Global Markets Continue To Stay Strong
Global markets continue to hit new highs only pausing for the occasional breath as we're seeing
On Episode 699 of The Core Report, financial journalist Govindraj Ethiraj talks to Sheetal Sapale, Vice President at Pharmarack as well as Deepak Maheshwari, Senior Policy Advisor at the Centre for Social and Economic Progress (CSEP).
SHOW NOTES
(00:00) Stories of the Day
(01:00) Global markets continue to stay strong
(02:41) Falling food prices are putting downward pressure on inflation
(05:12) How economic growth in Asia projected to come in stronger
(06:09) You would never guess which drug has made it No 2 in India’s drug brands
(11:09) Why clean energy stocks are actually outperforming equities and even gold
(12:47) We have just marked the 140th anniversary of the Indian Telegraph Act, 1885
(23:43) Feedback Section
NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on [email protected].
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Good morning, it's Friday the 10th of October and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital on most days but in transit right now.
Our top stories and themes.
Global markets are still holding strong including Wall Street
Falling food prices are putting downward pressure on inflation
How economic growth in Asia is projected to come in stronger
Why clean energy stocks are actually outperforming equities and even gold.
You would never guess which drug has made it to number two in the India drug brand list.
And we've just marked the 140th anniversary of the Indian Telegraph Act 1885, so what should come next?
Global Markets Are Strong
Global markets continue to hit new highs only pausing for the occasional breath as we're seeing there's of course gold and China's stock market is also seeing renewed enthusiasm for artificial intelligence and gold shares, yes gold, gold and chip stocks were amongst the top drivers of Thursday's onshore gains in China, that's an interesting combination indeed, chip represents cutting edge or bleeding edge technology and gold is of course as old as it gets. Wall Street notably S&P 500 hit fresh highs on Wednesday and was steady overnight and BTR gained in pre-market trading after the U.S. approved billions of chip exports to the United Arab Emirates, a fresh instance of how diplomacy and business is now intertwined almost in real-time transactions. Back home Sensex was up 398 points to 82,172, the Nifty 50 was up 136 points to 25,181, the BSE mid-cap and small-cap indices were up 0.75% and 0.18%. Now the first second quarter results are coming out, India's largest IT company Tata Consultancy Services or TCS reported a consolidated net profit of 12,075 crore rupees for the second quarter of the financial year which was about a 1.4% increase from the same quarter last year.
On a sequential basis the profit fell about 5.4%. Revenue from operations were at about 65,799 crores that's about 2.4% up from last year, sequentially revenue rose 3.7%, TCS also declared an interim dividend of 11 rupees per share. Elsewhere in the forex markets the rupee was at 88 rupees 78 paise per US dollar almost similar to its previous lows of 88 rupees 79. Now we pointed out a couple of days ago how prices of tomatoes, onions and potatoes had fallen quite sharply, taking down vegetable prices as a whole.
India's consumer inflation rate has now come back to below the lower end of the reserve bank's two to six percent target range to 1.7 percent last month on persistent cooling in food prices according to economists polled by Reuters. Food prices which represent roughly half the consumer price index have dropped sharply including tomatoes , onions and potatoes as we just pointed out. Meanwhile India's generic pharmaceutical companies can breathe more easily now in the context of exports to the United States.
The Trump administration has said it is not planning to impose tariffs on genetic drugs from foreign countries according to the Wall Street Journal. Had this happened healthcare costs for American citizens would have risen sharply according to several industry people the core report has been talking to in recent months. President Trump last month posted online he would impose a 100 percent tariff on name brand drugs on October 1st but did not mention generics.
A White House spokesperson said the administration is not actively discussing imposing section 232 tariffs against generic pharmaceuticals and a spokesperson for the commerce department which is handling the tariff investigation similarly said the 232 investigation would not result in tariffs on genetics. So all of this means that India's drug exports or most of it will not be touched at least for now. Back to markets the Black Swan author Nassim Taleb says investors should insure against a stock market crash as structural issues such as the U.S. debt burden threaten to derail an otherwise unstoppable rally according to a report in Bloomberg.
Even with U.S. stocks making multiple record highs and corporate profits surging, Taleb says that the real danger now comes from visible risks of so-called white swans that most people ignore until it's too late. Taleb who spoke at the Greenwich Economic Forum on Wednesday said when debt servicing becomes the largest item on your budget you are in trouble whether you're an individual, a corporation or a state. That's a problem he said in that report in Bloomberg. Meanwhile UK India relations are in the news with British Prime Minister Keith Starmer visiting Mumbai right now.
Britain said on Thursday it had signed a roughly 468 million dollar contract to supply India's army with UK manufactured lightweight missiles as a part of deepening weapons and defence partnership. British Prime Minister Keir Starmer was visiting India's Prime Minister Narendra Modi in Mumbai where they both hailed the potential of the commercial links from the recently signed India-UK free trade agreement.
Asia Economic Growth Is Strong
Economic growth across Asia is said to come in stronger than expected this year and next according to a regional research group according to Bloomberg. The region is likely to grow 4.1 percent this year and 3.8 percent in 2026 according to a report published Thursday by the ASEAN plus three macroeconomic research offices or AMRO. Now this compares with July estimates for 3.8 percent and 3.6 percent respectively and a 4.3 percent pace of growth last year.
AMRO's chief economist said that trade deals have stabilised expectations which should provide support to export growth. The global economy has held up well despite the headwinds associated with trade policy uncertainty. He also said that behind the rosier outlook is a surprise outperformance in the first half of the year when exporters raced to get shipments to the US as steep tariff hikes loomed ahead, according to the Bloomberg report.
There's A Big Surprise In The Ranking Of India's Top Drug Brands
While top drugs in India have traditionally been Augmentin and Lycomet and they continue to maintain their leadership in September 2025 as well, the big surprise or not is Eli Lilly's weight management drug Monjaro which has now moved up to the number two spot for September 2025 and obviously as you can guess it's pretty much come out of nowhere. So how did this happen and what explains this sudden and dramatic rise to this top position in the drug brand sweepstakes? I reached out to Sheetal Sapale, vice president at pharmaceutical tracking company Pharmarac and I began by asking her how Monjaro or rather what was the reason for Monjaro's sudden and dramatic rise.
INTERVIEW TRANSCRIPT
Sheetal Sapale: The acceptance of the drug has been good and if you see in the last one year, there is a lot of discussion happening around anti-obesity drugs, the therapies available for anti-obesity drugs and of course, companies like Eli Lilly and Oonautisk, they have done a lot of market priming, education to the doctors, lot of patient education has happened. So, usually when multinationals do a lot of market priming to make the market ready for the drug, the moment the drug gets launched in the market, the doctors usually put the eligible patients on the drug. You know, it's a very nice case wherein the eligible patients have started coming on the drug and it's not just in India, these drugs are available globally.
So, the patient is aware of the options available. Of course, now this is an innovative drug, patent protected drug, pricing is very high. Also, in terms of absolute value, value per unit, it is relatively on a higher side and that's the reason why it has come to the top position so fast and of course, injections are expensive.
So, that's the value that brings it to a top position.
Govindraj Ethiraj: Right. Having said that, your Augmentin is, let's say, number one at 85 crores last month and this is at 80.
Sheetal Sapale: Yeah.
Govindraj Ethiraj: The phase at which it's going value-wise, it could become the top drug in the country very soon, isn't it?
Sheetal Sapale: Yeah, it's just a gap of 5 crores. So, I don't see, you know, a challenge in becoming the number one position but the reason for becoming number one position is not a higher patient base but a higher value per unit and of course, the number of obese patients accepting this type of product option.
Govindraj Ethiraj: Right. So, Monjaro is one brand. There are other brands, at least a couple, which are also serving the same need.
So, what would that total be like, roughly?
Sheetal Sapale: The obesity market is more than 850 crore today. It is a relatively big market because we have Semaglutide, we have Ribasys in the market, we have got Vigovi in the market and there are some other brands from other molecules like Dulaglutide, Liraglutide which are actually anti-obesity but then it is the Semaglutide and Terzapatide which have been actually very strongly promoted in the anti-obesity treatment.
All of them fall in the GLP-1 agonist segment.
Govindraj Ethiraj: This is monthly figures, right, that you're talking about?
Sheetal Sapale: This is the monthly figure.
Govindraj Ethiraj: This entire market did not exist a few years ago, would that be correct?
Sheetal Sapale: It's not that the market did not exist but the market priming activity, creating awareness, has been strongly done by Novo and Eli Lilly when they launched their anti-obesity products.
Govindraj Ethiraj: Right. In the last month we've also seen the transition to some drugs being priced lower because of reduction in goods and services tax. Did you see anything happen in the drugs?
Sheetal Sapale: Yeah, there were life-saving drugs and some more drugs also were announced. Certain products, a good number of pharmaceuticals later on where the GST rates were brought down by to 5%. In terms of consumption, we did not see any major changes.
Consumption happened at a retailer level. The only thing is there was a lot of confusion amongst the retailers in terms of how they get the credit for the higher GST that they had already paid. This led to little slower pickup in terms of stocks at the distributor level.
But then towards the end of the month, many of the pharma companies, they released the credit notes, they extended the credit period from the existing 20 days to 35 days and majority of the issues were resolved. In fact, when we talked to a lot of pharma companies this month, they say that little disturbance was there last month but that everything should be normalised and streamlined.
Govindraj Ethiraj: Are there any other trends that you've seen going into the third quarter of this year?
Sheetal Sapale: The trends that we are seeing is the cardiac and the anti-diabetes segment continue to grow in terms of value on units. So, that is again a lifestyle disease thing which is actually getting stronger in the country. Besides that, the respiratory segment also seems to be doing pretty well in this quarter.
Govindraj Ethiraj: Sheetal, thank you so much for joining me.
Sheetal Sapale: Thank you so much.
It's Green Stocks
A global benchmark of clean energy stocks is outperforming major equity indices and even gold as investors try to clamber on to soaring demand for renewables needed to power the boom in AI or artificial intelligence according to Bloomberg. Now all of this is interesting because while renewable is not on top of priorities right now for the US administration, its role in backing up data centres and other computing infra is making it a stock market favourite.
The S&P clean energy transition index is up almost 50 percent since US president Donald Trump's April tariff announcements caused havoc across global markets. Now this compares with a roughly 35 percent gain delivered by both the S&P 500 index and gold over the same period according to Bloomberg which also says that investors have turned more positive on green stocks as it becomes increasingly clear that the energy needed to power AI cannot be delivered without renewables. The Trump administration as we know is getting rid of green policies while countries like India, China, Europe and others are committed to renewables and continued investments in renewables.
Earlier this week Bloomberg says that Brookfield Asset Management said it raised about 20 billion dollars for the world's first private fund dedicated to clean energy transition. Resolution investors said that it launched a global equity climate fund targeting about a billion dollars within a few years. The S&P index for clean energy stocks has also outperformed the S&P global oil index.
A Bloomberg ESG analyst said that AI driven energy demand which may more than double by 2028 favours faster deploy solar storage and gas capabilities.
Untangling Regulation
The 140th anniversary of the Indian telegraph act 1885 was last week whether it was celebrated or merely observed we do not know.
Nevertheless this is a good time to think of a strategic rethink of India's digital governance according to Deepak Maheshwari, senior policy advisor at the centre for social and economic progress and Bhavna Sharma also a researcher. The current digital ecosystem is deeply converged devices networks and services blur the lines between telecom broadcasting and IT according to these two authors. Yet regulation remains fragmented across multiple ministries, regulators and laws.
All telecom licences by the way still operate under the telegraph act of 1885. Now this mismatch obviously creates gaps, overlaps and uncertainty that slows innovation and raises costs for business and society, say the authors in this paper. There are solutions to all of this the authors argue and that includes creating a practical 3c framework or what they've called a 3c framework which is carriage content and conduct.
I reached out to Deepak Maheshwari and I began by asking him to walk us through a little bit of the history of coming to where it should go now
INTERVIEW TRANSCRIPT
Deepak Maheshwari: Thanks, Govind, for this opportunity. Currently, we have three major ministries. There's the Ministry of Communications, which has the Department of Post and the Department of Telecom.
We have the Ministry of Electronics and IT. And of course, there's the Ministry of Information and Broadcasting. But it's important for us to see where we are right now and how we have landed up here.
Now, these things actually started in the mid-19th century. So, we first had a telegraph board in 1853. Then, we had a postal board in 1854.
Things like that happened. We had multiple laws, etc. But ultimately, what happened was, early in the 19th century, what happened was, you had all these technologies like telegraph, etc., coming up. In the 20th century, we had broadcasting coming up. And around the time of the First World War, the information started from what is now known as the Ministry of Home Affairs. And that time, it was a different name.
It started from there. And broadcasting followed a few decades later from what is currently the telecom. That time, it was a telegraph board and started with communications.
It was only around the Second World War that these got split. So, information came from one and broadcasting came from another one. And that's how it became information broadcasting.
But the other big thing happened was in 1976, when we had the Department of Electronics coming up as a new entity. Again, of course, it started from the Department of Space and Nuclear Energy Programmes. So, we wanted to develop some indigenous capabilities.
And that's how the whole thing started. As a user, we have a mobile phone or a TV or a computer, and we use all types of content, all types of things on those. Same way, if you look at businesses, many of the businesses, they actually operate in multiple domains.
They provide telecom service, they provide OTT, they might be in payments, e-commerce, etc. But the regulations continue to be vertically salvoed across these three ministries and, of course, through multiple laws and regulators beyond that.
Govindraj Ethiraj: For example, if I'm a fintech player or if I'm an OTT player, which are two different things, of course, I'm exposed to multiple regulations and that multiple regulation causes what?
Deepak Maheshwari: If you're a fintech, obviously, you'll have RBI as a regulator plus, of course, METI, etc. If you're OTT, it will be essentially METI and the Ministry of I&B. So, there are multiple types of challenges that we have identified in this particular report.
For example, one is the state capacity itself. If you look at TD-SAT, it's got stuff to do with telecom, broadcasting, and a lot of people may not know, even airport economic regulatory authorities, appeals also go to them. The TD-SAT, if you can just explain that.
TD-SAT is Telecom Disputes Settlement and Appellate Tribunal, which got formed in 2000 after TRA was sort of bifurcated from SCOZA judicial functions. The regulatory functions continued with TRAI after the amendment in 2000 and TD-SAT, which was a new body, was created separately. In 2004, the government decided to put broadcasting also as part of TRAI.
TRAI became the regulator for broadcasting from 9th January 2004 and accordingly, TD-SAT became the appellate body for broadcasting as well.
Govindraj Ethiraj: You're saying even airport regulation issues land up with TD-SAT?
Deepak Maheshwari: What happened in 2017, late Mr. Arun Jaitley, then Finance Minister, he actually was looking at the multiple regulators and tried to consolidate some of those. And as a result of that, one of those was TD-SAT. So, what happened, two other tribunals that were existing separately got merged with TD-SAT at that point of time.
One was the Cyber Appellate Tribunal under the Information Technology Act. The other one was under the Airport Economic Regulatory Authority Act. So, both those functions are also currently with TD-SAT.
But overall, if you see the TD-SAT cause list, the majority of those cases currently are related to broadcasting, not really telecom from where it started. And going forward, what is going to happen is that the Data Protection Board of India's appeals, as and when it comes up under the Data Protection Act, will also come under TD-SAT. And the TD-SAT structure remains the same from 2000 till now, chairperson, two members.
Govindraj Ethiraj: So, one of the things you've suggested is a Unified Ministry of Digital Ecosystem, whether or not that's the name, but you're saying bring everything together. So, I guess there are several questions that arise from that. One is, is it at all feasible?
When I say feasible, I mean operationally feasible, given how things are scattered right now. Secondly, is there any cross-institution conflict? For example, let's say banking regulation, obviously, or regulator looks at banking, telecom obviously looks at telecom.
And if you're saying that there should be someone who should do both, then how would it work, if so?
Deepak Maheshwari: Obviously, I'm not saying banking or payment should come to this particular ministry or regulators. So, the proposal is this, broadly, we could have options going forward, looking at the type of convergence that is happening anyway across telecom, IT and broadcasting. One is obviously, we can continue with the current way things are and have a better coordination mechanism.
But I think that's still going to be quite a challenge because there are multiple issues around this. We already see a lot of issues around the media. For example, we have OTT content, whether it's METI, whether it's MIB, who's issuing the orders for blocking, etc.
Second thing is, we could have two major consolidations. One, across all carriage, under telecom as well as broadcasting, you have a lot of carriage. So, all the carriage in one place, consolidation, and all the content regulation in one place.
So, that's one option. And the third one, which I'll say is a big bang approach, is to fuse all of these together under a single ministry called the Ministry of Digital Ecosystem. And that's just a name suggested by us.
Now, there are two interesting things about this unified approach. Number one, from 2001 to 2016, we actually had a Ministry of Communications and IT, as a lot of people would recall. So, we had a common ministry, of course, with three different departments, Department of Post, Department of Telecom, and Department of IT separately.
Second thing is, while we were thinking that this is our idea of unification, while doing this research, I actually came across a very interesting report, which is from the first Administrative Reforms Commission, which was set up in the mid-60s. And in one of their reports, they've actually mentioned that the Ministry of Communications should be merged with the Ministry of Information and Broadcasting. And this was in 1968.
By the way, at that point of time, the Department of Electronics or the Ministry of Electronics and IT just did not exist. And I believe that IT in our country has actually become a concurrent subject by default, because you don't have a telecom department in any state, you don't have a broadcasting department in any state, because these are very clearly marked out in the list one, in the union list, in the constitution. However, IT does not find mention in any of those three lists.
So effectively, IT should have become a residuary power, which is with the central government in India. However, much before the Government of India set up an IT department or an IT policy, Andhra Pradesh started in 97, a few other states started that, and the Government of India formed the Department of Electronics to the Ministry of IT only in 1999. I think more by practice than by design.
Actually, IT has become more like a default concurrent subject in the country.
Govindraj Ethiraj: Right. Last question. So I'm sure many other countries are grappling with or have found ways into this or out of this.
What does your research tell you in terms of how others have worked on it or had success if so?
Deepak Maheshwari: So number one, there's no single model that works across every country, because every country has its own different constitutional or other type of administration or legislative framework. For example, in the US, a lot of utilities are not only subject to the federal legislation, but also at state level, there's a lot of utility commissions there. For example, in the UK, Ofcom, Office of Communications, which was formed in the early 21st century by merging five different regulators, not two or three, five different regulators.
So currently they do everything from post, to courier, to telecom, to internet, everything. You look at China has got a different model. Singapore, again, had two different authorities.
One was called Infocom Development Authority. The other one was called the Media Development Authority. And a few years back, they merged them together called Infocom and Media Development Authority.
In Thailand, you have a Ministry of Digital Economy, actually. It's known by that name. But different countries are grappling with this in different ways.
In the US, of course, there's an FCC, which has been looking at both telecom and broadcasting ever since it started. So different countries have this. But increasingly, people are realising that they need to have better coordination across these agencies.
And when I'm saying this, a single ministry, a single regulator, and a single law, maybe, I don't mean to say or imply that there should be a single regulation. A single regulator can still have different types of regulation for different types of actors, in terms of size, in terms of their functions, etc. But hopefully, that will have better coordination.
Of course, one flip side is that it will mainly lead to a very heavy concentration of power in one place.
Govindraj Ethiraj: Right. And that's something we should think of as well. Deepak, it's been a pleasure speaking with you. Thank you so much for joining me.
Deepak Maheshwari: Thanks, Govind, for this opportunity. Hopefully, this is something that will at least initiate some sort of discussion and debate about this type of issue. And hopefully, this will pave the way for more of a digital India on our way to Vixen Bharat.
Govindraj Ethiraj: Thank you so much. Thank you.
