News 14 ( 8 April - 15 April ) 2025

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1.​ US Tariffs | Is it India’s chance to capitalise on lost opportunities in Money

global trade? Control

Highlights: Apr 8, 2025

●​ While the uncertainty stemming from the US tariff announcement

poses challenges to an emerging economy such as India, it also
opens the door for the country to a rethink in its trade strategies.
○​ By staying agile, monitoring the evolving landscape, and
addressing sector-specific challenges, India can not only
navigate this disruption but also emerge stronger and more
competitive on the global stage.
●​ The Executive Order (‘EO’) released by the Trump administration
on 02 April 2025 for imposing reciprocal tariff appears to cause a
complete overhaul in the functioning of global trade; forcing major
economies of the world to re-think their way forward.
○​ The EO comprehensively articulated the concerns of the
President by identifying national emergencies due to rising
trade deficits of the US and economic imbalances caused
by the non-trade barriers of other nations.
○​ But a respite was offered for critical goods like
pharmaceuticals, minerals and semiconductors, which are
temporarily exempted from reciprocal tariffs (effective 09
April 2025) from the current EO.
●​ While more than 50 nations were targeted as part of this proposal
of reciprocal tariff, India too caught the eye with an additional levy
of 26%.
○​ However, India got a breather when it was observed that
major exporting economies to the US like China, Taiwan,
Thailand and Vietnam would be suffering an additional
levy of 34%, 32%, 36% and 46% respectively. Although,
such additional levy would be limited to 25% (for all
nations) where goods in question are automotive vehicles

By: Vibhas Jha Sir

 or their components, steel and aluminium products.
●​ To understand the impact in further detail below is an analysis of
the major products exported by above countries to the US in 2024
along with India’s share in such exports:

Way forward for converting global adversity into opportunity

Maximising benefits from existing incentive schemes

●​ Notably, storage solutions comprising of electric storage batteries

including separators contributed to USD 17,886 Mn worth of

By: Vibhas Jha Sir

 exports to the US whereas India barely managed to make its mark.
With Production Linked Incentive (‘PLI’) schemes for Advanced
Chemistry Cell (‘ACC’) in place, one can expect India to grow its
strength to surpass China in this regard.
●​ Similarly, as countries like China, Taiwan, Thailand and Vietnam
appear to dominate the US market in semiconductors, electronic
components and other electronic products, the participation of
India Inc is likely to increase in the global arena due to the
government’s support through schemes like National
Semiconductor Mission and Electronic Component Manufacturing
Scheme (‘ECMS’).
○​ These efforts towards building the value chain would
automatically encourage players to increase participation in
schemes prevalent for finished goods in the electronic
sector such as the PLI scheme for IT hardware.
●​ In auto-components, while the PLI scheme is in place, it is
important to understand that such products attract tariffs equally
for all nations.
○​ Consequently, a push for this sector may entail a two-step
approach i.e., building on indigenous capabilities to
manufacture globally competitive components and initiate
dialogues on tariff concessions with the US.
○​ Also, the Indian Government may enhance support given
to manufacturers in India in the form of Production-Linked
Incentive (PLI) scheme by incorporating more types of
auto components, allowing new players to participate, and
extending the scheme by two years.

Expanding incentive coverage and securing increased participation

●​ It is widely noted that the groundwork for manufacturing toys has

been established, with a focus on PLI schemes for this sector as
well.
○​ Additionally, the Government has already initiated
focussed discussions to build a manufacturing ecosystem
for footwear and furniture.
○​ While the existing/ proposed schemes of the Government
are likely to play a pivotal role in elevating India’s position
as key supplier in the U.S. market, there is a need for

By: Vibhas Jha Sir

 identification of more components/ segments which are not
yet benefited, to ensure India comprehensively captures the
needs of such a market.
○​ Specifically, attention in this regard should be drawn
towards gaming and sports equipment, New Pneumatic
Tyres etc., wherein India has very limited share in the U.S.
market.

Faster closure of Bilateral Trade Agreement (‘BTA’):

●​ While the above proactive measures address the concerns of

specific industries in India, it is widely noted that there remain
sectors like textile, furniture, agriculture, auto-components, gems
and jewellery etc., wherein the Government would be required to
lay down extended focus to facilitate global trade.
●​ Notably, the bordering countries of the US namely, Mexico and
Canada are exempt from these reciprocal tariffs under the
USMCA, which puts such countries in advantageous position
strategically.
●​ Consequently, there is a need to parallelly work towards faster
closure of BTA with the US and other countries to keep up with
the pace of global markets and seek liberalised tariff rates for
Indian exporters.

Stringent measures to navigate unfavourable trade practices:

●​ With a likely fall in trade with the U.S., the high-tariffed nations
would be keen to shift their focus to other economies including
India, which may result in dumping situations, as seen in the past.
●​ While India has mechanisms in place to monitor such practices,
there is a need to maintain a close watch on these activities to
ensure India’s interest always remains protected.
●​ This would also entail increased verification of benefits granted
under the Trade Agreements to ensure there is no misuse of
originating criteria mentioned therein.

Monitoring trade negotiations and change of trade destinations:

●​ As the tariff war escalates, one should bear in mind that not only

By: Vibhas Jha Sir

 India, but all affected nations would endeavour to fight this battle
either through negotiation or retaliation or alternative measures
like diverting trades to destinations other than the U.S. market.
●​ Thus, it would be extremely crucial for India to be nimble in its
approach and constantly monitor decisions taken by severely
impacted economies in the coming days to leverage on critical
opportunities and eliminate threats that may arise on this account
alone.

Conclusion

In conclusion, this is an opportune moment for India to conduct a

thorough analysis of its key sectors at a micro-level. Understanding the
specific challenges faced by industries such as manufacturing, agriculture,
and services will enable policymakers and business leaders to devise
targeted strategies that enhance competitiveness. For instance, sectors that
may be adversely affected by the new tariffs can be supported through
incentives, technology upgrades, and skill development initiatives. While
the tariffs poise a threat to fast-growing economies such as India, they can
be turned into an opportunity with the right policies, approach and
diplomacy by the government and proactive support from industry.

2.​ A currency war encore? China may already be on it Money

Control
Highlights:
Apr 9, 2025
●​ One won’t be wrong in assuming that one has watched this movie
before, in fact this could be a third rerun of it. China's devaluation
of the yuan in 1994 was one of the factors that led to the Asian
crisis a few years later.
○​ A currency war, the competitive devaluation of a currency
with respect to another through policies, invariably hurts
every economy involved in it.
○​ It also affects neighbouring countries that are not directly
involved.
○​ Therefore, the trepidation with which a section of the
market is anticipating a currency war this time around
should not be brushed aside.
●​ Currency wars are not new and have broken out many times

By: Vibhas Jha Sir

 historically. However, they have thankfully fizzled out in a short
time and limited the potential damage, with the exception of the
Asian crisis.
○​ Even in 2018 during Donald Trump’s first term as US
President, the People’s Bank of China set the reference rate
for its renminbi about 1 percent lower in response to
America’s tariffs, triggering talks of a currency war.
○​ Currencies of most other Asian nations, mainly direct
competitors with China through trade and finance, plunged
following the renminbi’s devaluation.
○​ But it stopped short of a full-blown currency devaluation
across countries.

Why are the currency war murmurs back?

●​ On April 7, 2025, the PBOC set the daily reference rate for
renminbi well below 7.2 per dollar which was a level that the
central bank was known to defend.
○​ The move sparked speculation that China is adopting the
tried and tested method of currency devaluation to offset
the impact of America’s tariffs.
○​ While the renminbi is a managed float now, the PBOC can
choose to set the reference rate lower thereby forcing
market participants to weaken the currency.
●​ But Trump, who has accused other nations of being currency
manipulators, won’t stay quiet with China’s devaluation.
○​ Responses and retaliations would mean that Asian
economies would be forced to respond to safeguard their
own interests.
■​ Of course, there is enough nuance around tariffs
and Trump’s moves aren’t written in stone either.
The upshot is that currency market participants are
on edge.
●​ China may well devalue its currency because a weakened renminbi
helps boost its exports and China desperately needs enough
demand for its exports.
○​ But currency devaluation has many unsavoury effects too.
A weak currency triggers flight of capital, and more
importantly an erosion of trust in the currency.

By: Vibhas Jha Sir

 ○​ Note that Beijing wants the renminbi to be a well sought
after reserve currency.
○​ At its worst, a large devaluation of the renminbi would
force other Asian nations to let their currencies depreciate.
●​ The Indonesian rupiah is already near its weakest since the 1991
Asian crisis.
○​ The Philippine peso is down about 1 percent, the Thailand
baht has weakened 1.5 percent and the Indian rupee is
down 1.2 percent ever since Trump announced his tariffs.
○​ In the current juncture, the flight of dollars into America
from emerging markets will ensure pressure on currencies
and all central banks have to do is choose to step aside.
●​ Asian central banks are not defending their currencies with vigour
yet, perhaps partly to protect export competitiveness in the wake
of tariffs.

Would a currency war be as bad as it was earlier?

●​ A currency war may not be as detrimental today as it was before

because most Asian countries have a high pile of foreign exchange
to cushion any volatility, their economic heft is better than before,
and fiscal mishaps are unlikely too.
○​ Even so, a race to weaken exchange rates would
complicate monetary policy immensely.
●​ Trump’s tariffs have left little room for Asian central banks to
avoid tough choices such as whether to choose between protecting
growth which would entail weakening their currency or to keep a
stable exchange rate in pursuit of credibility and a firm control on
inflation. There are no easy choices.
○​ As for India, the Reserve Bank of India (RBI) has more
reasons to pursue growth-friendly measures given the
rupee’s relative stability versus Asian peers.

3.​ RBI named as most innovative financial institution globally by Global Financial
Finance Express

Highlights: Apr 8, 2025

●​ The Reserve Bank of India (RBI) has been named as the Most

By: Vibhas Jha Sir

 Innovative Financial Institution globally in Global Finance’s
prestigious 2025 Innovators list, the central bank announced in a
post on X (formerly Twitter). With this, the RBI becomes the first
central bank to win this award.
●​ The award highlights the RBI’s Unified Lending Interface (ULI),
which has enhanced lender data access and credit support, driving
greater efficiency and inclusivity in India’s financial ecosystem.
●​ The RBI post said, “RBI has been named the Most Innovative
Financial Institution globally by GFmag in its 2025 Innovators
list! RBI is the first central bank to win and wins it for its Unified
Lending Interface, enhancing lender data access & credit support.”
●​ This is Global Finance’s twelfth annual awards program
recognizing entities that regularly identify new paths and design
new tools in finance.
●​ “Traditional banking is being rapidly transformed by advances
such as mobile and real-time payments, the use of blockchain
technology and emerging AI solutions, making financial services
more efficient, secure and accessible,” said Joseph Giarraputo,
○​ Founder And Editorial Director of Global Finance. “Global
Finance’s Innovators are at the forefront of this
transformation and are leading the way to the future of
finance.”
●​ All selections were made by the editorial board of Global Finance
with the input of reporters who are experts on the functions being
served by these innovators.
●​ Earlier this March, the RBI was selected for the Digital
Transformation Award 2025 by the Central Banking of London.

4.​ Centre revises norms for state capex loans Financial

Express
Highlights:
Apr 8, 2025
●​ The Centre has issued new guidelines for the disbursal of Rs
87,000 crore, or nearly 60% of the Rs 1.5 lakh crore interest-free
50-year capex loans, to the state governments and union territories
for FY26.
○​ The amount would be transferred to states and UTs largely
as untied and project-linked loans.
●​ The balance Rs 63,000 crore capex loans will be linked to reforms,

By: Vibhas Jha Sir

 the guidelines for which would be issued later, sources told FE.
○​ For the first time, UTs have included in the liberal
capex-grant like loans scheme for spreading out capital
assets across the country.
●​ Of the Rs 87,000 crore, Rs 55,000 crore is earmarked for states
and Rs 2,000 crore has been allocated for the first time to UTs.
○​ The Rs 55,000 crore has been allocated among states in
proportion to their share of central taxes & duties as per the
award of the 15 Finance Commission.
●​ Of the Rs 2,000 crore, Rs 1,200 crore is earmarked for Jammu &
Kashmir, Rs 600 Crore for Delhi and Rs 200 crore for Puducherry.
○​ Under this category, the first installment of 66% will be
released on meeting mandatory conditions while the
second installment of 34% will be released after 75% of
the fund utilisation from the first instalment and refund of
central share in state nodal agency account of all centrally
sponsored schemes migrated to SNA SPARSH by March
31, 2025.
●​ In order to avail benefits of any part of the scheme, in addition to
the conditions prescribed under various parts of the scheme, a state
government/ UT is required to meet the mandatory conditions.
○​ These are in full compliance with the official guidelines for
the branding of Centrally Sponsored Schemes (CSSs).
●​ An amount of Rs 15,000 crore will be available to the eligible
states and UTs who achieve a growth rate of over 10% in capital
expenditure in 2024-25 over 2023-24 and also achieve a growth
rate of over 10% in first nine months of 2025-26 over the growth
rate in the corresponding period of 2024-25.
○​ In FY25, the Centre had made a provision of Rs 25,000
crore assistance for states’ own capex achievements.
●​ An amount of Rs 10,000 Crore is earmarked for to fund State / UT
share for completion of major urban and rural infrastructure
projects under various schemes/programmes like railway projects,
metro rail projects, highway projects, power projects, airports and
State/ UT share of infrastructure oriented Centrally Sponsored
Schemes like Jal Jeevan Mission, AMRUT, PMGSY.
●​ The State government/ UTs are required to submit a list of
projects/schemes for which funds under this part of the scheme are
proposed to be applied by October 15, 2025.

By: Vibhas Jha Sir

 ●​ Another Rs 5,000 crore is earmarked for capital projects approved
in the previous year’s capex loan scheme for housing for police
personnel or police stations in urban areas, construction of Unity
Malls, children and adolescents’ libraries and digital infrastructure,
Iconic Tourist Centres and working women hostels.
●​ Of the Rs 1,49,484 crore capex loans released to the states in
FY24, half of that was for reforms or project-linked as outlined in
the scheme for special capital assistance for states for FY25.
●​ The Centre has been implementing schemes for special assistance
to states for capital expenditure since 2020-21 to support states as
well as boost investment-led economic growth.
○​ The states submit ongoing as well as new projects for
capex support from the Centre under the facility.

5. New oil regulatory bill to boost carbon capture in the sector Money
Control
Highlights
Apr 9, 2025
●​ India has taken an interesting step recently. The passage of the
Oilfield (Regulatory and Development) Amendment Bill in India’s
Lok Sabha marks a pivotal shift in the nation’s energy strategy.
○​ A core component of this legislation is its strong focus on
promoting Carbon Capture, Utilisation, and Storage
(CCUS) technologies.
○​ This initiative signals India’s growing commitment to
mitigating the environmental impact of its oil and gas
sector.
●​ The recent bill aims to facilitate the capture of carbon emissions
from oilfield operations, enabling their utilisation for industrial
purposes or safe, long-term storage.
○​ This move underscores India’s efforts to balance its energy
needs with its climate goals, potentially setting a precedent
for sustainable resource management in the region.

What’s the Big Deal About CCUS in This Bill?

●​ A notable feature of the amended bill is the direct inclusion of

CCUS within the regulatory framework governing oilfields. The
Oilfield (Regulatory and Development) Amendment Bill focuses

By: Vibhas Jha Sir

 on:
1.​ Strengthening oilfield regulation with stricter
environmental standards.
2.​ Promoting Carbon Capture, Utilisation, and Storage
(CCUS) through clear guidelines and incentives.
3.​ Encouraging innovation in CCUS with financial incentives
like tax breaks.
4.​ Fostering international collaboration for advanced CCUS
technology.
5.​ Driving CCUS deployment through public-private
partnerships.

●​ The legislation encourages oilfield operators to adopt practices

that capture and either utilise or safely store carbon emissions.
○​ This inclusion signifies a move towards integrating these
technologies into standard operational procedures.
○​ The Government of India has shared the intent that it is not
just a suggestion anymore; it’s built right into how they are
supposed to operate.
○​ This means they’ll be encouraged to find and use
technologies that can trap carbon emissions.
●​ If this leads to more CCUS being used, it could mean cleaner air in
the long run.
○​ It could also indicate that India is taking a more serious
stance on climate change, which affects us all.
○​ Additionally, the bill mentions CCUS alongside other
green initiatives, such as producing hydrogen without
fossil fuels, showcasing a holistic approach to making
things cleaner.

There’s a Reason to Pay Attention: Penalties Are Involved

●​ To ensure compliance, the government has also established rules

regarding the consequences for companies that do not adopt these
cleaner methods.
○​ They could face fines, which may increase the longer they
fail to comply.
○​ This is a clear signal that the government is serious about
encouraging the use of carbon capture technologies.

By: Vibhas Jha Sir

 ●​ The bill promotes cleaner and greener oilfield operations.
○​ To keep things moving in the right direction, there are
provisions for penalties—up to ₹25 lakh initially, and ₹10
lakh per day for ongoing non-compliance.

A Step Forward, But Not the Whole Journey

●​ The Oilfield (Regulatory and Development) Amendment Bill’s

strong emphasis on CCUS represents a significant step towards a
potentially greener future for India’s energy sector.
○​ While this new bill won’t solve all our environmental
problems overnight, it looks like a positive move.
●​ The passage of these amendment bills marks a significant
milestone in India’s journey towards a more sustainable and
environmentally friendly energy sector.
○​ With a strong focus on CCUS technologies, the country is
poised to lead the way in reducing carbon emissions and
promoting sustainable development in the oil and gas
industry.

6. From rate cut to gold loan guidelines, top 10 takeaways from RBI Financial
MPC meet that you need to know Express

Highlights: Apr 9, 2025

Here are key takeaways from Sanjay Malhotra’s speech:

1.​ Key interest rate reduced by 25 basis points to 6 per cent from
6.25 per cent, lowering it for the second time in a row.
a.​ RBI Governor Sanjay Malhotra said, “After a detailed
assessment of the evolving macroeconomic and financial
conditions and outlook, the MPC voted unanimously to
reduce the policy repo rate by 25 basis points to 6.00 per
cent with immediate effect.”
2.​ The RBI MPC changed the monetary stance to accommodative,
meaning MPC will, going forward, consider only two options —
status quo or a rate cut.
a.​ Sanjay Malhotra said, “With respect to the policy rate,
which is the mandate of the MPC, today’s change in stance

By: Vibhas Jha Sir

 from ‘neutral’ to ‘accommodative’ means that going
forward, absent any shocks, the MPC is considering only
two options – status quo or a rate cut.”
3.​ The RBI revised its GDP growth estimate for FY26 to 6.5 per
cent from 6.7 per cent, with Q1 at 6.5 per cent; Q2 at 6.7 per cent;
Q3 at 6.6 per cent; and Q4 at 6.3 per cent.
a.​ “While the risks are evenly balanced around these baseline
projections, uncertainties remain high in the wake of the
recent spike in global volatility. It may be noted that the
growth projection for the current year has been marked
down by 20 basis points relative to our earlier assessment
of 6.7 per cent in the February policy,” Sanjay Malhotra
said.
4.​ The RBI projected inflation for FY26 at 4 percent, lower from
earlier estimate of 4.2 per cent, with Q1 at 3.6 per cent; Q2 at 3.9
percent; Q3 at 3.8 per cent; and Q4 at 4.4 per cent.
5.​ The standing deposit facility (SDF) rate under the liquidity
adjustment facility (LAF) shall stand adjusted to 5.75 percent and
the marginal standing facility (MSF) rate and the Bank Rate to
6.25 per cent, the RBI announced.
6.​ The RBI permitted NPCI to raise the UPI transaction limit for
person-to-merchant payments.
7.​ RBI also proposed to review guidelines for lending against gold
jewellery.
a.​ Sanjay Malhotra said, “Loans against the collateral of gold
jewellery and ornaments, commonly known as gold loans,
are extended by regulated entities for both consumption
and income-generation purposes. In order to harmonise
guidelines across various types of regulated entities, to the
extent possible, keeping in view their differential
risk-bearing capabilities, we shall issue comprehensive
regulations on prudential norms and conduct related
aspects for such loans.”
8.​ The central bank proposed to expand scope for co-lending and
issue generic regulatory framework.
a.​ The extant guidelines on co-lending are presently
applicable only to arrangements between banks and
NBFCs.
9.​ As on 4th April, 2025, the RBI stated, India’s foreign exchange

By: Vibhas Jha Sir

 reserves stood at $676.3 billion, providing an import cover of
about 11 months.
a.​ “Overall, India’s external sector remains resilient as key
indicators stay robust,” Sanjay Malhotra said.

10.​ Liquidity buffer in banking system well above regulatory

threshold.
a.​ Sanjay Malhotra said, “The Reserve Bank is committed to
provide sufficient system liquidity. We will continue to
monitor the evolving liquidity and financial market
conditions and proactively take appropriate measures to
ensure adequate liquidity.”

7. India blocks transhipment facility for Bangladesh exports Financial

Express
Highlights:
Apr 9, 2025
●​ India has withdrawn the transhipment facility to exports from
Bangladesh to other countries through its ports and airports, in
response to the increasing friction in ties between the two
countries.
●​ The Central Board of Indirect Taxes and Customs (CBIC)
withdrew the facility through a circular that scrapped the earlier
communication of June 2020 that had extended this facility to
Bangladesh.
●​ The earlier circular had allowed transhipment of export cargo from
Bangladesh to third countries using Indian Land Customs Stations
(LCSs) en route to Indian ports and airports.
●​ Bangladesh uses Delhi airport to send out export cargoes by air to
third countries.
○​ This facility was accorded to the eastern neighbour in
2023.
○​ The immediate impact of the move, however, would be the
disruption in Bangladesh’s trade with Bhutan, Nepal, and
Myanmar, founder of Global Trade Research Initiative
(GTRI) Ajay Srivastava said.
●​ The decision to withdraw the transhipment facility seems to have
been driven by Bangladesh’s attempt to revive the British era base
at Lalmonirhat near India’s strategic Siliguri corridor with Chinese

By: Vibhas Jha Sir

 and Pakistani help.
○​ Reports suggest that work on the base could begin by
October this year.
●​ The development of an old airbase and Yunus’s comments on his
visit to China where he invited his hosts to treat Bangladesh as an
extension of the Chinese economy and using it as a maritime
conduit to India’s Northeast states, Nepal and Bhutan have made
another dent in ties between the two countries.
●​ “The seven states of India, the eastern part of India, are called the
Seven Sisters. They are a landlocked region of India. They have no
way to reach out to the ocean. We (Bangladesh) are the only
guardian of the ocean for this region,” he had said.
○​ Bangladesh was also exploring using Indian sea ports for
its exports.
○​ In July last a 13-member delegation from Bangladesh
visited India for six days to assess the possibilities of
transhipment of Exim cargo of Bangladesh through Indian
ports located on the East Coast.
○​ The delegation visited ports in Chennai, Krishnapatnam,
Visakhapatnam, Kolkata and Haldia.
○​ The visit followed India-Bangladesh Shipping Secretaries
Level Talks (SSLT) held in Dhaka in December 2023.
●​ Immediately after the visit, street protests led to the resignation of
the then Prime Minister Sheikh Hasina and her fleeing to India on
August 5, 2024.
○​ After Hasina the government in Bangladesh is being run by
Yunus.

8. Two rail infra projects worth Rs 3,200 crore get Cabinet nod Money
Control
Highlights:
Apr 9, 2025
●​ The Union Cabinet on Wednesday approved two railway projects
aimed at removing congestion, Union minister Ashwini Vaishnaw
said.
●​ It approved construction of a six-lane access controlled Zirakpur
bypass with a length of 19.2 km worth Rs 1,878.31 crore in Punjab
and Haryana on 'hybrid annuity mode'.
●​ The Cabinet also gave its nod for doubling of

By: Vibhas Jha Sir

 Tirupati-Pakala-Katpadi single railway line section of 104 km in
Andhra Pradesh and Tamil Nadu with total cost of Rs 1,332 crore,
Vaishnaw said.

9 Why India needs non-tariff barriers in agricultural trade Financial

Express
Highlights:
Apr 10, 2025
●​ The National Trade Estimate Report of the United States has
raised concerns that non-tariff barriers by India make it near
impossible to export dairy and poultry products besides staple
grains such as rice and wheat

What the US report says about non-tariff barriers imposed by India

●​ THE REPORT OUTLINED concerns about the science and risk

basis for India’s sanitary and phytosanitary-related trade barriers to
food and agricultural imports.
○​ For instance, it says India requires dairy products intended
for food be derived from animals that have not consumed
feeds containing internal organs, blood meal, or tissues of
ruminant or porcine origin and that exporting countries
certify to these conditions, “which lack a discernable
animal health or human health justification”.
○​ On India’s hesitation to approve genetically modified feed
and food products, it says that New Delhi does not appear
to take into account science-based approval processes for
genetically engineered (GE) products in exporting
countries.
●​ India’s minimum support prices (MSP) for major grains such as
wheat and rice also drew attention, with the report saying it results
in overproduction, limited demand for imports, and artificial
export competitiveness.

What are the reservations against GM products?

●​ INDIA HAD FIRST approved Genetically Modified (GM) cotton

way back in 2002. Since 2008, no new varieties of GM cotton seed
have been approved. BT brinjal was approved in 2012 by the

By: Vibhas Jha Sir

 Genetic Engineering Approval Committee (GEAC, which was
later converted into the Genetic Engineering Appraisal Committee
with truncated powers), but it was shelved by the government later
citing environmental concerns.
●​ Last year, a Supreme Court division bench issued a split verdict on
petitions challenging the approval given by the Genetic
Engineering Appraisal Committee and the ministry of environment
and forests to commercially cultivate and release a genetically
modified mustard variety— HT Mustard DMH-11.
●​ Agriculture minister Shivraj Singh Chouhan also recently said that
GM technology is "like playing with nature”, even if it helps
increase productivity.

Protecting the dairy sector

●​ PER THE NATIONAL Account Statistics, 2024, India’s milk

output by value accounts for the highest share in agriculture
produce and, even more than the combined value of paddy and
wheat.
○​ R S Sodhi, president, Indian Dairy Association, says the
dairy sector should not be unnecessarily tinkered with as it
has been growing steadily over the last few decades.
○​ He says the sector should not be seen only from a trade
perspective as around 100 million farmers are engaged in
dairy and allied sectors.
●​ Industry sources say higher import duties on skimmed milk
powder are justified as a typical Indian dairy farmer has 2-3
animals against an average herd size of 500 animals in major milk
producing countries like the US, Australia and New Zealand,
which reduces their cost of production. Meenesh Shah, chairman,
National Dairy Development Board (NDDB), says that global
dairy players, even if they were allowed to operate in India, would
find it very difficult due to the high costs of logistics.
○​ Dairy industry officials have indicated that there are no
discussions at the moment about reducing import duties on
dairy products.
●​ India also requires that imported dairy products must come from
animals not fed animal-derived feed, a norm that stems from
religious and cultural sensitivities of a large section of the

By: Vibhas Jha Sir

 vegetarian population here.

Domestic poultry & feed markets

●​ THE US HAS been insisting on a liberalised imports regime for

soyabean (primarily used for animal feed) and chicken legs for
many years.
○​ Any cut in import duties on chicken legs (currently 100%)
should be considered after taking into account the needs of
the domestic poultry industry which offers employment to
over 5 lakh families, trade sources say.
○​ Higher duty structure is aimed at protecting the domestic
industry which is growing at around 8% annually.
○​ For animal feed, India has imposed a few non-tariff
barriers such as ban on GM crops and compulsory
certification requirements.
○​ In 2021, the government had allowed import of 1.2 mn
tonnes of GM soymeal for chicken feed on an exceptional
basis due to high domestic feed prices.

International trade in rice, wheat

●​ INDIA HAS BEEN the biggest exporter of rice since 2012. India
did impose restrictions on rice exports in 2023, which it has since
removed. Being one of the largest producers of rice, there is no
possibility of imports though import duty has been kept at 70%.
●​ In April 2019, import duty on wheat was increased to 40% from
30% to boost procurement by the government agencies.
○​ Many traders from southern India have been calling for
reducing this to facilitate imports as transportation cost of
wheat to the southern states from Madhya Pradesh is high
while global prices often rule below the minimum support
price (MSP) offered to farmers.
●​ Though export of wheat is banned to maintain domestic supply, at
times the government allows it to meet the food security needs of
certain countries

10 Nearly half of India's poorest districts have seen a faster decline in Money
multidimensional poverty Control

By: Vibhas Jha Sir

Highlights: Apr 10, 2025

●​ Nearly half of the country’s 106 most under-developed districts

have seen a faster reduction in poverty between FY16 and FY21
than their state’s average.
●​ Data analysed using Niti Aayog’s Multidimensional Poverty Index
2023 report shows that 46 percent of the 106 so-called aspirational
districts saw a faster drop in poverty, with Madhya Pradesh,
Andhra Pradesh, Assam and Tamil Nadu leading the pack.
●​ Multidimensional poverty measures the deprivation of households
on socio-economic indicators such as sanitation, education, and
health, while also using the income criteria.
●​ Speaking at News18’s Rising Bharat summit on April 8, Prime
Minister Narendra Modi recounted the work done by his
government for the country’s most under-developed districts.
Some of the aspirational districts had done better than national and
state average, he said.
●​ “Earlier, the government had announced 100 districts as backward,
many of them in the Northeast and tribal belts. We changed this
approach and called them aspirational and implemented schemes
in mission mode. Reputed institutions and journals have praised
India's aspirational districts move,” Modi said.
●​ The government launched the aspirational district programme in
2018 to track the progress of socio-economic development in
India’s poorest districts.
●​ Moneycontrol found that in Andhra Pradesh, all three districts
listed as aspirational saw an over 50 percent change in poverty
ratio compared with 48.5 percent for the state.
●​ While the southern state’s poverty ratio declined to 6.06 percent in
2019-21 from 11.77 percent in 2015-16, the YSR Kadapa district
witnessed a 64 percent drop from 9.14 percent to 3.34 percent
during the period.
●​ The average drop across aspirational districts was 54.7 percent
compared with 48.5 percent average decline across the state.
●​ In Madhya Pradesh, aspirational districts saw a decline of 46.9
percent against the state’s average dip of 40.6 percent.
●​ Between FY16 and FY21, all aspirational districts witnessed a
decline in poverty save one.

By: Vibhas Jha Sir

 ●​ In Chhattisgarh’s Bijapur, multidimensional poverty increased to
49.7 percent from 41.2 percent five years ago.
●​ India’s multidimensional poverty has declined from 24.85 percent
to 14.96 percent during the period.
●​ Moneycontrol analysis shows that the number of aspirational
districts which have a lower poverty headcount or people who are
multidimensionally poor than their state average has increased.
●​ In 2019-21, nearly a fifth of the country's 112 aspirational districts
had lower multidimensional poverty than their state average
compared with 17 percent in 2015-16.

11 Does Trump’s tariff pause signal the end of uncertainty for investors? Money
Control
Highlights:
Apr 11, 2025
●​ Ever since US president Donald Trump’s second term commenced
it has been a volatile environment. Be it immigration, climate
change, government aid, government efficiency or tariffs, new
diktats have rocked the boat. And the ripples have been felt across
the globe.
●​ In recent weeks, tariffs have been making headlines all around the
world. What started with 10-20% tariffs on the US’ largest trading
partners, quickly escalated into blanket “reciprocal tariffs” on
more than 100 economies, going as high as 49%.
○​ These tariffs drew widespread criticism for how they were
calculated as well as their economic rationale (or the lack
of it). And just as they were supposed to go effective this
week, they have been paused for 90 days.
●​ There is one notable exception. Tariffs on China have now been
raised to 125% (including the 20 percent fentanyl tariff imposed
earlier, the total tariff is 145%).
○​ China has retaliated with 84% tariffs on the US. China and
the US account for 43% of the global GDP. So, as the two
heavyweights fight it out, the consequences will be
multi-fold.

In the fight of two, the third wins

●​ China ranks high on the list of US’ trading partners. Despite

By: Vibhas Jha Sir

 long-standing tariffs, China is the US’ 3rd largest export market
accounting for $150 billion or 7% of total US exports.
○​ This primarily comprises oilseeds and grains, oil and gas,
and pharmaceutical exports which make up a third of the
US exports to China.

●​ If China’s 84% tariffs make these exports unviable, the gap can be
filled up by other countries engaged in these exports.
○​ For example, Brazil, Canada and Australia export oilseeds
and grains, the Middle East and Russia export oil and gas,
and Germany, Switzerland, and Belgium export
pharmaceuticals. So, these countries stand to benefit by
capturing the market-share lost by the US in China.
●​ Similarly, the US accounts for 15% of China’s exports. Amounting
to $436 billion, these exports primarily consist of smartphones,
laptops, batteries, toys, and telecom equipment.
○​ While electronics and toys are more complicated as China
and the US are among the largest exporters, the gap left
behind in batteries and telecom equipment can be filled by
Germany and South Korea.

Risks and opportunities for India

●​ For sectors such as textiles, India can replace the US and China in
each other’s markets. Of course, a lot hinges on being able to

By: Vibhas Jha Sir

 expand capacity to cater to the higher demand.
●​ On the other hand, we have sectors such as metals where China
and the US are among the largest consumers.
○​ China is expected to subsidise its manufacturing, dump
cheaper commodities in less restrictive economies, and
drag down commodity prices globally.
○​ Considering the relatively low antidumping duty imposed
by India, this presents a risk to the margins of India’s metal
majors.
●​ Another interesting sector is electronics, because products like
smartphones are manufactured by US companies in China and sold
in the US.
○​ As China’s advantage of cheap labour and manufacturing
is all but negated by the 125% tariff, these companies may
have to shift their manufacturing base.
○​ Against this context, India is faced with an opportunity to
catch up in the semiconductor game by upping its
competitiveness in component manufacturing.

Innovation and creativity by China can alter the landscape

●​ China has been known to be creative when faced with constraints.

When the US attempted to restrict chip exports to China, it
innovated and introduced a technological breakthrough with
DeepSeek.
○​ It has also been allegedly devaluing its currency to improve
the competitiveness of its exports, and even sidestepping
tariffs by rerouting its exports to the US via Vietnam.
○​ That probably explains the 2 percent cheer in Hang Seng
index after Trump rolled back tariffs on Vietnam to the
baseline level of 10%, even though those on China were
hiked to 125%.
●​ China could also change its retaliatory stance by attempting to
negotiate lower tariffs with the US.
○​ It certainly has all the leverage it needs as one of the largest
economies and one of the US’ biggest trading partners. It
also holds significant US treasuries.

By: Vibhas Jha Sir

 What should investors do?

●​ Despite the tariff rollback, the fog has still not lifted. Anything can
happen in the 90 days of pause, and the dynamically evolving
situation will need to be closely monitored.
○​ While Indian stock markets may rally out of relief that the
can of US recession has been kicked down the road,
uncertainty is not behind us yet.
●​ That said, India’s long-term growth story is very much intact. It is
still the fastest growing major economy, and some of its sectors
may end up benefiting from the trade war.
○​ So, any short-term corrections in fundamentally strong
businesses should be used as opportunities to accumulate at
attractive valuations and achieve long-term
wealth-creation.

12 DIPAM to fast track sale of 2 Air India subsidiaries, may invite EOIs Money
this month Control

Highlights: Apr 14, 2025

●​ The department of investment and public asset Management

(DIPAM) is set to invite expressions of interest (EOIs) for the
strategic sale of at least two of the three remaining Air India
subsidiaries this month, sources have told Moneycontrol.
●​ The move is aimed at fast-tracking the long-delayed sale process
of Air India’s non-core entities – Air India Engineering Services
Ltd (AIESL), AI Airport Services Ltd (AIASL), and Airline Allied
Services Ltd (AAAL), which remain in government control after
Air India’s sale to the Tata Group in 2021.
●​ “The EOIs for at least two of Air India’s erstwhile subsidiaries are
likely to be invited this month. We are aiming for that. It's not yet
decided which two but any two of the three subsidiaries,” a senior
government official told Moneycontrol on condition of anonymity.
●​ The three subsidiaries – AIESL, a maintenance, repair and
operations (MRO) firm, AIASL, a ground-handling company, and
AAAL, which operates as Alliance Air – were transferred to Air
India Assets Holding Ltd (AIAHL), a special purpose vehicle
created in 2019 to hold Air India’s non-core debt and assets.

By: Vibhas Jha Sir

 ●​ While the cabinet cleared their strategic sale in 2017 along with
that of Air India, the divestment process was delayed due to
complex valuations and subdued investor interest.
●​ The Centre is now pushing ahead to complete their sale as part of
its disinvestment pipeline for FY26.
●​ Last year, DIPAM conducted roadshows in Mumbai to engage
investors for AIESL and subsequently, received approval from the
empowered group of ministers to begin the disinvestment process.
●​ AIESL, the largest of the three, is India’s biggest MRO service
provider. AIASL manages ground-handling operations at several
airports, while AAAL offers regional flight services.
●​ In the Budget 2025–26, the government did not lay down a
separate disinvestment target. Instead, proceeds from stake sales
and asset monetisation have been consolidated under a Rs
47,000-crore miscellaneous capital receipts head.
●​ A government estimate had earlier pegged potential receipts from
the sale of Air India subsidiaries at around Rs 3,000 crore.
●​ According to AIESL’s annual report, its revenue from operations
rose to Rs 1,953.40 crore in 2022–23 from Rs 1,881.91 crore in
the previous year, while total revenue increased to Rs 2,029.86
crore.

13 Tariff war offers opportunity in e-commerce exports: Report Financial

Express
Highlights:
Apr 13, 2025
●​ The removal of the duty‑free import regime for low‑value
consignments up to $ 800 per packet through courier or postal
networks addressed directly to individuals from China and Hong
Kong—effective May 2—presents India with a prime opportunity
to scale up its e‑commerce exports, according to a report by the
Global Trade Research Initiative (GTRI).
●​ From May 2, all imports from China and Hong Kong valued below
$ 800 will attract applicable duties across courier and other
channels, except the postal network.
○​ In the case of China, duties now stand at 125% after
successive escalations.
○​ Other countries will continue to enjoy the exemption.
●​ “The US ‘de minimis’ rule has been a key gateway for Chinese

By: Vibhas Jha Sir

 e-commerce companies like Shein and Temu to enter the
American market. Over 1,400 million low-value packets entered
the US in 2024 from the world, with China alone exporting $46
billion worth of such goods,” the report by trade policy think tank
GTRI. Shein is a clothing retail giant while Temu sells heavily
discounted consumer products shipped to consumers directly from
China.
●​ The report stated that this window of opportunity could be brief, as
the US administration has hinted at expanding these restrictions,
so India must act swiftly.
●​ With over 100,000 e‑commerce sellers and $ 5 billion in current
exports, India is well positioned to fill the void left by
China—especially in customised, small‑batch segments such as
handicrafts, fashion and home goods.
●​ However, Indian banks struggle with the high volume and low
value of e‑commerce exports.
○​ RBI rules currently allow only a 25% gap between
declared shipping value and final payment—too restrictive
for online exports, where discounts, returns and platform
fees often cause larger variances.
○​ GTRI recommends raising this limit to 100% and granting
banks flexibility to approve legitimate cases.
●​ Bank fees pose another hurdle: reconciling each small shipment
can cost Rs 1,500–2,000—sometimes half the shipment’s value.
These charges should be waived for low‑value exports, and the
reconciliation process must be fully digitised.
○​ “The RBI should also set strict service timelines and
grievance mechanisms to ensure timely support for
exporters,” GTRI said.
●​ To streamline customs, the report urges a fully online system with
24/7 automated inspections and easy‑to‑follow digital checklists
for small exporters.
○​ Courier‑mode shipments should be updated to
accommodate terms like “delivered duty paid (DDP)”,
aligning paperwork with logistics to avoid unnecessary
delays.
●​ The e-commerce exports should also be extended benefits that
bulk exports get and credit for them should be made cheaper to
help them grab this opportunity.

By: Vibhas Jha Sir

 ●​ While big players get 7–10% interest loans and purchase-order
based financing, small online sellers pay 12–15% and are left out
of public credit programs, the report pointed out.

14 March WPI inflation falls to four-month low of 2.05% on lower food Financial
and fuel prices Express

Highlights: Apr 6, 2025

●​ India’s wholesale price index (WPI)-based inflation eased to 2.05

per cent (provisional) for the month of March, 2025, primarily due
to increase in prices of manufacture of food products, other
manufacturing, food articles, electricity and manufacture of
textiles etc., data released by the Ministry of Commerce and
Industry showed.
○​ This is lower than the WPI rate in February which stood at
2.38 per cent.
●​ The month over month change in WPI for the month of March,
2025 stood at (-) 0.19% as compared to February, 2025.
●​ The month-over-month data released by the Ministry of
Commerce and Industry showed that the index for primary articles
decreased by 1.07 per cent to 184.6 (provisional) in March from
186.6 for the month of February.
○​ The price of crude petroleum & natural gas (-2.42 per
cent), non-food articles (-2.40 per cent) and food articles
(-0.72 per cent) decreased in March, 2025 as compared to
February 2025.
○​ The price of minerals (0.31 per cent) increased in March
2025 as compared to February 2025.
○​ The index for Fuel & Power decreased by 0.91 per cent to
152.4 (provisional) in March 2025 from 153.8
(provisional) for the month of February 2025.
○​ The manufactured products index increased by 0.42 per
cent to 144.4 (provisional) in March 2025 from 143.8
(provisional) for the month of February, 2025.
●​ Furthermore, per the release by the Ministry of Commerce &
Industry, inflation for food articles dropped significantly to 1.57
per cent in March as compared to 3.38 per cent in February.
○​ The inflation rate for primary articles went down to 0.76

By: Vibhas Jha Sir

 per cent from 2.81 per cent in the previous month.
○​ The fuel and power inflation was at 0.20 per cent in March
as compared to -0.71 per cent in February.
○​ And manufactured products inflation stood at 3.07 per cent
in March.
●​ Under the food articles category, vegetable inflation tanked to
-15.88 per cent in March from -5.80 per cent in February.
○​ Pulses inflation during the month of February came in at
-2.98 per cent, while the inflation for wheat stood at 7.96
per cent during the month in review.
○​ Eggs, Meat & Fish inflation went down to 0.71 per cent in
March from 1.48 per cent in February.
○​ Potato and onion reported inflation at -6.77 per cent and
26.65 per cent respectively.
●​ The non-food articles reported WPI inflation at 1.75 in March as
against 4.84 per cent in February.
○​ Minerals inflation went up to 2.84 per cent in March from
0.98 per cent in February.
○​ The Crude Petroleum & Natural gas posted wholesale
inflation at -7.64 per cent in March and crude petroleum
was at -11.50 per cent.

15 India’s retail inflation eases to 67-month low of 3.34% in March Money

Control
Highlights:
Apr 15, 2025
●​ India’s inflation eased to a 67-month low of 3.34 percent in March
compared with 3.61 percent in the previous month, as food
inflation declined further, with economists firming up their
expectations of a further rate cut in June policy meeting of the
Reserve Bank of India, according to data released on April 11
●​ March marks the second consecutive month that retail inflation
remained below the RBI’s target rate of 4 percent.
○​ The reading comes a week after the central bank delivered
its second consecutive rate cut of 25 bps.
○​ The policy rate now stands at 6 percent compared with 6.5
percent at the start of the year.
●​ The economy ended the year with 4.6 percent in inflation in FY25
compared with 5.4 percent in FY24.

By: Vibhas Jha Sir

 ●​ The Reserve Bank of India expects inflation to dip further to 4
percent in the coming year.
○​ In its latest meeting, the central bank’s monetary policy
committee revised the inflation forecast downward to 4
percent from 4.2 percent expected earlier.
●​ The central bank sharply revised its Q1 forecast downward to 3.6
percent from 4.5 percent, also lowering Q2 forecast to 3.9 percent
from 4 percent predicted earlier.
●​ Food inflation declined to a 40-month low of 2.69 percent in
March as against 3.75 percent in February, as vegetables, eggs,
pulses slipped further into deflation during the month.
●​ Vegetable deflation widened to 7.04 percent compared with 1.13
percent in the previous month, while eggs deflation stood at 3.16
percent compared with 2.96 percent in February.
●​ Pulses deflation was at 2.73 percent, nearly 2 percentage points
higher from the previous month.
●​ On the other hand, oil and fruits witnessed a rise in inflation in
March. Fruit inflation has remained in double digits for a third
consecutive month, while oil inflation has been over 10 percent for
a third month.
●​ Core inflation firmed up further to 4.1 percent in March, as
housing and miscellaneous items witnessed a rise in inflation.
○​ Miscellaneous inflation was up 4.99 percent in March
compared with 4.84 percent in the previous month, as
education, transportation and health prices increased faster
compared with the previous month.
●​ Fuel and light exited deflation for the first time in 18 months, as
prices increased 1.46 percent. But economists contend that the
trend is unlikely to sustain as discoms have cut electricity prices.

16 IMF flags geopolitical shocks as threats to global markets Money

Control
HIghlights:
Apr 15, 2025
●​ The International Monetary Fund’s most recent Financial Stability
Report has a chapter on the impact of geopolitical risks for asset
prices and financial stability.
○​ The analysis is timely, for obvious reasons, as geopolitical
uncertainty has soared as a result of Trump’s tariff wars

By: Vibhas Jha Sir

 against almost every country.
●​ At the heart of the analysis is a blunt message: geopolitical
shocks—including those tied to trade disruptions—can upend
global financial stability.
○​ The report doesn’t mention Trump by name, but the
reference is unmistakable.
●​ The IMF report underscores how geopolitical risks can destabilize
financial markets.
○​ By disrupting trade and eroding investor confidence, the
tariffs amplify risks to equities, sovereign yields, and
economic activity, creating a volatile environment that
could undermine macrofinancial stability.
○​ The report says, ‘a rise in geopolitical risks that manifests
through actual or potential restrictions on cross-border
trade and financial transactions or military conflicts can
trigger a reallocation of capital flows and cause abrupt
asset price corrections.’
●​ The IMF points out that geopolitical risks, such as trade
restrictions, affect financial markets through two primary
channels.
○​ First, the economic channel disrupts supply chains and
reverses capital flows, directly impacting asset prices.
○​ Second, the market sentiment channel increases uncertainty
and risk aversion, even without realised policy changes,
which means that threats are enough to cause instability.
○​ Add to that the on again, off again nature of Trump’s tariff
policies and it’s rather obvious that investor and business
confidence will be hit, and the markets will be
exceptionally volatile.
●​ The report says, ‘On average, major geopolitical events since
World War II have triggered a modest and short-lived decline in
aggregate stock prices, possibly because of policy reactions to
mitigate the adverse effects of these events.
○​ But, in some cases, such as the 1973 Arab oil embargo and
the 1990 Iraq invasion of Kuwait, the adverse stock market
reaction was stronger and more persistent, lasting over
several months.’
○​ The question is: what kind of a shock is the current one?
It’s hardly an average one, such as another flare-up in the

By: Vibhas Jha Sir

 Middle East.
○​ According to some accounts, Trump is attempting to
change the entire post-war economic system.
○​ By that yardstick, the impact of the shock on asset markets
and the global economy should be massive. Talking of the
impact from ‘average’ geopolitical crises makes little sense
here.
●​ The report says that long-term sovereign yields in safe-haven
countries, like the U.S., typically decline after geopolitical shocks
as investors seek security.
○​ However, Trump’s tariffs have disrupted this pattern, with
yields in advanced economies showing mixed responses
due to heightened uncertainty.
○​ The US dollar too has depreciated sharply and the DBS
report mentioned earlier points out ‘’There are good
reasons for diversifying reserves away from the USD.’’
●​ Emerging markets typically face rising yields during geopolitical
crises, increasing sovereign risk premiums and higher fiscal
vulnerabilities.
○​ Countries with limited fiscal buffers are particularly
exposed, as tariff-induced uncertainty raises borrowing
costs and exacerbates debt sustainability concerns.
○​ The report points out that this feedback loop between
geopolitical risks and fiscal strain could destabilize
financial systems, especially in trade-reliant economies.
●​ Cross-border contagion effects further complicate the outlook.
Firms in countries exposed to tariff-affected nations through trade
linkages are affected.
○​ For example, during the tariff war with China during the
first Trump administration, U.S. tariff announcements
impacted firms in third-party countries.
○​ The report says that at the time, firms in Mexico displayed
a significant positive effect for a short time, while firms in
Korea, Canada, Japan, Germany, the UK, and India
generally experienced negative stock market reactions,
possibly reflecting heightened trade policy uncertainty.
○​ Spillovers, driven by interconnected supply chains,
underscore how Trump’s tariffs reverberate globally,
amplifying financial market risks.

By: Vibhas Jha Sir

●​ Oil prices, another critical asset class, decline persistently after
geopolitical shocks, including trade disruptions. The IMF notes
that tariff-induced uncertainty dents global demand, lowering oil
prices as economic activity slows.
○​ Says the report: ‘On average, the negative response of
equity prices and the spike in option-implied volatility is
accompanied by persistent oil price declines, modest
inflationary pressures and the contraction of industrial
production, while the yield curve bears flattens.’
○​ This time too, oil prices have fallen significantly, reflecting
fears of a tariff-driven slowdown.
○​ The IMF report says that equities in commodity-exporting
economies usually suffer larger declines than those in
non-exporting countries.
●​ Trump’s tariffs, by escalating geopolitical risks, have created a
precarious environment for financial markets.
○​ Stock prices, sovereign yields, and oil prices face persistent
pressures, while cross-border spillovers intensify
vulnerabilities.
○​ The IMF warns that countries with weak fiscal reserves are
ill-equipped to handle rising risk premiums, and
interconnected trade networks could spread instability.
●​ Geopolitical risks appear to be, at least to some extent, priced into
stocks and options markets.
○​ The report points out that, for Chinese and US firms,
option premiums for protecting against downside and tail
risks increased after the tariff announcements by the
Chinese and US governments in 2018–19.
○​ Nevertheless, it adds that the sudden realisation of major
geopolitical risks can adversely affect bank and nonbank
financial institutions, with adverse consequences for
macrofinancial stability.
●​ As uncertainty lingers, the potential for sharp asset price
corrections grows, underscoring the need for robust risk
management to safeguard macrofinancial stability.
●​ Much depends, of course, on how deep the geopolitical fissures
are.
○​ Trump, for instance, has often said that he would welcome
a deal with China.

By: Vibhas Jha Sir

○​ Completely cutting off trade with China will be like cutting
off one’s nose to spite one’s face and Trump seems to have
realised that.
○​ But it’s all still very uncertain. An environments such as
the current one is ideal for pump and dump markets.

By: Vibhas Jha Sir