Indiacators 25/5
US negotiations, Pakistan aftermath,
US-India trade negotiations
Negotiations with the US continued this week with Commerce Minister Piyush Goyal in the US. It now looks likely that India will sign a short-term deal to avert the 26 percent tariff threatened by the US. It will continue with its longer-term schedule for a trade deal announced at the beginning of the Trump presidency. It now looks like India will open its central government contract procurement market to US firms.
1. India set to sign interim US trade deal by July 8, before 90-day pause ends - Indian Express
India is likely to sign an interim trade deal with the US by July 8, when the 90-day pause window ends and reciprocal tariffs kick in. This, a government official said, will ensure New Delhi averts the 26 per cent retaliatory tariff imposed by the US on Indian goods.
“Talks are progressing positively. We are looking to conclude an interim deal before the first tranche (of tariffs) takes effect on July 8. It will cover goods, non-tariff barriers, and select areas of services, including digital trade. We are working to ensure that the 26 per cent additional duty and possibly the 10 per cent baseline tariff do not apply to India,” the official said.
However, another official said that 10 per cent tariffs are likely to remain in place. Notably, the US chose to keep the 10 per cent baseline tariffs under its trade agreement with the UK, despite Washington having a trade surplus in goods.
2. India Mulls Opening Key Government Procurement Market to Foreign Companies - India Briefing
As per several media reports published on May 23, 2025, India is preparing to partially open its tightly controlled government procurement market to foreign companies, including those from the United States (US). In an article published by Reuters, this move follows similar access granted to the UK by India under a recently concluded free trade agreement (FTA).
Note: After India allowed British companies into its central government procurement market, this move was highly likely as a part of US trade negotiations.
3. Explained | What Trump's Apple threat means for India's tariff negotiations - Deccan Herald
But there is no certainty about the path for the talks, as the past 10 days have made frustratingly clear in New Delhi. Before he added Apple to the chaotic dynamic, Trump conflated India's trade negotiations with its recent conflict with its nuclear-armed neighbor Pakistan. Indian diplomats were frustrated when the American president claimed the credit for brokering a ceasefire and then offered to step into their dangerous dispute over the region of Kashmir.
India's government was made even more unhappy when Trump then inserted trade into his account of the peacemaking. "I said, 'Come on, we're going to do a lot of trade with you guys,'" he said on May 12. "People have never really used trade the way I used it." A senior Indian official denied that trade had even been discussed.
Then, on May 15, Trump demanded that Apple stop its yearslong efforts to reduce its reliance on China and make iPhones in India. "I told Tim Cook: 'We're not interested in you building in India. They can take care of themselves; you up your production” in the United States, he said, referring to Apple’s CEO.
4. Apple supplier Hon Hai commits $1.5 bn to India as iPhone exports soar - Business Standard
Note: Comes a week after Foxconn committed $500m to a semiconductor factory in Uttar Pradesh.
5. Apple’s Contract Manufacturers and Component Suppliers in India - India Briefing
Pakistan-India aftermath
In the aftermath of the Pakistan-India conflict, there has been an enormous amount of noise. Typically reliable sources have been drawn into the whirlpool of triumphalist propaganda. As this article from Brookings shows, information warfare is taken particularly seriously by the Pakistani defence establishment. This is because
6. Lessons for the next India-Pakistan war - Brookings
It is too early to comprehensively assess what this means for India, Pakistan, and the region. But I think there are at least four dynamics coming into view that will shape the nature of future crises.
First, the global debate on “attribution” has tilted decisively in India’s favor, but in ways that may exacerbate political pressures to react hastily following future terrorist attacks.
Second, the two militaries have set troubling new precedents about target selection that will influence military planning and could raise the stakes for a future war.
Third, information operations appear to be moving from the periphery to the center of wartime planning, particularly within the Pakistani defense establishment.
And fourth, the widespread use of drones and loitering munitions has complicated how both militaries interpret the escalation ladder. Each of these developments could make the next crisis more unpredictable than the one we just experienced.
7. Modi Rules Out Talks With Pakistan a Month After Kashmir Attacks - Bloomberg
8. India and Pakistan launch rival diplomatic efforts to spin Kashmir conflict - FT
Note: Pakistan sees an opportunity in the White House’s opportunity to reset US-Pakistan relations and weaken US-Pakistan ties. Shashi Tharoor, a prominent Congress politician, will head the Indian delegation, in an attempt to present a united front.
Indus Bank fraud scandal rolls forward
IndusInd Bank disclosed accounting lapses at the end of April worth around 230m USD. SEBI is now ‘looking into it’. Indus Ind’s initial cover story blamed an RBI rule change for the losses in the derivative portfolio. An internal investigation revealed serious accounting discrepancies. Broking firms downgraded the bank’s stock and the Indus Ind’s CEO resigned.
12. Sebi looking into ‘egregious violations’ in IndusInd Bank case - Indian Express
14. Maruti Suzuki looks to India’s ‘next billion’ car buyers - FT
RBI/policy watch
Regulators plan to close a loophole which allowed indirect foreign investment.
15. Exclusive: India plans stricter rules for companies with foreign ownership, sources say - Reuters
An FOCE will be defined as an Indian company or investment fund that is controlled by persons resident outside India. As well as covering indirect ownership, it will also make directly owned foreign firms subject to FDI rules when it comes to changes in structure or ownership.
In particular, any transfer of the indirect shareholding will need to be reported and will have to comply with sectoral foreign investment caps. These transactions will also be subject to rules stating they be made at fair market value.
The proposed revision in the rules aims to ensure foreign investors cannot bypass the intent of India's FDI policy, sources said.
Note: The INR has come under pretty intense pressure in the past few months. RBI foreign currency reserves fell by over $80bn to under $625bn from Sep 2024 to Jan 2025, but have since recovered most of the losses.
There was “virtually no public disclosure” for those at the helm of market regulator Securities and Exchange Board of India, not even meeting “minimal expectations”, new chief of SEBI Tuhin Kanta Pandey told The Indian Express.
This candid admission comes within three months of his taking over the charge at Sebi from Madhabi Puri Buch whose controversial three-year term ended in February. She and her husband Dhaval Buch had faced allegations that they held investments in offshore funds, in which associates of Adani Group Chairman Gautam Adani’s brother, Vinod Adani, had also invested. The Buchs had denied these allegations.
Note: The new SEBI chief has made a public commitment to transparency and has promised to set up a committee to write up new guidelines on conflicts of interest. This is definitely needed. Without proper recusal processes in place, trust in SEBI’s ability to confront India’s all powerful conglomerate will be undermined in future.
19. For foreign investors, a long path ahead for India nuclear reforms - Nikkei
India-Bangladesh relations tumble
20. India limits 42% of imports from Bangladesh, targeting $770 million in goods: GTRI - Economic Times
India has imposed new restrictions on imports from Bangladesh through land ports, affecting goods worth around USD 770 million. This amounts to nearly 42 per cent of total bilateral imports, according to the Global Trade Research Initiative (GTRI), a trade research group. The Union Ministry of Commerce and Industry issued the restrictions on Saturday following directions from the Directorate General of Foreign Trade (DGFT).
The move limits several key Bangladeshi products, including readymade garments, processed foods, and plastic items, to specific sea ports or bans them entirely from entering India via land routes. For example, Bangladeshi garments, valued at USD 618 million annually, can now only be imported through the Kolkata and Nhava Sheva seaports. This cuts off access through previously vital land routes and is expected to hit Bangladesh's garment exports to India hard.
21. How India–Bangladesh trade ties are fraying — and China gaining ground? - Indian Express
Political and economic tensions between India and its largest trade partner in South Asia are growing, as the union government on Saturday decided to impose a number of import restrictions on goods from Bangladesh — particularly ready-made garments, the country’s largest export item and a key source of foreign exchange.
While government sources say that Saturday’s import restrictions and the termination of the transhipment facility are a result of similar restrictions imposed by Dhaka and port congestion caused by goods from Dhaka respectively, Bangladesh’s Chief Adviser Muhammad Yunus — an economist and Nobel laureate who has suggested expanding the influence of the Chinese economy around India’s strategically important Northeast region — has contributed to worsening India–Bangladesh trade relations.
Note: After the fall of Sheikh Hasina, Bangladesh’s pivot to China continues apace. Ever closer integration between Bangladesh and India us under two separate, but fundamentally interconnected strands. Firstly, Hasina’s regime has given way to Yunus, whose pro-China rhetoric has infuriated New Delhi. Secondly, Bangladesh will soon lose its duty-free access to certain key export markets in the west, and is looking for new destinations for trade.
22. Is India perfecting a menacing deportation policy? - The Hindu Frontline
In 1992, the P.V. Narasimha Rao-led Congress government at the Centre, under pressure from an ascendant BJP, rounded up hundreds of so-called “illegal Bangladeshis” from Delhi and forcibly sent them to Bangladesh through the West Bengal border. The whole drive was named “Operation Pushback”…
However, with the dramatic change in government in Dhaka in 2024, this mutual understanding may be fraying at the edges. India’s renewed pushback policy, which appears to be more forceful, systematic and covert than before, could antagonise the new administration, which is not exactly India-friendly.
It could create conditions for Bangladeshi border guards to use lethal force against border-crossers to deter what they see as “push-ins”. Sarma’s latest announcement, by giving a more formal edge to the pushback policy and bringing it to the forefront of the political discourse, does not help. It gives Dhaka a ground to accuse India of subterfuge at the borders and violating Bangladesh’s sovereignty by sending people across without authorisation or verification.
Free speech in India
The news story causing the most chatter in opinion columns this week is the case of Ashoka University’s head of political science, Ali Khan Mahmudabad, who Haryana police arrested on spurious grounds. Mahmudabad made two Facebook posts, which drew attention to a contradiction in India’s use of female military leaders in press conferences. Cue two criminal complaints by a BJP leader and a Haryana State Commission for Women leader (private citizens can file criminal complaints in India). About a dozen police officers arrested Mahmudabad soon afterwards.
India’s relationship with free speech has long been troubled and Mahmudabad’s arrest is not unprecedented. Only a couple of months ago, police visited one of India’s biggest podcasters for making an off-colour joke on an internet panel show. Last year, Arundhati Roy was taken for a criticism of the government she made over a decade ago. What is worrying here is the reaction of Mahmudabad’s university. There have now been three high-profile pieces of controversial criticism of government by Ashoka academics since 2020. In all three cases, the university either disowned or sacked the provocateurs.
9. Suhas Palshikar writes on Pahalgam and free speech: How liberal is this democracy? - Indian Express
Recently, two citizens exercised their right to free speech — both referred to India’s decision to have Colonel Sofiya Qureshi as a member of the team at the press briefings during India’s post-Pahalgam military action. One citizen argued that there was a contradiction involved in this choice while the other used the same instance to target her as being the “sister” of terrorists. In the former case, the citizen was promptly arrested and received interim bail along with some bashing by the Court, and now faces the hanging sword of a Special Investigation Team; in the latter case, too, the idea of an SIT was invoked but the citizen got away without arrest.
These two instances bring into sharp focus the complications in the path of freedom of expression and the confusion about how to approach it. While India always prided itself on its democratic credentials, its journey on the liberal path is dotted with such complications. They stem not only from a resistance to the idea of FoE but an unwillingness to let society and the polity be governed by the liberal norm. How do these complications reflect on India’s democracy?
11. Silent universities, collapsing republics: When thought becomes a crime - Scroll
Bishnoi-Khan
A long read in the FT this week on an extraordinary gang saga featuring arguably India’s most popular actor – Salman Khan. In 1998, Khan allegedly shot a blackbuck while filming in Rajasthan. Blackbucks are sacred creatures to the Bishnoi community and conservationists have long pushed for prosecution against Khan. Decades later, Punjabi gangster Lawrence Bishnoi latched onto the case as a cause celebre, a common strategy.
23. How India’s most notorious gangster declared war on a Bollywood legend - FT
24. The Crazy Case of Lawrence Bishnoi | Mohak Mangal - YouTube
Others
25. The India-United Kingdom Technology and Security Initiative: Ideas for Change - Carnegie Endowment
26. Banu Mushtaq: The rebel writer - The Hindu Frontline
27. Prospects for India–China relations - IISS
Note: Banu Mushtaq won the International Booker Prize this year for her writing on the lives of south Indian Muslims.