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In today’s newsletter:

• The Indian state that loves UPI the most 
• Apple’s plan to tackle Foxconn’s engineer exits
• Indian IT woos AI startups

P.S.: Introducing the Tech3 Podcast, your daily dose of tech and startup insights. Monday to Friday! Check it out on Spotify or Apple Podcasts

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Bengaluru may wear the fintech crown, but Mumbai still rules the payments game.

Despite being home to India’s startup and digital payments ecosystem, Karnataka lags behind Maharashtra when it comes to UPI transaction value...by nearly 50%.

Maharashtra led all Indian states in UPI transaction value in May, recording Rs 3 lakh crore, followed by Karnataka with Rs 2 lakh crore.

• Other top performers include Uttar Pradesh, Telangana, and Tamil Nadu

The top four states processed over a billion transactions each in a single month.

• Nationally, UPI records over 18 billion transactions in a month, worth over Rs 24 lakh crore

The data does not give the full picture. In June, around 45% of all UPI transactions were unclassified, compared to 22% in May.

• While Delhi-NCR might be among the top three, the data is split between Delhi, Haryana (Gurugram), and Uttar Pradesh (Noida)

• The data is shared by UPI apps with NPCI and is based on users sharing their location information

To be sure, the data reflects the size of a state's economy and its population. States like Uttar Pradesh and Bihar lag behind due to lower digital penetration compared to states with larger urban centres.

Dig deeper

Apple’s India expansion, once seen as a smooth pivot from China, is hitting unexpected turbulence.

A growing labour crisis involving Chinese engineers at Foxconn’s iPhone plant in Tamil Nadu is forcing Apple to scramble for alternatives, even as geopolitics and export restrictions tighten the screws.

• Apple is activating contingency plans, pulling in engineers from other countries to keep iPhone 17 Pro production on track

• Over 300 Chinese engineers at Foxconn’s Sriperumbudur facility have reportedly returned home

The Indian government isn’t pressing the panic button just yet.

“We will track production targets, but it’s not our primary concern,” said a senior official.

Visa facilitation was earlier done at Apple’s request; any return of Chinese workers is between the company and its staff.

• Officials see this moment as a strategic inflexion point to boost domestic capabilities

China has reportedly slowed or blocked exports of key manufacturing tools—equipment critical to iPhone assembly.

• Industry executives warn that restricted export of manufacturing tools is disrupting Apple’s India assembly operations

A new Foxconn plant in Bengaluru is expected to go live soon.

• The company is onboarding 1,000 new local employees by mid-July, pushing India headcount to nearly 40,000

• Production of AirPods for global markets has also kicked off at its Hyderabad facility

Dig deeper

Indian IT majors are betting big on startups to stay future-ready.

India’s top IT services giants, including TCS, Infosys, Wipro, HCLTech, and Tech Mahindra, are leaning heavily on startups to navigate the fast-evolving world of Generative AI and automation.

• By investing in, partnering with, and co-creating alongside startups, these companies are racing to stay relevant as traditional headcount-driven revenue models lose steam

In February, the CEOs of HCLTech and Infosys declared that the clock has already run out on the traditional IT services model.

India’s largest IT company, TCS, has expanded its Co-Innovation Network (COIN) to 3,000 startups and 55 academic partners in FY25, up from 2,400 startups in FY21.

• Its closest rival, Infosys, grew its Innovation Network from 150 startups in FY22 to over 370 in FY25
  
  
• Wipro has taken a more direct approach through its $500 million Wipro Ventures fund, which grew from 16 investments in FY21 to 38 in FY25
  
  
• HCLTech, meanwhile, integrates startups via its Innovation Labs and co-creation programs without taking direct equity stakes
  
  
• Tech Mahindra has also built strong ties with startups through its Makers Lab and partnerships across 5G, automotive, and immersive tech

As Gen AI and automation reshape the IT landscape, these strategic startup bets help India’s IT majors build high-margin, IP-led solutions and reduce reliance on linear, manpower-heavy revenue.

• At the same time, startups gain access to enterprise clients and global scale

While most industry giants are tight-lipped about revenue from such partnerships, the push signals a decisive pivot toward future-proofing business models.

Dig deeper

• Harmonic AI, an artificial intelligence startup co-founded by Robinhood CEO Vlad Tenev, has raised $100 million to address a long-standing challenge for AI models: solving complex math problems.
  
  
• Google announced that it is expanding ads in AI Overviews, its artificial intelligence (AI) search experience, to desktop and mobile platforms in India later this year.

Looking for your next weekend watch?

First up, Aap Jaisa Koi on Netflix

• Fatima Sana Shaikh and R Madhavan are teachers with clashing ideologies...and unexpected chemistry. Their romance digs deep into cultural rifts and emotional truths.

Next up, Narivetta on SonyLIV

• Set deep in the forests of Wayanad, this Malayalam thriller throws you into a tribal protest that turns volatile. 

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