EFE | PAGE 10 THE BIG IDEA | PAGE 24 Meta struggles to monetise WhatsApp's scale in India INTERNATIONAL | PAGE 11 From corporate builder to startup creator CHENNAI/KOCHI, MONDAY, JULY 6, 2026 Iran's supreme leader skips funeral of Khamenei FOLLOW US ON TWITTER & FACEBOOK. APP AVAILABLE ON APP STORE & PLAYSTORE WWW.FINANCIALEXPRESS.COM READ TO LEAD VOL NO. XLVII 51, 24 PAGES, `12 P U B L I S H E D F R O M : A H M E D A B A D , B E N G A L U R U , C H A N D I G A R H , C H E N N A I , H Y D E R A B A D , K O C H I , K O L K ATA , L U C K N O W, M U M B A I , N E W D E L H I , P U N E IN THE NEWS ECONOMY PAGE 2 CENTRE TARGETS GLOBAL FUNDS FOR INFRA PUSH TO ACCELERATE INFRASTRUCTURE financing, the Centre is preparing a strategy to woo long-term global investors such as pension funds and sovereign wealth funds into sectors such as roads, railways, ports & airports, reports Prasanta Sahu. COMPANIES PAGE 5 ADANI LAUNCHES `2,500-CR MISSILE COMPLEX IN MP ADANI DEFENCE & Aerospace on Sunday held the groundbreaking ceremony for a `2,500-crore project in Shivpuri, Madhya Pradesh (MP), to set up South Asia's largest privatesector missile ecosystem, reports FE Bureau. » MARKETS « PAGE 6 GOVTDEVELOPING INDEPENDENTAITESTING CAPABILITY India buildsAI fallback amid US export curbs OJASVI GUPTA New Delhi, July 5 US RESTRICTIONS ON access to advanced artificial intelligence (AI) models are beginningtoreshapeIndia’sAIstrategy, with the government building independent capability to test critical software and cybersecurity systems instead of waiting for access to Anthropic’s most advanced model. The ministry of electronics and information technology (MeitY) has started using alternative frontier AI models to stress-test critical code while accelerating work on indigenous frontier models, reflecting a broader effort to reduce reliance on overseas AI platforms for strategic applications.The move comes even as India continues to seek access toAnthropic’s Mythos 5 under Project Glasswing, a trustedpartner programme that Washington is yet to expand. “We are one of the trusted countries to explore participation in Anthropic’s Glasswing exercise so that we have access tothesemodelsandcanstress- Firms brace for widerAI cyber risks,likely to raise spending A BLESSING IN DISGUISE ■ India is yet to get access to Anthropic’s Mythos 5 ■ In the meantime, URVI MALVANIA Mumbai, July 5 India has started using alternative frontier AI models to stress-test critical code ening cyber resilience is becoming a parallel priority as AI adoption gathers pace. Thegovernment’sresponse followsWashington’s decision to retain export restrictions on Mythos 5 even after lifting curbs on Anthropic’s Fable 5 model for India. Officials say the episode underscores the risksofrelyingonoverseasfirms fortechnologiesthatarecentral to national cybersecurity. INDIAN ENTERPRISES MAY need to raise cybersecurity spending to 15-20% of theirIT budgets over the coming years as artificial intelligence (AI) expands the digital attack surface and pushes cyber risk into the boardroom, according to industry executives. The shift marksadeparturefromtreating cybersecurityasatechnologyor compliance expense toviewing it as a strategic investment in business resilience,with boards increasingly focused on operational continuity, regulatory compliance and financial risk. At present, firms allocate about8-10%oftheirITbudgets to cybersecurity,while sectors suchasbankingspend10-15%. Continued on Page 5 Continued on Page 5 ■ Work on indigenous frontier models to secure AI systems critical to government infrastructure has been accelerated test our own systems. At the same time,we cannot wait for that process. We have developed in-house capabilities to test critical code using otherAI models that are currently around 60-70% as capable as Mythos,” MeitY Secretary S Krishnan said at the CII Cybersecurity Summit recently. He said the ministry is encouraging government departments to earmark at least 15% of theirITbudgets forcybersecurity, signalling that strength- China still powers India’s strategic industries.Afour-part series maps the dependencies — and the road out Electronics:The assembly boom,thecomponentgap THE DRAGON DEEPER REALITY IN THE SUPPLY CHAIN-I ■ India is now the world’s second-largest mobile phone manufacturer, with nearly 28-fold rise in production since 2014-15 OJASVI GUPTA & URVI MALVANIA New Delhi/Mumbai, July 5 INDIA’S ELECTRONICS EXPORTS hit a record nearly $48billioninFY26,cementing the country’s emergence as a global smartphone manufacturinghub.Smartphonesalone accounted for over $31 billion of exports, driven by Apple’s expanding manufacturing footprintandrisingshipments to the US and Europe. Yet, the export success masks a deeper reality: much of the value inside those devices still comes from China. Semiconductor chips, display assemblies, camera modules,printed circuit board inputs, connectors, sensors, manufacturing equipment and several industrial inputs continue to be imported, underscoring the gap between assembling electronics and ■ India’s smartphone exports surpassed $31 billion in FY26, accounting for 60% of electronics shipments ■ Domestic value addition in smartphones is pegged at around 18-20%, compared with 35-45% for integrated products made in China building a self-sustaining manufacturing ecosystem. That dependence, however, is not unique to India. Electronics manufacturing is organised around deeply integrated global value chains where components routinely cross borders before a finished product reaches consumers. Even China imports advanced semicon- A LIFE DEVOTED TO INDIA’S UNITYAND PROGRESS, PM NARENDRA MODI WRITES ON SYAMA PRASAD MOOKERJEE THE HUMAN FACTOR THE OFFICE CALLED; IT WANTS ITS MENTORS BACK P8 Continued on Page 11 A waterlogged street in Mumbai on Sunday. The financial capital took the hardest hit of the SANKHADEEP BANERJEE monsoon's fury, which disrupted normal life and forced brief airport closure Surplus Julyrains reduce monsoon deficit to 24% SANDIP DAS New Delhi, July 5 SURPLUS RAINFALL OF over 34% this month has reduced overall southwest monsoon deficiency in the current season till Sunday to 24% from close to 40% at the end of June, the India Meteorological Department (IMD) said. Cumulative rainfall during June 1-July 5 according to the met department is more than 24% below the bench- mark longer period average (LPA), which is still in the ‘deficient’ range. Due to the ‘active’ phase of monsoon during the week over the rain-fed core zone of central India,the deficit in the region has been reduced to 14% from over 50% reported till the end of June. This is expected to give a boost to kharif crops — paddy, pulse, oilseeds and cotton — sowing. Central India accounts for a third of the area under main kharif crops, namely paddy, pulses and oilseeds. A rainfall deficit of 42% in east and northeast India, however, continues to be a matter of concern as it may impact sowing in eastern Uttar Pradesh, Bihar and Jharkhand. The monsoon season accounts for over 70% of the country’s annual precipitation. Continued on Page 11 BIG BUSINESS Continued on Page 11 Childabuse content:Govt turnsupthe heatonMeta OJASVI GUPTA New Delhi, July 5 reveals the domination of the services segment. Services accounted for 65% of new incorporations in FY23,rising to 71% in FY24 and 72% each in both FY25 and FY26.At the same time, the industry’s share fell from 29% in FY23 to 23% in FY24 before recovering to 25% in FY25 and maintaining that percentage in FY26, while agriculture declined from 7% to just 3%. TURNING UP THE heat on Meta, the government has issued a notice to the social media giant directing it to immediatelyremove all advertisements and content on Instagram facilitating access child sexual exploitative and abuse material (CSAM),official sources said on Sunday. The Ministry of Electronics and Information Technology (MeitY)issuedthenoticeonSaturday and also demanded a detailed explanation from the platform within seven days. A day earlier, Electronics and IT MinisterAshwiniVaishnawhad directed ministry officials to summon Meta representatives over the matter. The government’s concerns also extend to Instagram’s recommendation algorithm,which had allegedly been surfacing similar content organically,beyondjustpaidads. Officials warned that noncompliance could invite action under the IT Act and the POCSO Act, 2012. Section 67(B) of the ITAct criminalises publishing or transmitting sexually explicit material involving children. Separately, any individual or agency may file its own complaint against the advertiser or platform. Continued on Page 5 Continued on Page 11 New company registrations Total pa p capital* paid-up pi 30,927 28,020 45,620 18,132 2,47,755 PAGE 6 INYETANOTHER signal that a robust investment cycle may be around the corner, newly registered companies are starting operationswith much larger capital bases than earlier. Promoters increasingly nurturing long-term ambitions and the rapid expansion of global capability centres (GCCs) are fuelling the trend. According to Ministry of Corporate Affairs (MCA) data, nearly 0.25 million new companies were registered in FY26, a jump of 36.8% over FY25. The real momentum was, however, visible in the underlying financial strength of the incorporated firms.The total paid-up capital for the new businesses skyrocketed by 62.8% in FY26, hitting `45,620 crore. A clutch of services includingIT,telecom,transportation, trading and storage continues to lead new registrations. The MCA data reflect an incipient trend of relatively larger businesses getting incorporated,ratherthan shell ortinycompanies.Expertssaid the latest rise reflects faster formalisation of the economy. A sector-wise analysis of new company registrations INVESTORS LOOKING FOR SHELTER FROM AI STORM ARE TURNING TO INDIA PAGE 6 1,81,135 » INSIDE « THE DEADLOCK OVER the renewal of the BroadcastAudience Research Council’s (BARC) licence is unlikely to be resolved anytime soon, informed sources have told FE, prolonging a television ratings blackout that has disrupted India’s `38,000-crore TV advertising market ahead of the festive season. The ministry of information and broadcasting on July 1 directed BARC to suspend publishing TV ratings across genres until its licence is renewed under the Television Rating Policy, 2026. It also asked BARC to suspend subscription billing to broadcasters during the period. For the TV industry,ratings serve as the trading currency, helping broadcasters price advertising inventory while enabling advertisers and media agencies to allocate marketing spends and evaluate campaign performance. The industry last witnessed a major ratings blackout during the transition from TAM to BARC in April 2015, when audience data remained unavailable forabout a month. OPENAI, ANTHROPIC FACE MOUNTING PRESSURE AS FIRMS SEEK CHEAPER ALTERNATIVES PAGE 4 1,85,312 SWIGGY'S BUDGET FOOD delivery app Toing has expanded to 50 cities in less than 10 months since its launch in Pune, pulling ahead of rival Rapido's Ownly in the emerging low-cost food delivery segment, reports Anees Hussain. ■ PAGE 4 MANU KAUSHIK New Delhi, July 5 »INSIDE« 1,59,524 Swiggy's Toing expands to 50 cities in 10 mths TVratings blackoutmay lastweeks Paid-up capital of newfirms surges 63% on GCC push VIVEAT SUSAN PINTO Mumbai, July 5 MARKETS HAVE LIMITED DOWNSIDE AND MUCH HIGHER UPSIDE, SAYS RAAMDEO AGRAWAL OF MOTILAL OSWAL FINANCIAL SERVICES ductor chips from Taiwan and South Korea, and manufacturing equipment and specialised materials from Japan, while Vietnam also relies heavily on imported components for its export-led electronics industry. The difference lies in the depth of the domestic ecosystem. FY23 FY24 FY25 *Figures in ` crore FY26 Source: MCA AUTO ZONE Small-format grocery chains draw shoppers and investors with an affordability-first model Value,notvelocity:Neighbourhoodstorestakeonq-commerce S SHANTHI Bengaluru, July 5 WHILE QUICK COMMERCE companies battle over faster deliveries and expand into smaller towns,a new breed of neighbourhood value supermarkets is quietly gaining ground by targeting consumers who prioritise affordability over speed. Small-format grocery chains such as SuperK, Apna Mart, SAVOmart, 7xBasket and Grocery4u are expanding across cities and emerging markets by catering to households earning `25,00050,000 a month, offering a shopping experience that sits between a traditional kirana and a large supermarket. The model has also begun attracting investor interest as organised retail looks beyond premium urban consumers. These stores, typically spread across 900-1,200 square feet, are designed for planned weekly and monthly grocery purchases rather than instant deliveries. Located in residential neighbourhoods, they promise transparent pricing, wider assortment and better merchandising without the delivery charges associated with quick commerce. “Going to these supermarkets is an experience they enjoy. It is a family outing for many customers. Since it’s a small supermarket located in theirown locality,theyare not BRIDGING A GAP Advantages of value supermarkets: transparent pricing, broader assortment, better merchandising and the perception of higher quality and consistency ■ Small-format grocery chains such as SuperK, Apna Mart, SAVOmart, 7xBasket and Grocery4u are expanding across cities and are drawing investor interest ■ The format fills a ■ These stores, typically gap that neither kiranas nor quick commerce has fully addressed spread across 900-1,200 square feet, are designed for planned weekly and monthly grocery purchases intimidated as they would be when theyvisit supermarkets in considerably posh localities,” said a former employee of a value supermarket. Industry executives say the format fills a gap that neither kiranas nor quick commerce has fully addressed. While kirana stores remain the preferred choice for emergency purchases because of familiarity and proximity, consumers are increasingly choosing different retail formats for different shopping missions. “Kiranas continue to dom- inate emergency purchases because of proximity, familiarity,flexibility and personal relationships.However,when consumers make planned weekly or monthly purchases, value supermarkets offer clear advantages: transparent pricing, broader assortment, better merchandising and the perception of higher quality and consistency,” Mani Singhal, managing director and co-lead, consumer and retail practice at Alvarez & Marsal India, told FE. Unlike quick commerce, where speed is the primary value proposition,neighbourhood supermarkets compete on savings. “For an urgent purchase, consumers may happily pay a small premium CHENNAI/KOCHI for delivery in 10 minutes. However, when purchasing a monthlygrocerybasketworth `2,500-5,000, saving 5-10% on the overall bill becomes much more meaningful than receiving the order immediately," Singhal said. The format is also proving attractive to investors. SuperK operates more than 130 stores across Andhra Pradesh and Telangana and has expanded into Karnataka. Apna Mart,launched in 2021, has built a network of more than 200 stores across Jharkhand, Chhattisgarh, West Bengal and Bihar, while SAVOmart,launched in 2024, has around 20 outlets. Continued on Page 11 Tataclosesgap inpetrolSUVs TATA MOTORS’ PUSH into petrolSUVs isbeginningtogain traction,thoughtheautomaker continues to trail established players such as Hyundai, Toyota and Kia in a market where they have built strong positionsovertheyears,reports AkbarMerchant. ■ PAGE 4 Windsor EV localisation JSWMG MOTOR India is looking to increase localisation level of its Windsor EV to over 70% to reduce supply chain risks as it eyes a double-digit overall sales growth in 2026, according to Managing Director Anurag Mehrotra, reports PTI. The EV crossed cumulativewholesalesof75,000units in 21 months. ■ PAGE 4