On Episode 872 of The Core Report, financial journalist Govindraj Ethiraj talks to Arvind Chari, Chief Investment Strategist at Quantum Advisors as well as Ramesh Subramaniam, Global Director - Programmes and Strategy at the Coalition for Disaster Resilient Infrastructure (CDRI).

SHOW NOTES

(00:00) Stories of the Day

(01:00) Markets recover as sellers take a break

(02:37) Rupee hits fresh all time low

(03:44) India weathering global financial pressures better than headline data suggest, says S&P Global Ratings

(07:12) Govt launches Coal gasification projects which could help reduce energy imports

(09:50) Why are FPIs selling and the surprising data point on their investments

(20:13) Funding for resilient infrastructure is coming but the needs are higher

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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.

Good morning, it's Thursday, the 14th of May and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes.

The markets recover as sellers take a break.

India weathering global financial pressures better than headline data suggests with worries over foreign outflows overstated says S&P global ratings.

Rupee hits a fresh all-time low.

The government launches coal gasification projects which could help reduce energy imports.

Why are foreign portfolio investors selling and the surprising data point on their investments in recent years?

And funding for resilient infrastructure is coming but the needs are higher.

Markets, The Rupee, Gold and Silver and S&P Ratings Upgrade

The question is not if but rather when the government will hike fuel prices and would it do so in small doses or one large one? Well, the need presently is for one large one. Meanwhile, the government including key federal ministers have said they're cutting the size of their motorcades and embarking on other expenditure cuts in an effort to demonstrate that they're leading the austerity drive rather than leaning on citizens to do all the heavy lifting. Perhaps the sequence could have been exactly that.

First announced they were cutting back, demonstrate and then request citizens to pitch in or raise for higher prices which will mostly come in any case. Other countries in Asia have already embarked on similar measures except that they started two months ago after the war in West Asia broke out. India is only catching up now.

The imposition of duties on gold and silver and the likelihood of other price signals provided some comfort to the markets or at least contributed to it on Wednesday. Stock prices rose after four sessions of steep falls thanks to gains in gold and silver ETFs after a hike in those import tariffs. The nifty 50 and sensex were swinging away and the nifty finally ended up 33 points up at 23,412 and the sensex was up 49 points at 74,608.

The nifty mid cap and the nifty small cap indices were also up 0.7 and 0.3 percent higher. Looking back the nifty and sensex had lost about four percent each over the past four sessions as the U.S. Iran talks did not materialise and they resulted in crude prices going even further up according to a Reuters report. Brent crude is up 48 percent since the war started end of February and has hovered about 107 dollars a barrel.

The rupee hit an all-time low on Wednesday extending its losing streak as overseas debt repayments and importer hedging demand outweighed limited support from the fiscal move to raise taxes on gold and silver shipments according to Reuters. The rupee finally closed down at 95 rupees 70 paise per dollar after hitting 95 rupees 79 paise during the day. Now it has fallen more than five percent since the war started making it Asia's worst performing currency this year according to Reuters.

Gold and silver futures in the morning that's on Wednesday morning jumped more than seven percent after the government raised import tariffs. Domestic gold futures were at about 164 rupees 497 per 10 grammes while silver futures were at about 301 429 rupees per kilogramme. In lakhs of that's about 1.64 lakhs for gold and about three lakhs for silver.

Import tariffs on gold and silver were raised from six percent to fifteen percent and that was done on late Tuesday night Wednesday morning. Meanwhile India is weathering global financial pressures better than headline data suggests with worries over foreign outflows overstated according to a Bloomberg report quoting S&P global ratings. India has sufficient buffer to absorb a higher current account deficit arising out of the surge in oil prices according to Yifan Phua director sovereign and international public finance ratings for Asia who spoke to Bloomberg.

S&P upgraded India's credit rating to Triple B from Triple B minus in August with a stable outlook. Phua said that concerns over net outflows of foreign business investments are a bit overplayed as they mostly reflect repatriation of profits while gross inflows remain strong. The important story is that fundamentally the sound with plenty of investment opportunities.

India received net foreign direct investments of about 4.6 billion dollars in February after six months of outflows according to data quoted by Bloomberg.

The West Asia War and Global Oil Supply

Global oil supply will not meet total demand this year as the war puts a halt to production in the Middle East according to the international energy agency in its monthly oil market report on Wednesday quoted by Reuters. The US and Israel's war with Iran the subsequent damage to Iran and its gulf neighbours oil infrastructure and the effective closure of the state of Hormuz have caused the largest oil supply crisis in history says the IEA.

Cumulative supply losses from Middle East gulf producers already exceed 1 billion barrels with more than 14 million barrels per day of oil now shut in leading to an unprecedented supply shock. The IEA said that their latest supply and demand estimates imply that the market will remain severely undersupplied through the end of the third quarter of 26 even assuming the conflict ends by early June. Oil prices as we know shot up after US and Israel attacked Iran on the 20th of February from an average of 60s to now steadily over 100s.

Most people are hoping that the war will end soon but that hope too is running out of patience. Moreover our conversation with oil analysts and including that snippet from the IEA which we just covered suggests that prices are unlikely to drop much even if the war were to conclusively end or at least not drop much immediately and thus it would take time. Remember there is always the other option a grinding status quo and a state of suspended animation shades of which we're seeing already.

The other point as we established yesterday was that the actual price of a barrel is much higher than the paper price that we see and talk about every day. So think about 140 dollars per barrel including for countries like India as opposed to 105 if that is what it is quoting at right now. A note from Bank of Baroda research gives another interesting insight into what history tells us on crude oil price swings.

First the note says that historical data suggests that in 18 out of 54 episodes oil prices have risen by more than 20 percent. Between 27 February 26 and 6th of May it was up about 40 percent. More importantly the research report says that the oil price shock historically has lasted for six to seven months on average if that helps.

So we are about two and a half months down at this point. The note also says oil price shocks are concentrated in particular years and not broad based and in their analysis the years 2007 to 16 were a crucial one in terms of volatility. Interestingly one of the models showed that there was no long-term or long-run relationship between change in oil prices and GDP, consumer price inflation and wholesale price inflation.

What is Coal Gasification and what are its outputs?

Sticking to oil and energy India's cabinet has approved a 37,500 crore rupee scheme to boost coal gasification projects reducing reliance on imported fuels and channelling domestic coal into cleaner industrial uses according to reports. The decision could encourage the conversion of coal into synthetic gas that can be used to produce power fertilisers petrochemicals among other industrial applications. Many countries including the United States and China are also exploring coal gasification technologies as part of efforts to cut emissions while continuing to rely on coal for energy security according to a Reuters report.

India has one of the world's largest coal reserves of 401 billion tonnes and 47 billion tonnes of lignite will aim to gasify about 75 million tonnes of coal annually according to the government. Meanwhile in a note shared with us Atanu Mukherjee, CEO of Dastur Energy told the core report that coal gasification can become an important pillar of this resilience architecture because it allows India to convert its domestic coal and lignite resources into syngas that's s-y-n-gas and downstream products like methanol ammonia d-m-e-s-n-g hydrogen and fertiliser intermediates. According to him these are precisely the molecules that are critical for industry agriculture transport fuels and energy security and if implemented at scale and linked to downstream industrial ecosystems coal gasification can help India reduce external vulnerability support current account stability improve industrial competitiveness and build domestic molecule security pathways.

But he also said the right gasification technology must be matched to the right coal. Indian coal is high ash and has very different characteristics from coal used in many global gasification systems, and thus the programme should not be judged only by the number of tonnes of coal gasified, but by the value created — that's import substituted strategic feedstocks, industrial clusters developed, carbon captured or managed, and the ability of projects to stand on their own economics over time.

Elsewhere, in impact of high oil prices, Air India is temporarily suspending flights on some sectors and reducing frequencies elsewhere. For instance, it's suspending flights on the Delhi-Chicago and Mumbai-New York routes. In Europe, it's reducing frequency of services from Delhi to Paris, Milan, and Rome. In Asia, services between Delhi and Shanghai have been suspended. The airline says it will continue to operate over 1200 international flights every month and would work to restore full operations when circumstances allow it. It also added that further adjustments — that's the term it used in its official release — to its network were possible if disruptions persist.

Why have FPI outflows Increased?

Foreign portfolio investors have been steadily selling shares, pushing total outflows in less than five months to last year's record levels. In calendar 26, investors — that's investors — have sold about 24 billion dollars of shares, just about 1.3 billion dollars short of the record 25.5 billion dollars of secondary market outflows in all of 2025. And back to 2026, of the 24 billion, roughly about 19.6 billion, or close to 20 billion dollars, came between March and 11th May alone.

So, the 64 million dollar question is: what's keeping the selling pressure so high, and what is the view from outside? I caught up with Arvind Chari, chief investment strategist for Quantum Advisors and Q India UK, and I began by asking him how he was reading the government's call for austerity measures and how that could affect market sentiment, or if it could affect market sentiment.

INTERVIEW TRANSCRIPT

Arvind Chari: You should read it as a function of imports. So if you look at postpone the purchase of gold, reduce your fuel consumption, reduce edible oil in cooking, farmers to use organic farming or natural farming. These are all gold fertilisers, crude oil.

These are all aspects where we have very large import dependence. So it's coming from that perspective that we'll have to reduce our import dependence. And that comes from, I think, the worry that the government is seeing in the trajectory of the Indian rupee.

You've seen the Indian rupee depreciate quite a lot over the last 18 months. So this call to reduce imports or reduce import dependence at a time when, you know, there is a conflict in West Asia and supply lines are stretched and tied. But the call should be seen from the perspective of can we have a lesser pressure on the rupee.

And the way to see that is to have a context of what happened in the previous times. And now, today, we are in a situation where it's not that import is very high. It's not that the demand in India is very high.

And it's not that we are importing a lot. We are continuing to import the same amount of gold, but gold prices have gone up. So, you know, you're importing the dollar value is higher.

So the same in oil prices, oil prices have gone up. But we are entering this period at a time when capital flows have been very weak. In fact, net capital flow, as I've spoken to you before, is actually now negative for continuous quarters.

If in a situation where global prices remain high, your import bill is going to be larger. And if you're unable to attract capital flows, you will continue to have a pressure on the currency. This is unlike what we saw during 2011 and 2013-14.

That's when, you know, India was bracketed as Fragile 5 by Morgan Stanley. During that period, we were entering that phase with reasonably high growth rates in the previous decade and continued, a large fiscal stimulus, and a lot of wealth effect in India, land prices, gold prices have gone up. So our import demand itself was very, very high, inflation was running high.

And that problem of the current account deficit then in 2012, was basically a demand driven import, high import situation. And then although we were getting enough capital flows, but the capital flows are not enough to, you know, cover the current account deficit. And current account deficit actually peaked at about more than 6% of GDP.

And hence, you had effectively a run on the currency and then the RBI had to come about and, you know, put a defence of by hiking interest rates. And of course, they also did the FCNR bond issuance, which kind of steadied the currency. Two other things happened.

Raghuram Rajan became the central bank governor and his maiden speech gave a lot of confidence to investors. And then Narendra Modi was appointed as BJP's candidate in September 2013. And that again had a positive impact.

And you could see things were shifting up. Of course, the government also started hiking fuel prices, they are reduced. They also had a similar gold import duty increase and, you know, the urge to people to stop buying gold.

But that's a difference. Last time was a demand driven current account deficit problem. This time, the current account deficit has still not gone up, like you will see that in the next two quarters.

But we already have an issue of capital flows being so low, so much so that the Indian rupee has been the most underperforming in terms of select emerging market and developed market currencies since 2025, at a time when the dollar itself has been weak, right? The dollar has been depreciating since 2025, but the Indian rupee depreciated against the dollar and hence it had very large depreciation against the pound and Chinese Yuan and, you know, Euro. And that's why you could see that the sentiment is getting so.

My sense is the prime minister's urge to reduce all these aspects are essentially import driven thing because I don't think the government is confident that they might be able to attract a lot of capital flows. I can talk about what they should do to be able to attract capital flow.

Govindraj Ethiraj: Yeah. So therefore, I mean, what's the current mood sitting in London where you are and from a foreign institutional investor lens, given all of this? I mean, not that it changes on a daily basis, but what's your current reading?

Arvind Chari: As we see from the data itself, the data is there to show you what the foreign investor sentiment seems to be. And we've not had 50 billion dollars of outflows over the last 18, 24 months. If I also put a chart in my note last time, if you look at from 2018, that's when capital gains tax was first introduced by India in the equity markets.

Foreign portfolio flows are on a cumulative basis, they're actually zero. So it's like eight years of data with almost no net inflows from foreign investors in India. Of course, there are multiple reasons people have given, especially in the recent times.

If you see the market peaked in about September 2024, and it's been flat since then. So of course, that is an AI story that India is not AI. So if you want to play AI, there's nothing to play in India.

So you would rather play China, Korea, Taiwan. And that is true to a large extent. But I would still believe that the issue has been to one is growth.

So 80% of flows that come into India from foreign investors are through global emerging market mandates or global mandates and 20% is India dedicated. Even both emerging market India dedicated, most people tend to invest in India from a growth lens, they want to buy India's growth. There are very few managers like us, where we want to buy that growth, but we are conscious of the valuation that we want to pay and the margin of safety.

But most other investors will just play the secular growth phase in India. And as you know, that has not worked. If you look at nominal GDP growth and nominal earnings growth, that has all reduced.

So a large problem of why you see foreign investors exiting is that that growth premium that India had on earnings, on book value, on enterprise value, as against emerging markets has actually reduced quite a bit. There's a reason why India always trades at a premium, still trades at a premium, because of this secular, almost predictable growth of nominal GDP, double digit earnings growth. And that has kind of reduced the nominal GDP growth is now turning below 10%.

So that was one big reason for when they're evaluating opportunities from an emerging market lens, the Indian growth premium has actually reduced quite dramatically. But at the same time, the valuations did not. The domestic bid that we are continuing to see had ensured that the Indian valuations remained expensive.

So you could start seeing that in September, October 2024, where you saw the first signs of fairly large outflows from India, and then capital get got reallocated to other countries. And you've seen over two years of markets being flat. Like if you look at the benchmark indices, markets are flat or down over this 18 month period.

And only now have you seen valuations like if I look at the BSE 30 cents XP, or if I look at the MSCI price earnings issue, it has come down to long term averages. So it's taken two years of a flat market, and the earnings kind of slowly catching up for the markets to come back to come down to average valuations. But you're still continue to see outflows.

Here you can now add other things. So growth is low, you know, the AI story, and then just the worry on the currencies has been a fairly big drag on returns. And this is where you start talking about, you know, when the returns are good and returns are attractive, and you're making money and you're not losing money on the depreciation of the currency, you don't care about capital gains tax, you can absorb that and still make a rate of return which is higher than other countries.

When those stop happening, you're already considering saying that I've lost 5-7% on currency, then I'm going to lose another 2% on capital gains tax. Am I making enough returns? Is the growth high enough for me to be able to attract allocation?

Having said that, I think, you know, valuations are at cyclical lows. India's underperformance to emerging markets is a record 25 year record in terms of you know, rolling one year underperformance. All that remains.

So you should expect that if macro conditions kind of stabilise, if the government indeed focusses on the fact that they should think about capital gains tax not from a perspective of tax revenues from the perspective of do you need 5% of GDP every year in capital flows from FDI from portfolio from bond investors. And if you need that, you need to be able to make it attractive enough or make it less attractive enough for them to, you know, remove that distraction for them to consider India on a pure risk return basis. So when you think from that perspective, most countries do not tax foreign investors when they invest abroad, right?

So when foreign investors are investing in our country, we should not be taxed because they're essentially getting double taxed, most of them. Plus the problem that the capital gains tax is based on rupee returns, and their returns are in dollars, and they don't get the benefit of the depreciation of the currency when they pay the capital gains tax. So you know, these things have to be considered from that perspective.

But overall, I think it's still a India remains a growth plane in people's eyes. And if in the time that growth premium or the growth trajectory picks up, I think we will keep struggling to attract very large capital flows, which will keep you know, the currency under pressure.

Govindraj Ethiraj: Right. So in the immediate future, are you seeing any bright spots in the markets?

Arvind Chari: I mean, in terms of sectors or themes, from a valuation perspective, quite a few sectors are seeing, you know, reduction like you can see across the consumer space, across the banking and financial space, IT services as well, if you believe that Indian IT services will actually deploy enterprise AI as they have done, you know, enterprise solutions for global IT services place. I think there are some pockets where we still see very over expensive remains in the industrials and in that space where maybe the growth momentum is slightly higher, but the valuations have picked up quite a bit.

Govindraj Ethiraj: Right. Arvind, thank you so much for joining me.

Arvind Chari: Thanks for having me.

How can Businesses Protect Against Extreme Weather Events?

Extreme weather events could result in economic losses amounting to 19 percent of global GDP by 2050. Currently, low and middle income countries, or LMICs, alone experience annual losses of about 127 billion dollars. Meanwhile, adaptation and resilience financing touched only 65 billion dollars in 23, far short of the projected 248 billion dollars needed annually by 2050, according to a new report put out by the Coalition of Disaster Resilient Infrastructure, or CDRI, and the Boston Consulting Group, titled How Investors Can Bridge the Funding Gap for Resilient Infrastructure.

Now, the CDRI has 65 member countries, headquartered in India, and is working over 180 projects worldwide to enhance climate and disaster resilience for infrastructure through technical expertise, innovation, financial arrangements, and risk governance. Incidentally, 80 percent of disaster risk is concentrated in the critical power, transport, and telecom sectors.

The report also says that most funds focus on new asset builds, while there is over 550 trillion dollars worth of existing installed assets currently at risk. It also highlights that only 44 percent of extreme weather losses were insured in 2024, with premiums skyrocketing in places like Florida.

I spoke with Ramesh Subramanian, global director, programmes and strategy, who oversees CDRI strategic planning and guides its global programmes, and also spent 28 years at the Asian Development Bank across the Asia-Pacific just before this. And I began by asking him what were the key challenges to funding resilient infrastructure, as the report laid out.

INTERVIEW TRANSCRIPT

Ramesh Subramaniam: Before I go to respond to your question, I wanted to put in a small but a very important plug for this whole work on mainstreaming resilience. Our premise at CDRI in the study as well as in the work that we've done over the last six years is that resilience cannot be an afterthought. It needs to be fully integrated at every step of the project cycle.

Using that as a segue to respond to your question, that is still an evolving, you can call it, area or imperative in any country, not just in India. Globally, as you know, resilience financing is a trickle. It's only 4-5% of the total climate financing that is happening.

So if you look at India, unfortunately, it's not different. But at the same time, we do, our data does show that investments in resilience are going up, but they're going up at a very small, slow pace. If you look at the power sector, for example, after the work that CDRI had done in Odisha, there is a lot more awareness of the need to bring in resilience from not just project design, actually, from project identification.

When you look at the pipeline, the idea of doing risk assessments from the beginning and using the outcomes to look at specific projects based on the asset profiles that we see for each project, each asset. So I would say it's definitely not glass half full, but it is challenging, you know, which is what the whole study is about. Coming up with a very clear, quantitative basis to show that you invest a dollar in resilience, you have a payoff of at least $7 at the lowest end.

You can go as high as 12 in what we are seeing.

Govindraj Ethiraj: Right. And one of the imbalances that you've pointed out is that amongst the funds that you've analysed, only 15% cover the recover phase of infrastructure assets life cycle. And it sort of relates to the first question again.

So why are investors hesitant to finance post-shock recovery and what can be done?

Ramesh Subramaniam: Well, you know, in fact, post-shock recovery from a public sector point of view, it's actually happening. In fact, it's happening a lot more than the pre-shock anticipation that you need to do, you know, risk-informed decisions. Now, private sector, typically what we see is even in privately financed assets, unless you can call it broadly neighbourhood infrastructure, unless public investments take place, private investments don't come in.

Other studies that CDRA has done shows very clearly that the time to recover, time to rehabilitate infrastructure, the longer it is, the losses, unfortunately, multiply and increase. Globally, if you look at Japan as one country that has done well. In India, there are experiences, I would say, which clearly show that the shorter the time for recovery, the lower the losses.

So it's a question of private sector investments catching up with public sector investments. How fast can the public sector investments take place is a challenge. And this is something not just unique to India or Govind, that's true globally.

And in fact, data points show that, you know, some of the major disasters, the average time to reconstruction for up to 60-70% mark takes about six years. We do, in the planning process, we do make heroic assumptions that you can do it in two or three years, but often it takes like six, seven years. So private investments do take time to catch up.

It's the same issue that we face with project finances, you know, much better than I do, that if you have the enabling environment, then private sector will come. So the question is, how can we create that enabling environment for post-disaster or post-shock spending? The faster you do, the prospects for getting private investments would also be higher, Govind.

Govindraj Ethiraj: Right. So let me ask an extended question in a slightly different way. So retrofitting existing assets is obviously a huge need and opportunity.

Now, in many cases, obviously it's not happening, but tell us about why it's or where it's actually worked and where private capital has come in to, you know, support risk mitigation for existing infrastructure and what was the sort of success factor there or what made it succeed?

Ramesh Subramaniam: An interesting fact or point or lesson learned is that if you look at the global level, now this is true in India as well, the various climate or resilience ratings or assessments, they're actually a lot more brownfield asset focused. The generally held notion is that these assessments look at more greenfield investments. When we zoom into India, again, power sector is a case in point across the country, particularly with the renewable energy expansion, we find that at the state level or at the district level or the grid level, there is certainly focus on shoring up the existing assets.

Now there is a life cycle issue here. If I remember based on work CDRI has done is also, as well as other institutions like ADB, where I used to be, the inflexion point is about sort of 15 to 20 years because the PPAs typically they go for about 30 years or so. The inflexion point is about 15 years or so.

Again, is it happening in the quantum that we need? It is not. Is it happening across all critical infrastructure assets?

It is not. Transport is much harder. You know, toll roads to some extent happens, but it's just because of technical difficulties, it's happening at a far slower pace than it should be.

Telecoms, it's actually beginning to happen at a bit more rapid pace because of the private investments that are already there. So that brownfield point of inflexion is something that we need to be looking at.

Govindraj Ethiraj: But what you're saying is that in areas like power, within power, renewable power and telecom, we are definitely seeing more progress than other areas. Correct. That's true.

Okay. The other aspect is insurance. And one of the data points that your report quotes is that only 44% of extreme weather losses were insured two years ago, and that may not have changed.

What can be done from a financing standpoint and of course, an awareness standpoint?

Ramesh Subramaniam: You know, this goes back to the very first point I made that resilience cannot be an afterthought. It needs to be from the pre-project identification. So when you start putting together your three to five-year pipeline, now insurance industry obviously would want to be involved in a way at every step of the project.

If not directly involved, they would want to know. Transparency in information sharing on design standards and specifications is very, very important. Procurement, how it is done, whose services are procured, who are the EPC or whatever other contractual modalities may be, that information is very critical.

Default liability provisions, insurance industry would want to know. There is still a 44% is actually is lower than what you may see in other contexts. It has been increasing slowly.

So, and then there is huge disparity across sectors, across the types of assets, depending on the size of the investments. But having said that, I think the fundamental point that kind of holds back insurance is the failure to bring in resilience from the beginning, because insurance industry would not want to come in if it is an afterthought, because obviously, you know, they are taking risks. So learning from other contexts, for example, in Southeast Asia, there is a renewed focus, or actually I would say new, stronger focus on sovereign assets, particularly at the municipal level, given the challenges that many countries face, can all municipal assets be brought into having insurance covered, including brownfield assets, what kind of retrofitting needs to be done.

So clearly, there has to be a much stronger interface with the insurance industry. The project sponsors and financiers need to interface much more with the insurance industry, share data, share information, overall improve governance and transparency. Right.

Govindraj Ethiraj: So blended finances, I mean, proposed in this report, as well as a key solution to some of these challenges. Tell us about where we are on that lifecycle, whether it's India or elsewhere. And blended finance, I'm assuming, is really a mix of commercial as well as concessional finance.

So where are we on that journey?

Ramesh Subramaniam: Particularly when it comes to resilience investments going, we are in very early stages. So where we have seen probably the best progress is in coastal protection. What is interesting there is that if you are able to find points of convergence between mitigation investments, which are more easily monetised, if you have carbon capture and storage, for example, philanthropic investors who are bringing in concessional financing are willing to come in because they're able to monetise it and get some credits elsewhere in their other investments.

Moving from their flood risk mitigation measures, getting more traction, again, with philanthropic or multilateral institutions that are putting in money, grant funding is always limited in this space. But if you are able to, again, find clearly monetizable ways of capturing the benefits, mitigation, you get more resilience is slower because of this challenge, which actually CDRI is working on this whole concept of avoided losses. How do you show clearly that the probabilistic assessments need to become much more deterministic, Govind?

You know, the resilience dividend concept needs to be understood much more broadly and much better. So these two sectors come in where there is scope potential. I think, you know, smaller rural grids will have potential.

The larger commercial investments on power transmission, for example, obviously, concessional funding will not come in for blended finance. But if it is for improving rural energy access, for example, there we see a lot of prospects. Again, transport solutions, if they're looking at, say, farm to market connectivity, how to make that resilient, would be another example where blended finance holds a lot of potential.

Because they would all be, whether you look at, for example, the International Finance Corporation principles or the OECD principles of blended finance, the premise is similar, that you need to bring minimum amount of concessionality to get the maximum leverage in terms of private investments. And these are the sectors that you can look at for progress in India or elsewhere in the neighbourhood of India, Govind.

Govindraj Ethiraj: Ramesh, thank you so much for joining me.

Ramesh Subramaniam: Thank you.