Trump’s Prize, India’s Fights

Good Morning. US president Donald Trump wants a Nobel Prize for brokering a “peace” deal that strips Palestinians of leverage. Meanwhile, the Indian cricket team, fresh off a win, chose not to accept a trophy from Asian Cricket Council (ACC) chief Mohsin Naqvi, who is also the chief of the Pakistan Cricket Board. Both instances involved mistaking theatrics for strategy.

Indian equity indexes snapped their losing streak, boosted by India's central bank, the Reserve Bank of India (the RBI), which announced rules to ease lending to capital markets. The BSE Sensex closed at 80,983.21, up 715.7 points or 0.9%, while the Nifty50 closed at 24,836.3, rising 225.2 points or 0.92%.

In other news, India saw the highest foreign portfolio investor (FPI) sales since 2022. Meanwhile, India’s manufacturing sector sees slower growth.

Editor’s Note: At The Core, we extend our warmest wishes for a joyous and prosperous Dussehra to you. In the spirit of this festive season and to give our team a well-deserved break, we will not be publishing an edition of the newsletter tomorrow. Our daily newsletter will resume as scheduled on Monday. Do look out for The Signal Daily newsletter on Saturday, and The Weekend Playlist on Sunday.

Trump Demands A Nobel, India Turns Cricket Into A Diplomatic Snub: The Week That Was

An end to the Gaza war seems in sight. President Trump of the US and prime minister Netanyahu of Israel have offered Palestinians a ceasefire deal that offers to end the fighting in return for all the hostages and complete disarming of Hamas, with no guarantees of a Palestinian state or non-aggression on Israel’s part.

Trump has given Palestinians an ultimatum to accept the deal or face the full wrath of Israel, with complete US backing. Trump has also issued an ultimatum to the Nobel committee that decides on the Peace prize, explaining that if this deal, which, in Trump’s words, puts an end to thousands of years of fighting between the two sides, does not get the prize, that would amount to an insult to the people of the United States.

The reference to thousands of years of conflict between Jews and Palestinians is, perhaps, not totally surprising in a man of Trump’s familiarity with history. Goliath, whom the future King David killed with a stone from a sling, was a Philistine. It is easy to confuse Philistine with Palestinian. The Philistines, it appears, probably came from the Aegean and were referred to as the sea people. The nomenclature of Palestine did not exist in Biblical times.

India’s Behaviour: A Mistake?

Elsewhere, India won the Asia Cup for T20 cricket, defeating Pakistan in a thrilling final. The Indian team captain refused to shake hands with his Pakistani counterpart and refused to accept the trophy from a Pakistani minister.

This divided opinion sharply in the country, many focusing on the game of cricket and the spirit and player conduct appropriate to the tradition of the game, while others chose to see the match as an extension of hostility between the two states, and endorsed the rejection of civility as the only patriotic option.

Suppose India had lost the match. Would that have meant that India as a nation had lost to Pakistan morally, in combat or geopolitical competition? If Pakistan as a nation is beneath India’s civilised engagement, why play that country’s team in the first place?

But this is not the only reason why boorish behaviour towards Pakistani players and officials is a mistake. Pakistan as a neighbour is a geographical compulsion that cannot be wished away. India’s aim should be to make this coexistence minimally harmful, if not maximally beneficial.

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CORE NUMBER

$2.7 billion

That’s how much foreign investors pulled out of Indian stocks in September 2025, according to data published by the National Securities Depository Limited. This year, net Foreign Portfolio Investment (FPI) outflows amount to $17.6 billion — the highest since 2022.

In 2022, FPIs pulled out because of the Russia-Ukraine war, global interest rate hikes and an increasing US dollar. But, inflows started back up after June 2022.

Here’s a breakdown of inflows and outflows in Nifty50:

• IT: Net outflow of Rs 638 billion

• Power: Net outflow of Rs 215.3 billion

• Consumer durables: Net outflow of Rs 168.1 billion

• FMCG: Net outflow of Rs 167 billion

• Financials: Net outflow of Rs 138.4 billion

• Telecom: Net inflow of Rs 324.2 billion

• Services: Net inflow of Rs 133.4 billion

Analysts say the reasons for foreign investment leaving are steep US tariffs of 50% on Indian exports and the recent H1-B visa hike. But they’re hopeful that the recent GST cuts could reverse the trend.

FROM THE PERIPHERY

Shutdown Stalemate

The US government shut down on Wednesday as lawmakers failed to pass a funding deal, suspending many federal operations and furloughing about 750,000 workers. The Senate rejected a short-term measure over disputes on health benefits, leaving no clear resolution. Reuters reported early on Thursday, Indian time, that US federal agencies have asked hundreds of thousands of employees not to work.

The Lead: The closure will slow air travel, delay data releases, and cost $400 million daily. President Trump said the shutdown could speed job losses. For Indians, the crisis matters because it can delay US visas, disrupt student processing, and rattle global markets, affecting IT exporters, remittances, and investments. 

What’s Next? While Trump’s Republican Party controls Congress, it needs Democratic support to pass bills in the Senate. It’s unclear how long this may last, but analysts warn that this standoff may last longer than earlier budget battles. Agencies were reportedly preparing for possible mass firings instead of just furloughs.

Rates On Hold

The Reserve Bank of India (RBI) kept the repo rate unchanged at 5.5% on Wednesday but signalled room for a cut in December. With inflation easing to 2.07% and GDP growth forecast raised to 6.8% from 6.5%, the Monetary Policy Committee said low inflation provides space to support growth.

Flashpoint: RBI Governor Sanjay Malhotra noted that the impact of tax cuts and earlier rate reductions is still unfolding, while US tariffs remain a risk. The RBI now pegs FY26 inflation at 2.6%, down from 3.1%.

Experts Say: “Contrary to our expectation of another cut in the repo rate, the MPC has preferred to stay put, even as inflation has declined more rapidly than anticipated,” said Dharmakirti Joshi, chief economist at Crisil. He noted that while inflation is expected to remain low, the RBI is watching transmission of earlier cuts and global uncertainties.

Output Up, Hiring Slips

India’s manufacturing sector grew at a slower pace in September, with the Purchasing Managers’ Index (PMI) easing to 57.7 from August’s 59.3, according to data by HSBC-S&P Global. 

By the Numbers: Output and new orders expanded but lost momentum, while job creation slipped to its weakest in a year as only 2% of firms hired more staff. Input costs surged, driving selling prices up at the fastest rate in nearly 12 years. Export orders improved, though US tariffs pose risks. 

Pivot: But, firms remain optimistic, buoyed by GST cuts and expectations of steady demand.

Flying Schools Get Rated!

India’s aviation regulator has released its first-ever ranking of flying training organisations (FTOs), and none of the 35 assessed secured the top grades of ‘A+’ or ‘A’. According to the Directorate General of Civil Aviation (DGCA), 13 FTOs were rated ‘B’ while 22 received a ‘C’, the lowest category.

Outcome: The rankings come at a time when the government has been stating that India is facing a growing pilot shortage, raising concerns about training quality. The DGCA evaluated FTOs on safety, compliance, operations, performance, and student support. Those rated ‘C’ will be asked to analyse and improve their performance.

What's Next? The rankings will be updated every six months, with the next due in April 2026. Whether this step can raise standards quickly enough to meet India’s growing demand for pilots remains to be seen.

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