With every war, I find a new hobby
Hey there,
The war in West Asia is raging on. Egos have been hurt and now nobody is willing to back down. Meanwhile, people are unable to fly home to meet their parents or fly back to their other homes to continue with the rest of their lives. People like us, DoorDesis.
There must be a price even we are paying for it, right? Even from this safe of a distance? The emotional dissonance caused by this overexposure to war, the in-your-face hypocrisy of world leaders and that followed by TikTok dances. Are we turning into a more apathetic generation or are we still capable of genuinely caring? I honestly do not know if I am. For the past week, I have taken to paper making at home. It has been therapeutic and genuinely relaxing. I am taken over all our kitchen counters and am obsessively hoarding all our paper waste so I can turn them into paper I can write on.
All this and more just so I do not have to think about real people suffering in the real world. And suffering doesn't just have to be death, you know? Hunger when food doesn't reach you is suffering, unable to reach your family because the internet has been shut down is suffering, or people being made to feel like second class citizens in their own country is suffering.
So when I read about a young PM who ran over the political establishment (Nepal) it gives me hope. When I hear about another PM (Spain) denying US military to use their bases to attack another country it gives me hope. When I see the Opposition of a country (India) move a vote of no-confidence against the clearly biased Speaker of the Parliament, it gives me hope. Hope that in whatever small ways possible, we are capable of making a difference. Every vote counts. Every time you show up at a protest to speak up for something you truly believe in counts. This is an election packed year in India. Go, vote! If your flight takes off, that is. :D
See you next week!
Just the gist
The temporary India-US trade deal that was supposed to be signed, sealed and delivered by March is now in purgatory. After an early February handshake where Trump agreed to ease tariffs in exchange for India buying more American goods, slowing Russian oil imports, and pledging $500 billion in purchases... you know, the usual arm twisting, things looked promising for the deal. Then the US Supreme Court struck down Trump's tariffs in late February, Trump started a war, and the administration decided to start an investigation into what it calls excess industrial capacity among trading partners.
The stricking down of Trump's tatiff by the US Supreme Court means the U.S. is imposing a 10% tariff on imports from all countries through July 24. That is a wayyy better deal than the 18% that was agreed upon as part of the temporary deal with India. So investigation into our 'excess industral capacity' or not, waiting is the best course of action indeed for India.
➡️ If you're tracking Indian markets or holding Indian ETFs, near-term volatility around trade headlines is likely but the fundamental story is the same. However, if the investigation concludes unfavourably, Indian exports in manufacturing — pharma, textiles, engineering goods — could face new duties, which would ripple through those sectors.
🔗 India's energy dependence comes to bite
Then the US attacked Iran, the Strait of Hormuz closed, and crude oil decided to disrupt the lives of every day Indians.
At $100/barrel oil, a price we are also skirting around, the rupee could hit 98.5 to the dollar. At $120/barrel, India's oil import bill could blow out to $220 billion, pushing the current account deficit past 3% of GDP. Given that math, know that Iran is threatening $200/barrel. The International Energy Agency is releasing its largest ever emergency oil reserve just to keep prices below $90, and it's barely working.
The ripple effects are already being felt in daily life . Cooking gas is now more expensive, cylinder refill wait times have gone up, and pump prices (frozen for four years) are looking at a hike. The Indian middle class seems to be trying to buy its way out of this as well by buying induction stoves instead.
The government is caught between protecting household budgets during a packed election calendar and keeping its fiscal deficit targets intact. And for once it is not the consequences of its own actions. Someone else's war, our wallets.
➡️ If you have rupee denominated investments or are sending money back home, the exchange rate is the number to watch. The 92-per-dollar level has already been breached. If oil stays elevated, 95 isn't a tail risk anymore.
🔗 The unending loop of on again, off again relationship
India's cabinet has rolled back a four-year-old rule that kept Chinese investment at arm's length. Press Note 3, introduced in April 2020 right after the Galwan clash, had forced any investment from land-bordering countries through a slow government approval route. That is changing now.
The changes are targeted instead of a blanket welcome mat. Two amendments: first, global funds like BlackRock and Carlyle with minimal Chinese ownership (under 10%) can now invest through the automatic route without government approval. Until now these funds were getting caught in PN3 despite having barely any Chinese exposure. Second, Chinese companies can invest directly in specific sectors — electronics components, rare earth magnets, polysilicon wafers, advanced battery components — but Indian firms must hold 51% or more at all times.
With US trade policy looking like a game of Jenga, this is India diversifying its portfolio. Modi visited Beijing last August, flights resumed in October. This is just the most visible step in a thaw that's been building quietly.
The thing though is that even before 2020, Chinese manufacturing investment in India was limited. Chinese firms have a habit of keeping high-value production at home and shipping intermediate goods abroad for assembly. India could end up with the screwdriver-factory end of the deal.
➡️ For diaspora investors, watch the electronics and clean energy manufacturing space — rare earth magnets and battery components are central to both. If this actually draws Chinese capital and technology into Indian companies remains to be seen.
In the neighbourhood
Nepal just had its most decisive election in decades. The Rastriya Swatantra Party (RSP), founded just four years ago, has won a majority, sweeping aside the political establishment that had traded power amongst themselves for twenty years. Its new Prime Minister, Balendra Shah is a 35-year-old, former mayor and rapper, who beat ex-PM KP Sharma Oli on his home turf. The symbolism is serving!
The RSP rode the wave of last year's Gen Z protests that forced Oli out, promising to clean up corruption and govern well. Voters in response torched the old guard. The royalists got wiped out, senior leaders across every mainstream party lost their seats, and even popular independents got swept aside simply for not being RSP.
Now comes the hard part. Shah inherits two immediate crises: releasing a suppressed commission report into the killing of 76 protesters — which could trigger prosecutions and fresh unrest — and figuring out what to do about the 1.7 million Nepalis working across the Gulf and Israel as the West Asia war continues. Evacuate them and you have a million unemployed, angry people back home. Wait too long and the window closes.
➡️ Practically: Nepal is one of India's most important labour corridors and a significant recipient of Indian investment. Political instability there — or a mass return of Nepali workers from the Gulf — is bound to have ripple effect on the region. Emotionally: It is refreshing to see young faces and minds with non-traditional political backgrounds be brought to the fore, from Zohran Mamdani in New York to Balendra Shah in Nepal. Meanwhile, the average age of members of the Indian Parliament is 56! That of India... 30.
Okay we made it through another week guys! Yalla, let's go!
