On Episode 873 of The Core Report, financial journalist Govindraj Ethiraj talks to Atul Chaturvedi, Chairman of the Asian Palm Oil Alliance as well as Indrani Bagchi, CEO at Ananta Aspen Centre.

SHOW NOTES

(00:00) Stories of the Day

(00:50) Markets rise on China-US talks as a sign of possible peace in West Asia

(03:19) India’s Whole Sale Price Inflation jumps sharply

(06:43) Can India reduce its dependence on cooking/vegetable oil?

(13:46) What will a ban on sugar exports mean?

(17:23) Viewing the China-US talks in Beijing right now through an Indian lens

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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 Friday the 15th of May and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital.

Our top stories and themes…

The markets rise on China-US talks as a sign of possible peace in West Asia.

India's wholesale price inflation jumps sharply.

Can India reduce its dependence on cooking or vegetable oil?

What will abandoned sugar exports mean?

And viewing the China-US talks in Beijing right now through an India lens.

The Markets, US-China talks, WPI and The Rupee

US President Donald Trump met with Chinese President Xi Jinping yesterday along with a group of top CEOs of US multinationals. The precise expected outcome of this visit and meeting is not clear since much has changed in the last few months and there are some old trade agendas and then some newer war ones.

Could the talks lead to more lasting peace in West Asia and could we expect the state of all mass to open up? Well, it's likely some statements have been made to that effect but we do not know. But in keeping with the general positive spirit which included Trump not threatening Iran in the last approximately 24 hours, the markets were up. The nifty 50 was up 277 points to 23,689.

The centsix 789 points to 75,398. And the broader markets, the nifty mid cap was up 1.1% though the nifty small cap was down slightly. The rupee did not feel as positive as the markets falling to an all-time low on Thursday.

Again, thanks to high prices and continued portfolio outflows, it fell to Rs 95.95, almost touching Rs 96, going past its previous record low of Rs 95.79 that was hit on Wednesday and finally closed at Rs 95.76 on Thursday, which is slightly down from its previous lows. A Reuters report said the rupee trimmed losses after Bloomberg News reported that India could reduce taxes paid by foreign investors on the country's bonds. India is considering a significant reduction in taxes paid by foreign investors on the country's bonds as authorities seek to align policies with global norms and attract inflows, according to a Bloomberg News report, basing this on a recommendation from the Reserve Bank of India, which is the central bank, to the Ministry of Finance.

And all of this is being considered as there is an effort on to stem the rupee's depreciation or at least the pace of depreciation. Foreign portfolio investors also pay capital gains on sales of Indian shares since 2018, something they do not do in most other countries. Meanwhile, a quick check and reminder from Wall Street, S&P 500 futures were up early Thursday, thanks to technology stocks which took the index to all-time highs.

Both the S&P 500 and the Nasdaq hit new intraday records on Wednesday. Shares of Cisco were up almost 19% in extended trading after its third-quarter results and guidance, which were better than Wall Street's expectations and also an announcement that it would cut 4,000 jobs. Back home, India's WPI, or wholesale price inflation, rose to a 42-month high, or more than three years, of 8.3% in April 2026, from 3.88% in March, thanks to a sharp rise in fuel and energy prices, according to data released by the Ministry of Commerce and Industry on Thursday.

The wholesale price index-based inflation was lifted by rising prices of mineral oils, crude petroleum, and natural gas, basic metals, and other manufactured products. The fuel and power category recorded the highest inflation amongst major groups at 24.7%, or close to 25%, compared with just 1% in March. India is the world's second-largest sugar producer and has banned exports for more than four months, according to a government notice.

It follows a cut in output estimates from a major sugar producer's group. India's gross sugar production is forecast at 32 million tonnes for the season ended September 30, down from an earlier projection of 32.4, according to the Indian Sugar and Bioenergy Manufacturers Association, quoted by Reuters. The next harvest, which starts around October, could also be affected by a lower-than-average monsoon.

More on sugar shortly.

Oil

Oil prices fell back, having lost some of their earlier gains on Thursday after Iran's state media said about 30 vessels had crossed the Strait of Hormuz in recent hours, while the semi-official Fars news agency cited a source saying that Iran had begun allowing transit for some Chinese vessels. Oil prices fell from a high of $107 per barrel to about $105.6 per barrel on Thursday morning.

Earlier on Thursday, during the China-U.S. meet in Beijing, President Xi Jinping expressed interest in purchasing more U.S. oil to reduce China's dependence on the Strait of Hormuz, according to the White House. Now, China has not really bought U.S. crude and has not imported any since May 2025, after a 20 percent import tariff imposed during the trade war, according to Reuters. Meanwhile, Bloomberg is reporting that India has asked the U.S. to extend its waiver on Russian oil.

The U.S. had first provided a green light in March, widened that with an authorisation that runs till May 16, in an effort to limit rising oil prices with additional barrels. The Bloomberg report also said that while Russian crude is not subject to blanket sanctions, the U.S. has previously pushed New Delhi to cut back on discounted purchases in order to pressure Moscow over its war in Ukraine. The report also says that with no end in sight for the conflict in West Asia, Indian government officials have warned Washington that supply remains a priority as continued volatility in the oil market will have wide consequences.

Meanwhile, Indian imports of Russian oil have been running at record pace, as refiners go all out before the current waiver expires. According to the Bloomberg report, daily inflows have totalled, in May that is, an unprecedented 2.3 million barrels, according to Kepler data. The waiver allowed imports of already loaded Russian oil.

How Can India Reduce its Dependence on Vegetable Oil?

The Prime Minister has appealed to all Indians to reduce, among other things, consumption of cooking oil, more than half of which is based on imports, thus obviously keeping the import bill in forex high. He specifically urged Indians to reduce consumption of cooking oil by 10%, saying these small steps can protect them against lifestyle diseases. India is one of the world's largest importers of edible oils, with the bill touching about $19, making it a key import head after oil at $135 billion, gold at $72 billion, and fertilisers at $14.5 billion.

Now, there are many reasons for why oil seeds are not grown sufficiently in India, also because farmers view it as a risky crop, unlike, let's say, rice or wheat. Be that as it may, there might also be challenges on the import front too, as we'll hear, apart from the cost of it. I reached out to Atul Chaturvedi, Chairman of the Asian Palm Oil Alliance, and also Chairman of Sri Renuka Sugars, and I began by asking him if Indian households could find substitutes, and what could they be, and what was the solution to our import bill in this context. I also asked him about India's ban on sugar exports right now, and what that meant for the industry and the market.

INTERVIEW TRANSCRIPT

Atul Chaturvedi: It's an interesting question. In fact, my take is that Indian consumption story is quite skewed. You have affluent states like Gujarat or Maharashtra, and even Punjab for that matter, which consume far too much oil.

But there are also states like Bihar or Odisha, the poorer states or eastern parts of India, which consume far less. So actually, the story should states consuming close to 28 to 30 kilos per capita on an annualised basis, they need to reduce. And overall, Indian consumption is not all that great, about something like about 18 kilos per capita.

But if the affluent section of the society or they bring it down, then maybe some moderation can happen. But Indians have actually not done justice to the oil seed sector in the last couple of decades. We have neglected that sector big time and the position now is such that your dependence on imports is close to between 55 to 60%.

And it's a bit of a challenge, because no nation can afford to compromise its oil security to such an extent. Now, whether it will have too much of an impact the Prime Minister's appeal is something which we will have to see. But having said this, there is a little bit of a silver lining in the sense that high prices are moderating consumption in the country.

What we are seeing during the summer months is very high temperatures as well as drop in the horeca segment so that both these things are moderating consumption. But whether the same situation will remain post July when the rains hit and the festive season kicks in, that is a million dollar question. So in a nutshell, difficult to reduce the consumption per se, but definitely price being a very important factor.

And India is a very price sensitive market. Some moderation we will see in consumption going forward.

Govindraj Ethiraj: And what's the option or substitute assuming if people did want to substitute from vegetable oil?

Atul Chaturvedi: I don't think we have a substitute. Vegetable oil is the vegetable oil. The only substitute is desi ghee or whatever, but that is way too expensive.

The only thing is that you can moderate it. But moderation for the people in Gujarat or Maharashtra, Punjab and all there, a little bit of a moderation is definitely on the cards. And it should be done, because these are also the diabetes capital of the world and obesity is pretty high in these parts of the country.

Here it's fine. To what extent it will have an impact or material impact, that we are not too sure.

Govindraj Ethiraj: Right. So let me put a question on the supply side. I mean, I know you've also talked about it on our show as well.

I mean, some of the challenges faced in improving or increasing the acreage for vegetable oils or oil seeds. Where do we stand broadly today and what direction are we headed?

Atul Chaturvedi: If you look at the Indian overall balance sheet of edible oils, we consume roughly about 26 million tonnes. Out of this 26 million tonnes, about 16 million tonnes is currently imported and the balance is domestically sourced from mustard or soya or groundnut or whatever. And out of the 16 million tonnes which we are importing, 50% of that would be palm, which is sourced from Malaysia, Indonesia and Thailand.

And the balance is soft oils like soya and sun. Soya would be from Argentina and a little bit from Brazil. Sunflower is from Russia and Ukraine, a little bit from Argentina as well.

So overall supply side, there is absolutely no issues. But going forward with B50 kicking in in Indonesia and the palm oil prices not coming down and moving northwards, Indians will have to pay through the nose to keep home fires burning as far as edible oil is concerned. And that is the kamyaza, as we say, which we have to bear for neglecting the oil seed sector over these years.

Can you explain B50? B50 is Indonesia currently has a biodiesel mandate of blending palm oil into diesel to the extent of 40%. Earlier this was via the mandate, it still is via the mandate.

But going forward effective 1st of July, what they are saying is they'll be blending 50%. So which means that much more oil will get sucked out of the edible oil system. At this point of time, with crude prices, petroleum prices being where they are, it is commercially and economically also a viable proposition to blend because palm oil still is more competitive.

Govindraj Ethiraj: Right. And now that I have you here, I will come to sugar in a second. But you mentioned countries like Malaysia, Indonesia and Thailand.

So and the palm imports that we do from them. So are these settled in dollars or are we using rupees anywhere?

Atul Chaturvedi: All imports into the country are in dollars. And currently, you would have read that our import bill for edible oil is close to 19.5 billion dollars. My take is that with the rupee being what it is now, this import bill is going to keep going up because the rupee has been very, very wobbly.

Now something like closer to about 96 to a dollar. So this is going to increase that import bill still further. And this year, I would not be too surprised if we end up having an import bill of close about 22, 23 billion dollars.

Govindraj Ethiraj: Right.. And since you're here, we've also now stopped sugar exports. I'm reckoning this is not the first time. How are you seeing it and why do you think it's happened at this point?

Atul Chaturvedi: In fact, India has gone pretty much very wrong as far as estimating the sugar crop. In fact, initially, sugar availability in the country was being estimated at more than 31 million tonnes on a net basis. And at that value, this was the estimate which was being talked about in September of last year.

But as things spanned out, when the production is closed, so we are now down to about something like 27.75 million tonnes or thereabouts, which means a massive drop. So whatever the government had planned for export or permitted or given allocations, which was something like about one point five million tonnes, international values were down. So Indian exports were not very strong earlier on.

But with the rupee weakening and world values also moving a little northwards, lately, the exports had picked up. So our back of the envelope calculation is that Indian exports could be anywhere between seven to eight lakh tonnes, which has already gone. And the impact would be on the balance six to seven lakh tonnes, which will not get exported.

But having said this, I think this policy flip-flops gives a little bit of a wrong impression as far as India being a serious player in the world market, in the international market. And a lot of problems, I'm sure, will be faced by Indian exporters, because as the trade works, many would have received some advance payment from the foreign buyers and the cargoes they can't export now. The only silver lining is that what whosoever had come in our contact, we were telling them, the writing on the wall is that exports might get banned, and it would be better to insert a clause in the contracts, export contracts, that it all will work basis the government's policy so that you don't get into trouble at a later date.

Whoever has inserted that clause will be saved. Others will have to fight it out themselves.

Govindraj Ethiraj: If I can supplement the question. So you're saying our exports would have been only about 1.5 million tonnes. So in the context of close to 28 million tonnes, the number would have not been much.

I mean, of course, those who were exporting would have been hurt. But it's not that the number is very large.

Atul Chaturvedi: Well, it's not very large. But the only thing is that Indian decision makers and the policymakers are comfortable with the closing stock level of about 6 million tonnes of sugar, which is sufficient for about two, two and a half months of consumption. But when we started the year, we started with about roughly 4.5 to 5 million tonnes. And by the time we end this year, it could be down to about less than 4 million tonnes and closer to about 3.5 million tonnes. That is what is putting fear in the minds of the decision makers. And they would much rather prefer to err on the side of caution than be hauled up for food inflation.

And the other thing is that El Nino doesn't seem to be relenting. In fact, that is also putting fear in the minds of next year's crop. So keeping all that in mind, I think the decision makers have taken a prudent decision to at least conserve whatever sugar would be available with them.

Govindraj Ethiraj: Right. Mr. Chaturvedi, thank you so much for joining me.

Atul Chaturvedi: Thank you very much.

How does India view the Latest China-US talks?

Chinese President Xi Jinping warned Donald Trump of a potential conflict if the Taiwan issue was mismanaged on Thursday, in blunt remarks that stood out in an otherwise friendly kick-off to the first trip to China by a sitting U.S. President in nearly a decade. A Bloomberg report said the two leaders spoke for nearly two and a half hours at the Great Hall of the People on Thursday after a welcome ceremony in central Beijing that included honour guards, a formal procession, and dozens of children waving flags and cheering enthusiastically.

The Bloomberg report added that while that meeting was still underway, China released a readout of President Xi's remarks that thrust self-ruled Taiwan into the spotlight. It said the Taiwan issue is the most important issue in China-U.S. relations. If mishandled, the two nations will experience collision or even clashes, pushing the entire China-U.S. relationship into a highly dangerous situation.

While the one-year trade truce has stabilised U.S.-China relations in recent months, Taiwan remains an issue that has strained the relationship. China has also posed a pending U.S. arms package to Taiwan that Beijing considers its territory and asked the U.S. to clarify that it does not support Taiwanese independence. Now, India, of course, has stepped up its relations with China in recent months, while relations with the U.S. continue to be, well, frosty.

So how does the latest China-U.S. bonhomie, if so, look from the Indian foreign affairs perspective? I reached out to Indrani Bagchi, Foreign Affairs Columnist for The Times of India and CEO of the Anantha Aspen Centre, and I began by asking her how she was viewing the latest Trump visit to China.

INTERVIEW TRANSCRIPT

Indrani Bagchi: A couple of things that, as background, which I think we should understand. One is, for a long time, the U.S. premised its relationship with India, that India's growth is beneficial for global balancing of China. Trump has abandoned that.

Trump not only believes that he can be with China by himself and he doesn't need growing India or doesn't need to facilitate a growing India. In fact, if you look at what Chris Landau, the Deputy Secretary of State, said here at the Rice-Sena Dialogue earlier this year, there is a section in the Trump administration that actually looks at India as a potential strategic risk, like China, and do not want to sort of empower India the way they have empowered China and created their own adversity. So that's sort of a background.

But we're looking at it in a different way. In a sense, the U.S. is going in to visit China at a time when the U.S. is perhaps not as powerful as it has always been. And a lot of that has come from the fact that it is finding itself mired in a war which it should have never gotten into.

That war is creating stresses and strains around the world much more than in the U.S., frankly, even in China. And in a sense, the build-up to the summit was Trump would ask President Xi for help on Iran and he might give some concessions on Taiwan. I think the administration has pushed back.

There is no concessions on Taiwan. And President Xi actually warned him on the Thucydides track. But from India's perspective, we may not see anything openly or just now.

What we would be looking for is, what does it take for U.S. companies to go back into China? As you have seen, U.S. companies have been diversifying away from China for a while. But Trump's sort of 16-member delegation of top CEOs is obviously intended to open up Chinese markets to U.S. companies yet again. That's something that I have not seen. I have not seen what it is that Chinese will do. But I'll tell you what is a bigger source of worry for us, which is Chinese regulations which came out in April that would penalise companies, individuals, entities for shifting supply chains away from China.

That would be directly impacting any diversification strategy towards India.

Govindraj Ethiraj: So I know the U.S. may not have a direct stake in India-China relations, at least in the context of, let's say, Chinese investments into India. And things have also changed between China and India in recent months. So where does that stand?

I mean, is that progressing in the same trajectory that it seemed to have started off a few months ago, or catching, is it gathering steam?

Indrani Bagchi: If you saw this recently, I think India notified some certain sectors where they would allow Chinese investments. So I think that's a very cautious opening up to China, Chinese investments, Chinese sort of presence in India. But we don't see a similar opening up by China for Indian companies into China.

That will always remain a problem area. Not to speak of the fact that there are security concerns. I mean, both India and China are particularly wary of each other.

There used to be a time when Chinese would look at India as part of the American sort of ecosystem or the American universe. I think in the last couple of years, it has become, I think they don't look at us in just such an integral part of the U.S. universe, given the difficulties between India and the U.S. anyway.

Govindraj Ethiraj: Right. So as you look ahead, after this summit is over and the Prime Minister returns from his travels, what do you think we could have maybe achieved, at least in the context of the war?

Indrani Bagchi: See, the thing is, we need the Straits of Hormuz to be open. That's the fundamental fact. We know, I mean, after all these decades, that Iran, that a country that embarks on a nuclear programme is unlikely to dump that programme or unlikely to give up that programme.

That said, what will it take for the Hormuz Strait to be open? I don't think a deal between America and China could cut that. Iran is playing for much bigger stakes.

So the point is that both India and China are actually on the same side at this point, demanding that the Hormuz Strait gets open, because frankly, the economies to the east of Hormuz actually are the worst affected by the Iran war than the ones to the west. I don't see any breakthrough on that war right now.

Govindraj Ethiraj: Right. Indrani, thank you so much for joining me.

Indrani Bagchi: Thank you, Govind. Pleasure as always.