October was a Good Month for The Markets
India's equity benchmarks logged their biggest monthly gains in seven months in October
On Episode 716 of The Core Report, financial journalist Govindraj Ethiraj talks to Indrani Bagchi, CEO, Ananta Aspen Centre as well as Shankkar Aiyar, Politics Economy Analyst & Author.
SHOW NOTES
(00:00) The Take: Robots Coming For Our Jobs
(06:55) October was a good month for the markets
(09:11) Ford is back in India but to manufacture and export
(11:21) What’s at stake in Bihar elections starting this week?
(21:50) India was not on the table during Trump’s SE Asia visit last week
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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 Monday the 3rd of November and this is Govind Raj Yathiraj broadcasting and streaming weekdays from Mumbai, India's financial capital, where it is still raining and let's see for how long.
The Take: Robots Are Coming For Our Jobs
A ubiquitous part of many middle class Indian homes is domestic help for many an extended part of the family.
The help's principal jobs have involved sweeping, mopping and washing dishes for almost time immemorial. Now there is considerable discussion about Artificial Intelligence taking away jobs which in all probability they will, though the extent is still being worked out. Industry is nevertheless gearing up for this shift in many ways including by reskilling its workforce even as policy makers attempt to frame policy to address this shift.
But another kind of job increasingly under threat and less discussed right now is the more menial, repetitive physical task both in factories and homes. Like factory workers who pick, sort, pack, label and place or retrieve goods or household help, who sweep, clean and wash dishes. An upcoming wave of robotics which is getting more sophisticated and accessible at the same time could cause tectonic shifts in this segment of the job market.
Domestic work is classified as informal by the Periodic Labour Force Survey of India. There are about 4.75 million domestic workers in India according to official statistics. Only 10 of the 31 states and union territories of India have included domestic workers in the Schedule of Minimum Wages Act.
These numbers don't seem high, I'm talking about the number of workers, but official estimates are contested and the figures suggested to counter that can go up to almost 10 times. On the other hand, data from the Annual Survey of Industries put together by Portal Data for India says around 200,000 plus operational factories of India employed about 18.5 million people as of 2023. This represents about 30% of the manufacturing workforce and about 3% of India's workforce as a whole.
These are people who are directly part of the manufacturing process and thus in my understanding stand to be affected. But this is already happening and has been happening for some time. Visit any modern car plant in India and you will see robots having taken over many tasks done by human hand even a few years ago.
And this goes beyond the other definitions I used earlier which are activities like packing, sorting and labelling. And here, companies like Amazon are driving change at scale. The e-commerce giant started a big thrust into robotics in 2012 when it paid 775 million to buy the robotics company Kiva, thanks to which robots have begun roaming Amazon's warehouses for several years, which in turn have got more sophisticated by almost a day.
In two years' time, Amazon will avoid hiring 160,000 more workers according to a New York Times report and eventually it believes that Amazon, it can automate up to 75% of the company's operations. And in June, as Professor Scott Galloway, author and professor of marketing at NYU Stern School of Business points out, Amazon deployed its millionth robot worker, putting the company on pace to have more robots than humans in its warehouses by year-end. Amazon, by the way, and this is the important number here, employs about 1.5 million people globally and recently announced it was cutting around 14,000 corporate jobs.
Professor Galloway believes a reduction in warehouse workforce is now imminent. Amazon is not alone. DHL, for example, as a logistics company, is increasingly roboticizing its warehouses which serve customers in e-commerce and other spaces.
Conversely, a lot of innovation that's happening in robotics is actually aimed at logistics companies like DHL. Which brings us back to homes. Maya Kakmak, professor at the Paul J. Allen School of Computer Science and Engineering at the University of Washington, in an article for the Institute of Electrical and Electronics Engineers recently wrote that if machines could match human form and function, they could simply step into human jobs without requiring us to change our environments.
She was referring to humanoids, the next level, so to speak, and also Elon Musk's grand vision and promise for Tesla. Yes, he's already moved on from cars. Now, if humanoids could do everything people can, then in theory they could replace workers on the factory floor or in warehouse aisles, she says.
It's no surprise then that many humanoid companies are targeting what they believe are sectors with labour shortages and undesirable jobs, manufacturing, logistics, distribution, retail as near-term markets. Then she says, it is factories first, homes next. A subset of humanoid companies are seeing homes as the next frontier.
There are several examples and prototypes floating around. Some companies, she says, claim humanoids will revolutionise assisting individuals in the home and caring for the elderly, and in cases, vacuuming, serving tea, wiping windows and tables, and carrying laundry and grocery bags. Speaking of vacuuming, those machines are already here, in many homes across India.
An article in Times of India in July quotes retailers and companies like Eureka Forbes saying sales of robotic vacuum cleaners, Roomba is a popular one, are rising dramatically in the last two years. The reasons range from unavailability of domestic help to sheer convenience. The TOI article quotes a Pune resident saying she bought a robotic home cleaner online last year because it was tough to get house help to come at a convenient time.
Another one says robotic cleaners were available only overseas but now cheaper ones, including ones at about Rs 15,000 each, are available in India. From my own experience, robotic vacuum cleaners which sweep and mop floors autonomously are quite effective. It is evident that the costs will come down further, the intelligence driving these machines will improve, as will the machines themselves, and thus, over a longer term, reduce the need for manual labour.
So while humanoids, in the way we see them perhaps in films, are still some time away, robots are already taking over individual components of our physical work like that robotic vacuum cleaner or robotic lawn mowers in countries like the United States where homes have large lawns. Now dishwashers and washing machines are not exactly robots but they also reduce a level of labour for most households right now in India. But between factories and homes, robots will undoubtedly start taking away jobs or potential jobs in countries like India.
One way to look at it is that this forces labour to seek more value-added jobs, which is of course feasible, possible, and desirable. But the transition is not that simple in a country like India. Between robots and AI, there are massive challenges on the horizon, something that we are not fully prepared for or are in a position to even respond right now.
But thinking about robots and their impact on the physical workforce is a good place to start.
And that brings us to the top stories of the day.
October was a good month for the markets, will November follow?
Election time again, what's at stake in Bihar elections which kick off this week?
Ford is back in India, but to manufacture and export, a welcome move.
India was not on the table during Donald Trump's Southeast Asia visit last week, what are the implications?
October, A Good Month
India's benchmark indices saw their biggest monthly gains in seven months in October thanks to better-than-expected corporate earnings and foreign investors who've returned for now, buying about $2 billion or less than $2 billion of stock. The Nifty 50 and Sensex gained about 4.5 and 4.6% in October, settling about 2% or rather between 2 and 2.4% below their all-time highs reached in September 2024.
As you know, we've been talking about the prospect or the likelihood of when we could see record highs once again. On Friday, the Nifty 50 was down to about 25,722 and the Sensex was also down to about 83,938. Reuters quoted the Securities and Exchange Board of India saying on Thursday that bank stock indices linked to derivatives contracts will be restructured in a phased manner by March 2026, which is estimated to lead to some outflows, about $300 million from HTFC Bank, $190 million from ICICI Bank, which matters because they're the two heaviest-weighted stocks in the major indices.
And Wall Street, of course, is having a party. Friday marked the end of a strong week and month for Wall Street. The S&P 500 gained 0.7%. Last week, the Nasdaq and Dow climbed 2.2% and 0.8%. And interestingly, says CNBC, October, which has experienced some of the largest one-day losses in stock market history, saw the S&P 500 climb 2.3%, Nasdaq was up 4.7% and Dow about 2.5%. The Dow posted its sixth positive month in a row for the first time since 2018, says CNBC.
And global markets, particularly the US, are thus looking quite strong. And remember, there is also a truce on the US-China trade war and more on that and its India implications coming up later in the show. Now, India, of course, is unlikely to see any immediate change on the trade front.
At least there are no indicators to that effect. And most of that impact has also been priced into stock prices, though there will be a larger impact, as we've discussed, on some industries, particularly labour-intensive ones and the jobs there. So, if FIIs step up buying into this month, that the foreign institutional investors in the markets could rise further and cross last year's peaks earlier.
Remember, it's still the initial public offer or IPO season, which is sucking out billions of dollars and tens of thousands of crores of liquidity. And some of the companies are not necessarily with the best of financials. Elsewhere, Ford Motor has said that it will invest about $370 million in India to make new engines, according to a report in Bloomberg over the weekend.
Ford will thus retool and restart its factory in Tamil Nadu near Chennai, which it had shut a few years ago when it exited India. All of this, of course, augurs well for the India manufacturing story. Ford, which is headquartered out of Michigan in the United States, first set up manufacturing near Chennai in 1995 and added a second plant in Sanand in Gujarat in 2015, which it subsequently sold to Tata Motors.
Tax Revenues Moderate
Growth in India's net revenues from the goods and services tax dropped to 0.6% year-on-year in October, the slowest so far in 2025-26, as businesses adjusted to the recent GST rate cuts and the government processed higher refunds, according to a report in Business Standard. In absolute terms, net collections remained strong at about Rs 169,000 crore or Rs 1.69 trillion, making October the third best month after April and May.
Gross GST received for October stood at about Rs 1.96 trillion or Rs 196,000 crore, an increase of 4.6% year-on-year, thanks to strong import-linked collections, which grew about 13%. Tax experts who the Business Standard spoke to said the soft print was because of the rate-induced recalibration by businesses and postponement of supplies in the run-up to the revised GST slabs from September 2022. Meanwhile, a report by economist Garima Kapoor at Elara Security says the government continues to drive capital expenditure with an aggressive spending growth of 9% year-on-year versus negative 0.4% in the first half of 2024-2025.
The robust momentum in spending is likely to support domestic growth in 2025-26 amidst global headwinds.
Its Elections In Bihar
Its election season and elections in Bihar are coming up this week, starting Thursday, November 6 and on till November 11. So what's at stake? Bihar, as columnist and author Shankar Iyer pointed out in a recent column, matters because it is home to the youngest population in India with a median age under 25.
It also matters because, as he says, it punches way below its young demography on the GDP scale. Bihar is home to about 130 million people, roughly a tenth of India's population, but contributes only around 3.2% of India's overall economy. The state's gap in per capita annual income from the top-ranked Karnataka, which is at about Rs 3.8 lakh, and India's national average is about Rs 2.3 lakh, is revealing, he says, Bihar's per capita income is only at about Rs 66,828, which is less than a sixth of Karnataka and a fourth of the national average.
Now, how much will all of this matter in the elections that are coming up and will a new leadership in the state, if there is one, change things? I began by asking Shankar Iyer how he has been seeing the changes in Bihar over the years and whether he saw any shift in prospects.
INTERVIEW TRANSCRIPT
Shankkar Aiyar: If you look at Bihar's population, it would be probably France and UK combined. And the India story is basically based on demography. That as we have a younger population, more working people, we will produce more, consume more, invest more, and stuff like that.
But Bihar is a kind of outlier in this. For over 25 years, it has had a stable government. I mean, Nitesh Kumar has been there since 2005, so 20 years flat out.
And it has all the resources to sort of build the agrarian to manufacturing transition. And yet, most young Bihar boys are all going outside Bihar to find work. The point that I made in my article is that if a tenth of the population is punching way below its weight, then India's overall economic growth and its social and political stability is going to be consistently shackled.
There is another thing here that worries you. If a state has such low per capita income, and its districts have even lower per capita income, I mean, there are three or four districts, Shiv, Har and others, who have a per capita income of about 22,000, that is simply not justified. There is something going wrong there.
There's some issue. So my assessment is that, A, the state has been robbed of its capacity. In 2001-2002, along with Vivek Debroy and others, I had done a study on India's 100 worst districts.
That was the United Bihar at that time with Jharkhand, and there were about over 30 districts in that. Most of these districts are still in the aspirational districts list of Government of India, which means that there's not much change there. And this has been the story of Bihar since 1960-65 from the Patel committee report, which is when they first tried to industrialise Bihar and didn't work.
For instance, Goan, one of the advantages or competitive edges that Bihar has, that it has plentiful water, decent soil quality, lot of agricultural crops, so you would think that food processing will work. And in fact, 28 licences were issued for sugar mills. Only one went online, and that too has closed.
So this is why I call my piece the Wasteland of Politics. I mean, there is something really rotten in the politics of the state. I mean, it's not the only state which has this caste-based political issue.
There's much more, and this is why I think that the only way to rescue Bihar would be to sort of review the state's capacity to execute anything.
Govindraj Ethiraj: Right. And you know, one of the things you pointed out is that schools, a third of Bihar's villages don't have primary schools, 40% lack upper primary schools, and only about 8.5% have secondary schools. Now, if you were to use the illustration of Bihar and maybe extrapolate it to a national level, is education or the lack of access to education one of the causes?
And really, what does this mean from a larger economic development standpoint as well?
Shankkar Aiyar: I did this comparison. I wanted to see when India's per capita income was 66,000, which is the per capita income of Bihar. And that was sometime in 2012.
And then I went back further. So Bihar has been consistently about 10-12 years behind India in all the parameters. And that's the average, behind the Indian average.
Indian average per capita. So if you look at the educational attainment data of Bihar, they did a social caste census a couple of years back in the reservation drama. And only 15% of people in Bihar have a school leaving certificate, which is class 10.
I have seen some of the most sordid statistics of India. Even I was shocked when I saw that. How can a state 80 years almost into independence, 78 years, have only 15% of the population who are schooled?
And the dropout rate must be phenomenal. So what's happening to all the budgeting? What's happening to all the spending?
Now, if you ask people in Bihar, they say that roads have improved. The rural electrification programme, which is one of the grand successes of the past 10 years, has happened. And there's water in the taps.
Beyond that, they are unable to name a single achievement of the politics of past 20-25 years. And this has got to do with the leadership, political leadership. It has also got to do with bureaucratic leadership.
And that it falls off the national focus. I mean, I always say that India is a democracy one day in five years. That's the day we vote.
And the other place, you're a monarchy. And depending on the quality of politics of the state, it's a benign monarchy or a malign monarchy. In Bihar's case, I think it's something worse.
This is like a feudal, the people are the vassal state of the politics of Bihar. I mean, you know, this is really sad. And I write on Bihar regularly.
I follow what's happening in Bihar because of my interest in the state. I mean, imagine this Govind. This is the state which had Nalanda, one of the top most universities in historic times.
And you have a situation where barely anybody is a graduate, four percent have government jobs, salaried jobs are only 11 percent. This is really something. I mean, all of this campaigning, all of these promises that they are making, you know, 10,000 rupees to women, jobs in every household by the RJD, one crore jobs by the NDA, all of this, what does it show?
That you have to promise so much because you haven't done anything. It's a sad spectacle.
Govindraj Ethiraj: Right. And looking ahead, so let's say the BJP were to be elected, as in, not directly, of course, but with its partners. Now, could that change things?
Because this is a government that's also in power at the centre. Or the larger question, can a change in the political mix at the state's leadership change anything going forward?
Shankkar Aiyar: We hope that it changes for the sake of India and for the sake of Bihar. I say for the sake of India because everything that Bihar represents is the problem that India faces. And Bihar is not an island or a republic.
It will face all the disruptions of climate, technology, demography, all the issues will visit it. And so governments in Delhi have to recognise that this particular province has to be lifted. The problem is that this whole double-engine government, I mean, you know, for the last 10 years, they've had barring 18 months in between, they've had coordination, the centre and state.
I don't think it's the connect there. I think there is a genuine lack of review, genuine study on what is the state of the capacity. If you are unable to provide schooling, that means there is something wrong.
I mean, because India has sort of finally edged towards the target of GDP spend on education. So we are spending a lot of money. Other states have improved.
Kerala is 100% literacy. Okay, fine. The other states are 70, 78, 80%.
Why would Bihar lag behind? I mean, where is the politics in preventing people from being educated? So I think this is actually a socioeconomic puzzle.
Govindraj Ethiraj: Right, Shankar. On that note, thank you so much for joining me.
Shankkar Aiyar: On that not too optimistic and dismal note, I am sorry.
I mean, there's no better news. I hope things change. I hope they put up something, maybe create public-private partnerships to enhance state capacity district-wise, maybe use corporates to fund CSR into the state.
I mean, there are many things that can be done. Let's hope they get it done.
Govindraj Ethiraj: Right. Shankar, thank you for joining us today.
Shankkar Aiyar: Thank you, Govind.
Trump in Asia
Last week saw US President Donald Trump swinging through Eastern Asia in a five-day trip. President Trump stopped in Malaysia, that's in Kuala Lumpur, Japan and South Korea over the first four days in Malaysia.
He secured access to critical minerals and also made progress towards trade agreements with other countries in the region. He was there, of course, for the 22nd ASEAN Summit on the 26th of October, and Indian Prime Minister Narendra Modi, who was supposed to attend physically, did not and attended only virtually, a move that everyone noticed and subsequently commented on later. Back in Japan, he met with newly-elected Prime Minister Sanai Takahichi, who also became the latest foreign leader to nominate him for his Nobel Peace Prize.
Trump's meeting with Chinese leader Xi Jinping in Busan in South Korea, the last leg of the trip, was, however, different and we've already talked about how there was almost no chemistry evident in that meeting, thus portending trouble around the corner. So where does all of this leave India? I reached out to Indrani Bakshi, CEO of Anantha Aspen Centre and columnist on international affairs with the Times of India and Economic Times, and I began by asking her what were her takeaways from Trump's visit to Asia.
INTERVIEW TRANSCRIPT
Indrani Bagchi: Frankly, this is his first real engagement with Asia. He has travelled to Europe a number of times, but he hasn't been to Asia. And normally, the East Asia Summit is something that the U.S. President sort of passed by. The main reason that he was here was not really to engage the Southeast Asian nations. He was there to sign a deal with, I think, Malaysia, but mainly to say hello to the new Japanese Prime Minister, Sanae Takahashi, and to meet Xi Jinping in Korea on the sidelines of the APEC Summit. The APEC Summit itself, he abandoned because after his meeting with Xi Jinping, he just left, leaving the entire Asia-Pacific stage, so to speak.
And that was interesting, particularly from the Chinese point of view, I think it was definitely a win. The Trump-Xi Summit, viewers watching it, looking at the takeaways, Xi Jinping came away with a lot more than Trump did. And in a previous such meeting between Barack Obama and then it was Hu Jintao, it was his first visit to Beijing.
Barack Obama took a lot of criticism for literally bowing to the Chinese president. But Trump, who for want of a better word, fawned over the Chinese president. And you could see that slight condescension, disinterest in the Chinese president's face.
But it's not like they came away with too much. They just got a moratorium, so to speak, for a year on rare earth magnet exports. China agreed to buy some soybeans, did not agree to buy everything, agreed to buy some soybeans.
The US agreed to put on hold the reciprocal tariffs. You've seen all of that. What did we gain or lose in this entire exercise?
The prime minister had been invited to APEC. He had declined it then. There's been a lot of questions about why the prime minister didn't go to Kuala Lumpur.
And he was supposed to go to Kuala Lumpur. But the government's point of view was that the US president was going to make it a performative affair, where his normal way of sort of putting down others and making sweeping statements. So Prime Minister Modi would have been like a prop on that performative stage.
And Modi doesn't want to do that. At least in Indian politics, he would have a hard time explaining why Trump could have told him in public, oh, seven of your jets went down to the Pakistanis. And as it was, Asif Munir came in for so much praise, it would have been difficult.
Having said that, we might want to rethink whether we would let Pakistan take a veto on whether we want to be at a particular international multilateral event or not. What else did we lose? We are now officially the highest tariffed nation in the world by America.
Because after the sort of tactical truce that the US and China achieved, China's tariffs have come down to about 47%. We are at 50, along with Brazil. And that's a question that Indians, and certainly the government is asking the US, that you wanted to punish India for buying Russian oil.
A, China buys more. But B, having put sweeping sanctions on Russian oil companies, which apply globally, singling out India for tariffs, for 25% tariffs, actually makes no sense. But nobody has removed those tariffs.
And as a matter of fact, if you look at it, Germany, for instance, asked for and received a letter of comfort from the US President to say that all the oil that Germany buys from a Rosneft subsidiary in Germany would not come under sanctions. However, this Rosneft subsidiary in India is under sanctions.
Govindraj Ethiraj: So that is basically status quo, then there's no change. So therefore, the next logical question is really, what is the status of the US-India bilateral trade agreement negotiations, which have now been on for more than six months?
Indrani Bagchi: They have not moved substantially since July. India is still where it was. India believes that we've given a very good offer to the US.
The US keeps wanting more. Negotiators have told me that every time it seemed like they've achieved agreement on a certain point, the US makes that a flaw for a secondary demand. These things are all becoming problems.
So everybody's sort of holding their nose and hanging on to where they were until some degree of a political understanding is achieved. And no political understanding is achieved because neither Trump nor Modi are going to sit across each other. Modi doesn't negotiate, no Indian Prime Minister actually negotiates at that level.
If you notice, even the Chinese President doesn't do that. But something will have to give at this point. So I think everybody's sort of waiting.
Govindraj Ethiraj: All right, Indrani. Thank you so much for joining me.
