🌐 Deportation

Good morning and Happy Friday. This will be our last newsletter for the year as we take a little break to recoup and recalibrate. We hope you all have a festive and restful remainder of the year, and we look forward to seeing you in the new year✨ ‼️ 

- Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

• 📉 India’s MSMEs struggle amid economic slowdown

• 🌐 Trump’s Border Czar reveals deportation plan

• 🗞️ Bite-sized summaries

  • 🚅 A metro city

  • 🇷🇺 Russia ready to negotiate

• 🧑‍🍳 What else is cookin’?

• 🍿 Entertainment, Entertainment, Entertainment

MARKETS

🇮🇳 India

• Indian stock markets plunged. The selloff was triggered by the US Federal Reserve's hawkish outlook on rate cuts. All sectoral indices faced losses, with IT, banking, and metal stocks hit hardest. Only the pharma sector showed resilience, emerging as the sole outlier.

🌍️ International

• Stock futures ended mixed on Thursday evening, following a significant selloff on Wednesday. The Dow Jones snapped its 10-day losing streak, while the S&P 500 and Nasdaq closed marginally lower. The market volatility was triggered by the Federal Reserve's hawkish outlook, projecting fewer rate cuts in 2025 than previously expected. Investors now await the release of the Fed's preferred inflation measure on Friday

ECONOMICS

📉 India’s MSMEs struggle amid economic slowdown

India’s micro, small, and medium enterprises (MSMEs) are grappling with unprecedented challenges as economic headwinds intensify. With second-quarter GDP growth for FY25 falling to a seven-quarter low of 5.4%, the sector that contributes 40% of India’s manufacturing output and employs over 22 crore people finds itself at a critical juncture.

Initially buoyed by a post-COVID recovery, MSMEs now face mounting hurdles. Manufacturing growth, which once spearheaded the revival, slowed to a mere 2.2% in Q2, according to the RBI. Compounding the slowdown is a staggering $530 billion unmet credit demand, forcing businesses to rely on high-interest loans from non-banking financial companies (NBFCs). This credit crunch has clipped the wings of enterprises, leaving them ill-equipped to seize emerging global and domestic opportunities.

Adding fuel to the fire is the influx of low-cost Chinese imports, which have dealt a severe blow to traditional manufacturing hubs like Solapur and Panipat. The dominance of cheap microfiber products has eroded market share, pushing many businesses to either pivot to trading or shutter operations entirely. Meanwhile, the sector struggles under the weight of inefficient government policies, burdensome compliance requirements, and pervasive corruption, further exacerbating its woes.

Yet, amid this grim landscape, there are glimmers of cautious optimism. Industry leaders speculate that demand might rebound post-election as economic uncertainty subsides. However, experts unanimously emphasize that recovery hinges on bold, comprehensive reforms. Access to affordable credit, streamlined regulatory frameworks, and strategic support for value-added industries are imperative to reignite growth.

Overall: If left unaddressed, the challenges faced by MSMEs could deepen India’s economic slowdown, jeopardizing its broader growth trajectory. As the backbone of the economy, the revival of MSMEs is not just desirable—it is essential for ensuring sustainable and inclusive development.

Read more: Economic Times

SEBI

🌐 Trump’s Border Czar reveals deportation plan

Tom Homan, the newly appointed "Border Czar" under U.S. President-elect Donald Trump, has outlined a large-scale strategy to deport undocumented immigrants. Trump and Vice President-elect JD Vance have pledged to initiate the most extensive deportation campaign in U.S. history.

Homan stated that deportations would begin on the first day of Trump’s presidency, with a focus on criminals, gang members, and fugitives. To execute the plan, he requires a minimum of 100,000 detention beds, a significant increase from the current 40,000, and additional Immigration and Customs Enforcement (ICE) agents.

The estimated cost of this operation is $86 billion. However, Homan argues it will ultimately reduce taxpayer expenses by cutting federal and state aid programs for undocumented migrants. Military support will be leveraged for logistical tasks, though ICE agents will handle arrests and deportations.

Addressing enforcement priorities, Homan cited a backlog of over 10 million undocumented migrants and criticised a 74% drop in deportations during the Biden administration. To ensure compliance, the administration may impose trade sanctions or halt aid to countries that refuse to accept deportees.

Homan emphasised that no one in the U.S. illegally is exempt from deportation, including parents of U.S. citizen children. He clarified that while citizen children will not be deported, decisions on their relocation will rest with their parents.

Overall: Trump has positioned Homan, a seasoned immigration enforcement veteran, as the leader of border security efforts. Homan assured readiness to implement these measures immediately upon Trump’s inauguration, stating, “We want to arrest as many people as we can.”

This initiative, if realised, marks a significant shift in U.S. immigration policy, aiming to “restore order at the border” through aggressive enforcement.

Read more: Economic Times

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🚅 A metro city - India is set to become home to the world's second-largest metro network, with 997km of metro rail under construction in 28 cities and 993km operational across 23 cities. Union Housing and Urban Affairs Minister Manohar Lal emphasized the government's focus on strengthening urban mobility to address the growing urban population. Discussions with Parliament members highlighted the Metro Rail Policy 2017 and projects like Delhi, Jaipur, and Patna Metros. Additionally, the 'PM-eBus Sewa' scheme, deploying 10,000 e-buses via public-private partnerships, aims to enhance urban transport. This expansion underscores India’s commitment to modernizing its urban transit infrastructure.

🇷🇺 Russia ready to negotiate - Russian President Vladimir Putin expressed readiness to negotiate and compromise on Ukraine during a televised Q&A, hinting at potential talks with Donald Trump. Putin claimed Russian forces are advancing toward key objectives in Ukraine, asserting a diminishing willingness among Ukrainians to fight. He ruled out major territorial concessions and reiterated demands for Kyiv to abandon NATO ambitions. Putin also addressed Russian bases in Syria, missing U.S. journalist Austin Tice, and Russia's hypersonic missile capabilities. The Ukraine war, launched in 2022, has caused massive displacement and strained Moscow-West relations. Putin noted economic challenges, including inflation, as the conflict continues.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

• Property prices at Dwarka Expressway increases by 29% in 2024.

• KKR buys secondary shares in Rebel Foods valuing the cloud kitchen firm at around $800 million.

• Delhi Police register FIR against Rahul Gandhi after BJP leaders injured in Parliament scuffle.

• Over 40 Indian startup leaders transitioned between founding and executive roles in 2024.

• Microsoft-backed OpenAI brings ChatGPT to WhatsApp via 1-800-ChatGPT.

CULTURE

🍿 Entertainment, Entertainment, Entertainment

• Superman teaser trailer out, features Superdog Krypto and Hawk Girl.

• Travis Kelce proves to be the mastermind behind Taylor Swift’s surprise eras party.