- The Core
- Posts
- Gaza Ceasefire: Global Economy Boost
Gaza Ceasefire: Global Economy Boost
In partnership with
Good morning. In today’s edition — what a ceasefire in Gaza would mean for the future of the global economy; HCL Tech’s share price sell-off; and how the budget could boost manufacturing in India.
JANUS VIEW
The Gaza Ceasefire Is Good News For Global Economy
Among the many things that took place in the week that was, perhaps the most significant one was the ceasefire deal in Gaza. As part of the deal, announced by both US President Joe Biden and President-elect Donald Trump, hostilities would cease for six weeks. It would mean Hamas freeing about a third of the 100 Israeli hostages it holds, and Israel dozens of Palestinian prisoners. However, Israel’s prime minister Benjamin Netanyahu is still warning about wrinkles remaining to be ironed out. The fact remains that how Donald Trump would react if the deal that he has taken credit for, turns out to be fake news is an ‘unknown unknown’, whose reality Netanyahu might not be too keen to find out. This means that there would, at the least, be a six-week break in the ongoing Gaza killings, starting this coming Sunday.
This is good news not only for the people in the conflict zone, but also for the global economy. The ceasefire would trigger a series of global trade events that now seem like a sliver of hope as the world prepares for Trumpian tariffs and probable counter-tariffs to cast a dark shadow over global trade and growth prospects. If the ceasefire holds, the next step would be rebuilding and rehabilitation.
What expertise could India bring to the table?
PODCAST
On Episode 483 of The Core Report, financial journalist Govindraj Ethiraj talks to Vinod Giri, Director General of the Brewers Association of India as well as Vivek Kumar, economist at QuantEco Research.
Markets gain on US interest rate outlook and positive fund flow cues.
Infosys results and guidance suggest US banks will increase spending on the back of strong performance.
Refiners are scampering to buy crude as sanctions on Russian oil take hold.
Hyderabad is running out of beer as United Breweries battles with the State Government for past dues.
India’s trade deficit conundrum. Decoding the numbers.
MESSAGE FROM INDIA ENERGY WEEK 2025
India Energy Week 2025 will bring together global energy leaders to explore pressing challenges, showcase India's energy transition, and highlight innovative solutions.
The conference is scheduled from February 11-14, 2025, in New Delhi.
THE BUDGET WISHLIST
🏭 A Boost For Manufacturers?
The government has tried to actively boost manufacturing for the past decade now. Manufacturing and services were key priorities highlighted by finance minister Nirmala Sitharaman in last year’s Union Budget presented in July as a road map towards a ‘Viksit Bharat’ or developed India.
Last year’s budget document has multiple mentions of manufacturing as a top agenda for the government.
While the government has introduced schemes such as the production-linked incentive (PLI) to boost manufacturing and ‘Make in India’, India Inc expects the government to be liberal with taxes to boost manufacturing.
The government reduced corporate tax rates for new manufacturing units from 25% to 15% in 2019, with the last date to have set up such a unit to avail of this rate being March 31, 2024.
Uday Ved, Partner, Tax Services at KNAV, called for an extension of this date till March 2026 as many manufacturers may have not been able to meet this deadline. “I think that will be the first ask. And that's very easy because that will really give a boost to the manufacturing and coupled with the PLI scheme, which has been successful in a few sectors, it will help a lot in terms of, you know, people trying to put the projects completing and new projects also to be put into place.”
With last year’s robust tax collection, Ved believes that Sitharaman has much wiggle room to give even businessmen a relief in taxes. Not only could this boost consumption but also benefit small and medium businesses.
🧮 Making Tax Less Taxing On A Tight Deadline
With less than a fortnight to go for the Union Budget 2025, the simplification of tax laws has emerged as a key focus. In July 2024, the government set up a committee to review India’s Income Tax Act 1961. The committee has so far received over 6,500 suggestions till October through a portal on the matter.
The government reportedly aims to not only remove redundancy but also make the laws simpler. One of them is the rationalisation and simplification of the TDS (tax deducted at source) regime. Ved said that TDS restoration should be on top priority.
Himanshu Parekh, partner and head of tax (west) at KPMG, told The Core, “As things stand today you have roughly about 35 TDS provisions in the income tax law which has made the entire TDS regime very very complicated. You have varying tax rates across a variety of transactions which have resulted in a lot of interpretation issues, sort of ambiguities and litigation.”
Another big expectation is the easier resolution of tax disputes. But will we see the committee formulate new laws before the budget? “To me, it seems to be a herculean task and I would be very very surprised and amazed if you were to see this exercise getting consummated and seeing some tangible outcome therefrom in the forthcoming budget I would be very surprised to see that happen in this budget,” said Parekh.
CO:RELATION
HCL Tech Drags
HCL Tech, one of India’s leading software services exporters, has witnessed a rough ride in the stock market. The company’s share price has witnessed a selloff, making it an underperformer among its peers for the past month. The sharp selloff was triggered after the company’s share price topped an all-time high of Rs 2,000 per share on the day it announced the December 2024 quarter results. If you hear the company’s management speak, they announced that operating profit margins were at a record high for the quarter.
However, there was a subtle warning from the management about a large job ending in December 2024 that could make the fourth quarter ending March 31, 2025, a ‘softer’ one regarding financial performance. That was enough for some investors and traders to sell or book profits. It is 25 years since the company was listed, and it has generated a compounded annual growth rate in revenue of 18.9% and annual profit of 19.4%. The company’s share price has tripled over the past five years, outperforming the Nifty IT sector index. The high relative valuation matters when markets witness a broad selloff. For now, HCL Tech seems to be in a healthy correction mode.
CORE NUMBER
900 million
—📱 This is the number of internet users in India by 2025, driven by growing digital content in Indic languages. India reached 886 million active users in 2024, marking an 8% year-on-year growth. Rural India leads with 488 million users, accounting for 55% of the total, as per the Internet in India Report 2024 by the Internet And Mobile Association of India (IAMAI) and market research company Kantar. While urban areas adopt more smart devices, rural users dominate OTT and social media. Tamil, Telugu, and Malayalam are the top Indic languages. AI adoption is strong, and women now represent 47% of all users.
MESSAGE FROM SELECTSOFTWARE REVIEWS
Need the right HR Software to meet your business goals?
SSR’s HR Software advisors will help you choose the right HR software to hire and retain the best people—at no cost. With a 4.9/5 star rating and expertise in guiding companies with up to 3,000 employees, SSR’s advisors provide unbiased HR software recommendations tailored to your organization’s unique needs.
FROM THE PERIPHERY
—🛢 Amid confusion as the US announced a fresh round of sanctions on Russian oil flows, reports suggest Indian refiners have even less time than expected earlier to receive sanction tankers. Business Standard reported refiners such as Reliance Industries and Indian Oil have until February 27 to finish transactions for the tankers. But to evade sanction laws, the cargo must have been loaded before January 10 to be able to circumvent the current sanctions, the report said.
—⚖️ Even as the Competition Commission of India (CCI) has accused Meta of misuse of user data and imposed a fine of Rs 213.14 crore, the American tech giant has challenged it in the National Company Law Appellate Tribunal (NCLAT). The tribunal admitted the pleas filed by Meta Platforms and WhatsApp. While Meta wanted a stay on the CCI order, the tribunal said a decision would be made next week. In November 2024, CCI had banned WhatsApp from sharing user data with Meta for advertising.
—🔌 Indian electronics, solar and EV firms are facing delays due to China’s export restrictions on key inputs and machinery, likely a response to India’s curbs on Chinese investments and visas, Global Trade Research Initiative (GTRI) reported. These restrictions, signalling deeper geopolitical tensions, impact India's manufacturing sectors and harm China’s exports. India’s imports from China rose to $101.73 billion in 2023-24, highlighting dependency. GTRI advises India to diversify supply chains and strengthen ties with Japan and South Korea for components, reducing reliance on China and building resilient manufacturing capabilities.
—💰 The cabinet, led by Prime Minister Narendra Modi, has approved the formation of the 8th Central Pay Commission, bringing relief to over one crore government employees and pensioners. Union Minister Ashwini Vaishnaw announced it is likely to be formed by 2026, The Economic Times reported. Central Pay Commissions, established every decade, review salaries, allowances and pensions, factoring in inflation and economic conditions. The 7th Pay Commission, implemented in 2016, introduced significant revisions. The 8th Pay Commission is expected to follow suit, revising salaries and Dearness Allowance from January 1, 2026.
MESSAGE FROM ARTISAN
Hire an AI BDR and Save on Headcount
Outbound requires hours of manual work.
Hire Ava who automates your entire outbound demand generation process, including:
Intent-Driven Lead Discovery
High Quality Emails with Waterfall Personalization
Follow-Up Management
Let your reps focus on closing deals instead of writing emails.
✉️ Write to us here, for queries or feedback
📩 Was this email forwarded to you? Subscribe
💰 Want to sponsor this newsletter? Contact us
💰💰 Found The Core interesting? Consider supporting us
👥 THE TEAM
✍️ Zinal Dedhia, Salman SH | ✂️ Rohini Chatterji | 🎧 Joshua Thomas