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Goyal Goes Bargaining
In today’s edition — what Indian trade minister Piyush Goyal’s visit to the US signals; the radio industry in India is still alive and kicking; and layoffs at Ola Electric amid losses.
THE TAKE
Indian Trade Minister’s US Visit A Good Sign, Even If It Achieves Little
India’s simple average tariff rate stands at around 17% against 3.3% of the US. India has said that there are only a few products in the high tariff range between 25% and 150%. Though, some visible products like cars and even alcohol fall into this category.
A top finance ministry official said recently that India had significantly reduced its average customs duty rate to 10.66% from 11.65% and is now moving towards the same levels as prevalent in the Southeast Asian countries. Is that really true?
Last month, Prime Minister Narendra Modi landed in the US for a two-day visit, which was scheduled at fairly short notice. The meeting seems to have had limited success on the issue of tariffs.
Trump greeted Modi at the White House with what Time Magazine called a bear hug two weeks ago and called him “a great friend of mine,” but also warned that India won’t be spared from higher tariffs he’s begun imposing on US trade partners around the world.
“Whatever India charges, we charge them,” Trump said at a joint news conference. “So, frankly, it no longer matters to us that much what they charge.”
The Indian finance ministry official who said very few products fell in the 25% to 150% duty range also added that duties on most products were actually in the narrow band of zero to 10%.
Another official said the duty on the top 30 items imported from the US — including crude oil, LNG, coal, diamonds, and aeroplanes — ranges from only 0 to 7.5%.
All this, of course, is not making much of a dent where it should.
A Rushed US Visit
Now India’s trade minister Piyush Goyal is en route to the US to negotiate a deal, if he can.
Goyal's visit was sudden as he departed after cancelling previously scheduled meetings until March 8, officials told Reuters.
The good news is that India’s ministers and officials are hitting the road because that is the only option now.
Even if little were to come out of this, India needs to show and be seen to be willing to sit down at the negotiating table.
This is obviously a good signal to both international and domestic audiences, particularly in trade and business.
Hopefully, this spirit of outreach will extend further domestically as well.
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THE MEDIA ROOM
Contrary To Popular Belief, The Radio Is 'Alive And Kicking'
How many of you still tune in to the radio on the way to work, while working or maybe during leisure? First launched in India in 1923, the radio was perhaps the only form of entertainment device at the time. It gained relevance over the decades and became a source of listening to music, news and other cultural programmes.
With the advent of cable TV in India and now digital media, the options to find your entertainment are ample, giving rise to the popular belief that the radio is not relevant anymore. Yatish Mehrishi, chief executive officer for Entertainment Network India Limited, that owns Mirchi, India's largest radio brand, told media specialist and author Vanita Kohli-Khandekar that this couldn't be further from the truth.
"It's not that people are not listening, habits are changing," Mehrishi said in the latest episode of The Media Room, and added, "It is still the last mile consumption medium. You go anywhere, you're still listening to that. That's the last mile advertising medium."
Mehrishi elaborated that in a digital world, radio was definitely fighting a battle with screens such as the phone, tablet or television.
Shrikant Shenoy, associate vice president at the Interpublic Group, said radio continues to be an "important part of the mix for our advertisers".
"It is still the last mile consumption medium. You go anywhere, you're still listening to that. That's the last mile advertising medium," Shenoy said.
What are the biggest challenges that India's radio industry must overcome in the near future?
CORE NUMBER
56.3
This is India's manufacturing Purchasing Managers' Index (PMI) for February, a 14-month low, indicating a slowdown in new orders and production, HSBC and S&P Global reported. It stood at 57.7 in January. Despite the dip, business conditions remained strong across consumer, intermediate and investment goods sectors. Robust domestic and global demand led firms to expand purchasing and hiring, marking a year of employment growth. New export orders rose sharply, though slower than January’s near 14-year high. Input costs increased, but overall inflation eased for the third consecutive month. Analysts say India’s manufacturing momentum remains positive despite softer output growth.
FROM THE PERIPHERY
—🫤 Ola Electric is cutting over 1,000 jobs across departments like procurement, fulfillment, and customer relations as it struggles with rising losses. This marks its second layoff in five months, following 500 job cuts in November. The company’s losses surged 50% in Q3, and it faces scrutiny from the consumer protection authority. Meanwhile, rivals Bajaj and TVS have overtaken Ola in market share. Its stock fell 3.25% on Monday, down 60% from its August IPO peak, as it renegotiates vendor contracts.
—🔋 Mukesh Ambani’s Reliance New Energy could face a massive penalty for failing to meet deadlines under India’s production linked incentive (PLI) for manufacturing advanced chemistry cell batteries. Bloomberg reported that Reliance could face penalties as high as Rs 125 crores. The company had won a bid for this in 2022, along with others. Rajesh Exports could also face similar penalties, sources told Bloomberg. The government had introduced the PLI scheme for manufacturing in many sectors to reduce dependence on imports.
—📉 Foreign direct investment (FDI) in India fell 5.6% year-on-year to $10.9 billion in October-December 2024 due to global uncertainties, per government data, Business Standard reported. However, cumulative inflows for April-December 2024-25 surged 27% to $40.67 billion. Singapore, the US, the Netherlands and the UAE saw higher investments, while Mauritius, Japan, the UK, and Germany declined. Maharashtra led with $16.65 billion, followed by Gujarat and Karnataka. Key sectors attracting FDI were services, software, telecom, and automobiles, with non-conventional energy receiving $3.5 billion.
—💸 Women borrowers in India have grown at a 22% CAGR over five years, with 60% from semi-urban and rural areas, according to a NITI Aayog report. While personal finance dominates at 42%, only 3% of loans support businesses. Credit monitoring among women surged 42% YoY, with 27 million tracking their scores in 2024. Gen Z women led this trend with a 56% increase. Maharashtra, Tamil Nadu, and Karnataka saw the highest self-monitoring rates. The report calls for gender-smart financial products to address access barriers..
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✍️ Zinal Dedhia, Salman SH | ✂️ Rohini Chatterji | 🎧 Joshua Thomas