Desi Dispatch June 21

Good Morning India 🇮🇳 

“Hot” off the press - Delhi Development Authority is planning to introduce hot air balloon rides at Commonwealth Games Village and Yamuna Sports Complex to give residents and tourists a new way to experience the city, religious sites and Old Delhi. Bonus? Cross Delhi without hearing a single horn.

Now, let’s get into the dispatch! 🚀 

MARKETS 🔔🐂🐻

• RBI's new comprehensive project financing guidelines, Fed's potential 2025 rate cuts, and a weaker dollar fuelled positive market momentum

• Jio Financial Services becomes the top gainer of today’s market with a 3.57% gain, Bajaj Auto was top loser with a 1.47% loss.  

Economy 📈🇮🇳
Global Trading Giants are rushing towards India! 

What happened?  
About half a dozen major global trading firms, including big names like Citadel Securities, IMC Trading, Millennium, and Optiver, are expanding their operations in India. This expansion is leading to a major hiring spree and pushing Indian exchanges to upgrade their technology.  

But why?  
The Futures Industry Association says India made up nearly 60% of global equity derivative trading volumes of 7.3 billion in April. Also, the potential for high profits, as mentioned by Jane Street, earning over $2.3 billion from its India trading strategy last year, makes the market too attractive to ignore for these Western firms. 

So? 
Indian Financial market is a clear winner with higher foreign investment and tech advancements in exchanges like the NSE and BSE expected. These exchanges are adding more co-location racks, which significantly speed up trade execution in India. 

High on recruitment
There’s also a surge in demand for tech and trading talent, as global trading firms have hired around 300 professionals across roles like trading, tech, compliance, and legal in the past two years. One of the company's executives said that they have now expanded recruitment efforts to outside of IITs. Desperate times, generous CV filters.

Banking 🏦
RBI Repo rate cut: How will it affect your savings? 

WTH is ‘Repo Rate’?
On June 6, the RBI's Monetary Policy Committee (MPC) decided to cut the key policy repo rate by 50 basis points—the second rate cut since May 2020. For the uninitiated, the repo rate (short for Repurchasing Option rate) is the rate at which commercial banks borrow funds from the RBI against collateral. It’s a vital tool for influencing interest rates and regulating the money supply.

What’s the noise?
This move brought cheer to all those looking to get new EMIs (i.e. all of us), as loans became cheaper and EMIs got lighter. A welcome breather, considering that as of September 2024, individual housing loans outstanding stood at ₹33.53 lakh crore. But what about your savings? Interestingly, savings rates have plunged to a 25-year low, and term deposit rates have seen a sharp cut. Let’s break it down.

Savings accounts in free-fall, FD rates down
Major banks slashed their interest rates as SBI cut its savings rate to 2.5%, while HDFC and ICICI now offer just 2.75% flat across all balance slabs. HDFC Bank and SBI also cut their FD rates by 25bps or more.

Why this matters - mereko kya?
Home and personal loans more attractive now but for if you’re relying on savings accounts and FDs for security or retirement, the outlook is dim. With real returns now barely outpacing inflation, India may witness a growing shift away from traditional savings to riskier investments—even among conservative depositors.

BUSINESS INDIA
DHANDA HAI YEH!

• India’s Rare Earth Push: India decides to go ‘Atmanirbhar’ as it plans a ₹3,500-5,000 crore scheme to boost domestic rare earth and magnet production, reducing reliance on China. These ‘Rare Earth minerals’ are critical for EVs and renewable energy production.  This reflects a growing trend world-wide of countries securing their rare-earth deposits for internal consumption.

• Cognizant's Vizag Boost: IT Giant Cognizant is set to invest ₹1,600 crore in a 21.31-acre Visakhapatnam IT campus by March 2029. This will boost the IT environment of the city by creating 8000 jobs. 

• EV Giant Ola’s AI unit acquired BharatSah’AI’yak (an AI chatbot) from consultancy firm Samagra. With this, they can scale AI assistance pan-India, aiming for inclusive, India-centric solutions, while competing with giant international players.  

• ‘Delhivery’ to direct Deliver: Logistic company ‘Delhivery’ launched "Delhivery Direct," an on-demand intracity shipping service in Delhi-NCR and Bengaluru. It offers 15-minute pickups, using various vehicles for fast, affordable deliveries to consumers and SMEs. 

• HAL’s Space Leap: Indian aerospace company Hindustan Aeronautics Ltd (HAL) will build small satellite rockets after securing ISRO tech for ₹511 crore. This deal will allow HAL to independently commercialise SSLV launches, a pivotal move for India's space industry. 

World: Business and Geopolitics 🌍
KYA CHAL RAHA HAI?

• According to Taiwan’s Defence Ministry, it was surrounded by 50 Chinese military aircraft and six naval vessels. China has repeatedly claimed sovereignty over Taiwan, a claim refuted by the island nation, leading to geopolitical tensions.

• Spain vs. Tourism continues as a Spanish court stayed an order forcing Airbnb to block ~66,000 listings in the country after the Consumer Rights Ministry flagged them for violations. The government also cited Airbnb’s short-term rentals as a contributor to Spain’s housing crisis.

• In a historic move, UK lawmakers approved a bill allowing terminally ill adults in England and Wales to end their lives. The members voted 314 (for) and 291 (against), taking it one step closer to becoming a law.

• The Iranian Deputy Chief of Mission, Javad Hosseini, states that India and Iran are cooperating in to bring back close to 1,000 Indian nationals stuck in Iran via three special flights. 290 citizens have already returned.

• US President Donald Trump, via a press conference, has stated that a decision regarding joining Israel’s offensive against Iran will be taken “within the next two weeks”. This is based on the indication that there’s a ‘substantial chance of negotiations’ between the warring countries.  

   

Aur Batao: News from across India 📰

• Ladakh witnesses the Green Revolution:  While India is moving towards net-zero emissions, India's first five hydrogen buses began operations in Ladakh, with the initiative of cutting 350 MT of Carbon emissions. This marks India’s first hydrogen-powered bus deployment.  

• Air India got a Warning: DGCA warned Air India for flying three Airbus planes with overdue escape slide checks, one delayed over a month. While unrelated to the recent crash, they pose serious safety concerns.  

• Air India route changes continue: Air India is cutting 38 international flights weekly and suspending 3 overseas routes (Delhi-Nairobi, Amritsar-London, Goa-London) until July 15. This comes after the airline trimmed operations of its wide-body planes by 15%. 

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