Daily News - Thursday, 7 November 2024
Biggest fall in nearly 5 months pulls down rupee to fresh low (Business Standard)
On Wednesday, the Indian rupee fell 0.20% to a record low of 84.28 per dollar, experiencing its largest single-day drop since June but still ranking as the best-performing Asian currency after the Hong Kong dollar, with the Thai baht and Japanese yen dropping more significantly by 1.92% and 1.66%, respectively. The rupee’s slide was influenced by Donald Trump’s election as U.S. president, whose anticipated strong-dollar policies, including a proposed 10% import tariff and 60% duty on Chinese goods, drove U.S. Treasury yields up to 4.48% before stabilizing at 4.44% and lifted the dollar index to 105.32 before settling at 104.95. Market analysts expect the rupee to trade between 84.10 and 84.40, with RBI expected to mitigate sharp depreciation ahead of the Federal Reserve’s rate decision on Thursday, as traders await a potential 25 basis point cut.
India may see impact of America First Policy (Financial Chronicle)
Trump’s “America First” policies and potential for intensified tariff wars could challenge India’s trade, as his administration might target the trade surplus India holds with the U.S., where India’s exports rose 46% to $77.5 billion from FY20 to FY24, while imports from the U.S. increased by 17.9% to $42.2 billion. A Trump presidency may not only extend tariffs beyond China but could press India to lower its tariffs and face higher tariffs on key sectors like textiles and pharmaceuticals, impacting several Indian exporters. Nonetheless, India’s “China-plus-one” strategy, competitive tariffs, and less restrictive environmental regulations may offer opportunities for exporters seeking alternatives to China.
Trump’s win resurrects H-1B visa fears (Financial Chronicle)
Donald Trump’s strict stance on immigration, particularly H-1B visas, poses challenges for Indian IT firms and professionals, as 80% of India’s IT export earnings are from the U.S., which is also the largest market for its $254 billion tech sector. Under Trump’s previous term, H-1B visa approvals dropped to 84.5% from 88% under Obama, with denial rates peaking at 18% compared to Biden’s 3.2%, while requests for additional evidence rose sharply from 12% to 34%, straining India’s access to U.S. tech roles. Trump’s policies could push U.S. companies to reduce outsourcing and force Indian IT firms in the U.S. to hire locally, raising costs, potentially reducing service exports, and squeezing profit margins if wage mandates increase for H-1B holders to align with standard U.S. worker wages.
Deutsche Bank pumps ₹5,113 cr into India ops (Financial Express)
Deutsche Bank announced a capital infusion of ₹5,113 crore (around $607.5 million) into its Indian operations, raising its total capital at Indian branches to nearly ₹30,000 crore, marking a 33% increase over 2023. The move aligns with India’s projected GDP growth rate of 7.2% for FY 2025, which has drawn foreign lenders seeking expansion in the country’s rapidly growing market. This capital injection will support Deutsche Bank’s further expansion across corporate, investment, and private banking sectors in India, highlighting the bank’s commitment to tapping into India’s economic potential.
‘Veg thali prices spurt 20% in Oct’ (Financial Express)
In October, the cost of a home-cooked vegetarian thali in India rose by 20% year-on-year, driven by significant increases in vegetable prices, particularly onions (up 46%) and potatoes (up 51%), as crop arrivals were disrupted by excessive September rainfall. Tomato prices more than doubled from ₹29/kg in October 2023 to ₹64/kg in October 2024 due to similar weather issues, though Crisil expects prices to stabilize in November with new supplies from states like Madhya Pradesh and Rajasthan. For non-vegetarian thalis, costs rose by 5%, with broiler prices steady but vegetables, which make up 22% of the thali, rising; an 11% drop in LPG prices from ₹903 to ₹803 over the past year, however, helped mitigate overall cost increases for both thali types.
