Handpicked updates about India’s business and the business of India
In a barking mad twist at the Parliament, Congress MP Renuka Chowdhury defended her decision to bring a stray puppy into the House by channelling her inner canine with a "bhow, bhow" response to reporters. We get it girl, tell them to stay off the dogs.
Now, let’s get into the Dispatch! 🚀
Today’s reading time is 6 mins.
Markets 🔔🐂🐻
As of the Indian market closed on Dec 3rd
The Indian equity markets ended a winning streak to close lower on Tuesday, despite reaching new all-time highs earlier in the day. This downturn was driven by continued profit-taking, depreciating rupee value, and sustained foreign institutional investor (FII) outflows.
Politics and Diplomacy
Putin's Visit to India
Image credit: Hindustan Times
What Happened: Russian President Vladimir Putin is visiting India amidst heightened geopolitical tensions, marking his first trip since the Ukraine conflict began. This visit is crucial for India as it navigates its trade relationships with both Russia and the United States. India is under pressure from the US to reduce its crude oil imports from Russia, yet it seeks to maintain its strategic autonomy. Discounted Russian oil has become a vital part of India's energy security, despite the associated risks of sanctions and geopolitical instability.
What Changed: The visit comes at a time when India faces ongoing pressure from the US to decrease its Russian oil imports and increase its market access for American goods. Historically, the India-Russia relationship has been strong, built on Cold War alliances and military cooperation. Russia has provided India with diplomatic backing in international forums and remains a key supplier of military equipment. However, the current geopolitical climate demands a delicate balance for India, as it seeks to maintain ties with both Russia and Western nations.
The Numbers: Russia has become India's largest supplier of crude oil, accounting for approximately 37% of total imports in 2024, up from a mere 1-2% prior to the Ukraine conflict. India's expenditure on Russian oil increased from $2.3 billion in 2021 to $52.7 billion in 2024. Despite these significant imports, India's exports to Russia are limited, standing at around $5 billion annually, primarily in pharmaceuticals and machinery.
Looking Ahead: Putin's visit could result in either a cautious strengthening of existing ties or a deeper realignment of India-Russia relations. Potential outcomes include firming up defense and energy agreements and possibly establishing a new payment framework using currencies like the UAE dirham. A more ambitious scenario might involve joint defense production and expanded cooperation in nuclear and energy projects.
Economics and Finance
Weak Rupee's Potential Benefits
Image Credit: India Today
The Core Issue: The Indian rupee's recent decline to record lows has sparked concern, yet some experts believe it could offer hidden advantages. Abhishek Banerjee, CEO of LotusDew, explains that a weaker rupee can benefit India's export-focused sectors. Companies like Infosys, which earn in dollars but incur costs in rupees, could see boosted profitability.
What Changed: Despite India's GDP growth of 8.2% in the second quarter, market reactions were muted. Analysts had anticipated strong performance due to high-frequency indicators such as GST collections and vehicle sales. However, global concerns, including geopolitical tensions and upcoming monetary policy decisions, tempered enthusiasm. The rupee's weakness, juxtaposed against these factors, positions India as a potential investment opportunity for foreign investors, who might be attracted by the possibility of currency appreciation alongside market gains.
The Stats: India's GDP growth of 8.2% was in line with forecasts, yet markets showed little enthusiasm, opening slightly positive before falling. Meanwhile, the rupee's depreciation has coincided with outflows of foreign portfolio investments, as compliance norms have tightened. Despite these challenges, the Reserve Bank of India might cut rates, with Banerjee predicting a possible 50 basis point reduction. This move could stimulate domestic growth and mitigate inflationary pressures, which currently remain below the RBI's 4% target.
Looking Ahead: Observers are keenly watching how the rupee's trajectory will influence India's economic landscape. As the year progresses, sectors such as infrastructure and pharmaceuticals could see positive effects from government spending and favorable currency conditions.
Business India: Dhanda Hai Yeh!
Image Credit: Tata Capital
Sebi to Review Major Overhaul of Mutual Fund and Broker Rules: On December 17, India's market regulator Sebi will consider significant regulatory changes for mutual funds and stock brokers, aiming to modernize outdated rules and improve transparency. Proposed changes include capping brokerage fees and revising transaction costs, which have faced criticism from asset management companies over potential income impact.
RBI Appoints Usha Janakiraman as Executive Director: The Reserve Bank of India has appointed Usha Janakiraman as Executive Director effective December 1, 2025. Previously Chief General Manager-in-charge of the Department of Regulation in Mumbai, Janakiraman brings over 30 years of experience in various central banking roles. As Executive Director, she will oversee the Department of Supervision, focusing on risk, analytics, and vulnerability assessment.
Supreme Court Upholds ₹30 Lakh Fine on Reliance for Disclosure Lapse: The Supreme Court has upheld a ₹30 lakh fine imposed by SEBI on Reliance Industries for not promptly disclosing details of the ₹43,000 crore Jio-Facebook deal in 2020. Despite media reports of negotiations, RIL failed to clarify, leading to share price jumps. The court emphasized the importance of timely disclosures to prevent market speculation.
Oil Prices Dip Amid Ukraine Tensions and Rising U.S. Inventories: Brent crude futures fell by 0.21% to $62.32 per barrel, while U.S. West Texas Intermediate dropped 0.20% to $58.52. The decline follows unsuccessful U.S.-Russia talks on Ukraine and rising U.S. oil inventories, which increased by 2.48 million barrels last week.
SPARC Wins Key U.S. Court Ruling on PRV Issuance: SPARC announced a legal victory as the U.S. District Court for the District of Columbia ruled against the FDA's decision to withhold a Priority Review Voucher (PRV) for Sezaby, a drug for neonatal seizures. The court found the FDA's actions “contrary to law,” impacting SPARC's stock, which has an RSI of 76.8, indicating potential overbought conditions. SPARC's financials remain challenged, with losses over eight consecutive quarters.