The Economic Times

India faces a critical challenge as its burgeoning data center sector, especially AI facilities, intensifies its already dire water scarcity. With limited freshwater and high groundwater extraction, the rapid growth of these centers threatens to deplete vital resources further. This expansion also brings toxic effluents and emissions, compounding existing groundwater contamination.

American companies and consumers can, and will, challenge tariffs in court if they are not properly authorised. Dramatic tariff announcements will now face greater legal scrutiny unless supported by Congress. Countries negotiating with the US should feel less compelled to respond with urgency or fear to such threats.

Modi's Israel outreach strengthens India's role within I2U2 and signals potential new alliances, ushering in a clear shift in regional posture. Amid a fragile regional climate, New Delhi seeks lasting benefits while balancing competing relationships on the global stage.

India's Budget 2026 aims for growth by boosting public investment and controlling the deficit. The focus now shifts to how this investment will create jobs and boost household incomes. The neo-middle class, a key consumer group, faces income volatility. Future success depends on ensuring stable employment and social infrastructure, not just building assets.

India is strengthening ties with Israel and the UAE, forming new alliances. This strategic shift aims to counter regional instability and Chinese influence. New Delhi is investing in defence, technology and resilient supply chains. The move signifies India's active participation in global geopolitics, securing its interests in a dynamic West Asia and beyond.

Canadian official Mark Carney visits India to strengthen strategic ties. This visit follows a diplomatic thaw and aims to finalize the Comprehensive Economic Partnership Agreement. The agreement, under negotiation since 2010, is crucial for boosting bilateral trade. Both nations seek to diversify economic partnerships and build resilience.

Artificial intelligence is transforming the IT sector. Experts predict AI will automate many coding tasks, changing the role of software engineers. This shift impacts IT services companies, especially in India. Business models are moving from paying for people to paying for results. New AI-powered companies will emerge, focusing on delivering specific outcomes.

Airport slots are crucial for airlines. India's current system favours established carriers, hindering new entrants and regional flights. This limits competition and passenger choice. New airports offer a chance to reform slot allocation. Prioritising new airlines and regional carriers at these hubs can ease congestion and boost connectivity. A policy shift is needed.

The 16th Finance Commission has ended revenue deficit grants for states. This move aims to fix fiscal problems and encourage states to manage their finances better. Previously, states relied on central support, weakening their incentive for reforms. This change signals a move towards greater fiscal responsibility. The commission's decision aligns with global practices to manage government debt effectively.

India's economic growth is attracting global attention. While net FDI has turned negative, this is a positive sign. It indicates foreign investors are profiting from India's high market valuations and repatriating funds. This trend, alongside robust domestic investment, highlights a dynamic and democratized capitalist landscape. The IPO market continues to thrive, showcasing India's economic strength.

The 16th Finance Commission prioritizes efficiency over equity, shifting incentives towards economic effort by weighting GSDP share in horizontal distribution. It also discontinues revenue-deficit grants, restoring a hard budget constraint and reducing moral hazard. This aims to incentivize states to expand their economic base and improve fiscal capacity.

The EU-India FTA promises cheaper drugs and medical devices, but India's regulatory framework may hinder patient benefits. Current pricing mechanisms, including market-based ceiling prices and loopholes for fixed-dose combinations, prevent cost reductions from reflecting in retail prices. An urgent overhaul of drug pricing and an independent regulator for procedures are needed to ensure affordability and realize the FTA's full potential.

Indias new GDP base revision sharpens economic measurement by using updated data sources like MGT-7 filings, GST data, ASUSE and PLFS. It improves sectoral and regional allocation, expands double deflation to manufacturing, and aligns production and expenditure estimates through supply-use tables, making growth estimates more accurate, transparent and policy-relevant.

Washington faces genuine instability after a Supreme Court ruling on tariffs. This development impacts President Trump's trade objectives, including revenue generation and reindustrialization efforts. India must remain grounded and nimble, maintaining multiple engagement channels. Businesses can capitalize on temporary tariff reductions. Diversifying trade and seeking stable economic anchors is now a political urgency.

Fraudsters are exploiting the regulatory gap between traditional telecom and digital communication platforms, leading to a surge in cybercrime. While telecom operators are enhancing fraud prevention, unregulated messaging apps and social media are becoming prime targets. A platform-neutral framework is needed to ensure accountability across all communication channels and protect consumers.

Government processes often appear slow, but this is a feature, not a bug. Decisions undergo extensive scrutiny for legal, political, and fiscal impacts. Effective public affairs requires understanding this system. Businesses must engage consistently, offering insights and acknowledging trade-offs. Patience and professionalism are crucial for navigating policy, as competence, not just connections, drives progress.

West Asia's conflicts rarely end, they transform. The Iran-Israel rivalry, spanning decades, continues to shape the region. Recent clashes have revealed vulnerabilities for all major players. An attack on Iran carries immense risks, potentially destabilising global shipping and alliances. The consequences would be far-reaching, impacting nations beyond the immediate conflict zone.

The US Supreme Court questioned President Trump's tariff powers. This ruling highlights a major shift in economic power. Value now lies in data and software, not just physical goods. India must adapt its laws to this intangible economy. Executives and courts need a new approach to govern digital power. This is crucial for future economic legitimacy.

The US Supreme Court's recent decision to invalidate global tariffs has thrown a wrench in Donald Trump's economic strategy, providing a sigh of relief for some stakeholders. However, the President is undeterred and is actively pursuing other legal avenues to maintain his tariff regime. This creates a challenging political atmosphere for Republicans gearing up for the midterm elections.