New Rules, Old Problems

Good Morning. The Air India crash report released on Saturday perhaps gave rise to more questions than it answered. As more airlines worldwide rush to check fuel switches on Boeing 787s, a few weeks ago, India's aviation watchdog, the Directorate General of Civil Aviation (DGCA), came up with a new set of rules to overhaul aircraft safety. But it's unlikely to solve the implementation problem.

In other news, Elon Musk’s Tesla opens doors in Mumbai (finally). Meanwhile, in this week's Build On Blockchain — tokenisation could bring credibility into the carbon credit market.

DECODE THE NEWS

DGCA Initiates Air Safety Overhaul, But Will Old Execution Gaps Remain?

What?

Days after the devastating crash of Air India Flight AI-171 in Ahmedabad that killed 271 people — including 241 onboard and 30 on the ground — the Ministry of Civil Aviation, along with the Airports Authority of India (AAI) and Directorate General of Civil Aviation (DGCA), announced a “comprehensive national civil aviation safety plan.”

Promising sweeping changes to the industry’s standard operating procedures (SOPs), the new safety plan is supposedly an overhaul of the way India intends to regulate, inspect, and investigate aviation operations.

According to a senior DGCA official, approval has been granted to fast-track the recruitment and deployment of additional inspectors and investigators to bolster oversight amid India's rapidly growing aircraft fleet.

“These measures are aligned with India’s State Safety Programme (SSP) and ICAO’s Global Aviation Safety Plan,” the official said on condition of anonymity. The International Civil Aviation Organisation (ICAO) is a United Nations agency that sets global standards and regulations for aviation safety, security, efficiency, and environmental protection.

Why?

While the new safety plan aims to fix long-standing gaps in oversight and bring India’s aviation safety standards in line with global norms, industry experts remain sceptical. They point to decades of systemic neglect and poor enforcement that just another new set of rules will not solve.

The civil aviation safety plan — also referred to as India’s National Aviation Safety Plan (NASP) — was first officially presented to ICAO in 2018, when DGCA launched its inaugural NASP covering the 2018–2022 period, aligned with ICAO’s Global Aviation Safety Plan (GASP).

The plan was only partially implemented. In the absence of a fully risk-based framework, India continued relying on traditional regulatory tools — Civil Aviation Requirements (CARs), routine inspections, AAIB-led investigations, and post-incident fixes, which lacked the integrated, proactive approach that NASP and SSP are designed to deliver.

But after years of half-measures and delayed reforms, can this new plan truly reset the clock on India’s aviation safety culture?

BUILD ON BLOCKCHAIN

How Credible Is Your Carbon Credit? Blockchain Can Call The Bluff

What?

The carbon-credit market came into being with a sole mission to save the planet.

But if you go beyond its grandiose mission statements, you are likely to find that this market has become a murky space. It’s difficult to verify what’s happening on the ground, and easy to manipulate crucial numbers.

Blockchain can streamline this opaque and fragmented carbon-credit market by tokenising each credit and assigning it a unique digital identity.

A major step in that direction has been taken by JPMorgan Chase & Co, which is developing a new service to tokenise carbon credits and is partnering with carbon companies for an initial trial, said Bloomberg in a report on July 2.

For the uninitiated, one carbon credit equals one tonne of carbon dioxide emissions, and the buyer of a credit is allowed to emit that much CO2.

A credit is typically generated from efforts made towards conserving forestry or supporting renewable energy projects.

A tokenised credit would be a digital version of a carbon offset issued on a blockchain.

Why Does It Matter?

The push to tokenise carbon credits isn’t just a hi-fi tech pursuit. It’s about fixing a system that’s quietly falling apart.

Tokenising credits makes every transaction transparent and traceable: who issued it, who bought it, and who used it.

In short, no more shady middlemen, no more invisible forests. Just simple, verifiable data on an open book.

Where does India stand in all of this?

This series is brought to you in partnership with Algorand. 

MESSAGE FROM OUR SPONSOR

Start learning AI in 2025

Everyone talks about AI, but no one has the time to learn it. So, we found the easiest way to learn AI in as little time as possible: The Rundown AI.

It's a free AI newsletter that keeps you up-to-date on the latest AI news, and teaches you how to apply it in just 5 minutes a day.

Plus, complete the quiz after signing up and they’ll recommend the best AI tools, guides, and courses – tailored to your needs.

Sign up to start learning.

CORE NUMBER

1 million

That’s the total number of passenger vehicles sold in India during Q1 of FY2025-26, according to data released by the Society of Indian Automobile Manufacturers (SIAM).

💡 The broader snapshot:
Sales crossed the 1 million mark for the second consecutive Q1, though they slipped 1.4% year-on-year amid weak demand in the latter part of the quarter.

🛵 Two-wheeler dip:
Two-wheeler sales fell 6.2% to 4.67 million units, mainly due to inventory corrections.

🚛 Commercial vehicle trend:
Commercial vehicle sales declined slightly by 0.6% to 2.23 lakh units, while three-wheelers posted their highest-ever Q1 sales at 1.65 lakh units.

FROM THE PERIPHERY

Tesla Rolls Into Mumbai: Electric Vehicle (EV) maker Tesla has opened its first showroom in Mumbai, launching its rear-wheel drive (RWD) and long-range RWD models starting at Rs 59.89 lakh, with on-road prices hitting Rs 61.07 lakh, The Economic Times reports.

Backdrop: High import duties of up to 100% remain a major barrier for Tesla, making its cars almost twice as costly in India when compared to US prices. A potential India-US trade deal could ease tariffs, but geopolitical uncertainties loom large.

The Twist: Tesla faces stiff competition from other EV makers. Vietnamese EV maker VinFast Auto announced bookings for its premium EV SUVs VF 7 and VF 6, just as Tesla opened shop. VinFast aims to start deliveries after inaugurating its Tamil Nadu plant in August.

India Tells China to Avoid Trade Curbs. For the first time since 2020, India’s Foreign Minister Subrahmanyam Jaishankar is visiting China. A Reuters report says that Jaishankar told his Chinese counterpart that to normalise their relationship, the two must resolve their border dispute, reduce troops and avoid restricting trade. 

How We Got Here: China cut down on its rare earth metal and magnet exports in early April, in response to the US’s tariffs, a move that’s had a major impact on key Indian industries. In June, China halted specialty fertiliser exports, which threatens to choke the Indian agricultural pipeline. 

What This Means Going Forward: The Chinese foreign minister responded positively, per Reuters. In the meantime, India has also been seeking alternative sources of rare earth metals and fertilisers, in addition to building domestic capacity.

Trade Deficit Widens. India's cumulative merchandise trade deficit for April-June 2025 widened to $67.26 billion, a rise from $62.10 billion in the same period of 2024. Merchandise exports grew by 1.92% to $112.17 billion, while imports increased by 4.22% to $179.44 billion. Services exports surged 10.93% to $98.13 billion, yielding a robust surplus of $ 46.95 billion. Overall, total exports (goods + services) for April-June 2025 grew nearly 5.94% to $210.31 billion, the Ministry of Commerce reported.

Why It Matters: While the widening merchandise trade deficit signals a challenge in goods trade, the strong performance of services exports provides a significant offset. Growth in sectors like electronic goods (up 46.93%) and non-petroleum exports (up 5.97%) indicates positive underlying trends in India's export capabilities.

What’s Next? As India eyes export-led growth, sustaining momentum in electronics and tapping newer markets like Kenya, Brazil and the United States of America will be key to balancing trade.

Urban Jobs Under Pressure. India’s overall unemployment rate held steady at 5.6% in June compared to the previous month, as rural joblessness eased even as urban employment conditions tightened, Reuters reported.

By the Numbers: Rural unemployment among those 15 years and above dropped to 4.9% from 5.1%, while urban unemployment rose to 7.1% from 6.9% in May. Among youth aged 15–29, joblessness jumped to 18.8% in urban areas in June and edged up to 13.8% in rural regions in May.

What This Means Going Forward: The data reveals a deepening employment crisis for young Indians, especially in cities. As the government expands monthly labour reporting, the challenge will be turning granular insights into meaningful job creation.

PODCAST

On Episode 634 of The Core Report, financial journalist Govindraj Ethiraj talks to Naushad Forbes, Chancellor of Nayanta University and Co-Chairperson of Forbes Marshall. We also feature an excerpt from our extended discussion with Algorand’s Technical Lead for India, Nikhil Varma and Anil Kakani, VP and India Head at the Algorand Foundation in our ongoing “Build On Blockchain” Series.

• Markets snap four day losing streak

• A Chinese invasion no one saw happen.

• Getting overseas student visas is tough but more options are opening up in India. 

• State owned telecom company defaults on loans with total debt over Rs 34,000 crore

• Build on Blockchain

👥 THE TEAM

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