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Good morning. In today’s edition —  the next in our year-ender series ‘2025 Through The Trump Lens’: how the US president-elect’s policies could affect India’s economy;  former prime minister of India, Dr Manmohan Singh dies aged 92; and bitcoins remain the market winner in 2024. 

JANUS VIEW

In 2025, India Must Navigate Trumpian Policy With Dignity And Without Getting Hurt

One of the biggest developments this year with implications for the future has, of course, been the re-election of Donald Trump as the next president of the United States. As Trump takes over as the 47th president, America’s impact on the world assumes a new, uncertain dimension. And this could impact India too.

Trump promises politics and policies radically different from those of the outgoing administration: large tariffs on imports, mass deportation of undocumented migrants, and another dose of tax cuts and deregulation. Tariffs and labour shortage would stoke inflation from the supply side; and a wider fiscal deficit created by tax cuts would stoke inflation from the demand side.

His personal equation with India’s prime minister has not prevented him from railing against India’s high tariffs and how he would reciprocate that favour. 

What implications could Trump’s presidency have on India?

PODCAST

Why Short-Term Thinking Is Killing India’s Business Potential with Rajendra Srivastava

In today’s Special Edition of The Core Report, financial journalist Govindraj Ethiraj talks to Professor Rajendra Srivastava, former Dean of the Indian School of Business and the Novartis Professor of Marketing strategy and Innovation, to dissect India’s evolving business landscape and its implications for economic growth. The discussion highlights the critical need for long-term investments in product development, infrastructure, and supply chains, contrasting this with the challenges posed by a focus on short-term profitability. Srivastava emphasises the role of resilience, or “immunity,” in building sustainable businesses, citing examples from the automotive industry and India’s technological ecosystem.

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CO:RELATION

Bitcoins, Gold And US Stocks Winners Of 2024

Bitcoins remained the top-performing global asset class in 2024 for a second straight year. The data from the National Stock Exchange for the past 11 years shows that Bitcoins have been at the top of the chart eight times. A 32.7% rally in gold puts it in the second position for the first time in 11 years. The performance of non-equity asset classes in 2024 is way ahead of equities in the US, India and other emerging markets. 

US stocks are rallying on the back of strong economic growth and a hope that interest rates are on a downward cycle. However, a surge in gold prices shows fear of an imminent correction. Indian equities remain among the top-performing asset classes in the world. That is despite slowing economic growth and weak corporate earnings for the quarter to September 2024. Domestic flows continue to support Indian equity prices despite foreigners making an exit or slowing down Indian investments.

CORE NUMBER

4,59,650

This is the number of houses sold in 2024, a 4% year-on-year (YoY) decline from 4,76,530 in 2023. According to an ANAROCK Research report, new supply also saw a downfall of 7% across India’s top seven cities that is MMR, NCR, Pune, Bengaluru, Chennai, Hyderabad, and Kolkata. Kolkata and Chennai led declines, while MMR and Bengaluru had slight increases. New supply fell to 4,12,520 units, impacted by elections and slow project approvals. Despite this, sales value rose 16% YoY due to a 21% surge in prices. Luxury housing rose 24%, and inventory dropped 8%. The Core had previously highlighted how this trend of only the luxury real estate segment doing well could affect the sector, including an increase in rents.

FROM THE PERIPHERY

—Former prime minister of India, Manmohan Singh, died at New Delhi's All India Institute of Medical Sciences (AIIMS) on Thursday, aged 92. He was admitted to hospital earlier in the evening. A press release from AIIIMS read, "He was brought to the Medical Emergency at AIIMS, New Delhi at 8:06 PM. Despite all efforts, he could not be revived and was declared dead at 9:51 pm.” He is said to have been ailing with age-related conditions for some time. Singh was the prime minister between 2004 and 2014. Singh also held the position of finance minister in PV Narasimha Rao's cabinet between 1991 and 1996. He was the 15th governor of the Reserve Bank of India, the country's central bank. Singh is credited with ushering in reforms that led to the economic liberalisation of India. 

—India's share in global trade has doubled over two decades, rising from 1.2% in 2005 to 2.4% in 2023 for exports and from 1.5% to 2.9% for imports, according to a National Stock Exchange report. Merchandise exports have increased from 0.9% in 2005 to 1.8% in 2023, and services exports climbed from 2% to 4.3%. Growth drivers include trade agreements, diversification, improved logistics, and initiatives like Make in India. However, export growth slowed in the last decade due to global demand dips, protectionism, and disruptions. The report underscores India's potential in agriculture, textiles and pharmaceuticals but highlights gaps in machinery and electronics.

—Two major travel disruptions were reported a day after Christmas on Friday, impacting travel plans for several lakh passengers across the country. The Indian Railway Catering and Tourism Corporation's (IRCTC) website and app suffered a major outage, leaving users unable to book tickets or access railway services for hours. Simultaneously, Delhi’s Indira Gandhi International Airport enforced low-visibility procedures due to dense fog, causing delays and disruptions to flight schedules. Airlines also issued advisories urging passengers to check flight statuses before heading to the airport.

—The Delhi High Court has sought Patanjali Ayurved's response to a lawsuit filed by Dabur, accusing the company of running advertisements that disparaged Dabur’s Chyawanprash.  Dabur, which holds over 60% of the chyawanprash market, alleged that Patanjali's ads falsely claimed their product was the "original" and "best" chyawanprash while dismissing other manufacturers' methods as inferior. This isn't the first time Patanjali’s advertising practices have faced scrutiny. Indian courts have previously questioned the company for misleading claims in its ads, for which it had to apologise publicly. The case will be heard on January 30.

—The central government has projected 6.5% economic growth for FY25 despite significant challenges earlier in the fiscal year. The Finance Ministry’s Monthly Economic Review, released on Wednesday, expressed optimism for higher growth in the latter half of FY25, driven by recovery in agriculture and industrial activity. The GDP growth rate fell to a seven-quarter low of 5.4% in the July-September quarter, a drop from 6.7% in the previous quarter, raising alarm among economists and corporate India. . The decline followed subdued corporate earnings and slowed consumer demand, worrying industry stakeholders.

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