India · page 2

Tech Mahindra ties up with SpaceX's AI arm to modernise old software

• Tech Mahindra, India's fifth-largest IT firm, has partnered with SpaceXSI, the AI division of SpaceX, to help companies modernise legacy applications and speed up software development.
• It will also use the Grok Build chatbot to create industry-specific tools, starting with technology, telecom, and banking and financial services clients.
• Tech Mahindra already has similar pacts with Google Gemini and Microsoft; Reuters says this is the first time an Indian IT major has teamed up with SpaceX's AI unit.

Other side: Partnership announcements are cheap, and Tech Mahindra already has similar deals with Google and Microsoft. Revenue, not logos, will show whether clients pay for AI-led modernisation.

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Summary based on Reuters. Read the full story ↗

AI researchers leave OpenAI, DeepMind to build startups in India

• Inc42 tracks researchers leaving global labs to build in India: Shyamal Anadkat, who led OpenAI’s Applied Evals team, founded Empirical Machines for AI-driven molecule and materials research; ex-DeepMind engineer Parth Sarthi’s Chariot builds speech-native models under the IndiaAI Mission.
• Former Google engineering director Anish Das Sarma’s Reinforce Labs red-teams enterprise AI. Empirical Machines is reportedly in talks to raise about $15 Mn, per Moneycontrol.
• Investors say lab pedigree helps recruit talent but does not prove a business; DeVC’s Rahul Mathur asks who will pay for the research.

Other side: Pedigree is not product. Research takes years to pay off, compute is costly, and investors say customers, not résumés, will decide which of these startups survive.

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Summary based on Inc42. Read the full story ↗

PHP2Shell, eMudhra, PingCAP: one week, three security scares

• PHP2Shell: two critical flaws (severity 9.2 of 10) let attackers take over unpatched PHP servers without a password. Found with AI help, fixes shipped on 21 Oct, a day early after a leak; Amazon says they are now broadly exploited, and the NSA says patch or go offline.
• eMudhra: eight intermediate certificates had keys weak enough to recover almost instantly. Mozilla, Google, Apple and Microsoft have blocked them; no misuse shows in public logs, and India’s IT ministry has set up a probe.
• PingCAP: stolen service credentials let an intruder copy TiDB Cloud user details, SQL editor text, billing data and encrypted API keys. It sees no sign that data stored in TiDB was hit.

Watch next: Patch speed. Servers and apps that update slowly may show damage in the coming weeks, though so far no attack using the eMudhra keys is known.

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Summary based on SecurityWeek and PingCAP. Read the full story ↗

Money managers brace as a record El Niño forms

• Forecasters see a very strong El Niño likely lasting into early 2027; Pictet’s Katie Self says it is almost certain to be the most extreme on record, with knock-on effects everywhere.
• It is already fanning droughts and floods: India had its weakest monsoon in more than a decade, food commodity prices are rising, and economists are revising inflation and deficit forecasts.
• T. Rowe Price uses custom models to shield its $165bn emerging-market portfolio, and an Anthropocene Fixed Income Institute note names Indonesia, Brazil and Colombia as the most exposed sovereigns.

Other side: El Niño cycles are not new and markets have lived through them; forecasters see the odds of a strong event fading through the first half of 2027.

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Summary based on The Economic Times. Read the full story ↗

France's debt trouble and a lopsided world economy: lessons for India

• A Mint editorial traces France's student protests to fiscal strain: debt near 120% of GDP, a deficit above 5%, and a pension bill governments failed to rein in, as borrowing costs rise worldwide.
• A Mint analysis of IMF data finds growth concentrated: 32 economies supplied over 95% of global growth in 2026, with China, India and the US together giving nearly 60%.
• It argues AI investment is offsetting the drag from the West Asia war and costly oil, but warns India, a net debtor, needs a stronger current account to stay resilient.

Other side: Debt ratios alone can mislead: a faster-growing economy can carry more borrowing, and street protests usually have many causes beyond the budget.

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Summary based on Mint. Read the full story ↗

India can build anything, and its founders are starting to

• Pixxel founder Awais Ahmed argues India must build rockets, chips and materials as well as apps, noting China’s share of world manufacturing rose from under 3% in 1990 to 32%.
• He points to the government’s ₹1 lakh crore research fund, whose first 19 managers have ₹7,131 crore committed. YourStory reports Prof. Ashok Jhunjhunwala telling TechSparks that India can develop any technology and should back young risk-takers.
• Inc42’s tracker says over 70 new-age tech companies are now listed, worth over $173bn combined, and over 60 are profitable.

Other side: Ahmed himself says deep-tech founders must meet rigorous standards, because patience is no licence for endless experimenting. Will results arrive as fast as the optimism?

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Summary based on X, YourStory and Inc42. Read the full story ↗

India’s solar boom is testing the grid

• Mint reports India reached 168.04GW of solar capacity by 31 August, but transmission lines and storage are struggling to carry and save the power.
• Ember estimates 300 GWh of clean electricity was lost to transmission limits in the first quarter of 2026, and new renewable awards fell to 14.7GW in FY26 from 40.6GW a year earlier.
• India has 8.6GWh of battery storage against a projected need of 236GWh by 2032; a proposed rule would require storage on new solar and wind projects from July 2027.

Other side: One industry chief says the stress should not be called grid instability, and the ministry says it is expanding transmission and storage. Can the build-out keep pace with the sun?

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Summary based on Mint. Read the full story ↗

India’s new UPI fee is reviving the case for cash

• The FT reports that a 0.4% charge on business UPI payments above a small threshold is due from November, with person-to-person and small-merchant payments exempt.
• A survey of merchants found 83% unwilling to absorb the cost, and shopkeepers say they may take cash or split bills to stay under the threshold.
• Cash never left: currency in circulation keeps growing even as UPI use soars. The operator says the fee helps cover running costs, while analysts also point to tax scrutiny of digital payments and election-season spending.

Other side: Small payments stay exempt, and the evidence does not prove the fee alone explains rising cash use. Tax scrutiny, prices and elections all play a part.

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Summary based on Financial Times. Read the full story ↗

AI agents breach Indian systems as Schwab locks them out

• Mint reports that India’s Cert-In issued its first AI-agent warning: agents infiltrated live Indian systems, including government bodies, in many cases during AI firms’ research trials but sometimes at criminals’ hands. No firms were named.
• The worry is speed, since attacks that took days can take hours, and India spends about 20% of its IT budget on cybersecurity, trailing mature western nations.
• The WSJ reports Schwab going the other way: blocking third-party AI agents from customer logins while building its own assistant, with any agent acting only on criteria the client sets.

Other side: Many breaches were reported by the AI firms themselves, and Schwab still lets a few traders connect Claude, so access is being managed rather than shut.

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Summary based on Mint and The Wall Street Journal. Read the full story ↗

Dr Doom turns optimist: Roubini says India's moment has arrived

• Nouriel Roubini, who warned of the 2008 crash at the IMF in 2006, told ET that India is a "major success story" and that the coming decades could be as much about India as past ones were about China.
• He expects market pressure and US worries about inflation and affordability to push tariffs lower and Washington towards a more constructive stance on India. The first phase of a trade deal is in legal drafting.
• His catch: 7% growth is not enough. India must get closer to 9% to give young people good jobs as AI reshapes work, and friendshoring away from China is the opening.

Watch next: Whether the US trade deal is signed and tariffs fall. "Next China" forecasts have come before, and moving from 7% to 9% needs reforms that have often stalled.

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Summary based on The Economic Times. Read the full story ↗

Foreign banks bet ₹1.32 lakh crore (about $13.7bn) on Indian lenders

• Four deals from Canada, Japan and the UAE total about ₹1.32 lakh crore, roughly $13.7 billion at the rate implied by ET's $5.5 billion for IDBI: Fairfax buying 60.72% of IDBI Bank, MUFG 20% of Shriram Finance, Emirates NBD 60% of RBL Bank and SMBC an initial 20% of Yes Bank.
• The total is deal value, not all fresh money: MUFG and Emirates NBD put in new capital, while SMBC mainly bought existing shares.
• Three of the buyers paid about 1.3 to 1.6 times book value for cleaned-up lenders. Fairfax also owns CSB Bank, a two-bank question for the RBI.

Watch next: RBI approval. It will weigh control, governance and Fairfax's overlap with CSB Bank, and foreign control of big lenders raises the question of who answers if things go wrong.

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Summary based on The Economic Times. Read the full story ↗

Nilesh Shah: Hindustan Zinc shows what IDBI Bank's sale could achieve

• Kotak AMC's Nilesh Shah says the government sold about 45% of loss-making Hindustan Zinc, with control, to Vedanta two decades ago for around ₹769 crore, and kept roughly 29%.
• Dividends on the stake it kept have exceeded the sale price, he says, and that stake is now worth over ₹62,000 crore, while the company became the world's largest integrated zinc producer.
• He contrasts IDBI, which stayed public, needed repeated capital top-ups and is valued at ₹90,000 crore, with ICICI, which went private and is worth ₹9.88 lakh crore.

Other side: One success picked with hindsight proves little: how much of Zinc's gain came from new owners and how much from its market? A bank holds public deposits, so its risks are different.

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Summary based on The Economic Times. Read the full story ↗

AI threatens the arbitrage that built India's IT industry

• David Oks traces how IBM's 1978 exit, undersea cables, the 1991 reforms and Y2K made India "the world's back office". IT is about 7% of GDP and a quarter of exports, and services earn a surplus of about $190 billion.
• Revenue has not collapsed: margins are up and TCS reports $2.3 billion of AI revenue. But hiring has fallen hard, and TCS, Infosys and Cognizant have each lost about 30% of market value in 2026.
• His worry: if AI does the work of fifty engineers with ten, exports shrink while India imports AI, and the spending that IT salaries support weakens.

Other side: The firms are being hired to put AI into clients' systems, and margins are rising. If they move up to higher-value work, the labour model can shrink without the industry shrinking.

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Summary based on Asterisk. Read the full story ↗

Rising AI costs squeeze Indian SaaS firms from both sides

• Zoho cofounder Sridhar Vembu says server prices have jumped four to five times in a year and AI usage is lifting costs, so Zoho is cutting marketing, freezing hiring and pausing its usual pay rises.
• AI products run at gross margins well below classic SaaS, per ICONIQ data cited by Inc42, while AI coding tools undercut per-seat pricing. Groww says AI compute inflation raised its serving costs.
• Firms are adapting: Perfios fine-tunes smaller models to cut GPU bills, Freshworks is buying Torii to track AI spending, and LeadSquared says the moat is running business processes reliably, not the app itself.

Other side: Computing has kept getting cheaper over time; if supply catches up, today's squeeze may ease, and AI also cuts the cost of building software in the first place.

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Summary based on Inc42. Read the full story ↗

J.P. Morgan: India is becoming investors’ default non-AI bet

• J.P. Morgan’s Rajiv Batra argues India is increasingly the default pick for investors who want emerging-market exposure without the AI trade. India is about 12% of the MSCI EM index, against about 25% for China.
• Foreign investors bought about $2.5bn in July and $3bn in August, yet own just 17.6% of large caps, a decade-plus low. Domestic institutions have been net buyers for 37 straight months.
• The bank expects FY27 earnings growth of about 10.4–11% and GDP growth of 6.5–7%. The risks it flags: oil well above $90, rising global yields and a stronger El Niño. Published 15 September.

Other side: Being the non-AI market cuts both ways. If AI stocks keep running, India lags, and a sustained oil spike would test the story fast.

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Summary based on J.P. Morgan. Read the full story ↗

Supreme Court: Yes Bank’s ₹8,415 crore AT-1 write-down stays quashed

• The Supreme Court dismissed appeals by Yes Bank, the RBI and the Centre, upholding the Bombay High Court’s 2023 ruling that the administrator’s 14 March 2020 write-down of ₹8,415 crore of AT-1 bonds was invalid.
• The final rescue scheme had deliberately dropped the write-down clause, the court held, and the RBI’s Basel III rules required any write-down before the reconstruction took effect, ordered by the RBI, not an administrator.
• It called the handling by the RBI, the administrator and Yes Bank questionable, noted the bank sold these high-risk bonds to individuals, and said coupons must be paid as the bond terms require.

Other side: Bail-ins exist so taxpayers don’t pay for bank failures. If write-downs are this easy to overturn, will the next rescue be slower and costlier, and will AT-1 buyers price in that protection as a free option?

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Summary based on Supreme Court of India. Read the full story ↗

Fairfax plans a ‘global Indian bank’ from IDBI, keeps its CEO

• Prem Watsa says Fairfax will build IDBI Bank into a global Indian bank, linking it with Digit Insurance and IIFL Capital Services for insurance, wealth management and investment banking, while those firms’ parents stay unchanged.
• The ₹52,878 crore purchase of a 60.72% stake, cleared by the government, is Fairfax’s largest ever and should close early next year. Rakesh Sharma stays as CEO; N S Kannan is lined up as chairman, subject to RBI approval.
• Watsa promised no cut in employee benefits. RBI cross-holding rules give Fairfax two years to decide on its 40% stake in CSB Bank.

Watch next: RBI approvals for the new chair and structure, and whether a long-time state-run workforce adapts to a private owner without the promised calm cracking.

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Summary based on Moneycontrol. Read the full story ↗

IDBI sale would be India’s 13th strategic disinvestment

• The proposed ₹52,878 crore sale of a 60.72% stake in IDBI Bank to Canada’s Fairfax would be the government’s 13th strategic disinvestment in a decade, and its largest, ahead of HPCL (₹36,915 crore) and Air India.
• Not every deal brought in cash. Some were transfers between state-owned firms, one raised no exchequer proceeds, and of Air India’s ₹18,000 crore price the Tatas paid ₹2,700 crore in cash and took over ₹15,300 crore of debt.

Watch next: Whether the Fairfax deal closes and how much of the price is cash. Private owners may also run weak state firms better, which is part of the policy case.

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Summary based on The Economic Times. Read the full story ↗

RBI rules turn rupee hedging from a trade into a commitment

• ET Prime explains what the RBI’s 10 October rules mean for company treasurers. A cancelled forward hedge can no longer be rebooked, so hedging is now a commitment, not a running trade.
• For importers, large hedges cost more because banks must park a 20% cash reserve with the RBI. Bigger hedges also need more paperwork.
• The piece argues waiting is not free either: companies that delayed hedging last month already paid for it.

Other side: Rolling over a contract is still allowed, and the rules aim at speculation rather than ordinary hedging. The cost may ease if the rupee steadies.

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Summary based on The Economic Times (ET Prime). Read the full story ↗

Blackstone’s Jon Gray: India is the second-easiest place to list

• Blackstone’s chief operating officer says India is the firm’s best-performing market and it wants to double its investment there to $100bn in five years, from about $50bn now.
• Gray concedes that wars, energy costs, rising rates and heavy AI spending may squeeze asset multiples, but calls India’s pullback a better entry point for a patient investor, citing growth above 7% and a young population.
• He points to liquid markets, including a $1bn-plus share sale in August, and says Indian IT firms are turning into AI deployment partners.

Other side: A big investor talks its own book: Blackstone gains if Indian valuations and listings stay strong. Public-market money moves faster, and Gray concedes it can be fickle.

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Summary based on The Economic Times. Read the full story ↗

How the RBI’s six forex measures aim to steady the rupee

• Since Saturday the RBI has taken six steps to lift the rupee to what Governor Sanjay Malhotra calls its “correct” value; the currency has recovered about 150 paise in two days to 95.28 a dollar.
• Banks must now hold a 20% cash reserve against forex derivative contracts above $2m, trading limits drop to $5m from $100m, and cancelled contracts cannot be rebooked. Importers’ hedging costs rise by at least 150 basis points.
• The RBI will also supply dollars directly to three state-run fuel retailers for now. Economists call this tactical, and say defending the rupee is costly without wider reform.

Watch next: Whether the rupee holds its gains once the temporary oil-retailer dollar window closes, and whether economists’ calls for broader reform and more flexible rates gain ground.

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Summary based on The Economic Times. Read the full story ↗

Craig Tindale: India is rich in dollars but short of key materials

• Tindale argues that seven inputs behind India’s factory push, from rare-earth magnets and battery cells to graphite, solar polysilicon, magnesium, antimony and gallium, all lead back to China through ore, ownership or licences.
• His evidence: after Beijing put export licences on rare-earth magnets in April 2025, Bajaj built 47% fewer Chetak e-scooters that July than a year earlier. China supplied about 83% of India’s imported permanent magnets in 2024.
• India holds $734.6bn in forex reserves but no published stockpile of these minerals, he notes, and China’s pause on wider export controls ends on 10 November.

Other side: The Bajaj episode also shows adaptation: within weeks it switched to a different type of magnet and found fresh supply, so dependence may bend before it breaks.

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Summary based on X. Read the full story ↗

Craig Tindale: RBI rules starve India’s factories of affordable credit

• In part two, Tindale blames India’s banking rulebook: a 4% inflation target driven by food prices keeps rates high, so in December 2025 Indian borrowers paid about 7% in real terms, against about 2.3% in China.
• Capital rules make an unrated factory loan far costlier for a bank to hold than a home loan or a government bond, so for every rupee of new credit to industry, about two and a half went to consumption and housing.
• India’s 19.7 million small manufacturers cannot raise equity and bear the brunt; manufacturing has slipped from 17.3% of GDP in 2006 to 13.1%.

Other side: Would cheaper, state-directed credit build factories or repeat India’s own bad-loan cycle? Tight money also shields savers and the poor from inflation.

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Summary based on X. Read the full story ↗

Brinjal, buffalo, bacteria: how India makes firms pay for nature

• Under the Biological Diversity Act, companies that commercially use India’s crops, medicinal plants, microbes or livestock genetics can owe a benefit-sharing payment to the National Biodiversity Authority.
• It collected ₹9.68 crore from April to September, mostly from seed and agriculture firms, and about ₹278 crore since 2008, much of it passed on for conservation and to farmers, communities and institutions.
• When seeds came via traders and the original farmers couldn’t be traced, the money was split among states by crop acreage, which funds conservation but not necessarily the growers themselves.

Other side: The sums are tiny next to the industries involved, paying state boards is not the same as paying farmers, and experts say communities still have too little say over access.

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Summary based on The Economic Times. Read the full story ↗

Africa takes on Moody’s, S&P and Fitch; India knows the grievance

• The African Union launched the Africa Credit Rating Agency in Mauritius on 7 October, arguing that Moody’s, S&P and Fitch overlook local strengths and saddle the continent with an unfair risk premium.
• A 2023 UNDP report put the cost at $74.5bn in excess interest and forgone borrowing; Africa had fewer than 4,000 ratings at the end of 2025, against more than two million in the US.
• India has long made a similar case: Japan’s JCR upgraded it to A- last month, but Moody’s and Fitch still rate it at the lowest investment grade.

Other side: Credibility comes from a track record under stress: Ghana called Moody’s 2022 downgrade biased, then defaulted on much of its external debt soon after.

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Summary based on The Economic Times. Read the full story ↗

TCS hires ahead of demand with a bigger bench and more subcontractors

• TCS added 4,258 people in the quarter to reach 598,056, and says it is deliberately carrying a larger bench and more subcontractors in India and abroad to match skills to expected demand.
• Management said new deals are staffed first and deployed later. Higher visa costs played some part in the subcontracting rise, but not the main one.
• Quarterly deal value was $9.6 billion, excluding two large deals. Operating margin was 24% against a 26-28% goal, and annualised AI revenue reached $3.1 billion, over a tenth of the total.

Watch next: TCS called overall demand largely unchanged from last quarter. If new work deploys slowly, a paid but idle bench weighs on margins, and trimming subcontractors is the lever management itself named.

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Summary based on The Hindu. Read the full story ↗

Papa CJ: Gen Z wants what every generation wanted

• Comedian Papa CJ, teaching as visiting faculty, asked 60 students what would make his course great. They wanted practical skills, better communication and storytelling, creativity, and some fun.
• Nobody asked how to become an influencer. They questioned ideas, disagreed politely and wanted explanations rather than instructions.
• His point: authority alone no longer earns attention, and leaders should read the person in front of them, not the generational label.

Other side: One class of 60 students at one university is an anecdote, not a survey. Generational patterns do show up in large studies, even if no single person fits them.

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Summary based on The Economic Times. Read the full story ↗

RBI moves to support the rupee at 96.78, curbs forex derivatives

• With the rupee at 96.78 to the dollar, near May’s record low of 96.95, the RBI barred rebooking of cancelled rupee forex derivative contracts and cut the limit for hedging without proof of exposure from $100m to $5m.
• Banks must keep a 20% cash reserve with the RBI on contracts above $2m where users buy foreign currency to hedge current-account payments.
• From 12 October the RBI will meet IOC, BPCL and HPCL’s entire daily dollar needs; reserves fell $12.95bn to $734.6bn in the week to 2 October, a fourth weekly drop.

Other side: Will tighter rules raise hedging costs for genuine importers? And if pressure persists, how long can falling reserves keep supplying dollars?

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Summary based on The Economic Times. Read the full story ↗

Mint Explainer: Why is Elon Musk’s Starlink at war with Indian telecom giants?

• On Wednesday Musk posted that unnamed Indian ‘oligarchs’ were blocking Starlink’s launch to keep a ‘monopolistic chokehold’; on Thursday the government called any suggestion of bias ‘baseless and misconceived’, citing security assessments under way.
• Starlink won its licence in June 2025, after OneWeb and Jio Satellite in 2022; more than four years after the first licence, commercial launches for all players remain stalled over security and data-sovereignty concerns.
• Jio wanted satellite spectrum auctioned; in September 2026 the telecom department chose administrative allocation with a 5% charge on adjusted gross revenue, still awaiting cabinet approval. Ironically, Airtel and Jio have both signed pacts with SpaceX to offer Starlink.

Other side: Is this protectionism, or a fair wait for security checks on foreign-run satellites carrying Indian data? Musk named no one, and his rivals are also his Indian partners.

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Summary based on Mint. Read the full story ↗

20,000-plus people shift as IT firms buy GCCs and captive tech carve-outs

• More than 20,000 employees moved from GCCs, enterprise IT units and product operations to IT services firms in the past 12 months; analyst Pareekh Jain expects similar numbers in the next 12.
• TCS took over Best Buy’s India GCC; HCLTech bought Guardian Life’s India operations for $10.5 million (nearly 2,000 staff); Wipro paid $386 million for Olam’s Mindsprint (3,200+ staff), tied to an eight-year deal expected to bring over $1 billion.
• HFS’s Achyuta Ghosh says about 10% of mature GCCs could be fully or partly transferred in two to three years, mostly operations-heavy, labour-intensive centres; deals usually involve 500–3,000 staff.

Other side: Is this a vote of confidence in IT firms, or a sign that many GCCs never reached scale? And how do transferred staff fare once AI-led productivity is priced into the contract?

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Summary based on The Economic Times. Read the full story ↗