Global Markets Including Asia Zoom Ahead As India Lags
Indian markets are continuing to fall even as global markets continue to shin
On Episode 767 of The Core Report, financial journalist Govindraj Ethiraj talks to Dinshaw Irani, Managing Director and CEO at Helios Capital as well as Dr Sanjaya Baru, the author of the book Secession of the Successful: The Flight Out of New India.
SHOW NOTES
(00:00) Stories of the Day
(01:00) Global markets including Asia are zooming ahead even as India lags
(05:45) Reliance stock takes a knock amidst confusion and hasty denials over its oil imports
(08:06) Oil prices edge up but largely steady
(10:11) Long term investing themes for 2026, what could grow and what will not?
(20:50) Indians are not much wanted globally, whether as workers or students. What could this mean globally?
(31:40) EV sales are slowing down world over
Register for India Energy Week 2026
https://www.indiaenergyweek.com/forms/register-as-a-delegate
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 feedback@thecore.in.
—
Good morning, it's Wednesday, the 7th of January, and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai. India's financial capital.
Our top stories and themes…
Global markets, including Asia, are zooming ahead even as India lags.
Reliance stock takes a knock amidst confusion and hasty denials over its oil imports.
Long-term investing themes for 2026, what could rise and maybe what will not?
Oil prices edge up, but largely steady at this point.
Indian workers and students are seeing doors closing in many parts of the world.
What could that mean economically and socially?
And finally, electric vehicle sales are slowing down world over.
Global Markets and Indian
Indian markets are continuing to fall, perhaps not surprisingly, given everything else that we've been seeing, even as global markets continue to shine.
Not surprisingly, like I said, because the overhang of a pending trade deal with the United States is still bearing down on sentiment, and Donald Trump's statement over the weekend threatening a fresh round of tariffs on Russian oil imports has not helped, and surely not Reliance's stock price, which we will come to. Meanwhile, it's useful to see what's happening around us. Asian stocks are having their best ever start to a year, with the region's currencies and bonds also rally as investors move funds out of the United States or look outside the United States, according to a Bloomberg report, which points out that the MSCI Asia Pacific Index is up 4% in just four trading sessions of 2026, and that makes it its strongest beginning and records going back to 1988, and South Korea and Taiwan are leading the gains.
Bloomberg also says that a gauge of the region's currencies has notched its best start since 2023, while dollar-based corporate debt has also rallied. Analysts Bloomberg spoke to are saying U.S. exceptionalism has peaked, at least for the rest of Asia, and emerging markets are said to benefit from a number of tailwinds, including attractive valuations and proximity to the AI value chain. So to get a sense of how bullish the rest of Asia is right now, you should see how tech-heavy benchmarks like South Korea's KOSPI and Taiwan's TAIX Index have gone up, which is almost 7.4% and 5.6% this year, rising obviously to new records.
Chinese stocks have also hit a four-year high, and once again, that's partly due to AI and some sense of optimism on the domestic economy. Analysts are saying that we're only halfway through the AI CAPEX super cycle, and associated productivity boom, and companies that are in Asia and part of the AI supply chain are still affordable. Now, the U.S. is also going strong with the attack on Venezuela and capture of its president being shrugged off or being treated as good news, at least when it comes to the oil giants, who will presumably swoop in en masse into the world's largest oil reserves, and more on that shortly.
Meanwhile, Bloomberg also said optimism for the S&P 500 gains remain robust with the latest Market Pulse survey predicting another advance following three years of double-digit gains, a feat which was apparently last accomplished at the end of the previous century. So the polls are saying that the U.S. benchmark, that's the S&P 500, will climb almost 20% this year, that's in 2026, according to 60% of the 590 respondents to a poll conducted in the last three weeks of December. Less than a third of participants expected losses, only a 10th saw more than a 20% gains for the index.
And meanwhile, while indices again globally were slightly down on Tuesday morning, and specifically Wall Street, they did close at highs on Monday with the Dow Jones closing at a record high. Analysts told CNBC that the Venezuelan situation was really a non-event for equities in general, so it looks like the next few weeks will be a wait and watch to see if some of that global optimism rubs off on Indian stocks as well. On Tuesday and back home, the benchmark indices fell for a second straight session thanks to a drop in index heavyweights like Reliance Industries and Trent.
The Nifty 50 index was down 71 points to 26,178. The Sensex was down 376 points to 85,063. In the broader markets, the NSE Nifty Mid-Cap 100 was down 0.19%, and the NSE Nifty Small Cap 100 was down 0.2%. Elsewhere, India's services sector expansion has slowed to its weakest pace in 11 months in December as new business growth eased and hiring stalled, according to the HSBC India Services Purchasing Manager's Index, or PMI, compiled with S&P Global, reported by Reuters.
And then gold prices continue to rise, not surprisingly, since risk is back on the table. As we discussed yesterday, money is moving from, among other places, the dollar to metals, including gold, silver, and copper. Spot gold was at about $4,461 per ounce on Tuesday, after rising nearly 3% in the last session.
The all-time high for bullion is 4,549, so we're not very far. And remember, last year, bullion was up 64%, which is the best annual performance since 1979, according to Reuters, which also pointed out that spot silver was up to $78.30, after hitting an all-time high of $83.62 on December 29th. Silver was up 147% last year.
And the rupee recovered after falling for four days, as state-run banks and foreign lenders sold dollars, according to Reuters, which also reported that the rupee ended finally 0.1% higher at 90 rupees 16 paise, up from 90 rupees 27 paise on Monday.
The Reliance Stock Takes A Hit
Reliance Industries stocks fell sharply on Tuesday, after it said it was not expecting any Russian crude oil deliveries in January, a move that could obviously sharply cut India's Russian oil imports during the month to the lowest in years.
Reliance stock, which is also the second heaviest on the benchmarks, fell about 4.5%. Its steepest one-day percentage falls since June 2024, when India's general election results were announced, according to Reuters, which added that the decline followed Reliance's statement that it did not expect Russian crude deliveries in January, after US President Donald Trump warned that they could raise tariffs on India over its oil purchases from Russia. Elsewhere, brokerage CLSA also dropped the Reliance stock from its India model portfolio. And by the way, the oil-to-telecom major had hit a 18-month high, or a near 18-month high just last week.
Veteran investor Deven Choksey told Bloomberg that investors spend 2025 under the threat of geopolitical risks and that they are not prepared to spend 2026 like that. Reliance, which operates refineries on the west coast of India, is the biggest buyer of Russian crude as of last year, at least the biggest Indian buyer. Interestingly, Reliance issued a statement on Tuesday, or yesterday, saying its Jamnagar refinery has not received any cargo of Russian oil at its refinery in the past three weeks and is not expecting any oil deliveries in January as well.
That's Russian. Now, that statement came four days after a Bloomberg report on the 2nd of January, or last Friday, which quoted Kepler data to say three vessels laden with Russian oil were heading towards Reliance's Jamnagar refinery. So they only said that they were heading towards Reliance's Jamnagar refinery, not that they had docked and started unloading.
Now, while the Bloomberg story carries Reliance's denial now, most likely the company did not immediately respond when Bloomberg may have asked for clarifications on the 1st or 2nd. Now, things possibly changed after Trump's renewed threat on the 4th of January, that is Sunday. So all in all, an exciting start to a week with Trump's shadow looming large over everything once again, including as of Tuesday, Reliance's stock price.
India is generally the biggest buyer of discounted Russian seaborne crude after the start of the Ukraine war in 2022. And many Western countries have targeted Russia's energy sector with sanctions on the ground that oil revenues helped fund Russia's war against Ukraine.
The India Energy Week Segment
Oil prices were up slightly on Tuesday after the market weighed expectations of ample global supply this year against uncertainty around Venezuelan crude output after the US attacked Venezuela and captured its president, Nicolas Maduro. Brent crude futures were up slightly at about $62.10 on Tuesday afternoon, and West Texas intermediate crude was at about $58.60. Analysts told Reuters that it's premature to evaluate the impact of Nicolas Maduro's capture on the oil balance because what seems obvious nonetheless is that oil supply will be sufficient in 2026 with or without an increase in production from Venezuela, which of course has the world's largest proven oil reserves but only pumps out less than 1% of total oil production right now. Speaking more specifically, an analyst told Reuters that they estimated only about 300,000 barrels per day of additional supply within the next two to three years on limited incremental spending.
And some of this could be financed organically by Venezuela's state-run oil company, but international capital would need to be committed to make 3 million barrels per day by 2040 possible. Reuters also says the Trump administration plans to meet US oil executives this week to discuss boosting Venezuelan oil production. Venezuela is a founding member of the Organisation of Petroleum Exporting Countries, or OPEC, and has, as we just said, the world's largest oil reserves at about 303 billion barrels.
However, because of underinvestment and likely mismanagement, its oil sector has long been in decline.
Investing In 2026
Meanwhile, we're collecting some thoughts on how 2026 is looking like and shaping up from different fund managers and whether there could be anything new or differentiating in terms of themes and what could be newer underlying themes, if so, that could drive some of the sector investing.
And also, what are the lessons from 2025, whether they're big or small? I reached out to Dinshaw Irani, Managing Director and CEO of Helios Capital, a multi-fund organisation which manages mutual funds, portfolio management schemes, and alternative investment funds. And I began by asking him how 2026 was looking, given that some of the factors that the markets were hoping would materialise, including the trade deal with the United States, did not. And on the other hand, India has been hit with threats of fresh tariffs.
INTERVIEW TRANSCRIPT
Dinshaw Irani: Our feel is that we have to look at domestic-focused companies. You can't be, I mean, we were never so keen on China Plus One, please, or PLI-based companies. We always were focused on domestic and mainly because I think consumption is the way forward for India per se, I mean, domestic consumption.
If you've seen China also, it was only in the mid-2010s when the real consumption kicked in and China just started booming, despite being the base for production for the world, that is what drove that economy. As I said, today, they're suffering because of consumption taking a back seat. They've never, the export figures are still very exciting.
And in India, why I'm so particularly kicked about is that if you look at the employee base today, I mean, the work pool today, fortunately, the pre-millions, they are less than 30% of the work pool. It's the millennials and the Generation Z, by the way, Generation Z is some 38% of the work pool. So that is, I think, is what is exciting me about the consumption base.
And you've seen it go with, I think you're one of the pre-millennials kind of a group, but the Generation Zs, they're like, I'm so excited about it because they want to spend, there's nothing like savings for these guys. They want to leverage their positions and do that. In fact, I remember sitting through one of the standup comedians and he was a Generation Z guy.
And I'm trying to share this anecdote because this was very reflective of how they think. So he said that I got my first salary. I went to my dad and said, look, I got my first salary.
I'm going to go to a bank. I'm going to take a loan and I'm going to buy a motorbike. And the dad said, like, look, son, why don't you put the money in the FD?
He said, dad, I won't be sitting on the FD. I'm taking my girlfriend for a date. Right?
This is the thinking these guys have. And that is what India needs today. I mean, our age group, taking a loan was a taboo.
I remember dialogues like, paav utti, phila aur jitni, chadar lappi ho and stuff like that. So I think this is what is going to turn India around. And mind you, these guys are very brand conscious.
They are the ones who are turning the unorganised into organised sectors. Women participation is moving up and that itself drives economies. Actually, when women participate, the household expenses turn to her and stuff like that.
So I think this is the way forward going for India and I think we're on a good track.
Govindraj Ethiraj: Right. Okay. So two things.
One is, of course, this has been in play for some time. And if you were to now look at consumer product companies or consumer tech, both of which I think you've talked about in the past. Now, are you seeing this incrementally growing volumes and realisations for companies in which you would invest in?
Or are things moving more at a steady pace?
Dinshaw Irani: No, so exponential growth can be expected even now from the consumer tech cup. However, the discretionary part, I think there's a pent up demand which has taken place and that is over and done with. But I think going forward, obviously, when the per capita start moving up, your discretionary also starts changing.
I mean, you start to get more and more spends which are out of the regular spend. And that's why we're not that comfortable, even though we're comfortable on consumers, we're not comfortable in the FMCG part because I don't think consumer just because he's earning more will take an extra three, four baths a day or brushes teeth four or five times a day. Right.
So that's why we are really clear that it has to be on discretionary and the tech, the platform companies, which is basically and the types. I think they're the exponential growth, which is happening will continue for a long time, because frankly, I mean, they're what last time I checked, there was some 330 odd million regular internet users, of which these platforms are accounting for just 20 million odd. So they were a long runway for growth.
And that's where Govindar philosophy also comes in. I mean, we are very clear that whenever there's a long runway, this is what you're supposed to look at. So obviously, there are a lot of checks along the way for that.
Govindraj Ethiraj: Right. So apart from consumer tech, I mean, are there sectors that you're seeing particularly either dormant or not so dormant or less visible, at least in 2026 or onwards?
Dinshaw Irani: So I think BFSI, I mean, banking, financial services and insurance, that's another sector that has to be looked at, and especially the banks and financial services, which are consumer focus. That's why we're not that keen on the public sector banks, mainly because they're not consumer focus, they're mainly a capex heavy kind of loans that they come out with and stuff like that. So private sector banks, NBFCs, which are consumer focus NBFCs, or the financiers of cars and CVs and stuff like that.
I think that's the sector that one has to look at. However, what we don't like, Govindar, I'm assuming that's what you were inferring from Dominic, was that IT, I think that will definitely take a backseat. Unfortunately for India, though, because services are a big part of exports, maybe that will not grow as much, mainly because of the concern that AI is going to be a big reset for that industry.
I mean, that industry has to go through a reset phase before they can really capitalise on AI as such, generative AI, artificial intelligence is what I'm talking about. And that I think will take probably, if not three, four quarters, probably a couple of years before they can capitalise on that.
Govindraj Ethiraj: Are there any surprises from 2025 that are useful as lessons going forward?
Dinshaw Irani: Many, many, many actually, Govind. So basically, one big surprise was the fact that all along, we thought that, you know, you can just invest and you can forget and stuff like that. But what we did realise was if you can time it, not perfectly, but closer to what your bets are, you can do a great job of it.
In fact, 2025 overall was a very bad year in the sense that in dollar terms, at least we didn't grow. In rupee terms, though, there was a growth. INR terms, there was a growth.
But if you had timed your entry sometime in Feb and March, your return would have been phenomenally different from whatever others are looking at, right? So that's why I tell everybody that, look, we, I don't know, you were lucky. I mean, we saw the opportunity.
We timed our mid-cap fund launch in Feb. We didn't raise much money, though. And today that fund is like thousand crores plus, by the way.
But the returns were phenomenal for that, just purely because we timed it right and things like that. So that way. Another big lesson is, please look out on Truth Social for Trump's speech, because that's what's going to drive the markets going forward.
Govindraj Ethiraj: Right. Okay. So one of the things you've talked about is timing.
And I'll come back to that in a second. The other thing is the nature of flows themselves. You know, the kind of investors who are coming into your funds, how are they coming in?
Where are they coming in? How has that changed? And how will that influence your ability to, let's say, be a more stable asset manager in coming months and years?
Dinshaw Irani: So fortunately for us, I mean, the flows, I mean, this is in India, I think that's mainly because the domestic investor today is fairly keen on participating in India's growth story. Stock markets are obviously, if India is going to grow, stock markets are going to grow. Basically, all indices are slaves to earnings growth, right?
So if that comes in, that's what. And I think that phenomenal job has been done by the industry in the sense, even the distributors, they've done an excellent job there. In fact, if you remember sometime in Feb, that's when he launched our mid-cap fund, one of the big managers came out and said that, look, it's time and as a very big manager we're talking about, he said, look, the investor should now redeem from all mid and small caps.
He should stop his sips in these funds and stuff like that, because I see a very big bloodbath going forward. And fortunately, I mean, because the distribution channel was so strong, they held on to that investor. The guys who came, and that's what we noticed actually, in our fund also, the guys who came on directly through their own analysis or studies, they were the first ones to redeem and move out.
And they lost out a lot. They lost out a lot because that particular fund is up some 27, 28 odd percent from those trends and such. So I think the way the distribution channel has worked, and by the way, one more data point that I want to share with you is that, which recently came out from Infy, was that the mutual fund industry, domestic mutual fund industry covers 99% of the pin codes of the country.
I mean, Amazon covers 95%. So you can imagine that that's how spread we are. I think that's what's helped and the resilience of the investor.
Every dip, you see a flow happening. In fact, that's what I noticed. Every time the market dips, we see a flow surging up as such.
So that, I think, has been a very big positive for us.
Govindraj Ethiraj: Right. And last question. So to come back to the point on timing, as an investing strategy in the middle, midterm, perhaps, if not mid to long term, do you see that things have changed from before?
You know, you have a core belief approach. Is that holding or how much of that is holding? And what can others who want to also invest, particularly if they're investing large sums, take away from that?
Dinshaw Irani: So these timing opportunities come once in a while. I don't think they're a regular feature. The best way for investing is obviously SIP.
You keep your averages going as such. So that way. And frankly, I mean, our philosophy actually is elevation investing.
Just give me a minute to share that with you. It's a philosophy of life. I mean, in life, you know what is bad.
You don't know what is good. If I ask you, please define a good person, probably you'll come up with statements like the person who doesn't commit a sin, who doesn't steal, who doesn't beat up people, who doesn't abuse and stuff like that. Right.
All these are bad points. So you know what is bad, but you don't know what is good. Absence of bad makes it good.
And we've come up with these eight factors which help us in identifying, I would say a good stock, but not a bad stock. Right. So as I said, there's no definition of good.
Right. So when that pool starts filling up with my mid cap stocks, I know that this is the time to get into mid caps or if the pool fills up with say large cap stocks. I know it's a time to move to large caps.
Right. That pool today is a mix of mid and small. Large is there.
So my feeling is that going into 26, mid and small is the one where you want to be in and probably let's see how that works out.
Govindraj Ethiraj: Dinshaw, it's been a pleasure. Thank you so much for joining me.
Dinshaw Irani: Always a pleasure, Govind, meeting you.
Non-welcome Indians
2026 will be a momentous year for another reason. It could be the first time in decades, if not longer, that Indian migration to overseas could see a sharp decline, if not a reversal in some cases.
As is quite evident for some time now, doors are closing everywhere for students and working professionals, notably in the United States, but also countries like the United Kingdom, Canada, and Australia, who've curtailed student admissions for several years now. Now, this is a shift that will take some getting used to, both economically and socially. And to understand how, I reached out to Dr. Sanjay Bharu, the author of the book, A Session of the Successful, The Flight Out of New India, Why Indians are Moving Abroad, to understand what's fundamentally changed, why it's changing, and what could be the impact socially and economically on the country.
INTERVIEW TRANSCRIPT
Sanjaya Baru: Actually, you know, it's very interesting. It confirms my basic argument that the class character of Indian emigration has been changing, with elite emigration becoming more pronounced. I mean, the basic argument of my book, The Secession of the Successful, is that while a hundred years back, very poor Indians were emigrating in large numbers, and then in the 1970s, we had, you know, working class Indians going in large numbers to the Gulf, etc.
More recently, we have seen wealthy Indians and upper class Indians going. So there is a kind of a change in the class composition of the emigrating Indian. Given the phenomenon that you refer to, which is a general hostility towards immigration worldwide.
I mean, we also have that hostility to immigrants in India. Don't forget, growing hostility to outsiders in this country. It's a global phenomenon.
But given that phenomenon, I think what is actually happening is that the bottom of the pyramid is getting hit, not the top of the pyramid. Don't forget that Indian emigration, talent emigration began in the 60s. When the United States changed its own law, constitutional changes were made in order to attract Indian doctors and engineers.
The US and Western world continues to seek, you know, talented Indians. There is no generalised anti-immigration sentiment against all Indians. It is certainly against the mass of low skilled working class Indians.
I mean, after all, we had a huge migration of working class Indians to the United Kingdom. And the British economy at the bottom of the pyramid is really manned by Indians, bus operators, people washing, cleaning airport, Heathrow airport. I mean, the working class in Britain has a lot of Indians.
I think immigration for them is going to be difficult. Similarly, the H1B workers, I mean, they were low skilled talent, which the US sucked in in large numbers. And now there is a reversal on that.
Also, students seeking education to all kinds of useless courses because they simply want to go to the US. Those things are getting hit. But what I don't see getting hit is the demand globally for Indian talent because of the demographic shifts in many of these countries.
I mean, with time, this demographic shift may change. Many countries are encouraging people to have more children. Even, you know, with China and even in India, some politicians say we should all have more children.
So there may be a sudden reversal of the demographic decline. But certainly at the moment, if you look at the kind of demand that is being made, well, I know for a fact that the German ambassador in Delhi, the Japanese ambassador in Delhi, they're all the time telling us we want more Indians to come to our country. But what kind of Indians?
They're looking at the more talented Indians, right? And the demand for talented Indians won't go. Even Donald Trump has remarked more than once that it is not as if he's opposed to all Indians coming into the US.
He wants the brainy guys to come. Bad shifting will happen. And also, I think the demand for wealth for those who are willing to buy golden visas, whether it's Dubai or Singapore or Portugal or Malta, the many countries which are willing to sell visas.
And there are Indians who are willing to buy. I don't see that demand going down.
Govindraj Ethiraj: Okay. So let me pick up on a couple of points. I think so.
One is that there is one category of Indians, including students who will now maybe not be able to go starting 2026, quite literally, or it started late 2025. Now, how could this change the job and workforce profile if it does in India?
Sanjaya Baru: Well, I think first of all, the demand for admission to private institutions in India has been increasing. Those who are unable to go overseas are looking for education at home. And you can see an increasing number of private universities coming up.
I mean, just around Delhi now, we have four or five large private universities. And almost every city in the country today has increasing number of private institutions. So the private sector is filling that gap for those who are in a position to pay.
I mean, after all, those who are planning to go overseas were paying for their education. So you can pay for that education. You can get that at home.
But in terms of employment, I think one area in which there is some hope is in, you know, the IT and related skills with GCC's growing number of global capability centres coming up in India. But even that, I don't know how long that boom will go on. But at the moment, they're sucking in a lot of this talent.
But finally, at the end of the day, employment at home has to increase. For that, the Indian economy has to grow faster. Private capital formation has to increase.
What we have seen in the last 10 years is a slowing down of private capital formation and is a slowing down of manufacturing sector, a slowing down of the economy as a whole. So unless the economy grows faster and generates more domestic employment, there will be frustration.
Govindraj Ethiraj: Right. So that's the, let's say, the economic argument. But I think even if the economy was doing perfectly well or was doing well and seemingly growing, let's say, in double digits as it has in the past, a lot of Indians would still aspire to go overseas, whether as students or as H-1B workers or in some other category.
And that is, I guess, a more social phenomenon than an economic phenomenon or maybe a socio-economic phenomenon. How do you see that evolving or panning out?
Sanjaya Baru: I think that will taper off. I mean, you know, there was a strange period we went through, particularly starting from the turn of the century with the Y2K demand. The US, for example, was simply picking up every person from India who had some capability in IT.
And that is how NIIT came up. I mean, I remember my friend Rajendra Pawar started this NIIT in a small way 30 years ago. And that suddenly boomed because he found that demand was booming.
And I mentioned a story in my book, an anecdote in my book. Once I was travelling from Delhi to Hyderabad, and there was this young woman in jeans and T-shirt who was from Nalgonda. Nalgonda is a district town, about a couple of hours' drive from Hyderabad.
And she had never come to Hyderabad. She had studied in Nalgonda. She was unfamiliar with Hyderabad as a city, state capital of Abu Dhabi.
But was living in San Francisco because she was married to a tech guy from Nalgonda who had a job in San Francisco. Now, that is what we saw in that period. And I also mentioned, for example, the fact that just outside Hyderabad in Chilkoot, there's a temple for visas.
The people go there to pray, visa temple. All of this was a social phenomenon we saw from around the turn of the century, 1999, 2000, till about 2020. I mean, for 20 years, we have seen this phenomenon of a completely new class.
I mean, I remember my wife telling me when she was doing some research on public health in a village in Andhra Pradesh, in Krishna district, going to this village and meeting this young man who had just come back from the US for a holiday, living virtually in a hut in a village. Father is a farmer. And this guy is speaking with an American accent.
And he's back home for a holiday. Now, that class of Indians who went in large numbers, or even from Punjab, I mean, all the workers in UK, I mean, UK, you had a huge issue of Indians not knowing English. They only knew Punjabi, because they're married to somebody from Ludhiana or wherever.
So, you saw a lower class migration, I would say, lower middle class, not really lower class, lower middle class migration in large numbers, which is not going to happen. And there will be some frustration there. You'll have a cousin living in the US, you are not able to go to the US, you feel frustrated.
Yes, that will be a social phenomenon.
Govindraj Ethiraj: Right. And as you look ahead in this new world of, let's say, reduced immigration, I mean, there are people within the Trump administration who want all immigration to be stopped, for example, and of course, the ejection of many others. How do you see countries like India?
How should countries like India approach this from a geopolitical point of view or when it comes to diplomacy, for example, as you also have pointed out, as a country, we have argued for more services exports and people exports in lieu of opening up our market. So, that's been sort of not a cornerstone, but definitely an important point in our trade negotiations. How do you see that changing and how could that path evolve?
Sanjaya Baru: I think that is already beginning to evolve with the diversification of the countries to which Indians are going. I mean, for example, in the last couple of years, we signed a MOU with Israel to export labour to Israel. We signed an MOU with Taiwan to export labour to Taiwan, because the demographic shift in many of these countries is forcing them to import talented young people.
And India has a large number of talented young people who are not able to get employment at home. So, there will be some diversification, even if the U.S. stops allowing these young people to come in. There are other countries in need of labour.
As I said, Japan is desperate. I mean, I keep hearing this from the Japanese ambassador in Delhi. He says, look, we want people to learn Japanese and come and work in our country.
Indians don't come. So, there are countries which are actually seeking Indians out. And I think, therefore, the geographical spread will change.
Govindraj Ethiraj: Right. And that's a good note to end on. I think that we should be learning other languages and not relying on our traditional strength of English and looking east as well, apart from traditional west.
Sanjaya Baru: Absolutely. Yes.
Govindraj Ethiraj: Right. Dr. Baru, thank you so much for joining me.
Sanjaya Baru: Thank you. Thank you.
EV Slowdown
A new report says that growth in global sales of electric vehicles is expected to slow this year as China winds down some subsidies, Europe waivers on its phase-out of combustion or internal combustion engines, and U.S. producers and policymakers make a U-turn from this segment. Bloomberg says that it expects people to buy about 24 million passenger electric vehicles this year, which is an increase of 12% on 2025 and weaker than the 23% growth in sales last year.
Remember, this is a new category. In the U.S. in particular, electric vehicle makers are facing an EV winter and will need to navigate bumpy months ahead before a likely revival in sales in 27 and 28, according to a Boston consulting analyst for EVs and energy storage. So one of the reasons, at least in the United States, is that the Trump administration has withdrawn a $7,500 consumer tax credit after September and also a hollowing out of fuel economy standards, which has put pressure on America's EV market.
U.S. sales in December fell 41% from a year earlier, according to Bloomberg. Elsewhere, a lot of companies have taken hits. As we've spoken about on the core report, Ford Motor in December took a $19.5 billion charge related to a sweeping overhaul of its electric vehicle business.
Even China, the world's largest EV market, is set to see a slowdown in sales growth also because of narrowing government support for the industry. China has cut the EV tax breaks in half for 2026, according to Bloomberg. And authorities have criticised rat race competition in China's crowded auto sector and are cracking down on discounts offered to counteract waning demand.
