📰IndiGo's Disaster, Explained | Daily India Briefing

Today, we break down how India’s largest airline accidentally shut down.

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Macro

• Copper has risen 30 percent this year to the detriment of India. The country’s rapidly growing infrastructure necessitates copper, and this rally has only accelerated as the material is being rushed from the US to front-run future tariffs, triggering even tighter supply and rising premiums globally. 

• Trump is weighing future tariffs on Indian rice to prevent alleged dumping in the US. Farmers in the US are net exporters of rice and some have said cheaper imports have led to lower prices and an inability to compete. India normally exports about 25 million tons around the globe with most going to Asia and Africa. 

• Swap rates are rising as an indicator that the rate easing cycle is over. 5-year overnight swaps rose to 5.95 percent, the highest since March, due to an assumption that there will be a pause for 3-4 quarters.

Equities

• Microsoft is pledging $17.5 billion (₹1.6 trillion) in India for AI cloud services. One of Microsoft’s priorities is to build infrastructure giving the country security and sovereignty over future technologies. Its first facilities will go live in Hyderabad during the middle of 2026. 

• Swiggy is looking for $1.1 billion (₹99 billion) a year after its IPO. The additional share sale is at a 6.8 percent discount to current share prices; the funding is to propel growth in its network of neighborhood warehouses and delivery fleets capable of fulfilling orders within minutes. 

• India has seen $19.6 billion (₹1.8 trillion) worth of IPOs this year, a new record. Even amid geopolitical tensions and a $17 billion (₹1.5 trillion) foreign investor selloff did not stop India from being the 4th-busiest IPO country in the world. 

• Property developer RMZ is weighing a $1 billion (₹90 billion) IPO.The company is an integrated real estate company spanning office, retail, hospitality, and digital infrastructure. RMZ has not picked advisors and key details are still liable to change; however this will likely be the largest real estate IPO since 2007 in India.

Alts

• India is limiting consumer-health companies from mislabelling products due to social media. Some health drinks, for example, used to be called ‘life-saving’; influencers and doctors used social media to spur regulators to end misrepresentative practices. Part of the growth in social media has also been due to the government’s $1 billion (₹90 billion) fund to help grow creators across India. 

• Credit Saison's Indian unit is raising $500 million (₹45 billion) through a two-part offshore loan.The raise will be denominated in dollars and yen to help expand their credit practice in India. Saison lends to micro, small, and medium-sized enterprises with over 90 branches in India.

Policy

• Rahul Gandhi of the opposition party is doubling down on electoral fraud claims. He is arguing that the Election Commission is aiding the BJP by adding fake voters to the BJP rolls while downsizing opposition party voters. 

• Deputy Power Minister Naik says that 7.2 GW of coal plants were added. This was 59 percent higher than the previous year with the country doubling down on coal to meet future power demands. This year’s growth is also due to slowdowns in previous years, causing a backlog to come through now.

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The IndiGo Disaster, Explained

India’s air travel all but collapsed after the country’s largest airline, controlling about 60-70 percent of the domestic air travel market, suffered a spectacular operational breakdown that forced the cancellation of more than 1,000 flights on December 5 alone, affecting 500,000+ travelers. Four days later, the carrier was slowly clawing back toward normalcy, but hundreds of daily cancellations continued as CEO Pieter Elbers scrambled to reconstruct flight schedules and reposition planes and crews. The aviation regulator, already alarmed by the scale of the failure, accused IndiGo of “significant lapses in planning, oversight, and resource management,” setting the stage for formal inquiries into how a company controlling two-thirds of India’s aviation market came undone with such speed.

The immediate causes were a mix of minor technology glitches, adverse weather, congestion, scheduling changes, and the November 1 tightening of mandatory pilot rest-period rules designed to limit fatigue. Because pilot rosters are typically locked in a month ahead, these sudden constraints created acute mismatches between aircraft and crews. Within days, IndiGo’s enormous system of more than 2,200 daily flights began to jam as planes and pilots ended up in the wrong places at the wrong times. The company also relies on hyper-efficient turnarounds and cost-cutting, which magnified the issue. Government officials later noted that IndiGo had two full years to prepare for the rule changes and should have expanded its pilot pool earlier, a strategic lapse that now carries a multibillion-dollar price tag. InterGlobe Aviation, the airline’s parent company, saw its shares plunge almost 17 percent by December 8, erasing $4.5 billion (₹405 billion) in market value.

What this reveals about India, broadly: The scale of the disruption underscores how deeply India’s major industries have become highly uncompetitive. IndiGo, a carrier that launched in 2006 with a single leased Airbus A320 has grown into a fleet of over 410 aircraft serving two-thirds of the domestic market, a position cemented as rival airlines collapsed under debt, mismanagement, and supply-chain failures. Kingfisher Airlines, Jet Airways, and Go First all failed during moments of industry stress, leaving the sector increasingly concentrated. Even today, SpiceJet remains financially fragile, while Air India, which was mismanaged directly by the Indian government for years, is now owned by the Tata Group and is still navigating a complex multiyear restructuring involving the integration of Vistara and AirAsia India. With its only serious competitor unable to expand rapidly, IndiGo’s dominance has become a systemic risk.

See you tomorrow.

Written by Yash Tibrewal. Edited by Shreyas Sinha.

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