Aug 1: Miss your card payment? Jewellers take tariff hit

Good Morning!

In the latest episode of interns vs. logic, a 19-year-old intern provided the CEO of a US based payments company with some golden advice on his first day - through email, mind you. ‘Have we tried increasing revenue?’ was the genuine question he had asked, clearly concerned for the company’s well-being. Twitter blew up when Roshan, the CEO, shared a screenshot of the conversation on X. We think the intern’s secretly training to be a strategy consultant. Next up, reduce costs.

Now, let’s get into the Dispatch! 🚀

Also - have a great weekend, we will now see you on Monday!
Today’s reading time is 5 mins.

The equity market ended lower on Thursday, dropping around 0.35% after a volatile day. The dip was triggered by concerns over the 25% tariffs on India.  

What’s happening? According to a recent report for Indian Express, credit card delinquencies (i.e. payments not made on time) are surging due to rising consumer spending. Payments that were 3 to 6 months overdue have increased by 44% since last year, reaching an astonishing ~Rs 34,000 crore as of March 2025. So how did we Indians, who generally love the savings account - get this kharcha on the books?

Credit-driven consumption boom: India has witnessed an explosive rise in credit card transactions, reaching a cumulative Rs 21 lakh crore in March 2025. Likewise, the number of credit cards in circulation has ballooned from just 6 crore in Jan 2021 to 11 crore in May 2025 according to RBI data. This highlights India’s post-pandemic economic recovery and rising consumer confidence. Additionally, banks and fintechs are aggressively promoting credit cards by providing attractive offers such as cashback rewards, travel perks, and interest-free EMIs, and buy-now-pay-later schemes among others.

The hidden cost: While a credit card may provide easy access to a more luxurious lifestyle, convenience and brushing the true cost under-the-carpet, it comes with a hidden cost - specially if you don’t pay on time. Banks typically charge up to 46% annual interest rates on unpaid balances beyond the interest-free period. So, a few of those ‘dimag-se-nikal-gaya’ excuses on your monthly statements and the banks will be smiling all the way to the …. bank.

Mindset shift: There’s also a mindset shift that’s driving this boom. Gen Z, unlike older generations that leaned more towards savings, is far more driven to spending on wants and experiences, even at the cost of borrowing. A whopping 73% believe affordable credit accelerates life goals and 12% reportedly borrowing even for basic needs - underscoring urgency of improving financial literacy and affordable credit access.

This trend shows rising credit use alongside a growing failure or refusal to repay on time. Banks, regulators, and fintechs must boost awareness around interest, billing cycles, and repayment habits. For consumers it’s critical to remember - credit cards are tools to use wisely, not free money.

What’s happening? The recently announced 25% tariffs are set to have a huge impact on India’s gem and jewellery industry. Gem and jewellery exports to the US touched ~$10 billion last year. The overall sector employs nearly 5 million people and contributes ~7% of India’s GDP. Industry experts recounted that ~50,000 jobs were impacted the last time a 10% tariff was levied on the industry. With 25% tariffs on the horizon, the expectation is that over 1 lakh jobs could be impacted.

So what now? With the industry already struggling due to geopolitical tensions arising from Middle East and Russia-Ukraine conflicts, these new tariffs are going to weaken a sector that is already in a vulnerable position. Industry bodies like GJEPC (Gem & Jewellery Export Promotion Council) are expected to lobby for an intervention, including possible tariff relief or incentives to explore new markets like the UAE, Europe, and Southeast Asia where trade agreements are more favourable.

Big Picture: As global protectionism surges, India’s labour-intensive sectors like jewellery and textiles are increasingly more vulnerable. The pain is not one sided, tariffs are set to impact America more as prices would rise significantly for consumers. Regardless, for India the need for diversified trade partnerships and driving domestic consumption becomes ever so clear.

US sanctions Indian nationals: The U.S. sanctioned several Indian nationals and firms for their roles in a global maritime oil smuggling network tied to Iran. This is part of the largest Iran-related sanctions package since 2018. Among those designated are Pankaj Nagjibhai Patel, Jacob Kurian, and Anil Kumar Nair.

India-Brazil defence ties: India and Brazil held their 8th Joint Defence Committee meeting in Brasilia on July 30, focusing on strengthening military cooperation and defence ties, including training, industry collaboration, and regional security.

Chip race speed up: India is boosting its domestic semiconductor ecosystem by sanctioning 23 chip-design projects under the ₹76,000 crore Semicon India Programme. The initiative, with a total outlay of ₹803.08 crore, provides up to ₹15 crore per project for prototyping.

Bullet train milestone: India's bullet train project is progressing, with the country set to adopt Japan's latest E10 Shinkansen model for the Mumbai-Ahmedabad route. The 508 km corridor has over 310 km of viaducts and five stations already completed. 

Thermal power seeks private money: According to a report by Crisil Ratings, India’s private firms are expected to invest ₹77,000 crore in thermal power by FY28. This revival is driven by new 25-year power purchase agreements, ensuring stable revenue for these projects. 

Google bets on AP: Google is set to invest $6 billion in a 1-gigawatt data centre in Visakhapatnam, Andhra Pradesh. The project, its first in India, will allocate $2 billion for renewable energy. 

What happened? U.S. President Donald Trump has imposed a 25% tariff on Indian exports over its Russian oil trade. Simultaneously, he announced a pact to help develop Pakistan's "massive oil reserves," claiming that "one day India will probably buy from them."

Key highlights

Strategic Implications: The Indian government is "studying the implications" while prioritising its energy needs. This pressure could prompt India to strengthen ties with other Global South nations. The American strategy appears to be a multi-pronged approach to counter China and isolate Russia, using Pakistan as a strategic pawn.

Australia wipes out students’ loans: Australia's Parliament passed a law to cut student loans by 20%, wiping out over AUD 16 billion (USD 10.31 billion) in debt for 3 million people. The move aims to ease the rising cost of living.

Support for Palestinian state: Canada plans to recognise the State of Palestine in a UN meeting in September, following similar announcements by the UK and France. The recognition is conditional on democratic reforms by the Palestinian Authority. However, the US and Israel argue that this move will reward terror outfits like Hamas.

Myanmar end emergency rule: Myanmar's junta ended its four-year emergency rule on Thursday, planning a December election. However, opposition groups and a UN expert have labelled the move a "fraud" aimed at cementing the military's power.  

2008 Malegaon blast acquittal: A special NIA court in Mumbai has just acquitted all seven accused in the 2008 Malegaon blast case, including high-profile individuals such as former BJP MP Pragya Singh Thakur and Lt. Col. Purohit, citing lack of evidence.

Buddha's sacred return: In a significant act of cultural repatriation, India has recovered Buddha’s fifth-century BC funerary gems from China, with funding from Godrej Industries. The relics, once set for auction, are now on restricted display at the National Museum in India.

Air India violations: India's aviation watchdog found 51 safety violations at Air India, including seven high-level issues. A total of 263 safety lapses were flagged across eight commercial airlines during the annual audit.

NOTE FROM THE DESI DISPATCH TEAM

Got thoughts? We love to hear it. Just reply to this email. 
Subscribe via ✉️ thedesidispatch.com
Join the exclusive WhatsApp community here

Thank you and keep reading!🚀