On Episode 914 of The Core Report, financial journalist Govindraj Ethiraj talks to Rahul Matthan, Founding Partner of Trilegal. We also feature bites from our recent Weekend Edition featuring Rajani Sinha of CareEdge Ratings, Somashekhar Vemuri of Crisil Ratings and Manas Majumdar of PwC.

SHOW NOTES

(00:00) Stories of the Day

(00:50) Stocks Fall Again Because Of Monsoon Concerns Even As Rains Pick Up.

(03:13) Electricity Consumption Spike Drives Up Industrial Output.

(10:43) Most NRI Deposits Into New Schemes Expected From The Gulf Region.

(14:02) Residential Sales Dropped 6% In Q2 2026 As Uncertainty Rules.

(14:58) Why India Needs A Single Destination For Its Multiple Laws And Rules.

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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 Tuesday, the 30th of June and this is Govindraj Ethiraj, broadcasting and streaming weekdays from a rainy Mumbai. India's financial capital.

Our top stories and themes…

Stocks fall again because of monsoon concerns. Even as rains pick up.

Electricity consumption spike drives up India's industrial output.

Most NRI deposits into new schemes are expected from the Gulf region.

Why India needs a single destination for its multiple laws and rules

And residential sales have fallen 6% for the second quarter of this year, thanks to uncertainty.

Markets, Gold, Industrial Output and the Monsoon

Stock prices fell on Monday, taking a break following their longest weekly winning streak of 2026 as concerns over a weak monsoon overrode falling crude prices and renewed attempts to resume pre-stocks in West Asia between Iran and the United States.

The rally had lasted three weeks and economists we spoke to pointed out over the weekend that monsoons were now the big concern and that the softer oil and rupee help mechanisms were largely priced in. The Nifty was down 109 points to 23,946 and the Sensex was down 372 points to 76,728. In the broader markets, the Nifty mid-cap and small-cap were also down 0.4 and 0.6% each, but there is action on the bonds front.

Overseas holdings of index-eligible debt has risen by about 39,700 crore rupees or about 4.2 billion dollars so far in June, on course for the biggest ever monthly purchase according to Clearing Corporation of India data quoted by Bloomberg. Inflows have risen after India scrapped taxes on debt for foreign investors and also expanded the pool of securities eligible for index inclusion. Goldman Sachs has now recommended buying India's 30-year government bonds as inflation expectations ease and lower oil prices reduce fiscal risks, according to Bloomberg report.

The overall macro impact of the US-Iran war has been less than initially feared, with the outlook improving further on the interim peace deal, according to those analysts. The moves could make India's eventual inclusion in the Bloomberg Global Aggregate Index increasingly a question of timing rather than direction, with a mid-year announcement likely, according to those Goldman analysts. Elsewhere, gold prices are still shaky, which means they are sliding slightly.

Spot gold was down to $4,049 per ounce on Monday morning. It has seen a 1.7% weekly decline on Friday and was on track for a fourth straight monthly loss of more than 10%. Moody's Ratings has said India can withstand a potentially wider-than-forecast fiscal deficit this year without jeopardising its investment-grade rating, even as higher energy prices are expected to pose only temporary budget pressures.

A senior official at Moody Ratings in Singapore told Bloomberg that they don't see India as being particularly affected because the shock is largely negative for most sovereigns. Moody has assigned India a BAA3 rating, the lowest investment-grade tier, with a stable outlook. India's industrial output rose 5.1% in May thanks to a pickup in electricity growth, according to government data, while growth in manufacturing moderated thanks to supply disruptions linked to the West Asia conflict.

Economists polled by Reuters had expected output to fall to 4.5% compared to a growth of 4.9% a month earlier. The May reading is the second out of the revised 2022-23 Bezier series, reflecting the government's shift to producer prices from wholesale prices for calculating factory output. A note from Bank of Baroda's chief economist Madan Sabnavis said the performance is encouraging as it appears we are on a higher growth path, notwithstanding the global environment.

He said the growth can be attributed to steady domestic demand conditions. Manufacturing has grown by 5.5%, which could be attributed to a revival in consumption. Both durable and non-durable have done well at 7.2% and 3.6% each.

Within durables, the auto sector was once again the leader, followed by computers and other electronic goods. Auto sector prices and sales is something we've been tracking consistently since September last year and even before that, but the big jump started in September 2025 after a reduction in goods and services tax, which particularly helped the lower end of passenger cars. The Bank of Borda note also says that the FMCG or fast-moving consumer goods growth is significant as this has been a sector that has lagged in the past, and quite clearly low inflation in the past has helped, and of course, the question is whether this will be maintained in coming months.

Incidentally, Crisil Ratings had revised positively its impact assessment of the West Asia War. Somasekar Vemuri, Senior Director at Crisil Ratings, told the Core Report's Weekend Edition their assessment of 34 sectors exposed to the conflict indicated that the impact on operating margins would be contained at 100 basis points compared to the 200 basis points expected earlier.

TRANSCRIPT

Somasekhar Vemuri: So what in our earlier stress scenario we anticipated, maybe there could be about 200 basis points of impact in terms of the, you know, profitability margin, operating profitability margin for the corporate India. Whereas in the current environment, you know, our analysis indicates that the impact could be limited to about 100 basis points, roughly halving of what we assumed in our previous stress test. Also, you know, the impact was much more broad based in our stress test.

Almost 22 out of 34 sectors that we looked at were expected to see some kind of a margin pressure in May when we carried out the stress test. Compared to that, currently, you know, it's a much, much lower number. So overall, it's far, far more benign kind of an environment.

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So, everything depends on oil prices. So, where are they right now? Well, they're steady, a little above the lowest since the end of February. Brent was above $72 a barrel and West Texas Intermediate was around $70 a barrel on Monday. So, the latest from West Asia is that after fresh attacks on each other, Iran and the US have said that they will stand down for now and vessels can move freely before peace talks resume this week, according to officials who spoke to Bloomberg.

And back to Indian markets, another sign of how Indian markets don't seem to reward risk-taking bets by Indian IT companies, shares of India's persistence systems dropped as much as 10.6% or just under 11% to a 15-month low on Monday after it said it would buy Germany's Nagaro for a billion euros, that's about $1.1 billion, with analysts flagging excessive valuation, integration, and margin dilution risks, according to a Reuters report. Meanwhile, Dubai's stock index is set for its best quarter in a year after the truce in the Middle East conflict pulled investors back to the market they had run away from and Iranian missile attacks shattered Dubai's reputation for stability, according to a Bloomberg report, which also pointed out that the Dubai Financial Market General Index has gained about 11% in April to June, more or less erasing its losses for 2026. The market still remains below levels it was trading at before the war started, and many investors also see this recovery as fragile.

And finally, we referred to this a little earlier, monsoons are back on track after absconding for a while, particularly from Mumbai. Intense overnight showers hit Mumbai's suburbs on Monday, with several areas receiving over 100 mm in just four hours, which predictably led to water logging and traffic disruptions in some pockets, according to civic officials who spoke to the Hindu newspaper. Conditions are favourable for further advance of the southwest monsoon into northern states over the next five to six days, according to the Indian Meteorological Department.

While June rainfall or the lack of it may not be severely damaging to the economy or agricultural output going by the past, according to some economists, it is nevertheless a concern, as Rajani Sinha, chief economist of CareEdge Ratings, told us over the weekend.

TRANSCRIPT

Rajani Sinha: The other important thing which, you know, everybody is concerned about is weak monsoon. But here, I would like to highlight that as per our study, over a period of time, if you see last few years, the impact of weak monsoon on agri GBA growth on India and on India's overall GBA growth, the impact has relatively reduced. But still, you know, a large portion of our workforce is employed in agriculture sector, a large part of agricultural income around more than 50% does come from crop production.

To that extent, yes, a poor monsoon will have an impact on rural demand. But I would like to highlight that the impact has relatively reduced over time. So we should keep that aspect in mind.

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On Wall Street Monday morning, stock futures rose with tech rebounding after a tough week and investors looked at the pause in hostilities between the US and Iran and other signs to resume their buying. Dow Jones was up 0.5 percent, while Nasdaq was up 1.2 percent, according to CNBC.

Also on Wall Street, investors are loading up on memory chip companies whose products help power AI and other consumer electronics. And this is something we discussed just yesterday in some detail with Counterpoint Vice President Neil Shah. Samsung, Micron, and SK Hynix are now the 10th, 13th, and 14th most valuable public companies in the world, surpassing Berkshire Hathaway and JP Morgan Chase, according to a note from Professor Scott Galloway.

But more perceptively, Galloway points out that with the first half of 2026 now coming to an end, the old winners have become the laggards. The hyperscalers, Microsoft, Alphabet, Amazon, Meta, and Oracle have solidly underperformed the market. Microsoft is on track for its worst monthly loss since 2008, down 20 percent in June alone, and Oracle is down 30 percent.

A quick reminder, the hyperscalers will spend $805 billion on CapEx this year, up from $449 billion in 2025, consuming about 93 percent of their cash flows from operations, compared with 33 percent in 2023, according to Galloway. At $805 billion, this is more than the combined defence budget of many Western countries, except of course the United States. So for those big bets to pay off, AI revenues need to be enormous.

So far, global AI sales exceeded depreciation costs in the first quarter, but just barely, and that margin is under pressure as competition from China and business backlash push AI prices down, according to Professor Galloway.

NRI Deposits into New Schemes

Banks will use foreign currency deposits raised from the Indian diaspora in the next few months to replace expensive funds on their books before channelling them to companies, according to Axis Bank's CEO, quoted by Bloomberg. The first thing banks will do, Axis Bank CEO Amitabh Choudhury told Bloomberg, is that they will reduce or pause growth in other very expensive deposits for some time.

Following that, the quickest areas of deployment would be across infrastructure projects, data centre investments, commercial real estate, and large capital expenditure plans, he said. Earlier, the Reserve Bank of India said it would absorb the hedging costs incurred by lenders that raise dollars overseas, which obviously gives banks more room to offer attractive rates on foreign currency deposits, all part of larger efforts by India's policy makers to boost foreign capital inflows and support the rupee, all of which is of course working for now. Choudhury also expected most of those foreign deposits to originate from the Gulf region, followed by Southeast Asia.

Staying with Axis Bank, the bank said its CFO was leaving after six years, even as Kotak Bank said over the weekend its CEO, Ashok Vaswani, would depart for personal reasons after his term ended in December this year. This would mean that the Kotak Bank's CEO, a former Barclays and Citigroup banker, would have spent only two years at the bank and thus potentially leading the bank to scramble for a successor.

Climate Risks to Data Centres and Europe

More around AI in data centres, a recent study by climate risk analytics firm First Street and quoted by CNBC found that 79% of global data centre capacity faces elevated risks from acute climate hazards like flooding, extreme winds, and wildfires that can disrupt operations, increase downtime, and drive insurance and repair costs.

Speaking of which, the deadly heatwave that's set temperature records across Western Europe for more than a week has shifted east to Hungary, Romania, and the Balkans, according to a Bloomberg report. Budapest is expected to see 40 degrees Celsius today, and red warnings for extreme heat have been issued in Poland, Hungary, Romania, Croatia, Bosnia and Herzegovina, Serbia, and Slovakia. Similar alerts are still in place for parts of southern and western Switzerland, according to the Bloomberg report.

Germany broke its temperature record for a third consecutive day on Sunday with a high of 41.7 degrees Celsius in Koscien, that's Brandenburg.

IATA on Air Cargo Demand and ANAROCK on Real Estate

Air cargo demand rose 6% year-on-year in May, with Africa, Asia, Pacific Europe, and North American regions all reporting above-trend growth, according to a latest bulletin from the International Air Transport Association. Middle East carriers, however, reported a combined contraction of almost 9% year-on-year, thanks to war-related impact.

The IATA report says that May's strong performance coupled with macroeconomic indicators gave cautious optimism for air cargo's prospects over the rest of the year, because trade and manufacturing output are both growing. And of course, as we've been discussing on the core report, airlines have adapted operations to align with shifting demand patterns and supply chain needs, along with the rest of the supply chain system, and yield growth and higher load factors are also helping recoup higher fuel costs, according to IATA. And back-home persistent uncertainty amidst the West Asia war and its inevitable supply chain disruptions impacted housing sales in the top seven cities for the second quarter of 2026.

According to the latest ANAROCk research data, residential sales dropped 6%, with approximately 90,700 units sold in the quarter against about 96,200 units in the same quarter for 2025. On a quarter-on-quarter basis, housing sales fell 11%. Mumbai metropolitan region and Bangalore accounted for about 48% of sales in the top seven cities.

New launches, on the other hand, are up about 7% from about 98,000 units in the second quarter of 2025 to about 106,000 units in the second quarter of 2026, which is now passing us. Bangalore saw the maximum new supply accounting for about 53% of the total new inventory additions across the top seven cities, according to that ANAROCK report.

“A Canonical List Of Legal Compliance”

There is no single source of truth for citizens and enterprises.

The lack of Jan Vishwas (citizen trust) imposes huge costs on justice, inclusiveness, and mass prosperity. It is time for a central government mission aimed at assuring us that any instrument or obligation not listed will not exist. A recent column in the Mint newspaper by Rahul Matthan, founding partner of law firm Trilegal, and Manish Sabharwal, co-founder of TeamLease Services, has argued.

The column points out that America's experience is instructive. As Ervin Criswold, who would later become Solicitor General, pointed out in a 1934 article titled Government in Ignorance of the Law, there was no way to tell whether a given law was in force or whether it had been amended, superseded, or withdrawn. What was needed, therefore, was a compilation of all laws, like the Index of Federal Statutes that had then been published by the Library of Congress.

The column also points out that America's Federal Register is an authoritative record of every federal regulation and executive action in the country that to this day, along with its Code of Federal Regulations, serves as the single source of truth for all U.S. federal laws, a canonical list of legal compliance. India, the authors point out, has no such equivalent. The India Code website is incomplete, the e-Gazette is separate from the Physical Gazette, and the administrative state mostly uses a battery of constitutionally suspect instruments that are not laws made by Parliament or rules notified in the Gazette.

So, what should be done now and how? I reached out to Rahul Matthan, and I began by asking him where we could start on this project.

INTERVIEW TRANSCRIPT

Rahul Matthan: I think everyone knows that in the country there are vast multiplicity of laws and not only laws, you have subordinate regulation, which is rules and regulations. And then we have mapped, you know, Manish has done this, some 25 other types of instruments or edicts, which could be things like FAQs or guidelines and circulars and things like that. And the fact is that most people and most businesses do not know every single law, regulation, edict, and any of the 25 below them apply to them.

One of the reasons why they don't know that is because this is scattered around various websites. Every ministry and department has its own website. And on those websites, a list of all of the circulars are there or sometimes are not there.

And some of these circulars are actually only printed in paper and you won't get to know it unless you visit the office and are shown that particular circular. Now, one of the principles of law is that you cannot, as an excuse to get away from culpability, claim that you are ignorant of the law. So it is ignorance of law is no excuse.

And the point that we're making in the article is that it is okay to say ignorance of law is no excuse because otherwise everyone will just stand up and say, look, I didn't know and so it does not apply to me. But it is not okay to say ignorance of law is no excuse when the law is fundamentally not knowable. And the law will not be knowable unless it is available in some repository where I can go in and search to see if a particular law applies.

So the point that we're trying to make is what the US, what Singapore, what the UK, what the EU and many countries in the world have done is create this central repository where no matter which department or ministry enacts a law or regulation, there is a central registry where all of these are kept and are searchable and citizens can go there and identify what the laws are and what applies to them. And I think that India in not doing that is actually doing a disservice to its people because how can you be held liable for not complying with the law if it was very difficult to figure out what laws, what's the total number of laws here to comply with.

Govindraj Ethiraj: Right. And I'll come back to the laws and their physical and non-physical versions in a moment. But would most of the laws that you're referring to or refer to when you wrote this in the industrial space or is this sort of broad based across, let's say, crime and so on?

Rahul Matthan: It's broad based. As you know, anyone who lives in India knows that they can be caught by all sorts of unknown things. Happily, most of our lives are lived without coming in contact with these things and compared to companies which have to or businesses which have to do it on a very regular basis.

If you're an employer, you have monthly, quarterly, annual filings with regard to your employees. And then most businesses have at least two or ten annual filings. Individuals don't have that much.

But every now and then, when you have to do a property transaction or when you have to in any other way come in with the government, you are coming in contact with the government because of the laws that have been passed, the regulations under them and the specific procedures that you have to follow in order to comply with that. So it's very broad based. I think every area of interaction with the government is based and predicated on some law, rule and regulation.

And it's not often knowable what the sum total of all of those laws and regulations are. But to answer your specific point, I think this is more pronounced in the context of industries because they are more regulated. Individuals tend to generally be less regulated, but there are areas where we come in contact with regulation.

Govindraj Ethiraj: Right. And in the context of the India code, you pointed out that the e-gazette is separate from the physical gazette and the administrative state uses a battery of constitutionally suspect instruments. Can you elaborate on that?

And also, when we say e-gazette versus physical gazette, so you're saying there are laws which are really distributed over different formats and different mediums.

Rahul Matthan: I should be more clear because it's probably more historical in the confusion than anything else. So to start with, every rule and regulation has to be notified in order to be valid. And this is a very old phenomenon.

And the place which is notified is in the Gazette of India. And the Gazette of India used to be published for some strange reason by the Ministry of Housing and Urban Affairs. I don't know why, but the Ministry of Housing and Urban Affairs maybe had a number of regulations.

And so it was just given to them to be the publisher of the Gazette. Anyway, be that as it may, they have historically published the physical Gazette. And then maybe a decade ago, I don't know the exact date, we also digitised the Gazette.

So then there is now a digital Gazette and all laws, regulations that are published, if you are given a digital copy of that, it comes from the e-Gazette. And there is also a website that is maintained by the government called India Codes. India Codes, I think, attempts and has the ambition of being a comprehensive repository of all laws, but perhaps not all regulations.

And so these are the broad repositories as it were, but every ministry and department on its website will also have a list of laws and regulations that ministry administers. Some administer many, some administer just one or two, but that's another place that you have it. And very often, since that's what is in the hands of the ministry, that tends to be much more updated with regard to the most recent notifications and circulars than these other things.

So in order to actually figure out what applies to you, you can try India Codes, but India Codes is not complete. You can try e-Gazette, but e-Gazette is not machine readable. Most of the things on e-Gazette are just PDFs that have been scanned.

So they're not, it's not easy to search and find, and that's chronologically ordered. So, you know, every e-Gazette will say this is the notification number such and such of such year, which is not the appropriate way to try and figure out what applies to you. Or you can go to the various ministries and look at their websites.

But once again, those, each ministry organises its, the laws that it administers in a different way. The Reserve Bank of India is in some senses very good because every six months, it actually comes up with a compilation to say, this is the master circular of everything that we have updated in the last six months. So you have one consolidated place where you can see everything.

And then in the two or three months that elapses after that master circular is issued, you can see just the two or three months worth of circulars that have come out. So that's a good way of doing, but very few websites actually handle it in that manner. So it is actually very difficult to figure out even lawyers who do this every day will struggle to list a comprehensive compendium of all the laws that apply to a given context or a given situation.

Govindraj Ethiraj: So here's the practical question and picking up from something you mentioned just before we started that there is a law which says that if I have a factory, I have to whitewash the walls once in a and literally whitewash, failing which I can be held to account. So like this, there could be many, many more laws, which I guess people know because of institutional memory. And these things get passed down.

But what is the solution now as you look ahead for this on for other issues that people face? And how could we do it in a way, maybe it's an LLM challenge, or maybe it's some other challenge, which is administrative as well. But how do we really try and start fixing this?

Rahul Matthan: I mentioned one, but there are hundreds of thousands. And I myself as a lawyer practising don't know more than a small fraction. I think in the area that I practise, I probably will have a good understanding, but that's also a very narrow vertical.

So I don't think any lawyer, anyone has a full idea. This is a solved problem. And that's why the article we point to what other countries have done, the US, the UK, Europe, Singapore, they have a single place where every law is just listed.

And I don't think we need to go so far as the LLM, because for nearly two decades, the US has maintained this online repository. And what it means is that every law that's passed is actually classified according to a taxonomy. All consumer laws are put into one bucket.

And that could include some competition laws, it could include consumer protection, it could include anything that has to do with the consumer. And similarly, for pollution, there's something else, pollution may be a subset of arms to society. And there's a taxonomy by which this is organised, so that if you're thinking about what third party harms, I would go to maybe two or three of the buckets of this taxonomy and look to see what applies.

So it's, I mean, I think we can use an LLM. But there's no need to go that far, because many countries have done it in a very simple tree hierarchy to find these things. And you can do that.

I mean, of course, now we have LLM. So I guess we could take it one level further than that. But I don't think we need to go that far.

I think it's very simple to do. And I think once it's available, and once again, we don't have to reinvent the wheel, because the taxonomy has been perfected over the years by many different countries. And we just have to see what works for India.

Govindraj Ethiraj: And you're also saying that we don't have this, right? I mean, so it's an interesting point, because you're saying if I want to look at laws, which concern me as a consumer, or a user of services or buyer of products, there is no single place or single bucket that I can go looking in, instead, I have to search across various buckets. But this could be done pretty easily.

But we haven't done it so far.

Rahul Matthan: Yeah, I mean, laws are enacted by the legislator. So they look at the organisation of all of these things from their perspective. But actually, they are complied with by organisations and individuals.

And really, if we are making it citizen centric, you would organise it in the way that I described, which is, if I'm a consumer, I want to see all the consumer laws. Now, the consumer laws, one of them may be issued by the Department of Commerce, another may be issued by Department of IT, all these different ministries are looking at it from the perspective of I issued it. And so this needs to be organised in this way, no one's thinking about what the citizen or the person who complies with would like to see.

Manish says this quite eloquently, when he says, you know, regulators read left to right, but we read right to left, we read from the implication of the law, whereas the regulator looks at it from just the process of enactment. And in that enactment, they issue a bunch of edicts that apply to many, many people in many contexts. But each person to whom it applies would like to see all of the laws that apply to them, which could be across a swath of different departments and ministries.

And that's probably what we should be designing if we're looking for ease of doing business and ease of living.

Govindraj Ethiraj: That's a very, very useful and important point, Rahul. Thank you so much for joining me.

Rahul Matthan: My pleasure.