On Episode 904 of The Core Report, financial journalist Govindraj Ethiraj speaks to Gauri Shankar Nagabhushanam, CEO at CapitaLand India Trust, in an excerpt from our Special Edition. We also feature an excerpt from our show How India’s Economy Works hosted by journalist and author Puja Mehra and featuring economist Renu Kohli, formerly at the Reserve Bank of India and the IMF and currently senior fellow at the Centre for Social and Economic Progress (CSEP).

SHOW NOTES

(00:00) Stories of the Day

(01:00) Indian Markets Are Now Cautious As They Standby For West Asia Developments

(06:50) FTA With UK To Kick Off Next Month Even As Indian Companies Step Up Investments There

(07:59) Mumbai Is Running Out Of Water

(09:00) Singapore Based Real Estate Investment Giant Capitaland Outlines India REIT Strategy And Outlines Datacentre Investment Plans

(22:37) India’s Rupee Problem Links To The Capital Account And Not The Current Account And Why That Matters

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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 Thursday the 18th of June and this is Govindraj Ethiraj broadcasting and streaming weekdays usually from Mumbai, India's financial capital, but in transit right now.

Our top stories and themes…

Indian markets are cautious now as they stand by for the latest West Asia developments.

The free trade agreement with the United Kingdom to kick off next month, even as Indian companies step up investments there.

Singapore-based real estate investment giant Capital Land outlines India real estate investment strategy and data centre plans.

India's rupee problem links to the capital account and not the current account and why that distinction matters

And Mumbai is running out of water.

Markets, The War, IPOs and The Rupee

Indian markets are now more cautious as they wait for the next round of developments on the US-Iran peace deal.

While they continue to rise as they did on Wednesday, the momentum is slowing and this might be how things play out for the next few days because markets have to live with surprises like the latest statement from US President Donald Trump when he said on Wednesday at the G7 conference that the US will go right back to dropping bombs if it doesn't like the Iran deal. The G7 conference is on in France. Trump said the proposed agreement to bring the Middle East conflict to an end which is said to be formalised at a signing ceremony in Geneva tomorrow is not final.

It's a memorandum of understanding or MOU and if I don't like it, we'll go back to shooting at them, dropping bombs on their heads. I don't like it if they don't behave, we'll go back to dropping bombs right smack in the middle of their head, the president said. On the other hand, at least three Iranian tankers carrying nearly five million barrels of crude oil have exited the US Navy blockade in the state of Hormuz in the first such outbound shipment in two months as ship owners cautiously repositioned ahead of that deal signing tomorrow according to CNBC.

Meanwhile, a 300 billion dollar private fund designed to trigger investment into Iran has been outlined in the US-Iran framework agreement and more than half that sum has already been committed according to a Reuters report and that fund is designed to give both sides an economic incentive to conclude a final deal to end the war. A White House spokesperson told Reuters or rather pointed Reuters to a CBS interview that Vice President J.D. Vance had given recently where he said that Iran could gain access to a 300 billion dollar reconstruction fund backed by the Gulf states if it complies with the agreement. A senior Iranian source told Reuters that Iran had originally sought about 400 billion dollars as compensation for war damages from the US but the US said it would not provide it.

The idea for the fund which is to be named the reconstruction and development fund then emerged. Back home, the markets were up for a fourth consecutive session, the longest winning streak in two months and the indices have now gained four and four point five percent in four sessions. Brent crude futures were down at around 79 dollars a barrel on Wednesday after having dropped five percent in the previous session that's on Tuesday to close near three month lows and the low oil price or low oil price levels obviously will keep the markets buoyant.

The nifty 50 was up 96 points to 24,085 and the sensex was up 347 points to 77,155. The broader markets were up two with the nifty mid cap and small cap rising 0.5 and 0.79 percent each. Of course, rising markets also mean that IPOs in the pipeline will resume their march towards Dalal street which also means that the markets would continue to stay subdued.

I guess you can't have one without the other. Speaking of IPOs, Reliance Jio Infocom could file draft papers for its expected four billion dollars IPO within days and just before chairman Mukesh Ambani's closely watched annual speech on Friday to Reliance Industries shareholders according to the Financial Times which reported this on Wednesday. Meanwhile, the race for overseas borrowings has started or taken off.

HDFC bank has accepted bids for 750 million dollars for its planned dollar bonds capitalising on the reserve bank's subsidising hedging window for overseas borrowings according to Reuters. This is the largest by an Indian lender since the state bank's 750 million dollar five-year bond sale in May 2023 and comes at the same time as state bank of India and bank of Baroda are also lining up similar overseas debt sales. HDFC has priced its five-year bond issue at 90 basis points over U.S. treasuries that's about 5.067 percent.

On Wall Street, SpaceX shares rose about three percent in pre-market trading on Wednesday and have now risen 62 percent since a blockbuster IPO on Friday. Consistent gains for SpaceX this week have pushed its market cap above Amazon on Tuesday and even for a moment past Microsoft to become the fourth largest company by valuation in the U.S. according to a CNBC report which also pointed out that SpaceX has a market cap of 2.65 trillion dollars at close on Tuesday. Speaking of SpaceX, Indian residents could not invest in the IPO stage because of local regulations but very likely many have jumped in to the post-IPO run and there are many more options opening up there.

Several large domestic mostly app-based stockbroking platforms have received approval to enable international and U.S. stock investing through Gift City according to a money control report and the services are expected to go live in the next two to three months after all the integration work is done. There is an interesting divide among some fund managers and analysts that I have seen or heard. Some believe that India has sufficient opportunity and investors should not look outside and others clearly feel that one needs to diversify for obvious reasons.

I do feel emotions are running a little high on this subject which should be viewed more clinically. The rupee rose to its strongest level in six weeks which led to projections that it could extend gains thanks to the reserve bank's various moves to boost foreign currency inflows earlier this month. The rupee rose to about 94 rupees 29 paise, its highest since May 7th and then trimmed some of those gains.

It ended at 94 rupees 52 paise against its previous lows of 94 rupees 56 paise. Analysts told Bloomberg that the rupee has traded well over the past few days drawing support from the reserve bank's measures to attract capital inflows. If oil prices continue to decline and the dollar weakens further the rupee could strengthen towards 93 rupees 39 paise having breached the 50-day moving average according to those analysts who spoke to Bloomberg.

India's exports of jet fuel meanwhile have risen to levels seen since before a EU ban was placed on Russian origin fuel in January according to data from Kepler and LSEG quoted by Reuters. About 62,000 barrels per day of jet fuel have been imported by the EU going to Italy from India's Jamnagar refinery that's Reliance according to Kepler data.

What is the Latest on the India-UK FTA?

We are still in trade territory. Britain's free trade agreement with India will come into force on the 15th of July according to the British government on Wednesday following an agreement to implement the deal despite a dispute over a steel tariff regime which the UK will levy. Officials here that's in India had raised the prospect of reopening or delaying the application of the FTA worth about six and a half billion dollars and signed last year over concern about the impact of those new steel trade measures which would take effect from the first of July. Meanwhile Britain has announced it has received 1.7 billion dollars in investments from Indian and French companies mostly in the area of battery storage and clean power projects.

These announcements were tied with the G7 meeting. A clean energy investor called Atri Energy Transition will invest about 300 million dollars to develop large-scale battery storage and advanced manufacturing. Tech firm Hexaware Technologies will invest about 25 million dollars to expand its UK operations.

These investments are expected to create about 1,400 jobs across the UK according to a Reuters report.

How is Mumbai Coping with the Late Monsoon?

It's the driest June in more than 10 years and Mumbai's civic authorities have cut water supply to construction sites and reduced industrial usage by 20 percent starting Wednesday even as reservoir levels have fallen. Mumbai depends on seven lakes outside the city for its water supply and they're now at just around 10 percent of their total capacity authorities have said in public notices.

This leaves the city with a population of over 13 million with just 40 days of water according to a Reuters report. A 10 percent water cut was already imposed by Mumbai civic authorities in mid-May. The state of Maharashtra of which Mumbai is part and is a capital has received 75 percent lower rainfall than average in the first 16 days of June according to weather officials who spoke to Reuters.

Monsoon rains usually arrive or hit Mumbai in the first week of June or sometimes second week but now they're expected at the end of the month.

What Opportunities are there in REIT Investments?

And now focus on real estate investment trusts and opportunities for Indian investors in real estate. Gauri Shankar Nagobhushanam is the CEO of Capital Land India Trust which is actually Singapore based and listed but owns India's first REIT or real estate investment trust amongst a much larger portfolio which spans across Asia across many other asset classes including business parks and data centres.

I caught up with Nagobhushanam in an exclusive interview and I began by asking him to walk us through some of the opportunities that Capital Land was working on and how he saw the prospects for collective investing in Indian real estate.

INTERVIEW TRANSCRIPT

Govindraj Ethiraj: What's your India journey been like? And this is an unusual structure, of course, that you're listed in Singapore, where your parent also is, but your operations or your investments are in India.

Gauri Shankar Nagabhushanam: Capital lines has a very interesting history, not many people know. So India's first IT park was built in Whitefield in Bangalore. It was called International Tech Park Bangalore.

It was a joint venture between the government of Singapore, the government of India. So India's Prime Minister, Mr. Narsimha Rao goes and meets the Singapore's Prime Minister, asking him, can you help me set up an industrial park, just like you helped the Chinese set up theirs in the late 80s. So the Prime Minister of Singapore agrees, he picks up his smartest secretary and tells, can you figure this out?

He happens to be a classmate of Mr. Ratan Tata. So he's the only person he knows in India well enough. So he picks up the phone, calls him and says, my Prime Minister asked this, can you help me with it?

So he says, okay, why don't you come in? So he actually flies him around, shows him the location. And it was a joint venture between government of Singapore through Capital Land.

We went by a different name back then. And then government of India was through KIDB, which is government of Karnataka. And then the other partner was Tata.

It was 20, 40, 40, 20 government KIDB, 40 Tata and 40 Capital Land. This joint venture came and set up ITPB. And that's where the first IT park was set up.

This happened, this began in 1994. So we have almost a 32 years history in India.

Govindraj Ethiraj: One year after Infosys listed.

Gauri Shankar Nagabhushanam: Yeah, exactly. And then that's where we started. So the first IT park came on live on 1999.

And then we did the first listing in 2007. We were largely only in IT parks. But back in Singapore, if you ask us, we were known for industrial and commercial assets.

By commercial, I mean, retail assets. So we moved into industrial in 2017. And then the data centre business, we entered in 2021.

So that has been our journey. We started with private balance sheet capital, moved to private funds, then to listed funds. And we have now multiple funds and across multiple asset classes in India.

We are fully committed to India, not just the REIT which I operate, but Capital Land as a whole. We have about $8 to $9 billion of investments in India across the products and pools of capital. We do want to double that over the next four to five years.

Govindraj Ethiraj: So in India, you're in parks, industrial facilities, logistics and data centre. Yes. Okay.

So now the first three are somewhat common, because it's sort of on ground infrastructure. Data centre has other elements. So you have one, which I know you opened last year in Navi Mumbai, outside Mumbai.

Gauri Shankar Nagabhushanam: We have another couple under construction, which is in Hyderabad and Chennai. Total 200 megawatts, about 110 megawatts in Navi Mumbai. The other two kind of split between Hyderabad and Chennai, different stages of development.

The entire Navi Mumbai facility is pre-leased. Good conversations happening on the Hyderabad asset and also on the Chennai asset. So we will go live for the Hyderabad asset sometime in the next quarter.

And then Chennai will be probably by year end. And then we are having good traction. Data centre story is quite good.

Govindraj Ethiraj: So now in the data centres, so you are building the power and utilities.

Gauri Shankar Nagabhushanam: I mean, there are different ways this scatter scheme. You have the core and shell, which is nothing but it's a building, no different from an office building. You build it, you lease it, somebody comes and occupies, does whatever they want, and they pay you a fixed rent.

Then it's called as a powered shell, which is you build it. But data centres is a power guzzling asset class. So you put in all the power infrastructure.

And so it's a lease, not just for the building, but for the power infrastructure as well. You're not going to provide any other maintenance or management service whatsoever. It's all the responsibility of the tenant themselves.

And then you have what is called as a co-location, which is you're doing this, but you're providing certain service levels with respect to the power infrastructure. So you're ensuring that the power is in a particular capacity of power is always available. The backups are maintained, there is security, there is chilled water coming in the HVAC systems.

So all of that, which is non-core to the tenant, you're taking care of. So these are co-location. The tenant only comes and puts up their rack.

Exactly. So you give them the floor area, their duty is, okay, I'll put in the racks, I'll bring in the chips, I'll run it for whatever purpose I want to run. Then some of them actually gone on to give that as a SaaS, the GPU as a service itself, which is Neo clouds.

And some of those players are coming in today saying that I can provide you that customisation as well, because they believe, I mean, all of this is architecture. So the efficiency of these is a function of what is the architecture you adopt. Some of the players are saying, I can come up with an architecture, which is even more efficient from an energy perspective than you are.

So why don't you let me run it for you? You just pay me by my service as I provided. So these are the different ways, at least the market is distributed right now.

And you are in the... We are in the co-location. We are in the co-loc space, wherein we provide the infrastructure, we maintain the infrastructure, and we ensure that the infrastructure is available for the core function that the tenant is taking up the space for.

Govindraj Ethiraj: So co-location includes the power.

Gauri Shankar Nagabhushanam: Let's say your core and shell is $1. Your power shell is $3. Out of $9, $1 goes to your core and shell, $2 goes to your power infrastructure.

So $3 put together, and your tenants racks and GPUs and all of that is $6. So if you distribute, the core and shell developer is only taking one ninth the risk from a capital perspective. If you're doing a powered shell, you're taking one third the risk.

If you're doing the racks yourself and the GPUs, you're taking two thirds. So the tenant is putting more capex, two times more capex than what you are putting, which is what makes this a bit more attractive for institutions because the tenant is really committed and sticky. Because once he has put in so much capex, and these are like billion dollars capex that one has to put in.

So he is going to continue to operate this on a long-term basis. So the income, which I said, is of primary importance. The counterparty is a hyperscaler.

They are the ones with the deepest pockets, and they are going to sign long-term leases. And they are not just signing leases, they are putting a lot of dollars to operate these assets. So Mumbai, you've already found one.

Mumbai entire capacity taken up. So for institutions which are looking at locking in long-term receivables from very, very safe tenants, data centres are very attractive. That's why the valuations of data centres are so sought after, especially in the West.

In Asia, we're still trying to figure out why are they paying crazy valuation. But this is my own theory, but I think this is why they are paying so much value.

Govindraj Ethiraj: So as you look ahead in the capital land portfolio, data centre seems to be the most exciting, including valuation and for all the reasons that the world is going mad over AI. How does the portfolio then look? I mean, what's the steady state?

What's the big bet or the exciting part? And what's the middle layer, if so?

Gauri Shankar Nagabhushanam: I would break it up into two parts. One, I would say we are quite agnostic to asset classes. We want to perform well and promise the returns that we promise in each of these asset classes.

It is different flavours of ice cream, let the customer come and pick up whichever. So all we promise is whichever flavour you pick up, that'll be the best flavour you would get is the promise that we make. From a client perspective, because I'm a listed read, the journey in data centre started out, the unique thing, and I've earlier mentioned that we generally avoid development because we want income to come in.

If you're constructing, you're not going to have income for three, four years. But 2021, in the midst of COVID, when there are only like four to five percent of the population visiting offices, there was an existential crisis. Are people even going to come back to office?

What if all the hours are going to be shut down? What do we do? So that existential crisis made us diversify into data centres, because he said, if it's not physical, the world is not going to be physical.

It's going to be digital. Let us look at digital infrastructure. That is how we got into 2021.

But there were no assets to purchase in India in 2021. So we were kind of forced to construct and develop our own assets. So we started the development of data centre assets, which goes against the grain of a reed.

A reed is generally trying to avoid any development. They want to stabilise properties to acquire. The part that we need to look at is, what is the diversification across these two?

So for Clint, at least in our mind, we want to split it up two thirds, one third. Two thirds is the steady state IT parks and offices and all that. One third, we want to look to the new economy assets, which is data centres and industrial.

So that at any point in time, if there is a significant change in the market, then making one third into a two third is much more easier than sort of having, let's say, I'm only 5% or 10%. And we don't even want to go on to the other extreme because it is a technology space. One needs to be very careful about when you're entering into a data centre.

It has to have certain specifications, which it has to meet and stringent specifications, which has to be valid over a long period of time. So we are quite watchful. I mean, the AI and all of that tech boom that is happening makes it exciting.

But we want to give stable, consistent returns to our unit holders, which means we will park our capital where we get stable income. And that stable income can be promised for a meaningfully long period of time. So therefore, we will continue to be diversified across all of these three assets.

We will continue to invest in office because India is a great office market still. The best performing office market in the world by quite a margin.

Govindraj Ethiraj: So what do you see as either the challenges and the challenges plus opportunities and what maybe needs to be done to, let's say, expand this industry further?

Gauri Shankar Nagabhushanam: I think a lot of investor education needs to happen. My worry has always been, are investors looking at this as a replay or are they looking at it as a real estate operations? These two are different.

Me running a real estate development company, investing in real estate, office development or residential development is very different from me running a real estate investment trust. Both are different risk return profiles. Just want to be sure that the investor community is cognisant of it.

So this is a much more risk adjusted product, which focusses more on current yields, current income to you, has some growth potential. So one should have realistic expectations of this. Total returns is something which people look at, but one needs to be fairly cautious about total returns because total returns is basically telling, I will give you income, but if my income is lower, look at the capital appreciation that you're going to get from this.

Capital appreciation is not the play of a REIT. REITs are more stable income providers. Capital appreciation is more an operational game.

So that investor education has to happen is number one. You need to have more professional REIT managers who are doing it for the sake of the REIT management itself, because the industry at the end of the day is going to be buying and selling from common sponsors, et cetera. So the industry should get a clear cut understanding of governance, frameworks and all of that.

And professional REIT managers will be able to set those standards for the industry. And that will help in attracting more investor community into this asset class. It does need to still open up into institutions.

This is a very, very safe play. If institutions are directly investing in real estate, well, they're investing in an asset class, which they actually don't know. Here, you're going to get access to that same quality asset for a very, very marginal price.

And at a significantly later stage, when it is diversified across, I would say if you're owning one office property, one full block, you need to think about diversification. I would rather invest that across multiple professionally managed REITs because yeah, my income may go down a little, but I'm diversifying across multiple assets. And these are much more professionally run.

Tomorrow, if a tenant vacates, REIT manager with an established leasing team is in a much better position to attract tenants, especially if they have presence across multiple markets. Then if I'm a standalone office owner, and if some tenant leaves, I have to depend on a third party to help me in this.

Govindraj Ethiraj: So at this point of time, where we are in the middle of 2016, happening around the world, what's the market looking like?

Gauri Shankar Nagabhushanam: Market is actually quite exciting. If you look at the numbers, pure play numbers, things are really very strong. But if you look at the rhetoric that is there on the market, there's always this scare of AI is going to come in and jobs are going to be lost.

So that keeps us very true. I mean, nobody can crystal gaze and say that you will have naysayers and you'll have doomsday players. So as managers, as trustee managers, we have to be cognisant about what is going to happen.

So we engage a lot with our tenant community, very significantly, trying to understand what is happening to them. Are jobs growing? Are they cutting down jobs?

What is the nature of work that they are getting? Are they pivoting themselves? So we have a fair mix of ID service company, we have healthcare companies, we have e-commerce.

We cater to a wide variety of industries.

What is India’s Balance of Payments Deficit?

India has comfortable levels of forex reserves over 680 billion dollars right now though that's not changed much the sentiment on the rupee. One reason for this is the argument that India's forex reserves are borrowed reserves and not accumulated current account surpluses.

Moreover even a trillion dollars in reserves could not help when the problem is with the capital account and therefore the balance of payments being in deficit for more than three years on the trot has affected the situation. So why does this distinction matter and how does one understand it better? Economist Renu Kohli spoke to journalist and author Pooja Mehra who also hosts how India's economy works on the core. Kohli who's worked with the Reserve Bank and the IMF in the past has focused on capital account and financial liberalisation, exchange rate management, monetary policy and sovereign debt resolution among other areas and published widely in leading journals.

INTERVIEW TRANSCRIPT

Renu Kohli: India has traditionally run a current account deficit in the sense that it imports more than it exports and therefore it doesn't have current account surpluses. And whatever is accumulated or absorbed into reserves, it's called reserves accretion, comes off its capital flows or excess of capital that flows into the country. Now that will be short term in nature.

In the last few years, what has happened is that the short term flows have tended to exceed the long term, which is a foreign direct investment. So that's what we mean by reserves being borrowed.

You don't really need the reserves as much to sell or buy, but the fact that the central bank can intervene and can support the exchange rate does impart confidence to investors and stabilise market sentiment. Having said that, now we can come to the shock.

The shock is the trigger is the West Asia war. Within that, it is the price of oil, which has skyrocketed, coupled with a lot of choke points arising from the closure of street performance. And a lot of India's critical imports like fertilisers, petro products and LPG, LNG gases, a lot of them, more than 50% of the fertilisers, for example, come from there.

So the choke supplies and having to arrange alternate supplies at higher prices. So both the aspects, the higher oil prices and higher supplies of certain necessary items have pushed up the import bill. And that's what is the current account side.

So again, and at the same time, some bit of exports have been impacted simply because it's also a trade route. So the same channel which is closed through which India imports, it also exports through that as do many other countries. So that's what has happened.

So what is unusual in this instance is that actually in the past crisis, for example, if I were to take 2013, India had a very, very wide gap on its current deficit. It was like historically the highest, if I'm not mistaken, it was in December 2012, six months before or five months before Ben Bernanke made his famous statement that, you know, they might have to taper off their patent QE. It was as much as 6.7% of GDP. And, you know, we can compare that it's like more than three times what is considered a comfortable or a sustainable threshold for India, which is in the region of 2% of GDP. So the current account has been actually very, very well behaved. It has been under 1% of GDP and not just before the West Asian crisis started, but also in the last two, three years, it's been very, very moderate.

So the pressure hasn't come from that side. What happened is that this expanded the current account gap precisely at a time when foreign capital, the financial capital inflows have been drying out and they haven't been drying out very recently. Of course, there is an acceleration of outflow of portfolio short-term capital.

That is, there is no doubt about that. At the same time, the exit of foreign capital, both short-term and long-term, FDI and portfolio was negative last year, which is financial year 25. And before that, FDI has been dry for almost close to three years on a trend basis, since 2022, actually.

And in three of the four years, last four years, India has recorded a deficit on its balance of payments, which is the sum of the current and the capital account. And whatever is the excess or the deficit reflects in our balance of payments. And that's what we mean by the balance of payments deficit.

I can see where the pressures are coming from.

And in real time, it's very difficult or hard for a central bank to assess exactly what the equilibrium value or the fair value of the exchange rate ought to be. But they're also aware of how much of speculation the pressure is there, whether it is speculation or not, it's the market expectations and market's own assessment of what the value of the rupee might be. In this instance, the management one is there is certainly an acceleration in the rate of depreciation starting from the end of February.

But if you go back, rewind that before for like at least last two or three years, the rupee has been drifting down. It's been a more modest rate of depreciation, but the Reserve Bank has been actively supporting it and managing it. I do not, in my view, I do not think that that was such a good idea, because if you look at the fundamentals, the exchange rate is determined both in the goods market, which is your current account, which is export versus imports, but it's also determined on the financial side, which is the assets market.

And while the current account was very well behaved, and as I said earlier, that it was much lower and very reasonable around in the region of one to one and a half percent of GDP, the capital account wasn't, the capital account was in deficit. So there would be a revaluation or an understanding as to how it is being determined by the fundamentals. These pressures were fundamental.

They weren't speculative because they were persisting for the last three years. In particular, we had a very strong episode in the last quarter of 2024, October to December. There was a huge, enormous amount of pressure and the Reserve Bank actually intervened massively, close to, I think, a hundred billion dollars, if we count both forward as well as the spot market intervention.

That was supportive. The situation changed in the first quarter of 2025 and the rupee was allowed to strengthen back to, I think, 83 or something like that to the dollar. In hindsight, or even at that time, actually, in my view, it ought to have been allowed to remain weak because that was a fundamental adjustment.

And if the adjustment had happened towards the end of 2024, then it was OK. It should have been allowed to be kept weak. So we wouldn't have this kind of persistent pressures because it's very important to flag the point that these pressures have been there upon the rupee, notwithstanding the fact that the current account is not being very wide.

And that is the critical difference from the past, from 2013, from 2008, 2009 and from 1991 as well. So there is a fundamental difference. We don't know about the short term capital because there is no doubt pressure which is coming from Britain of recreating capital and all of it shifting globally towards investment in artificial intelligence and tech related stocks.

So, you know, a few pool of countries, just about three or four markets, essentially Korea, Taiwan, China, and of course, at the apex is the United States. So these are the countries which are attracting a lot of capital. So India is suffering and we cannot expect anything of that.

So there is, you know, a coincidence of structural and fundamental and cyclical factors both. So in the last three months, I think the exchange rate management, the Reserve Bank has been doing what it has been doing. It has been selling a lot.

Its forward position did come down, unwind a bit, but it's again started building up. At last market reports say the data has yet to come out, but it's again in the region of 110 to 115 billion dollars. Now, if the central bank is committed ahead by that much of an amount, we have to subtract that straight away and the market knows it.

If the market knows it, everybody knows it. You and I know it too.