It's tariff tantrum

"The Reserve Bank (RBI)...announced a series of measures to boost the Indian Rupee's role in global trade, promoting its use for cross-border settlements and reducing dependence on the US dollar." It will allow Authorised Dealer (AD) banks to lend Indian Rupees to non-resident Indians (NRI) in Bhutan, Nepal and Sri Lanka, establish transparent reference rates and a wider use of Special Reserve Vostro Accounts (SRVA). TOI. Vostro accounts allow foreign banks to open accounts in an Indian bank and trade in rupees without having any physical presence in India. cleartax.in. This is meant to reduce outflow of foreign currency and promote the rupee in international trade. Recently LG Electronics India Ltd raised $1.3 billion and Hyundai India raised $3.2 billion through initial public offerings (IPO) in their subsidiaries in India for repatriation to their parent companies in Korea. Korean multinationals raising money from Indian investors means that the rupee is going global, wrote TK Arun. There is already a long list of foreign multinationals trading on Indian stock markets (IPO Central), so how are these IPOs any different? And, how do they make the rupee an international currency? "On average, the rupee falls 2-3% against the dollar annually; in crisis years the depreciation is much higher." Now, as the rupee approaches 100 to one dollar "there is a sense that the rupee as a currency has collapsed. This is simply irrational." Mint. The rupee is trading at 88.81 to one dollar this morning. xe.com. On 26 June 2013, "The rupee...tanked by a massive 106 paise to close at all-time low of 60.72 against dollar on heavy capital outflows and month-end dollar demand from importers, even as RBI intervened to stem the currency slide." The rupee lost nearly 12% since May and 7% in June itself. TOI. By August the rupee had lost 20% of its value over the year to a new low of 68.7 to one dollar (BBC) but by 2014 it has strengthened to 62.33 to the dollar (bookmyforex.com). The 2013 crisis has been labeled the 'Taper Tantrum', which resulted from Federal Reserve Chair Ben Bernanke announcing his intention of reducing bond purchases, or quantitative easing, started during the subprime crisis (Investopedia) to flood markets with liquidity. This time it is Trump's tariffs. "The rupee had rallied to a peak of 87.6250 earlier this month following heavy handed intervention by the central bank, but has since shed those gains to once again hover close to its record low of 88.80." Reuters. "The Indian rupee fell yesterday but managed to hold above its all-time low on the back of intermittent dollar sales by state-run banks that also helped the currency end the month on a quiet note." Reuters. US President Donald Trump said that the US and India are close to a deal but India cannot compromise on its red lines. ET. The RBI is doing everything it can to hold the rupee above 90 to the dollar in the hope of a trade deal and removal of tariffs which will ease selling by foreign institutional investors (FII). If the rupee breached 90 to the dollar it may race to 100. Trump has nothing to lose and Prime Minister Narendra Modi cannot afford to be seen to lose. Good thing the rupee is not an international currency. It would have plummeted.           

Must be their fault.

Two Australian cricketers "who are in India for the ICC Women's World Cup had stepped out of their hotel and were walking towards a cafe when the offender approached them and touched one of them inappropriately. Police have claimed that the molester was caught soon," and "Madhya Pradesh Minister Kailash Vijayvargiya said the players should have informed the security or local administration before leaving the hotel." DH. Blaming the victim is a standard response in India, so that the perpetrators mostly go unpunished. After a female student was gang-raped in West Bengal, Chief Minister Mamata Banerjee said, "They should avoid venturing out late at night." "Three weeks ago, three girls were raped on the beach in Odisha." "Such incidents have taken place in Manipur, UP, Bihar, Odisha." ET. It is commonplace because women are asking for it. In March 2023, a court in Uttar Pradesh acquitted three men, and convicted one man of culpable homicide not amounting to murder, in a case in which a 19-year old Dalit girl was gang raped and murdered in Hathras in September 2020. India Today. In an ongoing case in which Ashish Mishra, son of Union Minister for Home Ajay 'Teni' Mishra, is accused of the murder of four farmers and one journalist by deliberately driving his SUV over them, nearly 40% of witnesses have turned hostile. HT. This is common in India. Police take years in investigating the crime, the accused are released on bail and eyewitnesses turn hostile. Whether they have been 'persuaded' is not known. "India's growth story is falling apart, according to a startup CEO who says the problem isn't money. It's mindset, corruption, and a system built to stall progress." BT. Indian Forest Service officer Sanjiv Chaturvedi exposed "illegal tree-felling and poaching, misuse of public money and large-scale embezzlement in fake plantation schemes" in Haryana around 23 years ago. Evidently, political bigwigs were involved." Reaction was furious and vicious. There has been no conclusion to the charges because, "Two Supreme Court and four high court justices and eight members of the Central Administrative Tribunal (CAT) have recused themselves, without citing a reason, from his cases in the last 12 years." DH. If High Court and Supreme Court judges can be coerced, why should ordinary witnesses risk their lives? Last week, "Francesca Orsini, a London-based scholar of Hindi and South Asian literature, was denied entry at the Delhi airport...despite holding an Indian visa valid for another five years." The Print. No reason was given. Her offence could only be something she has said or written that the brotherhood did not like. In February 2021, "Princess Latifa, daughter of Dubai ruler Sheikh Mohammed bin Rashid al Maktoum, has for the first time described how she was captured by Indian special forces three years ago on a boat off the coast of India and how despite kicking and screaming that she was seeking political asylum she was tranquilised (italics to highlight assault) and carried onto a private jet." TOI. Blofeld would be proud. It must be their fault. Even when tranquilized.    

Eating much more.

"For decades India fought one great battle - hunger." "Those efforts worked. In one generation, poverty at the $3-a-day line has plunged from nearly half the population in 2004 to below 5% today." "As India has grown richer, a different epidemic has quietly spread - obesity." "Recognizing this, Prime Minister Narendra Modi has asked all Indians to reduce their edible oil consumption by 10%," wrote Chief Economic Advisor Anantha Nageswaran & Ruchir Agarwal. In 1990, "diarrhoeal diseases held the top spot in mortality with age-standardised mortality rate (ASMR) of 300.53 per 100,000," but in 2023, "ischemic heart disease leads with an ASMR of 127.82 per 100,000." Chronic obstructive pulmonary disease (COPD) was second with an ASMR of 99.25 while stroke was third at 92.88. NDTV. COPD is not due to overeating but mostly due to smoking, to pollution and to Alpha-1 antitrypsin deficiency. Cleveland Clinic. In India, "Bidis are popular (wikipedia) among individuals with lower incomes, due to their lower cost." And, "Contrary to common belief that they contain less tobacco and are made from leaves, bidis can be up to eight times more harmful than cigarettes." TOI. A study by the Indian Council of Medical Research (ICMR) and the Madras Diabetes Research Foundation found that carbohydrates, white rice, refined grains and sugar, contribute 62% of calories in an average Indian diet, much higher than recommended 55%, and fats are higher than the 30% advised. TOI. Cereals are cheaper than proteins, as bidis are cheaper than cigarettes, which means that poverty is a major contributor to noncommunicable diseases (NCD) (WHO) in India. Indian farmers prefer to grow rice and wheat because some states subsidise water and electricity and the central government buys rice and wheat, (Mint), at a pre-determined minimum support price (MSP) which prevents a steep fall in prices in case of over-production (pib.gov.in). Since 1 January 2023, the Indian government has been distributing 5 kg of free food grains to 813.5 million people. pib.gov.in. It seems therefore that people can make an informed choice in their diet and lifestyle if they become more affluent and that can only happen if they have steady, well-paying jobs. Unfortunately, "For long, India's services sector has been seen as the engine of economic growth." But, "Services now contribute around 55% of India's gross value added (GVA), but most of the employment they create remains informal and low-paying." TOI. "Services risk becoming a low-wage trap despite being the fastest-growing part of the economy," said a report by Niti Aayog. BS. People are eating a lot more. But a poor diet. Because they are still poor.       

Can't stop us buying gold.

"The Reserve Bank of India (RBI) has intensified its efforts to transfer gold reserves back to India," "As of September-end, out of the total gold holdings of 880.8 tonnes, the RBI maintained 575.8 tonnes within India, whilst 290.3 tonnes remained in the custody of the Bank of England and the Bank of International Settlements (BIS)." TOI. It makes sense because the price of gold has soared in recent months. In 2015, one troy ounce of gold would have cost $1,060 (onlygold.com), while today the price has more than trebled to $3,957 per troy ounce (goldprice.org). These banks charge a fee for storing gold. Storing 100 tonnes of gold with the Bank of England for one year would cost 102,200. bullionstar.com. Western countries have not forgotten their colonisation habit of plunder. "As much as $250 billion worth of Russian assets have been frozen in the EU since the US and its allies prohibited transactions with Russia's central bank and finance ministry after Moscow sent forces into Ukraine in February 2022." Reuters. The US and the EU think they have a right to order India to stop trading with Russia although India is a sovereign nation and Russia has been a trusted friend of India, while Richard Nixon, a Republican president, considered using a nuclear weapon on India (nyt.com) during the 1971 war between India and Pakistan, which resulted in the creation of Bangladesh (wikipedia) . "Two and a half decades ago, India and Russia elevated their enduring ties into a formal strategic partnership - a commitment not just to friendship, but to shared purpose and joint endeavor." ET. "Many Indian refiners have paused new orders for Russian oil since US sanctions last week on Moscow's two top crude exporters as they await clarity from the government and suppliers, with some turning to the spot market for alternatives, industry sources said. However, state-run Indian Oil said...it would not stop buying Russian oil as long as it is complying with sanctions." Reuters. In March, "India has signed a $248 million with Russian state arms exporter Rosoboronexport to acquire more powerful engines for its Soviet-era battle tanks, the Indian Defence Ministry said." Reuters. India is also looking to acquire more S-400 surface to air (SAM) missiles from Russia at a cost of Rs 100 billion. Defence Security Asia. In September, "Russia has submitted a proposal to India for the supply and local production of its fifth-generation Su-57 fighter jets, news agency TASS reported ." India Today. Just to annoy India, Trump has continued to claim that he was responsible for stopping the conflict between India and Pakistan in May 2025, known as Operation Sindoor in India (pib.giv.in ), which India claims to have won. Yesterday, once again Trump said in Tokyo that "Seven-brand new, beautiful" aircraft  were shot down during the conflict. DH. Daily foreign exchange trading reached $9.6 trillion in April 2025 and of that the US dollar "was on one side of 89% of all Fx trades in April 2025." The euro was second with a share of 28.9%, the Japanese yen was at 16.8% and the UK sterling at 10.2%. bis.org. If we cannot use these currencies we can use gold. Get all our gold back to India. We can buy more from countries like South Africa. With dollars.     

Style on borrowing.

"The Indian rupee has outperformed its regional peers in October, aided by the central bank's consistent market interventions that have helped the South Asian currency find its footing after being hit by a barrage of negative cues. The local unit has climbed nearly 1% this month." Taking advantage of a stronger rupee, importers are buying up dollars and "traders say the central bank appears to be defending the currency around the 88-handle." ET. The rupee fell from 84.220 on 5 May 2025 to 88.866 to $1 before strengthening to 87.742 on 22 October. exchangerates.org.uk. It is trading at 88.30 to $1 this morning. xe.com. "Liquidity in India's banking system has turned negative for the first time in a month as the Reserve Bank of India's (RBI) dollar sales to defend the rupee and higher cash withdrawals during the festive season drained funds from the market." In June the RBI cut the interest rate by 50 basis points (bps) to 5.50%, for a total of 100 bps cut this year, and also announced "a phased 100 bps cut in the Cash Reserve Ratio (CRR) - from 4% to 3% - to be implemented in four tranches of 25 bps each, starting in September." ET. This was expected to release Rs 2.5 trillion into the banking system. All this was supposed to encourage bank lending and push down lending rates. However, RBI data show that, "till 22 August, loans to industry had risen by only 6.5%, in contrast with 10.6% to services and 11.8% to retail borrowers." The RBI has also increased lending against shares and mutual funds, freed up funds for non bank finance companies (NBFC) and allowed private equity to buy larger shares in banks and NBFCs. "Rattled by nearly $17 billion in foreign outflows this year, India is doubling down on financial sector reforms in a push to beef up capital buffers and lift investment in the country amid wider worries about the economic hit from US tariffs." Reuters. Industries may be reluctant to avail of easy borrowing but individuals are borrowing to fund lifestyle aspirations such as expensive cars and multiple holidays in a year. "Economist Deepanshu Mohan says that it is not just the affluent class but those in relatively lower economic strata who are aspirational and comfortable with a credit -fueled lifestyle spending." "Ritesh Srivastava, founder of FREED, a platform that helps people overcome debt-related issues," said  that "between 2021-25, the company resolved Rs 2 billion of debt and enrolled 38,000 customers." "The stressed unsecured retail debt size is $35-45 billion in India, according to FREED." TOI. The RBI is pushing banks to increase lending by trying to force down lending rates by flooding the banking system with cash. However, yields on the benchmark 10-year government bonds are at 6.540% this morning. in.investing.com. If the government is having to borrow at over 100 bps higher than RBI interest rate, how can industries borrow cheaply? If the debt levels in middle and lower-middle classes pile up people will be forced to cut spending. That will depress demand and industries will be loathe to invest in new capacity. Is the RBI pushing on a string?   

A rare chemistry.

"US President Donald Trump has arrived in Asia for a whirlwind week of diplomacy, which includes a much-anticipated meeting with his Chinese counterpart Xi Jinping." "Trump landed in the Malaysian capital, Kuala Lumpur, as a summit for the Association of Southeast Asian Nations, or Asean, begins on Sunday. He will then visit Japan and finally South Korea, where the White House says he will meet Xi." BBC. In a problem for India, "Trump...hailed Pakistani Prime Minister Shehbaz Sharif and army chief Asim Munir as 'great people'," because Sharif "said beautifully that the President (Trump) saved millions of lives," a remark made in reference to the US President's claim of 'stopping' the India-Pakistan conflict in May this year." HT. India has been hit with 50% tariffs on goods exports to the US, due to which, "September 2025 shipments fell to $5.5 billion, down 20.3% from August, marking the fourth consecutive monthly decline and erasing over $3.3 billion in monthly trade since May, according to a report from GTRI." Exports were $8.8 billion in May. TOI. In July, Trump signed an executive order imposing 50% tariffs on Brazil for prosecuting former President Jair Bolsonaro. CNN. Equal tariffs created great friendship between India's Prime Minister Narendra Modi and Brazil's President Luiz Inacio Lula da Silva. In July, following a Brics Summit, Mr Modi embarked on a state visit to Brazil during which he exchanged hugs with President Lula at Alvorada Palace and was presented with a guard of honor comprised of 114 horses. TOI. Unfortunately, though Mr Modi decided to skip the UN General Assembly where he was scheduled to deliver a speech on 26 September (ET), Lula attended and "was pleasantly surprised by his first-ever encounter with US President Donald Trump at the United Nations General Assembly, describing it as having 'some chemistry' despite months of tension between the two largest economies in the Americas." "I saw him, he saw me, and we embraced," Trump told the assembly." (TOI). Eyes meet among hundreds of people, a sudden chemistry of brain chemicals and two men fall into each other's arms, an explosion of bromance! This could be the 'most unkindest cut of all' (Dictionary) for Mr Modi and for India. In a video chat on 6 October, "Lula asked Trump to remove most of the duties. Trump said on social media they had a 'very good telephone call'." BBC. Mr Modi also skipped the ASEAN summit to avoid meeting Trump (India Today) but Lula can't seem to stay away from Trump. Just this morning, "Lula said at a briefing on the sidelines of the ASEAN summit in Malaysia that his discussions with Trump had gone well and that an agreement would be reached 'faster than anyone thinks'." ET. But, "India will not accept limits on its trading choices or rush to sign agreements, Trade Minister Piyush Goyal said." Reuters. As in any romance, Lula has a gift irresistible to Trump. Brazil's "subsoil is rich in rare earth minerals coveted by manufacturers in a sector dominated by China." ET. What can we woo Trump with? 

It's all government.

Assistant General Manager, Sarthak Gulati, of the Reserve Bank of India's (RBI) Monetary Policy Department has accused the State Bank of India's (SBI) Ecowrap report of plagiarism. He accused SBI Ecowrap of "verbatim replication of RBI's Monetary Policy Reports", which the SBI Research team, led by Chief Economic Advisor Soumya Kanti Ghosh called "sad and sensationalized".TN. We may be excused for finding this intellectual dispute somewhat amusing because both the RBI and SBI are fully owned by the government. "Although originally privately owned, since nationalisation in 1949, the Reserve Bank of India is fully owned by the Government of India." rbi.org.in. SBI is a public sector bank, which means that the government has a controlling share of 55.50%, making it a government bank. wikipedia. In addition, the RBI is the regulator of the SBI. "The Banking Regulation Act, 1949 empowers the Reserve Bank of India to inspect and supervise commercial banks. These powers are exercised through onsite inspection and off site surveillance." rbi.org.in. Since the RBI's observations become a directive for all commercial banks, how can it be wrong for the SBI to quote them? It may be a case of the right hand and left hand (Dictionary) of the government not being in harmony or it may be a subliminal message  (vocabulary.com) to the uninitiated that both banks work independently of each other and the government to provide in depth, detailed research reports into the economy in the service of the nation. The present Governor of the RBI Sanjay Malhotra is a serving officer of the Indian Administrative Service (IAS) since 1990 (wikipedia) and he succeeded a retired IAS officer Shaktikanta Das who was Governor from December 2018 to December 2024 and is now the Principal Secretary to the Prime Minister of India (wikipedia). The present Chairman of the SBI Challa Sreenivasulu Setty has spent his entire career in the bank since 1988. wikipedia. Meanwhile, "Life Insurance Corporation of India (LIC)...denied reports by The Washington Post that alleged Indian officials crafted and pushed through a proposal in May to steer roughly $3.9 billion in investments from the state-owned insurer to Adani Group companies. LIC called the claims 'false'." ET. The government owns 96.5% of LIC. wikipedia. The Congress alleged that SBI invested Rs 5.25 billion in 2023 and now LIC has invested Rs 330 billion in the Adani Group because of the friendship between Mr Modi and Mr Gautam Adani which makes it a "Modani Mega Scam". DH. Last week, "The Indian government has reportedly reduced the number of officials who can order content to be taken down from the internet." TOI. Till now any jobsworth flunkey could order takedown of any post he didn't like. Sadly, even the senior-most official can't take down an article in The Washington Post. That's how we find out. From pesky furriners.  

International hide and seek.

"US President Donald Trump has once again claimed credit for averting a potential war between India and Pakistan, saying he used the threat of steep tariffs to stop the two nuclear-armed neighbors from 'going at it'." He claimed that seven planes were shot down. TOI. "Indian Prime Minister Narendra Modi has told Trump that Delhi will never accept third-party mediation with Pakistan on the issue of Kashmir." "Foreign Secretary Vikram Misri said that Modi had 'strongly' conveyed India's long-held stand to Trump during a phone call between the two leaders on Tuesday (17 June)." Mr Modi also told Trump 'clearly' that "no talks were held at any level on the India-America trade deal or on the mediation between India and Pakistan by America." BBC. How muscular were "strongly' and "clearly"? Trump left Canada early during the G7 summit without meeting Mr Modi. HT. After telling Trump off, Mr Modi kept away from the live session of the UN General Assembly  (UNGA) ,which he was to address on 26 September. ET. "If he travels all the way to New York, the PM would really want to have a bilateral meeting with Trump. However, in the current circumstances, govt believes it's best to avoid a high-stakes meeting between the two leaders." TOI. Now Trump is claiming that India will stop buying crude oil from Russia. "India, as you know, has told me they are going to stop...it's a process." "By the end of the year, they'll be down to almost nothing, about 40% of the (Russian) oil." HT. This was repeated by the White House when, "The White House Press Secretary Karoline Leavitt...claimed India had scaled back Russian oil imports at US President Donald Trump's 'request'." "India has dismissed reports of any policy shift, reiterating that its priority remains safeguarding consumer interest." TOI. Perhaps, as a result, "Modi has decided to avoid traveling to Kuala Lumpur for the meeting with ASEAN counterparts, pouring cold water on speculation about a bilateral meeting with Trump on the sidelines of the summit." "Look forward to joining the ASEAN-India summit virtually, and to further deepening the ASEAN-India Comprehensive Strategic Partnership," Mr Modi posted on X. DH. Mr Modi has projected himself as a 'strongman' so he cannot be seen to be caving in to Trump but, "India's largest private oil refinery Reliance Industries is reportedly halting purchases of Russian crude, following the US' decision to sanction Russia's two largest oil companies, Rosneft and Lukoil." "In September, it purchased 629,590 barrels of Russian crude per day from the two firms, out of India's total imports of 1.6 million barrels per day." CNBC. Obey Trump, with deniability. India may strongly reject hyphenating India with Pakistan (India TV) but we have quietly accepted Sergio Gor as the US Ambassador to India, as well as Trump's special envoy to South and Central Asia (pmindia.gov.in). That puts us in the same basket, not only with Pakistan, but with all the other 'stans' in Central Asia. A nation has the right to refuse agrement to a diplomat without giving a reason. wikipedia. Our tourist prime minister loves to travel, as his schedule shows (pmindia.gov.in). How long will he play hide and seek with Trump? Even if it's entertaining.               

A bidding war in Bihar.

Bihar is to hold election to its assembly on 06 and 11 November 2025. Votes will be counted on 14.11.2025. static.pib.gov.in. The Bihar Assembly has a total of 243 seats. The National Democratic Alliance, which includes the BJP (80 seats) and the JDU (45 seats), has a majority with 130 seats in total. The opposition Mahagathbandhan (MGB) has a total of 111 seats. wikipedia. Mr Nitish Kumar of the JDU is the Chief Minister for the ninth time since 2024. wikipedia. Mr Kumar is complimented as "Paltu  Ram", meaning 'one who does the opposite', a 'chameleon', for his effortless ability to switch political parties (BT) for personal gain without being troubled by ideology. In the 2015 election, Mr Kumar gained widespread support of women by promising to ban alcohol and, although his party lost seats (wikipedia), he managed to hang on as chief minister. In 2016, he banned alcohol in Bihar. Abolition is still popular among women because it has decreased domestic violence and crime and has helped financially by saving money previously wasted on alcohol. However, Bihar loses Rs 40 billion in revenue annually and is estimated to have lost a total of Rs 300 billion between 2016 and 2025. NDTV. This time Mr Kumar has announced a women's employment scheme under which one woman from each family will be provided employment by the state and paid Rs 10,000 by direct transfer into a bank account. "After six months of employment, an assessment will be conducted, additional assistance of up to Rs 200,000 will be provided if required." TOI. Surely, every woman will expect to be paid this amount and disappointment will turn to rage if denied. "Prime Minister Narendra Modi, shedding all his pretensions of not doing rewdi (freebie) politics, transferred the first installment of Rs 10,000 each to 7.5 million women voters. Kumar also released Rs10,000 to another 2.1 million women." "By now, an estimated 12.1 million women voters in Bihar have received Rs 10,000." Tejashwi Yadav of the RJD has promised "a government job to one person in every family that currently has none. Bihar has about 25 million families, and about 2.5 million Biharis have government jobs. Yadav's announcement will require creating about 10 times the current government jobs," wrote Subhash Chandra Garg. Politicians brazenly hand out freebies to win elections, but no one seems to dare to ask them about the fiscal implications for the state and country. "Indian states already offer an amazing and vaired number of freebies over and above what economists call 'public goods' - defense, police, courts, education and healthcare." "Meanwhile, economists watch with worry as fiscal discipline is sacrificed on the altar of electoral maths." "This often takes India to the brink of the fiscal abyss, but politicians are savvy enough to stop short of disaster," wrote Swaminathan SA Aiyar. Maybe so far, but it can easily be one freebie too many if they keep playing Russian Roulette (wikipedia) with the economy. Who will fire the last freebie?   

Forget the impossible.

In a recent speech, Finance Minister Nirmala Sitharaman said that the country needs to grow at 8% to become a developed country, while Reserve Bank of India (RBI) Governor Sanjay Malhota said that recent growth rates continue to be below our aspirations, wrote Niranjan Rajadhyaksha. On 01 October, "The RBI's Monetary Policy Committee (MPC) revised its GDP growth forecast for FY2025-26 upwards to 6.8%, compared with 6.5% in August." ET. India is already the fastest growing major economy in the world, so can we grow any faster without overheating? Although, "India's retail inflation eased below the lower end of the RBI's 2-6% target range to 1.54% in September from 2.07% in August (ET)," the core inflation, which excludes volatile food and fuel prices (wikipedia), was at 4.2% and could shoot up if demand rises faster than supply. According to the Ministry of Finance, "the share of private consumption in nominal GDP increased from 60.2% in FY24 to 61.4% in FY25 (1 April 2024-31 March 2025)." ET. To stimulate growth private consumption has to increase and that can only happen if income increases. Which means that the private sector needs to create more jobs by increasing investment in new plants but "That will happen only when companies see strong consumer demand on the ground." A kind of 'chicken and egg situation'  (wikipedia). FM Sitharaman said, "there should no longer be hesitation for industry to invest, expand capacities, produce more in India, as the government has delivered on key reforms in taxation, ease of doing business and foreign direct investment." BS. "Foreign direct investment (FDI) plunged by over 68% to $1.1 billion in August as gross investments fell 30%, while repatriations out of India held firm." TOI. GDP may be growing fast and, "Yet, the financial foundations of Indian households, which are the backbone of both consumption and investment, are showing signs of strain. Declining financial savings, rising dependence on gold loans as well as overall indebtedness and a collapse of net FDI do not portend a strong foundation for growth," wrote Ajit Ranade. "Foreign investors see impressive things in India." "It can attract much more foreign investment, but it will not," wrote Swaminathan Aiyar. Because, "A TeamLease report found that setting up a stand-alone solar plant requires 2,735 compliances. Almost 40% of these are labor-related, although such plants employ little labor." "Reforms create losers in the short run, while benefits accrue only later." "If 6.5% growth is enough to secure re-election, why risk pursuing 8% growth that could alienate farmers, labor unions, and domestic big business?" So, numerous regulations lead to weak foreign and domestic investment, poor job creation and deteriorating household finance. 8% growth is impossible. 6.5% is fast. Worth boasting about. 

Don't tilt the earth.

Delhi suffered the worst air quality in 3 years when, "Average PM2.5 levels reached shocking averages of 488 micrograms per cubic meter - nearly 100 times the exposure limit advised by the World Health Organization - and, perhaps worse, represented a catastrophic 212% increase from pre-Diwali levels. The single highest reading? A literally eye-watering 675 micrograms per cubic meter on Diwali night (20 October)." NDTV. "India is losing sunshine." "Aerosols have reduced the amount of sunshine reaching the ground in India by about 13%, while clouds accounted for an additional 31-44% drop in surface solar radiation between 1993 and 2022, according to Sachchida Nand Tripathy, an atmospheric scientist. These patterns raise concerns for agriculture, daily life and India's solar energy ambitions." BBC. The government has decided that 20% ethanol in petrol is the right punishment for car drivers. So, a new survey by Local- Circles found that "20% ethanol mixed fuel has drastically reduced fuel efficiency and harmed engines of older cars," so that "maintenance costs have doubled in just the past two months." The Wire. "India's roll-out of fuel with 20% ethanol will hurt a vehicle's mileage by 2%-4% but is safe to use, a lobby group representing the country's automakers said." BS. Changing manufacturing lines to produce new engines with the technology to accept 20% ethanol will be expensive, increase the cost of cars, and may reduce sales and profits. As of September 2024, "there are 185 two-wheelers and 34 cars for every 1000 people in the country." Data for India. No need to consult such a tiny minority. "Ethanol burns faster than petrol, delivers about 34% less energy per unit, and is corrosive because it absorbs water. Brazil's flex-fuel vehicles (FFVs), re-engineered to run on ethanol, are built to counter these drawbacks," while "In US, which produces more than 50% of the world's ethanol, the standard is a 10% ethanol blend for which most vehicles are tweaked," wrote Anjana Menon. Producing ethanol from sugarcane requires 1,344 liters of water per liter of ethanol. "India's heavy use of groundwater in sugarcane irrigation worsens the blue water footprint," wrote Aditya Sinha. "Excessive groundwater extraction in India, over 25% of the world's total, has thrown the planet off balance, literally shifting it from its axis, says a new study. If it goes unchecked, it could disrupt the cycle of day and night and may lead to multiple crises, like food and water shortages." News18. Batteries of electric cars need to be charged with electricity. In 2020-21. 53% of India's electricity generation was from coal, down from 54% in 2010-11. "In absolute terms, coal-based power capacity jumped from 93,918 megawatts to 202,675 megawatts," wrote Vivek Kaul. Sunshine is free, so solar power should be the answer. But, sunshine depends on the weather and disappears at night, whereas the world needs electricity 24/7. Which means alternative sources must be available. So, "One study in China showed that the real cost of solar power on average was twice as high as coal, while a peer-reviewed study of Germany and Texas showed solar and wind power many times more expensive than fossil fuels," wrote Bjorn Lomborg. At least solar and wind power will not affect the earth's axis, ethanol production will. How long before the rest of the world objects? Politics is not always right.   

The India-US paradox.

"Flux in the global economy presents considerable challenges to the global macroeconomic outlook and the Indian economy is not immune," but our economy is resilient because of low inflation and strong corporate and banking balance sheets. "The Reserve Bank of India (RBI) earlier this month raised its forecast for growth in the Indian economy to 6.8% in the current year." ET. India cannot be immune to actions by other countries. "US President Donald Trump reiterated...that Indian Prime Minister Narendra Modi told him India will stop buying Russian oil, while warning that New Delhi would continue paying 'massive' tariffs if it did not do so." Reuters. "Between 2018-19 and 2021-22, India's oil basket underwent its first major shift." Oil from Iran and Venezuela were phased out. "The second transition came with the Ukraine war." "India's imports of Russian oil soared from 4 million tonnes in 2021-22 to over 87 million tonnes in 2024-25." Discounts on Russian oil saves $9 billion per year." BBC. "Despite narrower discounts compared to 2023, Russian oil remains one of the most economical options for Indian refiners due to landed discounts and high Gross Product Worth (GPW) margin outputs from grades like Urals." "While replacing Russian crude is technically feasible, as Indian refineries can handle diverse crude grades, the shift would be challenging, costly and risky." TOI. As a sovereign nation India has the right to do what is best for its economy and people, regardless of Trump's demands. Trouble is that both Iran and Venezuela are also sanctioned by the US. "Iran's crude oil and condensate exports have reached a new high over the past 12 months despite the imposition of 14 US sanction packages totalling 465 measures, including the toughest oil-related restrictions since 2018." AIR. "In recent years, successive US administrations have levied wave after wave of unilateral sanctions against Venezuela's oil industry. The goal is clear: to strangle the country's most important economic sector." Venezuelanalysis. Since we are complying with sanctions on Iran and Venezuela, why not Russia? Also, Indian citizens are not benefiting from the savings on discounts on Russian oil. "Petrol tax in India consists of 55% of petrol's retailing price while diesel tax is 50% of the fuel's retail value." cleartax.in. Clearly, the profits are going into the government's deep pockets. One big hurdle to accepting Trump's demand is that Mr Modi claims to be of divine origin. "After my mother died, I began to doubt whether I had biological origins, whether I was born biologically." Mr Modi wondered. abc.net.au. Can't be seen to be giving in to a mere mortal. Trump, on the other hand, feels justified in imposing tariffs on India because companies in Mr Modi's home state of Gujarat have been accused of smuggling fentanyl precursors to Mexico and Guatemala from where they are taken into the US. DH. Neither man seems likely to retreat. A classical 'Irresistible force paradox' (wikipedia)?   

From 17% to 25%.

According the the World Economic Outlook of the International Monetary Fund (IMF) in October 2025, "Global growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026, with advanced economies growing around 1.5% and emerging markets and developing economies just above 4%." However, "Risks are tilted to the downside." "IMF has revised upwards its forecast for global growth in 2025 from 3% to 3.2%. India's expected growth has received a similar upgrade to 6.6%. It notes that the negative effects of Trump tariffs are smaller than anticipated. But if everything is moving in the right direction, why are prices of gold and silver hitting record highs?" asks Dhiraj Nayyar. "World trade has entered a very volatile phase as US and China - the two pillars of the global economy - clash over technology, resources and power." "The fight is no longer about exporting more or about competitiveness. It is over control of minerals, chips, energy and technology." India is squeezed by both the superpowers, wrote Ajay Srivastava. "The October 2025 update of the Brookings-FT Tracking Indexes for Global Economic Recovery (Tiger) reveals an economic landscape that seems benign in some ways, but unsettled in others." "India's economy continues to post strong growth, driven by resilient urban consumer base and high levels of manufacturing investment." But, "The challenge of creating jobs for its young and inexperienced workforce, however, has intensified following the sudden turmoil in India-US economic relations," wrote Eswar Prasad & Caroline Smiltneks. The 'Make in India' initiative was launched in 2014 to increase the share of manufacturing to 25% of GDP and create 100 million additional manufacturing jobs. "However, the GDP share of manufacturing has actually fallen from 16.7% in 2013-14 to 15.9% in 2023-24. wikipedia. "With the sector currently contributing 17% to India's GDP, the Confederation of Indian Industry (CII) has reaffirmed its commitment to achieving the long-standing target of 25% of GDP share for manufacturing, a critical step towards India's goal of becoming a global manufacturing powerhouse." pib.gov.in. "Over the next decade, the US economy will face two big challenges: higher interest rates and AI-generated disruption." It will be tempting to keep interest rates lower than market level, known as 'yield-curve control' but this could create a zombie economy, as happened to Japan, wrote Allison Schrager. On the other hand, Prof Nouriel Roubini is very optimistic about America's future. "The country is ahead of everyone - including China - in most of the revolutionary innovations [such as artificial intelligence] that will define the future. Accordingly, its potential annual growth is likely to rise from 2% to 4% by the end of the decade, before rising much higher in the 2030s." Will the US harness AI to reach another level while we are trying to manufacture widgets? Only till 25%.       

Was it a brilliant decision?

"This Dhanteras (a celebration of renewal before Diwali), trade across the country is expected to cross Rs 1 trillion, with gold and silver alone accounting for more than Rs 600 billion, according to the Confederation of All India Traders (CAIT)." "Gold prices have jumped from around Rs 80,000 per 10 grams last year to over Rs 1,30,000 this year, an increase of about 60%. At the same time, silver has also risen sharply from 98,000 per kilogram in 2024 to Rs 1,80,000, showing a 55% increase." TOI. Finance Minister Nirmala Sitharaman and IT & Railways Minister Ashwini Vaishnaw outlined the benefits of cuts in rates of the goods and services tax (GST). While Two-wheeler sales reached 2.16 million units, "Passenger vehicle dispatches alone stood at 372,000 units in September, driven by a flurry of buying in just the last nine days of the month." ET. The new GST rates came into effect on 22 September 2025, with the number of rates cut to two rates of 5% and 18%. static.pib.gov.in. The jump in sales after 22 September was probably because, "Sales growth across products from cars to footwear has slumped to a decade low, excluding the Covid lockdown period, in the past month since the GST rate cut was announced on Independence Day (15 August), as consumers and retailers hold back purchases until the September 22 rollout." ET. Thus, the surge in spending could be due to a combination of a catch up in postponed purchases in expectation of a fall in prices and the usual festival spending. Though not the same, it is a release of pent up demand, reminiscent of 'Revenge Spending' after the shutdown during the Covid pandemic (CFI). The bulk of the sales was in precious metals probably as a hedge against the steady devaluation of the rupee against the US dollar, to a low of 88.866 on 09 October (in.investing.com), despite the valiant efforts by the Reserve Bank of India (RBI) to support the currency (ET). "India's retail inflation eased below the lower end of the RBI's 2-6% target range to 1.54% in September from 2.07% in August, driven by persistent cooling in food prices." Vegetable prices fell by 21.38% after a fall of 15.92% in the previous month. ET. The Wholesale Price Index (WPI) inflation fell to 0.13% year-on-year from 0.52% in August. ET. These figures show that prices are still rising compared to last year but not as fast. However, since inflation compounds year on year people get still less for their money. Household finances are weak. "One of India's structural determinants of sustained high and inclusive growth has been the resilience of household savings." Hence, "Declining financial savings, rising dependence on gold loans as well as overall indebtedness and a collapse of net foreign direct investment (FDI) do not portend a strong growth foundation for growth," wrote Ajit Ranade. Bank deposits have been lagging bank loans in the last two years, except for the first (April-June) quarter of this year. "When deposits grow slower than loans over a prolonged period, it could lead to liquidity and asset-liability mismatch challenges for the lender." Mint. A cash crunch leads to higher lending rates. So, is the explosion in spending due to a brilliant cut in GST? Or, is it only till the festivals are over? Will they tell us?     

What about water?

"First it was FAANG: Facebook, Amazon, Apple, Netflix and Google." Then came the Magnificent Seven: "Alphabet (parent company of Google), Amazon, Apple, Meta Platforms (parent company of Facebook and Instagram), Microsoft, Nvidia and Tesla." Fidelity. "Now in the age of generative AI, a new term is taking hold: MANGO - Microsoft, Anthropic, Nvidia, Google DeepMind and OpenAI." Axios. "Between 2013 and 2024, private AI investment in the US totaled $417 billion. China committed $119 billion. India's figure was $11.3 billion." "What we face today is not unlike the East India Company moment, when foreign enterprises that came to trade with us ended up ruling the subcontinent." Today, "From cloud to search and messaging to social media, we remain tethered to US platforms." "On the hardware side - servers, laptops, networking gear and semiconductors - we are reliant on China," wrote Ajai Chowdhry. US companies have money and are not shy to invest. "Google's parent company Alphabet will invest $15bn to build an AI data hub in southern India's Andhra Pradesh State." "The country's low data costs and rapidly growing internet user base have made it a hub for cloud and AI expansion for tech giants." BBC. India's "Tata Consultancy Services (TCS) gave a glimpse of its roadmap to become the 'world's largest AI-led technology services company' during its Q2FY26 investor call on October 9, as it announced plans to build 1 Giga Watt (GW) in data center capacity in India," at a cost of $6-7 billion over five to seven years, MC. "Adani ConneX - the data-center joint venture of Adani Group and US-based Edge ConneX, along with Airtel will build the infrastructure for Google's AI hub in Vizag, including the construction of a new international subsea gateway," and "The co-investment also includes new transmission lines, renewable energy projects and energy storage systems." HT. Good intentions, but China remains an obstacle. "China dramatically expanded its rare earths export controls.., adding five new elements and extra scrutiny for semiconductor users as Beijing tightens control over the sector ahead of talks between Presidents Donald Trump and Xi Jinping." Reuters. Undaunted, "Government-owned IREL (India) Ltd will supply raw materials to private companies under the government's upcoming Rs 73 billion program for manufacturing rare earth magnets, officials told Moneycontrol." Problem is - "Data centers powering artificial intelligence (AI) in Scotland are using enough tap water to fill 27 million half-liter bottles a year," as "AI systems such as large language models (LLMs) that power OpenAI's ChatGPT and Google's Gemini require warehouses full of specialist computers," "consuming large amounts of energy, but they also use tonnes of water in their cooling systems to stop servers overheating." BBC. Worryingly, "In 1951, India was a water-rich nation. Every citizen had more than 5,200 cubic meters of water available annually. Seven decades later, that figure has drastically collapsed to less than 1,500 cubic meters. By 2050, it is projected to shrink further to around 1,200 cubic meters, dangerously close to the mark that will make the country a water-scarce nation." India Today. AI can be produced artificially, but water is natural. How can we create water? 

Financial magic.

"The IMF's October 2025 World Economic Outlook forecasts India's GDP growth at 6.6% in 2025, a slight increase from 6.5% in 2024, before easing modestly to 6.2% in 2026." Even though, "Worldwide economic output is expected to decline from 3.3% in 2024 to 3.2% in 2025 and further down to 3.1% in 2026. This drop is attributed to elevated US tariffs," but "While US tariffs have dampened external demand globally, India has weathered the impact better than many." TN. Probably because our goods exports are so small. "India's merchandise trade deficit widened to a 13-month high of $32.15 billion in September, driven by gold and silver imports and a drop in export to the US following President Donald Trump's up to 50% tariffs on Indian goods." "Goods exports to the US fell to $5.43 billion from $6,87 billion in August," while imports from the US rose to $3.98 billion from $3.6 billion. Reuters. "In Q2FY26, exports recorded 9% YoY growth vs a 7% decline in the past year." So, part of the growth could be due to base effect. "Overall, in H1 FY26 (1 April-30 September), merchandise trade deficit stood at USD 155bn vs USD 145bn during the same period last year, with exports up 3% YoY to USD 220bn and imports rising 4.5% to USD 375bn." ET.  "The Indian rupee has become the worst performing Asian currency this year, particularly in August." Foreign investors net sold Rs 238.85 billion Indian stocks in September after selling Rs 349.93 billion in August, wrote Payal Bhattacharya & Manjul Paul. The rupee fell to a low of 88.866 against the dollar on 09 October. in.investing.com. However, according to data from the NSDL, foreign institutional investors (FIIs) bought Rs 30 billion worth of shares in the secondary market as well as Rs 76 billion in the primary market  between 07 and 14 October. ET. The rupee also jumped against the dollar. "The rupee extended its gains on Thursday (yesterday) to settle at around 87.83 per dollar due to a decline in dollar index, and improved investor sentiment after heavy dollar sales by the Reserve Bank of India (RBI)." BS. "In June, the central bank had announced a phased 100-basis-points CRR cut from September to November to release about Rs 2.5 trillion ($28.3 billion)," freeing up funds "that banks must otherwise park with the central bank, boosting liquidity and typically easing short-term rates." But selling of dollars, to support the rupee, and maturing foreign exchange forwards is draining liquidity. Reuters. "The RBI has built up short dollar positions of at least $15 billion in the non-deliverable forwards market over the past two to three weeks to defend the rupee, Bloomberg News reported." ET. Amid all this incomprehensible confusion the RBI makes so much profits that it transferred Rs 2.69 trillion of surplus in 2024-25 to the government in May 2025. MC. This is financial magic. And the governor is the magician. 

A hug in time.

India and Canada took a major step forward to normalize their relationship as foreign minister S Jaishankar and his counterpart, Anita Anand, announced a roadmap comprising a slew of initiatives to boost cooperation," as "Anand, who is traveling to Mumbai as well during her first visit to India as foreign minister, was welcomed by PM Modi for a meeting as the bilateral meeting continues to thaw." TOI. Relations plummeted when former Prime Minister Justin Trudeau accused the Indian government of involvement in the fatal shooting of Canadian citizen Hardeep Singh Nijjar. CBS. Nijjar was shot to death in the car park of a Gurudwara in British Columbia on 18 June 2023. "In May 2024, the Royal Canadian Mounted Police (RCMP) arrested three Indian nationals, who were charged with killing Nijjar." wikipedia. Accusations led to tit-for-tat expulsion of diplomats and India stopped issuing visas to Canadian citizens wishing to travel to India. Reuters. Trudeau resigned and Mike Carney was elected as the 24th prime minister of Canada in March 2025. wikipedia. However, for the first time in six years, until 5 June, Prime Minister Narendra Modi had not been invited to the G-7 summit to be held in Canada from 15 to 17 June. Bloomberg. Finally, on 6 June, Mr Modi received a call from Carney inviting him to the summit  (mea.gov. in) "but not as a participant - only as an observer" (Jawhar Sircar). The present bonhomie between India and Canada may have been forced by a 35% tariff on Canada by US President Donald Trump (The Hindu) and a hefty 50% tariff on goods from India (BBC). A thaw in relations is good but it is hard to imagine what India can sell to a country with a total population of just over 40 million people (worldometer), probably equal to the combined population of Delhi and Mumbai (census2011.co.in). Naturally, about 77% of Canada's trade is with the US, with China at 3.70%, UK at 2.40%, Japan at 2.32% and Mexico at 1.17%. WITS. Perhaps, the biggest export from India to Canada is Indians. Starting at 21,000 in 2016, the number of students migrating to Canada rose to 278,000 in 2023. Only 48,000 have been accepted this year so far. India Today. Youth unemployment rate in India was 16.028% in 2024. FRED. In an interview Ms Anand said, "We are making sure that we work together on law enforcement and security." "So, Canada is taking every step necessary to ensure the safety and security of Canadian citizens on Canadian soil." TOI. Which means, don't do that again. Mr Modi is known to be a serial hugger of men (The Quint), but he ignored Trudeau for seven days when Trudeau visited India on a state visit along with his family, finally hugging him at an official reception on the last day in India (CNN). Trudeau has moved on and was last seen hugging pop singer, the luscious Katy Perry on a yacht. NDTV. While, Mr Modi had to receive foreign minister Anita Anand because AI is eating jobs of educated Indians (TOI) and he must be wanting to export more Indians urgently. Should have hugged Trudeau on the first day itself. Ms Anand is not for hugging. 

Any peace is worth it.

"Hamas freed the last living Israeli hostages from Gaza on Monday (13 October) under a ceasefire deal and Israel sent home busloads of Palestinian detainees, as US President Donald Trump declared the end of the two-year long war that has upended the broader Middle East." Reuters. However, "Trump has said that his 20-point plan for Gaza does not guarantee a two-state solution for the creation of the state of Palestine." "While there has been a growing international recognition of the state of Palestine, with 157 of the 193 UN member states, it is not recognized by both Israel and the US." TIE. "In 1974, India became the first Non-Arab state to recognize the Palestinian Organization (PLO) as the sole and legitimate representative of the Palestinian people. In 1988, India became one of the first countries to recognize the Palestinian state." Representative office of India. The problem is, "There was no such thing as Palestinians. When was there an independent Palestinian people with a Palestinian state? It was either southern Syria before the First World War and then it was Palestine including Jordan," said former Prime Minister of Israel Golda Meir. A unified Palestinian state, with one government, seems impossible because Gaza is on the west of Israel while the West Bank is on the east. Map. There is precedence. In 1947, West Pakistan was carved out of Punjab while East Pakistan was carved out of Bengal, with India in between. wikipedia. Lasted just 24 years, as East Pakistan became Bangladesh in 1971. wikipedia. The West Bank is governed by Fatah, the party of Yasser Arafat, and Mahmoud Abbas is the president. wikipedia. Gaza is controlled by Hamas, which is an offshoot of the Egyptian Muslim Brotherhood, a terrorist organization, and is in conflict with Fatah. wikipedia. The 20-point peace plan promises amnesty and free passage to all Hamas members who disarm and asks "Hamas and other factions agree to not have any role in the governance of Gaza directly, indirectly, or in any form." wikipedia. Hamas can never agree to that. If Hamas members disarm completely they may be attacked by ordinary Palestinians who may blame them for loss of loved ones and hardships they had to endure. Arab states are monarchies and will not want trained terrorists on their soil. "Even as key Arab states condemned the war in the Gaza strip, they quietly expanded security cooperation with the Israeli military, leaked US documents reveal." ICIJ. Although the peace deal prohibits the Israeli army from any operation in Gaza, it does not mean that Israel will forgive those it feels were responsible for the horrific attacks on 7 October 2023. (Britannica). Hamas members will be familiar with Operation Wrath of God (wikipedia) in which the Mossad killed members of the Black September terrorists responsible for the Munich massacre of Israeli athletes. Ehud Barak, later prime minister of Israel, famously disguised himself as a Muslim woman to kill Palestinian operatives inside Beirut. Y net news. So, will the peace last? Probably not. But, it is still worth it.     

The rupee doesn't know.

"India's rupee has barely budged over the past three weeks," as "The currency has been stuck in a narrow range, struggling to break past the 89-per-dollar mark after hitting fresh lows." "The Reserve Bank of India (RBI) has built up short dollar positions of at least $15 billion in the non-deliverable forwards market over the past two to three weeks to defend the rupee, Bloomberg News reported." ET. "India's external debt stood at USD 747.2 billion at the end of June 2025," with long term debt (original maturity of above one year) of $611.7 billion, the RBI said. NDTV. "India's foreign exchange reserves stood at $699.96 billion as on October 3, data released by the RBI showed." BS. Even though our reserves are less than our debt, the good thing is that the major portion of our debt is long term. However, RBI's definition of 'long term' as 'original maturity over one year' seems a little odd. "In the fixed-income market, bonds that have a maturity period of 2-10 years are considered to be medium-term bonds." Investopedia. One year maturity would be considered short term. Also, 2-11 months may have elapsed from the 'original maturity of one year' on some of the debt, which would make that part of the debt short term. Should we be worried at the addition of another $15 billion? In addition, "Companies may raise up to $1 billion or 300% of their net worth (whichever is higher), while financial sector firms regulated by RBI, Sebi, Irdai or PFRDA face no cap." TOI. All our regulators are controlled by the government, which means people linked to politicians or civil servants may register companies to be able to borrow any amount in foreign currency. Also, "Tucked in the new plan to liberalise the foreign loan regime is a move that every RBI governor in the past had resisted for the past 30 years. It deals with opening the gates to external commercial borrowings (ECB) in real-estate - an idea that the central bank had repeatedly scotched after the '97 Asia Crisis that had stemmed from foreign currency debts in properties." ET. All loans will have to be paid back with interest, so how will the RBI finance the foreign exchange outflow? From new loans? Sounds suspiciously like a Ponzi scheme  (wikipedia). "For Indian investors, this could be a reminder that keeping one's entire wealth in rupee-denominated assets could expose portfolios to risk that is often underestimated - currency depreciation." "A global allocation protects against rupee weakness," wrote Arihant Bardia. But how? Capital account convertibility, which is the ability to freely convert the rupee into any foreign currency and back, is forbidden in India. CNBC. However, rich people can invest through funds or offices in foreign countries. Ordinary people cannot. So, they buy gold. "India's merchandise trade deficit is expected to have widened to USD 28.0 billion in September 2025," "driven primarily by a sharp rise in gold imports, which nearly doubled month-on-month despite record-high prices." ET. Why are we borrowing to support the rupee? Are these the "Achhe Din (good days)" we were promised (wikipedia)? The rupee doesn't seem to know.      

Fancy stories.

On 09 October, "Afghanistan's Taliban government has accused Pakistan of violating Kabul's 'sovereign territory', describing it as an 'unprecedented, violent and provocative act'." "The allegation comes as two loud blasts were heard in the city. Pakistan had also bombed a civilian market in the border province of Patika, in Afghanistan's south-east." "Pakistan has neither confirmed nor denied that they had launched an attack inside Afghanistan." BBC. "Islamabad says militants of the Tehreek-e-Taliban Pakistan (TTP) operate from Afghanistan, a charge denied by Kabul." "A Pakistani security official said a vehicle used by the leader of the TTP, Noor Wali Mehsud, was targeted in the Kabul airstrike. It was unclear if he survived." Pakistan accuses India of supporting TTP, India denies the accusation. Reuters. "A Taliban spokesman said 58 Pakistani military personnel had been killed in what it called 'an act of retaliation'." BBC. "At least 23 Pakistani soldiers and over 200 Taliban affiliated terrorists were killed in intense overnight clashes along Pakistan-Afghanistan border, the Pakistan Army said." DH. Claims and counter-claims are reminiscent of India's retaliation against the Pahalgam attack on 22 April 2025, targeted mainly against Hindu tourists  (wikipedia). On 07 May, "Indian Armed Forces launched 'Operation Sindoor' hitting terrorist infrastructure." "Our actions have been focused, measured and non-escalatory in nature. No Pakistani military facilities have been targeted." pib.gov.in. However, in September, during a cricket game against India, Pakistani fast bowler Haris Rauf made a '6-0' gesture towards the Indian crowd to indicate six Indian fighter aircraft shot down during Operation Sindoor. TOI. Not in retaliation, on 03 October, "IAF destroyed 9-10 Pakistani fighters like US-origin F-16s and Chinese JF-17s, as well as at least two special aircraft...Air Chief Marshall AP Singh said.., while rejecting Islamabad's counter-claims as 'manohar kahaniyan (fanciful stories)." TOI.  In September, nuclear-armed Pakistan signed a mutual defence pact with Saudi Arabia which "states that any aggression against either country shall be considered an aggression against both," a statement from Pakistani prime minister's office said." Reuters. US troops fled Afghanistan on 30 August 2021 (wikipedia) leaving $7 billion worth of military hardware behind. "According to a 2022 Department of Defense report, 78 aircraft, 40,000 military vehicles and more than 300,000 were among some of what was left behind." CBS News. Mutual defence pact vs $7 billion worth of arms, six Indian planes vs 9-10 Pakistani ones, 58 or 23 Pakistani soldiers vs 200 Taliban. Very confusing. Which story is most fanciful?   

Teacher to friend.

"One of the most evocative terms invoked in the lexicon of India's recent self-identity is 'Vishwaguru' i.e., the idea of India as a 'teacher to the world'." "The Vishwaguru narrative found prominence in the early years of the Modi government, especially between 2014 and 2019." However, since 2019, "Increasingly, India is being framed not as a Vishwaguru, but as a 'Vishwamitra', a 'friend of the world'," wrote Sanchari Ghosh. We may hanker to be friends of the world, but the world is rejecting Indians. "With the benefit of hindsight, it's not surprising to see the recent spate of attacks on diaspora Indians, NRIs or people of Indian origin across the globe." "So when you read about assaults on Indians today - online, offline, in the workplace, on the streets of Dublin, Melbourne or California - it feels less like an aberration and more like a revert to an old system where politesse merely deemed that one not be openly racist." TOI. But, why are Indians so desperate to migrate to other countries, despite all the hostility and expense? Why is there an American Dream, an "ideal that the United States is a land of opportunity that allows the possibility of upward mobility, freedom, and equality for people of all classes who work hard and have the will to succeed, (Britannica)," and not an Indian dream?  "According to the new Trade.gov data analysed by The New York Times, student arrivals from India dropped by 44% in August 2025 compared with the same period last year." TOI. "Students are increasingly factoring in the predictability of visas, work opportunities, and long term career pathways." After the "proposed changes to the H-1B program, including $100,000 employer fee, have triggered widespread alarm among students and families, raising serious doubts about the feasibility of pursuing education and long term career in the US." ET. The italics are intentional, to highlight the fact that these are migrants disguised as students. Two days ago, "Tension prevails at Pondicherry University after police lathicharged (caned) and used force to disperse students who staged a demonstration ...demanding the immediate suspension of faculty members on Karaikal and Puducherry campuses accused of sexually harassing research scholars and students." TOI. Police in Bhopal in Madhya Pradesh allegedly thrashed a 22 year old engineer to death for celebrating his passing out. Apparently, the policemen demanded Rs 10,000. Mint. Will the perpetrators be punished? Unlikely, very unlikely. Crimes are best denied and covered up. "From billionaires hedging for mobility and tax, to professionals seeking career flexibility, to students mapping the PR-to-citizenship route, moving to another country for a foreign passport or even foreign residencies continue to lure high networth individuals in India." ET. Apparently for increased mobility, lower taxes and better education for children. Maybe, also to keep daughters safe from being caned by the police after being sexually molested by teachers and sons from being murdered by the police for partying. From Guru (teacher) to Mitra (friend). The world doesn't want either. Neither, it seems, do Indians.