Global Trade’s New Routes

Good Morning. Indian officials are meeting new countrymen every day from Asia to South America to forge new trade deals. Logistics experts believe that India is on a strong roll, but it has fixed its backend too by modernising and digitalising its ports with artificial intelligence (AI) as well as industry-friendly regulations.

In other news, the Indian aviation regulator is taking measures to ensure airlines and aircraft makers see less turbulence up in the air. Meanwhile, the US drug regulator has flagged off issues with a few drugs manufactured by Dr Reddy’s Laboratories and Zydus.

CORE CONVERSATIONS

How India Will Fare In A New World Order With New Trade Partners

By Govindraj Ethiraj

As global trade is thrown off its rails by the US tariff crisis, customers as well as manufacturers are affected. Among the most affected are those in the business of moving goods, like DHL Express. The global CEO of the logistics major John Pearson, called the situation ‘interesting dynamics’ as every country is looking for new partners.

“My phrase is that one country is retreating, 219 are embracing. Those 219 recognise what they had, recognise what they could lose and recognise the value of doing more. I am imagining a bumper sticker with I love global trade,” he said on The Core Report: Weekend Edition.  

He quotes examples like the UKFTA free trade agreement that India has gotten a head start with, and now looking at the European Free Trade Agreement, as it faces a sharp 50% tariff by the US. It’s not just India; most prime ministers are jetting off to far-off lands, talking to governments they haven’t talked to in five or ten years.

A New-Age Digital Environment

As of now, manufacturers in India are riding the tariff situation with multiple strategies. One of them includes pre-ordering bulk-order discounts.

“If you order more, you know, we'll give you a bit of a discount. They're cutting back some of their own costs to mitigate the 50%; taking a bit of a hit on the margin to the US obviously to keep customers there. They are hoping that in October, November, it will go to 25% and it stays at 25%. It's very unlikely this will go beyond January 1,” he added.

India, in particular, is on a strong roll, believes Pearson. Lifesciences, healthcare, electric vehicles (EV) and automotive sectors are very strong. But policy changes have to come in quickly, says Pearson, even as he is happy about the National Logistics Policy. He calls it a ‘force for good’ to make companies consider India as a manufacturing and international distribution base.

“Include increasing digitalisation and AI at container seaports etc. Export and import regulations and policies on duties have to be clear; it has to be more of a digital environment. Can't have packages waiting 10 days for customs clearance and so on and so forth,” Pearson said.

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CORE NUMBER

Rs 1.94 lakh crore

That’s how much the m-cap of 8 out of the top-10 most valued companies increased last week. Among them, Tata Consultancy Services (TCS) was the biggest gainer. 

By the Numbers: 

Meanwhile, Hindustan Unilever (HUL) saw a drop of Rs 3,571.37 crore and Life Insurance Corporation of India saw a drop of Rs 4,648.88 crore. 

FROM THE PERIPHERY

DGCA Seeks A Report From Boeing

India’s aviation regulator, the Directorate General of Civil Aviation (DGCA), sought a comprehensive report from the US aircraft maker Boeing. The report would be on the prevention measures that are to be implemented with respect to the un-commanded Ram Air Turbine (RAT) deployment incident. RAT deploys automatically in case of events like a dual engine failure, total electric or hydraulic failure.

Catch Up Quick: The regulator also asked Air India to reinspect the RAT for stowage on all aircraft whose power conditioning module was replaced in recent times. Pilots body Federation of Indian Pilots (FIP) recently wrote a letter to the Civil Aviation Minister, urging them to ground Air India's entire B787 aircraft fleet.

Fast Facts: Two back-to-back incidents took place involving Air India, in addition to the fatal July air crash which killed over 260 people. In its On October 4, RAT was deployed on its Amritsar-Birmingham flight AI-117, just before the landing. On October 9, AI-154 from Vienna to Delhi, was diverted to Dubai, due to ‘sudden failure of autopilot system, triggering a series of technical malfunctions’.

FDA Flags Indian Drugs

Dr. Reddy’s Laboratories and Zydus Lifesciences have voluntarily recalled certain products in the United States after the US Food and Drug Administration (USFDA) flagged manufacturing issues. 

Catch Up Quick: Dr. Reddy’s pulled 571 vials of a muscle relaxant injection that failed stability tests, while Zydus withdrew over 1,500 boxes of a Hepatitis B drug due to impurity concerns. Both are Class II recalls, meaning they pose low risk of serious harm. 

Break: The FDA also clarified that a toxic cough syrup linked to deaths of children in India has not entered the US supply chains, underscoring that the recalls are unrelated to that incident.

The Rare Earth Ultimatum

China’s Ministry of Commerce has accused the United States of ‘double standards’ after President Donald Trump announced a 100% tariff on Chinese goods, effective November 1. If enforced, the new duty would push the total tariff burden on Chinese exports to 130%.

Context: Trump says the move is retaliation against Beijing’s recently tightened export controls on rare earths. China began restricting shipments of certain rare earth elements and fertilisers in April, a decision that also hit Indian manufacturers. Starting December 1, Beijing will expand the list by five more elements and impose stricter scrutiny of end-use applications, particularly in strategic sectors like defence and semiconductors.

Pivot: In his Truth Social post announcing the tariffs, Trump hinted they could be rolled back if China backs down. “That’s why I made it Nov 1 — we’ll see what happens,” he wrote.

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• Trump reminds everyone he is still a market mover

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