India seems to be for ‘low-hanging fruit’ in excessive stakes US commerce talks

Good morning. The monsoon rains are soaking Delhi, the Air High quality Index has dipped nicely beneath 100 to breathable ranges, and India’s MPs are as a consequence of convene for Monsoon Session subsequent week. I’m stepping in for Veena this week, and boy do I’ve huge sneakers to fill. (Really, Veena’s sneakers are petite and trendy, so please delete that psychological picture!)

This week, my crew is digging deeper into what Saturday’s report on the tragic Air India crash means for the service and its proprietor Tata. However first, a number of phrases on certainly one of our high operating information tales: commerce.

Deal or no deal for India with Trump?

India’s commerce negotiators are again in Washington in pursuit of a framework deal forward of Donald Trump’s new August 1 deadline. In latest days, the US president has not shied away from pulling the tariff set off, focusing on America’s three greatest buying and selling companions — the EU, Canada and Mexico.

What may make India totally different from US neighbours and allies, nevertheless, is the 2 nations’ fast-expanding ties in defence, expertise and commerce — areas of co-operation which each nations see as a hedge towards China. Talking in Jaipur in April, Vice-President JD Vance fulsomely declared that “the future of the 21st century is going to be determined by the strength of the US-India partnership”.

As Delhi’s ink-stained economics reporter wretches (together with yours really) attempt to recreation out what’s subsequent, the query is whether or not India will show “special” sufficient to keep away from the looming 26 per cent US levy. In line with folks briefed on the talks, New Delhi and Washington are arguing over what finance minister Nirmala Sitharaman calls “red lines”: largely, opening up its protected, politically delicate grain and dairy markets to US exporters.

Within the closed-door commerce talks, the Indian delegation has nearly definitely pressed the purpose that any vital climbdown on farming can be politically precarious for Narendra Modi, who Trump has described as a “great friend”. If there’s no deal quickly, the August 1 endgame will unfold when parliament is in session, giving opposition politicians like Rahul Gandhi a simple speaking level.  

“I think there’s going to be an early harvest ‘lite’ deal because the stakes are quite high for India,” says Biswajit Dhar, a commerce economist. He’s betting that the 2 sides will pluck “low-hanging fruits”, with India opening as much as extra US manufactured items comparable to vehicles and minor farm commodities like nuts. 

To keep away from backlash from farmers on either side, many particulars could also be left intentionally murky, as my colleague Anantha reported occurred with Vietnam. Trump, too, must preserve American farmers comfortable, with a lot of them additionally voters in Republican states. After upending world markets, he will even be desirous to current Maga supporters with an enormous export market he can declare to have “opened up”. India would comfortably fill the invoice.

Will India and the US strike a preliminary commerce deal? Hit reply or e mail me at [email protected]

Advisable tales

1. A report into the deadly Air India crash has left the airline and its proprietor Tata going through mounting questions over what went improper.

2. The FT’s editorial board argue for focusing AI regulation on “mitigating specific real-world harms and ensuring real accountability”.

3. Sheikh Hasina’s daughter Saima Wazed is “on leave” from her World Well being Group job following accusations of fraud.

4. Jane Road has deposited greater than $560mn in a step to raise India’s buying and selling ban.

5. Trump’s Maga base is cut up over his administration’s dealing with of recordsdata regarding the late paedophile Jeffrey Epstein.

A slanging match over numbers

Is Narendra Modi’s authorities massaging knowledge to make India look good? As we wish to joke in my occupation, two is a development, and for the second time in two months, his officers have been criticised for making flawed however self-flattering statistical claims.

In Could BVR Subrahmanyam, who leads the federal government think-tank Niti Aayog, declared that India was the fourth-largest financial system, a place held by Japan. Indian reporters and fact-checkers identified that his declare was based mostly on forward-looking projections for the fiscal yr ending in March 2026. Whereas India’s financial system will nearly definitely overtake Japan’s in measurement within the coming years (possibly even this yr!), it has not but executed so.

Then this month, the federal government’s Press Info Bureau appeared to double down on Subrahmanyam’s assertion and went on to say that India was “one of the most equal societies today”. Citing a World Financial institution report on poverty revealed in Could, the company mentioned India’s Gini Index — a broadly quoted measure of inequality — made it “the fourth most equal country in the world”. This time, the opposition Nationwide Congress pounced on the declare, accusing the PIB of specializing in consumption-based measures of inequality moderately than income-based ones, that are extra generally used to gauge inequality.

The World Financial institution responded in feedback to native media that whereas there was “corroborating evidence that household welfare has improved since 2011”, about 5 per cent of India’s inhabitants — greater than 70mn folks — nonetheless stay in excessive poverty. Some observers famous that leftist economist Thomas Piketty’s World Inequality Lab had final yr reported an increase in top-end inequality in India, with the share of the nation’s high 1 per cent of whole revenue “among the very highest in the world”. In response, a senior authorities official instructed me the lab’s figures have been “voodoo numbers” and mentioned the World Financial institution figures have been extra credible than “Pikettian propaganda”.

As my crew have reported, how knowledge is interpreted and utilized in India may be each controversial and politically freighted. However whereas it’s self-evident that Modi authorities opponents ought to criticise it, if there’s any weight to their cavils, there’s an impression for enterprise too: Banks, score businesses and client items firms want to grasp the India they’re transacting with.

Go determine

Ukraine has for the primary time changed India because the world’s largest importer of arms within the first half of this decade, in response to the Stockholm-based group SIPRI. India’s outdated buddy Russia nonetheless accounted for 36 per cent of its whole imports in 2020-24, adopted by France with 33 per cent and Israel with a 13 per cent share.

My mantra

“I find productivity is high on days that start productively. The early morning meeting routine that has been part of my work life for the past 25 years now prepares me well for the day. I also find setting daily and weekly goals helps me avoid distractions. I believe healthy work-life balance and physical wellbeing are critical to maintain focus and high energy levels.”

Ashish Gupta, chief funding officer, Axis Mutual Fund

Every week, we invite a profitable enterprise chief to inform us their mantra for work and life. Wish to know what your boss is considering? Nominate them by replying to [email protected] 

Fast query

A few of Britain’s politicians and chief executives have been displaying their weak facet not too long ago. Ought to leaders present their feelings at work, or preserve them bottled up? Tell us in the ballot beneath.

Buzzer spherical

On Friday, we requested: For those who go to Paris this summer time, what are you free to try this you weren’t legally allowed to for the previous 100 years?

The reply is . . . take a dip within the Seine.

Ram Teja was the primary to write down in with the right reply, adopted by Aniruddha Dutta, Sushant Jain and Ranjan Kumar Sinha.

Congratulations!

Thanks for studying. India Business Briefing is edited by Tee Zhuo. Please ship suggestions, ideas (and gossip) to [email protected].