BasisPoint Insight

Thought-provoking insights on the #economy & #markets | Deep research, actionable analysis

[BasisPoint Insight @91basispoints]

Government Allows Commodity Trading at GIFT City
https://t.co/QJZPSbgEry

[BasisPoint Insight @91basispoints]

A Silicon Valley titan’s affair with an alleged spy makes for spicy reading but the real story in the Nvidia scandal is not the relationship but a loophole it exposed.

There are over 17,700 measures initiated against Chinese exports. Beijing’s answer to this has now been retreat, but relocation. As it poured investment into Asia, Africa, Central America and parts of Latin America, it achieved three things - production moved to cheaper locations, tariffs aimed at China were sidestepped, and Chinese firms secured cheaper energy and minerals abroad.

Chips are the newest product to travel this road, and Nvidia seems to have grasped this late, writes Nilanjan Banik for BasisPoint Insight in his analysis, ‘The Honey Trap Is the Headline. The Chip Pipeline, the Story’.

Whether former chief executive Jensen Huang’s judgment was compromised is one question. Whether Nvidia’s compliance caught its customers’ behavior is another. The company can be innocent of the first and still negligent on the second. A board investigation, a US Justice Department inquiry and a shareholder lawsuit will test both.

Read:
https://t.co/9tIPTrj0T3

@banik_nilanjan

#SemiconductorSupplyChain #AIChipExports #ExportControls #TechGeopolitics #SupplyChainSecurity #nvidia

[BasisPoint Insight @91basispoints]

PMC Bank reported a net profit of nearly ₹1 billion in 2018-19.

A few months later, the RBI restricted it. Police later told a court that the bank had hidden 44 loan accounts linked to one real estate group behind 21,049 fictitious ones.

How does something like that stay hidden for more than a decade?

Most banks have three lines of defence: the people who take the risk, the people who monitor it, and the auditors who check both. In India’s cooperative banks, some of those lines may barely exist. Boards are elected, control teams are thin, and depositors trust the bank because it’s local and familiar, not because they can see what’s going on inside.

In the concluding part of their series, Dr. Rabi N. Mishra, former Executive Director of the RBI, and economist Komal Gupta look at PMC, Madhavpura and Karuvannur. They explain why the same failure keeps repeating across two decades, and what it will take to stop it.

Read here:
Three Lines of Defence in Cooperative Banks: Orchestra Sans Instruments
https://t.co/62vwP5Q9fe

#CooperativeBanks #BankingRegulation #CorporateGovernance #RiskManagement #InternalAudit #RBI #PMCBank #BasisPointInsight

[BasisPoint Insight @91basispoints]

India is among the largest importers of gold, accounting for almost 20-25% of global trade, yet it only remains a price-taker, not a price-setter. That is done in the markets of London and New York.

To be a hub for gold trade and price discovery, India needs predictable policies, a transparent physical market, effective curbs on the grey market, reliable quality assurance and hallmarking, strong infrastructure, and integration with global value chains. These fundamentals remain yet unaddressed.

In his piece, ‘India’s Gold Hub Ambition Needs More Than Its Vast Gold Holdings Alone’, G. Chandrashekhar writes Indian households hold an estimated 30,000 tonnes of gold and leveraging this stock will require consistent policies that build confidence across the value chain. He mentions measures such as electronic gold receipts, gold monetisation scheme and distinction between investment and savings demand will help mobilise this largely unproductive wealth.

Read the full story on BasisPoint Insight
https://t.co/9tLVOg9GII

#Gold #IndiaGoldHub #GoldImports #EGR #GoldMonetisation #BullionMarkets #PriceDiscovery

[BasisPoint Insight @91basispoints]

Public anger over rising living costs is growing. But why is government debt largely missing from the debate?

Former RBI Deputy Governor Michael Patra examines the widening disconnect between public demands for greater spending and bond markets’ concerns about fiscal discipline.

With debt levels climbing, borrowing costs rising and fiscal rules increasingly under strain, governments face a difficult balancing act.

Patra also examines India's relative fiscal resilience and the challenges ahead for its bond market.

Can governments restore fiscal discipline when political pressures favour spending more?

Read Michael Patra’s column for BasisPoint: Why Are Festering Fiscal Follies So Faint in the Furore?
https://t.co/rvsF1QoIFY

#FiscalPolicy #PublicDebt #BondMarkets #IndiaEconomy #GlobalEconomy

[BasisPoint Insight @91basispoints]

Who gets the gains from AI?

The AI race needs trillions of dollars, and it’s now competing with governments for the same pool of capital.

Here’s what that’s starting to mean:
▪️ Bond yields have risen in several countries, partly because of AI’s huge borrowing needs
▪️ Some CoreWeave-linked bonds already yield around 15%
▪️ Anthropic’s estimated valuation has dropped from about $2 trillion to closer to $1 trillion as investors rethink the risks
▪️ Early signs suggest entry-level jobs are already being hit

That’s a double whammy for governments: higher borrowing costs and weaker tax revenues at the same time.

It’s even harder for India. It feels AI’s effect on jobs without having big AI companies of its own, and markets are starting to see it as an “anti-AI trade.”
So who should share in the gains, and how?

✍️ Sanjay Mansabdar, 30+ years in derivatives at J.P. Morgan, Bank of America and ICICI Securities

Read: Making AI Equitable Requires Markets and Governments to Share the Gains
https://t.co/d5dJjfaQm8

@SanjayMansabdar

#AIEconomy #FutureOfWork #FiscalPolicy #IndianEconomy #BasisPointInsight

[BasisPoint Insight @91basispoints]

In 2032, the US Social Security retirement fund runs out of reserves. Unless Congress acts, benefits for 62 million Americans get cut by 22% across the board.

That sounds like America’s problem. It’s India’s too.

Washington has three ways to close the gap, and each one reaches India through a different route:
💸 Borrow more: more pressure on global capital, at a time when India is already losing foreign portfolio money
📉 Cut benefits: weaker US demand, and the US buys 54% of India’s software exports ($119.7 bn)
🧾 Raise payroll taxes: smaller paychecks for Indian workers in the US, who send home over a quarter of India’s remittances

There’s also a sting in the tail. India and the US have no social security agreement, so Indians who work in the US for less than 10 years may pay in and never get anything back.

The deadline is six years away. Washington will decide how to fix it, and India will feel the effects in its exports, remittances and capital flows.

Read the full analysis by Sagari Gupta👇
America's 2032 Social Security Cliff Could Carry Wider Costs for India
https://t.co/v9jAiWKJyF

#SocialSecurity #IndianEconomy #Remittances #ITExports #USEconomy #BasisPoint

[BasisPoint Insight @91basispoints]

Rural energy planning often focuses on expanding infrastructure and deploying technologies, with less attention on how energy can support local economic transformation.

In his piece ‘Rural Energy Must Deliver More Than Connections’, Sarada Prasanna Das writes that connecting a village to the grid or installing a renewable energy system is only part of the task. The larger challenge is to match supply with the services people need and establish arrangements capable of sustaining them.

Energy planning needs to look beyond just household consumption, and also include agricultural operations, food processing and other livelihood-related work. Availability and cost, both, can influence the economic activities households undertake.

Read the full article on BasisPoint Insight.
https://t.co/pPLNoBPS5J

@SaradaPD

#RuralEnergy #Solar #Renewable #SustainableLivlihood

[BasisPoint Insight @91basispoints]

World Bank estimates say India achieved one of the most dramatic reductions in poverty in recent decades. Challenging this narrative, though, is evidence of weak real wage growth, stagnant household incomes, slowing labour productivity and increasing dependence on welfare support. Estimates from the RBI’s KLEMS database show real income per worker grew by only 2% annually during 2012–24, substantially below the 5.3% recorded during 2009–12 and 7.1% during 2004–09.

The reported decline must also be read carefully because the methodology is different, writes Dhananjay Sinha in his article, “India’s Poverty Success Story Needs a Second Look” on BasisPoint Insight.

Despite the numbers, many households appear to have only marginally crossed the poverty line, leaving them vulnerable to slipping back if inflation, global economic disruptions and government support play foul. As fiscal constraints intensify, poverty gains built primarily on transfers may prove fragile.

Read:
https://t.co/7lkNLT3enH

@Dhananj89102936

#Poverty #householdIncome #GovernmentSubsidy #FoodSubsidy

[BasisPoint Insight @91basispoints]

When should a nation fight, when should it negotiate, and when is it time to stop?

Military superiority does not always translate into strategic success. Winning territory, sustaining an offensive and achieving a political objective are three different things.

In his latest piece, Bihar Governor Lt Gen Syed Ata Hasnain draws on India's military history to examine the difficult choices political leaders face during conflict.

Four episodes offer lessons:
🔹Haji Pir, 1965: Military action can be necessary, but even limited operations carry the risk of wider escalation.
🔹The 1965 ceasefire: The ability to continue fighting is not the same as the likelihood of achieving a decisive result.
🔹Dhaka, 1971: Trust between political and military leaders allows commanders to exploit opportunities that emerge beyond the original plan.
🔹Sri Lanka, 1987–1990: Military commitment must be continually assessed against achievable objectives, changing circumstances and the costs of staying.

The article also examines India's diplomatic opening with Pakistan in 2015 and the difficult judgment involved in pursuing talks amid security threats.

These lessons have immediate relevance to Washington's decisions over Iran.

What can another round of military action realistically achieve? Will it improve the prospects of a settlement? And what happens if it does not?

Read: When to Fight, When to Talk and When to Stop
https://t.co/l0c4mIC2cw

@atahasnain53

#Geopolitics #MilitaryStrategy #StrategicAffairs #NationalSecurity #India #IranWar #Leadership

[BasisPoint Insight @91basispoints]

A trawler 15 km off the Tamil Nadu coast loses signal just as a cyclone warning goes out. A landslide in Assam cuts a BharatNet cable, and the village waits 17 days for a fix.

These are the people India’s satellite internet debate should be about. Instead, the coverage is stuck on Musk vs Ambani.

In this piece, Minari Shah argues that the “Indian vs foreign” framing falls apart once you look closely:
🔷OneWeb (Bharti) runs on Eutelsat satellites, and Eutelsat’s largest shareholder is the French government
🔷Jio’s satellite venture is a JV with Luxembourg’s SES
🔷 Starlink, the “foreign” player, distributes through Jio and Airtel

The questions that matter are who actually needs satellite broadband, and who controls the switch in the sky.

Read the full piece 👇
The Satellite Internet Conundrum for India
https://t.co/NldYLRL1I7

@MinariShah

#SatelliteInternet #Starlink #DigitalIndia #TelecomPolicy #India

[BasisPoint Insight @91basispoints]

The Financial Stability Board recently rated India as being non-compliant with its standard for public backstop funding in bank resolution. This is not a verdict on India’s overall financial capacity to absorb losses or provide liquidity, but concerns emergency funding for banks undergoing resolution.

Rahul Ghosh, in his article “Stress Testing Banks Before the Next Crisis” on BasisPoint Insight explains banks and NBFCs must generate reliable risk parameters and results, and report them consistently to the RBI. They need to prepare for the worst as while preparation cannot prevent every crisis, but it can prevent hesitation from making one worse.

Read the article on BasisPoint Insight.
https://t.co/ndmTYFq6P2

#Banking #NBFCs #FinancialStability

[BasisPoint Insight @91basispoints]

Two words disappeared from the US Treasury's latest refunding statement. Markets noticed.

In August, Treasury said coupon auction sizes would stay unchanged for "at least" the next several quarters. This time, "at least" was gone.

That isn't a policy shift. But it quietly lowers the bar for one, and it's a sign of how closely debt management is now being read.

Once a niche event for bond specialists, the Quarterly Refunding Announcement is starting to rival the FOMC as a market mover:

📌 Around a third of US debt has to be refinanced within a year, far more than France or Italy
📌 ~$70B in liquidity-support buybacks are lined up this quarter
📌 Longer-dated Treasuries have historically rallied the day before the announcement

In his latest piece, Venkat Thiagarajan explains what the QRA is, why investors are paying attention, and what the newest one signals for yields and term premia.

🔗 Read it here: Why the US Treasury’s Quarterly Refunding is Becoming a Market Event
https://t.co/fgdLLJ2PVl

#Treasury #BondMarkets #FixedIncome #Macro #FiscalPolicy

[BasisPoint Insight @91basispoints]

All that glitters IS gold. The precious metal has lost some of its shine recently, as it ended October at $3,913, down 6.3% during the month, 10.4% since the start of the year and about 28% below its peak, but it remains the safe haven investment option that it always was.

In India, gold closed October at ₹139,830 per 10 grams, down 5.3% during the month, but still 5.4% higher since the start of 2026. Among the major currencies tracked, only the rupee and Turkish lira continued to show positive gold returns for the year.

In ‘Gold’s Shine Fades, but its Foundations Hold’, Yield Scribe argues that gold’s fundamentals remain strong on demand from central banks and ETFs, geopolitical uncertainties, fluctuating prices of crude oil, and unsteady interest rates.

Read the full article on BasisPoint Insight.
https://t.co/AEdB2j0UVB

#Gold #GoldPrices #GoldETFs #CentralBanks #FedPolicy #OilPrices #Rupee

[BasisPoint Insight @91basispoints]

Every winter, Delhi fights air pollution. But why does the same crisis return year after year?

School closures, construction bans and vehicle restrictions may offer temporary relief. Yet they do little to address the structural weaknesses that keep Delhi’s air polluted.

Delhi needs to move beyond emergency measures and rethink how it manages waste, builds infrastructure and maintains its roads, writes former Finance Secretary Arvind Mayaram.

He identifies three areas for lasting reform.

Click on link to read: Delhi’s Air Pollution: The Real Reform Lies Beyond Emergency Measures
https://t.co/Ih9oZbvP6i

@MayaramArvind

#DelhiAirPollution #CleanAir #UrbanGovernance #Infrastructure #CircularEconomy #PublicPolicy #Sustainability

[BasisPoint Insight @91basispoints]

Trump’s midterm setback may change Washington’s politics. It will not necessarily end the Iran war. Hormuz remains unresolved, and the world continues to pay the price. @ssmumbai and @iam_AnandV examine why this war is far from over.

Read:
https://t.co/U3EBrORaNW

#IranWar #StraitOfHormuz #Geopolitics #OilPrices #IndiaEconomy #Rupee #GlobalMarkets

[BasisPoint Insight @91basispoints]

When the Festive Glow Meets the Economy's Hard Realities

India’s economic resilience faces some uncomfortable questions. FDI inflows are strong, but retention remains weak. Household debt is rising as incomes struggle to keep pace. The rupee faces pressure from volatile capital flows, while oil prices complicate the RBI’s inflation calculus. Meanwhile, questions around banking reform, regulatory accountability, AI-led disruption and India’s evolving relationship with Washington point to challenges well beyond the markets.

These are just a few of the stories on BasisPoint Insight in the week gone by.

Check out our newsletter for the full coverage:
https://t.co/xdQl7uwx0E

@ssmumbai, @kaul_vivek, @Dhananj89102936, @IndiaEconomists, @krishnadevanv, @sharathinfin, @gaurasengupta, @SanjayMansabdar, @SVenkat_Delhi, @atahasnain53, @apirk16, @r_sridharan, @MayaramArvind

#IndianEconomy #FIIFlows #Markets #Debt #USMidterms