail, not for the barnyard.

It worked a little too well. The average bird bred for the table went from 905 grams in 1957 to 4,202 grams by 2005. More than four times the meat, same footprint. Feed conversion improved. Production cycles shrank. Prices fell.

That’s not all. Once the economics broke chicken’s way, they never really reversed.

The scoreboard today

The chicken business is no longer an American story. The US pioneered the industrial model, but Brazil now exports more chicken than anyone else, shipping around 4.9 million tonnes in 2024, up from roughly 910,000 tonnes in 2000. That’s a five-fold jump in under 25 years.

China and America together eat a third of the world’s chicken. And China isn’t content being a customer anymore. It’s ramping up domestic production because it wants to become an exporter too. Yum China alone opened 457 net new KFC stores in a single quarter in early 2026, pushing its total past 13,000 outlets.

Global production growth has actually sped up recently. It ran at 2-2.5% a year for two decades, then accelerated past 3% in the last three to four years.

An agricultural economist at Kansas State put it bluntly: we’re a long way off peak chicken.

Where’s India in this story?

Curiously, India is barely mentioned in the original reporting. Which is a little strange, because India sits among the world’s top five chicken meat producers, turning out roughly 4.78 million tonnes of poultry meat a year and growing nearly 7% annually. The sector’s gross value added crossed ₹1.8 trillion in FY2023, government data shows, and it’s been climbing every year on record.

And India’s chicken story looks less like “peak” and more like “just getting started.”

Per capita chicken consumption in India is still tiny by global standards. Cornell’s Tata-Cornell Institute tracks government household survey data showing it inching up broadly across income groups, not just among the wealthy. But the more telling number is where this is headed. The OECD and FAO’s 2025-2034 Agricultural Outlook projects India and Southeast Asia together will drive 31% of all global consumption growth in agriculture and fisheries through 2033, with poultry meat alone expected to make up 43% of total meat protein eaten worldwide by then.

Small base. Big runway.

That growth isn’t just a metro story either. It’s broad-based, with eastern India specifically seeing some of the sharpest gains in recent years. That could be a signal for an actual market opeinng.

The India trade you’re probably not watching

Here’s where it gets interesting for anyone who actually tracks stocks.

Venky’s India, the country’s largest integrated poultry player, just had a brutal quarter. Net profit fell nearly 79% year-on-year to ₹15.83 crore in Q1FY26, down from ₹75.18 crore. Revenue actually grew 7%. Profit still collapsed.

Why? An April heatwave triggered panic selling of birds over fears about mortality in extreme heat, crushing realisations. Total expenses jumped over 19% while poultry segment revenue actually slipped.

This is the uncomfortable truth about chicken as a business, not just a dinner plate item. It looks like a boring, defensive staple, but it trades like a commodity with a temper. One heatwave, one feed price spike, one bird flu scare, and margins evaporate overnight.

Godrej Agrovet, which runs the Real Good Chicken and Yummiez brands, sits on the other side of this coin. It’s a bigger, more diversified business where poultry is one leg among feed, dairy, and crop protection, built specifically to smooth out this kind of volatility.

Same industry. Two completely different risk profiles. That’s the kind of detail a global “chicken is unstoppable” headline never tells you.

The part everyone would rather not discuss

Demand for chicken isn’t really the constraint anymore, anywhere. Permission is.

In the UK, campaign group River Action won a High Court ruling in 2025 reclassifying chicken manure from industrial farms as waste rather than an agricultural byproduct, a decision that later helped block a large poultry unit in the River Severn catchment. In Croatia, a mega poultry project by Ukrainian group MHP was abandoned this year after mass protests. Mallorca’s local government denied a processing plant permit outright.

A French poultry farmer summed up the contradiction perfectly: people reject industrial farming as citizens, then queue for it as consumers.

India hasn’t hit this wall yet. Planning objections, animal welfare litigation, and organised environmental pushback against poultry expansion are nowhere near European or even American intensity here. That’s either a genuine growth advantage or a problem that’s being deferred. Possibly both.

The Takeaway

Structurally, chicken has almost no natural predator among proteins. It’s cheap. It’s fast to produce. It clears religious and cultural restrictions that box out beef and pork across huge swathes of the world. When beef prices spike, as they have recently, chicken is the obvious substitute, and it doesn’t give that share back easily once consumers adjust.

But “unstoppable” and “immune to shocks” are different things. Ask Venky’s shareholders about April, and they’ll agree.

For India specifically, the real story isn’t imported from an FT headline about American drive-throughs or European court rulings. It’s a market where per capita consumption still has enormous room to run, where East India is genuinely part of the growth curve rather than an afterthought, and where the volatility is less about permission to expand and more about weather, feed costs, and festival-season demand swings.

The chicken didn’t just conquer the world’s plates. It’s becoming one of the more interesting, and more temperamental, bets on the Indian consumption story though.

Question is whether Indian investors are pricing that in, or still filing it under “boring commodity business.”

Until we find out, ReadOn!

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India is now the world’s second-largest mobile phone manufacturer, trailing only China. According to our IT minister, the industry’s manufacturing value surged from ₹18,900 crore in 2014 to ₹4.22 lakh crore in 2024.

But what’s inside these phones says less about independence than anything. According to Crisil, domestic value addition in mobile manufacturing has crept up to only around 20%. The rest, chips, displays, camera modules, batteries, still come from somewhere else. India isn’t building the phone. We’re assembling it.

That gap between the label and the supply chain is the whole story of a new Crisil note. It talk about how India’s import dependence goes beyond what we consume, and our mobile phones are just one of the industries where we do this.

Let’s see what’s going on!

Why is this coming up now?

Earlier this year, war broke out between Iran and a US-Israel coalition, and the Strait of Hormuz, the channel that carries roughly a fifth of the world’s oil trade, effectively shut down. The International Energy Agency called it the largest supply disruption in the history of the global oil market.

Brent crude spiked past $100 a barrel. Countries that import most of what they burn found out, in real time, what dependence actually costs.

Crisil’s note picks up exactly there. Not oil in isolation, but the broader question: where else is India exposed the same way?

Turns out, quite a few places. And it’s not just about the trade deficit anymore. Global Trade Alert data shows trade restrictions worldwide have piled up fast since 2021, far outpacing the trade rules countries are easing. The world is getting stingier with the very things it used to happily sell.

How do you actually measure “dependence”?

Crisil didn’t just eyeball this. It used the National Statistics Office’s Supply-Use Tables for 2023-24, which track, sector by sector, what share of everything India consumes is imported versus made at home.

The headline finding was that industry (mining plus manufacturing) is by far India’s most import-dependent piece of the economy. Agriculture, construction, utilities, and services barely lean on imports at all. They’re the buffer. Industry is the exposure.

Within manufacturing, there’s a pattern worth noticing. Finished products, clothing, cars, packaged food, mostly get made here. It’s the inputs, the raw materials and components that go into making those products, where India leans hardest on the outside world.

That’s the mobile phone story, generalised. Assemble locally. Source globally.

Three places where it actually bites

Energy. No surprise here, but the scale is still stark. Crude oil covers 85-90% of India’s domestic requirement, and that number has only crept upward. By fiscal 2025, import dependency hit a fresh high of 88.2%. Natural gas isn’t far behind, at 66% import-dependent. Interestingly, India’s oil and gas import bill actually fell 12% in the first seven months of FY26, to $69.9 billion. That sounds like progress. It isn’t. Prices just softened. The dependence never went anywhere.

Strategic tech. This is the newer worry. NITI Aayog pegs India’s semiconductor dependence at a staggering 90-95%. Rare earth permanent magnets, the things inside EV motors and wind turbines, sit at 60-80%. This isn’t hypothetical risk. In April 2025, China restricted exports of seven rare earth elements, and Indian automakers scrambled almost overnight, lobbying the government to fast-track approvals just to keep production lines running. China eventually eased the curbs during a foreign ministers’ visit in August, alongside similar restrictions on fertilisers. It was relief, but it was also conditional, granted at someone else’s convenience.

Food is the exception that proves the rule. Only 1.9% of India’s agricultural supply is imported. Cereals, pulses, sugar, milk, eggs, fish, nearly self-sufficient across the board. But two cracks run through that comfort. Edible oil imports cover 56.2% of domestic consumption. Fertiliser import dependence sits at 31.3%, and when China briefly restricted DAP fertiliser exports last year, Indian farmers felt it directly during the Rabi sowing season. Even the safest category has a soft underbelly.

Has anyone actually tried fixing this?

Yes, and it’s worked, partially. The government’s production-linked incentive scheme helped India become the world’s second-largest mobile phone manufacturer, pulling in over $17 billion in investment across mobiles, semiconductors and consumer electronics.

But that 20% value-addition number tells you where the ceiling currently sits. India assembles. It doesn’t yet make the parts.

So the government’s now going one layer deeper. The Electronic Component Manufacturing Scheme, launched in 2025, targets the components themselves, not just final assembly. The India Semiconductor Mission and the Rare Earth Permanent Magnet Scheme aim at the two most exposed strategic categories directly.

The market opportunity underneath all this is real. India’s semiconductor market, worth just $15 billion in 2020, is expected to reach $63 billion this year, with the government aiming to put India among the world’s top four semiconductor manufacturing nations by 2035. The demand is there. The question Crisil is really asking is whether the supply chain catches up before the next shock, or after.

The Takeaway

Import dependence used to be a trade-deficit problem, a problem that mattered to economists and finance ministry types. Crisil’s argument is that it’s become something more painful: a supply-shock risk that can hit growth and inflation at the exact same time, from the exact same event.

Your phone is a small, personal version of this. “Made in India” sits printed on the box. Inside, most of what makes it work travelled a long way to get there. Multiply that logic across chips, magnets, fertiliser and crude, and you get a trade deficit with China running past $100 billion a year, and a country that discovers its vulnerabilities mostly when someone else decides to test them.

Building real resilience here won’t happen in just a quarter, or even a few. It’s a decade-plus bet on components, minerals, and fabrication capacity that won’t show up in GDP data for years. India has started making that bet. Whether it has the patience to see it through before the next Strait of Hormuz moment arrives is the actual question. Crude discounts from Russia can buy time. They can’t buy independence.

Until next time, ReadOn!

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Ginger is up 83% this year. Garlic is up 35%. Onions are up 22%.

Not over five years. Over twelve months. That’s what India’s food inflation data for July 2026 is telling us, buried under a headline number that sounds almost boring.

UBS also just published a report with the title “The end of cheap food?”. That should worry us more than any of those percentages. Their answer, in short, is yes. And they think India is the exception.

Turns out, the data disagrees. Let’s see how.

The bank’s big claim

UBS isn’t talking about a bad monsoon year or a one-off supply shock. They’re arguing food inflation is becoming structural. Permanent, or close to it.

Their reasoning rests on five forces. Climate disruption, weak farm profitability, rising livestock welfare costs, higher labour costs across the food chain, and demand simply growing faster than supply can keep up.

Stack all five together, and you get a world where food prices don’t really come back down. They just find a new, higher normal.

The global numbers back this up. The FAO Food Price Index hit 131.1 points in July 2026, the highest reading in three years. Wheat is up 5.8%. Vegetable oils are at a four-year peak.

Clearly, this is a trend with momentum behind it, not just a blip.

So why does UBS think India’s fine?

Because on paper, India looks like it’s playing a different game. UBS’s report notes that markets like India “benefit from productivity gains and policy support,” unlike the UK and Europe, which are getting hit by nearly all five forces at once.

And there’s real substance behind that claim. India’s government has scaled up its agriculture budget from ₹11,915 crore in 2008-09 to ₹1.62 lakh crore in 2026, an almost fourteenfold jump. Add to that a report from Aspire Impact suggesting India could pull in $272 billion in agritech investment by 2030, generating $813 billion in revenue along the way.

Drones. Satellite crop monitoring. AI-driven advisory tools. All of it aimed at squeezing more food out of the same land, more reliably.

Sounds like a solid hedge against the five forces UBS is worried about.

Except.

What the RBI’s own data says

Here’s where the story gets interesting. While UBS was writing about India’s resilience, India’s own inflation print was doing the opposite of being resilient.

Food inflation hit 5.52% in July 2026, according to the Ministry of Statistics. That’s up from 5.32% in June and 4.78% in May. Three straight months of acceleration.

Rural India is getting hit harder than urban India. Rural food inflation sits at 5.79%, against 5.05% in cities. And it makes sense when you think about it. The people closest to the farm are often the ones most exposed when input costs and weather volatility spike, not the most insulated from them.

And this has pushed headline CPI to 4.45%, above the RBI’s 4% target for a second straight month. Still inside the central bank’s 2-6% comfort band, technically. But moving in the wrong direction, and moving there because of food, not some broader overheating.

So which is it? Is India the resilient exception UBS describes, or is it living through the same structural squeeze as everyone else, just with better PR?

Probably both, actually. That’s the uncomfortable answer.

A race, not a rescue

Think of it less as India being immune, and more as India running two parallel races at the same time.

In one lane, we have climate shocks. Weaker monsoon rainfall, an unpredictable El Niño pattern, and volatile input costs from a jittery global oil market are actively driving up prices for staples farmers can’t fully control.

In the other lane, we have productivity investment. Government spending, agritech capital, better irrigation, better crop forecasting, all trying to outrun those same shocks.

Right now, going by July’s numbers, the shocks are winning. Garlic at 35% inflation is a “something broke in the supply chain this season” story.

That doesn’t mean the productivity bet is wrong. Ten years is a long runway for drones and AI advisory tools to actually move the needle on yields. But it does mean investors shouldn’t read UBS’s India paragraph as “nothing to see here.”

The Takeaway

If food inflation is structurally higher, not just this year but for years, a few things follow.

The RBI has less room to cut rates, even if growth needs support. The repo rate sits at 5.25% right now, and food-driven inflation makes it harder to justify going lower without risking a spiral into the rest of the consumption basket.

Household budgets get squeezed in a very specific way. Food is a bigger share of spending for lower and middle-income Indians than for wealthier ones. That means less room for discretionary spending, the stuff that fuels categories like retail, travel, and entertainment.

And it means the agritech and FMCG-adjacent trade isn’t just a nice thematic story anymore. It’s becoming a genuine hedge against a macro trend, not a speculative bet on the future of farming.

Here’s the real question UBS’s report doesn’t quite answer. Can India’s ₹1.62 lakh crore agriculture bet and its agritech investment wave actually outpace the next El Niño cycle, or the one after that? Because right now, the ginger on your plate suggests the climate is still setting the pace, not the policy.

Until next time, ReadOn!

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-1.2%.

That was the return on assets, or how much profit a lender makes for every rupee it manages for India’s microfinance industry in FY25. In plain terms, the industry was losing money on the loans it gave out.

The microfinance industry gives small, mostly collateral-free loans to low-income borrowers, like owners of small businesses, and for two straight years, it looked broken.

It gets worse. Lenders had to set aside 8.7% of their assets just to cover loans that customers weren’t repaying.

Then, after seven quarters of struggle, India’s microfinance industry finally grew again in early 2026. Right now, the industry has reached ₹3.25 lakh crore in total loans outstanding.

Interestingly, right as the sector claws its way out of a two-year slump, two of India’s biggest lending groups have filed papers to list on the stock market. One of them is Svatantra Microfin, run by Ananya Birla. The other is Muthoot Fincorp, which belongs to the family that basically invented the modern Indian gold loan.

Turns out, timing is everything. Let’s find out what’s going on.

How things got this bad

Rewind to 2022. The Reserve Bank of India relaxed the rules around microfinance lending, hoping to help more people borrow after COVID. It worked, but a little too well.

Between FY23 and FY24, lenders raced to grow. Loan checks got sloppy. Many borrowers ended up juggling loans from four or more microfinance lenders at once. That’s a red flag called overleveraging, and it means owing more than you can realistically repay.

By FY25, the cracks showed. Loan defaults piled up. That’s what pushed credit cost, the money lenders set aside for loans that won’t be repaid, and return on assets into the red numbers you just read above.

Not a great look for an industry meant to be lending responsibly to India’s poorest borrowers.

The rulebook that saved the sector

So the industry’s self-regulator, MFIN (Microfinance Institutions Network), stepped in with what everyone now calls “the guardrails.”

The rules were simple, if strict. No borrower could have loans from more than three microfinance lenders at once (down from four). No single borrower could owe more than ₹2 lakh across all their microfinance loans. And if you already owed money that was more than 60 days overdue, no lender could give you a fresh loan.

It worked. The share of borrowers juggling four or more lenders fell from 13% in March 2024 to just 4% by June 2026. Lenders are now serving fewer borrowers (down from 7.8 crore to 6.4 crore) but giving them bigger, more carefully checked loans (the average loan size rose from ₹48,300 to ₹61,500).

That’s not all. Loans overdue by just 1 to 30 days, an early warning sign, dropped to 0.5% of the loan book by June 2026, down sharply from 1.4% a year earlier. Profitability followed. Return on assets flipped from -1.2% to 0.5% in FY26, and CareEdge Ratings expects it to climb further to around 2.4% in FY27.

The government also chipped in, launching a credit guarantee scheme in March 2026 to nudge banks toward lending to microfinance companies again. Sounds great on paper. In practice, a survey of 10 rated microfinance lenders found they’d only actually received ₹900 crore in loans through the scheme, against a target of ₹20,000 crore for the whole sector. So, is that it? Well, it’s not quite a fix, but more of a work in progress.

A recovery that isn’t reaching everyone

Here’s the catch. This comeback story is really a story about the big players.

Large microfinance companies (those managing over ₹2,000 crore) grabbed about 98% of all the new money that flowed into the sector in FY26. Small lenders, meanwhile, are struggling to raise funds at all. Big companies raised money worth 60% of their loan book size, while small companies could only manage 14%.

What does that mean in plain terms? The strong are getting stronger, and the weak may not survive as independent companies. Expect more mergers and shutdowns among the smaller players over the next couple of years.

Which brings us to why two giants just walked into the stock market’s front door.

Two companies, two very different bets

The first is Svatantra Microfin, promoted by Ananya Birla. Its draft paperwork for an initial public offering was filed on August 13, seeking to raise up to ₹3,000 crore, split evenly between fresh shares and existing investors selling their stake. This is a pure-play microfinance bet. Svatantra recently absorbed another lender, Chaitanya India Fin Credit, through a court-approved merger, and it also owns a small housing finance arm. But at its core, this is a company betting the market wants direct exposure to microfinance, recovery and all.

The second is Muthoot Fincorp, and here’s where it gets interesting. Despite the name overlap with “microfinance,” Muthoot Fincorp isn’t actually a microfinance company. It’s the flagship gold loan lender of the Muthoot Pappachan Group, the same family behind Muthoot Blue. Its own DRHP, filed August 12, seeks to raise ₹3,000 crore in fresh shares, with room for another ₹600 crore from investors just before listing.

So where does microfinance fit in? Through a subsidiary. Muthoot Fincorp owns just over half of Muthoot Microfin, an already separately listed microfinance lender that’s targeting ₹20,000 crore in loans by FY27 while pushing into safer, collateral-backed products like loans against property.

Before this DRHP could even be filed, the group had to clear a regulatory hurdle. Muthoot Fincorp’s promoters, the Muthoot brothers and their family trusts, needed to restructure who owned what within the family, so that enough shares stayed with the individual promoters to satisfy SEBI’s rules on minimum promoter ownership ahead of an IPO. SEBI granted that exemption on August 3, clearing the path for the DRHP filed nine days later.

Put simply, Svatantra is selling investors a bet on microfinance itself. Muthoot Fincorp is selling a bet on gold loans, with microfinance as a side dish through an already-listed subsidiary.

The Takeaway

So, is microfinance investable again?

Two IPOs from two very different kinds of companies are still a signal worth paying attention to. It tells you capital markets are warming up to a sector that was practically radioactive just 18 months ago.

But CareEdge’s own numbers carry a caveat. About 67% of the microfinance loan book is tied to agriculture and rural incomes, which means the whole recovery still leans on the monsoon behaving itself and rural India staying politically calm (loan waivers and recovery restrictions in election season have hurt lenders before).

So here’s the real question for anyone tracking these listings. Is this the moment microfinance finally grows up into a mainstream, investable asset class? Or are large promoters simply cashing out at the top of a recovery that’s still standing on fairly wet ground? That’s something worth keeping an eye on.

Until next time, ReadOn!

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87.7%.

That’s the share of individual traders who lost money trading equity derivatives in India last year. Not a bad quarter. Not a rough patch. The whole year of FY26.

SEBI’s own numbers put the aggregate damage at ₹91,685 crore. That’s smaller than FY25’s ₹1.12 lakh crore hole. Sounds like progress, right?

Turns out, not quite. Today, we’ll look at the reality of equity derivatives in India, through numbers presented in SEBI’s two reports on this market segment.

Let’s begin.

Wait, fewer people lost more money?

Here’s the twist. The average loss per trader actually went up, from ₹1.14 lakh to ₹1.17 lakh. Fewer people showed up to the table. The ones who stayed lost more on average.

Active individual traders fell 18%, from 106.2 lakh in FY25 to 87.5 lakh in FY26. That’s the first year-on-year drop in the trader base since FY16. New entrants crashed too, down 40% to just 20.8 lakh, well below FY24’s peak of 43.1 lakh.

And the exits accelerated. Nearly 46 lakh people who traded in FY25 simply didn’t come back in FY26, up 76% from the previous year’s dropout count.

So why the retreat? SEBI rolled out a set of curbs starting November 2024, weekly contract limits per exchange, bigger lot sizes, upfront premium collection from buyers. Fewer casual players walked in. The ones who stuck around kept playing the same losing hand.

Same house, same edge

Winners in this game made an average of ₹1.22 lakh. Losers lost an average of ₹1.47 lakh, or 21% more than the winners won.

That gap alone should tell you something about who this market favours. But the real story is what people are actually trading.

93% of individual traders in the derivatives segment traded only options. Not futures, not a mix. Just options. And options accounted for 92% of all the losses individual traders racked up in FY26.

SEBI’s companion study on trading behaviour breaks this down further. 97% of individual traders were classified as predominantly options buyers. Barely 2% were predominantly options sellers.

Interestingly, options sellers had the lowest incidence of losses, just 44% of them lost money, compared to 90% for buyers. When sellers did lose, though, their losses were brutal. About ₹51.7 lakh on average, more than 11 times what a buyer typically lost.

So buying options is the retail default. It’s also, on average, the losing side of the trade.

Who’s actually footing the bill

The losses aren’t spread evenly. They’re concentrated in a very specific kind of trader.

Traders under 30 made up 43% of the base in FY26, up from 31% in FY22. Their loss rate? 91.9%, compared to 83.6% for traders above 60.

Nearly three-fourths of individual traders declared an annual income below ₹5 lakh. That group contributed 43% of turnover but absorbed 53% of the losses, a full ten percentage points more pain than their share of activity would suggest. 88% of them lost money.

Small portfolios told the same story. 78% of EDS traders had an equity portfolio worth less than ₹1 lakh. They generated 51% of turnover but ate 70% of total losses.

The other side of the trade

If retail is losing, who’s winning? Follow the money.

Proprietary trading firms booked around ₹44,000 crore in gross trading profits in FY26, the highest of any category. FPIs made roughly ₹14,000 crore. Individual traders, collectively, posted a gross trading loss of about ₹72,000 crore.

Here’s the mechanical difference. 86% of FPIs and 47% of proprietary trading firms used algorithmic trading in FY26. 99% of their gross profits came from algo-driven activity.

Among individuals? Just 15% used any form of algo execution, and even that number is generous. It mostly captures brokers auto-squaring off intraday positions after 3:20 pm, not traders actually running strategies.

One side of this market is running code at machine speed. The other side is tapping buy on a phone app during a lunch break. That’s not really a level playing field. It’s not meant to be, either, derivatives markets exist for institutions to hedge and for sophisticated players to price risk. Retail speculation just happens to be along for the ride.

Does anyone ever learn?

You’d expect experience to help. It doesn’t.

Loss rates actually rose with tenure. 91% of first-year traders lost money. Among traders with four or more consecutive years in the market, that number climbed past 95%.

Zoom out further and it gets bleaker. Of traders active continuously from FY22 to FY26, only 0.5% were profitable in every single year. 65.6% lost money in every single year.

Cumulative losses across individual traders from FY22 to FY26 now stand at ₹3.85 lakh crore. And the wealth effect lingers long after people stop trading. Among traders with cumulative EDS losses exceeding ₹1 crore, the median equity portfolio left standing by FY26 was just ₹138.

Not ₹1.38 lakh. ₹138.

The Takeaway

SEBI’s curbs did their job on paper. Fewer people are trading. Aggregate losses look smaller. The regulator can point to a declining headline number and call it progress.

But look past the headline, and the game hasn’t really changed. The people still playing are, on average, losing more per person than before. The demographic getting hurt the most, young, lower-income, thinly capitalised traders, hasn’t shifted at all. And the side of the market with the algorithms, the capital, and the infrastructure keeps collecting what individuals keep giving up.

Maybe the real question isn’t whether retail traders should be in this market. Maybe it’s whether anyone’s told them what game they’re actually playing.

Until next time, ReadOn!

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India scores 0.865 on the OECD’s index for how closed its legal services market is. Out of 51 countries measured, that makes India the 3rd most restrictive place in the world to be a foreign lawyer. Only the Philippines and Poland do worse.

Now here’s the twist. This is the same India that’s the 7th largest exporter of services globally, holding a 4.3% share of world services exports in 2024, more than double what it held in 2005.

So how does a country get this good at selling services to the world, while staying this locked when it comes to the professionals who actually deliver them?

A new NITI Aayog report on professional services regulation basically answers that question. And it’s a weirder story than you’d expect.

The old war-horse

India’s Economic Survey has a favourite line for the services sector. It calls it an “old war horse”. It’s the thing that’s carried India’s GDP growth for three decades while everyone was busy talking about manufacturing.

Professional services, specifically legal, accounting, architecture, engineering, and healthcare, are the strongest suit of that horse. In 2024-25, professional and management consulting services alone made up nearly 20% of India’s total services exports, growing at an 18% CAGR between FY15 and FY25.

To put a number to that growth, accounting, auditing and bookkeeping exports went from $617 million in 2014-15 to $3.3 billion in 2024-25. That’s more than a 5x jump in a decade, and it happened almost entirely through Indian CA firms doing cross-border work for foreign clients, not through Indian firms setting up shop abroad.

Legal services exports grew too, from $852 million to $1.28 billion over the same period. That’s smaller, but it’s still real money.

Both these numbers should be much bigger. And the report’s own data tells you exactly why they aren’t.

Why your CA can’t run a company

This is where it gets interesting for anyone who’s ever thought about the words “Chartered Accountant” or “Advocate” next to their own name.

Under the Chartered Accountants Act, 1949, a firm of CAs in India cannot incorporate as a company. Full stop. They’re capped at being a sole proprietorship, a partnership, or an LLP. Same story for Company Secretaries and Cost Accountants under their respective 1959 and 1980 laws.

Lawyers have it even stricter. The Advocates Act, 1961, and the Bar Council of India’s own rules say an advocate cannot be a salaried employee of anyone. Which means a group of Indian lawyers legally cannot form a company and hire other lawyers as staff the way, say, a consulting firm does.

Why does this matter? Because a partnership can’t raise equity capital the way a company can. It can’t easily bring in outside investors. It can’t scale the way a Deloitte or an Accenture scales.

There’s more. Until 2008, advocates in India couldn’t even maintain a website with their own qualifications listed on it. CAs only got a similar relaxation to advertise this year, in April 2026. For decades, professional services in India operated a bit like a guild that had decided modern marketing simply didn’t apply to it.

Foreign professionals had it worse. Foreign law firms were formally locked out of India for over 30 years. In 2009, the Bombay High Court ruled in Lawyers Collective v. Bar Council of India that even a foreign firm’s liaison office in India was effectively practicing law, and therefore illegal. The door stayed shut until 2022.

The 60-day arbitration hub

That door has now opened, but just barely.

In May 2025, the BCI notified amended rules letting foreign lawyers and firms register to practice in India. But read the fine print. They’re restricted to non-litigious matters involving foreign law, international law, and arbitration. No Indian law. No appearing in Indian courts. And their presence is capped at 60 days in any 12-month period.

The logic here is arbitration. India wants to be a global arbitration hub, the place where cross-border commercial disputes actually get resolved, the way Singapore or London currently are. Indian parties are already consistently among the top users of arbitration institutions like SIAC and the ICC. Letting foreign counsel show up for arbitration work is meant to close that loop.

Turns out, not everyone’s thrilled. The Society of Indian Law Firms, which represents India’s elite firms, actually opposed the liberalisation. For decades, a small club of large Indian firms had informal referral tie-ups with foreign firms and quietly cornered the cross-border work. Opening the door properly threatens that arrangement. Mid-sized Indian firms, on the other hand, stand to gain access to work they were previously frozen out of.

So, is that it? Not quite. Because right next door, in a sector nobody talks about, India tells a completely different story.

The sector that’s already wide open

Engineering services score just 0.155 on the same OECD restrictiveness index, ranking 38th out of 51 countries. That makes it one of the more open professional sectors in India, not a closed one.

Why the gap? Simple. There’s no Bar Council of India or ICAI equivalent gatekeeping engineers. No law stops an engineering firm from incorporating as a company, raising capital, or hiring foreign staff freely. Which is exactly why you already see global EPC and infrastructure consulting firms operating in India without the drama that surrounds foreign law firms or accountancy networks.

Same story, roughly, for healthcare. India’s Mode 2 trade, or foreign patients travelling here for treatment, is already a real business, built on India’s cost advantage and a lightly gatekept system for allied health professionals.

The pattern that emerges is almost funny. India is simultaneously one of the world’s most closed markets for its lawyers and accountants, and one of its more open markets for its engineers. Same country, same government, two completely different regulatory instincts.

The Takeaway

This part should matter to you directly, especially if you’re a CA, a CFA candidate, a law graduate, or even just someone with one eye on India’s services boom.

NITI Aayog’s own fix is a four-pronged one. Push more mutual recognition agreements, modernise the legal forms professionals can operate under, phase in accreditation pathways for foreign professionals, and lean harder into continuous skilling.

None of this is hypothetical. ICAI already has mutual recognition agreements with accounting bodies in the UK, Australia, Canada, and South Africa, among others. A CA in Kolkata today can, in theory, get recognised in Sydney faster than a Big Four consulting firm can legally hire a salaried lawyer in Mumbai.

The template for opening up already exists. It just hasn’t been extended evenly.

By 2047, India wants professional services to be one of the pillars of a $30 trillion-plus economy. Whether that happens depends less on how many CAs or lawyers India produces every year, and more on whether the 1949 and 1961 laws governing them ever catch up to 2026.

The old war-horse has carried India this far on tied legs. Imagine what it does once someone finally unties them.

Until we find out, ReadOn!

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$3.2 trillion. That’s how much M&A activity the world clocked in the first half of 2026, up 44% year-on-year, according to JPMorgan’s Global M&A Mid-Year Outlook. It’s the busiest first half on record.

India didn’t sit this one out either. Deal value here jumped 31% to $86.9 billion in the same period. Deal count actually fell 8%. Translation: fewer deals, much bigger cheques.

Here’s the thing. This isn’t just a story about companies buying companies. It’s a story about boards deciding that standing still is now the risky move. And India, for once, isn’t just the target. It’s increasingly the one holding the chequebook.

Let’s see what’s going on!

Bigger, not more

The global number that jumps out isn’t the $3.2 trillion topline. It’s the mega-deals, transactions worth $10 billion or more. There were 48 of them in H1 2026, worth $1.3 trillion combined. That’s a record. It’s also up 114% from the $616 billion across 31 mega-deals in H1 2025.

Put that $1.3 trillion in context. It’s roughly the size of Spain’s entire GDP, moved through boardroom decisions in six months.

India’s version of the same story played out on a smaller scale but with an identical shape. Q2 alone brought in $66.9 billion, more than triple Q1’s number and the highest quarterly total since Q2 2022. Fewer deals, bigger ones, concentrated into one blowout quarter. Grant Thornton’s data tells a similar tale. Q2 M&A value alone jumped 302% sequentially to $27.9 billion, even as deal count fell 12%.

Everyone’s doing the same thing right now. Fewer bets, sized up.

Why boards suddenly want to spend, not save

For years, the corporate playbook leaned toward giving cash back to shareholders. Buybacks, dividends, the works. That’s flipping.

Boards globally are now pivoting from capital returns toward reinvestment, leaning on capex and M&A as the credible path to stay competitive. One telling detail is that deals are increasingly being paid for with a mix of cash and stock, at 33% of large deals in H1 2026, versus a 10-year historical average of just 25%. That’s dealmakers getting creative to bridge valuation gaps rather than walking away.

Markets are rewarding this. Companies that credibly build scale are getting valuation premiums of roughly 25% in the US and 40% in Europe. Growth, right now, is worth more than it has been in years.

Regulation helped too. Merger investigations in the US hit their second-lowest level ever in 2025, and abandonments (deals that die mid-process) dropped 90% as regulators favoured settlements over drawn-out litigation. In the EU, over 80% of investigations saw remedies cleared in the first phase, up from 50% the year before. This means that if your deal has a clean rationale and you’ve done your diligence upfront, it’s actually easier to get it through today than it was two years ago.

AI is eating its own category

Interestingly, a huge chunk of what looks like “deal activity” right now isn’t classic M&A at all. It’s AI companies raising money through minority stakes and mega funding rounds.

AI-linked stake sales hit $370 billion in H1 2026, and just six mega funding rounds, including ones for OpenAI, Anthropic, and xAI, accounted for around 40% of all minority investment volume and 8% of total global deal volume. Four of the top five global deals in H1 2026 were tied to AI and its infrastructure needs.

The flip side of this AI euphoria showed up brutally in public markets. In February 2026, the S&P 500’s Software & Services index shed roughly $1 trillion in what got nicknamed “software-mageddon,” as investors realised that AI could replicate a lot of what basic, seat-based software companies were charging for. Capital is now splitting hard between “AI-resilient” businesses (power, data centres, physical infrastructure) and software companies that suddenly look replaceable.

If you’re tracking Indian IT services or SaaS names, this is the exact dynamic to watch. The market isn’t asking “does this company use AI?” It’s asking “can AI just build this in-house?”

India: not just getting bought anymore

This is the part that should matter most to an Indian reader. For a long time, the India M&A story was mostly about foreign capital coming in. That’s still happening (inbound M&A hit $13.8 billion in H1 2026, up 28.8% and the highest first-half total since 2024). But increasingly, it’s Indian companies doing the shopping abroad.

Sun Pharma’s roughly $11.75 billion all-cash acquisition of US women’s health company Organon is, by some counts, the largest pharmaceutical acquisition an Indian company has ever attempted. Coforge bought Encora in an all-stock deal worth $2.35 billion, pushing further into IT consolidation abroad. Tata Motors closed its €3.8 billion takeover of Italy’s Iveco Group.

Grant Thornton’s Q2 numbers make the shift explicit: outbound acquisitions alone made up 84% of India’s total M&A value that quarter, driven by five separate billion-dollar cross-border deals.

There’s also a structural change that could fuel more of this. Starting July 1, 2026, the RBI is letting Indian banks fund up to 75% of an acquisition of control over a non-financial target, something they couldn’t do before. That’s a real unlock. Indian companies chasing global assets no longer have to rely purely on cash reserves, foreign debt, or equity issuance to fund a big swing.

The other half of the story

None of this scale-chasing is happening in a vacuum. Shareholder activists are having a record year too, with 260 public campaigns globally in H1 2026, up 15% year on year, and Japan alone seeing 87 campaigns, up 34%. A big chunk of that activism is aimed at forcing companies to simplify, spin off underperforming units, and focus.

That’s fuelling a parallel wave of divestitures. Global divestiture activity hit $1.4 trillion in H1 2026, the second-highest half-year total ever. Companies that split off weaker units are getting rewarded with meaningfully higher valuations than similarly sized conglomerates that don’t. It’s the same instinct as the mega-deal boom, just running in reverse: get smaller and sharper here, so you can get bigger and bolder somewhere else.

The Takeaway

The pattern to watch through the rest of 2026 isn’t whether deal volumes stay high. It’s whether Indian companies keep showing up on the buying side of these headline numbers, now that the RBI has handed them a bigger chequebook, and whether the AI-resilient versus AI-exposed split that just wiped $1 trillion off American software stocks starts drawing the same lines through Indian IT and SaaS names.

For years, the question in Indian dealmaking was who’s going to buy us. Increasingly, in 2026, it’s who are we going to buy next.

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On December 31, 2025, borrowing cash overnight against US government bonds, the safest collateral on earth, cost as much as 4.0%. That was well above where the US Federal Reserve wanted it.

Nobody defaulted that day. Nothing got downgraded.

Banks simply borrowed $75 billion from the Fed at 3.75% and lent it straight back into the market at a higher rate. Free money, for one night.

Why? Because US government bonds could not find a place to sleep.

That sounds absurd, but it happens more often than you’d think.

Meet the Market

The market we’re talking about is called repo, short for repurchase agreement. Think of it as a one-night pawnshop for bonds.

You own a government bond. You need cash today. So you hand the bond to someone, take their cash, and promise to buy the bond back tomorrow at a slightly higher price. That small extra amount is the interest you paid.

Tomorrow comes, you do it again. And again. This is how the global financial system funds itself, one night at a time.

It is unimaginably large. The US repo market runs over $12 trillion in daily outstanding volume. That is roughly three times India’s entire annual GDP, turning over every single day.

Sitting in the middle are the big bank trading desks, called primary dealers. Money market funds hand them cash. Hedge funds and bond investors take that cash. Dealers earn the difference.

Here’s the thing. Dealers cannot do this for free. Every trade they pass through has to sit on their own books for the night, and their books have a size limit set by regulators.

So think of a dealer as a warehouse owner. The bonds are boxes. The warehouse is a fixed size. And storage has rent.

A new IMF working paper by Kleopatra Nikolaou is really about one question. Who ends up paying that rent, and when?

Why “on average” is a useless answer

Most research on this asks what pushes repo rates up on average.

Nikolaou does something smarter. She splits the last seven years into calm days, normal days, and bad days, and asks the question separately for each.

It’s the difference between asking how a city’s traffic behaves on average, versus asking what jams it up at 3am versus 9am. Same roads. Totally different culprits.

And that’s exactly what she finds.

One thing works in every weather. Bank reserves, meaning the spare cash banks keep parked at the Fed, always calm the market down. More cash sloshing around, cheaper overnight borrowing. Simple.

But the effect is not constant. On calm days, extra reserves shave a small amount off borrowing costs. On the worst days, they shave off roughly twice as much. Cash matters most exactly when there isn’t enough of it.

Now the odd part. Dealer activity, meaning how much of that warehouse is being used, does not behave in a straight line at all.

On calm days, busier dealers mean higher rates. In the middle, busier dealers actually mean lower rates, because they’re smoothing out mismatches like good middlemen do. On the worst days, busier dealers mean sharply higher rates again.

Up, down, up.

Same measure, three different behaviours. Something is hiding inside it. Two somethings, actually.

Culprit one: the hedge funds are renting

On calm days, the pressure comes from leverage.

There is a trade hedge funds love called the cash-futures basis trade. A bond and a futures contract on that same bond should be priced almost identically. Sometimes there’s a tiny gap. A fund buys the bond, sells the futures, and pockets the gap.

The gap is minuscule. So the only way to make real money is to do it with borrowed cash, at enormous size.

Where does the borrowed cash come from?

The repo market. Every single night.

This has grown huge. The Fed estimates these positions reached roughly $830 billion by September 2025, about double their previous peak in early 2020. Hedge funds’ net repo borrowing hit roughly $1.8 trillion by the end of 2025, more than doubling in just two years.

All of that eats warehouse space. And when space gets tight, the warehouse owner raises the rent.

The paper’s numbers back it up. On calm days, a busy dealer book alone nudges borrowing costs up a little. Add a big jump in hedge fund positions, and that nudge roughly triples.

Then, as conditions get worse, the effect fades out entirely.

Why? Because the trade stops paying. Higher borrowing costs wipe out a gap that was tiny to begin with. So the funds stop adding, or start selling out.

Culprit two: the government itself

So on the bad days, who’s squeezing the market?

Uncle Sam.

Government bond issuance barely shows up in calm conditions. But once things tighten, it becomes the main pressure point. When dealer books are already stretched, a wave of new issuance roughly doubles the upward push on borrowing costs compared to normal times.

The reason is boringly mechanical. Every newly auctioned bond has to be stored and financed by somebody before it finds a long-term owner. That somebody is a dealer.

And the mismatch here is brutal. US government debt outstanding has gone from roughly $5 trillion in 2008 to over $25 trillion today. Dealer warehouses have stayed roughly the same size since the 2008 crisis.

More boxes. Same warehouse.

The cleverest part of the paper is a test she runs to check she isn’t imagining things. She reruns the entire model using mortgage-backed bonds instead of government bonds.

The effect vanishes. Completely.

That’s how you know this is specifically about the flood of government debt, and not just a general money market story.

The author is upfront that she’s showing strong patterns, not proof of cause and effect.

There’s a second condition. The warehouses may be getting bigger. After US regulators eased a key capital rule, dealers’ government bond holdings climbed to roughly $550 billion in 2026 on Financial Times calculations, the highest since 2007.

If the bottleneck was the rulebook, changing the rulebook moves the bottleneck. Whether that makes things safer or just shifts the risk somewhere less visible is genuinely unsettled.

Now look at India

Here’s why this matters for us.

India has the opposite problem. Our banking system is drowning in spare cash, not starved of it. Surplus liquidity crossed ₹4 trillion in early April 2026. Overnight rates fell below the RBI’s own policy rate instead of climbing above it.

The RBI has been running auctions to mop up the excess. It has also been openly debating which overnight rate it should even be targeting, since collateral-backed lending now makes up about 98% of India’s overnight money market volume.

In plain terms, India’s version of this pawnshop is already where the action is.

And our pile of government paper is growing fast. FY27 gross market borrowing was budgeted at ₹17.20 lakh crore, trimmed to ₹16.09 lakh crore after adjustments. That’s up roughly 16% on the previous year.

Right now, a cash surplus hides the strain. It won’t hide it forever. Someone still has to store all that paper.

The Takeaway

Every central bank unwinding a big balance sheet is hunting for the same thing. The right amount of cash to leave in the system. Too much and policy loses its grip. Too little and December 31 happens.

The Fed stopped shrinking in December 2025, having reversed only half of its pandemic-era expansion.

There is no right number. It depends on how much borrowed money is floating around and how much paper the warehouses are being asked to hold. Both change constantly.

So the honest question was never how much cash is enough.

It’s enough for whom, on which night?

Until we find out, ReadOn!

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₹13,215 crore.

That’s what Jharkhand alone expects to collect next year just from taxing land that happens to sit on minerals, according to its own projections for 2026-27. One state. One cess. More than ₹13,000 crore.

Now imagine the Parliament deciding it can switch that tap off whenever it wants.

That’s roughly what just happened. The Mines and Minerals (Development and Regulation) Amendment Bill, 2026 cleared both Houses in barely 48 hours. The Lok Sabha passed it on a Wednesday with no real debate, amid protests so loud the Deputy Speaker couldn’t restore order. The Rajya Sabha waved it through the very next day, rejecting a push to send it to a Select Committee. No prolonged Parliamentary churn. No months of back and forth. Just two days, and it was done.

The government’s pitch is simple. India needs predictable, uniform mining rules to attract investment and secure critical minerals. Fair enough.

But here’s the thing. This bill isn’t just about making mining easier. It’s about who gets to tax the ground beneath India’s feet, the Centre or the states. And that fight is only getting started.

What Is The Mining Bill, Actually?

The amendment does three things.

First, it inserts a brand new Section 9D into the MMDR Act. This section says state governments cannot impose any tax, cess, or levy on mineral rights or “mineral-bearing lands” (whether based on quantity, value, or royalty) unless the Centre allows it under conditions it prescribes.

Second, it redefines “mineral-bearing lands” and folds them into the Union’s regulatory turf under Section 2 of the Act, the provision that already gives the Centre control over mine regulation “in the public interest.”

Third, and this is the sting, it’s retrospective. Any state levy that was due but not yet paid before the law kicks in is now simply invalid. Money already collected stays collected. Money still owed just... disappears.

The bill now awaits presidential assent, after which it becomes law. Once that happens, the Centre gets to write the rulebook on exactly what states can and can’t charge miners.

Why Now?

Here’s where it gets geopolitical.

India is trying to break free of China on critical minerals. China supplies close to 90% of India’s rare earth magnet imports. That’s for the tiny components inside EV motors, wind turbines, and defence systems. Beijing has already shown it’s willing to weaponise these supply chains through export curbs. That’s a national security problem.

New Delhi’s answer has been the National Critical Mineral Mission, a ₹16,300 crore push to boost exploration, processing, and overseas acquisitions. It’s also part of the Quad’s critical minerals framework with the US, Japan, and Australia, aimed at mobilising up to $20 billion for the same goal.

None of that works if a mining company has to navigate a different, unpredictable tax regime in every state. Union Mines Minister G Kishan Reddy argued exactly this in the Rajya Sabha, saying coal alone powers 73% of India’s electricity, and reliable, cheap power needs a stable mining sector behind it. He also pointed out that states already get the lion’s share; their cut of mineral revenue has risen from 65% in 2014-15 to 85% now, with coal revenue share climbing from 51% to 96%.

There’s also a competitiveness argument. India’s mineral royalty rates are already among the highest in the world, which scares off the kind of long-horizon exploration capital India needs. Compare that to Australia, where mineral ownership sits with states, but the royalty structure is far more standardised and predictable within each jurisdiction. India, oddly, is trying to get Australia-style certainty by doing the opposite of what Australia does, centralising control instead of leaving it with the states.

If it works, miners get one set of rules instead of dozens of overlapping state cesses. Exploration picks up. India inches closer to weaning itself off Chinese rare earths.

That’s the sunny version of this story.

The Problems

Turns out, the sunny version isn’t the whole story.

Start with Jharkhand. Chief Minister Hemant Soren wrote directly to PM Modi on August 13, warning that the state’s Mineral Bearing Land Cess alone generated roughly ₹7,488 crore in 2025-26 and was projected to cross ₹13,000 crore next year. Mining revenue makes up 84.9% of Jharkhand’s own non-tax revenue. It’s the backbone of the state’s budget, funding everything from the Mukhyamantri Maiyaa Samman Yojana welfare scheme to rural healthcare and drinking water projects.

Soren didn’t just complain. He wrote to President Droupadi Murmu too, asked for a GST Council-style consultation mechanism with other mineral states, and explicitly reserved Jharkhand’s right to head to the Supreme Court.

He’s not alone. Odisha’s opposition leader Naveen Patnaik called the bill a “heavy blow to federalism and state revenue autonomy” in a letter to the state’s current CM. States like Chhattisgarh, Rajasthan, and Andhra Pradesh face similar exposure, since they lean heavily on mineral levies too.

Then there’s the legal landmine. In July 2024, a nine-judge Supreme Court bench ruled that royalty under the MMDR Act is not a tax, and explicitly upheld states’ power to levy it. This 2026 bill essentially legislates around that verdict. Legal experts already expect this to land back at the Supreme Court, this time asking whether Parliament can override its own constitutional bench through ordinary legislation.

And that retrospective clause? It wipes out dues states haven’t yet collected, no small thing when some of that money was already budgeted for welfare spending.

The Takeaway

All the acronyms and Section numbers aside, this bill is really a question about trust. Does India build critical mineral security by pulling power toward Delhi, or by getting states and the Centre to actually agree on how to share the spoils?

The government’s bet is that uniformity wins. Faster approvals, one tax framework, more investment, less dependence on China. States like Jharkhand and Odisha are betting the opposite, that a Centre which controls both the resource and the tax rules on it eventually squeezes the states that host the mines while the benefits flow elsewhere.

Both bets can’t be fully right. The Supreme Court will probably have to decide which one wins.

We should watch what happens the next time a mineral-rich state sits down at the negotiating table with New Delhi. Because this bill has just made that conversation a lot more interesting.

Until next time, ReadOn!

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€300 million.

That is roughly what half a million wheels of Parmigiano Reggiano are worth. That’s what’s sitting inside underground vaults in Emilia-Romagna. That’s what’s used as collateral for loans to Italian dairy farmers. In rupee terms, that is over ₹2,900 crore. In cheese.

This isn’t some quirky footnote. Parmigiano Reggiano is a €4 billion ($4.7 billion) industry backed by roughly 300 certified dairies, and it has been growing for over 70 years, with blockchain now letting farmers pledge wheels without even moving them out of their own facilities. That single tweak even doubled one bank’s lending capacity.

But this summer, the system is under real pressure. Europe’s heatwave has turned a beautifully engineered financial workaround into a costly headache, and the story of how it got there says a lot about the economics of a warming planet.

Europe is having a brutal summer, again

Heatwaves have hit Europe before, but 2026 is shaping up to be one for the record books. Back in 2003, Europe’s first “modern” mega-heatwave killed more than 70,000 people. In 2022, another brutal summer killed over 60,000, with Italy topping the death toll at 18,010.

This year hasn’t been kind either. A June heatwave alone caused more than 10,000 excess deaths across the continent, the highest mortality rate since 2003. Spain touched 45.1°C. Germany broke its all-time national record. The UK logged its hottest June day ever.

Turns out, it isn’t just about people struggling in the heat. Economies are struggling too.

France saw school closures and rail disruptions. Spain and France are staring down record wildfire risk. Italy’s vineyards in Franciacorta started their 2026 harvest on July 30, the earliest start on record, because the grapes are ripening too fast for their own good. Puglia and Calabria, Italy’s biggest olive oil regions, are set to produce well below their historical average this season.

So, is Parmigiano just another crop caught in the crossfire? Not quite.

Here’s the thing. Parmigiano Reggiano isn’t just a food product in Italy. It is literal collateral sitting on a bank’s balance sheet. And that changes the stakes considerably.

Why cheese, though?

Parmigiano takes a long time to become itself. The wheels need to age for at least 12 months, often 24, sometimes 36. That is a long time for a small family dairy to have cash tied up in something that cannot yet be sold.

So in 1953, an Italian bank called Credito Emiliano (Credem) came up with a fix. It would accept young, unmatured wheels of cheese as collateral and lend farmers 60% to 80% of a wheel’s eventual value upfront, while the cheese matured in the bank’s own climate-controlled warehouses in Reggio Emilia and Modena.

It worked so well that it never got phased out. Instead, it got modernised. Credem’s warehouses today handle around 2.3 million wheels a year, and blockchain tagging now lets farmers pledge wheels that never even leave their own facilities, expanding the bank’s lending book without expanding its physical vaults.

Why has this survived for over seven decades while other quirky financing arrangements have faded away? Because the underlying problem it solves, small dairies needing cash before their product is sellable, never went away. If anything, it got more valuable as Parmigiano’s global demand grew.

That is precisely why a heatwave hitting a cheese vault is not a “funny news” story. It is a bank’s asset quality story.

Can Italy save its cheese banks?

The immediate fix has been mechanical, not political. Credem has ramped up cooling systems, added insulation, and expanded its own renewable power generation at its vaults, after daily energy consumption at the peak of this year’s heat climbed roughly 30%.

On the farm side, dairies across Emilia-Romagna have installed ventilation systems, sprinklers, and barn cooling to keep cows comfortable, since milk yields fall by up to 10% once temperatures cross 40°C. That solves an animal welfare problem, but it also raises operating costs at exactly the point when farmers can least absorb them.

Italy’s strict Protected Designation of Origin (PDO) rules do not help either. Parmigiano can only be made in five specific provinces, using milk from cows fed on locally grown grass and hay. There is no relocating production to a cooler part of the country. The rulebook that protects the cheese’s authenticity is the same rulebook that traps it in a warming region.

Coldiretti, Italy’s largest farmers’ body, has flagged rising input costs across agriculture broadly, not cheese specifically, but there is no dedicated government bailout for cheese-backed lending on the table yet. For now, this is a problem banks and dairies are absorbing themselves, through higher energy bills and thinner margins.

Does this mark the end of cheese as collateral? Unlikely, at least not yet. The 4 million wheels Italy produces every year and the €4 billion industry behind them are too valuable to simply give up on. But the economics of storing three years’ worth of ageing cheese in a hotter Italy are getting worse, one summer at a time.

The Takeaway

It is genuinely funny, on the surface, that a heatwave could threaten a bank’s balance sheet because of cheese. Somewhere, a meme is writing itself.

But strip away the novelty, and this is just climate change doing what it always does, showing up in places nobody budgeted for. A hotter Italy means less milk, higher cooling bills, earlier grape harvests, and shrinking olive oil output, all in the same country, in the same summer. Economists at Wharton call this the “supply-chain spillover” effect, where heat shocks in one place show up as valuation problems somewhere else, months later.

For a country like India, where agriculture still employs nearly half the workforce and monsoon variability already dictates rural credit cycles, Italy’s cheese banks are a preview, not a curiosity. When climate stress touches something as foundational as collateral, the financial system feels it long before anyone notices the temperature on the label.

So no, Parmigiano probably will not bring down an Italian bank this year. But will it still be cheap enough, or cool enough, to back a farm loan a decade from now?

Until we find out, ReadOn!

In case you missed any of our articles from the previous fortnight, here’s everything bundled together. ReadOn!

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AI products now make up 42% of revenue at the software companies building them, up from 32% just a year ago.

That’s one source growing to capture nearly half of an industry’s income in twelve months.

For the last three years, the AI conversation has been about capability. Can it write code, can it draft a memo, can it hold a conversation without falling apart. ICONIQ Capital’s new “State of AI” report, based on a survey of 300+ software executives across two waves (December 2025 and May 2026), says the conversation has moved on. Boards don’t want the AI strategy slide anymore. They want the AI P&L.

Here’s the twist, though. This report is a US and Europe story (87% North America). And if you flip it around and look at India, specifically at the IT services industry that has spent two decades selling human hours to exactly these kinds of companies, the same data reads like a warning label.

Let’s get into it!

The builder’s economy, decoded

ICONIQ’s headline number is margin. Gross margins on AI products went from 45% in 2025 to a projected 53% in 2026, and 59% by 2027. That’s a 14 percentage point jump in two years, for products that were supposedly still “experimental” not long ago.

Four shifts are driving this.

One, builders have converged on the application layer. Nearly two-thirds are building horizontal or vertical AI apps, and the fastest-growing use cases are financial services and healthcare, both high-complexity, high-regulation domains. Turns out a product wedged deep into a real workflow is harder to rip out than a general-purpose model sitting one layer above it.

Two, multi-model is the default now. The average company runs about 3.3 model providers. And here’s the fun bit for an Indian reader who mostly hears about OpenAI. Anthropic went from being used by 51% of respondents to 81% in six months, overtaking everyone else as the most-cited provider.

Three, pricing is being rebuilt around actual usage. Consumption-based pricing rose from 35% to 42%, outcome-based pricing from 18% to 23%. Companies are blending 1.7 pricing models on average, up from 1.5. Translation: fewer flat subscriptions, more “pay for what the AI actually does for you.”

Four, and this is the one that matters most for India, org charts are shrinking. 78% of companies are rethinking workforce planning. 45% expect a different mix of roles. 33% expect smaller teams outright.

How the money actually moves

Think about what it costs to run an AI product. As it scales from a beta to general availability to full production, talent’s share of the cost pie shrinks, and model inference’s share grows. Makes sense. Once the product works, you need fewer engineers babysitting it and more compute to run it for more customers.

One striking illustration from the report: a workflow one builder had budgeted at $0.10 per run drifted to $1.50 or more once AI agents started retrying and self-correcting on complex tasks. Inference costs, it turns out, are the sneaky line item that blows every budget.

So how are companies clawing margin back? Mostly by reducing inference costs and getting smarter about routing, not by cutting corners on the product. Two-thirds of respondents report improved unit economics on a per-query basis over the last year.

There’s a neat case study in the report about Ramp, the fintech, which hit 99% internal AI adoption not by mandating tool use, but by removing setup friction. Employees shared over 350 reusable, version-controlled workflows company-wide. Every person who figured out a good prompt made the next person’s job easier. Compounding, but for productivity instead of interest.

This is where Indian IT walks in

Now here’s the part ICONIQ’s deck doesn’t spell out, because it’s not looking at India. But you can see it forming in the same data.

Remember that finding, AI absorbs entry-level capacity, 33% of companies planning smaller teams? That’s the demand side. The supply side of that same trade is sitting in Bengaluru, Pune, and Chennai.

TCS cut roughly 23,460 jobs in FY26, even as revenue rose, its first real headcount contraction in years. Wipro slashed its fresher hiring guidance to 7,500-8,000, down sharply from earlier plans, with roughly 200 recruits publicly stuck waiting more than seven months for onboarding. Infosys has run four consecutive rounds of “performance-based” layoffs, each round trimming headcount while the company insists there’s no mass layoff underway.

Across the top five Indian IT firms, TCS, Infosys, Wipro, HCLTech, and Tech Mahindra, net headcount actually fell in FY26. That reverses two straight years of hiring growth.

It’s not that clients stopped needing work done. It’s that the work changed shape. Nasscom’s own review of the sector describes providers “re-engineering revenue models, moving away from FTE delivery to outcome-based, risk-sharing constructs as AI-driven productivity materialises.” Read that sentence again slowly. That’s the exact same outcome-based pricing shift ICONIQ measured on the buyer’s side of the table, just showing up as a threat instead of an opportunity when you’re the one selling hours instead of outcomes.

The bench model, IT services’ old safety net of keeping people on payroll between projects, made sense when a project needed ten analysts and a six-month ramp. It stops making sense when an AI agent can do a chunk of that work for the price of a few API calls. Wipro and TCS aren’t laying off because business is bad. FY26 sector revenue actually crossed $315 billion, up 6.1%. They’re laying off because revenue no longer needs to scale with bodies.

The Takeaway

So you’ve got two economies sitting on either end of the same trade. In San Francisco, AI-native builders are watching margins expand toward 59% and hiring fewer, more senior people to run leaner, flatter teams. In Bengaluru, the firms that used to supply the human labour behind enterprise software are watching their oldest business model of selling hours get repriced out of existence.

But before you write off Indian IT entirely, one more number is worth sitting with. Deloitte’s India findings from its State of AI in the Enterprise report show 40% of Indian respondents reporting significant or full AI usage, against a global average of roughly 28%. Indian enterprises aren’t behind on adopting AI. If anything, they’re ahead of the curve as users of it.

The opportunity hasn’t disappeared. It’s moved. Away from selling engineers by the hour, toward actually building the products ICONIQ is describing margins for.

The question is whether India’s IT giants can make that leap fast enough, from FTE factory to product builder, before the bench they used to run on gets priced out from under them entirely. Or whether the next TCS-sized company to dominate this “builder’s economy” simply won’t be Indian at all.

Until next time, ReadOn!

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Asia-Pacific accounts for 33% of global trade and GDP. But its share of global financial assets? Just 21%. Its share of global financial liabilities? 16%. Those numbers have barely moved in over two decades.

That’s the central finding of a new IMF working paper published in July 2026. And it tells a story that goes well beyond boring tables of cross-border statistics.

A region that makes the world’s goods, but doesn’t own the world’s capital, is permanently writing cheques it can’t fully cash. It invites foreign money in. It sends its savings abroad. It depends on London, New York, and a handful of city-states to do its financial heavy lifting. And in a world where geopolitics is actively rewiring trade, that arrangement is starting to look fragile.

How fragile? Let’s find out.

The Scoreboard

Let’s set the scene with some numbers.

Asia-Pacific’s share of global foreign direct investment (FDI) positions has grown gradually, from 12% in 2009 to 20% in 2023. That’s progress, but still below the region’s weight in global trade.

Foreign portfolio investment (FPI)? Stuck at 14% since 2010. Flat, even as Asia’s economies boomed.

And intra-regional portfolio investment, or Asia investing in itself? Just 5% of regional GDP. Europe’s equivalent figure is more than sixteen times higher.

Sixteen times.

The Asian Development Bank’s 2025 integration report frames this as a missed opportunity. More intra-regional financial flows would lower the cost of capital, improve risk-sharing, and build more competitive markets. The potential is real. The gap between potential and reality is just very, very wide.

Three Markets, Three Very Different Stories

The IMF paper breaks down Asia’s financial integration into three instruments. Each has its own plot twist.

FDI is the good news story, relatively speaking. Asia-Pacific’s aggregate FDI positions grew faster than most regions in the decade to 2023. Even after COVID slowed global FDI sharply, Asia held up. The United Nations World Investment Report 2024 noted Asia-Pacific’s unusual resilience. Singapore alone pulled in $159.6 billion in FDI inflows in 2023. The FDI network within the region is also decentralised. This means that many economies, India and Vietnam included, are building meaningful bilateral connections.

Cross-border banking is more mixed. Eight of the 29 Global Systemically Important Banks are Asia-Pacific headquartered (five Chinese, three Japanese). Advanced economy borrowers in the region receive cross-border bank lending equivalent to over 30% of their GDP. But for emerging markets? Under 3% of GDP. One-tenth the rate. The banking infrastructure is world-class in the hubs. It just doesn’t reach very far down the ladder.

Portfolio investment is the laggard. Asia-Pacific’s gross FPI, summing up inbound and outbound positions, was just 59% of regional GDP in 2023. Other regions range from 80% to 280%. Capital controls, macroprudential limits, and memories of the 1997 Asian financial crisis mean most Asian governments still treat foreign portfolio flows with deep suspicion. The result is that Asia’s IPO boom, which accounted for over 40% of global IPO proceeds in 2021-23, was absorbed almost entirely by domestic investors. The capital barely crossed a border.

Singapore, Hong Kong, and the Shell Game

Here’s where it gets interesting.

On paper, Singapore and Hong Kong look like the engines of Asia’s financial integration. The two city-states accounted for more than half of total FDI growth in Asia-Pacific between 2013 and 2023.

Turns out, that number needs some unpacking.

Over two-thirds of Hong Kong’s outbound and inbound FDI positions sit in investment and holding companies. In Singapore, holding and investment companies make up 50-62% of FDI positions, with most net growth since 2020 flowing into such structures. A lot of what looks like regional financial integration is actually capital being rerouted through a special-purpose entity in a tax-friendly jurisdiction, not a factory being built or a business being funded.

That’s not illegal. But it does mean the integration numbers are flattering reality.

Singapore and Hong Kong remain genuinely important. The 2024 Global Financial Centres Index ranks Singapore third globally, behind only New York and London. BCG’s 2025 Global Wealth Report found Singapore’s cross-border wealth inflows grew 11.9% in 2024, driven by capital moving out of India and China. The hubs are booming. They’re just not quite the instruments of broad regional integration the headline FDI data suggests.

India’s Peculiar Position

India is a study in contradictions.

It is one of only two economies in Asia-Pacific where FPI has grown meaningfully over the past decade (China being the other). It is also, per the IMF, one of the most restrictive countries in the region on capital flow management, second globally only to sub-Saharan Africa.

The two things coexist, awkwardly.

The biggest shift has been on debt. India’s government bonds entered JP Morgan’s GBI-EM index in June 2024, in a phased process running to March 2025. Over that period, foreign investors bought roughly ₹1.09 lakh crore of FAR-designated government bonds. Bloomberg Emerging Market index inclusion followed in January 2025.

And then, by mid-2025, FPIs turned net sellers. They had sold ₹31,262 crore of FAR securities after the inclusion window closed. Narrowing yield spreads and profit-booking drove the exit.

This is the pattern with index-driven flows. Money comes in mechanically when the index says buy. It leaves just as mechanically when spreads compress or sentiment shifts. Real, structural financial integration requires more than a mandate from a bond index provider.

India’s equity FPI is largely unrestricted, but episodic. Debt remains capped and hedged with conditions. And domestic financial development, the precondition the IMF gravity model flags as essential for sustained financial integration, is still a work in progress.

The Takeaway

The IMF paper’s gravity model finds something unsettling. Trade and FDI are strongly correlated. A 1% rise in bilateral trade between two countries is associated with a 0.14% rise in bilateral FDI. But trade and portfolio investment show no statistically meaningful relationship. Zero.

This matters enormously right now.

US-China trade fell roughly 30% between 2024 and 2025, replaced by trade with geopolitically aligned partners. As trade fractures into blocs, FDI will follow. China’s centrality in Asia’s FDI network has already started declining post-2019. Vietnam, India, and ASEAN are gaining FDI as supply chains rewire.

But portfolio investment won’t automatically follow. It’s driven by financial development, capital account openness, and investor confidence. Those things change slowly. And in a fragmented world, geopolitical risk makes investors more selective, not more adventurous.

The result: Asia’s financial integration may grow unevenly. FDI deepens as supply chains shift. Portfolio money remains thin, concentrated in Japan and Australia within the region. And for India, Vietnam, and Indonesia, the dream of deep intra-regional capital markets remains just that for now.

Asia makes a third of everything the world buys. It holds barely a sixth of the world’s financial claims. The next decade will tell us whether those two numbers finally converge. Or whether the region that built the world’s factory floor just keeps lending its savings to someone else to invest.

Until next time, ReadOn!

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PhonePe controls 45.5% of UPI transaction volume. Google Pay holds another 34.6%. Together, a Walmart subsidiary and an Alphabet company process more than four out of every five UPI transactions in India. The NPCI first proposed a 30% market cap per player back in 2020. That deadline has since slipped to 2021, then 2025, and now December 2026.

Two apps. Over 80% of India’s payments. And the regulator has postponed its market cap deadline three times.

The cap may never land. And that tells you something important about the corner regulators worldwide have been backed into.

How “big” is big tech when it comes to finance? Let’s find out!

The App That Ate Finance

When BigTech enters financial services, it never announces itself.

It starts with payments. You’re already on the app. The trust is already there. And processing payments gives a company something more valuable than transaction fees: it gives them data.

Payment data tells you who someone pays, how often, how much, and more. Combine that with social media activity or e-commerce history, and you can build a surprisingly accurate picture of a person’s creditworthiness, even if they’ve never taken a formal loan in their life. That’s the move. Payments are the door. Credit is the real room.

This is exactly the pattern the IMF documented in a technical note this year on BigTech in financial services. The paper covers payments, lending, insurance, asset management, and the rise of what it calls “financial SuperApps.” The paper is aimed at regulators, but worth understanding if you’ve clicked “pay later” in the last six months.

The scale of what’s already happened globally is worthwhile. In China, Alipay and WeChat Pay together command close to 95% of retail mobile payment transaction volume. In Kenya, M-Pesa has an 89.7% share of mobile payments. In Singapore, GrabPay, the payment arm of a ride-hailing company, holds 35% of mobile payment volumes. These companies didn’t start as banks. They started as messaging apps, taxi apps, and e-commerce platforms. Finance came later, almost as an afterthought.

And in India, we’re watching the same movie.

Not a Bank, But Close Enough

So what actually makes BigTech different from a regular NBFC or a fintech startup? This is what the IMF paper focuses on.

Regular financial regulation is “activity-based.” A regulator sees a licensed entity, checks whether it’s complying with the rules for that specific activity, and moves on. A payment service provider gets checked for payment rules. A lending company gets checked for lending rules. Simple.

The problem is that this framework was built for firms that do one thing. BigTech does many things inside the same ecosystem. And those things feed each other in ways the rules weren’t designed to catch.

Take lending. In some emerging markets, up to 80% of BigTech’s total financial revenues come from consumer credit. But the credit business only works because the payments business generated the data. And the payments business only stays dominant because the lending product creates a dependency. One feeds the other. The licensed entity looks small. The group as a whole is enormous.

The IMF calls this the “cumulative effect” problem. Each service, taken alone, may not look systemic. But combined within a single platform, they generate what the paper describes as critical dependencies with little direct substitutability. What this means is, once your payments, loans, insurance, and investments are all inside one app, leaving that app is not a casual decision.

Alipay’s SuperApp hosts over 1 million restaurants, 40,000 supermarkets, 1 million taxis, and 300 hospitals in China. If you want to switch apps, you’re not switching apps. You’re rebuilding your life.

Sound far-fetched for India? Look at what JioFinance is building. UPI payments, personal loans, home loans, insurance, mutual funds, credit cards, and a digital gold product. It’s an all in one app. Jio has over 500 million subscribers on its telecom network. The distribution moat already exists. The financial layer is being stacked on top of it.

Buy Now, Worry Later

There’s one product category that sits at the centre of all of this. BNPL, or Buy Now Pay Later.

BNPL looks like a feature. It’s actually a credit product that slips through regulatory gaps because it was never formally classified as one. No affordability checks. No credit bureau reporting in most cases. No usury limits in many jurisdictions. In the US, BNPL loan originations grew 26% in a single year between 2022 and 2023, driven largely by BigTech embedding it at checkout.

India caught the same fever. The BNPL market crossed ₹50,000 crore in outstanding volume in 2025-26. PhonePe and Google Pay integrated it directly at checkout. The RBI issued Digital Lending Directions in May 2025, finally classifying BNPL as a lending product requiring oversight.

The classification clarified the rules. The ₹50,000 crore was already outstanding before the ink dried.

Regulators Are Moving. Slowly.

Here’s what’s changing globally, and what India is doing about it.

Brazil moved fastest. In July 2023, the Central Bank of Brazil introduced a new conglomerate regulation that recognises payment-led financial groups as distinct from bank-led ones. It creates tiered prudential requirements based on size and complexity, fully implemented by January 2025. Mercado Libre, one of Latin America’s largest tech conglomerates, now has to hold its financial operations to standards that track the actual scale of its business, not just its narrowest licensed entity.

Europe is closing in on BNPL. The UK’s FCA begins regulating BNPL in July 2026. The EU’s revised Consumer Credit Directive comes into force by November 2026, mandating affordability checks and standardised disclosures across all member states.

India is threading a more complex needle. The RBI’s Digital Lending Directions 2025 consolidate earlier circulars, require explicit borrower consent at every stage, ban dark patterns in loan apps, and mandate that data be stored within Indian jurisdiction. Alongside that, the DPDP Act 2023 and its Rules, finalised in late 2025, give India its first comprehensive data protection law. The compliance deadline for financial institutions is May 2027.

That’s meaningful progress. But the IMF’s core warning still applies. No global financial standards exist specifically for BigTech as conglomerates. The Joint Forum’s Principles for Financial Conglomerates, the closest thing to an international framework, were last updated in 2012. Before the smartphone era. Before UPI. Before the SuperApp existed as a concept.

Turns out, the regulatory playbook is running on technology that’s a decade behind the business models it’s supposed to govern.

The Takeaway

India is the most consequential test case in the world for what happens when digital payments scale faster than digital regulation.

The UPI cap expires in December 2026 with no enforcement plan in sight. JioFinance is adding financial products by the quarter. The fintech sector is valued at $44 billion and growing at nearly 17% a year. And two foreign-owned tech platforms still run the country’s most-used payment rail.

The IMF’s prescription is clear. Activity-based regulation isn’t enough. What’s needed is group-level supervision that sees the whole conglomerate, not just the licensed slice. Brazil did it. The EU is doing it. India has the building blocks, the RBI, SEBI, IRDAI, and now the DPDP Rules, but coordination between them remains fragmented.

At what point does an app that holds your payments, your loans, your insurance, and your investments stop being a tech company and start being a bank? And who in India gets to make that call?

Because if no one does, the market will make it by default. And we already know what the market has chosen.

Until next time, ReadOn!

At ReadOn, we don’t just report the markets. We help you understand what truly drives them, so your next decision isn’t just informed, it’s intelligent.

Join ReadOn's WhatsApp Community

For a brief, glorious few months in 2026, it looked like China had finally beaten deflation.

Consumer prices were rising. Factory-gate prices were climbing at their fastest pace in four years. Analysts were calling it the “reflation story.” Markets were excited.

Then July happened.

China’s Consumer Price Index (CPI) fell to 0.5% year-on-year, down from 1.0% in June, landing below every market forecast. It was the third straight month of negative month-on-month prices. The reflation story hadn’t just stalled. It had reversed.

Thing is, this was always going to happen. The question was just whether people were paying attention.

Let’s find out how the dominoes fell.

The Decade That Tried to Forget Inflation

To understand why this matters, you have to go back a few years.

For roughly ten consecutive quarters, China has been stuck in deflation. Consumer price inflation (CPI) averaged 0% in 2025. Producer prices (PPI) were in the red for over three years. For the world’s second-largest economy to be sitting on falling prices while the rest of the globe was fighting inflation is, to put it politely, unusual.

How did it get here?

China built out its industrial capacity at a blistering pace. It was backed by policy support for manufacturing, advanced industries, and supply-chain security. But household demand never kept up. What you got was a classic oversupply problem, not just in a sector or two, but across steel, solar panels, electric vehicles, and half a dozen other industries where Chinese capacity exceeds both domestic demand and global absorption.

Add to that a property sector in freefall since the Evergrande implosion. Youth unemployment at elevated levels. Household confidence badly damaged. The result? Deflation so persistent that economists started whispering the J-word (Japan). The comparison isn’t flattering. Japan’s asset bubble burst in 1990 and it took three decades to fully recover.

The War That Changed the Narrative

Then, on February 28, 2026, a war broke out involving Iran.

The conflict disrupted shipping through the Strait of Hormuz, a narrow waterway through which roughly a fifth of global petroleum flows passes. When it effectively closed, crude prices surged. And China, the world’s largest crude importer, felt it fast.

In March, China’s factory-gate prices turned positive for the first time in over three years, ending what had been the longest deflationary streak in the Producer Price Index (PPI) in decades. Consumer prices climbed too. By May, the Producer Price Index had jumped to 3.9% year-on-year, the highest reading since July 2022.

The narrative machine went into overdrive. China was reflationary. The deflation story was dead. Analysts at ANZ forecast full-year CPI at 1.2%.

Turns out, that was optimistic.

Borrowed Time

A peace deal signed around June 17, 2026, reopened the Strait of Hormuz. Oil prices, which was the one thing propping up China’s inflation numbers, began to fall.

The transportation fuels subcategory in China’s CPI basket fell to just 0.8% year-on-year in July, down from 15.3% in June. This was no gradual cooling, it was a cliff.

See what just happened? The entire reflation story was effectively a geopolitical event with an expiry date. The Iran oil shock pushed energy prices up. Energy pushed PPI up. PPI pushed headline CPI up. And when the shock resolved, the whole chain unwound.

ING now puts the PPI at 3.5% in July, down from June’s 4.1%, and says the peak for the year is likely already behind us. Barring another oil shock, that’s the high watermark. The reflation that looked durable was always just borrowed energy.

The Real Problem: Pigs and Rent

Apart from energy, two structural weights remain on China’s price level. Food and housing. Together, they represent over 50% of the CPI basket.

Start with pork. This sounds like a niche agricultural story. It isn’t.

China’s hog prices have been at or near multi-year lows throughout 2026. The current downcycle has lasted over 40 months. This is well past the historical average because breeding sow inventory remains above the level needed for a normal market. The hogs are there. The buyers aren’t.

Pork production in Q1 2026 rose 4.2% year-on-year, even as prices remained depressed. Farmers lost money on every animal. The Ministry of Commerce activated state pork reserves twice this year, trying to stabilise the market. It hasn’t worked well. Food prices fell for the fourth consecutive month in July, down 1.5% year-on-year.

And then there’s rent. Housing costs in China fell 0.3% year-on-year in July, matching June’s decline. This is a direct downstream consequence of the property market crisis. When home prices have been falling since 2021 and property investment has collapsed from its peak, rental expectations follow. It’s hard to charge more for a flat when the flat next door has fallen in value.

ING’s own framing is blunt. Roughly half of China’s CPI is being dragged down by sticky deflation in food and rent, while energy is just making the monthly noise.

Beijing’s Bind

The government is not oblivious to this. They’ve been trying to fix it.

China’s leadership has explicitly called out “involution”, the term for self-defeating price competition where companies slash prices to grab market share until everyone loses. Xi Jinping personally chaired a commission that called for tightening oversight of aggressive price-cutting. Officials want to restore pricing power to manufacturers and lift wages.

Noble goal. But here’s the bind.

You can regulate price wars in EVs. You can’t regulate away a pork glut caused by structural overcapacity. You can’t regulate your way to higher rents in a city where property prices have been falling for four years. Deflation is notoriously hard to reverse once it sets in consumer expectations. Japan proved that.

The People’s Bank of China, meanwhile, is sidelined by the reflation narrative it never quite believed in. With CPI positive but weak, there’s no rush to cut. But domestic demand is soft. The PBOC is watching and waiting.

The Takeaway

So why does this matter to you?

Two reasons. One short-term, one structural.

In the short-term, Chinese export deflation keeps global goods prices low. When Chinese manufacturers are under pricing pressure at home, they export it. Indian importers of electronics, machinery, chemicals, and consumer goods benefit from this. It’s been a tailwind for Indian inflation staying manageable even as food prices stay sticky.

The structural impact is that if China genuinely cannot escape deflation, the global growth story for the next decade looks different. China has been the marginal buyer of commodities for thirty years. A structurally weak Chinese consumer changes demand forecasts for everything from oil to iron ore to palm oil. That touches Indian commodity exporters, Indian infrastructure costs, and Indian energy policy.

ING still expects China to end 2026 with inflation more convincingly above zero than in the past three years. That’s not nothing, but it’s a long way from a reflation story.

The pigs are still too many. The rents are still falling. And the oil shock that briefly papered over both is gone.

The question is, what, exactly, is Beijing going to do about it?

Until we find out, ReadOn!