Maharaja Of Markets: When Tariffs, Rupee, And SIPs Steal The Script

Dear Reader,

If life were a movie, the rupee’s recent performance would be the kind of plot twist even Maharaja director Nithilan Swaminathan might applaud. Much like Vijay Sethupathi’s gritty hunt for his stolen dustbin Laxmi—a premise that masqueraded as quirky comedy  before plunging into noir-ish depths—the rupee’s slide has left markets gripping their armrests. 

What seemed like a stable protagonist (thank you, RBI) is now revealing layers of pent-up tension. As G. Mahalingam notes, this isn’t a crisis; it’s a correction with the dramatic timing of a Tamil thriller. The central bank’s reluctance to let the rupee adjust naturally, he says, has only delayed the inevitable—a climax years in the making. 

Dive into Part 1 of our no-holds-barred conversation here, where the RBI veteran pulls back the curtain on the central bank’s tactical interventions, warns of the pitfalls of fixating on nominal exchange rates, and reveals why battling NDF speculators is like playing chess with a hydra. Spoiler: The real villain might be short-term thinking.

But as N Srinivasa Rao warns, RBI’s 2025 test isn’t just about currency stability—it’s about saving growth from becoming collateral damage. Can they deepen capital markets and enforce fiscal discipline before time runs out? In similar vein, Dhananjay Sinha’s sharp critique asks: Is the central bank navigating with a rusting compass? Sticky inflation, stagnant incomes, and outdated growth models suggest the RBI’s playbook needs rewiring—fast. The RBI, like a seasoned scriptwriter, held the rupee steady while global currencies crumpled under the dollar’s Marvel-hero strength. Now, the adjustment unfolds—a climax markets can’t look away from.

But let’s not cast the dollar as the sole villain. Enter Donald Trump and Elon Musk, whose recent Fox News tête-à-tête could double as a masterclass in economic satire. “India’s tariffs are 100%,” Musk groaned, to which Trump replied, “I told Modi: Whatever you charge, I’m charging.” The threat of reciprocal tariffs—particularly on pharma and autos—sent stocks tumbling this week, as investors imagined a world where trade wars aren’t just tweets but tariffs. Yet, in a twist worthy of Maharaja’s screenplay, India seems to be scripting its own counterplot: reports suggest the government is slashing EV import duties to court Tesla, just as the automaker quietly posts job openings in Mumbai and Delhi. Cue the Yeh dosti remake: a tariff tango where reciprocity is less about friendship and more about fiscal fistfights. Yet, as Abheek Barua warns, India’s real challenge isn’t Trump’s bluster—it’s the RBI’s balancing act. Stability has costs: overvalued exchange rates, drained liquidity, and reserves built on fickle capital inflows. It’s like holding a yoga pose while juggling flaming diyas. One wrong move, and… poof.

Meanwhile, in the mutual fund universe, a storm brews—not in a teacup, but in a sippy cup. When ICICI Prudential’s Sankaran Naren dared to question the cult of SIPs in frothy markets, distributors reacted like overprotective parents. “How dare he critique mid-caps at our event?” The backlash, as Krishnadevan V writes, exposed a glaring irony: the industry’s reliance on distributors who’d rather sell fairy tales than fiduciary truths. Naren’s crime? Speaking plainly about risk in a market high on FOMO. As Sridhar Sattiraju quips, “Mutual fund manager hamesha sahi nahi hai”—but perhaps distributors need a mirror more than Naren needs a muzzle. Speaking of recurring nightmares: Sachin Malhotra’s investigation into cooperative banks reads like a horror franchise stuck on loop—fraud, governance failures, and depositors left holding the bag. Regulatory tweaks? More like Band-Aids on bullet wounds.

Elsewhere, India’s solar sprint risks tripping over its own shoelaces. We’ve hit 100GW—a milestone shiny enough to blind us to the cracks. As Aabhas Pandya reports, 40GW of projects languish in limbo, trapped between states haggling like Chor Bazaar merchants and tariffs falling faster than Bollywood’s 90s villains. Meanwhile, metros expand with the grace of a toddler on roller skates. Alok Mishra and Pavan Thimmavajjala argue that without last-mile connectivity, these sleek trains risk becoming ghost trains—all whistle, no passengers.

And then there’s gold. The eternal symbol of Indian love—and now, a trade deficit’s best frenemy. January’s import bill glittered with $59 billion in purchases, as exports sputtered like a Bullet with a clogged carburettor. The BasisPoint Groupthink likens it to a treasure hunt where X marks the problem: weak global demand, sticky inflation, and a rupee that’s less “Made in India” and more “Assembled in Forex Markets.”

But let’s end with a whisper, not a headline. In StillPoint’s latest meditation, Raghu Ananthanarayanan and Steve Correa remind us that the past is a fading echo, the future a mirage—and the present? A paradox. To be empty is to be full. 

Perhaps the RBI, policymakers, and even Trump and Musk could use a moment in that silence. As Maharaja showed us, the sharpest truths often lurk in the shadows. The rupee, tariffs, and markets may all be tangled in shifting narratives, but one thing remains clear—economic storytelling is far from over.

Until next week,
Your Guide Through the Noise

Phynix

P.S. If you figure out how to tariff-proof a Tesla and stabilise the rupee, let Modi and Musk know. They’re all ears. And maybe save a job application for us? Oh, and, Maharaja is NOT about a stolen dustbin.