India Last Week #79
A round-up of research & reportage on India across climate, energy, foreign policy, politics & more over the last week
Climate, Energy & Environment:
“State Bank of India, the largest lender in the country, continues to shun processing payments for purchases of Russian oil despite the temporary U.S. waiver for India to buy Russia’s crude stashed in floating storage in Asia, sources with knowledge of the situation have told Bloomberg. State Bank of India (SBI) is unwilling to risk its reputation amid uncertainties about how long the waiver, currently for one month, would last… At the end of last year, after the major crude flow shake-up with the U.S. sanctions on Russia’s top producers and exporters, Rosneft and Lukoil, some Indian banks were already considering financing Russian oil trades that involve only non-sanctioned entities and sanctions-compliant pricing and payments… India, the world’s third-largest crude importer, depends on Middle East supply for about 60% of its imports, and the de facto halted tanker traffic in the Strait of Hormuz has put severe pressure on its supplies. So the U.S. Treasury’s Office of Foreign Assets Control (OFAC) last week issued a general license to India for Indian refiners to buy Russian crude loaded on any vessel, including blocked vessels, on or before March 5, 2026, until April 4, 2026.” Read more: Charles Kennedy, OilPrice
“Some urea producers in India and Bangladesh have shut down plants or moved up annual maintenance after Qatari supplies of liquefied natural gas, a key feedstock, were suspended due to the Iran war. Manufacturers, including top producer Indian Farmers Fertiliser Cooperative Ltd., have either halted some of their facilities or started routine upkeep, according to people familiar with the matter. Restarting a paused plant could take as long as a month, provided LNG supplies resume, they added, asking not to be named because the matter is private… Any long-drawn halt to LNG supplies could force India — the world’s top importer of urea — to ramp up purchases, pushing up global prices and hampering government efforts to trim its subsidy burden. Fertilizer demand peaks during the monsoon season that begins in June… The government has taken measures to ensure that at least 70% of the average LNG needs of fertilizer makers are met while the Middle East conflict snarls supply, a spokesperson for the fertilizer ministry said.” Read more: Pratik Parija and Arun Devnath, Bloomberg
“The ₹20,000 crore ($2.2 billion) of support for carbon capture, utilisation and storage (CCUS) for industry announced in the recent 2026 Union Budget risks leading India’s steel sector down a path towards high emissions and rising energy security risk. The track record of CCUS demonstrates it has no capacity to adequately reduce steelmaking emissions… CCUS is not a new technology. Its implementation has been attempted around the world for decades, with a lengthy track record of failure and underperformance. Even the International Energy Agency (IEA) — historically optimistic about CCUS — now views its role in decarbonisation as minimal… Sinking billions into supporting CCUS projects looks unlikely to be an efficient use of government funding. In the steel industry, CCUS has an even more underwhelming track record. The only commercial-scale CCUS plant in the steel sector is the Al Reyadah plant in the United Arab Emirates. This plant captures only abouut 25 percent of total emissions. In the 10 years since it opened, no other commercial-scale CCUS plants for steelmaking have been built.” Read more: Simon Nicholas, Economic Times
“The government has raised Power Grid Corporation of India Ltd’s (Powergird) equity investment ceiling in each subsidiary from Rs. 5,000 crore to Rs. 7,500 crore, in a move designed to bolster funding for large transmission projects and renewable energy evacuation. The cabinet committee on economic affairs (CCEA) chairs by Prime Minister Narendra Modi, approved the higher threshold under existing Maharana delegation guidelines, while retaining the overall cap of 15 percent of the company’s net worth… The higher limit expands Powergrid’s headroom to back capital-intensive transmission schemes, particularly ultra high voltage alternating current (UHVAC) and high voltage direct current (HVDC) corridors… Government officials said the additional financial flexibility will help Powergrid step up investment in transmission systems dedicated to evacuating renewable power, a critical enabler for India’s goal of 500 Gw of non-fossil capacity by 2030. Powergrid already handles the majority of inter-regional transfer capacity in the national grid and has facilitated the evacuation of over 110 GW of non-fossil energy, positioning it as a key player in the next leg of green capacity build-out.” Read more: Times of India
Economy:
“This paper examines the GDP methodology introduced in January 2015, initially to the post 2011–12 numbers and later to the historical series. It explains why doubts about the GDP numbers arose, identifies the key methodological problems, and quantifies the bias they caused… The paper finds that after the 2015 methodology was introduced, correlations between GDP and key indicators that span sectors—exports, credit, taxes, electricity consumption, sales, and the index of industrial production — broke down or weakened… Why did this misestimation occur? The January 2015 methodology had two main problems: inappropriate data sources and inappropriate deflators. A large share of Gross Value Added (GVA) emanating from the informal sector was based on data from the formal sector, and a large share of GVA was deflated by indices that were driven not by the prices of the goods and services involved but rather by commodity prices, particularly oil prices… These methodological problems caused growth over the past two decades to be misestimated in both directions. Broadly, they caused growth for 2005–11 to be underestimated by about 1–1½ percentage points in the backcasting exercise; and caused subsequent growth to be overestimated by about 1½–2 percentage points. We estimate that from 2011 to 2023, the economy actually grew at 4–4½ percent on average instead of the 6 percent reported. Consequently, we find that instead of steady growth over the past two decades, there was a boom followed by slower but still robust growth.” Read more: Abhishek Anand, Josh Felman, and Arvind Subramanian, Peterson Institute for International Economics
“Indian officials pledged to protect consumers as the Iran conflict pushed oil prices above $100 and disrupted supplies, raising significant risks for the energy-importing economy. The country has enough oil reserves to weather the impact in the short run, government officials familiar with the matter said… With risks building, the government is monitoring the volatile situation to assess the implications for Asia’s third-largest economy and will consider measures to offset the impact if needed, the people familiar said… The world’s most populous nation, which imports nearly 90% of its oil, is highly exposed to rising prices. The central bank in 2025 estimated that a 10% rise in oil prices would push up inflation by about 30 basis points and trim economic growth by roughly 15 basis points, assuming the increase is fully passed on to consumers… Inflation has remained well within the Reserve Bank of India’s 4% target for several months. However, analysts cautioned that the risks could build quickly. “The macro implications are wide-reaching, touching every aspect of the economy due to India’s extreme dependence on crude imports,” said Shumita Deveshwar, chief economist at GlobalData TS Lombard… India, the world’s third-largest LPG consumer, sources more than 90% of its imports from the Middle East. Much of that supply transits the Strait of Hormuz, which is now effectively closed to traffic, squeezing shipments of a fuel widely used for cooking across the country.” Read more: Swati Gupta and Shruti Srivastava, Bloomberg
“If anything, trade agreements are increasingly multipolar, with no North Star, no central pillar, to ensure stability and predictability over chaos. The only multilateral trade body, the World Trade Organization (WTO), sits on the sidelines, openly questioning whether it has a role to fill in this new world order… Two recent agreements, involving three of the world’s four largest and most important economies and concluded outside the WTO, spell the challenges the WTO faces in reversing its slide in relevance. First came the agreement between the European Union (EU) and India on January 26. Just a few days later, on February 2, President Trump announced he had struck a deal with Indian Prime Minister Narendra Modi, and the United States and India issued a joint statement with some details on February 6… In substance, it is difficult to provide a detailed comparison of the two agreements and an assessment of their implications because we do not have the final texts of the negotiated terms… As broad as the agreement appears to be from this summary, the EU clearly cut some corners and veered from its longstanding templates for FTAs to secure one with India. There is far less information available on the US-India deal, but it appears to be partial, tentative, and more free-form… There is no beating around the bush that the EU-India and US-India agreements, negotiated outside the WTO, undermine the foundations of the multilateral trading system.” Read more: Mark Linscott, Hinrich Foundation
“Foreign investors pulled out Rs 21,000 crore (around USD 2.3 billion) from Indian equities over the last four trading sessions amid deteriorating global risk sentiment triggered by the West Asia crisis. The latest sell-off comes after foreign portfolio investors (FPIs) infused Rs 22,615 crore into Indian equities in February, the highest monthly inflow in 17 months. Prior to that, FPIs had been net sellers for three consecutive months. They withdrew Rs 35,962 crore in January, Rs 22,611 crore in December, and Rs 3,765 crore in November, according to data from the depositories… Market experts attributed the pullout primarily to the rising geopolitical tensions in West Asia. The US and Israel launched a major attack on Iran on February 28 which killed Iran’s Supreme Leader Ayatollah Ali Khamenei, triggering conflict in the region… Other factors contributing to the outflows include rupee depreciation beyond the 92-per-dollar level, elevated US Treasury yields drawing capital back to safe-haven assets, and mixed early outlook for Q4 FY26 corporate earnings, particularly margin pressures in the IT and consumption sectors, he added… Himanshu Srivastava, Principal Manager Research at Morningstar Investment Research India, noted that higher crude prices increase risks related to inflation, the current account deficit, and currency stability, which typically weigh on foreign investor sentiment toward emerging markets.” Read more: Outlook Business
Foreign Policy & Security:
“Within weeks of the new government assuming power in Dhaka, Bangladesh’s military intelligence chief Major General Mohammad Kaiser Rashid Chowdhury visited New Delhi and met with Parag Jain, chief of the Research & Analysis Wing (R&AW), and others including Lieutenant General R.S. Raman, his Indian counterpart, in another step of normalisation of ties between the two countries… People familiar with the matter said Maj. Gen. Chowdhury met with the two officials and an understanding was reached about ensuring that neither country is used by individuals with interests “that are inimical to the other”, apart from opening channels of communication that were frozen for over 18 months… Since the ouster of the Sheikh Hasina-led government, a number of communication channels between India and Bangladesh were frozen, with conversations between the two countries largely routed through the offices of the National Security Advisers (NSA) until Rahman took office. Khalilur Rahman, former NSA of Bangladesh, remains in Tarique Rahman’s cabinet as Minister of Foreign Affairs, a sign of continuity in foreign policy under the new PM. Khalilur Rahman and India’s NSA Ajit Doval remained in touch throughout last year, even as political and economic ties between New Delhi and Dhaka soured under the interim regime led by Muhammad Yunus… India has in the last few months indicated its willingness to work with and normalise ties with Tarique Rahman’s Bangladesh Nationalist Party (BNP).” Read more: Keshav Padmanabhan, ThePrint
“Iran’s closure of the Hormuz Strait is a matter of critical importance to India, given that a significant portion of our oil and LNG is sourced from the Persian Gulf. An overwhelming majority of its hydrocarbon requirements are imported by sea - over 5 mn barrels of crude oil a day, accounting for more than 85% of domestic consumption… Prolonged instability in the Hormuz Strait will significantly impact availability of essential energy supplies across India’s industrial, commercial and domestic sectors. So, how should a responsible maritime nation safeguard its economic lifelines during periods of heightened instability? Protection of sea lines of communication (Slocs) has long been a foundational element of India’s maritime doctrine. Ability to safeguard these Slocs during periods of crisis is one of the fundamental tests of maritime power… Operation Sankalp, launched in 2019 to ensure the safety of Indian-flagged merchant vessels in the Persian Gulf and Gulf of Oman after attacks on oil tankers, demonstrated that India possesses operational capability and institutional experience to safeguard its maritime trade routes when required… If India’s own maritime commerce were to require external protection in a theatre so closely linked to its national interests, it would raise uncomfortable questions about the extent to which India is prepared to shoulder responsibilities.” Read more: Karambir Singh, Economic Times
“Prime Minister Narendra Modi paid a highly publicised visit to Israel on February 25 and 26. His close and personal bond with Israeli Prime Minister Benjamin Netanyahu was on display, and a significant expansion of their multi-domain partnership was announced during the visit. On February 28, the United States and Israel launched a large-scale and unprovoked air and missile attack against Iran, killing Ayatollah Khamenie, Iran’s supreme leader, and several top clerical and state officials. In retrospect, the timing of the visit was unfortunate. Events had been building up to war with Iran for weeks… Was it that war was expected but that India put a wager on a swift Iranian defeat and its likely descent into American vassalage as in Mr Trump’s Venezuela model?… Why was there a reluctance to condemn the attack on Iran and the violation of its territorial integrity and sovereignty? There was not even a message of condolence on the death of Ayatollah Khamenei and it was only belatedly, on March 5, that the foreign secretary was dispatched to the Iranian embassy to sign the condolence book opened for the departed leader. Des this show that we are surprised by Iranian resilience in the face of a brutal campaign of death and destruction and that the state structures and authority remain in place? Are we beginning to hedge?” Read more: Shyam Saran, Business Standard
“Despite rapid naval modernisation and increasingly active maritime diplomacy, India’s exposure to maritime chokepoints – narrow sea routes through which a very large share of the world’s trade and energy supplies move – remains deep and largely unavoidable… Research shows that when these routes are disrupted, the effects are felt quickly in everyday economic outcomes such as fuel prices, inflation, and government finances, especially in countries that depend heavily on imported energy. Non-State actors further amplify this vulnerability. Piracy, maritime crime, and militant activity do not need to close a strait completely to cause damage… A historical perspective shows that India’s vulnerability to maritime chokepoints has increased sharply over time. In the decades following independence, the Indian economy remained relatively inward-looking, with limited trade integration and modest energy imports. During the 1970s and 1980s, India’s trade openness remained below 20% of GDP (gross domestic product), and crude oil import dependence was around 30-35%. As a result, while maritime security was strategically relevant, it did not occupy a central place in macroeconomic policymaking. This situation changed decisively after economic liberalisation in the early 1990s… In the post-liberalisation era, however, this vulnerability has deepened structurally, transforming maritime chokepoints from peripheral strategic concerns into central determinants of India’s macroeconomic stability.” Read more: Srishti Gupta and Roshan Soni, Ideas for India
People & Politics:
“A day in any Delhi household begins with an act of trust: turning on the tap. Millions of people assume that the water flowing out is safe. Other than daily washing and cleaning needs, this water fills bottles for schoolchildren, goes into morning tea, and is used in the food we eat (water purifiers are still not as ubiquitous as most people think they are). But a seven-day sampling exercise conducted by Hindustan Times at 18 complaint-prone locations suggests this trust may not always be warranted. Laboratory analysis found that nearly 44% of the samples violated basic microbiological safety standards… Laboratory analysis revealed that eight samples tested positive for total coliform or E. coli – indicators commonly associated with faecal contamination in drinking water… The problem appeared concentrated inside neighbourhood pipelines. West Delhi’s Rajouri Garden recorded the highest contamination levels, followed closely by Chilla village in east Delhi and DDA flats in Mayur Vihar Phase 3. In contrast, several pockets in south and central Delhi tested clean… Strikingly, three of these domestic samples did not meet even the threshold for “bathing water”… To be sure, none of the publicly accessible sources tested – a water vending machine at Connaught Place, a sweets shop in Kamla Nagar, a water cooler at Hindu Rao Hospital or a Delhi Jal Board (DJB) tanker in Chilla village – showed any microbial contamination.” Read more: Paras Singh, Jasjeev Gandhi, Jignasa Sinha, Hemani Bhandari, Gargi Shukla and Aaditya Khatwani, Hindustan Times
“In one move, Reliance Industries Ltd. has reset its relationship with Donald Trump. Billionaire Mukesh Ambani’s conglomerate is in talks with America First Refining, with options ranging from an equity stake to offtake agreements or broader strategic partnerships, people familiar with the matter said, asking not to be identified as the information is private… Although it didn’t name Reliance, Washington had last year accused India’s politically connected energy titans of war profiteering through purchases of discounted Russian crude. But on Tuesday, President Trump announced the Brownsville project, calling it “the FIRST new U.S. Oil Refinery in 50 YEARS” and thanking Reliance for its role… The recent developments follow a period of intensive engagement by the Reliance leadership, which helped secure the 30-day Russian oil purchase waiver and made progress on deals involving Venezuelan interests, the people said.” Read more: P R Sanjai and Rakesh Sharma, Bloomberg
“Former Balasore MP and Biju Janata Dal (BJD) leader Rabindra Kumar Jena on Wednesday (March 11) formally joined the ruling Bharatiya Janata Party (BJP) in Odisha. Jena joined the party along with his supporters, at the BJP’s state headquarters in Bhubaneswar, reported Hindustan Times. Notably, Jena joined the saffron party a day before a scheduled CBI court hearing on March 12, wherein the CBI has filed a chargesheet against Jena for his alleged involvement in the Seashore chit fund scam in Odisha… Earlier on Tuesday (March 10), Jena had resigned from BJD’s primary membership, citing “personal causes and circumstances” in his letter to party supremo Naveen Patnaik… The BJD had fielded his wife, Subasini Jena, the incumbent BJD MLA from Basta once again from the constituency in the 2024 Assembly elections. She had won by a margin of over 20,000 votes against Congress candidate Bijan Nayak… Jena said that while he held BJD supremo Patnaik in high regard. Jena said that a regional party could not survive without passing the baton to the next generation of leaders. Jena added that he had raised with the BJD leadership on multiple occasions, without result.” Read more: The Wire
Tech:
“India is working towards becoming independent in designing and producing sophisticated microchips under its semiconductor mission, while also attracting Indian professionals with chip-design experience at multinational companies (MNCs), NITI Aayog member Vijay Kumar Saraswat said… Saraswat also said that specific features and the incentive structure under the second phase of the India Semiconductor Mission announced in Union budget 2026 are being worked out… In the budget for 2026-27 the Centre announced a second tranche of sops under the mission, five years after rolling out the first INR 76,000-crore programme… India’s push to build domestic capabilities in semiconductors and critical minerals, which are vital for IT, clean energy and defense sectors, comes at a time tech is increasingly shaping industrial and military power in a deglobalizing world.” Read more: Gireesh Chandra Prasad, Mint
“India’s computing history is punctuated by moments of possibility, each representing a road not taken. What began as a genuine struggle for technological sovereignty has mutated into its inverse: a technological nationalism that celebrates the very forms of dependence it once sought to overcome. Silicon Valley’s relationship with India epitomizes this transformation. It draws talent from India’s skilled labor pool and treats the country as a captive market for its products, cloaking this dependency in the noble language of digital progress. India’s elite technocrats, in their single-minded search for technological solutions, did not recognize the depth of their own predicament… The grand designs of the early technocratic class have mutated into an endless parade of technological solutions to social problems, each more grandiose than the last. Over the past decade, the Indian state has launched scheme after scheme promising to harness digital technology to overcome every conceivable social and political challenge… While early computing initiatives at institutions like TIFR [Tata Institute of Fundamental Research] understood hardware development as the necessary foundation for genuine industrial growth, and while the Department of Electronics pursued a more strategic vision of leveraging software exports to build a hardware manufacturing base, today’s orthodoxy celebrates India’s supposed comparative advantage in software services while accepting permanent technological subordination in the hardware sector.” Read more: Dwaipayan Banerjee, Rest of World
Bonus:
“Every Sunday morning in 1987, India came to a standstill. Streets emptied. Shops closed. Families bathed and adorned their television sets with flowers before gathering – often with neighbours – to watch Ramayan, a televised retelling of the ancient Hindu epic. An estimated 80 million viewers tuned in weekly, making it the most-watched programme in Indian television history… We study Ramayan’s impacts, finding that exposure to the show caused strengthened Hindu religious identification, short-term increases in communal violence, and persistent electoral gains for the Bharatiya Janata Party, even though the Congress government aired it mainly to boost advertising revenue rather than for ideological reasons. How can one determine the causal impact of Ramayan? Our key insight is that television signals do not travel uniformly: hills and valleys create natural barriers that weaken reception in some areas, while others receive strong signals. This variation, driven by terrain and the timing of transmitter rollout rather than systematic differences across places, allows us to estimate the causal effect of exposure to Ramayan by comparing changes over time in places that had a stronger TV signal in 1987 when the show aired to places that had weaker or no signal… We show that exposure to religious media can shift religious identification, with cascading consequences across multiple domains – from personal choices to intergroup conflict to electoral politics to institutional change.” Read more: Dean Yang, Alessandro Saia, Akhila Kovvuri, Resuf Ahmed and Paul Brimble, VoxDev
Watch/listen:
Shivshankar Menon Says India’s Silence on Iran War, Khamenei Killing ‘Inexplicable’, ‘Diminishes Us’ | Shivshankar Menon in conversation with Karan Thapar | The Wire