New Delhi: Alex Travelli of The New York Times reports on the Indian economy facing new challenges as the war in West Asia continues despite showing great track-record, following trade deals with the EU and the US. “Only a few weeks ago, the stars seemed to be aligning for India’s economy,” he writes in ‘As War Disrupts India’s Gulf Ties, Economy Faces ‘New Broadside.’
Referencing India’s progress in the race to become the largest economy, Travelli makes a case for how its economy was holding steady in the face of mercurial geopolitical affairs—the Ukraine-Russia war and Trump’s tariff war.
Yet, the third week into the Israel-US war with Iran and India’s fuel trade with West Asia is already becoming a “liability”.
“The Middle East accounts for roughly 40 percent of the country’s oil imports and 80 percent of its gas. As energy prices soar, the effects ripple across the economy, threatening India’s mix of strong growth and mild inflation.”
India received the most remittances from workers abroad, and around 40 percent of those come from migrants working in the Gulf. “Any hit to overseas Indian workers’ earnings would further weaken an already softening currency.”
While Indians are already feeling the effects of the gas shortage since Iran blocked the Strait of Hormuz, any further disruption or prolongation of the war would only add to the distress. “The government has the power to control fuel prices, but cutting excise duties or expanding subsidies for a prolonged period would add to fiscal pressure.”
Although India is trying to keep prices under check and it has also secured safe passage for two oil vessels, Travelli notes that the Indian households and government “do not have robust financial buffers to withstand a prolonged oil price shock.”
Krishn Kaushik, David Keohane, and Harry Dempsey report for Financial Times as ‘Japanese investment in Indian finance hits record as business ties tighten’.
Japan’s largest bank, Mitsubishi UFJ Financial Group, closed a $ 4.4 billion deal to acquire part of India’s Shriram Finance at the end of last year, the “largest ever foreign investment in India’s financial sector”.
“Closer business and investment links between Japan and India are being driven by the opportunities presented by the south Asian nation’s vast market, geopolitical tensions and an urgent need to compete with ascendant Chinese companies,” it says.
Alongside rising investment in Indian companies, Japanese manufacturers are also pouring money into the country to achieve scale and better compete with lower-cost Chinese rivals, both in India and globally, the report notes.
Meanwhile, The Economist writes ‘Why Bangalore has India’s best billionaires’.
The column notes how Bengaluru’s billionaires are expanding the scope of philanthropy beyond basic social infrastructure, “rethinking the role of the billionaire”.
“Old-money philanthropy still mostly flows to fundamentals such as education and health, which together account for half of all donations. This is natural in a country that is still poor. But basics are not all that India needs. Indians who have gained access to decent schools and clinics now need further nourishment for the mind,” it notes.
Led by Nandan Nilekani, a founder of Infosys, this new group of philanthropists is funding, donating, and investing their time in everything from biometric systems to brain-research labs and science galleries.
“This generation, made up of people who are now mostly in their 60s and 70s, is the model for the new billionaires of Bangalore. Its members do their good deeds quietly. They also offer advice and help build informal networks of would-be givers. The result is that the city has become a hub for this sort of institution-building philanthropy,” it said.
What differentiates these billionaires from those in Mumbai or Delhi? The column notes that Bengaluru tycoons are first-generation wealth creators, and that they have the “experience of being normal people”. “They have taken public transport and wrangled with public services.”
“It is also the case that Mumbai, Delhi and Kolkata already have lots of institutions. Bangalore was until not long ago a sleepy retirement town. There is more for its billionaires to build,” the column notes.
As Germany’s working population ages past retirement, it is looking elsewhere to fill the vacancies that are rapidly being created, and India seems to be a strong contender. Tim Mansel of the BBC reports, ‘Germany has a shortage of workers – so it’s turning to India for help’.
The connection first emerged in 2021, when Handirk von Ungern-Sternberg in Germany received an email from India highlighting the country’s “young, motivated people looking for vocational training”.
Ungern-Sternberg said Germany also had a lot of “desperate” employers in the skilled crafts industry looking to fill their respective workforces.
The butcher industry was the first to make the move; it had been struggling with 19,000 small, family-run businesses in 2002 to fewer than 11,000 by 2021, the report notes.
Magic Billion, the employment agency that had sent the mail, was able to recruit 13 people to send to Germany in 2022 to begin their butchery apprenticeships. Soon, 200 Indian workers were engaged in the butchery in Germany.
“As the last of the baby boomer generation edge into retirement, there are not enough young Germans to replace them, due to a low birth rate. But there are plenty of young people in India,” according to the report.
The economy needs to attract 288,000 foreign workers per year, according to a report cited by Mansel. According to German figures, in 2024 there were 136,670 Indian workers in the country, up from 23,320 back in 2015.
“Young Indians who have found employment in Germany via India Works offer similar explanations for their decision to try their luck in a new country—the difficulties of finding a job in India, the higher salaries available in Europe, and the ambition to make their own way in life,” Mansel reports.
(Edited by Tony Rai)
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