The week in charts: Trump tariffs, Vodafone Idea’s second bailout, PMI cheer

US President Donald Trump announced sweeping reciprocal tariffs on nearly all US trade partners on Wednesday, including a 26% tariff on India. Meanwhile, the government offered another lifeline to debt-ridden Vodafone Idea by converting some of the company's dues into equity.

Reciprocal math: Advantage India?

Unveiling his ‘Liberation Day’ reciprocal tariffs, US President Donald Trump announced a baseline tariff of 10% on all US imports, with specific reciprocal tariffs on nearly all of its trade partners, effective 9 April. 

India has been slapped with a 26% reciprocal tariff, lower than many Asian peers such as Vietnam (46%) and China (34%). Higher reciprocal tariffs on India’s emerging market peers could give the country a competitive advantage. In a major breather for India, pharmaceutical products, which account for nearly 12% of its exports to the US, are exempt.

Also read: Many countries will retaliate against Trump’s tariffs. India must not.

US tariffs threaten Indian EV battery makers 

India’s electric vehicle battery makers may suffer due to the 25% US tariffs on all EV battery imports announced last week. Foreign companies could dump cheap batteries in the country, just as local companies such as Amara Raja, and Reliance Industries will invest in building battery plants, Mint reported. 

Experts warned that while India’s EV market could absorb the excess supply, it nonetheless posed a threat to local firms. Most EVs use lithium-ion batteries. In FY24, India imported lithium-ion cells worth about $3 billion, up 135% since FY20.

Vi gets a second government lifeline

48.99%: That will be the government’s stake in debt-ridden Vodafone Idea after it agreed to convert ₹36,950 crore of the company's dues into equity, Mint reported. The amount covers deferred spectrum payments, the telco said in an exchange filing. 

Also read: After a new lifeline, Vodafone Idea searches for a new CEO

As part of the deal, Vodafone Idea will issue 3,695 crore equity shares at ₹10 each within 30 days of getting the necessary regulatory approvals. This is the second major government bailout for the telecom operator. In February 2023 it converted ₹16,133 crore of interest dues into equity.

Last-minute project push

New projects worth ₹18.7 trillion were announced in the March quarter, making up half of FY25's total, according to provisional data from the Centre for Monitoring Indian Economy, Mint reported. 

A 117% year-on-year rise in government projects in January-March drove the surge even as private investments remained subdued. Private projects increased by only 3.3% year-on-year. Investment typically picks up in the final quarter of the fiscal year in order to meet yearly targets. Overall, project announcements in FY25 saw only a 2% overall increase.

Manufacturing cheer

India's manufacturing sector activity expanded at its fastest pace in eight months in March, data showed. The manufacturing purchasing managers' index (PMI) rose to 58.1 in March from 56.3 in February, which was a 14-month low. A print above 50 means expansion, and one below 50 denotes contraction. 

The rise was driven by quicker increases in factory orders and production amid strong demand conditions, the survey said. Despite a slowdown in international orders, firms tapped their inventories, which saw the sharpest decline in three years.

Theobroma's sweet deal

₹2,200-2,300 crore: That how much homegrown PE firm ChrysCapital will invest to acquire a controlling stake in bakery chain Theobroma Foods, Mint reported. Theobroma's founder Kainaz Messman and his family are expected to retain around 10% in the company. 

The deal will cause ICICI Venture to fully exit from the company, in which it held a 42% stake. ICICI Venture had invested around $20 million in Theobroma in 2017 to fund its expansion in Delhi-NCR, Mumbai and Pune.

QIPs hint at IPO revival

March saw a halt in IPOs owing to market volatility, with no mainboard listings. However, a subsequent Nifty recovery and increased qualified institutional placement (QIP) launches, particularly by public sector banks, indicate growing confidence, Mint reported. 

Also read: Manipal shortlists banks for $1 billion IPO, to file by June

March saw seven QIPs, with banks such as Indian Overseas Bank and Bank of Maharashtra raising funds to meet shareholding norms. Analysts suggested IPOs could see a revival if this bullish trend continued since QIPs and IPOs move in tandem, with both surging during bullish phases.

Indian prisoners abroad

More than 10,000 Indians are currently imprisoned in 86 foreign countries, the external affairs ministry told a parliamentary panel. This number includes undertrials as well. Saudi Arabia and the United Arab Emirates have the highest number of Indian prisoners, with more than 2,000 each, the data showed.

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