Smart Cars, Dumb Infrastructure

India Opens Doors To Connected Cars, But Its Biggest Challenge Is Beyond Technology

By Shubhangi Bhatia

What?

India has taken a major step toward a future where vehicles can "talk" to each other and to the road infrastructure around them, a technology called V2X (vehicle-to-everything). In simple terms, it means cars, two-wheelers, traffic signals and even pedestrians could soon send each other real-time safety signals.

Last month, the government removed a licensing rule that was making this technology expensive and slow to roll out. While it doesn't mandate carmakers to add this tech yet, it clears the way for them to start. Alongside this, Telecom Regulatory Authority of India has opened discussions on how this should work, and the road transport ministry has separately proposed new cybersecurity rules to keep the system safe.

As Praveen Sasidharan of PwC India explains, this turns connected cars from an optional innovation into "a governed, safety-critical system of national importance."

Why?

India's roads are famously chaotic, with cars, two-wheelers, autorickshaws, pedestrians and even animals all sharing the same space, often with little lane discipline. This is exactly where the technology could help most.

Picture a two-wheeler rider getting a silent warning that someone is about to step out from a dark, unlit corner, before they can even see it themselves. Or a car "sensing" that a truck two vehicles ahead has slammed the brakes, and warning the driver instantly. The hardware needed isn't complicated, Dhruba Sarma of KPIT simply calls it "a bigger telematics box," similar to tracking devices already used in vehicles today.

Beyond safety, this tech could also ease traffic jams, improve efficiency for electric vehicles and lay the groundwork for self-driving cars. But experts say the real challenge isn't technology, it's getting carmakers, telecom companies and the government to align together.

Why It Matters

The technology seems exciting, but it's still a long way off from mass deployment. Experts expect rules and technical standards to be finalised over the next one to two years, and full rollout across Indian roads could take five to eight years.

The biggest challenge is making sure every vehicle, no matter which company made it, can understand and trust the same safety signals. If different companies build systems that don't communicate to each other properly, India could spend years and huge amounts of money fixing it later.

There's also a trust problem, as Sasidharan warns that if even one fake danger alert causes an accident, it could damage public confidence for years.

Still, India has a rare chance to get the basic rules right before millions of vehicles are on this network, something most countries are still figuring out.

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53.5

That’s how much India's manufacturing Purchasing Managers' Index (PMI) slid to in July, its lowest reading in nearly five years, as weaker domestic demand slowed factory activity.

Catch Up Quick: India's manufacturing sector continued to expand in July, but at a much slower pace. The HSBC India Manufacturing PMI slipped to 53.5 from 54.2 in June, marking its weakest reading since August 2021.

While any reading above 50 signals growth, the latest survey suggests momentum is easing as demand softens.

Fast Facts: New orders grew at their second-slowest pace in more than four years as manufacturers reported weaker domestic demand. Hiring continued for a 29th consecutive month, but job creation slowed to its weakest pace during the current hiring streak.

Consumer goods producers saw the sharpest slowdown, while capital and intermediate goods manufacturers remained relatively resilient. Export orders improved from June's levels, offering some support, though overseas demand remained subdued. On the cost front, input price inflation eased to a five-month low, helping firms limit price increases despite higher transport costs.

Mission: No Leaks

The National Testing Agency (NTA) has floated a Rs 7.5 crore tender for round-the-clock security at its headquarters, regional offices and facilities housing confidential examination material, as it seeks to tighten safeguards following the NEET-UG 2026 paper leak. The two-year contract will cover access control, surveillance, server rooms, strong rooms and storage facilities, with bids open until August 17.

The Scoop: This move comes even as public confidence in the examination system remains shaky. A CVoter poll released on Monday found that more than half of Indian adults were dissatisfied with the Narendra Modi government's handling of the NEET-UG 2026 paper leak, which led to the cancellation of the May medical entrance exam, affected millions of candidates and triggered nationwide student protests.

Break: Meanwhile, NEET UG 2026 counselling registration opens on August 5, while the Cockroach Janta Party (CJP), which spearheaded the protests, has said it will pivot from demonstrations to a broader grassroots campaign on youth issues, including education reforms, jobs and government accountability.

RBI Set to Hold Rates

India's central bank is set to hold interest rates steady, according to 68 of 72 economists polled by Reuters, even as several global peers have raised borrowing costs since the West Asia war began five months ago.

Context: Retail inflation rose to 4.38% in June, exceeding the RBI's 4% target for the first time in 17 months but staying within its 2-6% tolerance band. Core inflation remains near 4%, though wholesale inflation jumped to 9.87%.

Abhishek Bisen, head of fixed income at Kotak Mahindra AMC, said strong inflows and tighter financial conditions have eased the urgency for a hike, adding that "the appeal for a rate hike may be loud, but the umpire is keeping the finger firmly down."

Setup: The rupee remains under pressure from higher oil prices despite $40 billion in inflows spurred by RBI measures such as the scrapped capital gains tax for foreign bondholders. Economists say wider rate differentials will eventually be needed to support the currency.

Everyday Costs Climb

India's wholesale inflation rose to 9.87% in June from 9.68% in May, driven by higher global commodity and energy prices, Minister of State for Finance Pankaj Chaudhary told the Lok Sabha. 

Pivot: Price pressures were strongest in mineral oils, food articles, basic metals and chemicals. Chaudhary said the government has expanded buffer stocks, sold grains in the open market and adjusted trade policies to contain inflation, while noting that retail inflation has remained below the RBI's 4% target on average over the past two quarters.

Fast Facts: Even as the government says it has contained the impact on consumers, households are paying more for everyday meals. According to CRISIL's June Roti Rice Rate report, the average cost of a home-cooked vegetarian thali rose 4% month-on-month to Rs 28.4 in June, while a non-vegetarian thali increased 3% to Rs 58.2. The increase was driven by a 31% year-on-year jump in tomato prices, an 8% month-on-month rise in onion prices, and higher edible oil, LPG, and chicken costs.

India Boosts Oil Reserves

India's top oil explorer Oil and Natural Gas Corp (ONGC) will reserve half of its planned 1.75 million metric ton oil storage facility to meet the country’s strategic needs, junior oil minister Suresh Gopi told lawmakers on Monday.

ONGC last month announced plans to build the strategic petroleum reserve at Mangaluru in Karnataka, where its Mangalore Refinery and Petrochemicals (MRPL) subsidiary already operates a 300,000 barrel-per-day refinery.

Context: New Delhi is expanding its emergency petroleum reserve capacity with private participation. Current Indian rules let firms use part of the existing storage built across Mangaluru, Padur and Vizag, managed by government-owned Indian Strategic Petroleum Reserves. MRPL has already leased half of the Mangaluru facility.

The Lead: Gopi said India can store crude and petroleum products to cover 74 days of net import needs. The country plans about 4 million tons of storage including one at Chandikhol, Odisha, and a facility at Padur, with private firms.

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Why Indian Markets Are Holding Steady

On Episode 938 of The Core Report, financial journalist Govindraj Ethiraj talks to Madhavi Arora, Chief Economist at Emkay Global Financial Services.

• Why Indian Markets Are Holding Steady

• Why The US And Japan Joint Intervention To Prop Up The Yen Is Unusual

• What Is The RBI’s Grappling With, Ahead Of The Credit Policy On Wednesday

• Which Banks Have The Most Clout With NRI Funds And Deposits?