A year of tariff wars, a West Asia conflict and disruptions around the Strait of Hormuz did not produce the feared global slump. The author credits AI-linked investment and a muted oil-price response, expects Indian growth of about 7% this fiscal, and warns that rising inflation, capital outflows and one-off export tailwinds make manufacturing competitiveness the Budget’s top task.

All four figures are the author’s and Crisil’s estimates. Petroleum exports rose 37% in dollar terms and nearly 50% in rupee terms in April–September, as damage to refineries abroad lifted product prices faster than crude.

• Why the world held up: heavy investment in AI infrastructure — data centres, chips — has driven capital spending, especially in the US; and crude prices rose less than feared as countries drew down reserves and inventories.
• India’s first half: broad-based — public investment, strong goods exports, double-digit credit growth, demand for consumer durables (notably cars), and household spending supported by tax relief and direct benefit transfers.
• Corporate health: upgrades outpace downgrades; median debt-to-equity near 0.5x; revenue up about 16–16.5% in July–September — but commodity producers gained while downstream manufacturers absorbed higher input costs.
• Headwinds: CPI expected near 5.3% with upside risks; a deficient kharif monsoon, low reservoirs and a persistent El Niño; net foreign capital outflows in the first eight months exceeded those of all of last year, though November saw FPI inflows return.
• Prescription: make manufacturing competitiveness the Budget’s focus; FTAs open doors but do not guarantee outcomes — lasting export powers cut costs, raise productivity and innovate faster than rivals. A favourable look at LTCG taxation could also support equity inflows.

• Manufacturing share: still around 16–17% of GVA, short of the long-standing 25% goal first set in the National Manufacturing Policy (2011) and carried into Make in India (2014).
• Lower costs: logistics costs of roughly 7.8–8.9% of GDP (DPIIT–NCAER estimate, 2021-22) — targeted by the National Logistics Policy (2022) and PM GatiShakti (2021); power tariffs and compliance burdens also matter.
• Productivity: scale through PLI schemes (14 sectors, ₹1.97 lakh crore), skills, and simpler labour rules under the four Labour Codes; regulatory decriminalisation under the Jan Vishwas Act, 2023.
• Innovation: India’s R&D spending, about 0.6–0.7% of GDP, is low; private R&D finance under the ₹1 lakh crore RDI scheme is a start.
• Trade architecture: agreements with the UAE and Australia (2022), EFTA (in force 2025), the UK (signed 2025) and Oman (in force 2026) widen market access — but only competitive firms can use it.

• Borrowed tailwinds: export gains rest partly on refinery outages abroad, high commodity prices and a weaker rupee — none of them permanent, as the author himself cautions.
• Concentrated global engine: if the AI investment boom cools, the main prop of global demand weakens at once.
• Household leverage: consumption financed by borrowing is less durable than consumption financed by income growth.
• Policy trade-off: rate hikes to contain cost-push inflation may hurt growth without addressing the supply-side causes of high food and energy prices.
• Capital flows: tax tweaks may attract portfolio money, but stable flows depend on earnings growth and macroeconomic stability more than on tax rates.

With the Prime Minister warning at the 18th BRICS Summit in New Delhi (13 September 2026) against the “weaponisation of technology and critical minerals”, the author argues that India’s growing pile of spent lithium-ion batteries is a domestic mine waiting to be tapped — recycling could meet about 10–12% of the lithium needed for EV battery manufacturing.

• A mine at home: spent batteries are a “waste-to-wealth” resource; recycling will not make India self-sufficient but can be a strategic secondary source alongside mining and imports, and build the processing capability India lacks.
• Plan ahead: volumes are small now, but “just-in-time” investment will not work — capacity must be built before the surge, even if plants run below capacity at first.
• Five-point strategy: (1) a mandated share of recycled minerals in the proposed national stockpile, nudging recyclers beyond black mass; (2) R&D for higher recovery and purity across diverse chemistries; (3) standards for battery characterisation, recycled-mineral quality and second-life use, with “design for repurposing and recycling”; (4) easy take-back or buy-back through EV makers and dealers; (5) patient capital for long-gestation plants.

• Strategic autonomy: recycled minerals are immune to foreign export bans once they are inside the country.
• Environment: landfilled lithium-ion batteries can catch fire and leach toxic substances; formal recycling also avoids the land and water impacts of fresh mining.
• Industrial opportunity: recycling plants create domestic refining skills that can later serve mined ore too — a step into the processing stage China now dominates.
• Climate goals: a circular battery chain lowers the lifecycle emissions of EVs, supporting India’s net-zero 2070 pathway (and SDG 12 on responsible consumption).

• Chemistry shift: the move to LFP batteries, which contain no nickel or cobalt, lowers the value recyclers can recover, weakening plant economics.
• Price swings: volatile lithium prices can make recycled material uncompetitive with fresh imports in some years — the reason stockpile purchases or price support are proposed.
• Timing of collection: EV batteries can last a decade; EPR collection targets based on conservative battery-life assumptions risk forcing early retirement.
• Informal workers: lakhs of kabadiwalas depend on scrap; formalisation should integrate them as collectors and aggregators rather than shut them out.
• Enforcement: EPR systems depend on verifying certificates and recycler claims; weak checks undermine the whole chain.