A shortage of farm labour is giving India’s tractor makers an unexpected boost. Swaraj Baggaonkar writes that despite an erratic monsoon, tractor demand is rising as more farm workers move to urban jobs. Tractor retail registrations rose 25% in the four months to July 31 from a year earlier, underlining how changes in rural labour market dynamics can sometimes matter more than the weather.
Why did TCS buy Porsche’s struggling IT arm? Debangana Ghosh and Reshab Shaw try to answer that question. TCS, they report, saw an opportunity in Porsche’s decision to sell MHP, acquiring the IT consulting arm for €320 million, though Porsche had initially sought more than €1 billion. While a five-year, €1.25 billion contract with Porsche provides a strong revenue base, the bigger bet is on using MHP’s expertise and European presence to move up the value chain and boost growth.
The government is looking to make India’s digital infrastructure more resilient. Danish Khan reports that the Department of Telecommunications is working on a single-window system to speed up clearances for undersea cable repairs, while also pushing for greater domestic capability in repairing submarine cables. The government expects the single-window mechanism to be implemented by March.
For global investors, the gap between Indian and US bond yields is becoming increasingly important. Navneet Dubey reports that the spread between the yields on India’s 10-year government bonds and US 10-year Treasuries has narrowed to around 2.1-2.3 percentage points, leaving less room for Indian bonds to compensate foreign investors if the rupee weakens. Separately, Navneet also looks at borrowing costs in India, the US, the UK and China, showing how differences in interest rates, costs and credit risks translate into sharply different home and personal loan rates. India is among the most expensive and China the cheapest.
The turmoil in the US bond market brings into focus the question of who will finance America’s $40 trillion-plus debt pile, and what return they will demand for doing so. N Mahalakshmi explains why efforts to suppress long-term Treasury yields could shift the pressure to the dollar, potentially pushing investors towards gold and other assets. If the intervention succeeds in bringing down yields and the dollar weakens, the environment could become more supportive for the Indian economy, but for foreign portfolio flows, the dollar’s direction and US interest rates matter far more.
Safety concerns are prompting calls for change in aviation rules. Swaraj Baggaonkar reports that the Federation of Indian Pilots has asked the Directorate General of Civil Aviation to mandate a comprehensive system for managing pilot fatigue at scheduled airlines. The pilots’ body cited the January 2024 Batik Air incident in which both pilots of an Airbus A320 fell asleep during a domestic flight, causing the aircraft to lose contact with air traffic control and stray from its assigned route.
And finally, the festive season is bringing both optimism and anxiety to mithai makers. While demand is expected to rise, soaring sugar, milk, ghee and dry-fruit costs have sent sweet-making costs sharply higher, Akshara Srivastava and Aishwarya Nair report. Although consumers are more willing to spend on sweets during festivals, businesses are trying to protect demand by absorbing much of the cost increase and adjusting product mix and pack sizes before resorting to price hikes.