Before the Reset Part 2: The Ripple Effects

 Before the Reset

Part 2: The Ripple Effects

If you missed Part 1, I wrote about why I believe the current global turbulence is not a collapse… it is a reset. This piece is about where the ripples from that storm are landing.

 

After my bypass surgery in 2012, the recovery was not uniform. Some parts of me bounced back quickly. My energy returned before my stamina did. My appetite came back before my strength did. Some days I felt nearly normal; other days, a single flight of stairs felt like a project. The body, it turns out, does not recover all at once. Different systems heal at different rates, and the ones that take longest are not always the ones you expect.

 

I have been thinking about that a lot lately, as I watch the global economy process what I described in Part 1 as its long-overdue reset, because the impact is not uniform either. Some sectors are being hammered. Some are quietly thriving. Some are somewhere in between; bruised, adapting, finding their footing, and I think it is worth sitting with each of them for a moment, because the ripple effects of this macro storm are telling a far more nuanced story than the headlines suggest.

 

Let me take you through what I am seeing.

 

Energy and Commodities: The Canary That Has Been Singing for a While

If there is one sector where the stress has been most visible, it is energy.

 

The Strait of Hormuz, through which roughly 25% of global seaborne crude oil passes, has faced its most serious disruption in a generation, triggering what analysts are calling the largest oil supply shock on record, with an initial reduction of around 10 million barrels per day. (Source: World Economic Forum / World Bank Commodity Outlook, April 2026) Brent crude averaged $117 per barrel in April 2026, the highest since June 2022. Energy prices overall are projected to surge 24% in 2026. (Source: World Bank Commodity Markets Outlook, April 2026).

 

It is not just oil. Overall commodity prices are forecast to rise 16% in 2026. Precious metals are up 42%, as geopolitical uncertainty pushes capital toward safe-haven assets. Base metals; copper, aluminium, tin are hitting record highs, driven partly by the enormous demand coming from AI data centres, electric vehicles, and the energy transition. (Source: World Bank / S&P Global, April 2026)

 

I wonder if we fully appreciate the paradox here. The same storm that is disrupting the old energy economy is simultaneously accelerating the transition to the new one. Higher oil prices are painful, but they are also the most powerful argument for energy diversification that has ever existed. Every time a government or business sees that Brent number, the case for renewables gets stronger.

 

For India, this is a double-edged sword. We are a net energy importer, so higher prices hurt in the short run. But India's renewable energy capacity additions are accelerating precisely because of this pressure, and the country's domestic consumption story means that getting the energy transition right is not optional, it is existential.

 

Manufacturing: The Moment India Has Been Waiting For

Here is the section I genuinely enjoy writing, because this is where the storm is creating a real opportunity, and India is in a position to catch it.

 

The rewiring of global supply chains away from single-country dependence is the biggest structural shift in manufacturing since China joined the WTO in 2001, and India, for the first time in a long time, is positioned to benefit directly.

 

The numbers from the PLI (Production Linked Incentive) scheme are striking. As of late 2025, 836 PLI applications had been approved, attracting committed investments of over ₹2.16 lakh crore. Cumulative sales have crossed ₹20.41 lakh crore, with exports above ₹8.3 lakh crore. (Source: Government of India / Real She Power, 2026) India is now the second-largest smartphone producer in the world. Electronics production jumped from ₹2.13 lakh crore in FY21 to over ₹5.45 lakh crore in FY25.

 

The China+1 strategy, where global manufacturers deliberately diversify supply chains away from single China dependence, has found its most credible destination in India. Not as a replacement for China, but as a deliberate parallel. Pharmaceuticals, auto components, textiles, specialty chemicals, electronics, the shift is real and it is gathering pace. (Source: IMARC Engineering / Dainik Jagran English, 2026).

 

I wonder, though,  and I say this as an honest observation rather than a criticism, are we doing enough at the ground level to make this opportunity stick? Infrastructure, logistics, ease of doing business at the district and state level, skilling the workforce. The policy architecture is there. The execution layer is what will determine whether 2026 becomes a turning point or just another missed moment.

 

That question keeps me up at night, but the opportunity itself is real. I have no doubt about that.

 

Financial Markets: Stretched, Nervous, and Looking for Direction

Walk into any conversation about investing right now and you will feel a very specific kind of unease.

 

The ECB's May 2026 Financial Stability Review described equity valuations as "stretched by historical standards" and noted that compressed corporate bond risk premia leave markets "vulnerable to sharp repricing." (Source: ECB Financial Stability Review, May 2026) The most sophisticated institutional investors, the ones managing pension funds and sovereign wealth, are quietly increasing allocations to real assets, private markets, and alternative diversifiers. (Source: PIMCO, Charting the Year Ahead, 2026).

 

What does that tell you? It tells you that the people who manage the world's largest pools of capital do not fully trust the current pricing of risk. They are not panicking. But they are hedging.

I find it interesting that in this environment, traditional 60/40 portfolios, the bedrock of conventional wealth management, are being questioned in a way that has not happened since the 2008 financial crisis. When both equities and bonds fall together, as they have in recent periods, the old playbook no longer works. Investors are being forced to think differently.

 

For India's retail investor community, and this is growing at a remarkable pace, with SIP contributions consistently hitting record highs, this is actually a moment of education. The lesson being taught by markets right now is the importance of diversification across asset classes, geographies, and yes, newer asset categories. That is a healthy lesson, even if the teaching method is uncomfortable.

 

Technology and AI: The One Sector That Has Not Got the Memo About Slowing Down

If there is one place where the storm seems to have barely registered, it is here.

 

Global AI spending is forecast at $2.5 trillion in 2026, a 44% increase over 2025. The largest technology companies have committed $740 billion in AI capital expenditure for 2026 alone, a 69% jump over last year. (Source: Morgan Stanley / Fortune, April 2026) To give that some perspective, these numbers are being compared by analysts to the scale of the Manhattan Project and the Apollo programme.

 

The physical consequences of this are significant and underappreciated. $660 billion going into AI data centres, chips, and cloud infrastructure creates an enormous demand pull for copper, steel, concrete, and skilled construction labour. It is one of the reasons base metal prices are where they are.

 

But here is my honest observation about AI and India. The question is not whether AI will change the world, it clearly will. The question is whether India will be a maker in this story or primarily a user. We have the talent. We have the software engineering depth. What we need is the ambition to compete not just at the services layer but at the infrastructure and product layer. That is the conversation Indian businesses and policymakers need to be having urgently.

 

The jobs disruption is real too. Early data is showing AI adoption contributing to net job losses, concentrated particularly at junior and entry-level roles. (Source: Barclays / Citadel Securities, 2026) This is not science fiction anymore, it is showing up in hiring data. I am not saying this to be alarmist. I am saying it because the answer is education and skilling, and we need to move faster than we currently are.

 

VDA: The Asset Class That This Macro Moment Was Made For

And now, the sector I am most directly involved with, and the one I find myself thinking about the most.

 

I said in Part 1 that institutional flows into digital assets are a macro signal, not just a markets story. Let me build on that.

 

When Brent is at $117, when precious metals are up 42%, when equity valuations are stretched and bonds are unreliable, and when the global reserve currency is being actively questioned by a growing number of nations, what are institutional investors doing? They are looking for stores of value that are not correlated to any one government's decisions. They are looking for assets that exist outside the traditional financial architecture that is currently under stress.

 

Bitcoin ETFs representing over $115 billion in institutional exposure is not a number that happened by accident. (Source: Grayscale Digital Asset Outlook, 2026) It happened because serious, conservative capital made a calculated decision that the old playbook is incomplete.

 

Closer to home, India's VDA regulatory environment is slowly, finding its shape. The 30% tax and 1% TDS regime has been a genuine drag on domestic market participation. But the compliance architecture is maturing: platforms are now under PMLA, FIU-IND updated its AML and CFT guidelines in January 2026, and the expectation is that VDA service providers will now operate at the same standard as banks. (Source: Zigram / CoinDCX, 2026)

 

I will be direct here. India has an extraordinary opportunity to be a serious player in the global digital asset ecosystem. We have the technical talent, the entrepreneurial energy, and the demographic profile that makes us a natural home for digital-native financial products. What we need is a regulatory framework that balances consumer protection with genuine innovation space. Prohibitive taxation without comprehensive regulation is not a policy, it is a delay. But even as I say that, I remain optimistic, because the direction, even if slow, is forward.

 

So What is the Pattern Across All of This?

I started this piece with a recovery metaphor, that different parts of the body heal at different rates after a shock.

 

Looking across these sectors, I see exactly that. Energy is in acute pain but beginning a structural transformation. Manufacturing, particularly in India, is absorbing the shock and finding opportunity inside it. Financial markets are nervous but not broken. Technology is barely pausing, and digital assets are, quietly and steadily, becoming a more mainstream part of the global investment conversation.

 

None of this is neat. None of this is moving in a straight line.

 

But when I step back and look at the whole picture, I do not see a world that is falling apart. I see a world that is renegotiating its terms; noisily, painfully, but with purpose.

 

In Part 3, I will talk about what comes after the storm. What does the reset actually look like? Where are the opportunities forming for businesses, investors, and for India specifically? Because I genuinely believe that when the dust settles, some of what is being built right now, in the midst of all this noise, will look, in hindsight, like the foundations of something quite remarkable.

Stay with me for Part 3.