Markets, Regulators, and the Gap Between Them
Writings across May - July 2026
Sometimes an update over three months surfaces a theme that a month-by-month one would miss — or so is my excuse for an update that's overdue.
Looking back at May–July together, seven pieces on rainfall futures, financial regulation, arbitration, coal, solar, insider trading, and AI supervision turn out to share one thread: India keeps building new markets and new mandates — and the institutions that make them work is where we need to pay more attention. Here's what I wrote.
Rainfall derivatives have arrived in India. We need 3 steps to make them work
ThePrint, 26 May
The NCDEX’s new RAINMUMBAI contract is the start of a real market for monsoon risk — a payout tied to measured rainfall, not a loss-based insurance claim. It could become one of India’s most consequential financial instruments, if we get the basics right.
“Most derivatives serve a narrow constituency—a nickel futures matters to metal traders, a crude oil futures to refiners and energy companies. But occasionally, a product emerges that is truly macro, whose movements ripple across the entire economy. For India, and perhaps only for India, the monsoon has that quality.”
Why India needs a dedicated financial conduct regulator
ThePrint, 2 June — with Harsh Vardhan
Financial inclusion has surged, but consumer protection remains an orphaned responsibility scattered across RBI, SEBI, IRDAI and PFRDA. We argue India should look past the American CFPB model and instead build a genuine Twin Peaks system, with a single Conduct Authority covering every financial product.
“The lesson from international experience is clear. Effective consumer protection cannot be treated merely as a subsidiary objective within a broader regulatory framework. It requires dedicated institutional focus, specialised expertise and clear accountability.”
Arbitration in India has become luxury litigation. Let retd judges go, hire a private institution
ThePrint, 16 June — with Prashant Narang
A three-member tribunal of retired judges was once paid roughly Rs 13 crore over seven years to resolve a single dispute. Our research on Delhi High Court extension orders shows the “cure” for arbitration delay — Section 29A — has itself become routine. Institutional arbitration, still a small sliver of the market, is the more promising alternative, if it can build real governance.
“Private institutions, if well governed, are better placed to do so because their credibility depends on neutrality, speed, and procedural discipline. To be hired again, they must keep arbitrations moving.”
India needs to prepare a strategy document that charts coal’s decline, year on year
ThePrint, 7 July
India’s installed renewable capacity has crossed 50%, but coal still generates nearly three-quarters of the electricity we actually use. Between health costs, shrinking global coal financing, and the EU’s and UK’s carbon border taxes, the case for an explicit, year-by-year glide path off coal is overwhelming — even if a full switch isn’t possible yet.
“A debate over the exact numbers — how much storage, how quickly it can be built, at what cost, and how large a residual role coal should play — is important. But that debate can only begin with the decision to phase-out coal. The need of the hour is a strategy document that charts coal’s decline, year by year.”
India’s solar boom masks a worrying dip in utility-scale projects
ThePrint, 28 July — with Upasa Borah and Rakesh Kacker
FY2026 was a record year for solar additions, but the headline number hides a shift: rooftop solar is carrying the growth while utility-scale, ground-mounted projects are slowing sharply. Tenders, auctions, and CMIE project-pipeline data all point the same way. Our back-of-envelope estimate for FY2027 puts total solar additions at 40–45 GW, with roughly half from rooftops alone.
“If India is to sustain the pace of clean energy deployment, it will need to focus beyond headline capacity numbers. It must prioritise a steady and sustainable flow of investment into the pipeline, and that requires designing a grid robust yet flexible enough to integrate and absorb a growing share of renewable energy.”
Market Reaction to Insider Trading: Evidence from Regulatory Orders in India
The Leap Blog, 11 May — with Arjun Gupta and Sonam Patel
We ran an event study on 218 SEBI and SAT insider-trading orders between 2009 and 2023. Unlike the US, where SEC enforcement actions move stock prices, Indian markets show no statistically significant reaction — not even for high-severity violations with large monetary penalties. High appeal-and-reversal rates, multi-year enforcement delays, and low penalties likely explain why investors have stopped treating these orders as news.
“A stock price reaction to an enforcement order is one observable signal of whether the market believes the enforcement actions carry some significance. A null result across many orders suggests the market does not view these actions as conveying meaningful new information.”
Supervising what you cannot inspect
The Leap Blog, 24 July — with Maninder Singh Juneja
Traditional bank supervision relies on inspecting the artefact — a model, a document, a scorecard. AI breaks that: it’s rented, it changes continuously, and it’s probabilistic. We argue regulators should stop demanding explainability they can’t get and instead mandate “supervisability” — outcomes that are observable, attributable, and reversible — through telemetry, staged rollouts with rollback, and active probing for bias.
“If a board is asked to approve something they can’t understand, they will default to saying no. But if you let them govern the limits and the exceptions instead, they can say yes.”
Thanks for reading. As always, replies and pushback welcome.