The Audacity Of Deceit & Other Stories

Dear Insighters

In the week gone by, most of us were wrapped up in ‘wassups’ on tirades over trade, breathe-easies in equities, rumblings from Parliament, and the hullabaloo over the enfant terrible of India’s stand-up comedy scene that wasn’t funny to some.

Did you also read about the charismatic young woman who managed to coolly defraud one of the world's largest banks of $175 million? Charlie Javice left her startup investor JPMorgan Chase red-faced by exaggerating her company Frank’s customer base--of students eyeing accessible loans for higher studies--tenfold.   

Apart from exposing the huge holes in audits and processes at the highest levels, this story of reckless ambition and deceit took me back by a few years to the story of another young and powerful startup founder, Elizabeth Holmes. Her company Theranos fraudulently promised magic for the human race - a technology to diagnose a battery of diseases with just a few drops of blood. Both were dynamic young women celebrated for their novel solutions for the vulnerable. Both spun webs of lies and used nefarious means to achieve their end. Both got convicted under US laws. 

One wonders what brings such audacity. And just how could they escape the scrutiny of some of the world’s top investors, regulators and the media, who hailed them as top solvers of the generation?       

From this story that caught my attention, back to what’s keeping India on its toes. The looming April 2 deadline for US tariff action has the government and trade on the edge.     

Trade and policy expert Vijay Chauhan delves into the US and Indian trade negotiators’ race to strike a deal between the world’s largest economy and one of the fastest growing ones. Can they navigate tariffs, non-tariff barriers, and competing priorities to avoid a trade war?

Getting a bilateral trade agreement with the US won’t come easy, says Ajay Srivastava, and even if it does happen, the implementation could trigger President Donald Trump’s tariff tantrums in full force. Signing of such an agreement might not really be the panacea New Delhi is hoping for to address the tariff issue at hand. 

In an offshoot story on the US tariff issue, Ajay Srivastava smells an opportunity for India’s automobile component sector from the announced sweeping tariff of 25% on completely built vehicles and automobile components. 

There is more on this issue as well as the author. As the world grapples with rising tariffs, shifting supply chains, and evolving trade policies, Rajesh Mahapatra digs into the complexities of modern trade and India’s positioning in an insightful interview with sector expert, Ajay Srivastava.  

While Trump’s tariff threats are shaking up India’s trade universe, his top aide Elon Musk’s X Corp. is taking the Indian government to court, accusing it of bypassing legal safeguards to censor content. The case could reshape India's digital laws, impact big tech, and test Musk’s stance on free speech. Will India defend its powers or back down, explores Shruti Mahajan.

India has more to offer Musk than just EVs and Starlink. The country’s market could be the solution to Tesla’s meltdowns elsewhere. Musk's integrated vision--fusing Tesla, SpaceX, Starlink, and xAI--positions India as a proving ground for his beyond-EV ambitions, writes Dev Chandrasekhar.

In India’s macroeconomy, the theme of the season is the comeback of consumption demand. Expectations of a revival in consumption have helped India’s equity markets stage a smart rebound after a five-month slide. But beneath the surface, household finances remain fragile and growth in demand elusive. The consumption narrative the market is betting on may not hold up, feels Dhananjay Sinha.

In another piece, Sinha says the market’s hopes for a revival in corporate earnings rest on shaky ground as fiscal restraint, weak job creation and tepid wage growth tighten the income squeeze. With inflation rising, the rally may soon hit a wall.

MARKETS & BANKING
Even with a rate cut and easing inflation, tight liquidity and sluggish transmission are keeping market rates stuck high. The RBI’s efforts to tackle this issue are adding pressure on India’s financial system, writes Manoj Rane in the first of his three-part series on what has been described as the perfect storm facing the new RBI Governor. 

Ahead of the next monetary policy review due in a week’s time, Richard Fargose says that the likelihood of a repo rate cut by the RBI has strengthened with each new data release since the last Monetary Policy Committee meeting. And yet the probability of this easing effectively reaching the real economy remains uncertain. The challenge lies in the structural transmission bottlenecks - foremost being the persistently elevated credit-deposit ratio in the banking system.

For long, the status of the dollar has given the US the “exorbitant privilege” of being unconstrained by its external balances. The key question to ask as one navigates the turbulent sea of global risks is whether we have a reached the turning point at which it begins to lose its status as a reserve or safe-haven currency, says Abheek Barua. 

While on this theme, Paola Subacchi and Paul van den Noord in their Project Syndicate column, warn that the dollar’s status as the world’s leading reserve currency would be in jeopardy if global investors abandon US sovereign debt amid sharply rising political and institutional uncertainty. 

From the currency and debt markets to equities. Alok Kumar Mishra, Akash Das and Soumili Sen demystify momentum investing, fuelled by cutting-edge algorithms and SEBI’s new regulations. By capitalizing on market trends and retail behaviour, this strategy, which promises big returns if you can navigate its risks and volatility.

The regulatory lens is now on finfluencers. Their popularity is not a fleeting trend; it's a structural shift in how retail investors consume financial information. The solution is not to eliminate them. It's about ensuring they operate with accountability, says Krishnadevan Vijayaraghavan. 

India’s financial sector is still reeling from the revelations on IndusInd Bank’s hit from FX derivative discrepancies. It was also revealed that bank insiders traded derivatives while holding price-sensitive data. The RBI cannot allow the financial system to become a playground for insiders, exhorts Krishnadevan Vijayaraghavan. Every instance of insider enrichment weakens the foundation of trust on which the system rests. 

AND MORE…
A firm legal stance on women’s rights and safety could boost both social equity and economic performance, writes TK Arun in the backdrop of the Supreme Court stay on a controversial High Court ruling that downgraded a rape attempt charge.

BasisPoint Insight wraps up the week’s top developments, rulings, case calendar, as well as all the buzz from India’s courts and tribunals. 

For COP30 to succeed where COP29 failed, it must move beyond vague pledges to secure clear, enforceable financial commitments, writes Montek Singh Ahluwalia in his Project Syndicate column. 

What if true knowledge doesn’t come from data, but from song, silence, and story? Executive Coach Steve Correa reflects on wisdom that was never truly lost.

From words of wisdom to soaking in the wilderness. A golden tabby tiger, years of patient pursuit, and a dream fulfilled - Shivaram Subramaniam relates his experience in the forests of Kaziranga, mostly known for the one-horned rhino, through lens and legend. 

And before I sign off, here are some commentaries from BasisPoint Groupthink, our House View: 
There are no easy answers on the issue of delimitation - will India tackle it now or kick the can down the road, leaving our children to handle the political fallout?

Financial advertisers will now have to register with platforms like Google and Meta, but more is needed to curb mis-selling and fraud.

Wishing you a happy, healthy and prosperous new financial year – one that brings more Insights and Clarity. And an audacious wish for a smooth sail through these troubled waters. 

Ranjana Chauhan