Sep 13: Balaji Wafers’ Big Bite, Affordable Housing Crunch

Louis Vuitton has added a porcelain “Louis Monogram Cup” to its Gift Collection. The cup, priced at a cool $955 (≈ ₹87,800), features a leather-trimmed canvas sleeve with the iconic LV logo, and is being marketed as a chic, sustainable alternative to disposable cups. It aims to turn everyday rituals like drinking coffee into designer moments. The only suspense now is whether the ₹88k cup can handle the daily ₹15 Vim bar scrub.

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6 mins.

The Indian stock market ended with decent gains on Friday, supported by select heavyweights, including ICICI Bank, Bajaj Finance and Reliance Industries, amid largely positive global cues. 

Rising Prices Outpace Affordability: Home prices in India are expected to rise faster than earlier estimates, fuelled largely by demand from affluent buyers, while the supply of affordable housing continues to lag. According to a Reuters poll of 20 property experts conducted between August 14 and September 12, average home prices are forecasted to climb 6.3% in 2025 and 7% in 2026, compared with a 4% rise in 2024. The pace marks an upward revision from the 6% and 5% projections made in June. This growth comes even as Asia’s third-largest economy expanded 7.8% last quarter, with experts cautioning that the benefits are concentrated in a small slice of the population. Stagnating wages and a scarcity of affordable housing have left millions priced out of ownership, forcing many to remain in expensive rentals.

Demand-Supply Divide: India currently faces a shortage of around 10 million affordable homes, a deficit Knight Frank projects could triple by 2030. The premium segment, however, continues to flourish, still the hard reality is - unable to buy in urban centres, many households are increasingly turning to rentals. Median forecasts suggest urban rents could rise between 5% and 8% over the coming year, outpacing consumer inflation. Analysts remain divided over whether purchasing affordability will improve. With the market tilted towards premium and luxury segments, entry-level buyers are facing the reality of being priced out.

Global Context: India’s housing market is also standing out globally. Knight Frank’s Global House Price Index ranked India 15th out of 55 tracked markets in the first quarter of 2025, with residential prices up 7.7% in nominal terms and 4.2% in real terms. The growth outpaced major economies such as the US, the UK, and Australia. On a quarterly basis, prices rose 2.9%, reflecting steady buyer confidence despite global headwinds.

Outlook: For India, the data illustrates both opportunities and challenges. Rising incomes, strong end-user demand, and investor interest continue to support growth in mid and premium housing. Yet the widening affordability gap shows a looming social and economic concern, with millions of would-be buyers left countering an increasingly expensive rental market. 

Under The Spotlight: Balaji Wafers, the Gujarat-based snacks company known for giving multinational rivals a run for their money in India’s wafers market, has once again caught the eye of global and domestic investors. According to reports, ITC, PepsiCo, TPG Capital and Temasek are among those in talks to acquire around a 10% stake in the company, a deal that could value Balaji at close to ₹13,000 crore. The homegrown brand, founded by brothers Chandubhai, Bhikhubhai and Kanubhai Virani in the 1970s, has built a formidable presence in western and central India, where it commands more than 70% of the market share in potato chips and namkeen. Its success has long been seen as a David-versus-Goliath story: the Virani brothers, who once ran a small canteen at a cinema hall in Rajkot, grew Balaji into one of India’s largest snack manufacturers without big-budget advertising or celebrity endorsements.

Getting The Numbers Right: Balaji’s strength lies in aggressive pricing, deep regional distribution, and products tailored to local tastes. While PepsiCo’s Lay’s and ITC’s Bingo rely on brand campaigns, Balaji has consistently stayed closer to the grassroots consumer, selling at price points that resonate with middle-class households. This approach has helped the company maintain a loyal consumer base and deliver steady growth even in inflationary times.

The Opportunity: For potential investors, the attraction is clear. India’s snack food market is projected to cross $20 billion in the coming years, with both urban and rural consumption rising. A stake in Balaji would give large FMCG players a foothold in a fast-growing segment that blends affordability with mass appeal.

Haldiram’s Parallel: Balaji’s story mirrors a similar arc at Haldiram’s, India’s largest snack and sweets brand. In recent months, Temasek, IHC and Alpha Wave Global have collectively picked up minority stakes in the company, valuing it at around $10 billion. Like Balaji, Haldiram’s has managed to attract marquee investors on the back of strong consumer loyalty, wide distribution and a growing international footprint.

The Outlook: Taken together, the developments indicate a broader shift in India’s FMCG sector: regional snack makers, once considered niche, are now billion-dollar brands drawing global investor interest.

Jewellery Push: India is making a big push into Saudi Arabia's $4.5-billion jewellery market with the SAJEX 2025 exhibition in Jeddah. The move is aimed at boosting the $890 million gems and jewellery trade between the two nations and capitalising on Saudi Arabia's strong economic growth. Experts project that Saudi Arabia's total jewellery market could reach a massive $8.3 billion by 2030. With a $165-billion industry of its own, India is seen as the perfect partner to help meet the growing demand.

Sugar Surplus: India, the world's second-largest sugar producer, is set to have a surplus in the new season starting October 1st, allowing it to begin exporting the commodity. This move could impact global sugar prices while also helping the Indian government manage local prices and ensure fair payments to farmers.

Rise of external debt: India’s external debt surged by 10% in FY25, hitting $736 billion, the fastest growth in seven years. According to a recent RBI report, this increase caused the country's external debt-to-GDP ratio to rise from 18.5% to 19.1%. Long-term debt saw a significant increase, while the ratio of short-term debt to foreign exchange reserves also slightly increased.

Border Connectivity Boost: India is planning to invest $3.4 billion to construct 500 kilometres of new railway lines in its northeastern region, strategically located near the borders with China, Bangladesh, Myanmar, and Bhutan. This ambitious project, which is expected to be completed within four years, is a crucial component of India's long-term strategy to enhance military logistics and readiness.

Adani's Display Plan: The Adani Group is reportedly in talks with Japanese companies like Sharp and Panasonic to set up a new LCD fabrication plant in India. This is the conglomerate's second attempt to enter the semiconductor sector after a previous plan for a chip facility in partnership with Tower Semiconductor did not move forward.

Mexico’s Tariff Move & China’s Swift Response: Mexico’s plan to raise tariffs on Asian-made cars, particularly Chinese vehicles, to 50% has triggered sharp warnings from Beijing. China’s Ministry of Commerce urged Mexico to “think twice before acting,” warning that countermeasures would follow if bilateral economic ties were harmed. Still Mexico has justified the move as part of a broader federal budget proposal, which could impact $52 billion worth of imports. China, however, views the plan as part of a larger pattern of economic coercion.

Mexico’s Balancing Act: The tariffs are also deeply tied to Mexico’s obligations under the United States-Mexico-Canada Agreement (USMCA). The agreement demands stricter local content requirements for tariff-free trade within North America, putting pressure on Mexico’s auto industry, which remains its largest employer. For China, Mexico is not just another export market, it is the top destination for Chinese car exports. From June 2022 to July 2024, Chinese auto firms pledged over $7 billion in investments in Mexico, though not all projects have materialized. BYD, China’s leading EV player, has yet to build its much-anticipated factory there. Analysts note that Chinese automakers have primarily eaten into the market share of other Asian brands rather than Western incumbents. Even so, with tariffs possibly doubling, the cost equation for Chinese carmakers may be disrupted, though some experts argue the “value proposition” of Chinese cars could still remain competitive.

A New Trade Reality: Mexico’s proposed tariffs, China’s response, and Trump’s tariff escalations all point to a sobering reality: tariffs have crossed from the realm of economics into geopolitics. What once was a policy tool for correcting imbalances has now become a weapon to demand obedience, shape alliances, and project power.

Fujifilm’s Nostalgic Success Story: Southwest of Yokohama, Japan - Fujifilm has been expanding its factories and pouring billions of yen into production. The reason is not cutting-edge AI cameras or advanced lenses, but something simpler: instant photography. In 2025, when smartphones boast 200-megapixel sensors, Fujifilm’s Instax range has become a global phenomenon, surpassing 100 million units sold worldwide and driving record sales for four consecutive years.

From Niche To Global Trend: Instax’s trajectory has been anything but linear. Launched in 1998, it quickly gained traction domestically but was nearly crushed by the rise of digital cameras and smartphones in the 2000s. A decade later, the mini 8, marketed as “the world’s cutest camera”, revived sales, especially among younger buyers in Asia. By 2015, Fujifilm had seized the global stage, just as rival Polaroid exited the market. Strategic timing and persistence turned Instax into Fujifilm’s flagship consumer camera business.

Japan Seeks $550B U.S. Investment: Japan is urging the United States to invest US$550 billion in its economy, hoping this will deter any future U.S. tariffs that may affect its exports. The move comes amid concerns over protectionist trade policies and growing tensions between the two nations.

Alibaba Fuel Cloud & AI Push: Alibaba is planning to issue about US$3.2 billion worth of zero-coupon convertible senior notes due 2032, targeting non-U.S. investors in offshore transactions. Roughly 80% of the proceeds will go toward scaling its cloud infrastructure (data centers, tech upgrades, etc.), with the remainder to boost its global e-commerce operations and operational efficiency.

Russia & Belarus Exercises: Russia and Belarus have begun joint military drills, “Zapad-2025,” near NATO’s eastern border, in the wake of Russian drones entering Polish airspace and being shot down. The exercises simulate repelling attacks and restoring territorial integrity, and include use of drones, AI, and electronic warfare. Poland, Lithuania, and Latvia have raised alert levels, closed some crossings and airspace, and view the drills as “very aggressive.” Russia maintains the drills were planned in advance and assert they are defensive.

Microsoft Dodges EU Fine: The European Commission accepted Microsoft’s proposal ending a long antitrust probe and allowing Microsoft to avoid a major fine. Regulators say the binding commitments, which also improve interoperability and data portability, will help restore competitive balance in collaboration software.

UK Economy Slowdown: In July 2025, the UK economy showed signs of stalling, with growth slowing sharply as both consumer spending and business investment cooled. Key sectors underperformed, suggesting that the momentum seen earlier in the year is fading. Economists warn the slowdown could persist unless fiscal or monetary policy steps are taken to revive demand.  

Trump’s India Visit? Sergio Gor, Trump's nominee for Ambassador to India, hinted that the US President may visit India this year for the Quad Leaders' Summit. The visit, aimed at reinforcing the US-India relationship, is a sign of strong cooperation despite past differences. 

PM’s Manipur Visit: PM Modi's first visit to Manipur in two years aims to promote peace after ethnic violence. He's unveiling projects worth over ₹8,000 crore, with ₹7,300 crore in Churachandpur and ₹1,200 crore in Imphal. The violence has resulted in over 260 deaths.

Gujarat Lion toll: Between August 2023 and July 2025, Gujarat reported 307 Asiatic lion deaths. Of these, 41 were from unnatural causes like falling into wells or road accidents. The government has already spent ₹37.35 crore on lion protection. A recent census counted 891 lions in the Gir Wildlife Sanctuary, despite the losses.

THAT’S ALL FOR TODAY!

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