Devil's In The (Trade Deal) Detail

Good Morning. What do the US trade agreements with the European Union and Japan have in common? Both deals are really vague on the specifics and critical details, and are being seen with scepticism. So, when it comes to India, the real importance of the trade deal with the US wouldn't be the timing, but what's in the fine print.

In other news, India’s aviation regulator, the Directorate General of Civil Aviation (DGCA), found many lapses in Air India's audit. Meanwhile, in this week's Build on Blockchain, how blockchain technology can help you get those elusive credit card rewards.

THE TAKE 

India-US Trade Deal May Meet August Deadline, But The Devil’s In The Details

August 1 is upon us.

On this day, the United States is set to announce a series of unilateral trade deals, essentially imposing tariffs of around 15% or higher on most goods coming into America.

The current tariff rate is 10% as opposed to almost nothing in April, and is most likely to settle around 15% for most countries. Or at least that is the consensus view.

Markets, at least Wall Street, seem jubilant. And while veteran fund managers are scratching their heads, retail investors, who clearly control the fate and fortune of many stocks in the market, are being won over quite easily.

The US-EU deal is a classic case where no one seems to be waiting for the critical fine print.

Currently, a 15% baseline tariff on European Union goods is in effect, down from the threatened 30%, in exchange for a range of continental investments in the US and substantial purchases of energy and military equipment, according to Bloomberg.

The report adds Japan sealed a similar deal last week while pushing back on some extravagant Trumpian claims.

It is companies that have to absorb the tariffs, or else customers in the US will most likely pay higher prices in the coming days.

Maybe investors are aware of this, maybe not.

Deals Vague On Details

The US wants India to commit to instantly removing customs duties on most products as soon as the bilateral trade deal takes effect, posing another hurdle to an agreement before August 1, when new US tariffs will kick in, a report in Business Standard says.

“The US has sought from India an aggressive timeline for duty elimination. It wants zero duty on most of its products as soon as the deal comes into force, except for a few tariff lines that can be phased out in a year or two,” the report quotes a government official saying.

Countries usually reduce import duties on sensitive goods over a specified period of time while removing tariffs on non-sensitive items immediately when the agreement comes into force.

For example, in the recently concluded UK trade deal, India committed to phase out tariffs on 90% of goods over 10 years, with 64% of goods to be tariff-free as soon as the free trade agreement becomes operational.

This is also why you should not be celebrating cheap scotch whiskey right away.

Though Indian could do with lower duties on many products, Trump or no Trump.

To return to the US-EU deal is, it is by all accounts, light on specifics and vague on detail. And some voices are already questioning the big numbers touted.

Ditto with Japan, with whom on paper it would appear like a win-win deal, but the mechanics of it are already being viewed with scepticism.

Not When, But What

Whether India and the US have a deal in a few days or not is not the issue.

It's whether the deal will hold out and for how long, and what the deal really means in the long term.

India faces two additional sets of tariff threats, one for its membership in the BRICS union and the second for importing Russian oil.

Will all this get ironed out in the bilateral trade deal that we are on the verge of signing? Maybe, maybe not.

And could more such tariff slabs be threatened, or worse, imposed on countries like India?

It all depends on the geopolitics of the day and the mood of one person.

Get ready for Round II when the empire strikes back.

BUILD ON BLOCKCHAIN

Your Reward Points Aren’t Pointless: They Need Redemption, The Blockchain Way

What?

Most of us don’t really know what’s going on with our credit card reward points. We earn them, vaguely feel good about it, and then forget they exist until they expire.

Around the world, millions of customers are missing out on the full value of their credit or debit card points.

It’s totally counterintuitive that though institutions make loyalty programmes a crucial part of their sales pitch, they pay very little attention to making the redemption process user-friendly.

But things may change soon for good because slowly, banks and credit-card issuers across the globe are changing the way they work and adopting a blockchain-based system to simplify their loyalty programmes.

On July 21, 2025, DBS, Singapore’s largest bank, took a major step in that direction. It launched Programmable Rewards which allows its customers to use smart contract-powered vouchers.

Why It Matters

The new rewards programme, accessible via the DBS Paylah! app, offers a cost-effective way to issue, manage and utilise digital vouchers redeemable at a wide range of merchants.

Smart contract technology allows vouchers to be programmed with specific conditions, such as redemptions at approved merchants or within campaign periods.

One may argue that conventional vouchers work in the same way, but the key advantage here is automation. Reconciliation is far simpler because there’s a shared record of transactions, and settlement can be automated through the conventional payment system.

Where does India stand when it comes to blockchain technology for credit card rewards?

This series is brought to you in partnership with Algorand. 

CORE NUMBER

1.4 million metric tons

That is India’s finished steel imports during April to June 2025, down 28.8% year-on-year, according to provisional government data reviewed by Reuters.

📉 Import breakdown:

• China: Shipments fell 45.8%

• Japan: Shipments dropped 65.2%

• South Korea: Largest exporter to India, but still down 6.5%

📦 Export snapshot:

• Exports: Down 5.1% overall

• Top destination: Belgium, up 40.8%

• Biggest product: Galvanised sheets and coils

🏭 Domestic production:

• Crude steel output: 40.6 million tons (+11.2%)

• Finished steel consumption: 38.3 million tons (+7.9%)

FROM THE PERIPHERY

DGCA Flags Safety Breaches: India’s aviation regulator found 51 safety lapses at Air India in a July audit, including poor pilot training, use of unapproved simulators, and flawed crew rostering, according to a confidential audit report seen by Reuters.

By the Numbers: The airline was flagged for serious breaches, including overdue engine part replacements, flying without emergency checks, and fatigue mismanagement. The DGCA flagged seven “Level I” violations due by July 30, and 44 other issues by August 23. A 787 flight exceeded duty limits by over two hours.

What’s Next? Air India, under Tata since 2022, says it will submit corrective measures. The audit adds pressure as the airline faces ongoing scrutiny following a deadly June crash and mounting passenger complaints.

TCS Freezes Hikes, Widens Cuts. Information Technology (IT) major Tata Consultancy Services (TCS) will pause annual salary hikes and freeze lateral hiring, while asking business heads to submit “release lists” of employees to be let go, Mint and Economic Times reported.

Backdrop: Mint reported that layoffs began in early July, targeting bench staff and those with low work-from-office compliance. Employees aged 24–55 in Bengaluru, London, and New Jersey have been affected.

Implications: TCS aims to complete the 2% workforce cut by year-end, potentially impacting 12,000 roles. Internally, concerns are rising over dividend payouts amid job losses. The company maintains the move is strategic, not profit-driven.

India Exports Highest Ever Smartphones to the US. India overtook China as the largest supplier of smartphones to the US in the April–June 2025 quarter, according to a report by Canalys, a market analysis firm. That’s India’s highest smartphone exports to the US to date.

By the Numbers: The report found that in Q2 2025, 44% of smartphone imports to the US came from India–a steep rise from 13% last year. China’s share dropped from 61% to 25%. Apple is predominantly responsible for this shift, though Samsung and Motorola are also pivoting to India. 

The Twist: But, the catch here is that companies are still manufacturing in China, or Vietnam in the case of Samsung, and later assembling devices in India. That’s in part because yield rates — a marker of manufacturing efficiency — remain higher in China than in India. 

Nayara Turns to Rediff After EU Sanctions. On July 18, the European Union (EU) released a fresh round of sanctions targeting Russia, which also included Nayara Energy, an Indo-Russian refinery. Russian company Rosneft has a 49.1% stake in Nayara Energy. Now, Nayara is seeking software support from Rediff.com, after Microsoft suspended their IT services, according to sources Reuters spoke to. 

Implications: The sources added that Nayara Energy’s employees couldn’t access their Outlook email or their Teams account. 

Outcome: Nayara Energy has also filed a case against Microsoft in the Delhi High Court. 

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