Glittering GDP, Gritty Reality

JANUS VIEW

India’s Growth Of Economic Output Isn’t A Happy Story After All

While Indians have reason to be cheered, at least at first glance, by the higher-than-expected growth of economic output in the January to March quarter of 2025, the world at large continues to be tumbled by the waves of uncertainty radiating from the White House under its current occupant.

President Trump has successfully obtained a stay on the International Trade Court’s verdict against his “Liberation Day” or reciprocal tariffs.

However, he has asked all countries to come up with their best offer within a short negotiating window.

Trump has doubled the import duties on steel and aluminium and imposed a travel ban on 12 nations and a partial travel ban on seven others. India does not figure in these lists.

Indian students hoping to study in US universities are affected by the halt to visa application processing announced by the US administration, in order to facilitate social media vetting of the applicants.

Rare Earth, Hard Choices

Automobile production in India is impacted by the need to apply for and obtain licences to import rare earth magnets from China. These magnets go into the assorted motors that operate the braking system, assist steering, wind windows up or down, or perform other functions inside the car.

There are two possible solutions to this dependence on China for vital magnets and rare earths used in electronics and other bits of modern manufacturing.

Find alternate sources. Rare earths are not all that rare, in terms of supply. But refining the needed metals out of the mineral is a complex process. It would have to be mastered.

Another solution, particularly in the case of motors, is to shed dependence on rare earth magnets that are vital for motors driven by magnetic induction.

GDP Reality

The reason why the initial enthusiasm over better-than-expected GDP growth numbers for the January-March quarter soon peters out is that the growth of the gross value added is much lower than the GDP growth.

GDP is the sum of gross value added and product/service taxes net of subsidies. GDP growth at 7.4% was much higher than GVA growth, at 6.8%, because of the higher incidence of net taxes.

Is it such a happy story after all?

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CORE NUMBER

Rs 26.20

That’s the cost of a home-cooked vegetarian thali in May 2025, according to global analytics firm CRISIL—down 5.8% from Rs 27.8 in May 2024. Looking ahead, CRISIL expects vegetable prices to rise due to seasonal factors, while wheat and pulse prices may ease on strong domestic output. Rice prices, however, could climb, driven by a projected 20–25% export surge from global demand.

📉 What drove the annual drop:

• Tomato prices fell ~29% YoY

• Onion and potato prices dropped ~15% and ~16% respectively

• However, a 19% spike in vegetable oil and a 6% rise in Liquefied petroleum gas (LPG) prices limited further relief.

🍗 Non-veg thali update:

• Fell to Rs 52.6, down 6% YoY from Rs 55.9

• Broiler prices which consists half the thali’s cost fell 6% YoY due to oversupply and bird flu

• Also declined 4% MoM, keeping the non-veg thali cheaper in May

Make In India Rafale? Dassault Aviation and Tata Advanced Systems have signed four Production Transfer Agreements to locally manufacture the main body section of the Rafale fighter jets, marking the first time these will be built outside France. Tata will establish a high-precision facility in Hyderabad to produce key structural components, with production set to begin by FY2028 and up to two complete fuselages delivered monthly. The move strengthens India’s aerospace capabilities and boosts its role in global supply chains.

Rare Earth Supply Push. India is drafting a major policy to build domestic rare earth magnet stockpiles and manufacturing, offering fiscal incentives to reduce its reliance on China, which controls 90% of global magnet processing. China’s recent export curbs triggered production halts worldwide, including Suzuki in Japan, and now threaten India’s auto industry. The government may fund the price gap between Indian-made and Chinese magnets to boost demand. With global EV investments at risk, India is fast-tracking efforts exploring tariff cuts for machinery needed to build local capacity.

Trump Reinstates Travel Ban. US President Donald Trump reinstated a controversial travel ban against citizens of 12 countries, including Afghanistan, Iran and Haiti. His current travel ban is reminiscent of one that US courts struck down during his last presidency. This time, Trump also placed travel restrictions on nationals of seven countries including Cuba and Venezuela, in a bid to "protect Americans from dangerous foreign actors." Trump’s announcement follows an attack against a pro-Israel march by an Egyptian national who had overstayed his visa. This action is part of the Trump’s presidency’s broader slew of actions targeting foreign nationals, including deportations of undocumented immigrants and a crackdown on international students.

Flipkart Goes NBFC Route. Flipkart has joined the growing list of Indian consumer internet startups—like Slice, Jupiter, and Cred—that now hold non-banking financial company (NBFC) licences, allowing them to lend directly instead of through bank tie-ups. While its rival Amazon lends via Capital Float, Flipkart can offer loans through its app and e-commerce platform. This move comes as the company, last valued at $37 billion, prepares to shift its holding from Singapore to India—paving the way for a long-anticipated IPO. A full-stack fintech future is clearly in sight for Flipkart.

THE SIGNAL DAILY

How Do You Break Free From Dark Patterns?

Ever found yourself in this position – you want to read something behind a paywall, so you begrudgingly sign up for a subscription. It’s so easy peasy. But when you try to cancel, it’s as if the site is actively working against you?

That’s not a coincidence, but rather, an intentional design strategy, called a ‘dark pattern’. Despite the fact that they’re illegal, they remain everywhere on the internet. But now, you can fight back.

In the latest episode of The Signal Daily, we’ll learn about dark patterns. What are they and what laws exist in India to protect consumers? What can you do if you spot a dark pattern? 

The Core produces The Signal Daily. Follow us wherever you get your favourite podcasts. To check out the rest of our work go to www.thecore.in.

👥 THE TEAM

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