China’s exporters to step up offshoring to beat Donald Trump’s tariffs
US president’s trade offensive pushes producers to seek other markets as Beijing mulls retaliation options
Budget strives to rev up EV ecosystem, but some key measures missing
The Budgetary measures will help reduce India’s dependence on imports and drive local manufacturing of batteries, thus making EVs more affordable
Will India’s image as a trade ally get a lift after Budget 2025?
Trade facilitation and export promotion are long-term objectives of the government, while the budget largely skips short-term relief measures
The US trade deficit with India is higher than that with Canada
Apart from China, US trade deficits with the EU, Vietnam, Japan, South Korea, India and Taiwan are larger than with Canada. Will these countries be next in line for Trump tariffs?
Bond markets are back in the eye of the storm
If the RBI cuts rates then overseas investors may find yields on bonds significantly less attractive due to higher taxes, lower coupon rates and the currency risk
Hamilton to Trump: America’s repeated dalliances with tariffs
Tariffs have often been viewed and used as tools to build domestic industrial strength. In displaying faith in them, Donald Trump is not an outlier in American political history. The question is whether tariffs are an unstoppable force or just another page in the economics textbooks. The next four years will answer that question for the U.S. and for the world at large.
Chart of the Day: The remarkable rise in passenger traffic revenues at Indian Railways
The share of passenger train business in total revenues is expected to rise to the highest levels in two decades
Tariffs make dollar supreme, India’s choices more difficult than ever
Amid tariffs, the RBI will need to choose a battle it can win: either exchange rate or domestic inflation
Can the Supreme Court become an interim Parliament?
This month the Supreme Court will hear a matter examining the scope of Article 141 of the Constitution which says that the law declared by the apex court shall be binding on all courts. The underlying issue centers on a test of legitimacy of legislative power or the Supreme Court’s power under Article 141.
Salute the understated commitment to fiscal rectitude which enables a favourable macroeconomic environment
Key budget announcements like support for gig workers, global capacity centres, and startups will unleash entrepreneurial talent. The Finance Minister’s fiscal discipline is praiseworthy, as India moves towards private sector-driven growth.
To leverage AI, India needs a robust regulatory mechanism
Sanghnomics: India is developing its own generative AI model, set for release in 2025. The Economic Survey highlights potential job losses due to AI, particularly in service sectors. Regulatory frameworks are evolving, but ensuring timely legislation remains a significant challenge
A budget that scores on four of five essential criteria
Budget does well on transparency, diluting intrusiveness in taxation, fiscal prudence and laying down a roadmap for more consolidation. It could have been more ambitious in its goals but the global uncertainty triggered by US policy could have nudged the government to err on the side of caution
The tariff trouble starts with oil
And weak sales of big-ticket items
India’s Middle Class Boom: How PM Modi’s budget is reshaping economic prosperity
At a single stroke, 70 million taxpayers have been wholly unburdened by the budget and the middle class has seen a substantial increase in its post-tax income. This will spur a consumption boom, pushing India’s GDP to an 8% range.
Corporate effective tax rate stabilises at higher levels, larger companies in better shape
Companies with above Rs 500 crore PBT have seen their effective tax rate decline in 2022-23 compared to those in the Rs 50-500 crore PBT range
Delhi’s ‘freebie’ anchored political campaigns pose fundamental questions
‘Freebies’ are a counter to the conventional mobilization around caste blocs, which upended national politics after the release of Mandal Commission report. However, freebies raise questions about fiscal sustainability and the trade-offs involved for economic performance. As Delhi continues to set a precedent, the debate over the merits and demerits of freebies versus caste politics is likely to shape the future of Indian democracy
Chart of the Day| Are Indian markets still over-valued?
On a forward PE basis Nifty 50 stocks are around 20 times now, with the long-term mean at 17.2 times and one standard deviation above the mean is at 21.7 times.
With sustained infra focus, Budget marks a shift to emerging sectors
Significant investments are planned to promote AI research, establish centres of excellence, and integrate AI across sectors like agriculture, healthcare, and manufacturing
Marking a new anchor: Budget seeks higher structural strength for the economy
The government has sought to address the credit needs of the lower segments of the population and possibly the still unbanked category
The Eastern Window: China’s innovation cookbook
Behind the success of Chinese scientists and tech companies, there is a well-organised educational and support system to foster the growth of scientific and technological talent
The Budget empowers the consumer -- and the patient investor
The best course is to stay invested to reap the benefits of a consumption boost
A new Trump tariff era could benefit China, disadvantage US
Canada, Mexico and China will feel the heat from Trump’s tariff war, but the US will not be left unscathed either, in a conflict that threatens to envelop the world
Crunching the Numbers: Does Budget 2025 really boost consumption?
The share of GDP the government takes in taxes out of total income is expected to go up. That in turn means the share available for households for consumption or saving or investment is slightly lower than what it is in the current fiscal year
Challenges lie ahead on the path of fiscal consolidation
Budget for FY26 tries to offset a decline in expenditure as a share of GDP by focussing on quality of spending and deficits. However, the path of fiscal consolidation outlined in terms of debt-to-GDP ratio will not be easy
Budget floats on some risky bets
The budget identifies trade as an engine of growth. That engine is likely to stall, under the assault on global trade that the newly elected US president Donald Trump is rolling out. India would need to make other engines tick.
