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By:

Abhijit Mulye

21 August 2024 at 11:29:11 am

RBI forced to rethink inflation, growth

Mumbai: The undeniable reality of climate change is rapidly transitioning from an ecological warning to a severe economic crisis in India. Global warming is no longer just altering natural ecosystems; it is fundamentally rewriting the rules of the nation's macroeconomic stability. A stark illustration of this shift comes from the HSBC report published on Monday, which highlights how rising surface temperatures and the looming threat of El Niño are directly forcing the Reserve Bank of India to...

RBI forced to rethink inflation, growth

Mumbai: The undeniable reality of climate change is rapidly transitioning from an ecological warning to a severe economic crisis in India. Global warming is no longer just altering natural ecosystems; it is fundamentally rewriting the rules of the nation's macroeconomic stability. A stark illustration of this shift comes from the HSBC report published on Monday, which highlights how rising surface temperatures and the looming threat of El Niño are directly forcing the Reserve Bank of India to reconsider its monetary policy, proving that climate shocks are now dictating everyday financial realities. ​ For decades, economists and policymakers have anxiously tracked the Indian monsoon, relying on rain gauges and reservoir levels to forecast agricultural output and inflation. However, HSBC’s analysis reveals a startling paradigm shift: tracking rising temperatures has now become a far more accurate method for predicting food inflation than observing traditional rainfall patterns. As average surface temperatures breach historical thresholds, the sensitivity of food prices to extreme heat has increased dramatically. During El Niño years, the probability of severe temperature spikes is now significantly higher than the chances of a rainfall deficit. These intensifying spikes mean the thermometer has become a far more vital forecasting tool for the central bank than the rain gauge. ​ The effects of this warming planet are cascading through various walks of life, starting at the very roots of the agricultural sector. Intense and frequent heatwaves are no longer just wilting delicate, perishable crops like fruits and vegetables, which have traditionally been highly vulnerable to sudden temperature fluctuations. The soaring mercury is now directly threatening the resilience of durable staple crops, including cereals, pulses, oilseeds, and sugar. When these crucial crops fail to withstand the intensifying heat, the immediate fallout is a sharp surge in food prices. While robust granaries might offer a temporary buffer, the overarching trend points to persistent agricultural distress, threatening food security and pushing the financial burden directly onto the plates of ordinary citizens. Complex Web ​This climate-induced disruption is creating a complex web of challenges for the national economy. The HSBC report predicts that the combination of El Niño-driven temperature shocks and global energy pressures could push headline inflation to an average of 5.6 percent in the 2026-27 financial year. This overlapping environmental and economic crisis leaves the Reserve Bank of India in a precarious position. To combat the inflationary heat, the central bank is projected to deliver two interest rate hikes between late 2026 and early 2027, ultimately pushing the repo rate to 5.75 percent. However, the central bank must tread carefully, as these relentless climate shocks are simultaneously dragging down the nation's economic momentum, with GDP growth projections downgraded from a robust 7.4 percent to a sluggish 6 percent. ​ Ultimately, the heaviest toll of this shifting climate is borne by the most vulnerable segments of society. The intersection of severe weather events, rising food costs, and tightening economic policies strikes hardest at the informal sector. Rural households, small agricultural businesses, and daily wage earners find their livelihoods increasingly squeezed by extreme weather forces entirely out of their control. The warming climate is fundamentally changing the drivers of India’s economic growth, turning environmental predictability into a luxury of the past. As policymakers grapple with these twin shocks of heat and inflation, it is evident that climate change has firmly rooted itself in every facet of Indian life.

What Operation Sindoor Reveals About Two Different Militaries

On the night of May 7, 2025, the Indian Air Force executed a military operation that lasted exactly 23 minutes. In that time, it struck nine targets across Pakistan and Pakistan-occupied Kashmir with precision munitions, satellite-guided weapons, and loitering drones. The Indian Air Force bypassed and jammed Pakistan's Chinese-supplied air defence systems, completing the mission in just 23 minutes, demonstrating India's technological edge. Within 48 hours, satellite imagery was available. Satellite imagery from Maxar, Kawa Space, and Mizar Vision, captured on May 10-11, provided visual evidence of the strikes' impact. At Shahbaz Air Base in Jacobabad, before-and-after images showed a hangar on the main apron reduced to rubble, with minor damage to the air traffic control building suspected. Similarly, craters on runways at Sargodha, Rahim Yar Khan, and Nur Khan, along with damaged air defence radars at Pasrur, Chunian, and Arifwala, confirmed the precision and scale of Indian attacks.


That satellite imagery is the story because it shows accountability. Every bomb, every target, every crater can be verified by commercial satellite imagery that the entire world can see. Pakistan’s response couldn’t be more different. It used drones and shelling to target religious sites. The Shambhu Temple in Jammu, the Gurdwara in Poonch, and Christian convents were attacked. These were part of a plan to break India’s unity.


According to India, Pakistani cross-border artillery shelling and small arms firing increased following the Indian attacks, including in the regions of Poonch, Rajouri, Kupwara, Baramulla, Uri and Akhnoor. Indiscriminate Pakistani shelling of Poonch town and its vicinity killed at least 11 people and damaged an Islamic school along with numerous homes.


Technology Gap

India’s strikes were preceded by a level of intelligence integration that is still rare in military operations. The operation was underpinned by an unusually integrated intelligence effort. The National Technical Research Organisation used commercial satellite networks such as Maxar Technologies alongside Indian spy drones to monitor compound activity, while the Intelligence Bureau tracked internal movement and Kashmir-based networks. NTRO also intercepted encrypted militant communications linked to the Pahalgam attackers. Military Intelligence and the Defence Intelligence Agency assessed target feasibility for precision strikes. Under the National Security Council, RAW, NTRO, DIA, and IB fed daily inputs into a unified threat dashboard, with real-time geospatial and drone imagery shared directly with Army and Air Force commanders. NSA Ajit Doval reportedly oversaw strike briefings with the Prime Minister, the CDS, RAW, and service chiefs. The Indian Air Force did not strike on instinct. It struck from a screen where multiple streams of intelligence converged upon the same targets.


Pakistan’s response was technological generations behind. Pakistani shelling resulted in 16 civilian deaths, including three women and five children. These were unprovoked mortar and heavy-calibre artillery fire into civilian areas. It was indiscriminate by design. Pakistan hit harder but less effectively. The technology made both facts visible.


Indigenous Precision vs. Imported Indiscrimination

Platforms such as the BrahMos missile, Akash air defence system, and SkyStriker drones were utilised, showcasing the effectiveness of India's self-reliance push in defence manufacturing. These were not American or Russian systems but indigenous, or co-developed, or built in India. SkyStriker (Alpha Design Technologies/Adani Group), co-developed with Israel's Elbit Systems, made its combat debut during Operation Sindoor. Capable of carrying a 5-10 kg warhead over a 100 km range, it executed precision strikes on terror infrastructure with minimal collateral damage. Nagastra-1 (Solar Industries), an indigenous loitering munition, carrying a 1.5 kg explosive payload over a 15 km range, was confirmed by Solar Industries' leadership to have been used in Operation Sindoor. JM-1 (Johnnette Technologies), a 100 percent Indian-designed kamikaze drone, made its combat debut during Operation Sindoor, becoming the first fully indigenous loitering munition to strike Pakistani targets.


India did not just use precision weapons but tested them in combat. That is a technology feedback loop. The weapons worked, so more money flows to the companies that built them. More money means more R&D. More R&D means better systems.


Pakistan, by contrast, relies on imports. Official sources estimate that 20 percent of PAF infrastructure was destroyed, including runways, hangars, command centers, and several fighter aircraft, such as JF-17 Thunders, F-16 Fighting Falcons, and possibly a Saab 2000 Erieye AWACS. These are purchased systems. The JF-17 is designed in Pakistan but lacks indigenous avionics. The F-16 is American. The AWACS is Swedish. When Pakistan loses these, it loses the ability to buy them back without permission from other countries.


Pakistan claimed that Indian strikes targeted civilian areas, including mosques, killing 31 Pakistani civilians. But the satellite imagery exists to refute these. Satellite imagery from Maxar, KawaSpace, and MizarVision confirmed the precision and scale of India's attacks.


Pakistan can claim whatever it wants, but its lies do not survive the next pass of a commercial satellite. Satellite imagery showed logistical convoys coming into Bahawalpur indicating continued training activity. Not just of the strikes themselves, but of what was inside the targets. The terrorist training camps were real and Indian missiles hit them. The satellite imagery proves it.


This is an asymmetry Pakistan has no answer to. It can purchase propaganda expertise. It can amplify false claims on social media. But it cannot make satellite imagery disappear.


From a first-principles perspective, Pakistan’s long-standing strategy rested on a simple assumption: nuclear weapons would deter any meaningful Indian conventional retaliation. The logic was straightforward. India, fearing escalation, would stop short because Pakistan could always threaten to climb the ladder to nuclear war. Operation Sindoor shattered that leverage point.


Doctrinal Shift

Even during the crisis, Pakistan attempted the familiar tactic of nuclear blackmail to ward off further Indian escalation. Yet the true significance of Sindoor lies not merely in its military execution, but in the new doctrine it appeared to establish in India’s counter-terrorism response. It signalled that no terrorist facility across the border or along the Line of Control would henceforth be beyond reach. India demonstrated with remarkable calibration that it was prepared to strike despite nuclear weapons sitting across the frontier.


The nuclear deterrent, in effect, lost much of its practical coercive power. The decisive factor was not the bomb itself, but precision. India possessed the technological ability to hit exactly what it intended, and in a manner visibly distinguishable from an attack on the Pakistani state itself. Indian forces deliberately avoided Pakistani military installations and civilian centres, confining their strikes to terror infrastructure alone.


Pakistan was then confronted with an unenviable choice: escalate against Indian military targets and risk an uncontrollable wider war, or absorb the setback and retaliate asymmetrically against civilian and symbolic targets in an attempt to impose political costs. It chose the latter. In doing so, it weakened its own deterrent posture. Rather than appearing as a rational nuclear power exercising calibrated restraint, Pakistan increasingly appeared as a state compensating for the absence of comparable precision-strike capability through indiscriminate artillery and coercive bombardment.


The Drone War

Operation Sindoor was India’s deepest military campaign since the 1971 war, and it also marked the first major drone confrontation between two nuclear-armed states. Equally significant was India’s air-defence performance in repelling Pakistani drones and missile strikes amid some of the heaviest shelling seen in decades.


But the drones on either side revealed two very different doctrines. India deployed precision loitering munitions designed to identify and destroy specific targets with calibrated force. Pakistan relied largely on waves of UAVs and small drones aimed at saturation rather than accuracy. Most were intercepted by India’s layered air-defence network.


Indian systems reflected precision, discrimination and escalation control; Pakistan’s relied on volume and disruption. As drone warfare becomes central to modern conflict, countries investing in indigenous drone ecosystems and precision-strike capabilities will hold a structural advantage over those using drones chiefly as improvised tools of coercion or terror.


India has understood that the future of military operations is not in who has more weapons. It is in who can be most credibly seen to be using them precisely. That requires indigenous technology, integrated intelligence, real-time decision-making, and the courage to let satellite imagery verify every claim. Pakistan has not yet understood this shift. It is still operating in the age of plausible deniability and propaganda. That age is ending.


 (The writer is a subject matter expert at Centre for Joint Warfare Studies, Ministry of Defence, New Delhi. He specialises in AI geopolitics and cyberwarfare. He is also a visiting research fellow at MGIMO, Moscow. Views personal.)


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