On Episode 889 of The Core Report, financial journalist Govindraj Ethiraj talks to Manisha Kapoor, CEO and Secretary-General at ASCI. We also feature an excerpt from our show How India’s Economy Works featuring economist and former NITI Aayog Vice Chairman, Dr. Rajiv Kumar.

SHOW NOTES

(00:00) The Take

(08:34) Index rebalancing is a larger problem for markets to grapple with.

(10:22) Markets are still expecting a deal on the Iran-US war.

(12:27) Despite bans, offshore betting and its advertisements flourish in India.

(23:45) What ails manufacturing in India and what should be the policy response.

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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 Monday the 1st of June and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

The Take

Four decades ago, India's two-wheeler market became a battlefield for four Japanese automotive giants, each seeking to capture the mobility of a nascent middle class. While Suzuki, Yamaha and Kawasaki and their Indian partners placed their bets on the youthful allure of performance and the raw power of two-stroke engines, Hero Honda of the Munjal Group chose a quieter, more utilitarian path.

In 1985, Hero Honda launched the CD100, a modest motorcycle equipped with a four-stroke engine. What it lacked in speed, it made up for in engineering metric that matters more than horsepower to the subcontinental consumer, thrift. Backed by a brilliantly bold advertising campaign, headlined by the iconic mantra, fill it, shut it, forget it, the bike promised an unprecedented 80 kilometres per litre.

That phrase quickly permeated the national lexicon used millions of times, even in entirely non-motorcycling contexts. As automotive journalist Srinivas Krishnan, former editor of Business Standard Motoring and columnist with Autoex, pointed out to me, Hero deliberately went for pure efficiency at a time when its rivals were chasing youthfulness and power, traits that fuel-thirsty two-stroke engines excelled at delivering. The four-stroke CD100 was subdued, but it was highly economical.

Today, history is repeating itself in the Indian automotive landscape, but with a high-tech twist. Once again, macroeconomic shocks are forcing drivers to prioritise efficiency three whole months after the onset of the geopolitical conflicts. With fuel prices having risen and poised to climb further, the focus is back on fuel economy.

The difference today is that innovation is no longer focused on squeezing an extra kilometre out of an internal combustion engine. Instead, the market is leaning heavily into electric and hybrid fuels. For a long time, the growth of electric vehicles in India was steady but modest, lagging behind Western and Chinese adoption curves.

The last few months, however, have sharply altered consumer perceptions, and this is visible on the ground. Just last week, my driver told me that at least three new electric cars of varying shapes and sizes had been purchased within our sprawling multi-tower residential complex in Mumbai. This anecdotal surge appears to be backed by data.

Shailesh Chandra, head of Tata Motors Passenger Vehicles, told AutoCar Professional Magazine last week that while EVs historically accounted for about 15 to 16 percent of their sales mix, forward bookings have suddenly climbed to nearly 23 percent. This suggests that demand is running significantly ahead of available production capacity. According to him, the recent spike in fuel prices has dramatically accelerated the consumer migration towards alternative powertrains.

In the last two months, the jump has been two to two and a half times of what it used to be, he said, adding that in the last 15 days, things have changed completely. It's an even sharper growth. To address this wave of demand, AutoCar Professional reports that Tata Motors is actively working to raise EV production by around 50 percent, aiming to scale monthly output from roughly 10,000 units to 15,000 units in the next few months.

Tata Motors is the largest EV maker in India, but AutoCar also reports that other car makers with growing EV portfolios like JSWMG Motor and Mahindra and Mahindra are seeing similar demand surges. This rapid consumer migration underscores a fundamental truth about the Indian market, the extreme value consciousness of its buyers. Electric vehicles are proving to be a boon for a country facing perennial energy anxieties, and their success has come despite relatively weak public charging infrastructure.

When economic incentives align, Indian consumers willingly bypass these infrastructural inconveniences to clearly secure longer-term savings. As Krishnan quips, whether someone is buying a top-end luxury Mercedes-Benz or a simple two-wheeler, the unifying question remains exactly the same, kitna deti hai, or how much mileage does it give in Hindi. This shift also offers a profound lesson in the efficacy of raw price signals.

India delayed raising retail prices for petrol and diesel by at least two months. Once those higher prices finally hit the pumps, they acted as an immediate unvarnished incentive for customers to shift or consider moving to more eco-friendly fuels, including electric, a transition that obviously bodes well for the wider economy. It may even force internal combustion engine makers to look for new efficiencies, though it remains unclear to me how much more mileage can realistically be extracted from traditional fossil fuel setups.

Crises also have a remarkable track record of sweeping away institutional inertia. High fuel prices will undoubtedly spur further innovation, accelerating the domestic supply chains for batteries and hybrid tech. When a crisis alters consumer behaviour this sharply, it also forces capital to allocate more efficiently.

Forty years after its debut, Hero still sells the CD100 platform as the improved Hero Splendour, operating on almost identical engineering specifications. There has been no turning back from the point the four-stroke engine transformed India from a nation of casual commuters into a global two-wheeler manufacturing powerhouse. Today, the price signals sent by expensive fossil fuels are doing the exact same thing for the EV ecosystem.

For India's economy, nudging drivers to fill it, shut it, and forget it with an electrical cord rather than a fuel pump isn't just an environmental victory, it is a renewed textbook example of capitalist adaptation at its finest.

And that brings us to our top stories and themes…

Index rebalancing is a larger problem for markets to grapple with.

Markets are still expecting a deal on the Iran-US ward.

Despite bans, offshore betting and its advertisements flourish in India.

What ails manufacturing in India and what should be the policy responses?

Markets, Oil, Magnificent Seven and The War

FIIs pulled out roughly $3.5 billion in the month of May thanks to weak earnings and a depreciating rupee with a high exposure to energy shocks.

FPIs, or foreign portfolio investors, have been net sellers in all months of 2026 except February. Incidentally, subdued earnings growth in India and significantly stronger corporate performance in markets such as South Korea, Japan, US, and Taiwan is also causing sell-offs. So it is not just AI, but also AI.

And India's retail inflation at around 3.48% right now could rise as a result of recent fuel price hikes and weaker than normal monsoon rains, according to India's finance ministry in a report released on Saturday and reported by Reuters. The duration of the state of Hormuz disruption remains the single most consequential variable for India's external and price outlook, adding that a sharp rise in upstream price pressures, along with recent increases in fuel prices, suggests a gradual pass-through to retail inflation through higher transport, energy and food-related costs in coming months. And then there is also the threat of a significant rainfall deficit, which could translate into food inflation weakening rural demand and aggregate growth, according to that report.

Meanwhile, last week the IMD, or the India Meteorological Department, has forecast a El Niño-weakened monsoon in 2026 that will bring the lowest rainfall in 11 years. Monsoons typically deliver about 70% of annual rains in India, where half of the farmland lacks irrigation and about half the population earns its livelihood from farming. Reuters reports summed up that the monsoon delivers about 70% of annual rains, where almost half of farmland lacks irrigation and about half the population earns its livelihood from farming.

Meanwhile, India's foreign exchange reserves have fallen to more than a one-year low of $681 billion for the week ended May 22 from $688.8 billion or close to $689 billion a week ago, according to RBI, a Reserve Bank of India data released on Friday last week. The $7.5 billion decline was largely due to a $4.5 billion fall in the value of the central bank's gold holdings, according to a Reuters report. In the markets, the benchmarks fell on Friday after the market saw a monthly drop after the previous month's strong rally.

Losses jumped in the last half-hour of trade on Friday as index provider MSCI's May index reject came into effect, while India saw a jump in its weight in the MSCI EM, that's Emerging Markets Index, between 2020 and 2024, rising to about 20%. In July 24, it's expected to come down to 11.2% after the latest MSCI rebalancing, according to a report in the Business Standard quoting IIFL Capital. Speaking of index balancing, an Economist article pointed out last week that as of 2025, some $36 trillion worth of capital was in passive investment funds, which automatically track decisions by MSCI, FTSE Russell, S&P Global, and other such indices to determine what to buy and how much.

The article speaks of what it calls the awesome power of financial indices and points to how the Indonesian market, South Korean government bonds, and an online broker in the US have this in common. Goldman Sachs has said that close to $8 billion could flow out of Indonesian markets if the country is downgraded to a frontier market by MSCI in June, the online brokerage Robinhood gained because it joined the S&P 500, and South Korean bonds entry into the FTSE World Government Bond Index may pull in as much as $60 billion of foreign investment, according to the Economist. Back home, the Nifty 50 and Sensex were lower on Friday.

Sensex fell about 1,092 points to close at 74,775, and the Nifty 50 fell 359 points to close at 23,547. The broader markets were also down, Nifty mid-cap falling about 1.3, and the small cap falling about 0.8%. For the month, the Nifty 50 is down 1.9%, and the Sensex 2.8%. Meanwhile, oil markets were feeling more confident going into the weekend, though the threats of renewing bombing from the US have been incessant. Oil futures were down more than 2% on Friday, even as traders waited to see whether there would be any agreement on a ceasefire between Iran and the United States.

And of course, the US did not disappoint, keeping the pot boiling, so to speak. The US is ready to restart attacks on Iran if a deal cannot be reached, the country's defence secretary said on Saturday, even as negotiators from the US and Iran are working to bridge major differences blocking an agreement. A Reuters report quoted the defence secretary saying that their ability to recommence, if necessary, were more than capable, he said, speaking in Singapore.

Brent crude futures were at $92 a barrel on Friday, down about $1.66. Meanwhile, in a sign that it's never too late to innovate, particularly if you're in a business facing technology pressures, a Bloomberg report points out that several stars of the dot-com era, that's the 2000s, who faded into the background as the bubble burst are now back with a vengeance thanks to the unrelenting AI spending boom. A rush to build on AI infrastructure has led to soaring demand for everything from computer servers to storage components, networking gear, and even legacy chips. The latest surge has brought up and swept up iconic tech names from the 90s, including many of the so-called four horsemen, a group considered the equivalent of the magnificent seven cohort during that era, according to that Bloomberg report.

The names include Dell, Nokia, and Lenovo, and also other high flyers from the dot-com era, like Micron Technology, Intel, Texas Instruments, and Cisco Systems. These seven stocks have gone up about 158% in 2026, adding about $1.7 trillion in market value. And why is that happening? Well, U.S. equities closed once again at record highs on Friday, even as crude prices fell, helping the major averages scoring a winning month, according to CNBC.

The Nasdaq Composite was up, so was the S&P 500 and the Dow Jones Industrial Average. All three indices hit fresh all-time intraday highs earlier as well, according to CNBC.

How are Online Ads violating Indian Law?

Offshore betting online is as banned as banned can be, and yet spouts up everywhere across digital platforms, including via influencers here in India.

So much so that the latest Advertising Standards Council of India annual complaints report 2526 says offshore betting, despite regulatory interventions, was the most violative sector, accounting for some 6,933 cases. It was followed by realty, personal care, food and beverages, and products violating the Drugs and Magic Remedies Act. The ASCI reviewed something like 11,581 cases in this period, which was a 21% increase over the previous year, and looked at 9,841 advertisements, up 37% over the previous year.

And 98% of the ads scrutinised required some modification, and 93% of these cases came from ASCI's proactive monitoring, according to ASCI. Digital platforms continue to dominate the violations landscape, accounting for almost 97% of all ads scrutinised, with 82% of these being sponsored content on social media platforms. Meta platforms accounted for almost 80% of digital violations.

Now, the data indicates a consumer safety risk that's growing beyond misinformation to promotion of categories restricted by law. I reached out to Manisha Kapoor, CEO of ASCI, and I began by asking her what had changed between the previous year's report and the latest one.

INTERVIEW TRANSCRIPT

Manisha Kapoor: So I think one is our own focus on categories like betting, which has seen a much more intense scrutiny from our side. And of course, in betting, we know that in the middle of last year, a new law was enacted. I think the rules have only just been notified, but the fact is that the promotion and regulation of gambling kind of was enacted, and it prohibited any games that had any kind of wager, whether they were games of skill or whether they were games of chance, which previously, you would know that games of skills were permitted in the country, but games of chance were not.

And even at that time, offshore betting gambling companies were quite visible, they were using a lot of celebrities. And at some point, the government kind of managed to put a stop to their very visible kind of appearance, and you know, the use of celebrities. And in the middle of last year, this act was announced, and therefore that stopped the real money gaming category completely, which was your India based operators.

And what we saw, in fact, ironically, was that we saw a huge upsurge in the offshore betting companies making their presence felt in terms of being very aggressive. A lot of it was not visible, you know, in mass media, etc. Because the government had clamped down on that.

But on social media, on digital platforms, they were extremely active. And we've seen, in fact, one of the things the report talks about is how the pre and the post proga kind of has taken place. And we've actually seen a surge in the number of complaints or in the number of cases that we have addressed in terms of betting and gambling.

So that's something both surprising, but you know, something to kind of make note of.

Govindraj Ethiraj: Right. And what would be the next most violative category? And I know it's drugs and magic remedies, but why is it so?

I mean, and why are we seeing continued, let's say, violations there at this scale?

Manisha Kapoor: So reality, for example, is another big category that we are seeing. Drugs and magic remedies. I think the interesting shifts that are happening over there is really to do with things like, you know, which earlier these kind of categories were not very visible.

If I go back three or four years back, many of these categories you would find in regional newspapers kind of hidden behind, spoken in a very kind of a hush hush manner. But what is happening in the last couple of years, you know, a lot of them have made their presence felt on digital platforms, which also offers a kind of anonymity. So we are seeing a lot of that, issues around sexual wellness, these kind of categories really opening up.

The point is that the law does not permit it. The reason the law does not permit it is because many of these treatments are considered medical in nature. And therefore, I guess the intent behind the law is that consumers should not take medicines themselves without actually visiting a medical professional.

So there are several conditions, whether it's obesity, cancer, diabetes, sexual wellness, that are not permitted to be advertised. Cures for them are not permitted to be advertised. But we are seeing that continuing on social media.

We've seen in the F&B category, for example, that nutraceuticals as a subsection or as a subsegment seems to have gotten wings and is again a very, very active part of the advertising ecosystem. So I would say these are some of the shifts that we've seen now over the last couple of years.

Govindraj Ethiraj: And reality is your second biggest. And what's the kind of violative advertising that you're seeing there?

Manisha Kapoor: So there are a couple of things in reality that we are seeing. One is, of course, certain promises and exaggerations that we see in terms of the claims that are being made. But also, we are now closely working with a few RERA authorities, the real estate regulatory authorities.

And this year, for example, we have a MOU with the Telangana RERA authority. Last year, we had a similar arrangement with the Maharashtra RERA authorities. Now, the RERA authorities also have certain rules to make sure that consumers are not misled and that they have the right information to make or decide and take an informed choice.

Some of these include links to the RERA website, which has a list of all the cases, the status of the progress of the particular project, etc. And in many cases, we find that these very important details are actually missing from the advertisement. So the buyer or somebody who's considering buying a house is not able to kind of get independently verified third-party information on the project.

So that is the nature also of the violations that we are working on. And like I said, in some cases, there are green claims which are being made on homes. We see a lot of that, many of them done without any kind of substantiation.

So those are the kind of claims that we are seeing in reality.

Govindraj Ethiraj: Right. And one of the things that you pointed out is that influencer marketing is like a horizontal, which is a problem area across the board that includes promoting categories prohibited by law, as well as other categories like personal care, where I'm assuming it's more not about breaking the law, but misleading. So what's the larger approach here from your vantage point that we should be looking at now and going ahead?

Manisha Kapoor: So there are some categories that tend to use influencers a lot. And we've seen that in the case of again, betting, which is the largest area that we've seen. And we've also seen the maximum number of influencer violations in that category.

So as you said, these are categories that are not allowed to be advertised at all. I mean, so in the case of betting, of course, the category itself is banned. So it follows that you cannot advertise it.

But also in areas like personal care, food and beverages, nutraceuticals, financial services, we see influencers play a fairly important role. And I think that there is a lot of value that influencers can actually bring in dismantling complex concepts around, you know, maybe skin types, or even financial concepts. So I think there is a great role for influencers there.

And I think if they are used rightly by brands, they can really add a lot of value to the whole advertising ecosystem. But unfortunately, the tendency still remains to avoid disclosures for the influencers not to do any due diligence around the claims that they are making. And I think those are the aspects where we are seeing a lot of this tripping kind of happening.

And with so many companies spending more and more of their advertising money on influencers, it's important that this develops into a professional channel of sorts, you know, not a hobby activity for so many people. And you know, for brands, it's also about putting their reputation at risk. Because you could have influencers that kind of come into, let's say the ASCII scrutiny, or even the government scrutiny, and then there is a brand associated with it.

And although the brand may not have told them that, you know, don't disclose my brand, etc, you know, they may still kind of get caught because their brand is being promoted without disclosure. So I think there is a long way to go for this ecosystem to mature, to really offer the kind of professional channel that brands may be looking for and that consumers would like to trust. So I think we are also unfortunately seeing that the lead influencers are not setting the standards.

You know, our studies over the last two years have shown that, you know, the first year, we found two thirds of them in violation. And in the next year, we found three fourths of them in violation, that you know, some posts of theirs go without disclosure. So, you know, unfortunately, we are not seeing the leaders set the standards.

So I think we hope that someone will step in the agencies, the brands, only to build that as a trusted ecosystem.

Govindraj Ethiraj: Right. And last question. So one of the points in your report is that meta platforms is where a lot of violations happen.

So is that because they are the largest by virtue of Facebook and Instagram and WhatsApp? Or are there other reasons as well?

Manisha Kapoor: No, I would say that Instagram particularly is really a marketplace, possibly the most marketplace kind of any of the platforms. So brands do tend to kind of push out a lot of promotional content on meta, particularly on Instagram. So I think that remains a concern for us, because at least as far as betting is concerned, these are ads that should not have made it to the public.

And therefore, what is happening with platform filters? Are they strong enough? Are they keeping up with the innovation that these bad actors are kind of using?

And it's complex. I mean, I would say that it's not easy. But yeah, I think that's the need of the hour that the platforms do need to step up and make sure that at least the illegal stuff is kind of kept out very clearly.

And then hopefully, you know, work with self-regulatory organisations and the government to also prevent other kinds of issues on platforms.

Govindraj Ethiraj: Manisha, thank you very much. It's been a pleasure speaking with you.

Manisha Kapoor: Thank you. Thank you so much.

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The Delhi High Court has ruled that Google infringed the trademark rights of a bathroom fittings maker, Hindware, by allowing rivals to use its name as an advertising keyword that could shape the online ads market, according to a report from Reuters.

The court ordered Google to pay damages of $31,600 in a ruling issued on the 22nd of May. The court said Google allowed rivals of India's Hindware to use Hindware as a keyword to target their own advertising. The ruling said the manner in which Google operates its AdWords policy makes it clear that Google sells or auctions the use of the trademark without any authorisation from the proprietor of the trademark.

The ruling could change the economics of online advertising for millions of businesses. The founder of Indian matchmaking company Shaadi.com, Anupam Mithal, told Reuters that you create the brand, someone else bids on it, and Google takes the fee.

What is stalling Manufacturing Progress in India?

Languishing at around 17% of GDP, despite successive governments trying different approaches to boost it, there are, of course, many answers.

But Dr. Rajiv Kumar, former vice chairman of Neeti Aayog, had some interesting granular insights. A former economic advisor with the Department of Economic Affairs, he served as the head of NITI Aayog, the planning body from 2017 to 22, and is now chairman of Pehle India Foundation, a not-for-profit policy think tank he established in 2013. Pooja Mehra, who hosts the course How India's Economy Works podcast, interviewed Dr. Kumar last week in New Delhi and began by asking him why India is not seeing the kind of outcomes for its manufacturing efforts that we would have liked.

TRANSCRIPT

Dr. Rajiv Kumar: Puja, I think what's going on, I'm not sure. But I think what's happening is that we are not focussing sharply enough on the sector that we should be focussing on. And in my recent article published in the Economic Times, I made the point that we will have a rise in the share of manufacturing sector if we are able to tap into external demand, which is the global markets.

So we need to have a manufacturing sector, which is very sharply and very predominantly export orientated. But unless we do that, we will not be able to get the scale that we require. If we don't get the scale, we don't get the competitiveness, and therefore we don't get the growth that is required.

Now, in India for a very long time, for decades, we've been suffering with what I call export pessimism. And we started off with import substitution, etc. But we've never ever given export orientation the kind of push that it requires.

Now, even within the PLI, the Production Link Incentive Scheme, the idea at the beginning was that this will be an export orientated scheme. But lo and behold, it soon expanded into 14 sectors, and most of the sectors lost their export focus. And we have got only one sector there, which is the mobile phones, which has done whatever it has done.

And that's got the scale as we can. So the bottom line, the government and the industry have to come together on the agenda for expanding our exports and increasing the share of our exports in the world markets. If we do that, only and only then will the manufacturing sector share in the GDP rise.

Puja Mehra: So are you suggesting that this lack of focus is because of a lack of understanding of what is required? Because I discuss this topic with many economists, and I often come across three points. The first is slightly ideological sort of a point where national leaders, political leadership feels that the domestic market is so large that India does not need to focus on an export market, which is perhaps an overestimation of the size of the domestic market.

The second point I come across is that the Indian manufacturing sector does not have competitiveness, especially vis-a-vis China. And this is because of legacy issues. This is because of new upcoming issues.

And the third point that I come across is that there is a certain lack of ambition in the Indian corporate sector. It's not like their hands are tied behind their backs, but it's also because they just simply are quite content to cater to the domestic sector. And they ask for protection and they don't want to compete.

Dr. Rajiv Kumar: Taking them one by one, the first is that this is a myth that we suffer from, that India is a large economy. India is a large market. We are a large population, but not a large market.

For the $3,000 per capita, heavily skewed, and 65% of our people are still living below $3 a day. We are not a large market. We are a fairly small market.

And therefore, if we cater only to this market, which we tend to do, and which is the focus of all our action and policy response as well, then we will not get the scale that we require to be able to compete in the global market. And then we don't get the scale, therefore we don't get the competitiveness, and that's the end of it. So we have to shatter this myth that India is a large market.

That's the first thing. And also, this myth also carries over to the fact that, oh, because we are a large market, therefore all the foreign investors will come running to us in any case. And we can play coy with them and decide whom to get and whom not to get.

Complete zero. Total nonsense. And the boards of the big companies, India is just one market, and they take a decision on the basis of what is on offer from one country or the other.

So that's the first one. The second one is about competing with China. Yes, of course, it's very difficult now to compete with China.

But please also remember that our steel industry started much before China. In Asia, we were one of the first, if not the first to have started a steel industry, and we had the cheapest iron ore, and we had the cheapest coking coal right there, and also the cheapest labour. And yet what we have done ultimately is that we are still importing certain types of steel, while China has got 80 percent of the steel market in the world.

Why should that have been? That has been because the industry and the government both, for some reason, decided that the world is not their playground. It's just India that's the playground, and that is it.

And then the third one that you said, it is very true that our industry, unfortunately, has played the protectionist game to the hills rather than become export-orientated and go out and compete. And again, steel is a very good example. A lot of time with what is called the Steel Association of India is spent in getting the government to ban the export of iron ore, especially one with 65 percent ferrous content, etc., because that should be captive for us, and we should be producing this, etc., and so on. And then we went on to say that even the 45 percent content should be banned, while Anwar Hoda Committee, when he was a member of the Planning Commission some time ago, had said that India has more than 400 years worth of iron ore to play with. So there is no scarcity of iron, but we just wanted to compete. And then along with that is this ideological nonsense that we will not export or we will not compete in primary product, we will only compete in the finished product, the technologically superior product.

I call it the illusion of not exporting potato chips, but only semiconductor chips. At the end of the day, you do neither. That's what's happened.

So I think what we need to do is to really re-look and sit down with the industry. And this is where I think what we really need is a very candid conversation between the government and the industry, and also maybe the academia and their put together, to say that, look, our target is to increase our share in the world trade, in merchandise trade, from 2 percent to 4 percent in a given time period. Let's work together to figure out how we will do it.

So I think that conversation doesn't take place. And that is because I think each stakeholder works for its own objective rather than for the national objective of making India an export-orientated economy. So I think the bottom line, Puja, is that we don't encourage, we don't incentivise, we don't reward the exporters big enough for them to become role models for the rest of the industry.

And therefore, this domestic orientation and this closed economy stance continues forever and ever.

Puja Mehra: When you say we don't reward exporters, what would that be? Currently, exports of petroleum products are being taxed because there is a shortage. Is that a good policy?

Petroleum products are India's premium exports.

Dr. Rajiv Kumar: You know, I mean, exporting petroleum products is really a lose-lose situation. Because it's the most capital-intensive, least employment-generative exports possible. So therefore, you really don't want to export them because at the end of the day, you are importing the intermediates, you know, the sort of fuels.

And you're really just getting a refiner's margin to be able to export back the petroleum products. So that's not an industry to encourage. What you need to encourage are industries, you know, where employment intensity is much higher.

You know, and these are light manufacturing products. This could be leather products. This could be toys.

This could be light engineering products. This could be gems and jewellery. This could be garments.

It's such a misfortune that Bangladesh probably exports larger volumes of ready-made garments today than India. They started much, much later than us. So therefore, when I was in NITI Aayog, I tried to do this.

Couldn't succeed. Couldn't take it to the culmination of getting the ready-made garment industry people together with the textile ministry and the state government to say, what is it that is required to get the industry back up and start exporting? This brings me, Puja, to the point that I sort of wanted to mention, which is that I think one of the weaknesses for the exports is that we always want to have a pan-India export promotion policy.

Even the PLI is sort of, you know, framed in that direction. To that extent, mea culpa. What you need really is state-specific export promotion policy.

What is good for Punjab for exporting cannot be the same as being good for Tamil Nadu. You know, because they have very different histories. They have very different requirements.

They have very different resource endowments, skill endowments, etc. So what you need today, actually, urgently need, is for the central government, the Ministry of Commerce, to sit down with each state and work with it to create a state-specific export promotion policy, set up those targets, and work with the state governments to ensure that those industries which you agree on get the sort of, you know, help, you know, the double-engine or the triple-engine help that you want to give to get those exports going from that particular state. Because at the end of the day, the reward or the incentives or the ease of doing business for the exporters is also very much in the state realm, you know, because that's where it really, the rubber hits the road. So I think it's time, honestly time, even for setting up the Export Promotion Council of India, not the EPCR that we have, which doesn't work, but the one where the central government will sit with the state governments, and together they will determine as to what each state can do and determine targets and determine the incentive structures that are required to get the exports going.

And that will then take manufacturing to a different level altogether, in my view.