📰Tesla Hires in India, TCS Accused of Fraud, Trade Deficit Widens

Good morning, 

Welcome to the best way to stay up-to-date on India’s financial markets. Here’s what’s in today’s newsletter:

• Tata Consulting Services—a major India-based IT consulting company—was allegedly gaming the American visa system,

• Tesla begins hiring in India shortly after Musk meets with Modi,

• and, India’s trade deficit widens.

• Finally, we’ll close with Gupshup, a round-up of the most important headlines.

Have a question you want us to answer? Fill out this form and you could be featured in our newsletter.

—Shreyas, [email protected]

Market Update.

Tata Consultancy Services Misusing American Visas.

Former employees have accused Tata Consultancy Services (TCS), India’s largest IT outsourcing firm, of exploiting the U.S. visa system by misusing L-1A manager visas to bring in front-line workers, bypassing stricter H-1B requirements. Anil Kini, a former IT manager at TCS, alleges he was instructed in 2017 to falsify organizational charts to make the company appear more top-heavy with managers, allowing it to justify L-1A visa applications. Kini resisted and later filed a whistleblower lawsuit, which was dismissed but is currently being appealed.  

Why use L-1As? The L-1A visa program, designed for international managers and executives, has fewer restrictions than the H-1B, including no salary requirements. Federal data shows TCS secured more L-1A approvals than any other U.S. employer, far exceeding the number of managers it officially reported. Other ex-employees have made similar claims, alleging TCS misrepresented their job roles to obtain L-1A visas while paying them significantly less than American workers.  

TCS has denied wrongdoing, stating that courts have dismissed previous allegations. However, internal company documents and an investigation by the Equal Employment Opportunity Commission (EEOC) suggest a pattern of falsified documentation. While U.S. authorities have uncovered instances of L-1A visa fraud, enforcement remains limited.  

Adverse effects for workers: Kini and others argue that TCS's use of L-1A visas undermines American workers by bringing in foreign employees at lower wages. Despite multiple lawsuits, no legal action has resulted in significant penalties for TCS. Experts say visa loopholes and weak enforcement continue to allow large IT firms to exploit the system for cost savings.

Message from our Sponsor

Want Real Insights on the Global Economy? Start Here.

Looming trade wars and shifting global policies raise a critical question—are we on the brink of market turmoil? Staying informed has never been more important. That’s why we read The Daily Upside. Founded by career journalists, investment bankers, and finance professionals, The Daily Upside delivers exclusive news, in-depth analysis, and expert commentary on the forces shaping the world economy. Join over 1 million readers and subscribe for free today.

Subscribe for free today.

Tesla Expands in India.

Tesla is ramping up hiring in India, signaling its imminent entry into the market following CEO Elon Musk’s meeting with Modi in the US. The company has posted job listings for 13 positions on its LinkedIn page, spanning both customer-facing and backend roles.  

At least five of these roles, including service technician and advisory positions, are open in both Mumbai and Delhi, while others, such as customer engagement manager and delivery operations specialist, are specifically for Mumbai. Tesla has long engaged with India but previously stayed out due to high import duties. However, with India recently lowering the basic customs duty on luxury EVs priced above $40,000 (₹3.5 million) from 110 percent to 70 percent, conditions may now be more favorable for Tesla’s market entry.  

Just the beginning: India’s EV sector remains in its early stages compared to China, where electric car sales reached 11 million last year, while India’s sales were just under 100,000. However, India presents an opportunity for Tesla to counteract slowing sales, following its first annual decline in EV deliveries in over a decade.  

A little conflict of interests: Tesla’s move aligns with Modi’s recent meetings with Musk and Trump in Washington. Musk’s dual role as a business leader and a key figure in Trump’s administration has raised questions about the intersection of his political and corporate interests. Last month, Italy confirmed discussions with Musk’s SpaceX regarding secure government telecommunications, following Prime Minister Giorgia Meloni’s meeting with Trump in Florida.

India’s Trade Deficit Continues to Widen.

India’s trade deficit expanded beyond expectations last month, intensifying economic challenges amid a weakening currency and the looming threat of US retaliatory tariffs. In January, the gap between exports and imports reached $23 billion (₹2 trillion), surpassing the $21 billion (₹1.8 trillion) forecast by economists and the $22 billion (₹1.9 trillion) deficit recorded in December, according to trade ministry data released Monday. Exports declined by 2.4 percent year-over-year to $36.4 billion (₹3.2 trillion), while imports surged by 10.3 percent to $59.4 billion (₹5.2 trillion).

Yet another currency issue. The growing trade imbalance puts additional strain on the Indian rupee, which has depreciated 1.4 percent against the U.S. dollar since the start of the year. This depreciation increases the cost of imports, particularly critical commodities like oil, which accounts for 90 percent of India's energy needs. In January, gold imports fell to $2.7 billion (₹234.9 billion) from $4.7 billion (₹417.6 billion) in December, while oil imports totaled $13.4 billion (₹1.2 trillion).

Despite these challenges, India’s Trade Secretary Sunil Barthwal remained optimistic, highlighting strong export performance in sectors such as electronics, pharmaceuticals, gems and jewelry. He emphasized that, despite global conflicts and trade tensions, India’s goods and services exports have remained resilient.

However, geopolitical uncertainties continue to weigh on India’s trade outlook. Economists warn that India is particularly vulnerable to the US president’s proposed reciprocal tariffs on trading partners. In response, India and the US recently agreed to initiate discussions on an early trade deal, with Washington urging India to increase its purchases of American goods, including energy and military equipment.

Gupshup.

Macro

• Sugar prices are rising as India’s output is set to fall to 26 million tons due to crop disease, tightening global supplies. While production may rebound next season, near-term shortages and lower output in Thailand are driving up white sugar futures.

• The US's potential reciprocal tariffs could heavily impact key Indian sectors like chemicals, automobiles, textiles, and footwear. India faces economic challenges as trade negotiations with the US intensify.

• India's trade with the US grew by 8 percent to over $106 billion (₹9.2 trillion) through January. Both countries aim for a trade deal by 2025 to reach $500 billion (₹43.5 trillion) by 2030.

Equities

• LG Electronics has launched roadshows for its Indian unit’s IPO, which aims to raise up to $1.5 billion (₹130.4 billion) and could value the company at $15 billion (₹1.3 trillion). The listing follows Hyundai India's record $3.3 billion (₹286.9 billion) IPO last year, amid a shifting stock market landscape.

• Licious, a Temasek-backed meat and seafood startup, plans a $2 billion (₹173.9 billion) India IPO in 2026 after reaching EBITDA profitability. The company is expanding physical stores, speeding up deliveries, and competing with quick-commerce rivals like Zomato and Swiggy.

• Vedanta Ltd.’s creditors will vote Tuesday on a plan to split the conglomerate into five businesses, aiming to simplify its structure and manage debt. The overhaul, backed by billionaire Anil Agarwal, requires approval from creditors holding three-fourths of the debt value.

• Global aerospace companies are increasing parts sourcing from India, driving growth in the country's aerospace sector. India’s aerospace industry is expanding beyond basic manufacturing to more advanced work, contributing significantly to the global supply chain.

• Volkswagen India claims that the country's $1.4 billion (₹121.7 billion) tax demand could become a matter of survival for the company in India. Volkswagen continues to contest the claim of underpaying duties on imported cars.

Alts

• Indian state power company, NTPC, plans to build 30 GW of nuclear energy over the next 2 decades costing around $62 billion (₹5.4 trillion). NTPC, which has historically focused on coal-fired plants, is seeking land to execute its ambitious plan despite local resistance.

Policy

• To counter Trump’s tariff threats, India is cutting import taxes and signaling further reductions to maintain investor confidence and avoid a trade war. Officials are working toward a trade deal with the U.S. by late 2025 while negotiating tariff adjustments to protect economic growth.

See you Wednesday.

Written by Yash Tibrewal. Edited by Shreyas Sinha.

Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.