📰Is India Underreporting Unemployment? | Daily India Briefing

China promises to solve India’s rare earth problem. U.S. Treasury Secretary Scott Bessent criticized India’s wealthiest families for profiting off Russian oil deals. Economists criticize India for underreporting unemployment.

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Macro

• Indian defense stocks lagged as signs of easing tensions with China reduced the urgency for arms spending. A sector gauge trailed peers, underscoring how valuations inflated by geopolitical risk premiums can quickly deflate when diplomatic signals turn more positive.

• India is curbing solar output during low-demand periods to stabilize its grid and ease congestion from new projects coming online ahead of schedule. Developers warn these curbs threaten project viability, with Rajasthan facing the steepest peak-hour restrictions.

• India must grow by about 8 percent annually over the next decade to offset geopolitical risks, the finance ministry told lawmakers. Current growth is projected at 6.3 percent-6.8 percent this year, below the 9.2 percent seen in 2023-24.

• India’s stock benchmarks rose Tuesday, led by Reliance Industries and auto makers, as investors bet proposed GST cuts will lift demand. The gains helped offset weakness in some sectors, keeping equity sentiment broadly positive.

• The rupee logged its biggest rise in over a month on Tuesday, strengthening 0.46 percent to 86.95 per dollar, as optimism grew that Washington may soften new tariff measures after President Trump’s talks with Russian and Ukrainian leaders.

Equities

• Apple will produce all four iPhone 17 models in India for the first time, expanding output at five plants, including Tata-run factories, as it diversifies from China and boosts US-bound shipments amid tariff pressures.

• Hindustan Zinc plans to expand into uranium mining if India opens the sector to private firms, CEO Arun Misra said. The government is considering ending its decades-old monopoly to attract investment and boost the nuclear industry.

Alts

• OpenAI has launched ChatGPT Go in India, a $5-per-month (₹435) plan offering GPT-5 access, longer memory, higher upload limits, and more frequent chatbot use. It’s exclusive to India, targeting rapid adoption in the country’s booming AI market.

• BHP says China’s export resilience and India’s infrastructure push will sustain commodity demand. India’s metals appetite is set to surge, potentially turning the nation into an opportunistic iron ore importer, while copper demand in China should remain strong into 2026.

• India’s shrimp industry, the top U.S. supplier, is reeling as Trump’s threatened 50 percent tariffs halt orders and crush margins. Farmers in Andhra Pradesh, after investing heavily in shrimp ponds, are now weighing abandoning aquaculture for alternative livelihoods.

Policy

• Modi said India-China ties have made steady progress since his October meeting with Xi Jinping. He emphasized mutual respect and sensitivities, adding that stable, constructive relations will aid regional and global peace ahead of the SCO summit.

• India’s market regulator SEBI is reviewing stricter intraday position limits on equity derivatives after banning U.S. trading firm Jane Street over manipulative strategies. The move aims to curb large firms’ influence in a market that dominates global trading volumes.

• India suspended its 11 percent cotton import duty until Sept. 30, signaling goodwill to Washington and easing pressure on its garment sector. The move could benefit U.S. cotton growers and help India stay competitive against China and Bangladesh.

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1. China Promises to Solve India’s Rare Earth Mineral Problem

China has pledged to ease India’s access to critical rare earths, a sign of thawing relations between the two Asian powers after years of tension over their disputed border.

During talks in New Delhi, Chinese Foreign Minister Wang Yi assured Indian counterparts that Beijing would address India’s needs for fertilizers, rare earths, and tunnel-boring machines, according to an Indian official briefed on the discussions. The move comes as Prime Minister Narendra Modi prepares to visit China later this month for the Shanghai Cooperation Organisation summit.

India, which holds the world’s fifth-largest rare-earth reserves, remains heavily reliant on imports of magnets from China, the dominant global supplier. But Chinese exports of rare earth magnets to India have fallen 58 percent since January, customs data show, even as Beijing accelerated license approvals for Europe and the U.S. earlier this year. That supply crunch has weighed on Indian manufacturers in sectors ranging from defense to renewable energy.

For Beijing, the outreach reflects a pragmatic calculus: stabilizing ties with New Delhi amid mounting U.S. tariffs on both economies. For India, the concessions could ease supply risks, though officials remain wary about over-dependence. New Delhi is exploring partnerships to develop its magnet-making capacity while balancing security concerns with economic necessity.

2. US Says India’s Wealthiest Families Profit From Russian Oil Deals

US Treasury Secretary Scott Bessent accused some of India’s wealthiest business families of reaping billions in excess profits from the country’s surging imports of Russian crude, sharpening Washington’s criticism ahead of fresh tariff hikes.

“India is just profiteering,” Bessent said in a CNBC interview on Tuesday, claiming oil refiners earned $16 billion (₹1.4 trillion) on resales of discounted Russian cargoes. Before Moscow’s 2022 invasion of Ukraine, less than 1 percent of India’s oil came from Russia. That share has now risen to 42 percent, according to Bessent.

The comments are the strongest signal yet that the Trump administration is preparing to impose punitive levies on New Delhi, with the president threatening to lift tariffs on Indian exports to 50 percent later this month. At least half the penalty would be linked to purchases of Russian oil.

The remarks also amount to a veiled swipe at Reliance Industries, controlled by Asia’s richest man, Mukesh Ambani. Reliance runs the world’s largest refining complex and has been among the leading buyers of Russian barrels.

India has defended its position, insisting it will purchase oil from the cheapest source available to secure energy for its fast-growing economy. Officials in New Delhi argue the US is singling them out, noting that China continues to import significant volumes of Russian crude without facing secondary tariffs.

3. Economists Criticize India for Underreporting Unemployment

India has recommended a three-year safeguard duty on select steel imports, escalating efforts to shield its domestic industry from a flood of cheap Chinese supply made worse by U.S. tariffs.

The Directorate General of Trade Remedies (DGTR) proposed a levy starting at 12 percent in the first year, tapering to 11.5 percent and then 11 percent by the third. The agency flagged a “sudden, sharp and significant” jump in inbound shipments that threatens “serious injury” to Indian producers. A temporary 12 percent tariff was already imposed in April for 200 days, but the DGTR’s latest call seeks to lock in protection for longer.

Global distortions are intensifying pressure. With Washington maintaining 50 percent tariffs on Chinese steel, and other countries from South Korea to Vietnam layering on anti-dumping duties, unsold volumes are piling up across Asia. That overhang has redirected flows toward India, one of the fastest-growing steel markets, sparking fears of a supply shock undermining margins for domestic players like JSW Steel and Tata Steel.

New Delhi’s response mirrors a wider global turn inward, as even Japan’s steel lobby pushed for stricter safeguards this week. For India, the balance is delicate: keeping prices stable for downstream industries like construction and autos, while protecting local capacity from being swamped by global oversupply.

See you tomorrow.

Written by Eshaan Chanda & Yash Tibrewal. Edited by Shreyas Sinha.

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