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Good morning! In the most recent episode of entertainment from Truth Social - Donald Trump went super-saiyan on the unsuspecting Lip-Bu Tan, Intel’s recently appointed CEO - calling him highly conflicted and demanding his immediate resignation. This comes at the back of a fellow Republican claiming that Lip-Bu “reportedly controls dozens of Chinese companies … has a stake in hundreds of … chip firms … companies have ties to the Chinese People’s Liberation Army.” This is the latest card that Trump has played to increase pressure on the semiconductor majors to make chips in the United States, or face 100% tariffs on imported chips. At this point we’re heavily debating whether we should be on Truth Social.
Now, let’s get into the Dispatch! 🚀
Today’s reading time is 7 mins.
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Markets 🔔🐂🐻
As of the Indian market close on 7th Aug.
Indian stock markets had a volatile session on Thursday, opening lower but rallying sharply in the final hour to close with significant gains. Despite new US tariffs, investor optimism grew, as the 20-day notice period provides a window for trade negotiations.
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Economy
New sanctions, old frictions
Image credit: Business Insider
U.S. President Donald Trump has slapped an additional 25% tariff on Indian goods, citing India's continued purchase of Russian oil. This comes on top of an earlier 25% country-specific levy set to kick in soon, bringing the total tariff burden to 50% on select Indian exports. The executive order, signed Wednesday, follows a failed round of talks between Washington and Moscow over the Ukraine war. Unfortunately, India’s trade dialogue with the U.S. has also broken down, stuck on two contentious issues: America’s push to open up India’s vast farm and dairy sectors, and India’s refusal to stop importing discounted Russian crude. And just to stir the pot further? PM Modi is reportedly heading to China later this month - his first visit in over seven years.
Oil at the Heart of It All: The rift really began to smoulder on July 31, when Trump first floated the idea of penalizing countries buying Russian energy. And India’s name was right up there. India imports roughly 1.75 million barrels of Russian crude a day - a strategic and economic decision given the discount rates, or in the words of all our moms “value for money”. But that bargain could come at a bigger cost, as some global experts are asking if India should be risking $87 billion worth of exports to save a few billion on oil purchases - not an easy question to answer.
Modi Stands His Ground: Unfazed, PM Modi addressed the situation on Thursday, defending India’s stance without directly naming the U.S. “I will not compromise the interests of our farmers,” he said - a clear reference to U.S. pressure to liberalise India's agri and dairy sectors, a long-standing red line for New Delhi. India is making it clear: oil discounts and farm protections are non-negotiable.
What About China: Ironically, China, the world’s largest buyer of Russian oil, hasn’t faced the same heat. Experts point to China’s control over rare earth minerals, which the U.S. desperately needs for its tech industries. That gives Beijing a powerful bargaining chip - one India doesn’t currently possess.
If Not Russia, Then Who: India isn’t sitting idle. Oil giants like Indian Oil Corporation (IOC) are already making alternate arrangements, locking in 7 million barrels for September from sources like: United States, Canada, West Asia, Brazil, Guyana, Nigeria and Angola (West Africa). But the transition isn’t cheap. Analysts estimate that moving away from Russian crude could raise India’s oil bill by $9–11 billion annually.
Economic Fallout: The GDP Hit: The financial costs are high. Morgan Stanley warns that the 50% tariff, if fully implemented, could shave 80 basis points off India’s GDP. Here’s what’s at risk:
$58 billion worth of exports (that’s 67% of India’s total exports to the U.S.) fall under the new tariffs.
Only sectors like pharma and electronics - around 30% of total exports - have been spared for now.
That’s a potential trade body blow, especially with global headwinds already pressuring India’s economy.
What’s Next: India now stands at a tricky juncture: capitulate to U.S. pressure or absorb the financial hit while holding on to strategic oil deals and domestic priorities. Still, New Delhi isn’t ready to bow down just yet. With new rates starting 27 August, the next 20 days are critical - India's moves in this bargaining window will be closely watched by anxious markets.
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Aviation
Passenger pains and Indigo gains
Image credit: Our team’s AI talents
What is it? Is it a bird? Is it a plane? No, … it’s your baggage weight magically increasing mid-check-in. IndiGo is in the hot seat after a passenger accused the airline of pulling off what he called “one of the biggest unnoticed scams” with its inconsistent baggage scales. The passenger, flying from Goa to Chandigarh, claimed his suitcase weighed 18 kg on one belt, 16 kg on another, and 15 kg on a third. Naturally, IndiGo chose to believe the heaviest reading and slapped him with a ₹11,900 overcharge - including ₹1,500 for carrying an umbrella (on a plane?).
Inconsistent scales or new revenue model? The passenger’s post on X went viral and seems others have had similar concerns, with Indigo always picking the higher weight across scales. Back in February, another passenger flying Chandigarh to Delhi recorded a similar issue. That video had also ignited a flurry of “me too” baggage stories. Turns out, mystery weight gain is quite the frequent flyer.
The Low Cost Carrier: India ranks no. 1 among the top 10 countries with the highest share of low-cost carriers (LCCs) in overall airline capacity - a market that’s absolutely dominated by IndiGo with 70%+ market share. Indigo’s strategy (like other LCCs) is to offer basic, affordable flights while providing opportunities for customization with optional i.e paid, add-ons (seats, food, luggage, umbrella) - leading to ancillary income. But while global LCCs such as Ryanair drive 35%+ income from ancillary sources, Indian LCCs lag in that regard with single digit incomes from such optional purchases. Indian carriers still face challenges in shoring up ancillary revenues and the potential appears limited. This hasn’t stopped Indigo from doing well though, with their recent quarterly earnings declaring a solid 62% surge in profit vs. the same quarter last year.
Big picture: Well whether its weight-conscious scales or a snickering consultant somewhere who’s come up with the new revenue model - travel-savvy folks have now started advising others to carry personal luggage scales and demand weight calibration stickers at check-in counters. For now, no heads have rolled and the umbrella remains unaccounted for.
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Business India: Dhanda Hai Yeh!
Image credit: Mint
PayTM lays-off 10% workforce: As part of a major restructuring, Paytm has trimmed its workforce by 4,600 in FY25, slashing employee costs by ₹651 crore. This strategic move aims to create a leaner organization, and helped the company achieve its first-ever quarterly profit.
India’s retail power play: Reliance Retail reported strong FY25 growth, with revenue climbing 7.9% to ₹3.3 lakh crore. It added 2,659 new stores, expanding its customer base to 349 million and betting big on India's booming retail market.
Putin to visit India: Amid US tariff pressure, President Putin is likely to visit India by year-end, his first trip since Dec 2021. Key talks will cover food security, fertilizer exports, India's Arctic presence, and a second Russian-built nuclear plant.
Foreign fund flight: Foreign investors dumped a whopping $4.17 billion from key Indian sectors in July, hammering IT stocks with a $2 billion+ outflow. Financials, realty, and auto also faced heavy selling pressure amid weak corporate earnings.
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World 🌏
A STABLEcoin Future
Image credit: Mudrex
Trump Signs GENIUS Act: In a bold move that could redefine the future of digital finance, US President Donald Trump signed the GENIUS Act - short for Guiding and Establishing National Innovation for U.S. Stablecoins - into law last Friday. The legislation, which sailed through both the House and Senate with overwhelming bipartisan support, marks the country’s first major step toward officially integrating stablecoins into the financial mainstream. The signing ceremony saw the presence of some of crypto’s biggest names, including CEOs from Coinbase, Circle, Tether, and Gemini.
A Framework for Stablecoins at Last: The GENIUS Act does more than just acknowledge stablecoins, it grants them legal recognition as financial products. It lays out clear regulatory standards, including a 1:1 reserve mandate, requiring all issued stablecoins to be backed by liquid assets like cash or short-term treasuries. With a current market size of $250 billion, dominated by Tether (USDT) and Circle’s USDC, stablecoins have already proven their utility in cross-border transactions, offering faster, cheaper, and more private alternatives to traditional systems. Now, with this legal backing, major corporates like JPMorgan, Amazon, Walmart, Alibaba, and Mastercard are reportedly exploring launching their own stablecoins.
Why This Matters for India: While the U.S. is moving forward with regulatory clarity, India remains cautiously optimistic - still struggling with high taxes, policy ambiguity, and a ban on crypto as a payment mechanism. Despite this, crypto activity in India is booming. In FY 2022–23, the government collected ₹437 crore in taxes from Virtual Digital Assets (VDAs), indicating strong investor participation. But stablecoins, even those from KYC-compliant platforms, remain off-limits for everyday transactions.
With India being the world’s largest remittance market (inflows of $130 billion in 2024), the low-cost, near-instant potential of stablecoins could be revolutionary. Industry insiders believe the GENIUS Act could serve as a regulatory blueprint for India: simple licensing, strict reserves, and mandatory audits - striking a balance between innovation and oversight. While two more U.S. crypto bills now head to the Senate, India watches closely. If the GENIUS Act proves successful, a shift in Delhi’s stance may just be a matter of time.
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DuniyaDIARY 🌏📒
Image credit: CNBC
Apple Pledges More to the U.S: President Donald Trump announced on Wednesday that Apple will invest an additional $100 billion in the United States, raising its total domestic investment commitment to $600 billion over the next four years. The move is widely seen as a strategic response to Trump’s tariff threats on foreign-assembled iPhones. The new pledge focuses on expanding Apple’s supply chain and advanced manufacturing presence within the U.S., but it still stops short of Trump's long-standing demand: that iPhones be built entirely on American soil. Apple had already committed $500 billion earlier this year, including plans to hire 20,000 workers across the U.S. Trump’s renewed push comes after he threatened a 25% tariff in May on Apple products manufactured abroad. Apple has already felt the pinch, with tariffs reportedly costing the company $800 million in the June quarter.
Japan's Jetsons Moment: All Nippon Airways (ANA) is teaming up with California’s Joby Aviation to launch electric air taxis in Japan by 2027. The plan? Over 100 eVTOLs (electric vertical take-off and landing aircraft) zipping through the skies at 320 km/h. These sleek five-seaters will carry a pilot and four passengers …. because traffic jams are just too 2023.
Brazil’s Lula Snubs Tariff Talks with Trump: As U.S. tariffs on Brazilian goods soar to 50%, President Lula da Silva is keeping his distance from the White House. In an interview with Reuters, Lula dismissed the idea of direct talks with President Trump, calling them a likely "humiliation." While Brazil won’t retaliate with matching tariffs, cabinet-level discussions will continue. But as for Lula dialing Trump anytime soon? “The day my intuition says Trump wants to talk, I’ll call,” he said. “But today, it says he doesn’t. And I won’t humiliate myself.”
Pak Army Chief to Visit US Again: Pakistan Army Chief Gen. Asim Munir will visit the US this month - his second trip in two months - signalling warming military ties. He will attend the farewell of CENTCOM chief Gen. Michael Kurilla, who had earlier praised Pakistan as a "phenomenal partner" in counter-terrorism. Kurilla had also lauded Pakistan for capturing ISIS-K terrorists using US intelligence - remarks that had irked New Delhi.
France Biggest Wildfire in 75 Years: France is still battling its worst wildfire in 75 years, which has scorched an area larger than Paris. While the blaze has slowed overnight, it remains out of control, officials said. Over 2,000 firefighters and 500 vehicles are deployed in the Aude region, supported by the army and gendarmerie. Satellite images reveal vast swathes of scorched land and thick smoke, underscoring the fire's devastating scale.
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Aur Batao 📰
Modi's China trip: Amid US tensions threatening $64 billion in goods, PM Modi is making his first visit to China in seven years for the SCO summit from August 31 to September 1. He'll also visit Japan before China. This visit signifies renewed diplomatic engagement after past border clashes.
India-Russia digging deeper: Feeling the heat from new US tariffs and China's export curbs, which supplies 85-95% of the world's rare earths, India is now talking with Russia. They are exploring joint extraction and technology transfer for these critical minerals to build a secure supply chain.
TCS balancing both hike & fire: TCS is giving 80% of its junior and mid-level staff a pay hike from September 1. This comes as the IT giant cuts 12,000 senior roles, about 2% of its workforce, to restructure for the future.
Vote Theft? Rahul Gandhi accused the Election Commission and BJP of a "huge criminal fraud," claiming over 100,000 votes were stolen in the Mahadevapura Assembly constituency of Karnataka alone. He presented evidence of duplicate voters, fake addresses, and misuse of new voter forms.
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