Mint TOTM: Indian IT's AI crisis, told in 3 stories

India’s IT sector is in a tough spot. AI is automating the very work that built the $300-billion industry. Clients are demanding fewer billable hours and lower prices. The response? Go shopping.

Indian IT companies spent $4.5 billion on acquisitions in the first half of 2026 alone. Persistent Systems Ltd. snapped up Germany’s Nagarro SE for $1.4 billion. Coforge Ltd. bought Encora for $2.35 billion. Wipro, TCS, Infosys—everyone’s been writing cheques.

But there’s a new problem nobody saw coming. Tokenmaxxing. As AI usage surges, clients are spending more on AI tokens, paid directly to OpenAI and Anthropic, leaving less budget for traditional IT services. JPMorgan calls it “money pressuring budgets available for IT services”.

Meanwhile, the Q1 FY27 results starting with TCS on 9 July are expected to be the sector’s worst in two years. The Nifty IT index is already down 28% in 2026, trading at a steep discount to its five-year average.

Acquisitions buy capabilities. They don’t buy time. Can Indian IT reinvent its pricing model before AI rewrites the entire playbook?

THE MAIN STUFF

India weighs Tesla-style cash boost for carmakers

India may soon have its own version of Tesla's famous emissions credit goldmine. The government is considering letting automakers that exceeded fuel-efficiency targets under the CAFE 2 norms sell surplus credits to rivals who missed theirs, potentially creating a brand new revenue stream.

The biggest winners are Tata Motors PV, which beat its CAFE targets by up to 25%, and Maruti Suzuki, which has consistently outperformed.

First-movers get paid. Laggards foot the bill. That mirrors credit-trading markets in the US, Europe and China, where Tesla earned over $10 billion selling such credits to legacy automakers. There's a catch, though. Laggards can also buy credits directly from regulator BEE at ₹2,500 per CO₂ g/km, which caps what compliant carmakers can charge.

Greaves Cotton’s diversification drive

Greaves Cotton Ltd. is beginning to reap the benefits of a decade-long diversification drive, sharply reducing its reliance on diesel engines for three-wheelers as the Karan Thapar group-backed company transforms into a broader engineering and industrial solutions enterprise.

The company’s dependence on three-wheeler engines has fallen from around 80% of its business a decade ago to just over a quarter now, as businesses spanning gensets, mechanical cables, electric motors and engine exports have gained scale.

Now, the company is eyeing the M&A route to expand into defence, aerospace, auto components and energy solutions. Read more.

Vi's debt deal is stuck

Vodafone Idea Ltd.'s massive debt plan is hitting turbulence. Lenders are pushing back, asking the struggling telecom operator to tone down its financial projections and, more significantly, demanding a corporate guarantee from an Aditya Birla firm before signing off on one of the sector's biggest-ever loans.

Vi needs the ₹35,000 crore to fund a ₹45,000 crore network upgrade, without which competing with Jio's 524 million users and Airtel's 482 million is nearly impossible. Vi currently has 192.8 million. Add ₹49,000 crore in spectrum dues over three years, and the math gets uncomfortable.

Ratings agencies have turned cautiously optimistic. But with Jio earning an ARPU of ₹214 and Airtel ₹257 against Vi's ₹174, the clock is ticking.

Chabahar’s cargo is picking up

With the Gulf conflict easing and US sanctions on Iran lifting, India is moving fast to revive a project that's been stalled for years. A 700-km rail corridor connecting Iran's Chabahar port to Zahedan, near the Afghan border. This single rail link could give India a trade route to Central Asia that bypasses Pakistan entirely, counters China's Gwadar port, and unlocks Afghanistan's vast mineral wealth for Indian markets.

Trade between India and Central Asian nations is at $2.5 billion, three times India-Pakistan trade volumes. India plans to invest $400-500 million in the Chabahar port and rail project. Iran funds the bulk of the railway. The missing piece was always geopolitics. Read more.

Nothing stops the Indian traveller, not even a war

Longer flight paths, higher airfares, a war in West Asia, and Indian outbound tourism just kept going. Indians made 32.71 million overseas departures in 2025, up nearly 6% from the year before. In Q1 2026 alone, 9.77 million departed internationally.

And everyone wants a piece of this market—from Thailand to Australia and the US, tourism boards are scrambling to double their Indian visitor numbers. One luxury travel company puts it bluntly. In the post-war period, all eyes have turned to India, replacing Russia and China.

The spending is climbing too. Indians dropped A$2.5 billion in Australia and 93.86 billion baht in Thailand in 2025 alone. India’s outbound tourism market is projected to nearly triple, from $18.8 billion in 2024 to $55.4 billion by 2034. Read on.

MINT LONG STORY

Inside the glittering world of India’s GCC offices

Just like global capability centres are leaving no stone unturned to retain talent by creating premium workspaces, developers in India are racing to woo global office tenants, upgrading their realty play. Read more.

🔢 NEWS IN NUMBERS

• 5%: The equity stake OpenAI Inc. is reportedly considering offering to the US government, giving Washington DC a financial interest while overseeing AI model releases.
• ₹1.96 lakh: The average ticket size of gold loans in FY26, jumping 39% YoY and doubling in three years as high gold prices drove growth.
• $16 million: The estimated Friday earnings of ‘Minions & Monsters’ from 4,243 cinemas across the US and Canada, topping the North American box office.
• 9: The number of aircraft Akasa Air inducted in 2026, taking its fleet strength to 40 after launching operations in August 2022.
• ₹1.65 lakh: The new application fee for Australia’s standard student visa effective 1 July 2026, marking a 25% increase from the previous fee.
• ₹9,330 crore: The amount lying unclaimed in 30.91 lakh inoperative Employees’ Provident Fund (EPF) accounts as of 31 March 2026, according to RTI data.
• ₹12.73 trillion: The total gross advances reported by Axis Bank as of 30 June 2026, up 18.8% year-on-year, even as its total deposits grew 18.2% to ₹13.73 trillion.

AROUND THE WORLD

• How Xi Jinping steamrolls dissent with tactics from Stalin and Mao
• China is devastating the last stronghold of German industry
• How a mayor pulled off a bloodless coup to become UK PM in waiting
• Only one old-school haven stands firm during Iran war as gold
• Pakistan’s army chief battles with its imprisoned ex-prime minister

CHART OF THE DAY

LOUNGE RECOMMENDS

The demands for justice that tie India’s youth movements

Re-reading journalist Nikhila Henry’s 2018 book, ‘The Ferment’, today is a reminder that dissent, along with caste and gender struggles, continue to define the politics of India’s campuses. Read more.

WHAT THE FACT

When Serena beat Venus

On this day in 2002, Serena Williams defeated her sister Venus to claim her first Wimbledon singles title. This marked a victory that announced her arrival as the sport’s dominant force.

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