Best of the Week: A week where decades happened

The US and Israel launched a sweeping military attack on Iran on 28 February, with US President Donald Trump saying the operation aimed to destroy Tehran’s military capabilities and eliminate the threat of it developing nuclear weapons. Early strikes targeted sites linked to Iran’s leadership, and state media later confirmed the death of Supreme Leader Ali Khamenei. Iran retaliated with drones and missiles against Israel and US bases across the Middle East, quickly widening the conflict.

28 February

The US and Israel launch coordinated strikes on Iran; early attacks hit near Khamenei’s compound, and Iran later confirms the Supreme leader was killed. Iran responds with missiles and drones targeting Israel and US bases in Bahrain, Kuwait, Qatar, and the UAE.

1 March

The UK allows the US to use RAF bases in Cyprus for defensive operations as Iranian missiles target the region and a drone strikes RAF Akrotiri.

2 March

Iran and Tehran-backed militias fire missiles across the region, reportedly hitting the US embassy compound in Kuwait, while US-Israeli strikes intensify across Iran.

3 March

The death toll rises sharply across Iran, Israel, and Lebanon as the conflict spreads, with Iranian strikes hitting US-linked targets in Saudi Arabia and elsewhere.

4 March

The war expands beyond the Middle East after a missile enters Turkish airspace and a US submarine sinks an Iranian warship near Sri Lanka.

5 March

Azerbaijan accuses Iran of launching drones into its territory and closes its southern airspace, signalling further regional escalation.

6 March

Iran threatens shipping through the Strait of Hormuz, prompting heightened naval deployments and fears of disruption to global oil supplies.

How the conflict affects the Indian and global economy:

Iran’s Hormuz move rattles global energy flows: Iran says it has shut the Strait of Hormuz after US-Israeli strikes, sending shockwaves through energy markets. The narrow sea lane carries about 20% of global oil and gas shipments. Ship traffic has plunged, and crude prices have jumped past $80 a barrel. While a total blockade may be hard to sustain, even sporadic attacks could keep ships away and push oil prices sharply higher.

War jitters shake markets and the rupee: The conflict has spilled into financial markets. The rupee slid to a record 92.32 per dollar, foreign investors pulled out ₹11,700 crore, and the Nifty 50 fell 2.1% in four days. Rising oil prices threaten margins for oil firms, airlines and chemical makers, while investors juggle safe-haven bets such as gold against fears of slower growth.

Inflation risk contained—for now: Despite the oil spike, economists say India’s inflation outlook remains relatively stable. Retail inflation is running below RBI’s 4% target, and the country has sizeable strategic oil reserves. Even if crude rises further, the impact on consumer prices may be modest because taxes make up a large share of pump prices, cushioning the pass-through to households.

On to the best of Mint’s work from this week:

How Iranian missiles damaged “Brand Dubai”

For years, Dubai symbolized safety, tax efficiency, and global ambition for Indian professionals. Now, Iranian drone strikes near residential areas have rattled that image. Expats who moved there for family support and stability say “Brand Dubai” has taken a hit, with sentiment and property prices likely to feel pressure. The broader Gulf Cooperation Council, spanning the UAE, Saudi Arabia, and Qatar, has long marketed itself as a secure haven for capital and talent. The UAE alone hosts over 3.5 million Indians and remains a key remittance source. Yet, escalating tensions have forced Indian firms and families to reassess safety and contingency plans.

AI data boom raises power and water questions

As India positions itself as an AI and data-centre hub, concerns are rising over energy and water use. According to the International Energy Agency, AI-focused data centres can consume as much power as 100,000 homes, with global usage set to more than double by 2030. India’s capacity has tripled since 2020 and may hit 6.5GW by 2030, though it currently accounts for just 0.5% of national electricity demand. Cooling drives heavy water use, and with 43% of global centres in water-stressed areas, policymakers face tough trade-offs as expansion accelerates.

India’s GDP reset shows a smaller economy

India’s economy just shrank, statistically. Under the new 2022-23 base-year series, nominal GDP for FY26 is pegged at ₹345.47 trillion, about 3.3% lower than earlier estimates, after officials replaced proxy indicators with better survey data. The sharpest cut is to private consumption, revised down 9.7-11.5% for FY23–FY26, challenging assumptions about demand strength. Services’ share has dipped, while manufacturing growth has been revised higher. Importantly, discrepancies that once troubled the International Monetary Fund have narrowed. The reset improves credibility, but questions over deflators and measurement persist.

Private capital set for record comeback in highways

India could see nearly ₹1 trillion in private investment commitments for highway construction in FY27, marking the strongest revival yet of the build-operate-transfer, or BOT, model. Projects worth ₹35,000 crore are set to be bid out early in the year, with another ₹50,000-60,000 crore pipeline under preparation. Unlike the hybrid annuity model, BOT requires higher upfront equity and exposes developers to traffic risk. After years of muted activity, investor interest is reviving amid policy tweaks and strong toll visibility. Total highway awards in FY27 may reach ₹3-4 trillion, signalling a decisive shift back to private-led road building.

PSU boardrooms struggle with independence and diversity

Corporate governance gaps persist across India’s top state-run firms. A survey by Excellence Enablers found 36 Maharatna and Navratna companies failed to meet the mandated one-third quota for independent directors in FY25. Gender diversity has worsened. Thirty PSUs had no women independent directors, up sharply from seven in FY22, despite legal requirements. Boardrooms are also greying, with independent directors under 50 dropping to just five from 40 three years ago. Short tenures and patchy succession planning disclosures add to concerns, signalling that governance reforms still have ground to cover.

How discipline fuelled Milky Mist’s national ambition

A school dropout who shuns consultants, Sathish Kumar built Milky Mist into a ₹2,350 crore dairy brand through relentless self learning and a sharp bet on value-added products. The company has grown at a 30% CAGR between FY23 and FY25 and is now preparing for an IPO to pare ₹1,376 crore of debt and fund expansion. Unlike rivals such as Amul and other state-backed players, Milky Mist focuses on paneer, cheese, and curd rather than liquid milk. With 71% of revenue still coming from the south, it is pushing into markets like Gujarat and Maharashtra. Success will hinge on scaling nationally while protecting margins in a fiercely competitive dairy sector.

The quiet architect of India’s economic awakening

Former prime minister Manmohan Singh rarely relied on political theatre, preferring facts, restraint and careful policy. As finance minister in 1991 under P. V. Narasimha Rao, he dismantled the licence raj, opened India to global trade and investment, and set the economy on a path that transformed opportunities for millions. Born in what is now Pakistan and shaped by Partition, Singh rose through academia and public service to become a reluctant but consequential prime minister in 2004. His tenure saw rapid economic growth and landmark reforms. Singh died in 2024 at 92, leaving behind a legacy of quiet integrity and economic transformation that reshaped modern India. Read Sundeep Khanna’s tribute to one of India’s most underrated statesmen.

India monitors fuel stocks as Hormuz disruption rattles oil flows

India is closely monitoring fuel supplies as tensions around the Strait of Hormuz disrupt global oil flows. Officials say state-run refiners currently hold about 25 days of crude stocks and another 25 days of petrol and diesel, along with roughly 25 days of cooking gas and about 21 days of LNG. These are in addition to the country’s strategic petroleum reserves of 5.3 million tonnes. The government says supplies are comfortable for now, and alternative sources are being explored. With nearly half of India’s crude imports passing through the strait, authorities have set up a 24×7 control room to track stocks and manage any potential disruptions.

Quick money transfer to Dubai? Central banks are stepping in to help

India and the UAE are exploring a link between their central bank digital currencies that could enable near-instant cross-border money transfers, potentially reshaping one of India’s largest remittance corridors. If implemented, the system would allow funds to move directly between digital currency accounts, bypassing traditional bank-led settlement and sharply reducing transfer times. The effort involves connecting RBI’s e-rupee with the UAE’s digital dirham. Fintech platforms operating in both countries could debit a sender’s CBDC wallet in India and credit the recipient in the UAE almost instantly.

Wipro risks $100 million hit as Estée Lauder shifts work

Wipro could lose up to $100 million in annual revenue after Estée Lauder Companies shifted a key IT services contract to Accenture. The work was part of a $500 million, five-year deal Wipro won in 2021, and included finance systems, database management and backend operations. The transition is underway and may continue until July. If fully lost, the contract would shave about 1% off Wipro’s revenue at a time when it faces a third straight year of decline. Analysts say the move reflects a broader shift toward AI-led outsourcing, where competitors are pitching integrated transformation deals and sharper pricing.