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Good Morning. IndiGo is learning the hard way that its “not enough pilots” ruse cannot outpace public perception. After days of mass flight cancellations and huge public outcry, the airline’s “we’re truly apologetic” defence is looking less like an error, and more like a strategy to dodge the cost of complying with pilot-fatigue norms.

India’s equity indices ended a three-day losing streak on Thursday. The BSE Sensex closed at 84,818.13, gaining 426.86 points, or 0.51%. The NSE Nifty50 closed at 25,898.55, gaining 140.55 points, or 0.55%.

In other news, Mexico’s tariffs are set to hit Indian carmakers. Meanwhile, Prime Minister Narendra Modi spoke to US president Donald Trump, the first time in months, about India-US bilateral ties.

How IndiGo Played Number Games To Justify Non-Compliance

The biggest event in India over the last week has definitely been the chaos in the skies, over Indigo’s massive flight cancellations. These were caused by Indigo’s arrogance that, given its market dominance, it would choose how and when to comply with the Directorate General of Civil Aviation’s new norms on Flight Duty Time Limitation (FTDL) for pilots. These FDTL revisions were notified in January 2024, but its implementation was staggered and postponed to commence in November 2025.

Under the revised norms — calling for reduced pilot workloads that would reduce the risk of stressed pilots causing accidents and endangering passengers — to maintain its existing flight schedule, an airline would have to hire several more pilots. Pilots had been mandated 36 hours of continuous rest in a week, that now stands revised to 48 hours of continuous rest. 

Now, a pilot is restricted to just two stretches of consecutive night duty, whereas earlier norms allowed greater flexibility. The night has become a bit longer for pilots as well, stretching from midnight to 6 am, while, earlier, night meant the time from midnight to 5 am. Pilots were earlier permitted to make up to six night landings during a single flight duty period. Now, only two night landings are permitted per flight duty period.

Just the redefinition of the night and the capping of permitted night landings at two per flight duty period necessitate a jump in the number of pilots required. 

A Good Way To Mess Up

Other airlines hired more pilots. Indigo expanded services and hired more pilots, but nowhere on the scale required to comply with the new norms. It says it messed up.

Nice way to mess up, when you avoid incurring costs on new pilot recruits, even as your rivals in the business add to their costs. The government has given IndiGo time till February to comply with the new norms, meaning two more months of savings and accumulation of reserves vis-à-vis rivals in the business.

Indigo accounts for 65% of the aviation market. If their flights get disrupted, the nation comes to a standstill. IndiGo was probably banking on this potential when it decided to hide behind elementary innumeracy to justify non-compliance. The government should levy a fine that takes away the entirety of the savings the airline has made on pilot salaries by defying the regulation.

If the airline baulks, the Competition Commission of India should break up the company.

This week also saw AI investments, another US Fed rate cut and US president Trump diverting attention from America’s domestic problems. 

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Mexico Jolts Automakers

India’s auto sector faces a setback after Mexico approved a sharp tariff hike, raising import duties on passenger vehicles from 20% to 50% for countries without trade agreements, including India. The move, effective next year, threatens nearly $1 billion in annual exports from Volkswagen, Hyundai, Nissan and Maruti Suzuki, Reuters reported.

Setting: Industry body Society of Indian Automobile Manufacturers (SIAM) had urged the government to intervene, warning the increase would hurt exports and disrupt strategies built around Mexico, India’s third-largest car export market.

Catch Up Quick: Volkswagen is the most exposed, accounting for nearly half of shipments. Automakers said India mainly exports compact cars under one-litre engines that don’t compete with Mexico’s high-end output, but the tariff shock may force a strategic rethink.

Microsoft Bullish On India

Microsoft has announced artificial intelligence (AI) partnerships with India’s largest IT services firms TCS, Infosys, Wipro and Cognizant, with each committing to deploy more than 50,000 Microsoft Copilot (the company’s AI assistant) licences, totalling over 200,000 AI deployments. 

Backdrop: The move follows Microsoft’s pledge of $17.5 billion to build cloud and AI infrastructure in India by 2029.

The Scoop: As well, at the ‘Building India’s AI Frontier’ event in Bengaluru, CEO Satya Nadella said artificial intelligence now requires a new software development lifecycle because coding, testing and deployment increasingly rely on AI-generated outputs. He urged developers to embrace a mindset shift and focus on supervising and refining AI-driven workflows.

India-US Dealmaking

India’s Chief Economic Advisor V Anantha Nageswaran said on Thursday that India and the US have resolved most of their outstanding trade differences, with a formal agreement possible by March 2026, Business Standard reported. He also said India’s FY27 growth outlook remains strong and the rupee is “undervalued relative to fundamentals.” Later in the day, Prime Minister Modi said he had a warm and engaging conversation with US president Trump and reviewed “the progress in our bilateral relations”.

Flashpoint: His remarks come as both sides push to reduce trade barriers, with US officials describing India’s latest proposals as the most forward-leaning yet. According to Business Standard, Commerce Minister Piyush Goyal confirmed talks are progressing, as a US delegation visits New Delhi for negotiations.

Backstory: Nageswaran's comments come as Commerce Secretary Rajesh Agrawal met US Deputy Trade Representative Rick Switzer in New Delhi to review ties and push negotiations on a Bilateral Trade Agreement. Washington continues to demand greater market access, especially for agricultural goods, even as US officials say India’s latest proposals are among the most forward-leaning they have seen.

Pune Gets JPMorgan

JPMorgan Chase & Co is set to open a new branch in India after nearly a decade, signalling the Wall Street lender’s growing focus on one of the world’s fastest-expanding economies, Bloomberg reported.

Context: The Reserve Bank of India has granted in-principle approval for the bank to establish its fourth branch, in Pune, to serve corporate clients with products ranging from transaction banking to term lending.

Setup: Foreign banks are stepping up expansion in India as strong economic growth, rising credit demand and a stable macro environment make the market increasingly attractive. JPMorgan last received branch approvals in 2016 and has since broadened its commercial banking operations and opened a new campus.

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

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