On Episode 824 of The Core Report, financial journalist Govindraj Ethiraj talks to Dr. Ashish Lele, Director at CSIR-National Chemical Laboratory as well as Amit Kumar Sharma, Head – Americas at VFS Global.

SHOW NOTES

(00:00) Stories of the day

(01:00) The Iran war reaches a fresh turning point as the US attempts to drag other countries into the mix falters.

(03:50) Markets snap a three day run, rise on value buying.

(05:49) Indian refineries are running at full steam and gas supplies are inching up, says the Government.

(07:45) Can India’s domestic answer to LPG, the DME, make up for shortages?

(21:27) A view from visa services provider VFS on how travel has been impacted by the war

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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.

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Good morning, it's Tuesday the 17th of March and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai. India's financial capital.

Our top stories and themes…

The Iran war reaches another turning point as the United States attempts to drag other countries into the mix.

Markets snap a three-day losing run and rise on value buying.

Indian refineries are running at full steam and gas supplies are inching up, says the government.

Can India's domestic answer to LPG, the DME gas, make up for shortages in future?

And a view from visa services provider VFS on how travel has been impacted by the war.

Markets

It's like watching a suspense film, mapping the path of each ship as it traverses through the Strait of Hormuz, not knowing if the helpless hunk of metal could be torpedoed by an Iranian missile. On Monday, the suspense appeared to be lifting a little as two things have happened. First, India is managing to get more ships through or permissions from Iran to get them through.

Two ships can barely meet a day's requirement of LPG, but the fact that they are passing through helps. Just to recap, India gets about 90% of its LPG imports from West Asia and the effective closure of the Strait of Hormuz has hit commercial food establishments, homes, and industries, among others. India just secured safe transit through those waterways for two tankers carrying about 92,000 tonnes of LPG, which is about a day's demand.

Tanker traffic through the Strait has obviously dropped as Iran has attacked commercial ships in the Persian Gulf. And of course, now you have the U.S. Treasury Secretary saying that they were allowing those Iranian ships. Well, Iran has continued to export millions of barrels of oil despite the large U.S. Navy presence in the region, and it exports about one and a half million barrels a day.

On the other hand, as things stand as of Monday evening, the U.S. may have to fight the Hormuz battle alone if it wants to. As most countries, it has sought participation from in the form of naval presence in that region have politely declined, and that includes the European Union, Australia, Japan, and the United Kingdom, which is a signal, even if a small one, that the war is now reaching another turning point. Of course, the U.S. can throw more bombs and marines at the problem and hope it'll get fixed, but without allies, that will be a little tough and not something that the U.S. may want to do.

And that is the other signal, which is that most countries who in any case have been shafted by the Trump administration for the last year and called names are not likely to turn up to fix a problem that America created in the first place, not again, and at least not this time. So does this mean that we are closer to the end of the Iran war? Well, given the asymmetric nature of the war, a fact that America realises or realised belatedly like many other things, it will be Iran who will call the end under pressure or otherwise. Because of this, stock futures were higher on Wall Street on Monday morning, and oil prices were lower, having reversed their advance.

Bloomberg reported that S&P 500 futures were higher on Monday morning, and that was the first gain in five days for that gauge after President Trump raised pressure on countries to help reopen the key oil route and also said that the U.S. was talking to Iran, according to Bloomberg. After all, while attacks on oil facilities have kept crude above $100, barrel mark prices did fall about $4 off levels hit earlier on Monday. India, of course, is attempting to get more vessels across after the two successful transits is attempting to get six more across, while other countries are also working their back channels with Iran to ensure safe passage for their tankers, according to Bloomberg once again.

And India's benchmark indices surprised with the late turnaround after several ups and downs during the day on a day where it looked like it would sink further after opening in the positive and then beginning a fairly predictable fall. Buying in heavyweight stocks and the partial rebound in auto shares after last week's steep fall led to the indices snapping a three-session losing streak. The Nifty 50 was up 257 points to 23,408.

The Sensex was up 939 points to 75,502. The broader markets did not do as well. The Nifty mid-cap and the Nifty small-cap indices were down 0.4 and 0.6% each.

Just to put things in perspective, the Nifty 50 index has fallen more than 7% so far this month, putting it on track for its worst monthly performance since March 2020, according to Reuters. Not surprisingly, it will take several days of recovery for the IPO market to regain its confidence. The Walmart-backed PhonePe Limited has deferred its listing plans, becoming one of the first Indian companies to put an offering on hold amidst geopolitical tensions and, of course, markets being where they are, according to a Bloomberg report, which quoted the Bangalore-based fintech firm saying it will resume the process once markets stabilise.

It was hoping to raise about $1.5 billion, according to sources who spoke to Bloomberg. A period of no or slow IPOs might be good for the secondary markets, though, because they have been hit incessantly by IPOs in the last year, absorbing big chunks of demand and investor appetite.

Oil and Gas

The government on Monday said India has adequate crude oil and LPG supplies and there is no shortage across the country.

A top Petroleum Ministry official said crude was available in sufficient quantities and all refineries were operating at the highest capacity. Petrol pumps were operating normally and there were no dryouts being reported anywhere. The words obviously provide some comfort because while there is a gas shortage, India has so far escaped any pressure on oil supplies.

The problem, of course, is the price of oil. The official also said supply of piped natural gas to households and compressed natural gas used in transport has remained at 100% and she also said that consumers who have both piped and LPG connections have been requested to give up their LPG connections in order to improve distribution efficiency. You may remember that many people who had PNG connections gave up LPG connections in recent years.

I would be one of them for sure and more on that in a bit. Many gas companies have announced incentives to encourage households and businesses to shift to PNG connections. Meanwhile, it appears to be sinking in within the United States that the economic shock triggered by the Iran war could get worse.

The Wall Street Journal says American oil executives delivered that message to Trump officials in recent days that the energy crisis the Iran war has unleashed is likely to get worse. In a series of White House meetings on Wednesday and recent conversations with Energy Secretary Chris Wright and Interior Secretary Doug Burgum, CEOs of ExxonMobil, Chevron, and ConocoPhillips warned that the disruption to energy flows out of the vital state of the Hormuz would continue to create volatility in global energy markets and in response to questions from officials, Exxon CEO Darren Woods said oil prices could rise past current elevated levels if speculators unexpectedly bid up prices and that markets could see a supply crunch of refined products, all according to the Wall Street Journal. Chevron and ConocoPhillips CEOs also conveyed their concerns about the scale of disruption.

LPG alternative DME

Mounting gas shortages have disrupted operations at some steel plants of top metals company JSW with one unit facing a potential shutdown in coming days, according to a note seen by Reuters. India is the world's second largest crude steel producer and is of course facing a gas crisis. Some 6,000 products are linked to energy flows through the state of Hormuz into India, including of course gas and downstream gas products.

The JSW group said that disruptions to fuel supplies and maritime operations were starting to affect its operational stability and supply chain. On the other hand, LPG gas, which powers cooking stoves across India, is seeing some relief as supplies pick up, though the gap between domestic production and demand is huge. The Council of Scientific and Industrial Research National Chemical Laboratory or CSIR-NCL scientists have developed a patent-produced DME or dimethyl ether production process technology that utilises an indigenously invented highly active selective and cost-effective catalyst ensuring efficient conversion of methanol to DME.

Now DME is the potential substitute for LPG and CSIR-NCL says they are ready to scale up technology to a commercial level. The laboratory said that DME, which is a synthetic fuel, boasts several advantages over conventional options. It burns cleaner emitting minimal amounts of soot, nitrogen oxides, sulphur oxides, and particulate matter.

I reached out to Dr. Ashish Lele, director of CSIR-NCL Pune and behind the team that's working on DME and I asked him or rather began by asking him if DME could fill the 18 million tonne gap we are seeing between LPG consumption in India and domestic production.

INTERVIEW TRANSCRIPT

Dr. Ashish Lele: You know, I think some numbers are interesting to look at. The LPG, we must understand that it's a cooking fuel mostly, and it's of course for domestic and commercial consumption. And one number that strikes out is the LPG cylinders that are distributed under the PM Ujjwala Yojana.

I think many of us, if you remember, would have surrendered our LPG connections because we got pipe natural gas into our kitchens, and we surrendered those cylinders. And this was on the clarion call by the Honourable Prime Minister. And these cylinders were then, or these connections were then distributed across the length and breadth of rural India, right?

And the idea was to move rural kitchens away from burning firewood, which is not very... From a health standpoint. From a health standpoint, and allow Indian ladies in rural India to have access to cleaner fuels.

If you look at the PM UI Ujjwala Yojana scheme, you will see that there are 10.5 odd LPG connections that have been given to rural India.

Govindraj Ethiraj: About 100 million plus, yeah.

Dr. Ashish Lele: That's right.

Govindraj Ethiraj: Out of a total of 330 million, yeah.

Dr. Ashish Lele: Right. So if you assume that in a family that is using LPG gas, cylinder maybe lasts for three months, which is a very conservative estimate, right? And cylinder has 14.2 kgs of LPG in it. And if you substitute only 8% of that LPG with dimethyl ether, right? So the math is about 10.5 crore connections. Each cylinder lasts for three months.

Each cylinder has 14.2 kg LPG. And you replace 8% of that LPG with DME. If you do the math, comes to around 1200 to 1300 tonnes per day as a production capacity for DME.

To just do this number, just this number. Starting from where we are, which is zero kg per day production of DME for this application. There's some production of DME happening in India today, but not for the LPG replacement.

It happens for other applications. What is an example of one application? So aerosols, for example.

There are many aerosols which use LPG. Instead of LPG, they use DME. So those are small applications, niche application, but we are looking at a bigger volume application, which is LPG replacement, right?

So for LPG replacement, there is zero manufacturing today. From there to go to 1300 tonnes per day, just for this one initiative to go into this 10.5 crore rural gas cylinders. So that itself is a fairly large number, right?

Like you said, 18 or 19 million tonnes of LPG is imported. And even if you want to replace 10% of it with DME, that's a very large number. That's 2 million tonnes per annum of DME.

So we are talking of very large numbers here. So how do you scale it up? That's the question, right?

Today we have, let's say, our own technology from methanol to dimethyl ether. We are at a level of producing 250 kgs per day in our pilot plant. From there to go to, let's say, 1200 tonnes per day, our strategy is to put in an intermediate, what we call a demonstration plant.

So 250 kg per day going to 2500 kg per day or 2.5 tonnes per day. So this is what we would call a demonstration plant. In the demonstration plant, when we set up, it will be located within the premises of a large company who has the ambition of going from 2.5 tonnes per day to, let's say, 1200 tonnes per day. So it will be a large company in which this will set up. But this demonstration plant will essentially validate all the technological pieces, the reactors, the distillation columns, the heat integration, the mass balance, and then at that level do a real techno-economics, validate the techno-economics. And that's what the demonstration plant will do.

And that techno-economics will basically be the final techno-economics. And going from there to 1200 tonnes per day is a very simple scale-up and a very simple extrapolation of techno-economics.

Govindraj Ethiraj: And this would be typically an oil marketing company which would house this plant? So there are two ways of looking at it.

Dr. Ashish Lele: Ideally, the way we do it today, it will be a large oil company. You know, upstream or midstream or downstream. They will set up such large plants because this is how we are doing it today.

But it need not be that way. If one thinks a little differently and uses boody biomass as a primary source of energy, then biomass to syngas through the gasification route, and then syngas to methanol, and then methanol to DME. Or if possible, syngas directly to DME.

Either ways, one can argue about which is good or bad. And there is no very clear answer there. But this is a very interesting way because biomass is available in a very decentralised manner in India.

So instead of producing in one place, large amount of DME, and then distributing the DME across the country, you could think of a decentralised model where feedstock is available, you produce locally and you consume locally. So for example, bottling plants of LPG are available in a decentralised manner today. There is no one large bottling plant.

Govindraj Ethiraj: We have over 220, I think.

Dr. Ashish Lele: Right. That is a large number compared to number of refineries or number of these large production sites that we have, at least a 10X higher. So you could then choose a bottling plant and around it, you use the biomass and convert that into DME and then supply it right to the bottling plant.

In fact, the technology that we have produces DME at 10 bar pressure. So it can be directly dispensed into the cylinders. Yeah.

So there are these two models, centralised production and distribution or decentralised production. Yeah.

Govindraj Ethiraj: And what was the availability of methane or whatever compounds before that, which will produce methane to produce DME? What's the availability like? And do we have enough to do what we want to do with or produce DME?

Dr. Ashish Lele: It's a very nice question because the starting product, the feedstock for our technology is methanol. Of course, everybody asks me, where does the country produce methanol today? We don't produce methanol.

We import methanol. And interestingly, a large part of that methanol actually comes from Iran. So clearly that supply chain is no longer available, at least in the present moment.

But methanol supply chains are more diversified than LPG supply chains. We have already ramped up our methanol imports from Russia and from China. Now look at China.

China produces a large amount of methanol by coal gasification. Coal to gasification to syngas, and then one step into methanol. They, of course, go beyond methanol all the way to olefins.

That's a different story. But they do make methanol today from coal gasification. And I think that is where India must look at.

Because we neither have plenty full of natural gas, nor do we have plenty full of oil with us. But what we do have is a very large amount of coal. Now this coal is difficult because it has a high ash content in it.

40 plus percent ash content in it. And the question a few years ago was, can we gasify the coal? Can we actually take that coal and make syngas out of it?

But there are many pilot projects that have already happened in India. Testing different technologies, whether it is a pressurised fluidized bed technology or an entrained bed technology. We have tested multiple technologies and we have shown that, yes, we can gasify high ash coal.

Okay, so coal gasification to syngas and syngas to methanol, which is what China has done. But for Indian coal. So I think one option, the other is biomass that I already spoke about.

And that's entirely possible. And we have companies today that already have shown gasification of biomass.

Govindraj Ethiraj: Right. And I'm sure you've done the numbers there. But if assuming one of the oil marketing companies or someone else were to start the process of setting up first the methanol capture and then the production of DME, what's the timeline that we could look at to do all of this, to reach more sort of commercial scale?

Dr. Ashish Lele: See, methanol to dimethyl ether, honestly, is not a very complicated technology. Okay. You need one or two reactors.

One reactor is enough, but it gives you till equilibrium conversion. You need one more reactor to treat the recycles. So two reactors, two distillation columns.

So it's not a very complicated technology. So why I'm saying this is, our oil companies have set up and are running much more complicated technologies. Right.

So therefore, technologically, it's not such a big hurdle to set up a DME plant. We think that if the funding is available to set up the demonstration plant, within six months, we should be able to put up a 2.5 tonnes per day plant in an oil major company. That is the level of confidence we have today of very quick scale up.

And within the oil majors or within engineering companies that we have, there's huge capability that such a small, simpler technology should not present a very big challenge for them to move to 1000 tonnes per day.

Govindraj Ethiraj: Right. And how do the economics of this whole process, including methanol and of course DME look like? And is there any reason why others have not done this in the past?

Dr. Ashish Lele: So the DME from methanol, the costing is very, very sensitive to the methanol costs. Perhaps the most significant factor that determines the cost of a diameter litre. If methanol is available at 23, 24 rupees a kg, which it is not today, but if it is available at that price, the DME produced is no different.

The cost is no different than the landed price of LPG in the country. And mind you, LPG is a subsidised commodity, right? It is a lot of subsidies that are given.

So we have to treat on par DME and LPG, right? Today's methanol prices are much higher, but that's for many reasons, the supply chain disruptions and all of that. But if we scale up the gasification of coal or biomass and make methanol out of it, we should be able to produce at 24, 25 rupees a kg of methanol, in which case at scale, DME becomes cost competitive to LPG.

Well, it is definitely a issue of costs, right? But it is also an issue of resilience.

Govindraj Ethiraj: Energy security.

Dr. Ashish Lele: Yeah. India must have these options available. We don't know where the world is going right now and how long this all will continue.

If we don't even have an option, then we are in serious trouble.

Govindraj Ethiraj: Right. Can this also be mixed with city gas distribution, which is LNG sourced? I know there's some compressed biogas that's already going into that system, isn't it?

Dr. Ashish Lele: Yeah, biogas is not a problem because they will bio, not biogas, but biomethane. So you take biogas and you purify it to make biomethane, actually remove the CO2 from biogas, you get biomethane. And that is today even distributed in the CDG.

But LPG is not the same as methane. So distribution within the biogas, honestly, we have not looked at it. We have always compared DME with LPG.

LPG is interesting because it has reached the nooks and corners of the country, whereas pipe natural gas is very far away. I mean, even in tier one cities, it has not reached every home, pipe natural gas. Tier two, tier three cities, very little penetration.

Villages, practically no penetration of pipe natural gas. But LPG has reached every home, has the potential to reach because of various reasons. So therefore, we are looking at LPG substitution, not pipe natural gas substitution.

Govindraj Ethiraj: Got it. Dr. Lele, thank you so much for joining me.

Dr. Ashish Lele: Thank you so much.

Travel Trends

The Emirati airlines are a determined lot not allowing drone attacks to disrupt air services beyond a point. Dubai's international airport resumed a limited flight schedule on Monday morning after a drone attack hit a fuel depot at the airport which caused a fire.

This is the fourth incident to hit Dubai's international airport which handles about 90 million passengers annually. This incident also reminds me of how Tel Aviv airport tends to operate almost normally even as missiles would rain down on the city because the iron dome would capture them or intercept them before they reached their destination. I'm of course referring to the period before February 28th and the onset of the current war.

Emirates expects to operate a limited schedule after 10 a.m. Dubai local time today. It said in a statement in the morning on Monday though some flights were cancelled. So how are travellers and businesses readjusting to this new world and what is the kind of damage it's causing and what should travellers be looking out for even as they travel right now? I reached out to Amit Kumar Sharma, head of the Americas region for VFS Global, an outsourcing and technology services company that works with some 68 countries to streamline passport, visa and consular services and I began by asking him how he was seeing travel trends right now.

INTERVIEW TRANSCRIPT

Amit Kumar Sharma: We have to look at it from the lenses of different perspective, this particular problem. As far as we are concerned, you know, we look at it as a temporary issue, which is of course impacting one part of the world. Very important part, you know, West Asia and Middle East has been, of course, from the travel and aviation perspective, one of the busiest sector, if I can say that, you know.

And over the last couple of weeks, we have seen the disruption. But one thing from the industry perspective, which is very, very clear is that we see this as a temporary disruption, not as a whole to the travel and trade sector per se. We have seen that with the COVID crisis, where people were not able to travel at all.

You know, the governments had to repatriate their expats from different countries. They do have an experience of handling, if not exactly the same crisis, but similar crisis before as well. And that is what we are seeing.

And from the travel perspective, if you see, you know, business travel, urgent travel, students, all of this travel is still happening. It's just that people have to look at different routes to make sure their travel plans are not disrupted. And they have the convenience and comfort while they're travelling from one country to another.

Govindraj Ethiraj: Right. So there's one kind of travel, which I'm assuming was already planned for or had to be done because people wanted to move either back home, if the home could be West Asia or home could be somewhere else. What about other plans which would have otherwise kicked in, let's say for summer, for example, including in Asia and Far East?

Amit Kumar Sharma: Yeah, I think if you look at from the absolute summer vacation perspective, it starts sometime in June, July and August. These are the peak months for the summer travel. You know, when the school sessions in, let's say, in the Western world, Europe and North America, of course, they get over by the end of June.

And then you have July, August and part of September is actually your period when you see most of the summer travel happening. You know, I don't think we hopefully should not see a major impact on that part of the travel and things should be restored before that. You know, right now what people are looking at, they're looking at alternate routes.

So if, of course, let's say people from India are travelling to North America or Europe, you know, they are looking at travelling from the airspace that Russia has. A lot of airlines are operating from there. If you would have seen in the Middle East also, of course, partly the airlines have started already working and they've resumed their operations.

A lot of flights are already departing. And as we speak, yesterday only I was referring to the UAE statistics, about 1.4 million people have already travelled out of UAE since the crisis has started. You know, it's already a couple of weeks now we are into this, but it peaked from 28th of February until now, which is mid-March.

Two full weeks have gone into this. People are already looking at their travel plans. You know, they're also starting to becoming more aware right now.

You know, so when the traveller is just travelling from one destination to another, you know, they are just catching a flight and going. But right now they are aware that the geopolitics situation is not at its best in certain parts of the world. So they are being more aware, they're checking which airlines are operating, which travel routes are currently functional, airspaces are open or not.

All this information is quite easy. You know, we are in the world of technology also to find out before you travel. And they're also referring to different client governments website and of course, the website of companies like VFS who works with different governments.

Our websites are completely up to date. We are making sure that we are reaching out to people through social media as well, you know, so that they're fully aware about their potential travel plan is well on its way from the execution perspective or not.

Govindraj Ethiraj: Right. And how about, you know, visas, for instance, a lot of people who are stranded in the Emirates got extensions. India also gave extensions, you know, passengers were stranded here.

So how is that working at a time like this? And is everyone being accommodative or how are countries responding?

Amit Kumar Sharma: Look, this is and I can say this as one of the best practise, you know, whenever you are going through a crisis, of course, one way of looking at it is that there is a disruption, there is a problem. And of course, it's the real people who are impacted because of that, you know, but at the same time, you don't have to look aside, you still have to find the best practises, you still have to see, you know, these crises are, of course, not in your hand, but how best you can respond to that, you know, so it's always the response that we are talking about, you know, to a problem, because most of the time, the problem itself is not in your hand, but the response is truly that something you can, of course, regulate. And I am very pleased to say that that most of the governments are responding really well to this. And as I said, five years ago, they had gone through a crisis, which was, of course, much larger at scale, the COVID crisis, right.

So there also, we had situation where people got stuck into another country without the visas are getting expired. So most of the governments then extended their stay and they're doing the same right now. UAE alone have issued so many visas in the last couple of weeks where people were, of course, as you know, you know, UAE is one of the major transit point for many travellers from east to west, you know, and people plan their travels, a lot of people can access that destination without a visa also, because their visa on arrival or you have valid visas from countries like US, for example, Indian passport holders are able to go to UAE. So they have handled it very nicely, you know, they've issued visas to people on the spot, emergency visas, we have seen that in UAE, we have seen you just mentioned about India as well, that people have been sort of regulated, their overstay is not counted as overstay, and they've been facilitated with certain set of documents and visas. So emergency visa is something that we call about in this situation.

And those are the visas that governments are issuing to people make sure, you know, they can help them in this crisis as easily as possible. And people don't have to really at least this is the last thing you have to worry when you're not able to exit a particular country due to disruption or due to flights cancellation. The last thing you want to worry about is your stay legal or not.

And that is where the governments have beautifully handled it, I obviously, you know, their experience from COVID was not long back. So they have sort of that experience. And they're making sure all of those best practises are implemented now in this crisis as well.

Govindraj Ethiraj: Last question, Amit. So how are you seeing the next few weeks and perhaps months? And what are your concerns at this point of time?

Amit Kumar Sharma: I see that the travel, obviously, as I mentioned in my opening remarks, travel is here to stay, you know, it's the globalised world that we live in. Millions of people are living in different parts of the world, their family, their roots, their connections, education is the other part, business travel, of course, is something that cannot be stopped. So the travel is here to stay just temporary hiccup that we are seeing right now due to geopolitics largely leading into the disruption and more of a safety thing, right?

The airlines are also doing more from the safety perspective, they don't want to take any chance when they fly. So I think in the immediate future and present, what we see is we see the demand for some other countries can be increased, you know, people might look at alternate routes. So the countries in Europe, for example, in some of them in Africa, they would look at alternate routes to fly.

The demand for those visas can be, of course, increased, I would recommend people to be fully aware of the destination that they're flying to, what are the flying routes, are the airlines, of course, been flying over the last couple of weeks before you fly, and make sure the visas are valid, you've got visas in your passports before you plan to travel. You know, these are some of the things that are, of course, very important from the applicant's perspective, from the traveller's perspective. As far as the governments are concerned, they are, of course, being very helpful to people in general, and they're trying to issue those visas so people are able to travel and travel is not completely halted.

But we are very confident this will bounce back, the travel will bounce back, the industry is very confident of this.

Govindraj Ethiraj: Right, Amit. Thank you so much for joining me.

Amit Kumar Sharma: Thank you so much, Govind.

India-US Trade Deal

Yesterday we spoke of Malaysia walking out of its trade deal with the United States following the US Supreme Court's nullifying of tariffs. Could India follow suit? Well the Commerce Secretary of India on Monday said India will sign the trade deal with the United States after Washington restores global tariff structures. He said that the deal was supposed to be signed in March.

The international emergency economic powers tariffs didn't exist per se due to US Supreme Court rulings and under article 122 tariffs of 10% exist globally. Now any deal that India signs will be signed against tariff structure. Well actual signing he also said will be done when the new architecture of tariffs globally is done by the US.

After that ruling the US had announced a blanket 10% tariff on all countries for 150 days under that section 122 which is what should be operating right now. However the US has also been trying to increase tariff pressure on its trading partners through investigations into alleged unfair trade practises something we discussed yesterday as well which include probes by the USTR against 16 nations over structural excess capacity and another investigation involving 60 countries for alleged failure to ban imports of goods produced using forced labour. India is amongst those countries under scrutiny and it could also include inputs into goods which eventually find their way to the United States.

On that probe the government's official said India is examining its legal implications according to Reuters.