Welcome to Samosa Capital’s daily briefing — the best way to stay up-to-date on India’s financial markets. Every Friday, we bring you a long-form reflection on Indian markets: today, Yash shares insights from his trip to India.

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Reflections From My Trip to India: A Nation of Entrepreneurs?

Hi all, Yash here. I took a trip to India recently, seeing the beautiful cities of Surat, Bombay, and Jaipur.

While visiting family, it occurred to me that only two were formally employed in salaried jobs. In fact, most people I met were self-employed or owned their businesses. The data backs this up: only 20 percent of the Indian labor force, or 130 million people, have a salaried job. Even among them, only 42 percent have a written official contract, 48 percent have no paid leave, and 54 percent lack any social security benefits. 

India’s economy is structurally informal: the remaining 80 percent without salaried jobs work at the 77 million unregistered informal enterprises running at the household level, such as small stores. 20 percent of the Indian workforce are “casual workers,” who work long hours on someone else’s farm, construction site, small store, or as help in a residence to earn daily or periodic wages.

How it compares: India still lags behind China (55 percent), Sri Lanka (58 percent), and a global leader in the US (90 percent). This reveals some deeper faults in India: 25 percent of the population remains illiterate, compared to China’s 3 percent and Sri Lanka’s 7.5 percent. Additionally, India suffers from a severe underemployment crisis: two-thirds of India’s unemployed youth are educated, but cannot find jobs better than working on farms. Low-level government jobs that require basic literacy, like checking tickets on a train, get countless applications from doctors, lawyers, and PhDs.

NOTE: Hourly workers with formal contracts and consistent hours are included among salaried workers in the data.

With a vast informal economy, who will pay the taxes? 2.2 percent of Indians pay any income tax: that’s 100 million taxpayers in an economy of 575 million workers and a population of 1.3 billion. This means local and national governments squeeze tax through high sales taxes: 27 percent on ‘luxury goods,’ 18 percent on electronics and services, 12 percent on clothing and certain medicines, and 5 percent on essentials. I live in New York City, with an 8.5 percent sales tax rate, and most people think that is outrageous. Without a formal business sector with employees, India funds essential services through a highly regressive tax system.

Gupshup

Macro

• US fintech firm Broadridge to boost India headcount by 26 percent in 3 years, top exec says. Broadridge Financial plans to expand its India tech staff to over 6,800 over three years. 

• Billionaire Ambani Plans World’s Biggest Data Center in India. Mukesh Ambani’s Reliance Group is building what could become the world’s largest data center in Jamnagar, India, with a capacity of three gigawatts, significantly outpacing current data centers. The project, aimed at capitalizing on growing AI demand, may cost up to $30 billion (₹2.6 Trillion) and will be powered largely by renewable energy.

Equities

• Uber denies implementing phone model-based pricing in India. An Indian government body claimed that Uber and their rival Ola offered different prices to customers based on whether they are using an Apple or Android phone. The Central Consumer Protection Agency (CCPA) has sent notices to the companies over the alleged price disparity or "differential pricing.”

• An Indian tribunal temporarily suspended a five-year data-sharing ban between WhatsApp and its owner Meta Platforms. Meta criticized the CCI for not having the "technical expertise" to understand the ramifications of its order.

• India's United Spirits tops Q3 profit view but is 'cautiously optimistic' over short-term. United Spirits’ Q3 profit rose 36 percent to $54.3 million (₹4.7 billion), driven by festive demand and Andhra Pradesh sales. Leadership changes include V.K. Viswanathan as chairperson and Praveen Someshwar as CEO from April 1.

• India’s benchmark indexes closed higher, driven by a 1.8 percent rise in IT stocks amid optimism over the U.S. AI spending. Despite strong gains in IT companies, concerns over U.S. tariffs and weaker earnings from BPCL and Hindustan Unilever limited gains.

Alts

• German-Indian JV emerges as sole contender for $5 billion (₹432.5 billion) India submarine deal. ThyssenKrupp and its Indian partner have passed trials to become the sole contender for an Indian Navy submarine project. Rival Navantia, partnered with Larsen & Toubro, failed to meet key technology requirements in 2024 trials.

• India's Indus Towers to invest in EV charging infrastructure. Indus Towers has launched pilot EV charging stations in Gurugram and Bengaluru, marking its entry into the EV charging sector.

• Indian drugmaker Dr Reddy's says it is 'optimistic' about the Trump administration. Dr. Reddy's Laboratories reported a 2.3 percent increase in Q3 profit to $163.7 million (₹14.1 billion), missing analyst expectations due to weak pricing in the competitive U.S. market.

Policy

• India is set to raise the farm budget by over 15 percent, the biggest increase in six years. India plans to raise agriculture spending to $20 billion (₹1.7 trillion) in its upcoming budget. The funds will focus on high-yield seed development, storage infrastructure, and boosting production of pulses, oilseeds, vegetables, and dairy to raise rural incomes and curb inflation.

• The National Human Rights Commission (NHRC) has admonished labor officials for failure to adequately investigate evidence of employment discrimination at Foxconn. The NHRC ordered a fresh probe of Foxconn’s iPhone plant after reports revealed the exclusion of married women from assembly jobs, with exceptions during high-production periods.

• India Foreign Secretary to visit China this weekend in an attempt to revive ties. India's Foreign Secretary Vikram Misri will visit Beijing on Jan. 26-27 to discuss boosting ties with China, following a pact in October to ease military tensions.  

See you Monday.

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.