Stablecoins could make dollar exposure easier to acquire. For India, that creates a new external-sector challenge. Former Finance Secretary Dr Arvind Mayaram argues that the rupee’s vulnerability is not just about the dollar’s global dominance. It also reflects domestic weaknesses — from high input costs and fuel taxation to weak competitiveness and dependence on imported energy and technology. Digital dollarisation could add another layer. As dollar-backed stablecoins become easier to hold and transfer, households and businesses may gain a faster route into dollar-denominated assets. That does not mean stablecoins explain the rupee’s past weakness. But they could become another channel through which existing pressures are transmitted. What should India do? Keep domestic payments anchored in the rupee. Regulate stablecoin gateways. Track cross-border flows. Protect users. And make rupee-based international payments more competitive. The larger point is simple: monetary sovereignty cannot rest on regulation alone. It also depends on building a stronger productive economy and making the rupee more useful internationally. Read Dr Arvind Mayaram’s column for BasisPoint: The Rupee in the Age of Digital Dollarisation basispointinsight.com/Story/… @MayaramArvind #Rupee #Stablecoins #RBI #DigitalPayments #Dollarisation #IndianEconomy #MonetaryPolicy #IMF

AI is the new corporate FOMO. As banks race to deploy it, they may be expanding an attack surface boards barely see. From Storm-0940 and agentic AI to supply chains, geopolitics and quantum risk, the next cyber threat may come through something we already trust, writes @ssmumbai Read: basispointinsight.com/Story/… #AI #Cybersecurity #CyberRisk #Banking #AIGovernance #CyberResilience

AI is rewriting India’s forex equation: replacing labour-led services exports with imported compute, silicon and energy. The RBI can buy time with reserves and FCNR. But what must India build before that time runs out?, write @ssmumbai @iam_anandv Read: basispointinsight.com/Story/… #AI #IndiaExports #Rupee #RBI #ForexReserves #FCNR

Mumbai airport’s T1 redevelopment is not just an infrastructure story. It is a governance test. MIAL says the airport must shed around five million passengers a year from the Summer 2027 schedule and has proposed cutting 33% of international departures or shifting them to Navi Mumbai. Airlines have pushed back. Their objections go beyond commercial inconvenience. They are asking who has the authority to redistribute scarce slots, what evidence supports the proposed capacity cuts, and whether the process complies with the rules governing coordinated airports. The issue becomes more significant because both Mumbai and Navi Mumbai airports sit within the same corporate group. Sharmila Chavaly argues that the real question is not whether T1 needs redevelopment. It clearly does. The question is whether the cost of that redevelopment can be allocated by the airport operator, or whether a regulated process must decide who bears the loss. Read Sharmila Chavaly’s column for BasisPoint: The Mumbai Airport Shuffle: MIAL vs the Airlines, or a Question of Authority? basispointinsight.com/Story/… @SharmilaChavaly #MumbaiAirport #Aviation #MIAL #NaviMumbaiAirport #Infrastructure #Competition #IndiaPolicy

Who is really benefiting from India’s retail investing boom? Foreign institutional investors have sold heavily since April 2024. Promoters have also reduced stakes, while IPOs have given founders and venture capital investors an exit at high valuations. Yet the market has not collapsed. Vivek Kaul argues that the reason is the steady flow of retail money into equity mutual funds, SIPs, pension products and direct stock investing. That liquidity has supported valuations and made it easier for larger investors to sell. But it may also be contributing to another pressure point: the rupee. If foreign investors can keep exiting without sharply disrupting markets, should policymakers be encouraging even more retail money into equities through favourable tax treatment? Read Vivek Kaul’s column for BasisPoint: Nirmala Sitharaman, Retail Investors and the Great Indian Wealth Transfer basispointinsight.com/Story/… @kaul_vivek #RetailInvestors #IndianMarkets #MutualFunds #FII #Rupee #Investing #IndianEconomy

The Rupee Hired Bodyguards, and Someone Else Is Paying Overtime From the RBI’s attempts to defend the rupee and the limits of borrowed stability to India’s productivity challenge, subdued private capex and the changing dynamics of gold and equity flows, the week’s stories examine the costs of economic choices. We also look at the Supreme Court’s Yes Bank AT-1 bond ruling, the quick commerce dilemma facing FMCG brands, and the risks of investing in a world of shifting correlations. These are just a few of the themes covered on BasisPoint Insight in the week gone by. Check out the newsletter for the full coverage: share.google/BuJzTOF2dJNBZxk… @kkalyanram, @Dhananj89102936, @AbheekBarua, @SparshChhabra6, @dravirmani, @rakeshkhar, @MayaramArvind, @AtulPrakash14, @kaul_vivek, @csoyantar, @krishnadevanv #Economy #RBI #Markets #Banking #Investing #India

A reassuring headline can conceal a more difficult reality. The RBI says rural India has become less vulnerable to weak monsoons as non-farm activity expands and wages account for a larger share of income for small farming households. But Former Finance Secretary Dr Arvind Mayaram argues that the household picture looks far less resilient. Real rural wages have barely grown for much of the past decade, he says. Pay in several forms of non-farm work has stagnated or fallen in real terms. And changes to the rural employment guarantee may weaken the bargaining power that once allowed landless workers to refuse the lowest wages during peak farm seasons. That matters because resilience is not only about output holding up after a bad monsoon. It is also about whether rural workers retain enough leverage to protect their incomes when conditions turn difficult. Read Arvind Mayaram’s column for BasisPoint: The Bargaining Power Rural India Is Losing basispointinsight.com/Story/… @MayaramArvind #RuralIndia #MGNREGA #IndianEconomy #Wages #Agriculture #Policy

Pakistan is becoming more visible abroad even as its domestic pressures deepen. Field Marshal Asim Munir has expanded Pakistan’s diplomatic reach, strengthening ties with Washington, China and West Asia. But the country he represents is dealing with a difficult mix of fiscal strain, political confrontation, provincial resentment and a worsening security relationship with Afghanistan. That creates a strategic paradox. Pakistan remains important because of its geography, military strength, nuclear capability and regional links. Yet international relevance does not necessarily translate into domestic resilience. For India, that distinction matters. Pakistan’s economic weakness should not be mistaken for strategic irrelevance, just as Munir’s diplomatic visibility should not be read as evidence of national recovery. Bihar Governor Lt Gen Syed Ata Hasnain examines whether Pakistan can sustain its external ambitions while its internal political and economic foundations remain under pressure. Read his column on BasisPoint: Pakistan's Strategic Paradox: Global Ambition, Domestic Fragility basispointinsight.com/Story/… @atahasnain53 #Pakistan #India #AsimMunir #Geopolitics #Afghanistan #SouthAsia

Does the RBI really need another 2013-style interest-rate defence of the rupee? Forward foreign exchange markets are already doing part of the tightening. Short-tenor implied rupee rates have risen to punitive levels, while the RBI has used reserves, forward-market intervention and new macroprudential tools to curb speculation and manage dollar demand. That weakens the case for an outsized MSF hike. But the policy question may soon shift. If inflation moves back towards 6% and the rupee remains under pressure, the MPC could have reason to front-load normalisation with a 50-bps repo rate increase in December rather than move in smaller steps, writes Abhishek Upadhyay of ICICI Securities Primary Dealership. The key distinction is between defending the currency through emergency liquidity measures and restoring real policy rates before they turn negative. Abhishek Upadhyay’s column for BasisPoint examines how much ammunition the RBI still has, what elevated forward premia are signalling, and why a repo hike may make more sense than a fresh MSF shock. Read: Does RBI Need to Mount an Interest Rate Defence of Rupee, Again? basispointinsight.com/Story/… #RBI #Rupee #InterestRates #MonetaryPolicy #Forex #IndiaMarkets

Can India sustain 7% growth all the way to 2047? Dr Arvind Virmani believes the underlying strength of the economy has improved — but says deeper reform, stronger economic expertise and better implementation will determine whether India can convert that potential into durable growth. In a wide-ranging conversation with Rakesh Khar on The Big Picture, the former Chief Economic Adviser discusses: • Why UPI should not remain indefinitely subsidised • Why continued free food raises an economic contradiction • How India should respond to China’s manufacturing dominance • Why FTAs with high-income economies could be transformative • Why state-level reforms remain critical • Why learning, rather than credentials, may be the most important metric for India’s 2047 ambitions He also revisits the lessons of the 2008 financial crisis and explains why he continues to see 7% as India’s underlying growth trajectory, even amid global uncertainty. Watch the full conversation youtu.be/7GIqmPh2gVA Or Listen to the full conversation open.spotify.com/episode/4pL… @dravirmani @rakeshkhar #IndiaEconomy #ViksitBharat #EconomicReforms #UPI #China #Manufacturing #FTA #ArvindVirmani #TheBigPicture #BasisPointInsight

From 1944, under the Bretton Woods agreement, countries adopted a system of fixed exchange rates pegged to the US dollar, with US inflation and growth determining inflation and growth in all other countries. That system gave way a long time ago and now, how the exchange rate is determined shapes in a fundamental way the manner in which monetary policy is conducted. When the exchange rate is fixed or managed to ensure some degree of fixity, the role of monetary policy is to maintain the exchange rate at the fixed level. Other objectives like inflation and growth become subservient to the exchange rate objective. Implicitly, domestic inflation and growth become tied to global inflation and growth. In his Masterclass, Michael Debabrata Patra explains International Dimensions of Monetary Policy and how, if the exchange rate is freely floating and determined by market forces of demand and supply, monetary policy is freed from the exchange rate parity goal to serve the objectives of domestic price stability and growth that may be different from global inflation and growth. basispointinsight.com/Story/… #MonetaryPolicy #ExchangeRates #CapitalFlows #RBI #CentralBanking #BrettonWoods

India’s growth story has not lacked policy action. It has lacked sequencing. The 2019 corporate tax cut followed the NBFC crisis. PLI followed the COVID supply-chain shock and China tensions. Income-tax relief arrived after urban consumption weakened. GST rationalisation followed the US tariff shock. Labour-code implementation came years after the statutes were passed. Taken individually, each measure had a rationale. Taken together, they look less like a coordinated rebalancing strategy and more like a series of responses to successive crises. That matters because the four main engines of demand — private investment, consumption, government expenditure and exports — have not strengthened together. Private investment remains subdued despite tax cuts and incentives. Consumption support has struggled to reach workers outside the income-tax net. Government capex has carried growth but is now facing fiscal constraints. Trade agreements have expanded, but competitiveness has not kept pace. In Part 2 of this series, former Finance Secretary Arvind Mayaram asks whether India’s policy response has amounted to a coherent strategy for rebalancing growth — or whether the economy has been relying on one lever at a time. Read Arvind Mayaram’s column for BasisPoint: “India's Growth Rebalancing: A Patchwork of Crisis Responses, Not a Strategy” basispointinsight.com/Story/… This is the concluding part of a two-part series on the mismatch between strong headline GDP growth, weak consumption, subdued private investment and foreign capital outflows. @MayaramArvind #IndiaEconomy #GDP #Investment #Consumption #Capex #EconomicPolicy #FDI #FPI #BasisPointInsight

Retail investors are pouring money into small-cap mutual funds just as valuations remain stretched. In September 2026 alone, small-cap schemes saw net inflows of ₹90.4 billion, compared with just ₹8.6 billion for large-cap funds. Between April and September, small-cap funds attracted ₹422.1 billion — nearly 10 times the amount that went into large-cap schemes. Why? Vivek Kaul argues that investors may be chasing past performance rather than future value. The BSE SmallCap Index rose 29.1% between end-March and end-June 2026. Since then, money has continued to pour in even as the index has gained only about 2% through October 12. At the same time, small-cap valuations remain demanding. The index was trading at a price-to-earnings ratio of 33.5 on October 12, close to the 34.7 level seen near its December 2024 peak. Kaul’s larger question is for the managers of other people’s money — the “OPM wallahs”. Why is there so much enthusiasm around supposedly cheaper large caps, but so little warning about the risks retail investors are taking in small caps, mid caps and thematic funds? As long as investors keep paying up for excitement and recent performance, the money will keep flowing. But when sentiment changes, so can the weather. Read Vivek Kaul’s column for BasisPoint Insight: “As Long as Retail Investors Stay in La-La Land, It’s Always Summer for OPM Wallahs.” basispointinsight.com/Story/… @kaul_vivek #Investing #MutualFunds #SmallCaps #Markets #RetailInvestors #Valuations #IndiaMarkets #BasisPointInsight

The Houthis are no longer just Iran’s proxies. What began as a localised insurgency in Yemen has evolved into a force capable of disrupting global shipping, threatening Saudi infrastructure and influencing the strategic calculations of major regional powers. Their growing use of missiles and drones shows how precision warfare is changing the balance between stronger states and comparatively weaker actors. The cost is not measured only in physical damage. Repeated threats can disrupt aviation, raise insurance costs, unsettle energy markets and force expensive defensive deployments. This also creates a difficult question for Saudi Arabia, writes Lt Gen Syed Ata Hasnain, the Governor of Bihar and Former Commander of India's Srinagar-based Chinar Corps. Riyadh must restore deterrence without being drawn back into another open-ended war in Yemen. For Iran, the challenge is different: preserving strategic leverage while retaining some control over escalation. The Houthis may now have enough operational autonomy to pursue objectives that do not always align neatly with Tehran’s. Pakistan and Turkey also face choices over how far political solidarity with Saudi Arabia should translate into military cooperation. For India, the stakes are substantial. Red Sea instability affects energy security, shipping costs, trade competitiveness and the welfare of millions of Indians in the Gulf. Lt Gen Syed Ata Hasnain examines how Houthi military capability, Saudi vulnerability and changing regional alignments are reshaping the security balance in the Red Sea. Read the full column ‘The Houthis Are No Longer Just Iran's Proxies’. basispointinsight.com/Story/… @atahasnain53 #MiddleEast #RedSea #Houthis #SaudiArabia #Iran #Geopolitics #India #MaritimeSecurity

The Reserve Bank of India is on a war footing. And this time, it is protecting the rupee. Administrative restrictions, higher costs on derivative positions, and tighter banking-system liquidity all resemble the defensive interventions deployed during the Asian financial crisis of 1997–98, the rupee slump of 2011–12 and the taper tantrum of 2013. They may contain volatility temporarily, but their reappearance is difficult to reconcile with the narrative of an economy growing at around 8%. In his piece “RBI’s FX Barricades Expose the Limits of Borrowed Stability”, Dhananjay Sinha argues that the $143 billion mobilisation was intended to provide stability. The return to currency controls so soon afterwards suggests that the underlying external imbalance remains unresolved. Borrowed reserves can buy time, but cannot indefinitely finance the gap between India's growth ambitions and its capacity to attract sustainable foreign capital. basispointinsight.com/Story/… @Dhananj89102936 #RBI #Rupee #Forex #CurrencyIntervention #DollarFlows #IndiaEconomy

Ten Arms, One Leap: Why Humans Keep Betting on a Better Tomorrow In the week gone by, a 25 bps RBI hike signalled a shift in the inflation battle. The rupee tested new lows, foreign investors continued to retreat, and questions mounted over manufacturing, wages and India’s growth ambitions. Across markets, regulation and public life, one theme connects the dots: institutions, investors and citizens must act before certainty arrives. These are just a few of the week’s big themes. Check out the BasisPoint Insight newsletter for the full coverage: basispointinsight.com/Story/… @csoyantar, @krishnadevanv, @ssmumbai, @rajeshmahapatra, @kaul_vivek, @apirk16, @MayaramArvind, @shuklasach, @SakshiGupta86, @Dhananj89102936, @kkalyanram, @EconicAnuj, @abhishekdey04 #RBI #MPC #Inflation #Economy #Markets #FIIs

The Reserve Bank of India has just raised interest rates and shifted its monetary policy stance to calibrated tightening. But is the central bank confronting an inflation problem that conventional monetary policy is no longer equipped to handle? For decades, central banks have distinguished between temporary supply shocks, which they could largely look through, and demand-driven inflation, which they could address through interest rates. But what happens when supply shocks are no longer temporary? When geopolitical conflicts, climate disruptions and restrictions on critical inputs become recurring features of the global economy? And what happens when these disruptions push prices higher while simultaneously hurting production, investment and demand? Can raising interest rates solve that problem, or does it risk making matters worse? In his latest column for BasisPoint Insight, abheek barua, former Chief Economist of HDFC Bank and now a faculty member at Ashoka University, argues that monetary policy may need an entirely new operating paradigm. Abheek joins BasisPoint Insight today to discuss these dilemmas and what they mean for the RBI's next moves. Listen to the conversation. open.spotify.com/episode/4cP… @AbheekBarua @kkalyanram #MonetaryPolicy⁠ ⁠#RBI⁠ ⁠#Inflation⁠⁠ #Economy⁠⁠ #India

Can forward guidance help markets without tying a central bank’s hands? The RBI’s shift to “calibrated tightening” has been read by markets as a signal that a rate-hiking cycle is beginning. But former MPC member Ashima Goyal argues that committing to a particular interest-rate path can constrain policy if the data change. A central bank may then face a choice between adjusting rates as conditions require and sticking to guidance that no longer fits. There is another way to guide markets: explain the reaction function. In emerging economies, exchange rates can overshoot when global risk shifts, and the RBI has tools beyond the repo rate to respond. Clearer communication about the role of the rupee in policy could help markets understand the RBI’s intentions without promising a specific rate or exchange-rate level. Ashima Goyal also warns that hawkish rate guidance can push bond yields higher—even when the rate decision itself is a cut. A clear commitment to act against persistent currency misalignment, she argues, can offer useful guidance while leaving room to respond to changing conditions. Read The Dangers and Benefits of Forward Guidance by Ashima Goyal. basispointinsight.com/Story/… #MonetaryPolicy #RBI #ForwardGuidance #CurrencyMarkets #India

Can monetary policy keep treating supply shocks as temporary? Climate events, geopolitical conflict and restrictions on critical inputs are creating repeated disruptions. When these shocks persist, they can raise inflation expectations, encourage precautionary stockpiling and weigh on output and demand—complicating the choices facing central banks. In his latest column, Abheek Barua, former Chief Economist of HDFC Bank, asks whether the RBI’s inflation target and reaction function need to account for this new reality. How should monetary policy respond when inflation rises even as supply constraints weaken output? Read Abheek Barua’s column: Does Monetary Policy Need a New Paradigm? basispointinsight.com/Story/… @AbheekBarua #MonetaryPolicy #RBI #Inflation #Economy #India