India Last Week #36
A round-up of research & reportage on India across climate, energy, foreign policy, politics & more over the last week
Climate, Energy & Environment -
“SMRs are advanced nuclear microreactors that possess a power capacity of up to 300 MW(e) per unit, which is almost one-third of the power-generating capacity of standard nuclear reactors… With nuclear energy accounting for only 3.15% of India’s total electricity generation, emerging technologies such as SMRs could potentially work to facilitate this transformation to nuclear. SMRs have been on Indian policy lineups for almost a decade now but have not yet translated to practical commercial options. This lack of progress is often due to the economic intensiveness, delayed outcome benefits, and tentative safety liabilities of constructing nuclear power reactors (i.e., NPPs) such that some states become less favorable toward initiating a nuclear commitment… A further collaborative venture between government bodies such as NPCIL, the Bhabha Atomic Research Centre, National Thermal Power Corporation, and Bharat Heavy Electricals Limited that have significant experience in running NPPs with capital investments from private industry patrons and maximum operational rights with the government will work as an ideal solution for a conducive SMR environment.” Read more: Hely Desai, International Journal of Nuclear Security
“In November, NTPC Green had one of the biggest IPOs in 2024, aiming to raise ₹10,000 crore, offering share prices at ₹102-108. It was oversubscribed 2.5 times. Currently, its market cap is ₹101,132 crore and it is trading close to its listing price, hitting a peak of ₹149 on December 11. “The renewable energy market has grown and matured. Renewables are commercially viable and can stand on their own. Investment will come through sustainable financing markets, or through bank finance,” says Shantanu Srivastava, the sustainable finance and climate risk lead at the Institute for Energy Economics and Financial Analysis (IEEFA). For renewable energy companies to scale up, they need to invest in physical assets. For that, nearly 80-85% of the financing is through debt at the moment, so there shouldn’t be a problem raising equity now, according to Srivastava… In 2024, the renewable energy sector saw an influx of roughly ₹100,000 crore in total, nearly double the funds that went into traditional energy sectors like coal and refinery, according to a senior analyst with a prominent securities firm, who wished to remain anonymous. By 2027, the investment in the renewable segment is expected to grow by 3X, while conventional energy forms will see similar investments as now. “In relative terms, old energy sectors will decline. Once more renewables get into the system, conventional energy will decline further. It will have to,” said the analyst.” Read more: Shaswata Kundu Chaudhuri, CarbonCopy
“ Trade for March-loading Russian oil in top buyer Asia has stalled as a wide price gap between buyers and sellers emerged in China after costs for chartering tankers unaffected by U.S. sanctions jumped, according to traders and shipping data. Washington imposed fresh sanctions on Jan. 10 targeting Russia's oil supply chain, causing tanker freight rates to soar as some buyers and ports in China and India steered clear of sanctioned ships… Prior to the January sanctions, robust winter demand and firming prices for rival grades from Iran sent spot premiums for ESPO Blend crude to China rising to close to $2 a barrel, the highest since the start of the Ukraine war in 2022, the aftermath of which had sent discounts to as deep as $6… The latest sanctions target tankers that carry about 42% of Russia's seaborne oil exports, primarily to China, according to analytics firm Kpler, although sanctioned tankers are gradually discharging oil in China and India during a waiver period. The U.S. clarified to India that tankers loaded with Russian oil must discharge by Feb. 27 under the sanctions, India's oil secretary Pankaj Jain told reporters on Friday. Payments for oil onboard affected ships must be cleared by March 12, he added.” Read more: Siyi Liu, Chen Aizhu and Nidhi Verma, Reuters
Economy -
“Our GDP growth has surprisingly and inexplicably slowed down. World growth is expanding, even the IMF says so, so why is the global star slowing down? This should be the first bit of accountability that is required from our monetary and fiscal policymakers… In this article, I want to point to the inexplicable policy of high rates of personal income and overall taxation — a policy I believe is responsible for the slowdown along with our Deep-State-inspired policy of high tariffs on manufactured goods and the same source-inspired policy on the closing of foreign direct investment (FDI). I want to expand on my comment about a deep state. First, who makes policy? Major industrialists, senior IAS babus, and their friendly influencers in the media… Regarding personal income taxation, the Indian government’s own data and projections suggest that X-PIT will reach 3.9 per cent of GDP in FY2025. How exceptional is this “performance”? Very. Outside of the advanced countries, there is no regional average that even comes close – Eastern Europe is the highest, at 3.4 per cent in 2019, the last full year before the pandemic… There has been a discussion about the lopsided recommendations of the GST Council, advice that at least generated some humour with regard to sugar and popcorn. The income tax collection records, however, are no laughing matter. For close to 20 years the governments have talked about direct tax reform. Talked, and badly acted.” Read more: Surjit Bhalla, Indian Express
“Indian Prime Minister Narendra Modi is pouring billions into ailing state-run firms after slowing ambitious divestment plans that were intended to reduce the role of the state in business, according to government sources and a document reviewed by Reuters. Less than a month into 2025, New Delhi has plans to invest about $1.5 billion in financial rescue packages for two state-owned firms after failing to sell them to private companies. It has also decided to put in "abeyance" privatisation of at least nine state-owned units after opposition from relevant ministries, according to a document that detailed recommendations of a government panel set up to identify privatisation candidates. The document, reviewed by Reuters, did not cite reasons for the decision… The sources declined to be identified because of the sensitivity of the issue… In 2021, Modi's government announced a major programme to privatise most of India's state-run companies. The plan was so drastic that even in the four sectors that India sees as sensitive, such as telecoms and banking, it wanted to keep only a minimum presence, while exiting from all other sectors. But now it is planning rescue and revival plans for companies even outside the sensitive sectors… The U-turn in policy was partly driven by the expectation that some large state-owned firms could be overhauled and made more profitable, helping the government earn dividend income, Reuters has reported previously. Political pressures on Modi have increased after he came back to power in mid-2024 only with the help of regional allies, making it more difficult to overcome opposition to privatisation by employee unions fearing job losses.” Read more: Nikunj Ohri and Sarita Chaganti Singh, Reuters
“A slack in private investment has persisted for over a decade in India. Reviving it has been a central macroeconomic concern and challenge, eliciting significant policy attention… Despite wide-ranging endeavours, however, aggregate nominal investment shares in relation to the gross domestic product (GDP) trend well below their past peak - 35.8% in 2007-08 - by ~5 percentage points… Relative to national GDP however, the intended capex from all financing sources displays a significant fall. At 0.8% of GDP in 2024-25, it is a steep drop from 1.4% last year, which itself only matched up to 2015-16 levels. It is noteworthy that between 2004-05 and 2012-13, the intended investments were in the region of 3-6% of GDP, averaging 4.5% a year. Put differently, the planned investment pipeline in this year is not even a fifth of the past magnitudes, testifying to the extent of the deficit that remains after the post-pandemic demand surge has tapered… [I]n light of optimistic business sentiments consistently outweighing their corresponding economic assessments, a disaggregation of factors underlying the fluctuations in business expectations yields interesting insights. Inter alia, the most prominent drivers in the past decade are found to be the changes in expectations of profit margins and exports, suggesting that firms’ over-optimism may not only explain the divergence from real economic calculations but also underpin the higher investments planned for, resulting in their subsequent shelving as expectation were unmet.” Read more: Renu Kohli and Kritima Bhapta, Indian Public Policy Review
Foreign Policy & Security -
“Three months after negotiating an end to the military stand-off at the Line of Actual Control (LAC), India and China agreed to concrete measures to resume direct flights, visas, a number of exchanges, and the Mansarovar Yatra for pilgrims this summer. They also agreed to resume the dialogue on trans-border rivers and sharing of hydrological data, that China has withheld for years. Both sides committed to marking the 75th year of establishment of ties with a number of celebratory events this year, as Chinese Foreign Minister Wang Yi called for an end to “mutual suspicion and estrangement” between the two countries… The officials also held a discussion on economic and trade areas. This is significant as despite record trade levels, India and China have been levying restrictions on each other amidst the LAC tensions. While China had complained about the need for a “level playing field” over India’s decision in 2020 to require Home Ministry clearance for investment from China and other land-border countries, denial of business visas, as well as raids on Chinese telecom companies, India has been worried about Chinese restrictions on pharmaceutical ingredients (API), high technology exports and transfers to India, as well as withholding critical equipment like Tunnel Boring Machines (TBMs)… Mr. Misri, who travelled to China on Sunday, also met with Chinese Foreign Minister Mr. Wang, who is a Member of the Politburo of Communist Party of China (CCP)’s Central Committee and the CCP’s Minister of the International Department Liu Jianchao during the visit.” Read more: Suhasini Haidar, The Hindu
“Seeking to cut down delays in aircraft manufacturing projects, a team from India is scheduled to visit the US for talks to complete the GE-414 engine deal by the end of March. The team comprises officials from HAL and are visiting the facilities of the American engine maker GE. The members are set to hold detailed discussions on all the aspects of the programme and prepare for an early signing of the deal, officials told India Today TV. India has been facing issues due to delays in the supply of jet engines for its LCA Mark1A and LCA Mark 2 programmes. While the GE-404 engine supplies for the 83 LCA Mark 1A project have been delayed due to supply chain issues faced by GE globally, the GE-414 project has not yet been signed. This may delay the prestigious LCA Mark2 project which is planned to be inducted in large numbers as a 4.5 generation aircraft. The LCA Mark 2 is likely to be the replacement for the Mirage-2000, Jaguar and MiG-29 fighter jet fleets in the Indian Air Force.” Read more: Manjeet Negi, India Today
“Ignore the conventional wisdom in Washington and New Delhi that the U.S.-India trade relationship is likely to deteriorate during U.S. President Donald Trump’s second term: The two countries in fact have a huge opportunity to expand trade and a realistic path forward for doing so… Early in Trump’s first term, when one of us served as the U.S. ambassador to India and the other as assistant U.S. trade representative for South and Central Asia, the United States put on the table its willingness to negotiate a broad trade agreement with India. While U.S. officials thought that the Indian government had signaled general interest in such an agreement, there did not seem to be the concrete follow-through in terms of the mutual concessions required to conclude any such large deal… Once the Trump tariffs (and possible Modi retaliatory tariffs) go into effect, the United States and India should view this as only the beginning of the trade and economic dialogue. Both leaders and their advisors should see the logic of aspiring to conclude a broader deal. After all, Trump and Modi are drawn to high-profile initiatives and prefer bilateral deals to multilateral ones… A U.S.-India deal could certainly follow the USJTA model. The natural starting point would be to address most of the issues that the parties left on the table during Trump’s first term, when they came close to reaching an agreement. Such a deal now would require substantial tariff reductions by New Delhi because it has much higher tariff rates than Washington; Trump believes in some degree of reciprocity.” Read more: Kenneth I. Juster and Mark Linscott, Foreign Policy
People & Politics -
“Activists Rona Wilson and Sudhir Dhawale walked out of prison on Friday after being under incarceration for six and a half years in the Bhima Koregaon case. The Bombay High Court granted them bail on January 8 on grounds that they had spent a long period in jail without trial or even charges being framed against them. Prolonged detention without trial is violative of the rights of an accused under Article 21 of the Constitution… Proceedings in the case so far indicate that the prosecution is responsible for the delay. It has filed several chargesheets in the case and failed to provide the defence lawyers with replicas of digital devices used as evidence against the accused. This has slowed down the process of the accused challenging the charges. Such challenges must first be decided before courts can frame charges and then commence trial. Courts have also played a role in the long incarceration of Wilson and Dhawale. Both of them had the opportunity to be released on bail in 2018 and 2021 due to procedural improprieties by the prosecution – but controversial court orders kept them in jail… The prosecution’s case is almost entirely centred on digital evidence – documents allegedly recovered from the phones and computers of Wilson, alongside some other accused persons in the case… Independent digital forensics analysis has alleged that key evidence used by the prosecution in the case was planted on the digital devices of some of the accused… A report in Wired magazine confirmed that Pune police hacked the devices of Wilson, Varavara Rao and Hany Babu. All this raised serious questions about the integrity of the evidence.” Read more: Vineet Bhalla, Scroll
“The stampede at the Maha Kumbh in Prayagraj, Uttar Pradesh — the third such incident in recent months — confirms India’s dubious distinction of having the most number of deaths during religious gatherings. While the day’s developments have not yielded conclusive reasons for the stampede that happened in the early hours of January 29, initial investigations suggest an uncontrolled surge of devotees at the bathing ghats… According to government estimates, more than a third of those who were expected had performed the ritual early — 36 million people by 10 a.m. — despite temporary closures of the roads leading to Prayagraj after the stampede. This measure of regulating traffic into the city could have been proactively implemented, ensuring a steady and manageable stream of devotees, as the government was well aware of a surge in numbers. The focus, unsurprisingly, is again on the lack of crowd management and the prioritisation of VIP visitors over the common man… What has been even more alarming was the State government’s delay in formally announcing the fatalities and those injured — 30 dead and over 60 injured — deviating from established protocols of transparency during disasters. It is reminiscent of the opacity of Chief Minister Yogi Adityanath and his government after the widespread deaths during the second COVID-19 wave in March 2021, the scale of which was evident later when horrific images of bodies floating in the Ganga emerged.” Read more: The Hindu
“Across the political spectrum, India’s parties are embracing cash transfers as a political and policy tool. Alongside Delhi, some 11 states now implement cash-transfer programmes for women (see chart), and more are expected to do so later this year. All told, these schemes reach around 134m women, or a fifth of India’s adult female population, according to research by Axis Bank. The total splurge amounts to 2trn rupees, equivalent to 0.6% of India’s gdp. In some states, transfers exceed 5% of total government expenditure… Although handouts seek to improve the lot of women and farmers (and cows), expediency is foremost in politicians’ minds. Schemes tend to be announced on the eve of elections. Last year in Maharashtra, state elections were reportedly postponed so that money from a cash-transfer programme could reach women’s bank accounts before they cast their votes… Research by Neelanjan Sircar and Yamini Aiyar, two political scientists, suggests that regional parties that have implemented cash-transfer policies and linked them to their own leaders have eaten into the bjp’s support in their states. India is in an era of “competitive welfarism”, the authors say, in which parties vie to woo voters with ever more generous policies… The biggest concern with freebies is what they mean for the role of the Indian state. Cash has emerged as a “one-size-fits-all” solution, says Himanshu, a professor at Jawaharlal Nehru University in Delhi. Yet handouts do little to improve the quality of schools or health-care facilities. Nor do they generate jobs, perhaps India’s greatest task.” Read more: The Economist
“Weeks after the Mahayuti swept to power in Maharashtra on the back of popular schemes like the Ladki Bahin Yojna and the PM Kisan Samman Nidhi bureaucrats are scrambling to recover crores of rupees that were paid to ineligible recipients. According to government estimates, there are three million women who do not meet the eligibility criteria for Ladki Bahin but who got six instalments of ₹1,500 per month and 1.2 million ineligible farmers in the state who got dole under the PM Kisan Yojna. The cumulative amount to be recovered is upwards of ₹4,000 crore. Maharashtra has a fiscal deficit of ₹1,10,355 crore according to the budget presented in June 2024, and a revenue deficit of ₹20,151 crore. Last week, speaking to the media in Pune, finance minister Ajit Pawar conceded that the government had passed on the benefits of the schemes to recipients without ensuring their accounts were linked to Aadhaar. As reported earlier by this newspaper, one of the first decisions of the Devendra Fadnavis government has been to recalibrate the list of Ladki Bahin beneficiaries. The second aspect of that, and which may not be easy to execute, caution bureaucrats, is to recover the monies already paid to ineligible beneficiaries by the previous government. The state, at present, pays ₹3,700 crore each month as direct cash benefit to 24.6 million women under the Ladki Bahin scheme.” Read more: Surendra P. Gangan, Hindustan Times
Tech -
“In the late 1960s, the US restricted wheat imports to India. At the time, India was heavily dependent on the US for its massive food shortage, and this crunch was a wake-up call, which eventually led to self sufficiency through the Green Revolution. Sixty years later, India is again on the brink of facing such a situation. This time, however, it’s GPUs – which not only power gaming PCs, but also new-age data centres running the AI revolution. But instead of the US, this time around, India may be compelled to look at China for an answer and the Chinese AI project DeepSeek… A lot of the hype around the Chinese competitor for ChatGPT and OpenAI comes from the fact that it has managed to surpass existing closed source models without relying on high-performance GPUs. In fact, DeepSeek’s usage of just 2,000 Nvidia H800 GPUs compared to OpenAI’s model which relies on 100,000 GPUs (the more advanced H100). In fact, the H800 GPUs were specifically designed by Nvidia for the Chinese market, and are said to be less powerful than the H100 GPUs on which they are based… For India, 2025 is a critical year in AI development, especially as debates around Indian LLMs have picked up pace. Under the IndiaAI mission, the Indian government planned to procure 10,000 GPUs, and has received bids from manufacturers for 20,000 GPU imports into India. These GPUs are to be distributed to companies like Reliance Industries, Adani Group and others who are building data centre capabilities in India to tap the AI opportunity.” Read more: Lokesh Choudhary, Inc42
“The Federation of Indian Publishers has approached the Delhi High Court, filing an intervention application to join the ongoing case filed against OpenAI by the Indian news agency Asian News International (ANI). It seeks impleadment under the Code of Civil Procedure, 1908, which allows interested entities to join as parties in legal proceedings. The Federation has stated in an application reviewed by MediaNama, that it is one of the oldest and most prominent national representative bodies of the Indian publishing industry, with a “real and substantial interest in the legal questions raised in the case.”… The Federation added that it constitutes a substantial class of entities and individuals who own copyright in a significant number of literary works… The Federation of Indian Publishers includes both Indian and international publishing houses, such as Bloomsbury, Cambridge University Press, Jaico Publishing House, Oxford University Press, Penguin Random House, Rupa Publications, Sage Publications, and S Chand and Company… Globally, OpenAI faces legal disputes with publications such as the New York Times over copyright issues. While simultaneously it has forged partnerships with other publishers, including some of the largest news outlets in France and Spain, neither party is openly disclosing the amounts OpenAI is paying each publisher.” Read more: Sakshi Sadashiv, Medianama
“In January 2021, the Competition Commission of India (“CCI”) took suo motu cognisance of WhatsApp’s 2021 privacy policy (“2021 Policy”), which mandated users to accept updated terms and conditions, including the sharing of personalised user information with Facebook (now Meta). This marked a shift from WhatsApp’s previous privacy policies of 2016 and 2019, which had given users the choice to opt out of personal data sharing…. The case centered on how Meta combined user data across its apps and how this practice affected both user privacy and competition. The CCI’s investigation revealed that the 2021 policy update forced users to accept more intrusive data collection practices, leveraging the company’s significant market position… Privacy laws aim to protect individual data rights and ensure informed consent, while competition laws focus on maintaining market efficiency and preventing the abuse of market power. However, the unique characteristics of the digital economy have challenged this separation, leading to what scholars now call the “privacy-antitrust paradox.”… The CCI’s penalty on Meta is a defining moment in India’s competition law framework, underscoring the growing recognition of privacy as a key element of fair competition. Unlike in earlier cases such as Matrimony.com and Vinod Kumar Gupta, where privacy issues were acknowledged but relegated to the Information Technology Act, this order marks a significant development in building India’s position on privacy-antitrust integration.” Read more: Naman Kumar, Internet Freedom Foundation
Listen -
Martin Wolf talks to Arvind Subramanian: India, the next economic superpower? | Financial Times