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Good morning. In today’s edition —  the next in our ‘2025 Through The Trump Lens’ series: will US president-elect Donald Trump’s policies affect India’s supply chain?; airfares unlikely to reduce in 2025; and Reliance Industries Ltd’s (RIL) massive expansion in the last five years.

Wishing all our readers a Happy New Year! May 2025 bring insight, resilience, and growth.

Editorial Note: The Core will not be publishing on January 2nd to observe the New Year holiday. We will resume with our next newsletter on January 3rd.

DECODE THE NEWS

Trump’s America First Policy: Stakeholders Divided On How It Will Affect India’s Supply-Chain 2025

Trump’s return to the White House has reignited fears of a global trade conflict, with the president-elect threatening 100% tariffs on BRICS nations, including India. If enforced, these tariffs could severely impact India’s trade relations. Not just India but China, Canada and Mexico are also on Trump's tariff radar. 

Recently the president of a logistics advisory firm in Los Angeles, United States, told Bloomberg that the country’s logistics players were in a ‘freakout mode’. This was true not only for the US but also for Europe. The report said that companies are trying to get orders out before he takes over as president.

Arun Kumar, president of the Association of Multimodal Transport Operators of India told The Core, “If there's global turmoil, it will disrupt logistics worldwide, and India will naturally be part of that.”  

In India, stakeholders and logistics experts that The Core spoke to were divided about whether Trump's policies would affect logistics players in India. 

Imposing tariffs is a way to focus on the ‘America First’ policy, which means keeping America first and focusing on the US's domestic policies.

But with Trump's potential return to power,  India’s trade resilience shine through or will the global logistics ecosystem face disruptions too vast to overcome?

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CORE NUMBER

$13 Billion

This is the total value Reliance Industries Ltd. (RIL) has spent on acquisitions over the past five years, according to a Morgan Stanley report. Of this, 48% went to technology, media, and telecom (TMT), 14% to new energy, and the remainder to retail, healthcare, and other sectors. The $42 million acquisition of Karkinos Healthcare marked RIL’s entry into oncology and diagnostics, signalling diversification into healthcare. While TMT dominates the acquisitions, investments in new energy and healthcare highlight RIL's strategy to diversify beyond its traditional oil-to-chemicals business amidst evolving market dynamics and competitive pressures.

FROM THE PERIPHERY

—📉 India’s fiscal deficit for April-November was recorded at Rs 8.47 lakh crore, or 52.5% of the estimate for the financial year, data released by the government showed. While the government's capital expenditure for April-November stood at Rs 5.13 lakh crore, or 46.2% of the annual target, it was lower compared to Rs 5.86 lakh crore during the same period last year. Government expenditure for the eight months was Rs 27.41 lakh crore, while this stood at Rs 26.52 lakh crore in the same period last year. Net tax receipts for the first eight months of the current financial year were at Rs 14.43 lakh crore, 56% of the yearly target.

—🚘 Electric vehicle (EV) prices are falling due to excess inventory, lower component costs, slow demand and compliance with Corporate Average Fuel Efficiency (CAFE) regulations. Popular models, including the Nexon EV and XUV400 EV, are offering discounts of up to Rs 3 lakh. Electric two-wheelers also see price cuts, with discounts ranging from 10% to 20%, depending on the model. Models like Hero Vida V1 Pro and Ather scooters also feature price cuts and exchange bonuses on marketplaces like Flipkart. Experts attribute these reductions to leftover festive promotions, overproduction, and global trends. ICRA, a credit rating company, projects EV market share to reach 25% for two-wheelers by 2030.

—✈️ India’s airlines are poised to have an interesting 2025. Airlines including IndiGo, Air India, and Akasa Air, have ordered over 1,600 aircraft, with IndiGo leading at 910, followed by Air India’s 570 and Akasa Air’s 150. Despite this massive capacity expansion, airfares are unlikely to drop due to high operating costs, including elevated fuel prices and infrastructure expenses, according to The Economic Times. IndiGo and Air India aim to expand their fleets to 410 and 243 aircraft, respectively, by FY26. However, supply chain issues, like delays in Boeing’s 737 Max deliveries, may slow fleet additions. Passenger traffic is projected to grow, but analysts say elevated costs will continue to keep fares high.

—📵 The Department of Telecommunications (DoT) has sought the Telecom Regulatory Authority of India’s (TRAI) clarification on the licence clauses that can be used to encash telcos’ bank guarantees (BGs) to recover fines for spam. This is the first case of its kind where the issue of unsolicited commercial communications is being addressed without a specific rule or regulation in the licensing terms. Telecom associations have previously claimed that consumer behaviour plays a key role in spam, making penalising telcos unfair. The issue is another ongoing tug-of-war between regulators and telcos, as the DoT awaits Trai’s response to determine its next steps.

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