The dinosaurs became extinct because they didn’t have a space programme.
The American science fiction writer Larry Niven may have taken some creative liberty when he made this statement, since it was an asteroid strike and the subsequent climate catastrophe that killed the giant reptiles millions of years ago.
But the point that he is making about the importance of space exploration can’t be argued.
That’s why India has been one of a handful of nations on earth with a significant space programme that started in the early 1960s and took shape under the leadership of Dr Vikram Sarabhai with the establishment of the Indian Space Research Organisation, or ISRO, in 1969.
India’s space ambitions took another leap forward recently when a Hyderabad-based startup, Skyroot Aerospace, successfully launched its Vikram-1 rocket into space.
Why is this significant? Well, this makes Skyroot the first private Indian company to place a rocket into orbit and India only the third country, after the US and China, to demonstrate private orbital launch capability.
The launch is important for other reasons, too. For one, putting a satellite into space has rarely been the hardest part of a space mission. Getting it there often is.
For years, organisations developing small satellites have largely depended on government agencies or large commercial rockets that operate on fixed schedules. Many satellites share the same launch, wait for an available slot and travel to an orbit that is often chosen to suit several customers rather than just one.
In other words, the bottleneck has rarely been building satellites. It has been finding a ride. That is the problem Skyroot is trying to solve.
To be sure, Skyroot’s ambition is not to compete with ISRO’s largest launch vehicles. Instead, it wants to serve a growing market of smaller satellites by offering dedicated launches, allowing customers to choose when they fly and the orbit they want to reach instead of waiting to share space on a larger mission.
For many commercial operators, that flexibility can be just as important as the cost of a launch. Satellites used for earth observation, communications or other services begin creating value only after they reach orbit. Reducing the wait for a launch can, therefore, mean bringing those services online sooner.
The idea only makes sense because the space industry itself has changed.
As satellites have become smaller, cheaper and more specialised, demand has shifted as well. Earth observation, communications, weather forecasting and a growing range of commercial services increasingly rely on constellations of satellites in Low Earth Orbit rather than a handful of large spacecraft positioned much farther away.
For launch providers, success is no longer defined only by how much weight a rocket can carry. Reliability, flexibility and the ability to launch frequently have become equally important.
Skyroot isn’t alone. India is now home to around 400 space startups working across launch vehicles, satellites, space-grade electronics and downstream applications.
However, ISRO remains central to India’s space ambitions. For decades, India’s space programme was measured largely by the missions ISRO completed. Those missions built scientific capability, engineering expertise and the infrastructure on which companies like Skyroot now depend.
The next phase may increasingly be measured by something different: whether that foundation can support a commercially viable space ecosystem. If private companies can make access to space more frequent, more flexible and more responsive to the needs of businesses, India’s role in the global space economy will extend beyond the missions it launches itself. It will increasingly be defined by the services its companies provide to others.
Whether companies like Skyroot can build sustainable businesses remains uncertain. But Vikram-1 suggests that India’s space programme is entering a new phase – one in which the measure of success is no longer only what the country can send into space, but also the ecosystem it can build around getting others there.
Redrawing the Map
Staying in the air a little while longer, India’s aviation sector was abuzz this week with reports that the billionaire Gautam Adani-led Adani Group was exploring the possibility of launching an airline.
According to several media reports, the conglomerate has asked the government to remove restrictions that prevent operators of Delhi and Mumbai airports from owning more than a 10% stake in a scheduled carrier. The Ministry of Civil Aviation has begun preliminary discussions on the proposal and is seeking legal opinion, the reports said.
On its part, the group called those reports “baseless” and “factually incorrect”. Meanwhile, IndiGo and Air India have reportedly raised concerns about Adani’s possible entry into the airline business.
Now, India definitely needs more airlines. Today, IndiGo and Air India together account for around 90% of India’s aviation market. SpiceJet, Akasa Air and few regional carriers make up for the remaining. Many of these carriers are struggling. Air India is still dealing with the aftereffects of the deadly crash last year while IndiGo’s cancellation of thousands of flights last year is still fresh in memory. SpiceJet, too, is barely sustaining itself.
Adani’s reported interest is significant not simply because another large business group could enter aviation, but because it reopens a broader policy question: should airport operators be allowed to run airlines?
For years, India’s answer was no. The reasoning was straightforward. Airports control infrastructure that every airline depends on, from landing slots and terminal gates to ground services. Keeping airport operators and airlines separate reduced the risk that one carrier could receive preferential treatment, helping preserve a level playing field in a business where access to infrastructure can be as valuable as the aircraft themselves.
The Adani Group illustrates why that debate has emerged. Although it does not operate an airline today, it already manages eight airports and has expanded into ground handling, maintenance, repair and overhaul, pilot training and other aviation services. It also plans to establish an aircraft assembly facility in India with Brazil’s Embraer.
Owning an airline would extend that presence across much of the aviation ecosystem.
Whether that also makes commercial sense is a different question. Airlines remain among the most difficult businesses to run. Thin margins, aircraft delivery delays and persistent supply chain constraints continue to weigh on the industry, while several Indian carriers have failed over the past two decades despite operating in one of the world’s fastest-growing aviation markets. Think of Sahara, Jet Airways, Air Deccan, GoAir and so on. Those realities help explain why Adani Group had said only months ago that airlines did not fit their investment philosophy.
The proposal may or may not result in a new airline. The regulations may or may not change. But the debate itself signals something important.
Regulations are designed around the problems policymakers are trying to solve. In Indian aviation, that once meant preventing conflicts between airports and airlines. As the market has consolidated, policymakers are weighing that concern against another: whether existing ownership rules now make it harder for new competitors to emerge.
Whether the answer ultimately lies in changing ownership rules or preserving the existing framework remains uncertain. What is becoming clearer is that India’s aviation sector is entering a phase where the debate is no longer only about who can own an airline or an airport, but about how regulation itself should adapt as the industry evolves.
Prescription for Change
Talking of policy news, US President Donald Trump this week returned to his favourite policy measure—tariffs—and Indian pharmaceutical companies were directly in the crossfire.
Trump said that generic medicines imported into the US would face zero tariffs for the next two years before attracting tariffs of 100% for one year and 200% thereafter. Drugmakers that choose not to establish manufacturing facilities in the US would face penalties, he said.
The stated objective is to encourage more pharmaceutical production within the US, where millions of people buy generic medicines that come from India.
In fact, more than four out of every 10 generic prescriptions filled in the US are supplied by Indian drugmakers. The US is also India’s largest pharmaceutical export market, accounting for roughly a third of the country’s overseas drug sales.
That position did not emerge overnight. When patents on medicines expire, manufacturers are free to produce generic versions. Competition shifts from discovering new drugs to producing existing ones reliably, at scale and at low cost. Over several decades, Indian pharmaceutical companies built a strong presence in that business, becoming major suppliers of affordable generic medicines to markets around the world. And this position won’t change overnight, either.
Trump’s announcement is the latest in a series of similar proposals on trade. So far, however, pharmaceutical products have largely remained exempt from tariff measures announced under different trade frameworks, and earlier proposals for steep duties on medicines have not been implemented.
That has left much of the Indian pharmaceutical industry viewing the announcement with caution rather than alarm.
Industry executives say the proposal does not change existing tariff arrangements for the next two years. They also note that Trump has previously announced similar measures that never took effect.
Even so, repeated tariff threats appear to be influencing how companies think about manufacturing and investment.
Sun Pharmaceutical Industries recently announced its $11.8 billion acquisition of US-listed Organon & Co, the largest overseas acquisition by an Indian drugmaker. Official data suggest that Indian investment into the US has been rising. Outbound investment reached $4.08 billion in FY26, compared with $3.44 billion in FY25 and $2.44 billion in FY24.
Several Indian drugmakers already manufacture in the US. Sun Pharma, Zydus Lifesciences, Lupin, Aurobindo Pharma, Cipla and Dr Reddy’s Laboratories all operate US Food and Drug Administration-approved facilities. Cipla is expanding production at plants in Massachusetts and New York, while Dr Reddy’s has said it is prepared to increase manufacturing in the US if doing so makes commercial sense.
Yet moving large-scale generic drug production to the US is unlikely to be straightforward.
Unlike patented medicines, generic drugs operate on thin margins. Their economics depend on producing large volumes efficiently while drawing on global supply chains for active pharmaceutical ingredients, many of which come from India and China.
Recreating that supply chain entirely within the US would require significant investment and time, and it would almost certainly raise medicine prices.
For now, Trump’s proposal leaves existing tariff arrangements unchanged, giving companies time before any new duties could come into force.
Whether those tariffs are eventually implemented remains uncertain. What is already visible, however, is that prolonged uncertainty around US trade policy is encouraging pharmaceutical companies to think more carefully about where they manufacture, where they invest and how they secure access to one of their most important markets.
Drawing the Line
Now, let’s come to a topic of direct interest to readers of this newsletter—long-term capital gains (LTCG) tax on equities.
Will the government abolish or reduce the LTCG tax? It has been one of the more persistent questions in the market in recent months. This week, investors received their clearest answer yet.
Replying to a question in Parliament, the finance ministry said there is currently no proposal to abolish the tax for retail or domestic investors.
The statement does not change the existing tax regime, and LTCG on listed equities and equity mutual funds continues to attract a tax of 12.5% on gains above Rs 1.25 lakh per financial year. But it does provide clarity on an issue that has been the subject of growing speculation among investors and market participants.
Part of that speculation emerged after the government recently exempted foreign portfolio investors (FPIs) from paying tax on interest income and capital gains from investments in government securities. Some investors argued that a similar approach could eventually be extended to equities. Overseas investors have also maintained that India’s combination of securities transaction tax and LTCG tax makes the equity market less competitive than some other jurisdictions.
The government, however, drew a clear distinction between the two.
Responding in Parliament, the government said the exemption for investments by FPIs in government securities was introduced to encourage durable, long-term foreign investment in the debt market. It said the measure would also align the tax treatment of government securities with that of several comparable jurisdictions.
No similar proposal is currently under consideration for equities.
The debate nevertheless remains significant because of the scale of revenue involved. According to figures shared in Parliament, long-term capital gains tax on equities and equity mutual funds generated Rs 1.29 trillion in 2024-25, making it an important source of tax revenue. If the government were to abolish the LTCG tax, it would have to raise some other tax to meet the overall shortfall in its revenue.
That does not mean the current framework is fixed indefinitely. The finance ministry noted that tax policies are reviewed periodically through the annual budget process. That leaves open the possibility of future changes.
For investors, the immediate takeaway is straightforward. The debate over LTCG tax is unlikely to disappear, and market participants may continue to press for changes. But for now, the government’s position is unchanged.
Market wrap
India’s stock market benchmarks posted losses all five days of this week, as the escalating Middle East conflict pushed Brent crude prices to $100 a barrel again from $70 in early July.
The Nifty 50 fell 2.33% this week while the 30-stock Sensex lost 2.7%. As many as 13 of the 16 major sectoral indexes fell this week. Small-caps lost 2.2% and mid-caps slipped 1.3%.
HDFC Bank, the biggest weight on the two indexes, slumped 9.4% on concerns over margins. This was its sharpest weekly decline in two-and-a-half years. Axis Bank lost 7.6% after reporting weaker net interest margins for the April-June quarter. SBI, Kotak Mahindra Bank, ICICI Bank, Bajaj Finance and Shriram Finance also ended lower.
Infosys recorded the third-steepest fall among the Nifty stocks, ending 5.2% down after it cut revenue growth forecast for FY27. InterGlobe Aviation, the parent company of IndiGo, crashed 5% after reports that the Adani Group was looking into the possibility of starting an airline. Drugmaker Dr Reddy’s Labs slipped 4.9% after many brokerages cut their earnings forecasts following weaker-than-expected Q1 results and disruptions in semaglutide supplies.
Adani Enterprises, Adani Ports, Reliance Industries and Jio Financial were among the other prominent losers and fell 3-4% each.
Bucking the trend, Bajaj Auto was the top Nifty performer and jumped 6.6% thanks to upbeat results. HCL Technologies gained 5.6%, helped by its plans for the data centre business.
Trent, Power Grid Corp, NTPC, SBI Life, Nestle, and Titan were among the other stocks that rose this week.
Other Headlines
- Infosys names Ashiss Kumar Dash next CEO, trims FY27 revenue growth forecast to 1.5-3.0% from 1.5-3.5%
- Manipal Health sets IPO price band at Rs 560-590 for Rs 9,275 crore IPO
- ICICI Bank Q1 profit rises 15.9% to Rs 14,800 crore, beats estimates
- HDFC Bank profit rises 5% to Rs 19,060 crore, meets forecasts
- Axis Bank profit rises 23% to Rs 7,114 crore, exceeds estimates
- Kotak Mahindra Bank profit jumps 26% to Rs 4,123 crore, tops estimates
- IndusInd Bank profit jumps 47% to Rs 1,003 crore; YES Bank profit climbs 34% to Rs 107 crore
- State-run HPCL posts net loss of Rs 11,526 crore vs a profit of Rs 4,371 crore a year ago
- State-run BPCL posts net loss of Rs 3,962 crore vs profit of Rs 6,124 crore a year ago
- TVS Motor Q1 profit jumps 51.4% to Rs 1,174 crore, revenue climbs 38%
- IndiGo Q1 standalone net loss at Rs 382 crore vs year-ago profit of Rs 2,161 crore
- Cipla consolidated net profit falls 39.2% to Rs 789 crore, misses analysts’ estimate
- PVR Inox consolidated net profit at Rs 56.5 crore vs net loss of Rs 54.5 crore year earlier
- Diageo-owned United Spirits Q1 profit rises to Rs 391 crore from Rs 258 crore a year ago
- Zomato, Blinkit parent Eternal’s consolidated net profit Rs 92 crore vs Rs 25 crore a year ago
- Nestle India Q1 profit surges 48% to Rs 975 crore
- SEBI proposes to allow portfolio management schemes to invest in overseas equities, debt
- RBI proposes wider test to determine foreign control of Indian companies
- Maruti Suzuki hikes prices for second time in two months
- Coforge secures over $230 million AI transformation contract with European client
That’s all for this week. Until next week, happy investing!
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