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By Dr. Gyan Pathak On the very onset of the Financial Year 2026-27, beginning from April 1, 2026, India faces a multi-layered set of risks, given its position as a major energy importer with strong trade, investment, and remittance linkages with the West Asia region, which has turned into a war zone since the United […]

The article India Faces Multi-Layered Set Of Risks At The Onset Of FY2026-27 appeared first on Latest India news, analysis and reports on Newspack by India Press Agency).

South Korea is weighing whether to extend car-use restrictions beyond the public sector as oil prices climb sharply, a step that would amount to the country’s first nationwide driving curbs since the 1991 Gulf War if it is applied broadly to the public. Finance Minister Koo Yun-cheol said wider restrictions could come into play if crude prices rise into a $120-$130 a barrel range, up from about $100-$110 now, as Seoul tries to contain fuel demand and cushion the economic shock from turmoil in the Middle East.

The discussion marks an escalation from measures already in force. Public institutions are operating under a five-day vehicle rotation system, while large companies including Samsung Electronics and SK Group have begun urging staff to cut private car use, reduce parking demand and adopt other energy-saving practices. Officials have also left open the possibility of further fuel-tax relief to soften the burden on households and businesses, though no final decision has been announced on compulsory curbs for private motorists.

At the centre of Seoul’s concern is its exposure to imported energy. About 70% of South Korea’s oil imports come from the Middle East, leaving the country highly sensitive to any disruption in supplies or shipping routes. The government raised its crude oil supply disruption alert to Level 2 on March 18 as tensions mounted, signalling a more serious official assessment of the risks facing one of Asia’s largest energy importers.

The external shock has been severe. Reuters reported that Brent crude climbed to nearly $115 a barrel over the weekend and above $116 on Monday, putting it on course for its biggest monthly jump on record, while US crude also surged past $100. The rally has been driven by a widening conflict linked to Iran and growing anxiety over disruptions around the Strait of Hormuz, a vital artery for global oil flows. That backdrop has sharpened pressure on Asian economies that rely heavily on imported fuel, with South Korea among the most exposed.

For policymakers in Seoul, the issue is no longer only about fuel bills. Higher oil prices threaten to spill into inflation, transport costs, industrial input prices and consumer sentiment. A Reuters poll published on Monday projected that South Korea’s imports rose 18% in March, the fastest pace since September 2022, largely because of elevated oil prices, even as exports remained buoyant on strong semiconductor demand. That split picture captures the dilemma facing the government: trade performance is being helped by chips and artificial intelligence-linked demand, but the economy’s dependence on imported energy is pushing up costs and widening vulnerability.

President Lee Jae Myung has responded by urging a nationwide energy-saving drive, while Energy Minister Kim Sung-whan has pushed demand management and warned against panic behaviour. The government has promoted 12 power-saving practices, from shorter showers to shifting electricity use away from peak hours, and has also moved to restart several nuclear reactors, loosen coal plant restrictions and expand renewable energy to offset pressure on gas imports. The mix underlines how Seoul is trying to balance short-term crisis management with longer-term energy security, even as those goals can pull in different directions.

That tension is visible in the broader regional response. Across Asia, governments are looking again at emergency stock releases, fuel-saving directives and, in some cases, greater coal use to bridge supply gaps. Analysts say such measures may shield economies from the immediate shock, but they also expose how quickly climate and transition goals can be tested when energy security comes under strain. In South Korea’s case, the administration’s public emphasis on renewables sits alongside plans to lean harder on nuclear and coal generation if needed.

The market fallout has already been visible in financial assets. South Korean equities were hit as investors fled Asian markets on fears of a prolonged oil shock, though some analysts argue the sell-off has reflected panic rather than a collapse in fundamentals. Technology and industrial names remain central to the country’s earnings outlook, but energy-intensive sectors face a tougher operating environment if high crude prices persist or if physical shortages emerge.

The survey found that 53 per cent of Taiwanese small businesses grew in 2025, slightly below the 57 per cent recorded in the previous survey. Looking ahead, business sentiment strengthened notably. In 2026, 63 per cent of respondents expect their business to grow, while confidence in the local economy also improved, with 61 per cent anticipating economic growth, the highest level recorded since Taiwan was first included in the survey in 2018.

Taiwan’s small and medium‑sized enterprises (SMEs) continue to play a vital role in creating new jobs. In 2025, 31 per cent of SMEs increasing staff numbers, while 44 per cent plan to hire additional employees in 2026.

With rising costs identified as the biggest challenge facing Taiwan’s SME in 2025, many businesses identified cost control as the most positive contributor to business performance last year.

Mr Elic Lam FCPA (Aust.), Honorary Taiwan Advisor at CPA Australia, said Taiwan’s economic fundamentals continue to support small business resilience, “Rising global demand for semiconductors and AI related chips continues to create opportunities for exporters and suppliers across Taiwan’s value chain,” Mr Lam said. “While geopolitical tensions and intensifying competition are adding uncertainty, government support measures for SMEs, including targeted subsidies and tax incentives, together with Taiwan’s resilient domestic demand, are helping to lift business confidence.”

Technology adoption, particularly artificial intelligence (AI), is becoming increasingly widespread among Taiwanese small businesses. The survey found that 33 per cent of small businesses identified AI as the technology they invested in most heavily invested in 2025, up from 29 per cent in the previous year.

Cyber risk among Taiwanese small businesses fell markedly. The share of small businesses reporting losses of time or money due to cyber incidents declined sharply from 59 per cent in 2024 to 27 per cent in 2025, reflecting stronger awareness and the uptake of basic protective measures across the sector.

However, the survey also indicates there is room to strengthen the returns from digital investment. Only 40 per cent of respondents reported that their technology investment in 2025 improved profitability, compared with the survey average of 56 per cent.

Mr Lam noted that Taiwan’s SME sector is undergoing a generational transition that is influencing technology adoption patterns, “Many SMEs in Taiwan are moving from first generation ownership to second or third generation leadership, and technology adoption remains cautious and practical,” he said. “The increase in AI investment reflects both external drivers, such as changing customer expectations and government policy support for digital transformation, as well as internal factors, including younger owners’ familiarity with AI tools and rising operating and staffing costs.”

“To improve profitability, SMEs should focus on applying digital solutions in areas with the greatest impact. For example, as rising costs were identified as the most negative factor affecting performance in 2025, investing in ready-to-use and AI enabled accounting or financial management tools can help reduce operating expenses and lift productivity.”

Access to finance is another notable finding. Financing conditions in Taiwan improved significantly in 2025, even as borrowing softened. Two-thirds of businesses (66 per cent) I said it was easy to access external finance, placing Taiwan among the top three surveyed markets and representing a sharp increase from 28 per cent in 2024. Looking ahead, financing conditions are expected to remain supportive, with 63 per cent anticipating easy access to finance in 2026.

Despite the marked improvement in financing conditions, demand for finance was more subdued. In 2025, 54 per cent of SMEs sought external finance, down from 72 per cent in 2024.

“The Taiwan government has expanded inclusive and guaranteed financing mechanisms to support SMEs, including higher guarantee ratios under the SME Credit Guarantee Fund and preferential loans offered through state affiliated banks,” Mr Lam said. “These measures have made bank financing more accessible for small businesses.”

“Even so, many SMEs remain cautious about taking on new debt. In a stable domestic environment, businesses can maintain steady growth, but external uncertainties drive them to take a prudent approach to borrowing. This aligns well with the government’s policy focus on gradual and resilient SME transformation rather than rapid, high risk expansion.”

Lam concluded, “To navigate international uncertainty and intensifying market competition, Taiwan’s small businesses should make better use of government policy support to upskill their workforce through AI adoption, foster innovation, and diversify export markets by strengthening online sales channels.”

The Asia Pacific Small Business Survey 2025–26 gathered views from 4,166 small businesses across 11 markets in the region, including Singapore, Chinese Mainland and Australia. The Taiwan survey sample comprised 311 small businesses.

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India has cut special excise duties on petrol and diesel after a sharp rise in global crude prices, seeking to shield consumers from a broader inflation shock as the Iran war and disruption around the Strait of Hormuz continue to unsettle energy markets. A government order issued late on Thursday reduced the special excise duty on petrol to Rs 3 a litre from Rs 13, while the levy on diesel was removed entirely from Rs 10 a litre. At the same time, New Delhi imposed fresh windfall taxes on diesel and aviation turbine fuel exports to recover part of the revenue loss and manage the fiscal hit.

The move underlines the pressure facing policymakers as oil prices remain volatile and the rupee weakens, raising the cost of imports for one of the world’s biggest crude buyers. Brent crude climbed above $112 a barrel on Friday, extending a rally driven by doubts over any near-term ceasefire and persistent fears that supply disruptions in the Gulf could deepen. Traders and analysts have said the risk premium now reflects not only lost barrels but also the strategic importance of Hormuz, through which a large share of global oil and liquefied natural gas flows.

For India, the tax cut is as much about inflation management as political optics. Retail prices at state-run fuel retailers have been largely held steady even as global crude costs have climbed, forcing public-sector oil marketing companies to absorb losses on every litre sold. Reuters reported that those losses were running at about Rs 24 a litre on petrol and Rs 30 on diesel at the time of the duty cut, a burden that had begun to raise concerns about the financial strain on the country’s dominant fuel retailers. By lowering excise duties, the government creates room for those companies to keep pump prices stable without taking the full blow on their balance sheets.

That relief, however, comes with a cost. The excise reduction is expected to trim government revenue by roughly Rs 70 billion every fortnight, with the net impact estimated at about Rs 55 billion after accounting for the new export levies on diesel and jet fuel. Those numbers matter because New Delhi is already balancing slower growth risks, higher import costs and sensitivity in bond markets. India’s 10-year government bond yield rose as investors weighed the inflationary impact of oil and the possibility that fiscal targets may come under pressure if energy turbulence persists.

Currency markets have been sending a similar warning. The rupee slipped beyond 94 to the US dollar, marking a record low and capping its weakest fiscal-year performance in more than a decade. Higher oil prices have compounded external pressures by widening import costs and fuelling worries over inflation, while signs of reduced support from the Reserve Bank of India have added to volatility in both the currency and government debt markets. The combination of a softer rupee and expensive crude intensifies the urgency for measures that can prevent fuel inflation from feeding into transport, food and manufacturing costs.

The government has paired the tax changes with broader supply assurances. Officials have said retail fuel prices will remain stable and that supplies of fuel, fertiliser and coal are adequate. India has also increased the availability of liquefied petroleum gas for industrial use, an indication that authorities are trying to prevent energy stress from spilling into factories and power demand. That broader messaging is aimed at containing panic in a market already on edge over whether the Middle East conflict could trigger a more prolonged energy shock.

The burden of holding down prices has not been distributed evenly across the sector. State-run retailers, which control more than 90 per cent of the country’s fuel stations, have largely refrained from raising pump prices, while private players have begun adjusting. Nayara Energy, for example, increased gasoline and gasoil prices this week, citing the combined impact of a weaker rupee and surging global crude prices. The divergence highlights the structural challenge for the government: keeping inflation contained without unduly damaging the finances of state-backed refiners and marketers.

Banks are pressing the Reserve Bank of India to soften a new foreign-exchange rule that dealers say could force the unwinding of large arbitrage positions, deepen trading losses and add fresh strain to the rupee at a fragile moment for the currency market. The central bank has told lenders to keep their net open rupee positions in the onshore deliverable market within $100 million by the end of each business day from April 10, replacing a far more flexible regime under which banks’ boards could set limits linked to capital.

The pushback from lenders has grown because the rule change lands after weeks of pressure on the rupee from higher oil prices, foreign portfolio outflows and war-driven risk aversion across global markets. The rupee touched a record low of 94.84 against the US dollar after a sharp slide this week, underscoring the urgency with which the central bank is trying to contain volatility and regain influence over price formation in the domestic market.

At the heart of the dispute is a trading structure that banks have used to profit from differences between the onshore market and the offshore non-deliverable forward, or NDF, market. Under the earlier framework, dealers could offset positions across the two venues without breaching broader exposure limits. The new rule narrows that room sharply by capping end-of-day net open rupee exposure in the onshore deliverable market, regardless of how positions are balanced elsewhere. Traders told Reuters that arbitrage books likely to be affected are worth about $10 billion to $18 billion, while Bloomberg reported that banks see total unwinding pressure building toward roughly $30 billion.

That distinction matters because the RBI appears to be targeting a channel through which offshore pricing has increasingly spilled back into the domestic market. By tightening end-of-day exposure, the central bank is seeking to reduce the ability of banks to transmit volatility from the NDF market into onshore rupee trading, while making its own intervention in the domestic market more effective. That objective fits with a broader pattern this month, as the RBI has been active in spot, futures and non-deliverable forward markets to steady the currency.

Banks, however, argue that the speed of implementation could be costly. Treasury officials have warned that compressing positions before the April 10 deadline may force disorderly exits, widen onshore-offshore spreads and crystallise mark-to-market losses on trades that had previously been profitable. The immediate complaint is not only about tighter oversight but also about the lack of transition time for legacy positions built under the old regime. Reports from the domestic financial press say lenders have asked the central bank to reconsider or provide relief, reflecting concern that a hard cap applied uniformly across banks does not distinguish between speculative bets and market-making activity.

The central bank’s tougher line comes as India’s external buffers, while still substantial, have been tested by intervention. RBI data cited in a Reuters report showed foreign-exchange reserves at $709.76 billion as of March 13, enough to cover 11.2 months of imports and about 95 per cent of outstanding external debt. Even so, reserves had fallen notably over the month as the central bank sold dollars to smooth rupee moves. That means policymakers are trying to balance two goals at once: preserving confidence in India’s macro-financial resilience while discouraging trading structures that may amplify pressure during periods of external shock.

Another layer of complexity is that the RBI had, only weeks earlier, proposed broader reforms that would ease some foreign-exchange transaction norms for authorised dealers and give market participants greater flexibility in hedging and balance-sheet management. That makes the present clampdown look less like a reversal of liberalisation and more like a targeted response to extraordinary market conditions. For banks, though, the contrast has sharpened frustration: one arm of the regulatory agenda promises flexibility, while another has suddenly imposed a hard operational ceiling on rupee positions.

By K Raveendran US President Donald Trump’s attempt to jawbone oil lower has run into the hard edge of market reality. At the start, the strategy appeared to work. When he signalled that peace talks with Iran were possible and suggested a diplomatic opening, crude quickly gave back a large share of its war premium. […]

The article Energy Markets See Through Shallow Peace Talk, Move On Their Own Terms appeared first on Latest India news, analysis and reports on Newspack by India Press Agency).