Many global giants, such as Shein and Apple, are shifting their production to India to diversify risks and leverage the country’s young workforce and various government incentives. Although India is increasingly attracting investments, challenges include labor law violations and weak infrastructure.
More on the matter in the article below. 
https://www.cnbc.com/2025/06/12/from-shein-to-iphones-indias-manufacturing-moment-is-here.html
Here’s a story about how India aims to leverage its large reserves of rare earth metals, especially “in response” to China’s export restrictions.
The country’s goal is to develop domestic mining and processing by trying to offer an alternative to the market largely dominated by China. However, challenges so far include a lack of technology, investment, and expertise.
Here’s a five-minute read on India’s economy.
The article discusses, among other things, the slowdown in India’s economic growth, but it emphasizes that the country maintains its position among the world’s fastest-growing economies. Even if growth slows slightly, India will still rapidly outpace many other major powers and benefits from favorable structural reforms and a young, growing population. Moreover, according to forecasts, growth is on a stable footing.
India’s IT and digital services exports continue to surge, and the country is increasingly positioning itself as a global back office for advanced services including fintech, edtech, and healthtech, coming a long way to Global Capability Centres from call centres of early 2000s. This high-margin sector provides a valuable cushion to current account pressures. Amid US-China decoupling and China+1 strategies, India is attracting foreign direct investment into electronics, pharmaceuticals, semicondductors and renewable energy manufacturing.
Last year, household savings in India decreased for the third consecutive year. At the same time, household debt grew significantly, indicating that credit is increasingly being used to cover consumption. The article below states that this development is concerning, but it also reminds us that positive signs are visible in rural areas, such as rising wages and a recovery in demand, especially as food prices stabilize.
Consumer confidence in rural areas remains cautiously optimistic, while in urban areas, the mood is more pessimistic. Inflation has slowed, and the central bank is expected to cut interest rates, which could further support demand growth. Simultaneously, the growth in labor costs for IT companies has slowed, and favorable weather conditions are expected to stabilize food price trends.
The article below has more on these themes.
Here are more figures and details about the Indian economy’s performance. Partially overlaps with the aforementioned story.
India’s economy grew strongly by 7.4 percent in January–March and 6.5 percent for the entire fiscal year 2024–2025, exceeding market expectations.
Growth was particularly driven by services and construction. Inflation slowed, but household savings decreased. Investments and public spending supported economic development, although private consumption stabilized.
A concise story readable in a couple of minutes.
The rupee depreciated marginally amid volatile foreign FPI flows and elevated oil prices, though it remains above previous lows. Looking ahead, CareEdge anticipates a stable FY26, marked by moderate inflation, sustained growth, and ongoing investment momentum.
India’s IPO boom has cooled down this year.
According to the article below, only 99 stock market listings were made in the first half of the year compared to last year’s 147. Reasons for this include weak investor confidence, global uncertainty, and the country’s slowed consumption.
Several companies are waiting for better times; in the second half of the year, listings are expected to pick up again. Potential giant IPOs include Reliance Jio and Tata Capital.
The Indian rupee weakened on Monday, as Middle East tensions increased safe-haven demand for the dollar. During the day, a drop in oil prices supported the currency, and the rupee strengthened.
These developments seem to have a significant impact almost everywhere, which is, of course, not surprising.
India is restricting the import of jute yarn and fibres from Bangladesh to only one port to protect, among other things, its domestic industry and rural jobs.
The reasons include unfair trade practices, subsidized prices, and malpractices. The countries have already drifted into “strained relations” due to political changes and previous trade restrictions. Such decisions further strain relations between the countries.
More on the matter can be found in the article below.
Below is an article, among other things, about how India’s Finance Minister Nirmala Sitharaman believes the country’s economy will remain the world’s fastest-growing, even as geopolitical challenges continue.
She emphasized strategies such as increasing trade agreements and reforms targeting the banking sector. Additionally, the country is discussing the distribution of finances to states and GST tax reforms… possibly a higher tax rate by 2026.
We need to have more trade agreements, need to open up on very many more sectors, make banks be more amenable for industry and their needs.
India’s stock market has risen less than 6 percent year-to-date, significantly less than its Asian peers, while valuation levels have remained expensive.
According to the article, the short-term return expectation is therefore limited. In the long term, however, population growth and consumption still support earnings growth. Additionally, the article states that investors should focus on companies relying on strong cash flow and household consumption, or similar.
The article below, readable in a few minutes, states that a comprehensive trade agreement between India and the States could boost India’s exports and industry, and also support agricultural growth.
Negotiations continue, but disagreements are particularly related to agricultural products. The agreement could almost double India’s goods exports to the United States in a decade, while without an agreement, India could lose a third of its exports.
The United States and India are, according to the news below, finalizing an interim trade agreement, under which tariffs could fall below 20 percent.
India may get better terms than many other countries in the region; additionally, the agreement is expected to be announced with a joint statement without a formal tariff requirement, and it would leave room for further negotiations. Challenges still exist, such as the dispute over the import of genetically modified products mentioned in the article.
Musk’s and India’s ventures have started to progress.
Tesla opened its first showroom in Mumbai, and Starlink received permission to start commercial services in India.
Musk is looking for growth opportunities in India as relations with China and the United States have become more difficult.
Investments are still in their early stages, but the article highlights that Tesla and Starlink could trigger a new wave of foreign investment in India.
India and the United States concluded the fifth round of talks on a new bilateral trade agreement in Washington.
The goal would be to complete the first part of the agreement by autumn. The negotiations covered, among other things, tariffs on agricultural products, automobiles, and steel, as well as possible tariff reductions.
India is seeking additional concessions for labor-intensive sectors, while the United States wants relaxations on industrial products and agriculture.
The article below explains how India is unfazed by the approaching tariff deadline set by the United States, even though the negotiation period ends on the first day of August.
India has negotiating leverage, such as its BRICS membership, as well as alternative trade partners and a strategic position as a counterweight to China. It is simultaneously actively engaged in trade negotiations with other countries to strengthen its position in the global economy.
“Strategically, the U.S. has little interest in alienating India. It sees India as a strong partner that can shape the Indo-Pacific landscape,” Harsh V. Pant, Vice President of Studies and Foreign Policy at Observer Research Foundation, told CNBC.
Intian keskuspankin eli RBI:n rahapoliittisen komitean jäsen arvioi, että Intian talous voi kasvaa yli 6,5 % vuonna 2025–26 ilman merkittäviä esteitä.
Intia erottuu edukseen maailmantaloudessa, joka kärsii velkakriiseistä ja inflaatiosta, koska kasvu perustuu vahvaan kotimarkkinaan. Myös Intiaan suuntautuvien suorien sijoitusten näkymät pysyvät myönteisinä.
“And, you know, hopefully this kind of growth momentum will continue for coming years, but also be over time strengthened to 7 -7.5 per cent,” he said.
The Indian economy is estimated to have grown at 6.5 per cent in the previous fiscal year.
As per the Reserve Bank of India’s projections, the country’s economy will expand at the same rate in the current fiscal year as well.
Responding to a question on inflation, Kumar said current rate of CPI inflation is around 2 per cent and this is largely a result of the policy adopted by the MPC (monetary policy committee) or RBI, and now it has come down to within the target range.
India’s interesting derivatives market has apparently not yet been discussed in this thread. As can be inferred from the image below, the derivatives market is unbelievably large relative to the market for the underlying assets themselves. India can therefore be considered a Mecca for decadent options trading, in the style of Wall Street Bets. India’s regulatory authority (SEBI) recently published a report stating that 91% of retail investors engaging in options trading incur losses.
(Note: The statistics in the image extend to 2023.)
This has not gone unnoticed by Wall Street, and a firm called Jane Street, in particular, has made significant profits in India’s derivatives market. Jane Street’s activities have now come under SEBI’s scrutiny, and SEBI is accusing the company of market manipulation. The way this allegedly illegal market manipulation came to light is quite amusing: Jane Street sued another firm, accusing it of using JS’s trading strategy in the market, which had allegedly been leaked to them by former JS employees. As a result of the lawsuit, this strategy also piqued SEBI’s interest, which then began investigating JS.
What happened next was that SEBI banned JS from trading in the Indian markets due to market manipulation. JS denies this, but it has nevertheless transferred $564 million in assets to SEBI’s escrow account (I’m not entirely sure about the terminology here, so I’m not completely confident about this expression).
So, what exactly was this alleged market manipulation about? According to Jane Street, their trading was merely based on index arbitrage. SEBI, on the other hand, claims that JS manipulated the index price through loss-making trades; these loss-making trades would have affected index-linked options, which JS also traded, to such an extent that the losses incurred from the alleged index manipulation would still have been smaller than the profits from options trading. The unusual relationship between derivatives and underlying asset trading in the Indian markets makes such manipulation possible.
If my ramblings on the subject are too unclear, or alternatively so interesting that you’d like to explore the topic elsewhere, I strongly recommend the video and podcast episode below on the subject, as well as the FT articles, from one of which the above quote was taken.
https://youtu.be/VhqosmgfGR0?si=h4Z5VEfh20v23A4P
https://youtu.be/ZzjfDS7y1aA?si=oDfuvPCGCbU2McPq
https://www.livemint.com/market/stock-market-news/can-sebi-truly-level-the-playing-field-for-retail-traders-11753510440285.html
https://www.ft.com/content/2438489c-0326-4ffb-b58f-e4a2a7f34f0a
https://www.ft.com/content/41c4789a-afa6-462c-a6ea-9704c2ba78a7
Here’s a story about how India has become the largest smartphone exporter to the United States, surpassing even China, as manufacturing in the country grew by 240 percent annually. Nearly half of the phones exported to the United States are assembled in India, because China’s share has dropped significantly. This is due, among other things, to Apple’s relocation of production away from China due to trade tensions.
https://www.cnbc.com/2025/07/29/india-surpasses-chinese-smartphone-shipments-to-us.html
Trump has imposed a 25 percent tariff on India and threatened further sanctions, calling India a “dead economy”. India’s Trade Minister Piyush Goyal responded in parliament that the country’s interests would not be jeopardized in the negotiations. The country emphasized that agriculture and dairy products were outside these negotiations.
Bilateral trade with the United States amounted to 131.8 billion dollars last year.
With India facing a 25% tariff rate effective August 1, and the possibility of an additional penalty being announced by Trump for its oil and arms trade with Russia, the future of trade deal talks remains uncertain.
India’s IT sector is reducing staff, for example, Tata Consultancy Services laying off over 12,000 employees.
According to the article below, the reasons are the impact of AI, a skill gap, and a slowdown in global demand. Routine jobs are disappearing, and new skills are required. The economy threatens to get stuck in a middle-income trap if the workforce is not trained and services are not developed towards higher added value.
Economists have urged New Delhi to accelerate its efforts in upskilling its labor force and bridge the skill gap to lower the risk of job displacement. One in five young adults in India have participated in an AI-skilling program, according to a report supported by Google.org and Asian Development Bank.
There’s more on this in the article below.