Trump’s Good Turn For India?

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In today’s edition — US president Donald Trump’s actions towards Europe have a favourable fallout for India; contract drugmakers want the Indian government to ease raw material import laws; and a tariff hike in Delhi’s airport could make your flight tickets more expensive.

JANUS VIEW

By Forcing Europe To Muster Up A Backbone, Trump Has Done India A Good Turn

US president Donald Trump continues to hog global headlines. He has won a Supreme Court order to shelter his freeze on aid disbursals by USAID from a lower court ban. He, it would appear, has made headway in persuading Ukraine president Zelensky to share that country’s mineral wealth with the US, even if not quite on the rapacious terms the US president had initially proposed.

However, Trump has done India a good turn, forcing Europe to muster up a backbone.

German elections to form the next government produced a result that pushed Angela Merkel’s party, the Christian Democratic Union, to the top, in combination with its Bavarian regional twin, the Christian Social Union. It secured 28.5% of the vote. The far-right Alternative für Deutschland (AfD) came in second, with 20.8% of the vote. The party of the outgoing chancellor, the Social Democratic Party (SPD), came in third, with 16.4% of the vote. The SPD’s vote share loss of 10 percentage points was what the AfD gained.

Leader of the CDU-CSU, Friedrich Merz, is expected to lead the next government, becoming the chancellor, with the SPD as a coalition partner. One of his first statements after his ascent to the chancellorship made clear that he would strive to secure Europe’s independence from the US. He echoes the sentiments, on the one hand, of fellow European leader, president Emmanuel Macron of France, who has long advocated acquiring European strategic capability outside NATO, meaning, outside the control of the US, and, on the other, of the Trump regime’s reluctance to foot the bill for European Security. Trump’s vice-president, JD Vance told the Munich Security Conference, earlier this month, that Europe should look after its own security, even as the US turned its attention to other parts of the world.

On top of that, Trump has been negotiating peace in Ukraine directly with Russian leader Putin, over the heads of Europe and Kiev. Trump has made American disdain for Europe indisputably obvious, and Europe cannot hide this truth as they could when soft-spoken Barack Obama had announced America’s pivot to the Indo-Pacific and reduced troop strength in Europe.

Trump has forced the Europeans to begin fending for themselves. The result would be a spree of arms purchases by all the major European powers, and by Japan and South Korea in Asia, who would learn the lesson that they should look out for themselves, instead of relying on treaty protection by the US, if the US can abandon its long-time allies, Europe.

This guarantees the emergence of a multipolar world, which suits India just fine.

PODCAST

On Episode 519 of The Core Report, financial journalist Govindraj Ethiraj talks to Varun Singh, Managing Director at XIPHIAS - Certified Investment Migration consultant. We also feature an excerpt from a recent panel discussion moderated by the Core’s editor-in-chief (at BioAsia 2025 in Hyderabad) which featured amongst others G.V. Prasad, Co-Chairman & Managing Director Dr. Reddy's Laboratories, India.

1. The markets go flat in search of signals.

2. A personal story in the life sciences innovation journey.

3. India’s G20 Sherpa Amitabh Kant says Mahindra and Tatas will give Tesla a run for its money.

4. Brace for one of the warmest March ever.

5. The new US gold card replacing the EB5, what will be the outcome ?

6. Air cargo is growing but growth slows down in January.

FROM THE PERIPHERY

—💊 Contract drugmakers in India want the government to make it easier to import raw materials as it is essential for them to scale their business. Reuters reports that they have urged the government to remove regulatory hurdles. The report said that this was essential as more international firms are counting on India rather than on China, an after effect from the supply chain hurdles during the pandemic. While the global market is valued at  $140 billion-$145 billion, Boston Consulting Group found that the industry in India could grow seven-fold to $22 billion-$25 billion by 2035. 

—📈 Passenger vehicle sales in India are expected to grow by 4-7% in FY26, with demand drivers remaining neutral or favourable. According to the Investment Information and Credit Rating Agency (ICRA), two-wheeler sales are projected to rise by 6-9% following an 11-14% growth in FY25. Passenger vehicle volumes hit a record 4.2 million in FY24, but growth in FY25 has been modest, around 2%, due to high inventory and waning replacement demand. Meanwhile, two-wheeler sales benefited from strong rural demand and improved disposable incomes. The commercial vehicle sector is also expected to see marginal growth, driven by factors such as infrastructure spending and the scrappage policy.

—✂️ The central government is looking to reduce the share of federal tax revenue allocated to states from 41% to at least 40%, according to a Reuters report. Based on current tax projections, a 1% cut could give the Centre an additional Rs 3.5 trillion ($4.03 billion). Over the decades, states’ share of tax revenue has grown from 20% in 1980 to 41% today. However, with rising fiscal demands—especially during economic slowdowns—the centre is pushing for a revision, the report said. India’s fiscal deficit is projected at 4.8% of GDP for 2024-25, with states at 3.2%. States account for 60% of total government spending, focusing on health and education, while the centre primarily invests in infrastructure.

—🛣️ The Jammu and Kashmir and Ladakh High Court has ordered the National Highways Authority of India (NHAI) to slash toll fees by 80% at two plazas on the Pathankot-Udhampur highway, citing the poor condition of the roads. The court ruled that charging a full toll on a highway riddled with potholes and diversions due to ongoing construction is unfair to commuters. It also directed the removal of toll plazas within 60 km of NH-44. This ruling, further emphasises that tolls should reflect road quality, and could have broader implications for NHAI's toll collection practices in the future, especially for under-construction and poorly maintained highways.

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UGGH

Flying out of Delhi’s Indira Gandhi International Airport (IGIA)? Get ready to pay more, because your flight’s about to cost more than ever.

IGIA has proposed a tariff hike that could push domestic fares up by 1.5-2% and international fares by 0.5-1%, especially if travelling during peak hours (5:00–8:55 AM & PM).

The current User Development Fee (UDF) from IGIA is Rs 77. With the new proposal,  for domestic travellers, the UDF rates will range from Rs 315 to Rs 610 for departing passengers during peak times, while disembarking passengers will pay Rs 115 to Rs 210. 

International flyers can expect to pay between Rs 430 and Rs 810 in the economy, with business class passengers facing fees from Rs 860 to Rs 1,620. Disembarking international passengers will be charged Rs 280 (economy) and Rs 570 (business class).

To top it off, the Yield Per Passenger (YPP) will climb from Rs 145 to Rs 370, with 70% of the cost now falling on passengers instead of airlines.

DIAL defends the move by comparing it to other airports like Bengaluru, Chennai, Kolkata, and even Heathrow! They call it passenger flow management. We call it what it is—a costly inconvenience.

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