Arvind's Newsletter

1.Economic growth seen at 6.5% in FY25, RBI policy pushed down demand: FinMin

The Centre expects the economy to grow at 6.5 per cent in FY25 after a dull first half of the current fiscal, driven by gain in agricultural and industrial activity, according to Finance Ministry's Monthly Economic Review released on Wednesday. In the review, the ministry has cited the Reserve Bank of India's (RBI) monetary policy stance among the reasons for the slowdown in the first half of FY25.

The GDP growth rate fell to a seven-quarter low of 5.4 per cent in the July-September quarter, down from 6.7 per cent in the previous quarter. However, the RBI kept its key rates unchanged for 11 straight monetary policy meetings despite pressure from the industry, citing inflation.

2.N Chandrasekaran’s year-end note: Tribute to Ratan Tata and a vision for 500,000 jobs in manufacturing in next 5 years

Tata Group Chairman N Chandrasekaran recently posted his year-end message on the company's website that not only pays tribute to Ratan Tata's legacy but also points to 500,000 new jobs within the company in the next five years.

In his year-end message, the Tata Group chairman discussed the humanitarian crises following the year’s geopolitical upheavals. He touched upon the ongoing military conflicts in Ukraine, Gaza and Sudan and their impact on global supply chains.

3.India roars ahead of China to top Asian IPO rankings

India has eclipsed China as Asia’s top market for company listings this year, as buoyant stock prices spark a boom in initial public offerings.

Propelled by companies including Swiggy and Hyundai Motor, India will be the world’s second-largest equity fundraising market behind the US for the first time, according to data from Dealogic for 2024. The National Stock Exchange of India is set to be the number-one venue for primary listings by value, ahead of Nasdaq and Hong Kong Stock Exchange, KPMG figures show.

The rankings herald a shift in 2024 in Asian finance, as a tightening of regulations leads to a relative listings drought in China. Meanwhile, companies have rushed to take advantage of high valuations following a multiyear rally in Indian equities, despite concerns over whether the market can weather an economic slowdown.

“It’s been one of the most busiest times in the history of Indian capital markets,” said V Jayasankar, a managing director at Kotak Investment Banking, which worked on some of the country’s biggest IPOs this year. “India is certainly getting noticed — China needs to probably do a lot more to really consistently attract that business.”

4.Indian immigration is great for America; The economist Noah Smith in his blogpost Noahpinion.

“Indians are now the second-biggest group of foreign-born residents in America (behind Mexicans, of course), and they are also the most successful by many measures — their median household income far exceeds that of any other group.

And Indian Americans are now influential well beyond STEM and the tech world — for example, in politics. Kash Patel has been nominated to head the FBI, and Vivek Ramaswamy is helping to lead the new Department of Government Efficiency. Even Vice President JD Vance’s wife is Indian! Although Indian Americans still lean a bit toward the Democrats on average, they’re becoming more evenly split between the parties — there are a substantial number of Indians on the right now, despite the presence of another faction of the right that doesn’t particularly like Indians.

So the debate over skilled immigration is actually just part of a broader debate about the fast-growing role of Indian and Indian-American people in the U.S. elite. But first, let’s talk about skilled immigration on its own merits.

H-1b workers are good for American tech workers (and for American workers in general)

First, let’s point out that skilled immigration overall is very important and good for America. Elon Musk is right when he says “If you force the world’s best talent to play for the other side, America will lose.” Read on,

5.Russia accused of shooting down Azerbaijan passenger plane

Russian anti-aircraft fire may have caused a plane to crash in Kazakhstan on Christmas Day, according to defence experts and officials in the region.

The Azerbaijan Airlines flight was en route from Azerbaijan’s capital Baku to Grozny in Chechnya, southern Russia, when it diverted and crash-landed in Kazakhstan, killing 38 people. Twenty-nine passengers survived. Most of those on the plane, an Embraer 190, were Azerbaijani citizens. There were also 16 Russians onboard and several citizens of Kazakhstan and Kyrgyzstan.

In preliminary official reports on Wednesday, Russia said that heavy fog had forced the plane to divert from its planned landing in Grozny and seek to land in Kazakhstan, where it crashed after hitting a flock of birds.

On the same day, Azerbaijan’s president said he had been told the plane had been diverted due to poor weather conditions. But that was contradicted by experts and officials in the region and in Ukraine, who cited evidence that Russian air defences were operating over Grozny at the time in response to a Ukrainian drone strike. They also cited images of what appeared to be shrapnel damage on the inside and tail of the wrecked plane.

6. The US state of Virginia will be the site of the world’s first commercial fusion reactor — if all goes according to plan

Commonwealth Fusion Systems announced plans to build a grid-scale plant near Richmond, scheduled to come online in the early 2030s and capable of powering around 150,000 homes.

In theory, fusion — the process that powers the stars — offers essentially limitless clean energy, but is technically challenging. Recent breakthroughs have raised hopes and money, with several startups fundraising to build reactors. Traditional fission-based nuclear energy is also seeing a revival.

7.Pakistan’s nuclear strategy shifts as US realigns ties in Asia; Wall Street Journal

Pakistan rejected Biden administration officials’ assertions that it is developing ballistic-missile technology that could eventually give it the capability to strike the U.S., but geopolitical experts say long-range weapons would be in step with Islamabad’s shifting national security concerns as India and the U.S. draw closer.

The U.S. last week imposed sanctions on four entities involved in Pakistan’s missile program, including the National Development Complex, which it said oversees Pakistan’s development of ballistic missiles. Deputy national security adviser Jon Finer said the sanctions were imposed after Washington and Islamabad failed to make progress in confidential talks.

U.S. intelligence points to efforts by Pakistan to develop equipment to test large rocket motors, according to White House officials. “Just looking at a map and looking at ranges, you know, we believe that this is fundamentally focused on us," said Finer at an event sponsored by the Carnegie Endowment for International Peace and the Arms Control Association in Washington on Thursday.

Pakistan hasn’t publicly acknowledged developing long-range or intercontinental ballistic missiles. Its longest-range publicly known missile is the Shaheen-III, tested in 2021, with a range of about 1,700 miles.

8.Germany joins EU’s ‘ultra-low’ fertility club

Three more EU member states — including the most populous, Germany — have joined the list of countries with “ultra-low” fertility rates, highlighting the extent of the region’s demographic challenges.

Official statistics show Germany’s birth rate fell to 1.35 children per woman in 2023, below the UN’s “ultra-low” threshold of 1.4 — characterising a scenario where falling birth rates become tough to reverse.

Estonia and Austria also passed under the 1.4 threshold, joining the nine EU countries — including Spain, Greece and Italy — that in 2022 had fertility rates below 1.4 children per woman.

With young people reaching milestones, such as buying a house, later in life, the average age of EU women at childbirth rose to 31.1 years in 2023, a year later than a decade ago.

…Austria reported a fall to 1.32 children per woman in 2023, down from 1.41 in the previous year. In Estonia, the rate hit 1.31 in 2023, down from 1.41 in the previous year.

Birth rates have fallen across Europe — even in countries such as Finland, Sweden and France, where family-friendly policies and greater gender equality had previously helped boost the number of babies. In Finland, the birth rate was above the EU average until 2010, but it dropped to 1.26 in 2023, the lowest since the record began in 1776, according to official data.

France had the highest birth rate at 1.79 children per woman in 2022, but the national figures showed it dropped to 1.67 last year, the lowest on record.

9.Adani Green's Khavda power plant world's largest, five times the size of Paris

Adani Green Energy Limited is developing 30 GW renewable energy plant on barren land at Khavda in Kutch of Gujarat over area of 538 sq km after which it would become the planet's largest power plant regardless of the energy source.

The area of project in Khavda is five times the size of Paris and almost as large as Mumbai. The project was started in December 2022 and the first production was made on December 31, 2023. Adani Green Energy Limited will invest about Rs 1.5 lakh crore and Adani group will invest about Rs 2.3 lakh crore in renewable energy and manufacturing capacity by 2030.

10.Russian companies are using bitcoin in international trade to get around Western sanctions, the Kremlin said.

Laws passed by Moscow earlier this year cleared the way for the use of cryptocurrencies in cross-border transactions, while Russia also stepped up bitcoin mining.

Banks in the country worry that traditional payments could land them in hot water, and the embrace of digital currencies marks the latest maneuver to evade foreign government scrutiny; Iran has also used crypto to get around sanctions.

But Moscow’s steps to promote crypto mining have already hit hurdles, Crypto Briefing wrote: The activity will be banned in 10 regions of Russia starting next year because of electricity shortages.