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Rewiring India’s Power Economy
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Good Morning. Big reforms are finally in the offing for India’s power sector. From clearing old regulatory dues to changing how electricity prices are discovered, 2026 could mark a turning point. But as it always is with the sector, execution and politics will decide whether this overhaul delivers efficiency or just higher bills.
Indian equity indices ended lower on Wednesday. The BSE Sensex closed at 85,408.70, falling 116.14 points or 0.14%. The NSE Nifty50 closed at 26,142.10, falling 35.05 points or 0.13%.
In other news, gold breaches the $4,500 mark, which is a record high. Meanwhile, the Delhi High Court wants GST reduced on air purifiers.
Programming Note: There won’t be an edition on Friday, December 26, as we’re taking a break for Christmas. We will be back in your inboxes on Saturday, December 27.
A Long-Delayed Overhaul Comes For India’s Power Sector In 2026
What?
For the past several years, India’s electricity sector has functioned on deferred tariff hikes, deferred reforms and delayed digital upgrades. Policies made in 2025 will attempt to address these strained discom balance sheets and market inefficiencies in 2026.
From the cost of electricity, how the country discovers its spot market power rates, and digital infrastructure, India’s electricity ecosystem is hoping for a year of transition that will be felt by everyone, from the end-consumer to those in the power business. Like all things in the Indian electricity market, this hopeful transition is riddled with many caveats.
In 2026, India’s electricity sector is expected to undergo a shift on three fronts — tariffs, technology and trading.
A Supreme Court directive to clear long-pending regulatory assets could raise electricity costs in some states; a new market-coupling mechanism aims to deliver a single spot price for power across exchanges; and the rollout of the India Energy Stack seeks to digitally rewire the sector.
Why It Matters
Experts caution that the overhaul is contingent on various factors — legal go-aheads, on-ground timely execution and the fiscal health and political willingness of various states.
As Rajasekhar Devaguptapu, Fellow at the Center for Social and Economic Progress (CSEP) notes, a Supreme Court order on regulatory assets (RA), a central electricity regulator’s imitative on market coupling and the Power Ministry push for an India Energy Stack (IES), “are significant in their own right and carry deep impact on future of Indian electricity market.”
While these legislative moves were made in the last twelve months, their on-ground impact in terms of higher electricity tariffs for some states, better tech for the power industry eco-system and a single price discovery for the power spot markets, is expected to unfold in 2026.
Which states will see higher power tariffs, and will a new electricity law be in the offing?
Rare Earths Become Oil India’s New Strategic Frontier As China Risk Grows
Critical minerals have that name because, well, they are critical to different sectors, be it health, mobility or communication. In the face of China blocking the export of these minerals, the government is looking to cut dependence.
Under the National Critical Mineral Mission, the government plans to enhance exploration. Oil India Ltd, known best for its oil exploration efforts, is also going on a journey to explore for critical minerals.
"As we do exploration for oil and gas, we saw that the same exists for critical minerals, a select few. So, out of the identified 24, we have shortlisted about eight. And basis, we also had another shortlisting parameter, we said wherever we have our area of operation. So, as we speak, we have got two exploratory blocks, it's in composite licence mode, unlike the oil and gas block," said Dr Ranjit Rath, chairman and managing director of Oil India.
One of the blocks of graphite and vanadium is located in Arunachal Pradesh, near Itanagar and holds about 5 million metric tonne of reserves of graphite and 5 million metric tons of vanadium.
Oil India is also exploring a potash block in Rajasthan that holds around 25 to 26 million metric tonnes of potash.
Strategy Shift
While India's focus was earlier on the exploration of bulk minerals, such as limestones, bauxites, iron ores and hydrothermal minerals like copper, lead, zinc and black, the focus has now shifted to rare earths.
"There is a concept called obvious geological potential areas with GSI (Geological Survey of India) maps. That mapping has already been done. There is a significant thrust from the government of India as a two-pronged strategy. One is enhanced exploration, per se," said Rath.
Oil India and other entities, such as the GSI and Coal India, are carrying out this exploration. The second is for processing these minerals.
"Significant thrust is underway to acquire processing technology and also to encourage both the private sector and the public sector and the research organisations," Rath said.
Oil India is also continuing deepwater and ultra-deepwater drilling for oil exploration. Where do these projects stand?
This series is brought to you in partnership with India Energy Week 2026. Get your delegate passes here.
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$4,500
That’s the level gold surged past for the first time on Wednesday. Silver, platinum and palladium also hit record highs, as investors flocked to precious metals to hedge against geopolitical and trade risks, and expectations of US rate cuts in 2026. Spot gold touched a peak of $4,525 before easing, while silver climbed to a record $72.70 an ounce. Platinum and palladium jumped to multi-year highs.
Overview: Analysts said thin year-end liquidity amplified price moves, but the broader rally reflected safe-haven demand, de-globalisation concerns and bets on easier US monetary policy. Gold has risen more than 70% this year, its strongest annual gain since 1979, supported by central-bank buying and ETF inflows.
Setup: Silver has surged over 150%, while platinum and palladium have climbed on tight supply, tariff uncertainty and rotation from gold, though analysts warned the latter two remain vulnerable to sharp swings as liquidity normalises.
Murugappa Group’s Financial Web
A Cobrapost report on the 125-year-old Murugappa Group has flagged related-party transactions of more than Rs 10,100 crore across four entities, led by flagship NBFC Cholamandalam Investment & Finance Co. Ltd. (CIFCL).
Catch Up Quick: Filings reviewed show CIFCL diverted about Rs 6,419 crore, while Chola MS General Insurance routed Rs 3,040 crore and Chola Business Services handled Rs 4,103 crore over the past decade, largely booked as work contracts, commissions and professional fees. Murugappa Management Services extracted Rs 675 crore from 17 group firms and paid out an estimated Rs 365 crore, mostly to family members and associates.
Setting: Separately, CIFCL deposited over Rs 25,000 crore in cash across 14 banks since 2019, including Rs 13,360 crore with ICICI Bank, raising regulatory oversight concerns.
Russia Squeeze Tightens
Reliance Industries has reportedly received a one-month concession from the United States to receive oil cargoes supplied by Russia-backed Rosneft, sources told Reuters. Reliance said it is only receiving tankers it had already paid for before US sanctions kicked in, and that the waiver allows the company to wind down pre-existing contracts without breaching sanctions.
How We Got Here: Meanwhile, Nayara Energy, which Rosneft partly owns, will delay maintenance at its Vadinar refinery from February 2026 to April 2026. European contractors have avoided working with the firm after the European Union imposed fresh sanctions linked to Russia’s war on Ukraine.
Trigger: The EU rolled out a fresh round of sanctions earlier this month, which also targeted Indian refiners that continue to source Russian crude.
Fresh Air Or Else
The Delhi High Court has asked the central government to consider cutting the goods and services tax (GST) on air purifiers from 18%, a slab that applies to non-essential consumer goods.
Origin: The court is currently hearing a public interest litigation (PIL) filed by advocate Kapil Madan, seeking the state to classify air purifiers as medical devices and reducing GST on them to 5%. The air-quality index in North India has consistently come under the hazardous category; New Delhi is currently the most-polluted capital city in the world.
Impact: “This is the minimum that you can do. Every citizen requires fresh air. If you can't do it, minimum you can do is reduce GST. Give an exemption for 15 days on a temporary basis. Treat this situation as an emergency,” said a division bench consisting of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela.
Office Demand Surges
Despite IT layoffs and global tariff tensions, India’s office market delivered a strong performance in 2025. According to the Anarock report, across the top seven cities, net office absorption reached a record 55.16 million square feet, up 10% year-over-year, led by sharp gains in Pune, NCR, Chennai, and MMR.
By The Numbers: Bengaluru remained the largest market despite a modest 5% dip, while Kolkata also saw a marginal decline. New office supply rose 8% to 51.83 million sq. ft., with Pune and Chennai recording the fastest growth, even as MMR and Hyderabad slowed.
What’s Next? Vacancy levels edged down to 16.1%, reflecting steady demand. Rentals climbed 6% on average, driven by Bengaluru. Global Capability Centres (GCC), Information Technology (IT) / Information Technology–enabled Services (ITeS) and coworking continued to anchor leasing momentum.
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