Can Modi-Trump Talk End Tariff Pain?

Good Morning. US president Donald Trump’s tariff sword still hangs over India as trade worth billions of dollars is at stake. While it may do good for India to find other strategic partners, and India has been cutting deals with other countries too, the US is still too big for us to ignore. With Russian oil entering the equation, the stalemate on the deal has gone beyond what will be and won't included in the deal. Can only a Modi-Trump talk break this?

In other news, India’s investors continue to put their faith into SIPs and mutual fund schemes. Meanwhile, what Google search reveals about India’s health and wellness consumption patterns.

CORE CONVERSATION

Could Cool Heads And Negotiations Salvage India-US Trade Talks?

What?

Days after US President Donald Trump levied 25% additional tariffs on India, taking total tariffs to 50%, Minister of State for Finance Pankaj Chaudhary told Parliament that a variety of factors could determine how exporters would be affected. The factors will include demand and existing contractual arrangements.

Despite the tariff salvo, the trade negotiations between the two countries are still going on. However, the introduction of the Russian angle has perhaps made things more complicated.

“We need cool minds, and negotiations will be the way forward because these are two large economies, two large democracies, the largest and the most prosperous. And we have committed ourselves towards serving the future of humanity. So that is a very strong strategic partnership to which both of us are wedded on a bipartisan level,” Sanjay Bhattacharya, former secretary of the Ministry of External Affairs, told The Core Report: The Weekend Edition.

How?

The complications arose as there were certain concessions that America wanted, but for India, it was crossing the red line. But the role of Russia also played on Trump’s mind.

“The Europeans and the Americans have convinced themselves that we (India) are the problem. And it's not just this one. Remember in Trump-1, Trump passed the CAATSA, where again, he went after India for buying the S-400s from Russia. He didn't put sanctions on us then. He waived those sanctions. This time, he wants Putin at the table,” said Indrani Bagchi, CEO of Anantha Aspen Centre & foreign Affairs columnist.

While the negotiations with Trump may have stalled, India has been striking deals with other countries, too. “If you look at the last few years of the Modi administration, we see an effort towards trade openness and trade diversification, which is new. I agree with the ambassador and Indrani about, like, how India historically has been an irritant in the trade space,” said Gaurav Sansanwal, fellow for the Chair on India and Emerging Asia Economics at the Centre for Strategic and International Studies (CSIS), Washington DC.

What Now?

While India could push back or bend a little, Bagchi believes there is a third way, which is to go back to the table. While GM crops and dairy may not happen, the negotiators may be able to find common ground.

“There will be areas where we can work on, which is energy imports, energy investments, defence investments, and defence buys. Basically, energy and defence are your big sort of areas where you can invest,” Bagchi said.

The Russian oil issue still remains in the balance. India is one of the biggest buyers of Russian crude.

But Bhattacharya believes that a 50% tariff will be a pain for both sides and there is likely going to be a breakthrough. “I am convinced that it will require a conversation between the prime minister and president at the end of the day to get back on an even keel because this relationship is way too important. And both of them realise that,” he said.

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CORE NUMBER

Rs 42,702 crore

That’s the amount that flowed into equity mutual funds in July — an all-time high, up 81% from June’s Rs 23,587 crore, per AMFI data.

📌 The details:

• Small-cap funds saw inflows of Rs 6,484 crore (+61% MoM)

• Mid-cap funds attracted Rs 5,182 crore (+38% MoM)

• Dividend yield funds logged the smallest inflow at Rs 96.65 crore

• Out of 11 categories, only ELSS funds saw outflows — Rs 368 crore in July vs Rs 556 crore in June

• Compared with July 2024’s Rs 37,113 crore, this year’s tally is sharply higher

Why It Matters:

This trend shows that India’s investors have trust in SIPs and mutual fund schemes. “Equity (including hybrid) net sales zoomed to more than Rs 45000 crores in July, 2025. Series of new fund offers and SIP inflows lead to this high number. Domestic investors continue to keep their faith in mutual fund schemes and SIPs. The distribution community continue to educate the investors on long-term benefits of staying invested in mutual funds and use SIPs as an effective medium of equity investing,” said Manish Mehta, national head - sales, marketing & digital Business at Kotak Mahindra AMC.

FROM THE PERIPHERY

Adani Expands MRO Footprint: Adani Defence & Aerospace, in partnership with Prime Aero, will acquire 100% of Indamer Technics Private Limited (ITPL), a Nagpur-based private maintenance, repair and overhaul (MRO) company certified by the Directorate General of Civil Aviation, the Federation of Aviation Administration, and other global regulators. The deal, via their Horizon Aero Solutions JV, adds 15 aircraft bays across 10 hangars to Adani’s portfolio, just months after its Rs 400 crore acquisition of Air Works India, another MRO facility.

Context: For India’s MRO industry, which has struggled with talent drain as skilled engineers move to the Gulf for better pay and work environments, a heavyweight like Adani could bring scale, capital, and credibility. Whether it will translate on ground is yet to be seen.

Projections: The move cements Adani as India’s largest private MRO operator and strengthens ambitions to pull more heavy maintenance work back home from overseas facilities.

Indian Steelmakers File Petition Against China. The Indian Alloy Steel Producers’ Association (ASPA) filed an anti-dumping petition against China with the Directorate General of Trade Remedies, according to a Reuters story. This body represents major players like JSW Steel, India's largest steelmaker, Jindal Steel, Kalyani Steels and Mukand Sumi Special Steel. 

Context: India is the world’s largest producer of crude steel, and has the capacity to make 180-200 lakh metric tonnes of steel per year. But, the ASPA said in its petition filed on July 31 that Chinese dumping of cheap alloy steel in markets like India has increased significantly in the past three years, which hurts local players. 

Pivot: The move follows New Delhi’s April decision to impose a 12% temporary safeguard duty on select steel imports from China. 

Shipping Corporation of India's Big Dreams! State-run Shipping Corp. of India (SCI) plans to buy 26 India-built ships for Rs 19,820 crore ($2.3 billion) in a bid to strengthen the country’s shipbuilding sector. The vessels, totalling 1.18 million gross tonnes, will be delivered in phases, forming part of a larger national plan to acquire 207 ships worth nearly Rs 1.5 trillion, including 112 crude carriers by 2040.

Critical Moment: The Modi government has announced a Rs 25,000 crore shipbuilding fund, proposed licensing reforms, and set targets to raise locally built tanker share from 5% to 7% by 2030 and 70% by 2047. But progress has stalled — industry reports no movement on the fund, minimal consultation, and tax burdens that push Indian ship makers to register abroad.

What's Next? While SCI's plan could attract investment from Japanese and Korean yards, bottlenecks in financing, regulation, and execution risk keep India’s ambitious shipbuilding vision stuck in port.

India Focuses on Holistic Health. Indians now want goal-driven health outcomes (e.g. collagen for skin health, melatonin for better sleep) and are equating inner health with outer beauty, according to marketing and data analytics company Kantar’s recent Health and Wellness ‘India in Search’ report. Kantar analysed over 110 validated Google search topics and used volume and growth in monthly searches to measure their findings.

By the Numbers: Specifically, the report saw a 15% growth in search queries for biotin, collagen, and multivitamins for skin and hair health. Additionally, the report also found a 17% in searches for traditional health systems like ayurveda, homoeopathy and acupuncture. Weight-loss was a concern too, and Indians sought GLP-1 drugs like Ozempic (its search term saw a 216% rise), Zepbound (rose by 943%), and Mounjaro (rose by 94%). As well, there was a 59% increase in the searches for cortisol — that’s colloquially known as the stress hormone.

What This Means Going Forward: More Indians want personalised and functional wellness solutions. The report says that brands that can cater to these consumer needs will have a higher chance of succeeding.

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PODCAST

On Episode 652 of The Core Report, financial journalist Govindraj Ethiraj talks to Viral Desai, Senior Executive Director at Knight Frank as well as Sugandha Sachdev, Founder at SS WealthStreet.

• Markets appear to price in the worst of Trump tariffs as domestic flows stay strong

• A new IT Bill has been passed, with some changes as expected

• At 1 billion square feet, India is now the world’s fourth largest market by area

• Where could gold prices go?

👥 THE TEAM

✍️ Zinal Dedhia, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas