July 28: Hindi-Chini bhai-bhai 2.0? Rahman meets Sam Altman

Good Morning 🇮🇳, we’re back after the weekend!

Not sure if you heard but the weekend was buzzing with reports of Barcelona and Spain football legend Xavi Hernández applying to AIFF for the role of Indian national football team coach. A recent fresh twist has revealed that it was a prank - the work of a 19-year-old student aided by the one and only ChatGPT. If you were fooled, you’re not alone, the news apparently made it to renowned sports journalist Fabrizio Romano’s X account as well. Is this kid an AIFF marketing intern? Legend.

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

Finance Minister Nirmala Sitharaman recently hinted at the possibility of reviving India–China business ties, suggesting that both sides have shown interest in opening economic windows. However, she highlighted the need for caution in such an endeavour. Stakeholders in India have called for improved access to Chinese markets, and Chinese authorities have reportedly signalled reciprocal interest too.

Strategic reboot incoming? In a sign of thawing ties, India has resumed issuing tourist visas to Chinese nationals after a five-year hiatus. This comes alongside Foreign Minister S. Jaishankar’s first visit to China since the Galwan Valley clashes in Ladakh in 2020, marking a notable shift from the strong anti-China stance that had dominated India’s diplomacy post that event. Additionally, NITI Aayog also recently proposed easing restrictions on Chinese investments, suggesting up to 24% investment in Indian companies by Chinese entities without needing additional security clearances.

Global seismic shifts demand a rethink:

Big Picture: Strategic diversification and maintaining ties in the current geopolitical context have become critical. However, time shall tell whether this realignment with China gains momentum or hits familiar roadblocks.

During his two-day visit to the Maldives, Prime Minister Narendra Modi met with President Mohamed Muizzu to strengthen diplomatic and economic ties. India announced a ₹4,850 crore line of credit and initiated formal negotiations for a Free Trade Agreement (FTA). The two countries also signed cooperation pacts across key sectors, including fisheries, tourism, health, and digital payments through India’s UPI system. As part of the visit, India handed over 3,300 social housing units, 72 heavy vehicles, and medical kits to support the Maldives’ defence and infrastructure development.

Look back - From standoff to shakeout: Not long ago, relations between the two nations had hit a low point. In 2023–24, Maldivian President Mohamed Muizzu had pushed a pro-China agenda with slogans like “India Out,” expelling Indian troops and sparking tourism boycotts in India. Tensions spiked when local ministers made derogatory comments about PM Modi. However, the diplomatic tides started to change in late 2024 and early 2025, as Muizzu attended Modi’s swearing-in ceremony.

What changed? Multiple meetings on the sidelines of global summits, India’s positive reaction (and understanding of domestic politics) to troop withdrawal, significant financial aid to Maldives and and underwhelming support from China has nudged Maldives to separate politics from geopolitics.

As per MEA, India was Maldives’ 2nd largest trade partner in 2022 and largest in 2023, which 90%+ trade volume coming from Imports from India. There seems to be a concerted effort from the Indian government to keep this going.

TCS big layoff plans: Tata Consultancy Services is set to cut 2% of its global workforce, affecting over 12,000 employees in middle/senior roles, due to macro uncertainties and AI impact on demand. The company will provide affected employees with severance and support.

India-UK trade deal: The India-UK CETA (Comprehensive Economic and Trade Agreement) offer could significantly increase Indian seafood exports with duty-free access. India exported $104 million worth of seafood to the UK in 2024-25, with import tariffs ranging upto 21.5%. With this agreement, exports are projected to increase by 70%. 

UPI will not always be free? RBI Governor warned that UPI may not stay free forever due to rising subsidy costs. UPI daily transaction volume has doubled from ~30 crore to 60 crore in two years, and maintaining long-term sustainability may require service charges.

India-US trade talk: Commerce minister Piyush Goyal said that India-US trade talks are making fast progress. The talks aim to significantly boost bilateral trade from $191B to $500B. The next round of negotiations is scheduled in August.    

In continued restructuring, Intel’s new CEO Lip Bu Tan announced in a letter to employees last Friday that Intel will end this year roughly a fifth smaller than last year. The restructuring, which has been ongoing since the beginning of this year, is focussed on reducing middle management layers by up to 50%. The move is part of a larger pivot to focus away from previous strategic errors such as the costly 18A chip fabrication business (to rival TSMC) towards sustainable growth and profits.

Spinning off the robotics division: Meanwhile, Intel’s RealSense division, known for its 3D vision and robotics tech, has officially been spun off as a separate entity. This move allows the group more agility to pursue innovation outside Intel’s traditional framework and marks a major strategic shift in how Intel is viewing “non-core” AI projects.

Big picture: Intel has underperformed due to years of management blunders, that have left it with virtually no foothold in the booming AI chip industry dominated by Nvidia and AMD. With its ambitious and costly plan for a chip contracting business (18A) to rival TSMC failing to take off, CEO Lip Bu Tan who took the helm in March this year has his work cut out for next year’s bonus cycle.

US-EU trade talks: Trump and the EU's von der Leyen met on Sunday in Scotland to finalise a trade deal. It includes a 15% tariff on most EU goods, avoiding the threatened 30% rate. Steel/aluminium imports from the EU will continue to face 50% tariffs, but may replaced with a quota system.

Meta says NO to EU’s AI code: Meta is refusing to sign the EU's AI code of practice, arguing it's an "overreach" that will "stunt growth" and create legal uncertainties beyond the existing AI Act, hindering European AI development.  

Aid into Gaza: On Sunday, Israel announced that it would halt military operations for 10 hours (i.e. 10 am – 8 pm) a day in Gaza, allowing new aid to be provided. Jordan and the UAE started air drops after Israel announced the measures. More than 100 international aid organizations and human rights groups had warned of mass starvation in Gaza earlier this week.

Starlink's Ukraine controversy: Elon Musk reportedly ordered a Starlink shutdown in parts of Ukraine in late September 2022 as Ukraine retook territory from Russia, disrupting their counteroffensive and raising concerns.

AR Rahman x Sam Altman collab: Indian music composer, AR Rahman, is teaming up with OpenAI's Sam Altman for a futuristic project, an AI-powered musical metaverse called "Secret Mountain". The aim is to build a virtual global band that brings singers and mentors to one platform.  

India’s first hydrogen train: For the first time, Indian Railways successfully tested a hydrogen-powered coach in Chennai. This ₹136 crore project aims to reduce emissions and fossil fuel reliance. This train is proposed to operate between Jind and Sonepat, in Haryana. 

Indian football update: AIFF President Kalyan Chaubey confirmed that the ISL, which was on hold, will be held this season. Additionally, a new national football head coach - not Xavi - shall be appointed within 10 days. Stephen Constantine, Stefan Tarkovic and Khalid Jamil are the shortlisted candidates in contention for this role.    

Indian duo achieve new Test feat: Indian cricketers, Shubman Gill (697 runs) and KL Rahul (508 runs) became the first Indian pair in 55 years to each score over 500 runs in an away Test series, achieving this feat against England. Another day, another record!

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