Ship Insurance Not In Shipshape

Good Morning. The Indian peninsula has big maritime ambitions. Its policies and plans are also at a grand, global scale. Like many countries abroad, shipowners were allowed to set up their own insurance fund. A year after finance minister Nirmala Sitharaman’s suggestion, it’s still in the discussion and debate stage, and even its stakeholders lack operational clarity.

In other news, the Indian government is still thinking over Russian oil imports amidst penalty threats. Meanwhile, tech experts warn that artificial intelligence (AI) could take white collar jobs with the click of a button.

DECODE THE NEWS

India’s Plan For A Shipowners’ Insurance Club Is Stuck At Sea, Here’s Why 

What?

Over a year ago, finance minister Nirmala Sitharaman floated the idea of India setting up its own Protection and Indemnity (P&I) club — essentially, an insurance fund for shipowners, created and owned by shipowners themselves.

It sounded like a logical next step for a country with maritime ambitions. Nations like the UK, China, Japan, and Iran already operate their own P&I clubs. Why not India?

On October 19, 2023, speaking at the Global Maritime India Summit in Mumbai, Sitharaman had said: “A need has been felt to have a full‑fledged India-owned and India‑based P&I entity… It would reduce India’s vulnerability to international sanctions and pressures to provide greater strategic flexibility in shipping operations.”

That statement marked the first official push towards building a domestic P&I ecosystem — an idea that received initial nods of approval from policymakers and industry veterans alike.

Why It Matters

But fast forward to today, very little has moved on the ground.

Not only is there no roadmap, but even core stakeholders — India’s Directorate General of Shipping and leading shipowners — don’t seem to have a clear understanding of how such a club would actually function.

“There have been some initial discussions and recommendations sent to the government. But operational clarity? That's still missing,” Anil Devli, CEO of the INSA, told The Core.

What is a P&I Club and where is India lacking? Read the full story below to know.

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CORE NUMBER

Rs 1.35 lakh crore

That’s how much market cap seven of India’s top 10 companies shed last week, combined. Tech major TCS took the biggest hit of them all, as its valuation nosedived by ₹47,487 crore. Apart from tech, BFSI and telecom blue chips slipped into the red last week; as benchmark index BSE fell by 1% or 863 points. The markets were shaken by Trump’s tariffs and threats of a penalty.

🌳 Company-wise breakdown of market cap erosion:

• Bharti Airtel: Rs 29,936 crore

• Bajaj Finance: Rs 22,806 crore

• Infosys: Rs 18,694 crore

• State Bank of India: Rs 11,584 crore

• ICICI Bank: Rs 3,608 crore

• LIC: Rs 1,233 crore

But, India’s top two most valued companies — RIL and HDFC saw their valuations rise during the week. HUL too gained sharply on brokerage upgrades after it delivered stellar Q1 earnings, beating estimates.

FROM THE PERIPHERY

No Decision Yet On Russian Imports. Even as the word on the street says Indian refiners are keeping Russian oil shipments at bay, Bloomberg reports that no such instruction has been given by the government. Two sources told the wire that no decision has been taken on stopping Russian imports, and oil refiners are allowed to buy from their preferred sources, for now. 

Next Steps: The government, however, is known to have asked state-owned refiners to prepare plans for buying non-Russian crude last week. They were asked to prepare an outline on where and how much they can source extra crude from, if the need were to arise.  

Impact: Analysts believe that India’s import bill could rise by $9-11 billion annually, if it moves away from Russian crude. India would have to play a delicate balance as sources say that there could be further negotiations between US and India on the tariff front. On Saturday, Prime Minister Narendra Modi made a statement that “India must remain alert to its own economic priorities”, as he made a strong ‘Swadeshi’ appeal.

Vinfast EV Enters Chennai. Vietnam’s top electric vehicle (EV) maker Vinfast has opened its second showroom in Chennai, a week after inaugurating its first showroom in Surat. The Chennai facility is the largest of the 35 stores it plans to open in India this year. It has already tied up with various companies like RoadGrid, myTVS, and Global Assure for a charging network and after-sales services.

Setup: The showroom will showcase premium electric SUVs like VF6 and VF7. The company opened the bookings for these SUVs on July 15. The EV maker will assemble the EVs at its own factory in Thoothukudi, Tamil Nadu.

Backdrop: International EV makers are making rapid strides in the Indian market. US major Tesla too said that it plans to open its first Indian charging station in Mumbai, after making an official entry in July.

Two Jobs Gone In One Prompt. In a perplexing statement, Perplexity AI CEO Arvind Srinivas said that his new AI browser Comet can replace two essential jobs: recruiters and assistants. He claims that one Comet prompt can do one week’s worth of work of a recruiter. It can generate candidate lists, extract contact information, and send personalised emails to potential job seekers, Srinivas told The Verge’s Decoder podcast.

The Shift: Srinivas believes that users could pay as much as $2,000 per prompt if it can generate business value. Comet can go beyond recruitment to play the role of several executive assistants, carrying out tasks like email management, calendar coordination, meeting preparation etc.

What This Means Going Forward: India recently tasted a hint of AI-led job losses with TCS firing 12,000 middle and senior level employees. While no other Indian tech companies followed suit yet, global CEOs like Anthropic’s Dario Amodei and Ford’s Jim Farley predict large scale losses in white collar jobs in the next few years.

Prices of 37 Essential Drugs Slashed: The government has set retail prices of 37 essential drugs that include fever medication paracetamol, cholesterol drug Atorvastatin and antibiotic amoxycillin. A range of anti-inflammatory medicines, anti-diabetics, as well as oral suspensions for children and vitamin supplements, were included in the list.

Fast Facts: Price ceilings are used by the National Pharmaceutical Pricing Authority (NPPA) for medicines used to treat chronic illnesses. They ensure availability as well as affordability of essential medicines across the country.

Next Steps: As per NPPA, the manufacturers must release the revised price lists through the Integrated Pharmaceutical Database Management System (IPDMS). They also have to forward them to NPPA and state drug controllers. Retailers and dealers must display new prices prominently.

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PODCAST

On Episode 645 of The Core Report, financial journalist Govindraj Ethiraj talks to Indrani Bagchi, Chief Executive Officer, Ananta Centre as well as Shankkar Aiyar, veteran economic journalist, columnist and author.

• Markets continue to reel from FII selling and weak cues.

• Rising gold demand suggests prices will be stable to high in coming months.

• India will continue to buy Russian oil, for now.

• Where have India-US relations gone so wrong? with Indrani Bagchi.

• India must fix its domestic economy before aspiring for strategic autonomy with Shankkar Aiyar.

👥 THE TEAM

✍️ Zinal Dedhia, Katya Naidu, Kudrat Wadhwa | ✂️ Rohini Chatterji | 🎧 Joshua Thomas