Just do your duty.

"US President Donald Trump has issued a new executive order that slaps import tariffs on a long list of American trading partners. The decision...is set to go into effect on 7 August and covers a wide range of goods from 69 countries." ET. On 27 July, "The US struck a framework trade agreement with the European Union,.. imposing a 15% import tariff on most EU goods - half the threatened rate - and averting a bigger trade war between the two allies that account for almost a third of global trade." Reuters. "France denounced the trade agreement between the EU and the US as a 'submission'...though other EU states largely backed a deal they acknowledged was lopsided but which averts an economically damaging war with Washington." ET. "The country's (France's) deficit for 2024, which was initially forecast to be 4.4%, was later revised upwards to 6.1%. This revision raised serious questions not only about the state of France's public finances but also about how it was possible that the worsening budgetary situation was able to fly under the radar for so long." blogs.lse.ac.uk. "Industrial production in France fell unexpectedly again in January, declining by 0.6% for the industry as a whole, following a downwardly revised fall of 0.5% in December. The decline was 0.7% for manufacturing, after a drop of 0.1% in December. ING. If France had put its own house in order, instead of fudging its figures, there would be no need for it to be so indignant. Trump "slapped a 50% tariff on most Brazilian goods to fight what he has called a 'witch hunt' against former President Jair Bolsonaro, but softened the blow by excluding sectors such as aircraft, energy and orange juice from heavier levies." Reuters. "There is perhaps no world leader defying Trump as strongly as Lula." "President Luiz Inacio Lula da Silva of Brazil is outraged. President Donald Trump is trying to push around his nation of 200 million, dangling 50% tariffs as a threat, Lula said in an interview. And yet, he added, the US President is ignoring his government's offers to talk." ET. "The US economy surged between April and June," as its "GDP increased at an annual rate of 3% in the second quarter, the Commerce Department said." "This number represents a turnaround from the first three months of 2025, when GDP fell 0.5%." CBS. "US inflation increased in June," as "Personal Consumption Expenditures (PCE) price index rose 0.3% last month," and "In the 12 months through June, the PCE price index advanced 2.6% after increasing 2.4% in May." ET. On 30 July, the US Federal Reserve "said it would maintain the funds rate at its current range of 4.25% to 4.5%. The last time the central bank cut its interest rates was in December 2024." CBS. This is even after Trump called Fed Chair Jerome Powell a "stubborn moron" and said he is "too stupid" for not cutting interest rates. Opindia. The Fed is doing its duty. Governments should do the same. Trump is temporary. Duty is permanent.   

Not dead as yet.

"Donald Trump said that India will pay a penalty over and above the decided 25% for its trade with Russia despite the ongoing Ukraine war." HT. "I don't care what India does with Russia. They can take their dead economies down together, for all I care. We have done very little business with India, their tariffs are too high, among the highest in the world," he said. In response, Commerce Minister Piyush Goyal said in Parliament that "the Indian economy will soon become the third largest in the world in terms of GDP size and is currently the world's fastest growing major economy." TOI. The biggest puzzle is that our GDP is driven by private consumption when the vast majority of our people are too poor to consume. A report by the Ministry of Finance "highlighted that the share of private consumption in nominal GDP increased from 60.2% in FY24 to 61.4% in FY25. This marks the second highest level in the last 20 years." ET. While the number of income tax returns has "more than doubled, from 33.5 million in 2013-14 to 75.4 million in 2023-24," the number of "individuals filing zero-income tax returns has also more than doubled from 16.9 million to 47.3 million over the same period." Which means that the actual number of taxpayers has increased from 16.6 million to 28.2 million. NDTV. The overwhelming majority of Indians earn too little. This is supported by the fact that Prime Minister Narendra Modi announced that 813.5 million people will be provided free food grains for five years from 1 January 2024. pib.gov.in. Citing International Labour Organisation (ILO) data Mr Modi said that 950 million, or "64% of India's population received at least one social security benefit." TOI. Does it mean that 64% of our consumption, comprising about 40% of our GDP, is just government handouts? Is it productive? Should it even be counted? In the same speech, Mr Goyal also said that "the government stands firm in protecting the interests of Indian farmers, workers and entrepreneurs." ET. India's Consumer Price Index (CPI) inflation fell to 2.10% year-on-year in June 2025 with food prices contracting by -1.06%. pib.gov.in. Vegetable prices have fallen by 19% and pulses by 12%, partly due to good rainfall but also because the government imported 7.3 million tonnes of pulses last year at prices lower than the Minimum Support Price (MSP) which is set by the government to guarantee (Vikaspedia) a minimum income for farmers. This resulted in lower farmgate prices while input costs have been rising relentlessly, reducing income of farmers and "mass distress is likely to intensify now", wrote Prof Himanshu. In 2023, Union Home Minister Amit Shah said that "about 65% of the people in India are engaged in agriculture and allied activities directly and about 55% of the workforce is engaged in agriculture and allied activities." pib.giv.in. Farmers thus constitute a gigantic vote bank (wikipedia) and, after fleecing them to force inflation down, to please urban voters, the government doles out Rs 2,000 every four months, for a total of Rs 6,000 annually, to every eligible farming family. DD News. At today's prices this is not even chump change. When the government functions solely to win elections the economy becomes sick. Not dead as yet. Gasping may be.

Can anyone do a Soros?

"US President Donald Trump yesterday announced that 'friend' India will be paying a 25% tariff from August 1. He also noted that New Delhi will have to pay additional penalty due to its oil and military purchase from Russia in the face of the ongoing war in Ukraine." HT. "If this tariff is sustained, this move may directly affect key sectors such as marine products, pharmaceuticals, textiles, leather and automobiles," said Agneshwar Sen and "may shave off 20 basis points from India's GDP growth if the tariff rate stays at that level," according to Garima Kapoor. TOI. "India's faltering equities market faces the risk of more losses," as "foreign investors have accelerated their withdrawals, turning attention to cheaper or more attractive markets like Hong Kong and South Korea. The value of India's stock market is down $248 billion since reaching a record on July 2." ET. The Indian rupee (INR) fell to 87.663 against the US dollar (USD) yesterday. It had fallen to 87.789 on 7 February but hardened to 84.220 on 5 May. exchangerates.org.uk. "India's forex reserves dipped by $3.06 bn to $696.67 billion for the week ending 11 July, data by Reserve Bank of India (RBI) showed." ET. Forex reserves "rose to $702.8 billion as of June 27," and "At the same time, RBI's short-dollar position in the forward market, which had risen to $88.7 billion in February, declined to $65.2 billion in May. Substantial short positions in the forward dollar book offset some of the cushion offered by headline FX reserves, since they imply future commitments that could drain the reserves." Reuters. "According to recent data, the RBI's gold holdings remain stable at 880 metric tonnes from end-March through end-May this year." That may be because, "Price projections from Citi, a Fitch Research division, Motilal Oswal Securities and ICICI Bank suggest a decline from $3,445 per troy ounce." TOI. "From dismantling its protectionist 'inspector raj,' to cutting duties on Tesla Inc cars, and treating Amazon.com Inc and Walmart Inc on a par with domestic retailers, India is under pressure on many fronts on its trade talks with the US." But India must not compromise on ethanol produced from maize (corn), to broken rice, rotten potatoes, sugarcane and molasses, for mixing with automobile fuel because that would hurt income for our farmers, wrote Andy Mukherjee. "Next month's talks would probably be the 50th round of negotiations with the US," because the US is focusing on a single overall tariff figure. "For Britain it was 10%, the EU and Japan settled at 15%, Indonesia at 19% and Vietnam was about 20%-plus. So, this is the 'Trump deal' within the deal. It's unprecedented and, until now, not even properly documented as a model," wrote Pranab Dhal Samanta. "The economy has the look and feel of 'steady as she goes' as far as FY26 is concerned, the Finance Ministry's Monthly Economic Review for June said, even though it pointed out downside risks." ET. In September 1992, George Soros made a profit of $1 billion by short selling the pound forcing the UK government to withdraw the sterling from the European Exchange Rate Mechanism. wikipedia. Can the Indian rupee also be shorted, even though it is not fully convertible? Can anyone do a Soros on the rupee? Despite the RBI.       

Digital Rozgar Mela.

 On 12 July, "Prime Minister Narendra Modi distributed over 51,000 appointment letters to newly appointed youth in various government departments and organisations via video conferencing at the 16th edition of Rozgar Mela (employment fair)." ET. In April, PM Modi "distributed 51,236 appointment letters to newly-recruited candidates in central government departments and organisations as part of the 15th Rozgar Mela. The event was held virtually and coordinated across 47 locations nationwide." NDTV. Why is this such an enormous publicity opportunity for Mr Modi? Because, in September 2024, "In Haryana, over 166,000 candidates, including more than 6,000 postgraduates and nearly 40,000 graduates, have applied for the position of sweeper in government departments, boards, corporations, and civic bodies, offering a salary of Rs 15,000 (about $175) per month. ET. The reason is that these positions are a kind of gift to keep people happy. Performance and efficiency are optional. For example, in 2022, three municipal corporations in the capital city Delhi had a total of 60,000 sanitation workers. TIE. And yet, Delhi is extremely dirty with rubbish strewn everywhere and cows and feral dogs rummaging for food in the rubbish tips. "The youth, or those between the ages of 15 and 29 years, make up 27% of the total population, thus representing a vast potential workforce. Yet, this is the very segment facing an acute crisis of high unemployment, low employability and widespread under-utilization." "According to the India Employment Report 2024, the youth make up 83% of the total unemployed." At the same time, "The coexistence of high unemployment among educated job-seekers and an acute shortage of skilled candidates expressed by industry is a severe indictment of the country's higher education system," wrote Ajit Ranade. "Our most telling finding was that for so many of our respondents, the aspiration was a government job, a coveted position of stability and security," reported a study by Prof Mathangi Krishnamurthy & Ms Rama Bijapurkar. "They are eschewing the full depth and breadth of possibilities that new India offers for them to aspire to, replacing it with the self-inflicted myopia of bonsai dreams and perfectly stable lives." This is not as myopic as the authors think because, "India's largest IT exporter and private-sector employer, Tata Consultancy Services (TCS), has decided to lay off around 2% of its workforce, roughly 12,000 employees," because of "a skill mismatch and lack of deployment feasibility for certain roles." ET. With such high rates of unemployment, losing jobs must be devastating. No wonder, a study by MediBuddy showed that "70% of employees are carrying at least one lifestyle-related health risk." Most alarming, "Non-communicable diseases now account for 63% of all deaths in India, with heart disease, diabetes and stroke impacting the workforce at median ages of 32, 34 and 36 respectively." ET. Since performance is not a necessity for government jobs, "stability and security" are assured. That, in India, is more valued and coveted than a high paying position in the private sector with the threat of sudden termination. Rozgar Mela: how to milk unemployed misery for free publicity. Taxpayer pays.   

Don't bet on it.

"The BJP...hailed Prime Minister Narendra Modi's tenure as 'golden chapters of development'," "after Modi overtook Indira Gandhi to become the second-longest serving prime minister of India in consecutive terms after he completed 4,078 days in office on Friday (25 July). Gandhi was in office in an unbroken stint for 4,077 days." DH. Ms Indira Gandhi was prime minister from 24 January 1966 to 24 March 1977 and then again from 14 January 1980 to 31 October 1984. wikipedia. Presumably, the BJP is comparing with her first term in office. However, "Rashtriya Swayamsevak Sangh (RSS) chief Mohan Bhagwat's remark on stepping aside at the age of 75 has prompted opposition politicians to question its implications for PM Modi, who, like Bhagwat, turns 75 this September." HT. It seems unlikely that Mr Modi will want to retire as he is almost never in his office and the lists of his international and domestic tourism (PM India.gov) suggest he must be hugely enjoying himself. Mr Bhagwat has been a friend and supporter of Mr Modi for decades and Mr Modi has the support of the BJP. The Hindu. Indeed, the rank and file of the BJP would probably want Mr Modi to stay because they see him as an election winner, although the BJP won only 240 seats in the 2024 general election, well short of the 272 required (ECI) to form a government on its own. "Remember how they pasted his picture on Covid-19 vaccine certifications? And on school satchels? Not to speak of every page of every news outlet, although positioning his head just a millimeter above that of pretenders who draw breath from the slightest tilt of his eyebrow. And now the time comes when these mischievous satraps have him gracing even such quotidian pieces of authorisation as railway booking tickets," wrote Badri Raina. On the other hand, the other leaders in the BJP would surely want him to step down so that one of them could grab the seat of prime minister till the next general election in 2029. If Mr Bhagwat keeps his word and steps down on the exact date, the taunts from the opposition and subtle pressure from the other leaders, before they themselves hit the sell-by date, may become intense. Mr Modi himself came through the ranks of the RSS and won elections because of its support, wrote Christophe Jaffrelot, so will he dishonor its tradition? "The Vedas, from whence we are instructed, Hindutva derives, designate 75 as the marker for the jeev atma (the fleshly human) to turn towards the forest in order to renounce this world and begin the quest for moksha (salvation)." So will Mr Modi defy Vedic principles and "stick to his worldly project of finishing the political job of making Bharat great again via her make-over into a theocracy? asked Badri Raina. Will Mr Bhagwat step down in September or will he be pressured to stay? Will Mr Modi go if Mr Bhagwat does? Best not to bet on it. Odds of losing will be 99 to 1.     

Yacht parties better than capex.

"Finance Minister Nirmala Sitharama...said India's private sector appears to be holding on to 'passive investible funds' instead of deploying them towards new capacity creation, even as government capital expenditure (capex) continues to be the main driver of economic growth." CNBC. The government spends taxpayer money as it pleases without being held to account by a 'Godi (lapdog) media' (wikipedia) but companies have to account to shareholders and regulators. "Public Sector Banks (PSBs) in India have written off loans amounting to more than Rs 12 trillion between financial years 2015-16 and 2024-25, the finance ministry informed the Rajya Sabha on July 22." Write offs in the last five fiscal years (FY21 to FY25) exceeded Rs 5.82 trillion. The Wire. To create new capacity needs hard work, but "India's Gen Z billionaires are bored with business." "Today among the scions of some of the most affluent families of India, someone is an artist, someone wants to be a sportsman, someone wants to run a small restaurant." "It's the modern trend, people want to do their own thing," said Dilip Piramal, 75-year-old Chairman of VIP Industries. DH. "There was a time when being born into a business family meant inheriting responsibility before wealth." But, "Modern scions believe in passive income, aggressive networking and yacht parties," Harsh Goenka, Chairman RPG Enterprises. There are many reasons why companies are reluctant to invest. UBS Securities India said, "The lack of clarity on international trade is a significant factor hindering long-term capital expenditure by Indian companies." ET. The US and the European Union (EU) reached "a broad trade agreement yesterday that sets 15% tariffs on most European imports." By concluding the deal before 1 August the EU averted 30% tariffs. Mint. But, "As the window of opportunity for India to seal a trade deal with the US closes on Aug 1 -when tariffs are set to increase to 26% - New Delhi appears to be unfazed." CNBC. A report by Team lease "revealed that setting up and operating a standalone solar plant in India entails an astonishing  2,735 compliance obligations - a level of red tape that makes one wonder how India manages to grow at all. Remember, solar energy is a high-priority area for which the govt offers several incentives and subsidies," wrote Swaminathan Aiyar. To invest, businesses need workers. "Only 42.6% of Indian graduates were found employable last year, marking a decline from 44.3% in 2023, reveals a recent report by Mercer-Mettl, which attributes the drop primarily to a lack of non-technical skills." The Print. And, "L&T chairman says laborers are unwilling to work or relocate for jobs due to the availability of welfare schemes and a preference for comfort." HT. "Prime Minister Narendra Modi...said over 950 million Indians were now covered under at least one social security scheme." TOI. Mr Mohandas Pai "slammed tax authorities and the central and state governments for 'oppressing' taxpayers and hounding them with 'tax terrorism'." FE. Red tape, tax terrorism, unemployable graduates, unavailable labor. Why invest? Yacht parties better. Over to FM.

They are unfazed.

"As the window of opportunity to seal a trade deal with the US closes on Aug 1 - when tariffs are set to increase to 26% - New Delhi appears to be unfazed by the looming deadline." CNBC. "US total goods trade with India were an estimated $129.2 billion in 2024." India imported $41.8 billion worth of goods from the US while we exported $87.4 billion to the US, giving us a positive trade balance of $45.7 billion in 2024. ustr.gov. "In 2024, India was the United States' 10th largest trading partner by country (2.4% of US trade), and the US was India's largest goods trade partner (10.8% of India's trade)." "The US trade deficit with India was -$45.6 billion for goods and -$485 million for services in 2024." congress.gov. Perhaps, we should be a little more fazed about a trade deal with the US. "India's largest export, it is often said, is middle management talent to large global corporations." "One does not need to name the many poster boys and girls of this phenomenon. They are well known and well celebrated in India," wrote Rama Bijapurkar. Like all exports, "Overseas Indians sent home a record $129.4 billion in 2024 with the highest ever inflows of $36 billion in the December quarter alone." ET. Why do Indians flee from India? On 12 June 2025, Air India Flight 171 from Ahmedabad in Gujarat to Gatwick Airport in London crashed 32 seconds after takeoff killing 229 passengers and all 12 crew members. One passenger survived. wikipedia. It appears that although Air India is now run by the Tata group, which owns 74.9% with Singapore Airlines owning the other 25.1% (wikipedia),  maintenance is still in the hands of the government owned Air India Engineering Services Ltd (AIESL) whose workers are now on strike (The Hindu). "A number of applicants under India's Electronics Manufacturing Scheme (ECMS) have flagged concerns over meeting their first year production targets due to ongoing shortages of rare earth minerals." "The rare earth scarcity stems from export restrictions imposed by China, which controls more than 90% of global rare earth processing." TOI. Ironically, "India's rare earth exports predated Independence, when radioactive material was accidentally discovered in the beach sands in Kerala." Unfortunately, Indian Rare Earth Ltd (IREL) is an ignored government company, headquartered in a run down building in Mumbai, wrote T Surender. In July, the government told the Rajya Sabha that "nearly one out of every three faculty positions was lying vacant across all 20 AIIMS (All India Institute of Medical Sciences) including the Delhi AIIMS. TOI. AIIMS Delhi was the first, established by the Prime Minister Jawaharlal Nehru in 1956. wikipedia. "India's premier institutions - from IIMs (Indian Institute of Management)  to central universities -are being run by bureaucrats instead of academics, a trend that is discouraging India's top talent from returning home, says policy analyst and author Sanjaya Baru." BT. There is only one reason why Indians are so keen to leave India, never to return -- it is the government. They are unfazed. About India. And Indians.