The Art of Unpacking: Boxes, Bonds, and Broken Switches

Dear Insighter,

Let me tell you about the single most exhausting thing I've done this year: moving apartments in Mumbai. Not the lifting, mind you. No, the exhausting part was everything else. The part where you stand in your new, empty home at 9 PM, surrounded by cardboard boxes that all look identical, and realise you have no idea which switch operates which light, which door closes with a satisfying thunk versus a concerning scrape, which tap has the kind of water pressure that makes you want to weep with gratitude, and which one just... dribbles.

And that's before you even get to the real work. Finding a carpenter who won't overcharge you. A plumber who shows up when he says he will. A welder who understands that the window railing isn't supposed to rattle when you lean on it. Months of searching for a place that fits your budget, your locality preference, and your vague sense of what "home" should feel like, and then—then—you have to actually make it livable. Somewhere in the middle of this, you wonder if the universe is testing your patience or simply reminding you that everything worth having requires a certain amount of chaos.

As Sagari Gupta observes, the RBI's inflation test is moving from food and fuel to the wider economy, with headline retail inflation crossing the 4% target for the first time in sixteen months. The MPC held rates steady, wagering that commodity shocks won't trigger wage-setting behaviour, but as Gupta notes, restaurant inflation at 6.91% is already showing up in household budgets, adding roughly ₹4,146 a year to a ₹5,000 monthly eating-out budget.

Meanwhile, the markets have been doing something equally disorienting. Sanjay Mansabdar writes while the volatility appears to have settled down, the larger learnings from CAS's implementation must not be lost. Each untoward incident damages markets and confidence in the long run, introducing needless risk premiums. R. Gurumurthy puts it perfectly when he says that a reform introduced to make closing prices more representative has made the closing minutes more unpredictable.

And then there's the household debt situation. Prasanna Mohanty's analysis of RBI data shows that accumulated household debt has risen from 41.9% of GDP in 2023-24 to 45.8% in 2025-26, while household financial assets have been declining from 143.1% to 141.6% over the same period. Mohanty notes that the debt is being driven primarily by non-housing retail loans rather than the housing boom of the mid-2000s.

SBI Cards, Krishnadevan V reports, is chasing growth where risk is harder to see, using EMIs and UPI to win a bigger share of multi-loan borrowers' wallets. Profit is up 20% year-on-year, return on assets is nearing 4%, and net NPAs sit below 1%. It looks like prudent growth in unsecured lending. The problem is that the system in which it operates looks less prudent, with TransUnion CIBIL data showing that Indian card growth increasingly comes from borrowers who hold several cards and loans.

The governance challenges facing Indian banking, as Rahul Ghosh argues, point to something deeper than regulation. The first challenge is the chronic underinvestment in core technical competencies—credit risk measurement, market risk management, risk governance. Technology is an exceptional enabler, but it cannot replace domain expertise.

Speaking of retail chains, Zudio made Trent famous, but Westside may have to save it. Krishnadevan V points out that Zudio's standalone sales grew 19% year-on-year, but Trent’s gross margin rose to 46.6% from 45.1%, EBITDA margin rose to 19.6%, and EBITDA itself grew 33%. There's power in that combination. A retailer that can open more stores in a city where it already attracts footfalls gains leverage with mall owners. It can negotiate harder, choose better sites, and walk away when the rent becomes silly.

Meanwhile, at Tata, the succession question has reopened a debate the group has never quite settled. The Independent Director writes that Chandrasekaran's exit, after six months without resolution on his proposed five-year extension, has turned a private deadlock over his own future into a public succession deadline.

As Krishnadevan V notes, Tata's listed wealth cannot wait on a private deadlock. The RBI recently retained Tata Sons in its Upper Layer category for large NBFCs, requiring enhanced scrutiny and a listing within three years. Tata needs to decide its leadership structure, capital rules, and listing strategy together. A private holding company can retain control, but it cannot expect public markets to ignore the cost when that control cannot produce a decision.

The AI debate, meanwhile, has taken an interesting turn. R. Sridharan writes that Meta's Mark Zuckerberg has proposed shifting the power of AI from a few to everyone. A little more than two weeks earlier, Nvidia's Jensen Huang made a similar pitch. While it may seem like both were speaking against the dominance of proprietary models, the reality is that each is pitching in their self-interest: Huang benefits when there is more widespread use of AI, and Zuckerberg gains when proprietary models yield ground to others. Kalpesh Mantri notes that AI is moving from pilots to the core of banking, reshaping how financial institutions design products, manage risk, engage customers, and operate at scale.

The UPI fee debate, as Rajesh Mahapatra reports, risks changing far more than its economics. The finance ministry says it intends to keep small merchants and person-to-person transfers free, but the problem is that the proposed amendment does not specify a fee or identify categories of users; it merely seeks to create an enabling legal framework. If the government intends to charge only transactions above a certain threshold and keep the fee nominal, why not guarantee that in law?

Amitrajeet A. Batabyal asks whether it makes sense to tax international trade, examining when trade taxes or subsidies can improve social welfare. The broader conclusion is that free trade is neither an absolute principle nor an obsolete idea—trade should be taxed or subsidised when private decisions fail to account for their marginal effects on social welfare, but where a more targeted domestic instrument is available, governments should generally use it.

Anshuman Gupta writes about America's climate retreat and who will carry the world's climate burden. The EU has put climate policy at the heart of its economic agenda, but keeping those targets on track is becoming harder. China faces its own constraints, and India, while pursuing its own transition, cannot simply replace the United States either.

Nilanjan Banik argues that ethanol could be India's most exportable idea. The ethanol programme began as an agricultural intervention, a second market for surplus cane and other produce. From there, it has become one of the more consequential instruments of the country's energy and foreign policy.

Atul Prakash notes that India's critical minerals ambitions remain underground. While discovery of these minerals is only the easiest part of the equation, the real challenge lies in extraction, refining, and building industrial capability. What's important now is to create conditions for private capital to flow into assets that may not prove profitable for 10-15 years.

Sharmila Chavaly documents the growing opacity in India's infrastructure data, noting that over the past year, the government has made significant changes to how infrastructure project progress is reported—changes that have obscured rather than illuminated the true scale of the problem.

Prakash Nanda writes that the Big Four are losing their grip on global education, with visa barriers pushing Indian students beyond the US, UK, Canada, and Australia. Yet India has bargaining power: more than 1.2 million Indians are enrolled in higher education abroad, making India the world's largest outbound student market. The Big Four will remain important, but their dominance is no longer assured.

Raj K. Kattula argues that India's jobs challenge goes beyond skilling—degrees and training matter, but geography, mobility, and weak employer links still prevent many young Indians from finding decent work.

Sharmila Kantha reports on India's space diplomacy set for lift-off with private industry partnership, noting that the commercialisation of R&D and higher participation of the private sector in space technology will come from increased funding options, better tax regimes, faster government approvals, and demand creation through procurement.

And finally, Arvind Mayaram raises a question about India's coercive power and the need for stronger democratic safeguards. The recent police action against students in Delhi has generated intense political controversy, but amid the competing narratives, an important question has received surprisingly little attention: when the State decides to use force against its own citizens, who exercises an independent judgment that such force is necessary and proportionate?

So here I am, in my new apartment, surrounded by boxes I still haven't fully unpacked, wondering about all the systems that make this place work. 

The systems we rely on are always more complicated than they appear, and the difference between a smooth move and a chaotic one is often just a matter of finding the right switch, the right plumber, the right framework for understanding what's really going on.

Until next week, may your taps flow freely.

Phynix

Also Read:

• Women Are Entering India's Boardrooms. But How Far Have They Come? by Sohini Ghosh: SEBI mandated women directors, but the government hasn't assessed what still holds them back.
• UPI & RuPay Payments May Soon Cost You: Here's What Could Change by Rajesh Mahapatra: The government eyes merchant fees on UPI and RuPay, raising questions about whether India's digital public infrastructure is about to stop being quite so public.
• The Comforting Illusion of Purchasing Power by R. Gurumurthy: PPP makes India look richer on paper, but statistical adjustments cannot fix crumbling roads, unreliable electricity, or the quality of the air you breathe.
• The Intelligent Fool Has Entered the Room by Kalyani Srinath: Intelligence explains why you keep making the same mistake; wisdom asks why you're still making it.      
• Cotton, Speculation and the Birth of Modern Bombay's Financial System by Aadya Tyagi: The American Civil War sent cotton prices soaring and Bombay's markets into a frenzy, proving that financial infrastructure often matures through catastrophe rather than design.
• The Indian Media Problem Is Bigger Than Trust by Minari Shah: When student protesters film themselves and bypass newsrooms entirely, media companies discover that reach without relevance is just noise.
• Sarci Sense: India Has Discovered Protein. Again. by Srinath Sridharan: Protein orders on quick-commerce platforms have risen 150%, as a generation raised on social media pays a premium to rediscover what its grandmother's kitchen always knew.
• How Corporations Can Mitigate an AI Jobocalypse by Raghuram Rajan: Only 37% of larger firms use AI in any business function—job displacement is coming, but corporate adoption remains surprisingly tentative.
• The World Economy Is Swerving, and the Destination Is Unknown by Mohamed A. El-Erian: The old equilibrium of globalisation and multilateral rules is gone, replaced by a perpetual, directionless transition that demands constant recalibration.
• The Mecca Pact's Nuclear Shadow by Lt Gen Syed Ata Hasnain: Sometimes the most powerful ingredient in any agreement is what others believe may lie behind it—the Mecca Pact's nuclear implications may matter more than its actual text.

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