Rupee Hits Record Low, Now at 86.4/$

Rupee downslide continues, hits new low: Driven down by a strong US currency amid uncertain global indications, the rupee's slump continued for the second consecutive session on Monday, losing 27 paise to hit a new lifetime low of 86.435 against the US dollar. According to an analysis made by The Times of India, The Reserve Bank of India (RBI) faces a major challenge this week with the dollar continuing to strengthen against most currencies. This would hinder attempts to use lower interest rates to boost GDP growth, which is predicted to drop to 6.4% in FY25. Due to tight rupee liquidity conditions, the timing for a 50 basis point repo rate drop has been rescheduled from February-April to April-June, according to a Stanchart analysis co-authored by Anubhuti Sahay, quoted by The Times of India. At the February MPC meeting, Stanchart anticipates a 50 basis point reduction in the cash reserve ratio (CRR), citing concerns about the liquidity gap getting worse. If nothing is done, the headline liquidity shortfall is predicted to rise to between ₹1.9 and ₹2.5 lakh crore by the end of FY25. Additionally, the report reduces its projection for the dollar-rupee by 175 paise to 86.25 by March 2025, citing the RBI's heightened tolerance for a higher currency and worse balance of payments flows as the reasons for the adjustment.

India’s defence deals

India to finalise major defence contracts by March 31: The Times of India reports that India is set to finalise four major defence contracts worth over ₹1.5 lakh crore (around $18 billion) by March 31, including deals for fighter jets, submarines, helicopters, and artillery. The first deal involves a ₹63,000 crore ($7.6 billion) agreement with France for 26 Rafale-Marine fighter jets, set to operate from the indigenous INS Vikrant. The deal also includes 22 single-seat maritime jets, four twin-seat trainers for the Navy, weapons, simulators, crew training, five-year performance-based logistics support, and spares for the 36 Rafales already inducted by the Indian Air Force (IAF). This contract is now headed for final approval from the Prime Minister-led Cabinet Committee on Security (CCS). Another deal with France for three additional Scorpene-class submarines, worth ₹38,000 crore ($4.6 billion), is also on the cards. Additional contracts include 156 Prachand light combat helicopters for ₹53,000 crore ($6.4 billion) and 307 advanced towed artillery gun systems (ATAGS) for ₹8,500 crore ($1 billion).

New schemes in 2025

₹70,000 crore expenditure to be saved by the Centre: The government is expected to save over ₹70,000 crore on capital and revenue expenditure allocated towards new schemes in FY25. This is majorly due to the allotment of ₹62,000 crores to the Department of Economic Affairs to introduce “new schemes”, most of it is going unspent.

Government procurement fails to meet 'Make in India' standards: Government procurement rules under the 2017 Public Procurement (Preference to Make in India) Order are facing challenges, with 40% of tenders, worth Rs 64,000 crore (approximately $7.7 billion), flagged as non-compliant, according to records reviewed by The Indian Express. The Department for Promotion of Industry and Internal Trade (DPIIT) found numerous tenders specifying foreign brands or imposing restrictive eligibility conditions. Despite calls for corrective action, only limited steps were taken by procuring entities, with many departments citing the economic or quality advantages of foreign products.

Akhilesh backs INDIA bloc

Akhilesh assures continuity of the INDIA bloc: Samajwadi Party (SP) chief Akhilesh Yadav insisted on Sunday that the INDIA alliance was still in place, days after J&K Chief Minister Omar Abdullah questioned its operations. Speaking at a press conference in Lucknow, Akhilesh stated, "INDIA alliance is intact." He said that his party was only adopting the alliance's tactic of supporting a powerful regional party in opposition to the BJP, referring to his support for the Aam Aadmi Party (AAP) in the Delhi elections. Akhbilesh's SP is the prime Opposition in Uttar Pradesh (UP), which successfully took on the BJP. The SP won more seats than the BP in UP in the 2024 Lok Sabha elections, winning 37 out of the 62 seats it contested.

AAP and BJP lock horns over slum votes: Both the AAP and BJP attempted to woo Delhi's slum dwellers. The AAP claimed that BJP will demolish all the slums in Delhi. Countering the allegation, the BJP pointed out that no work has been done for the slums in the previous ten years under AAP. Approximately, 1.5 million voters live in slum clusters. At four separate press conferences in Delhi on Sunday, senior leaders from the BJP and the Aam Aadmi Party (AAP) engaged in a new political slugfest, accusing one another of breaking pledges made in the lead-up to previous state and general elections.

Budget survey

Public wants short-term benefits, more jobs: The Mint surveyed 7,051 of its print and digital readers to gain their views on how the government should approach the annual budget. The results depicted that the public prefers short-term government planning over long-term ambitious goals. Job creation was given high priority. There was dissatisfaction over income tax slabs, majorly among salaried individuals. The debate of old vs new tax regime got mixed responses.

Indian professionals struggle amid US H-1B visa uncertainty: Indian professionals in the US are grappling with job offer withdrawals, visa delays, and potential layoffs due to the anticipated tightening of the H-1B visa programme under President-elect Donald Trump’s administration, The Times of India reports. With over 72% of the 380,000 H-1B visas issued in 2023 going to Indians, many working in fields like data science, AI, and cybersecurity, these professionals are now facing an increasingly uncertain future. The situation is compounded by concerns about reforms aimed at prioritising American workers and increasing salary thresholds. 

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SEBI to revise exposure limits and open interest measurement for derivatives: The Securities and Exchange Board of India (SEBI) is considering revisions to the ₹500 crore (approx. $60 million) exposure or open interest limit for institutional investors in index futures and options. The regulator plans to change the methodology for measuring open interest in the derivatives segment and link market-wide position limits (MWPL) for single stock futures and options to the average daily delivery volumes of underlying stocks. These changes aim to prevent market manipulation and excessive volatility. The proposed adjustments follow SEBI's earlier measures in October 2024 to address the retail trading surge in index options, as reported by Mint.

Ather’s $2.4 billion IPO: According to the Economic Times, Ather Energy, a producer of electric two-wheelers, plans to value itself at up to $2.4 billion in its next initial public offering (IPO). They said that this represents a premium of nearly 80% over the company's previous investment round in August when it became a unicorn. After providing the Securities and Exchange Board of India (SEBI) with final clarifications, Ather is anticipated to submit its revised draft red herring prospectus (DRHP) later this month or the first week of February.

Bangladesh protests BSF's border fencing

Indo-Bangladesh row over border fencing: Bangladesh’s Foreign Secretary Mohammad Jashim Uddin on Sunday expressed "deep concern" to Indian high commissioner Pranay Verma over "unauthorised" fencing attempts by India’s Border Security Force (BSF) during a meeting in Dhaka. Tensions have risen along the India-Bangladesh border after an interim government took over in Dhaka, after the exit of former Prime Minister Sheikh Hasina following protests. The BSF has stepped up efforts to deter Bangladeshi smugglers, while Dhaka claims India violated bilateral agreements by attempting to build fencing at five locations. The Border Guard Bangladesh (BGB) has opposed the BSF's construction at several sites that had been mutually agreed upon under the previous government, as reported by the Hindustan Times. Jashim Uddin also expressed concern over the killing of a Bangladeshi citizen in Sunamganj by Border Security Force (BSF) personnel and called for urgent action to prevent further border killings.

UK PM under pressure to sack Hasina's niece: UK Prime Minister Keir Starmer is under growing pressure to dismiss Labour minister Tulip Siddiq, who is former Bangladesh Prime Minister Sheikh Hasina’s niece. She faces allegations of corruption linked to her London properties. The Economic Secretary to the Treasury, Siddiq, is accused of using properties allegedly gifted by Awami League allies. Bangladesh's interim leader, Muhammad Yunus, called for an investigation by the Anti-Corruption Commission, asserting that the assets bought by allies of Hasina’s Awami League should be returned to Bangladesh. Siddiq referred herself to the independent adviser on ministerial standards last Monday after media reports revealed that some London properties she lived in had been gifted by Awami League, maintaining she had done nothing wrong. Opposition leader Kemi Badenoch on Sunday called for PM Starmer to sack Siddiq.

JNPA on track for 10 million TEU capacity

JNPA targets 10 million TEU capacity as Vadhvan Port progresses: India's largest state-owned container port, Jawaharlal Nehru Port Authority (JNPA), is on track to become the country’s first port to reach a capacity of 10 million twenty-foot equivalent units (TEU). In an interview with Business Standard, Chairperson of JNPA and Chairman and Managing Director of Vadhvan Port Project, Unmesh Wagh, revealed that the port handled 7.05 million TEU in 2024, marking its highest-ever volume. The expansion will include a new terminal with a 2.4 million TEU capacity, expected to raise the total capacity to 10.4 million TEU by the next financial year. Meanwhile, the Vadhvan Port Project, which will cost ₹76,220 crore (approx. $9.1 billion), is progressing ahead of schedule with the first tender awarded for construction.

Apple sees iPhone export growth from India

Apple’s local production, exports surge in India: Apple has surpassed the ₹1 lakh crore (approximately $12.8 billion) mark for iPhone exports from India in 2024, marking a 42% year-on-year increase, according to preliminary industry estimates reviewed by The Economic Times. The company’s local production has surged nearly 46% to $17.5 billion (₹1.48 lakh crore) for 2024, with local value addition now reaching 15-20% depending on the model. Apple is set to reach $30 billion in annual production, potentially increasing its share in the iPhone production ecosystem in India to 26% from the current 14%.

Adani surpasses Ambanis in merger and acquisition deals in 2024: Adani Group outpaced Mukesh Ambani-led conglomerates in mergers and acquisitions (M&A) deals last year, securing agreements worth $6.32 billion, compared to the Ambanis’ $3.14 billion. However, in 2023, Ambani-run entities led the M&A league among Indian conglomerates, signing deals totalling $8.77 billion, while Adani’s deals were valued at $1.73 billion, reports Business Standard.

Tata Consultancy Services signals optimism despite quarterly headcount reduction: Tata Consultancy Services (TCS) senior management remains confident about a stronger calendar year 2025, despite a reduction of over 5,000 employees in Q3 FY25. Chief Human Resources Officer Milind Lakkad, in an interview with Business Standard, clarified that headcount fluctuations are not directly tied to growth, as hiring plans are structured annually. TCS is also positioning itself as an Artificial Intelligence (AI)-first company, integrating AI across talent acquisition, development, and operations, with plans to hire 40,000 freshers this year.

Mahakumbh Mela kicks off

Mahakumbh begins in UP, Laurene Jobs to take a ritual dip on Tuesday: Mahakumbh mela began on Monday morning. Around 1 crore devotees will take a ritual dip at the confluence of Ganga, Yamuna, and the mythical Saraswati, which is said to be the largest congregation of mankind. The whole festival will continue until February 26. Around 4 crore devotees will take a dip in the first two days. Billionaire philanthropist Laurene Jobs, widow of Steve Jobs, reached the Ashram of Swami Kailashnand Giri, the head of congregation of Hindu monks called the Niranjini Akhara, in Prayagraj on Saturday. She will attend the first three days of prayers at the Mahakumbh in Prayagraj, after which she will be travelling to the US for Donald Trump's swearing-in ceremony. Laurene arrived in Prayagraj on Saturday evening with her 40-person crew. On Sunday noon, she made her way into the Maha Kumbh Mela region. According to Hindustan Times, she will take the ritual dip at the Sangam on January 14.

ISRO’s successful satellite docking trial

ISRO brings experimental satellites within three metres in docking trial: The Indian Space Research Organisation (ISRO) successfully brought two experimental satellites within three metres of each other on Sunday, marking a significant achievement in India’s attempt to master autonomous orbital docking technology. The Space Docking Experiment (SPADEX) satellites, launched on December 30, performed a trial manoeuvre, initially coming within 15 metres before closing to three metres. The SPADEX mission aims to pave the way for future space station operations and deep space missions.

ModiWatch: Prime Minister Narendra Modi will inaugurate the strategically significant Z-Morh tunnel in Jammu and Kashmir's Ganderbal district on Monday. Summer travel to Ladakh will be made easier by the 6.5km tunnel, which guarantees smooth connectivity between Gagangir and Sonamarg.

PM Modi celebrated the commencement of Mahakumbh Mela in Prayagraj through a social media post on X. He called it "a very special day."

Delhi Today: Hazy.

The Commission for Air Quality Management (CAQM) in the National Capital Region (NCR) revoked Stage 3 measures of the Graded Response Action Plan (GRAP) with immediate effect after the Capital's air quality improved to the "poor" level on Sunday. The AQI improvement can be attributed to the light rainfall and strong winds over the weekend. The IMD said the minimum temperature is likely to take a dip, which will worsen the air quality further. AQI is likely to fall into the "very poor" category between Monday and Wednesday.

The capital woke up to a thick layer of dense fog on Monday. An "orange" alert for dense to very dense fog conditions that affect traffic throughout the national capital region was issued by the India Meteorological Department (IMD). Routes to the Delhi airport, train stations, and numerous highways were impacted. Visibility at Indira Gandhi International Airport dropped to 50 meters. Flight operations experienced minor delays.