India’s Big Trade Test

DECODE THE NEWS

Tariff Wars A Great Opportunity For India’s Exporters, But Can They Match China’s Scale? 

What?

As shelves at US retailers Walmart and Target seem to be under the threat of running dry, many interesting buy-sell trends are emerging amidst the tariff war. Chinese sellers seem to be tapping their Indian competitors to help supply to their US retailers. A few Indian companies, as well trade bodies, are reporting such deals under negotiation at the Canton Fair in Guangzhou. 

“A lot of Chinese manufacturers, who were exporting to the US so far, are totally outpriced in the market with a 245% duty. They are approaching Indian exporters to supply to their buyer as a kind of goodwill gesture so that they can retain the buyer when the tariff is off,” Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO), told The Core. 

Why? 

Chinese sellers who do not want to lose their buyers are asking Indian manufacturers to sell desi-made products to their buyers — to tide over the tariff uncertainty. Chinese companies, as well as China-based US companies are known to have approached many Indian manufacturers to fill the gap until tariff uncertainty rests. 

Apart from retaining their customers, Chinese suppliers gain commission from such deals. While a few Chinese companies are doing it for commissions of around 3-5%, others are doing it purely for goodwill with their clients. Since China and India compete with each other for similar products, the latter is the obvious choice to send some of their business to. 

What Next? 

Some of these deals, in the first phase, were across sectors like hand tools, home appliances, and electronics. Later on, it could extend to handicrafts, textiles, footwear, furniture and toys as well, hopes the FIEO. 

“This tariff wall has given us, I think, a wonderful opportunity. There were some sectors where we were not competing also. We will be able to take some markets because once you start exporting to a customer and customers start liking your product, customers may not go back to the earlier supplier,” said Sahai who has attended the Canton Fair. 

But can India match up to China’s manufacturing and exporting scale? 

BUILD ON BLOCKCHAIN

Blockchain: Adopt Slowly, Scale Smartly

Businesses in India have had to navigate several changes in the past few years because of some systemic changes and digital revolutions. First came GST, then UPI, and currently, the adoption of artificial intelligence (AI) is in full swing.

Now, blockchain is emerging as the next big thing because it has the potential to dramatically change the way companies work by providing enhanced security and transparency, reducing overheads, and adding a layer of decentralised trust.

Its benefits are indeed significant. 

The Perils Of Change

Every structural change or adoption of a new technology usually brings some short-term chaos in its wake. Blockchain isn’t an exception. Hence, if the thought of incorporating it in your business is making you nervous, you’re going to like what we have to say:

You do not need to overhaul your entire setup or hire an army of techies in black hoodies sipping matcha to run the day-to-day operations on blockchain. And second, blockchain is not here to disrupt your enterprise 

Why does blockchain matter and how can your business adopt it? 

This series is brought to you in partnership with Algorand. 

—⚠️ Derivatives Debacle. IndusInd Bank managing director and CEO Sumant Kathpalia resigned from his position on Tuesday as the bank grappled with a crisis because of accounting lapses in the derivatives segment, costing the bank around Rs 1,960 crore in FY2025. Kathpalia’s resignation comes a day after Arun Khurana, deputy chief executive officer at the bank resigned on Monday. “I undertake moral responsibility, given the various acts of commission/omission that have been brought to my notice,” Kathpalia’s said in a letter to the bank’s board of directors.

—💹 Turbulent Times. Amid the ongoing tariff wars, the latest monthly economic report from the Department of Economic Affairs said that while India's growth outlook appears positive, risks from global turmoil can't be discounted. The report released on Tuesday said, "Uncertainties stemming from global developments constitute a key risk for the growth outlook for FY26. More than trade, the perception of prolonged uncertainty may cause the private sector to put its capital formation plans on hold." This comes as the International Monetary Fund and World Bank have reduced India's growth outlook for FY2026.

—♻️ Adani Green Claims Clean Chit. An independent review of the corruption charges against the Adani Group did not find any irregularities, the company said on Monday. In November 2024, US authorities indicted Gautam Adani, his nephew and executive director Sagar Adani and managing director Vneet S Jaain, accusing them of paying bribes to secure Indian power supply contracts and misleading US investors. The Securities and Exchange Commission (SEC) in the US asked India for help in its investigation in February, but said they haven’t received a response yet. Despite the ongoing investigation against him, the Adani Group reinstated Mr. Jaain as the managing director of Adani Green for another five years, effective July 10th. 

—🛢️ Oil Diplomacy. Indian refiners are ramping up US oil purchases ahead of trade talks between the two nations next month. According to a Business Line report, about 11.2 million barrels of US crude are expected to arrive in India in June, the highest since last August. Due to lower demand from Singapore and China, weaker West Texas Intermediate (WTI) prices are driving the trend. Analysts say Asian buyers may also be using WTI imports as leverage in tariff negotiations. Indian Oil and Bharat Petroleum have bought at least 6 million barrels for June, with more purchases underway. The increased US imports are displacing West African supplies.

—💥 Trade War Hits China. Up to 16 million jobs in China could be at risk due to escalating US-China trade tensions, Goldman Sachs warned in a report cited by Business Standard. Manufacturing, retail, and wholesale sectors are especially vulnerable, with key coastal provinces like Guangdong and Shanghai expected to bear the brunt. US tariffs on Chinese goods have surged to 145–245%, while China retaliated with 125% tariffs. Beijing has promised targeted support for specific industries and regions hit by the tariffs, but Goldman and S&P Global both warned of lasting strain on China's economy.

NASSCOM CONVERSATIONS

DBS Bank's CEO Piyush Gupta On Using Technology To Police Technology

In today’s digital age, a bank doesn’t only have to function as a bank but also as a technology company that stores data of millions of its customers. Piyush Gupta, CEO of DBS Bank, said they were using an array of technologies to protect customer data and to earn customer trust at a time when digital scams are not only increasing, but improving by the day. 

“So, using AI, micro-segmentation, data, this thing, circumstantialization, use all kinds of technologies and techniques to create customer trust. But on top of that is this whole new world with scams and frauds. I mean, people are constantly… And now with AI, deepfakes. So, we're constantly trying to figure out how do you use technology to police technology. You can't do it by human beings alone,” Gupta said on the Nasscom Show. 

But the bank is not only using technology to protect its customers, but also to get to know them better. 

“With AI, they (customers) are no longer faceless. You can start dealing with a customer, a segment of one, in a relationship way. The amount we actually know about customers is massive. I have unbelievable amounts of data…  for example, the high degree of accuracy, what restaurant you're likely to go to in the next month, because the data can tell you that. It shows me what you like,” Gupta said. 

What are DBS Bank’s specific plans for India? “We'd like to be an embedded local bank in India,” said Gupta. 

PODCAST

On Episode 569 of The Core Report, financial journalist Govindraj Ethiraj talks to Anindya Banerjee, Head of Research for Forex and interest rates at Kotak Securities as well as Pushan Sharma, Director-Research at Crisil Limited.

• The markets rise on positive undertone but struggle against border tensions

• The rupee swings wildly hits calendar high even as value of forex reserves jumps

• Build on Blockchain

• India Inc revenue up around 5% for over 400 companies studied by Crisil Intelligence, 1/3rd of companies do well

• US braces for supply shocks as shop shelves could start running empty in weeks now

• China announces more nuclear power generation capacity

👥 THE TEAM

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