India Beats Tariff Tantrums
India is the first major equity market globally to erase the tariff-induced losses even as a broader gauge of Asian equities is still down
On Episode 558 of The Core Report, financial journalist Govindraj Ethiraj talks to Pawan Kumar, President of Seafood Exporters Association of India as well as Aditi Nayar
Chief Economist, Head - Research & Outreach at ICRA..
SHOW NOTES
(00:00) Stories of the Day
(01:00) India beats tariff tantrums, becoming first global market to do so
(03:59) Morgan Stanley cuts December Sensex target to 82,000, still 7% above current
(07:38) Inflation is down to 5 year low, will it hold?
(16:33) The International Energy Agency joins OPEC in slashing oil demand forecasts
(18:19) How tariff tussles are have upended the lives of India’s shrimp and seafood exporters
(32:18) Build On Blockchain
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Wednesday, the 16th of April and this is Govindraj Ethiraj headquartered and Broadcasting and streaming from Mumbai, India's financial capital.
Our top stories for the day, India beats tariff tantrums becoming amongst the first major global markets to do so.
Morgan Stanley cuts the December Sensex target to 82,000, still 7% above current.
Inflation is down to a five-year low, will it hold?
The International Energy Agency joins the Organisation of Petroleum Exporting Countries in slashing oil demand forecasts.
How tariff tussles are upending the lives of India's shrimp and seafood exporters.
And finally, introducing our new segment on blockchain in partnership with Algorand
India Has Beaten The Tariff Tantrums, At Least For Now
The NEC Nifty passed its closing level on the 2nd of April, the Liberation Day, as Donald Trump called it, which saw the announcement of reciprocal tariffs on a host of countries by the United States. The reciprocal tariffs were subsequently suspended for 90 days, but sector-wise tariffs on semiconductors and pharmaceuticals are still being explored by the US, even as it's not fully clear what will happen after 90 days. India is working furiously on a bilateral deal with the US, but the final conjures of that will take weeks, if not months, to come together.
Meanwhile, there is a 10% duty that is applicable to all imports into the US that continues, apart from higher tariffs in some categories in countries like Canada and Mexico. India is the first major equity market globally to erase the tariff-induced losses, even as a broader gauge of Asian equities is still down more than 3% since the tariff announcements, according to Bloomberg, adding that investors are touting Indian markets as a relative safe haven amidst the volatility around us. For the same reason that we've been discussing in the core report, India's domestic economy is seen as being able to withstand a potential global recession better than many peers who face higher tariffs.
India accounted for just 2.7% of total US imports last year compared to 14% for China and 15% for Mexico, according to Bloomberg data. The Global CIO office told Bloomberg that they remained overweight India in their portfolio thanks to good domestic growth and aided by a likely diversification of supply chains away from China, which made Indian equities a safer bet over the median term. India, of course, is facing internal pressures, including slowing economic growth and high valuations, and has been so for several quarters and more on that shortly.
Overseas funds have already sold more than $16 billion worth of local shares this year on a net basis, and that's the most they have withdrawn in any calendar year was $17 billion in 2022. The Nifty 50 benchmark is currently trading at 18.5 times its 12-month forward earnings estimate compared to the five-year average of 19.5 times and a multiple of 21 times at its peak in late September, according to Bloomberg data. On Tuesday, the BSE Sensex opened strong and stayed strong all through the trading session, closing finally with a gain of 1,578 points or around 2% at 76,735.
The NSE Nifty registered the day's high at 23,368, closed 500 points up or also about 2% higher at 23,329. The private banks were the biggest gainers, HDFC, ICICI, and Axis Bank, which according to Business Standard contributed about 50% or 750 points to the day's gain. Meanwhile, on Wall Street, futures were quoting in the positive territory with the Dow up about 195 points, and that was on Tuesday.
Morgan Stanley has cut its December 2025 target for the Sensex by 12% to 82,000 as its base case from 93,000 levels predicted earlier. This target is of course about 7% still higher from the current levels, and Morgan Stanley attaches a 50% probability of the index, hitting this mark by December 25, according to Business Standard. The investment bank said that this level assumes continuation in India's gains in macro stability via fiscal consolidation, increased private investment, and a positive gap between real growth and real rates.
They also pointed out that robust domestic growth, slow growth in the US but no recession, and benign oil prices are part of their assumptions, and they also expect, as do many others, another 50 basis point cut in short-term interest rates and a positive liquidity environment. Meanwhile, there is no specific tariff update as of today except that it continues to be uncertain, as it was over the weekend with some flips and flops. It is worth remembering that China has imposed export controls on rare earth elements.
A study by the Centre for Strategic and International Studies has said that the United States would not be able to fill a potential shortfall, which in turn could threaten Washington's military capabilities, according to a report in CNBC. China earlier this month imposed export restrictions on seven rare earth elements and magnets used in defence energy and automotive technologies. The new restrictions, which encompass the medium and heavy rare earth elements like samarium, gadolinium, terbium, dysprosium, ttm, scandium, and vitreum, will require Chinese companies to secure specialised licences to export these resources.
The Rupee Closes Is Strong
A weak dollar, which by the way was not in anybody's calculation until quite recently, is helping currencies elsewhere gain. The rupee closed stronger on Tuesday, ending below the 86 rupee mark, thanks to that weekend tariff relief, short-lived as it might be. The rupee strengthened 28 paise to close at 85 rupees 77 paise against the dollar after closing at 86 rupees 5 paise on Tuesday, according to Bloomberg data.
The rupee strengthened 28 paise to close at 85 rupees 77 according to Bloomberg data. On Friday, the rupee registered its highest single-day gain in more than two years. Importantly, the dollar index, a measure of the value of the U.S. dollar relative to a basket of foreign currencies, was down slightly to 99.6 on Tuesday, which is the lowest level since April 22. The dollar is weakening because of concerns about the U.S. economy, as we have discussed here, thanks to the impact of tariffs, among others. Elsewhere, India's oil imports rose sharply to $19 billion in March from about $12 billion in February, and the government said March goods exports stood at about $42 billion, while imports were $63.5 billion, compared to about $36.9 or about $37 billion of exports and about $51 billion of imports in February. So, India's merchandise trade deficit in March is therefore at $21.5 billion, which is more than expected thanks to a sharp rise in oil and gold imports, according to data released on Tuesday. Gold imports have nearly doubled to about $4.4 billion in March from about $2.3 billion the previous month, and one hopes the figures are accurate because there was a problem in the past. Economists had expected a trade deficit of $16 billion, according to a Reuters poll, and March merchandise trade deficit rose from more than a three-year deficit of $14 billion in the previous month.
Retail Inflation Is Down
India's retail inflation numbers have eased to about 3.3% in March from a seven-month low of 3.6% in February, according to data released on Tuesday by the government. Now, this figure, i.e., the Consumer Price Index or CPI-based inflation figure, is within the Reserve Bank's medium-term target of 4% and well inside the 2-6% tolerance band. It is the lowest year-on-year inflation after August 2019, according to the Ministry of Statistics and Programme Implementation. India's Wholesale Price Index-based inflation eased to about 2% in March, down from about 2.38% in February, according to data released by the Ministry of Commerce and Industry. The decline was driven by drop in prices of food and fuel and power categories even as prices of manufactured goods went up. Retail inflation is overall expected to ease in the first half of the year and could rise slightly towards the end of the fiscal year, reaching about 4.4% in Q4. I reached out to ICRA chief economist Aditi Nair and I began by asking her about the latest inflation numbers, the five-year low, and the overall context of the macro picture, which seemed quite good if you looked at all the numbers together and whether she was reading it the same way, and also equally how she was seeing the interest rate situation ahead.
INTERVIEW TRANSCRIPT
Aditi Nayar: See, it's certainly good news. I don't think I'm reading it in a negative way at all. Will it last?
Certainly in the next few months we feel that the inflation readings are going to be very benign. What are my concerns for the CPI inflation trajectory? One, today we got a monsoon forecast which is expected to be above normal this year and above normal brings with it a slight risk that there could be episodes of very heavy rainfall and that is something that isn't good for perishables.
Backtracking, as the temperatures now start rising over most of India over the next month, again that's a situation in which perishable prices could actually rise very rapidly. So we need to really map out this trajectory because I don't have a bearing on how things play out. And overall the experience of the last five-odd years has been that we end up with some sort of a vegetable price shock every year from one of the three key ingredients in the Indian palette which is potato, onion or tomato.
So again we need to see how that's going to play out. Are we going to be in for another shock like that or not? So this is some of the food inflation related potential pitfalls which should be there over the course of the year even though it is food inflation that has come in so much lower than expected and brought the headline inflation down to 3.3% in this month. Now globally of course we're in fairly unchartered territory. Tariffs, counter tariffs, implications for supply demand and you know overall disruption to supply chains could end up leading to prices of some commodities dipping, prices of some finished products increasing. We don't know how this is going to play out especially disruptions to things like the semiconductor supply chains and you know wherever that's an input into finished products.
So I think globally it could go both ways in terms of how we see inflation readings and how that affects India.
Govindraj Ethiraj: Why did you refer to semiconductors specifically?
Aditi Nayar: See in case you are in a situation where China is going to look at specific items which either they export out of China or which they're importing from the US which are American made, then there could be possibilities of a disruption which is much more widespread. Not only to items going into the US but into entire supply chains out of China and to the rest of the world. So just going back to the Covid scenario where we had a shortage of semiconductors specifically.
You remember how disruptive that was right? So today we've seen that China is halting the receipt of Boeing planes but they may also look at you know where their input into the supply chains is also going to be disrupted. I mean it's completely unchartered territory right now.
Govindraj Ethiraj: You're right I mean it's tough to forecast something that we have zero ability to predict or project but if you were to look at the things that we know one is of course inflation that we've just spoken about, oil prices which are definitely trending lower, the IEA and the OPEC have come out with lower projections for the year ahead in terms of demand and supply is likely to be higher. So oil prices are likely to be lower. So if you were to look at some of these other factors on the macro front how are things looking?
Aditi Nayar: See overall my sense is that domestically we have quite a lot of buffers on the growth side and I think we are kind of very well placed starting off of course with the fact that we had the income tax relief which the budget had announced. So you had a supportive fiscal policy going into a global kind of crisis like this. Monetary easing has already seen 50 basis points, that's how much we had predicted for this cycle at the beginning of the year and now I'm saying there'll be 50 basis points more at least.
So the monetary easing is going to be much sharper than what we had initially thought. Partly because inflation has come in much lower than we expected and clearly we've seen that the RBI is trying to like you know the APC is pivoting to a more growth supportive stance which is enabled by the fact that CPI inflation has also come down. So there again it's something that is going to help things like buffering private consumption and also we've got a double digit growth in CAPEX of the Government of India at Pennsylvania.
When we look at the state government data my sense is that the FY25 RE for CAPEX will be undershot by a very large margin and therefore the headroom for potential growth in CAPEX in the FY26 budget is actually going to turn out to be quite high. Now execution will be key. How quickly does the CAPEX take off both for the centre and the states. But again this is something where we find that fiscal policy can play a very supportive role for our domestic growth impulses right now.
The main issue of course is the uncertainty globally what that means for merchandise exports, the knock-on impact on exports, merchandise exports and services exports and the impact on overall sentiment. Private CAPEX certainly for those industries that have either a large export component or where imports can come in very quickly and be competitive. We don't expect that private CAPEX is going to really come in very quickly in industries such as that.
Govindraj Ethiraj: Even without the tariff challenges we've obviously been seeing a slowing economy or economy under pressure in the previous couple of quarters. So any signs that you're seeing that things are changing?
Aditi Nayar: So it's an interesting kind of trajectory GDP growth had slowed over Q1 and Q2 revived in Q3 and we are expecting it to improve further in Q4 of FY25. Although we suspect that the final growth number is going to be much lower than what was implicit in the NSO's forecasts for that quarter. Now a lot of interesting things that are yet to kind of play out.
Our hunch was that we were going to see a lot of front-loading of exports and today's March trade data has completely belied that. There is no front-loading of exports that's visible in the March data. That could still happen in the April data, we don't know.
So there are going to be some sort of temporary mismatches in terms of you know up-fronting of some shipments etc. But I think overall uncertainty is going to be the key and the disruption that I was talking about earlier. I think these are going to be the main themes for FY26.
We had started off with a forecast of a 6.5% growth in FY26. We brought it down to 6.2% after the reciprocal tariffs were announced and despite the 90-day sort of pause, we are actually sticking to 6.2% because of the uncertainty and the potential disruption.
Govindraj Ethiraj: Right. Aditi, thank you so much for joining me.
Good Monsoons Ahead
We just spoke of monsoons. The India Meteorological Department or IMD has predicted an above normal monsoon in 2025 which quantitatively could be about 105% of the long period average. The long period average for June to September rains is 87 centimetres and rainfall between 96 to 104 percent of LPA is considered normal. You must have heard all these terms last year.
Well, they're back. An El Nino Southern Oscillation or ENSO that has turned neutral is expected to remain so by the time the monsoon season sets in June which could benefit Indian rains according to a report in Business Standard. Some more technical stuff, if you're interested, a neutral Indian Ocean Dipole or IOD and below normal snow cover in the northern hemisphere in the months of Jan to March will altogether combine to give India a good monsoon, said the IMD.
The southwest monsoon had closed the 2024 season with an 8% surplus which was the best performance in the past three years since 2020.
International Energy Agency Forecasts Lower Demand
The Paris-based International Energy Agency has slashed its outlook for global oil demand growth for 2025 by a steep 300,000 barrels per day to a total of now 730,000 barrels per day thanks to those rising tariffs by the United States, China, which in turn has obviously triggered fears of inflation, slow economic growth and more trade disputes. Demand growth is expected to slow further in 2026 to about 690,000 barrels per day from 730,000 barrels per day to about 690,000 barrels per day according to IEA's monthly oil market report for April. Now this downgrade comes on the heels of robust oil consumption in the first three months of 2025 which were up by about 1.2 million barrels per day year-on-year, its strongest rate since 2023, the IEA said. A day earlier, the more optimistic Organisation of Petroleum Exporting Countries or OPEC had also cut forecasts for global oil demand growth for this year and the next by about 100,000 barrels per day, projecting an expansion of 1.3 million barrels per day. So global oil prices have fallen by about $10 per barrel in March and early April thanks to increasing perception of risk both on the trade front as well as some geopolitical risk. Also remember OPEC countries are saying they are going to increase supply which is obviously going to add to or rather contribute to lower prices.
Brent futures are around $65 a barrel after hitting their lowest levels in more than four years to below $60 a barrel according to the IEA.
A Story From India's Shrimp Industry
Much of the discussion surrounding Indian exports centred around the bigger segments like pharmaceuticals, electronics, apparel and gems and jewellery. But the United States and China are amongst India's major markets for seafood exports that touched about $7.3 billion last year on a volume of 1.8 billion tonnes that was an all-time high as a Reuters report two days pointed out. Shrimps formed a major component with some 300,000 farmers in Andhra Pradesh contributing the most to industry supplies which in turn account for about 92% of India's seafood exports of $2.5 billion last year to the United States according to that Reuters report. Much of this is up in the air. While the 26% reciprocal duty is paused for now a 10% duty still stands which could eat into exporters margins if the importers refuse to absorb the difference or ask for lower prices. But the story of shrimps also illustrates the intricacy of the global trade system and how industries small and big including in India depend on trade in general and the United States in specific.
Shrimp farmers mostly on the east coast of India are now faced with challenging times even as they try and make the best of the low duty window that is open right now. I spoke with the Kakinada Andhra Pradesh based G. Pavan Kumar, President of the Seafood Exporters Association of India and I began by asking him to walk us through the industry size and spread and how the export markets are working right now.
In this long interview which I urge you to listen to, I try to cover the various dynamics of the industry and its current position and the options they're weighing currently which of course also hold true for many other industries and many other entrepreneurs and businesses across India.
INTERVIEW TRANSCRIPT
Pawan Kumar: The entire seafood industry in India is spread across nine maritime states. If you start from Gujarat then you have Maharashtra, Goa, Karnataka, Kerala, Tamil Nadu, Andhra, Orissa and West Bengal. These are the nine maritime states that we call them.
So we are present in all the nine states and the overall size of the industry as in only the seafood exports is about 8 billion dollar industry from India to various parts of the world and we export to 132 countries across the world and of course the US being the major market for us. So when I say major market I would say the US occupies about 35 to 40 percent in terms of value and probably slightly lower in terms of volume.
Govindraj Ethiraj: And what kind of products go primarily to the US and also what is the breakup of this 8 billion dollars roughly?
Pawan Kumar: The 8 billion dollars I would say about 40 to 45 percent is shrimp and in terms of volume and the rest of the items are like other fish items like ribbon fish, cuttlefish, squids, all the sea cod items, sea cod, the kingfish, sardines, pomfrets.
Govindraj Ethiraj: And shrimp I'm assuming is therefore the largest component and when it comes to the US from India. Could you give us a sense on how big that is?
Pawan Kumar: Yeah, the overall US market is about 2.7 billion dollars from India of which 92 percent is shrimp. That's roughly about 2.6 billion dollars is shrimp. Rest could be other sea cod material or sea cod fishes.
Govindraj Ethiraj: And what would be roughly the size of the US market in all as in how much shrimp does the US import in all?
Pawan Kumar: This 2.6 billion dollars is shrimp. And which other countries is the US importing from? The next is Ecuador.
I think it's somewhere around 18 to 20 percent. Somewhere around 20 percent is what I know. And you have Indonesia the third in line and Vietnam followed by Thailand and other countries.
Govindraj Ethiraj: So if you were to come to the reciprocal tariff as last announced though now currently put on hold, where did we stand?
Pawan Kumar: See when the tariffs were announced it was a country tariff that was about 26 percent which we felt was very steep. When we compare it to the other Asian countries, India is much lower. For example, in Vietnam they had an initial tariff of 44 percent.
Thailand was somewhere close to that. Indonesia also somewhere was close to that. The only country which got lower tariffs among our competitors is Ecuador.
The initial tariff of Ecuador was 10 percent. For India it is 26 percent as you all know. Subsequently when the tariff was reduced from 26 to 10 percent for all the countries, I think in a way it is a big relief for most of the exporters from India.
And we are on a level playing field with Ecuador as far as tariffs today are concerned.
Govindraj Ethiraj: At 10 percent how competitive are we regardless of whether there is competition or not?
Pawan Kumar: See 10 percent will definitely pinch the exporters. It is not as bad as 26 but it will definitely pinch the exporter because normally the exports don't work on this 10 percent margin because it's a high volume intensive business. So it is going to pinch the exporters and the farmers also.
So it's not a good feeling but still it is better than 26.
Govindraj Ethiraj: From your understanding, let's say what is the capability or the ability of the US consumer to absorb this additional 10 percent or let's say the people you supply to which could be I'm assuming large importers or food restaurant chains and so on.
Pawan Kumar: Now just for your understanding I'll give you a small breakup of the US market. The US market has three components to it. One is the retail customer, the second is the food service customer and the third one is the street sales or the spot sales customer.
When I say retail, the big retail users like Walmarts, Safeway, Kroger and all the other retail customers come into picture. When I say the food service they're basically the restaurant people, the big restaurant people, TGA Fridays, Olive Garden, Red Lobster. Now likewise you know you have multiple chains which buy from India and the third one is the spot sales.
The spot sales people are the small-time importers in the US who buy maybe a few containers or a few hundred containers from all the exporters from India and they start distributing in small small quantities in the local market. When they distribute to the local market they when I say local market it is like maybe small grocery stores in those areas, small small restaurants or the Thai restaurants or the Chinese restaurants or the China town in those areas. So these are catered by the spot sale people.
So the first people who get affected are the spot sellers because it's very difficult for them to absorb those tariffs. They cannot give you an immediate they're going to push back and since they don't work on such high margins either but the retail and the wholesale probably they have that margins. We are sure they have those kind of margins to work with that 10% but still it is initial reaction is going to be a pushback from them.
Govindraj Ethiraj: Okay let me come back to India. So what's the normal cycle like for shrimp farmers in India let's say along the east coast including where you are. Is shrimp the only product that is being let's say farmed or could they shift to something else if let's say tariff levels went up I mean at a level which is obviously untenable.
What are the options?
Pawan Kumar: As on date we don't have any option let me put it this way. The reason is very simple because tariffs are there across the board for all products shipped out of India. If it is shrimp, fish or any item which goes to the US we have tariffs in place.
So shifting to a product does not change the entire dynamics.
Govindraj Ethiraj: And the infrastructure is only geared in and we talk about shrimps now but and the infrastructure is geared only to produce shrimps or grow shrimps.
Pawan Kumar: Converting from shrimp to any other variety is not all that easy because normally the kind of shrimp that we export the majority of is the salt water or the saline only saline conditions. For the farmer or the agricultural farmer for them to ship from shrimp to any other item is not all that easy because even if they want to convert into fish because those fishes they are not sold in the US. They are the domestic fishes but converting them into fish is not all that going to be easy.
Govindraj Ethiraj: Tell us about consignments that left in the last month or so and what is the status also what is the normal time between let's say the product leaving the farm and the refrigeration centres to its final destination?
Pawan Kumar: It is like this: from the farms we buy shrimp from the farmers we do the processing as per the buyer's requirement if it is a retail market or the food service or the pot sales we process them and pack them according to their requirements. If it is a retail buyer we pack in the retail bags directly it is packed in retail bags. So the minute container is ready from the time it goes on board onto a vessel that is the carrier it takes depending on the destination for example if it is going to LA it takes about 25 days for New York it takes about 40-45 days and it is slightly higher when it goes to other ports like the internal ports or the smaller ports and the transit times are slightly higher on the gulf coast like Houston, Miami and all these areas the transit time is slightly higher somewhere around 50 to 55 days.
Govindraj Ethiraj: Are these leaving from Vijayawada or which port on the east coast do you?
Pawan Kumar: As far as the shipments are concerned Vizag is the biggest port Vishakhapatnam brought by Krishnapatnam then Chennai you have Ennore port these are the four major ports which export these reefer containers on the east coast.
Govindraj Ethiraj: Right so and at this point the consignments that are already on the way because you said it's almost 40 days so consignments we should have left about 30-40 days ago so what is the current status?
Pawan Kumar: I'll give you the this thing about the tariffs when the initial tariffs came and 5th of April was the cutoff date the containers should be on board by 5th of April that is you should be holding a bill of lading the vessel would have sailed and you should be holding a bill of lading by 5th of April anything after that the 10% tariff kicks in. Our assessment is there are about 2000 containers by the time the tariff was announced on the 2nd of April there are roughly about 2000 containers which are on waters to the USA. One good thing is 90% of the containers will escape the tariffs but the 10% of the containers which will be hit by tariffs because they were loaded prior to the 5th of April deadline we are trying to negotiate with the buyers it's not going to be all that easy because initially there is a pushback saying that you know tariffs are not our headache that's what the importer says now we are slowly working out with importers and seeing how we can work around the tariffs. The second set is the inventory which is sitting in the cold store that is after 5th of April Indian packers have been sitting on roughly about 2000 containers which is ready for shipments cargo ready and ready for shipments that was a major concern for most of the exporters because initially the tariffs were about 26% then it was highly impossible for the packers to ship and the importers to absorb that kind of tariffs. Now slowly we are trying to talk to the importers saying that see these tariffs belong to your country you need to figure a way so that you know you can take them into your account. There is a pushback we are trying to negotiate with them, talk to them and find out a solution before we can start shipping them.
The window we have is from 5th of April till 15th of May before which all these containers should go because post 15th May these containers will reach the destination after that 90-day period so that is going to have an impact. So we are trying to work out with the buyers trying to find a solution, not sure how it is going to turn out in the next 4-5 days.
Govindraj Ethiraj: So assuming the US market is going to be a challenge for various reasons including the uncertainty I am sure or it appears like between India's bilateral talks and the importers ability to absorb something Indian exporters ability to absorb something maybe there will be a solution but are there other markets apart from the US which India could focus on or target if assuming uncertainty is going to continue for longer?
Pawan Kumar: There are alternate markets but the big question is can the alternate market take this 2.6 billion worth option that is a point of concern for us because we have other competitors from Vietnam and Indonesia they are also equally hit they will also be looking at alternate markets to US so it is going to be a challenge to find an alternate market immediately but here the only other alternate market the biggest alternate market for India is Europe. In Europe we have some trade barriers or the non-tariff barriers what you call them in terms of testing our product once it reaches the European shores we don't have a free trade agreement with Europe so that means there is a certain amount of duty which the European government levies on Indian shrimp that varies between four to about eight percent or nine percent today it is being observed by the importer but Vietnam one of our competitors Vietnam they have a free trade agreement with Europe and you know they don't have tariffs and other things it is going to be a challenge to find a market here I've probably you know we've been pushing we in fact we had a series of meetings with the commerce ministry in fact they are working they are burning all the midnight oil for the last so many weeks trying to find a solution for this we have been pushing them to get into a bilateral trade agreement with the US as soon as possible the advantage what India has is when our prime minister went to US in February the first thing he did was you know he spoke about the bilateral trade agreement which was a good thing he has done and then followed by our commerce ministers where I visit to the US it's the first country in the world India is the first country in the world which initiated the bilateral trade agreement talks yeah then other countries probably you must have seen the news report also we are way ahead trees as far as bilateral trade agreement is concerned hopefully once the bilateral trade agreement comes into place we will at least stick to this 10 percent tariff and it happens within this 90 day window what we have now so that was first request which we have made to the government of India right now and
Govindraj Ethiraj: Thank you so much for joining me
Pawan Kumar: No pleasure thanks bye
Build On Blockchain
Over the last decade the word blockchain has been thrown around a lot sometimes with excitement sometimes with scepticism it's been called revolutionary overhyped even mysterious but this is not about the technology alone it's about what it can do for your enterprise industry and even customers in this series called build on blockchain we're talking to the people behind building real solutions on blockchain who are making it easier to move money securely to trust without middlemen to serve the unbanked or to make business operations logistics and even agriculture faster cheaper and more transparent in the next few months we will bring you conversations with founders technologists and policymakers who are trying to stay ahead of the curve so if you're curious about how blockchain is being used today not in theory but in practise you're in the right place joining me today are algorands nikhil varma technical lead in india and anil kakani vice president and india country head
INTERVIEW TRANSCRIPT
Govindraj Ethiraj: so let me talk about trust when i have conversations with people veterans in the banking space and i remember one such conversation a few years ago he told me that banking equals trust you know finance equals trust and if you take that away or if you don't have that then there's really nothing left and that really is the underpinning of the whole system so tell us about how you view trust from your vantage point in the blockchain system and how people should look at it which is both blockchain as well as trust in today's
Anil Kakani: environment so if you think about banking equals trust right and then you realise the number the millions of people that don't get access to traditional banking services why is that right because trust does not exist with that segment of the population right whether it's around an issue of identity whether it's the ability to to move money to them or to collect payment from them so because there is not trust a significant segment of the global population and certainly of India's population doesn't get to fully participate in the economic experience right and so the country suffers because you don't have you know that productivity taking place and then of course quality of life suffers as a result of that so banks don't offer you know or operate in a charitable manner right they want to serve that population but they have to be able to make money serving that population understandable right and blockchain helps build trust in relationships
Nikihil Varma: where trust doesn't exist right and how does that work thank you govind for inviting us here one of the things that i just want to mention over here is yes the trust is very important there is without trust nothing exists right it's not saying that trust will go away it's just that the amount of investments that the bank need to put into to kind of get trust set up to be able to have an infrastructure to be able to do a lot so we will have to have the means to do that kind of paperwork imagine that trust now is managed by a technology so essentially we talk about outsourcing from the context of india over here i'm outsourcing the trust to technology so now this is a technology facilitated in some ways technology mediated trust and that makes it scalable that changes the whole construct of trust still stays at the bank but now more people can be brought in we will have access to multiple things so on and so forth
Govindraj Ethiraj: And if you were to build that further in either a product or a service that people would use including in the context of a country like india most of us would know trust in the context of finance is through the institution of a bank are we saying that banks will not be there or banks will continue to be there there will be another intermediary in between?
Anil Kakani: All of the above i'd say right you'll have new players come in but banks also i mean we work with many banks that you're looking at how do i serve that segment of the population here in india right how do i develop a credit score for a population that borrows maybe not from the traditional banks they have a transactional experience they have a company they might have some assets but they can't get access to lending right so how do you develop an alternative scorecard so to speak that is with data that's verified by some trusted source right so you can lend to that population take an example of insurance right there's a significant segment of the population for whom the traditional insurance product it doesn't serve the needs of that individual because i don't need an insurance policy for thousands of or good orders of rupees i need you know maybe 10,000 rupees if i have a disaster in my life right but it's too expensive to serve that policy because i have to a the individual has to prove they're actually they are who they claim they are but then they also have to prove they suffered from some calamity for which they should be claiming right for a 10,000 or 5,000 rupee policy it's not worth it for me as an insurance company to serve that individual maybe so if i can rely on a oracle if i can use a smart contract to make that payment all of a sudden you know i'm able to in a commercially sound way serve that individual and i can meet regulatory requirements of course you know all of this is in the regulatory context.
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This segment built on blockchain was supported by Algorand.
