Pushing the Boulder: India’s Economy, Tariff Tantrums & FII Exodus 

Dear Reader,

Have you ever read about Sisyphus, the Greek king condemned to eternally push a boulder uphill, only to watch it roll back? Now imagine him in a tailored suit, scrolling through GDP reports while Elon Musk revs a Tesla nearby. That’s India’s economy today: straining against gravity (sluggish demand), dodging falling rocks (Trump’s tariffs), and eyeing shiny distractions (record-breaking showrooms) without addressing fundamental flaws. Let’s unpack this myth-meets-mayhem moment.

India’s 6.5% GDP growth target? Pronab Sen argues it’s a facade propped up by government spending—like building a palace on quicksand. If you’d rather watch than read, click here for a video interview. Private consumption, that fickle deity, remains in hibernation, he explains. Households hoard cash like dragons guarding treasure. Alok Mishra writes that without wage hikes or job security, demand is a car with no fuel—all horsepower, no motion. Even the RBI’s rate cuts, per Kalyan Ram here, fizzled out faster than soda left open in Mumbai’s heat—₹1 trillion in OMOs now attempt to sweeten the deal.

Vivek Kumar, an economist at QuantEco Research, adds his weight to the debate with his article on how much liquidity surplus RBI should ensure to for smooth credit flow. Some of these issues emanate from the leadership vacuum at the central bank as a Deputy Governor post stays vacant, leaving a new non-economist Governor to navigate uncertain waters, writes Richard Fargose.

Meanwhile, Trump’s tariff theatrics could give Zeus’ lightning bolts a run for their drama. After threatening Mexico with auto tariffs, he backtracked like a toddler denied candy, delaying the levy until April 2. Ajay Srivastava calls this “diplomatic whiplash,” arguing that nothing should be off the table, not even withdrawing from trade talks. TK Arun skewers Trump’s belief that “China pays tariffs”—a myth as sturdy as a Bollywood prop sword. Warren Buffett nailed it when he likened tariffs to “an act of war” in a recent interview, scoffing, “The tooth fairy doesn’t pay ’em.” Translation: American wallets bleed first.

But let’s pivot from Washington’s chaos to Mumbai’s glitz. Tesla’s ₹35 lakh/month showroom in BKC isn’t just real estate—it’s a high-stakes poker move. Musk bets on India’s EV future, but as BasisPoint Groupthink notes, demand needs cheaper loans and charging infra, not just glossy storefronts. Imagine selling iPhones in 2007 without 3G towers. Risky? Absolutely. Bold? Oscar-worthy.

Speaking of Oscars, Anora’s win for Best Picture—a raucous tale of sex work—proves that audacity pays. India’s policymakers could take notes as Anant Swarup argues that the Railways should ditch its “bit role” in budgets and become a lead actor. After all, a nation’s logistics backbone shouldn’t be an afterthought. Meanwhile, Ajay Srivastava exposes fake BIS certifications flooding markets—phantom stamps of approval that turn “Make in India” into “Break in India.”

Markets, meanwhile, swing between hope and despair like a pendulum on caffeine. Muralidhar Swaminathan writes that “rotational selling” has replaced bullish fervour, with FIIs fleeing and domestic investors holding on. Dhananjay Sinha adds that any path to a sustained recovery will be volatile.

Even mutual fund CEOs aren’t spared—one compared the Nifty to Shah Rukh Khan, arguing both are “bankable despite bad patches.” Krishnadevan V fires back: “Khan’s flops don’t bankrupt him—he’s a diversified empire. Retail investors aren’t stars with backup endorsements and IPL teams.” The analogy, while catchy, glosses over a brutal truth: households can’t shrug off market duds like a Bollywood A-lister. Leaders need to swap lazy metaphors for hard truths.

Another hard truth? The rise of Claude 3.7, the AI game-changer that Dev Chandrasekhar warns will vapourise junior developer jobs, unless India Inc pivots towards AI governance. Meanwhile, crypto’s rise demands a “digital monetary theory” that blends Satoshi Nakamoto’s anarchic vision with the RBI’s rulebook.

But let’s not forget the ₹2.61 trillion capex crunch—a last-minute fiscal fire drill. It’s like cramming for exams with Red Bull and prayers. You pass, but you won’t remember a thing. States, showered with ₹1.73 trillion in January, now face the Sisyphean task of spending wisely before March’s clock strikes midnight.

So where does this leave us? Staring at a trifecta of trials: Trump’s tariff whiplash, an FII exodus draining market confidence, and domestic demand stuck in first gear. The path forward demands more than grinding Sisyphus-style. It needs Anora-level audacity—policies that jolt consumption, lure back skittish FIIs with reforms sharper than Emilia Perez’s plot twists, and data transparency that replaces GDP mirages with trust. Think of it as directing an Oscar-worthy economic thriller: the stakes are high, the audience (read: investors) is impatient, and the script must balance boldness with believability. Or, as Sisyphus might say: Keep pushing. Maybe the hill flattens.

Yours in navigating myth and reality. 

Phynix