The Markets Are Up Again But All Eyes On Metals
US President Donald Trump on Monday announced that India and US have finalised a trade deal
On Episode 789 of The Core Report, financial journalist Govindraj Ethiraj talks to Prasanna Tantri, Associate Professor of Finance and the Executive Director of the Centre for Analytical Finance at the Indian School of Business (ISB) as well as Rajesh Sinha, Independent Director at Sahyadri Farms.
SHOW NOTES
(00:00) Stories of the Day
(00:50) India-US Trade Deal Finalised
(02:41) The markets are up again but all eyes on metals
(05:23) The gold and silver story
(10:47) Oil prices dip after Trump says he will talk to Iran.
(11:47) What are the top level Budget numbers looking like?
(20:50) India’s farmers can seize the FTA opportunity but there is work to do.
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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 3rd of February and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital
And our top stories and themes…
The stock markets are up once again but all eyes are on metals.
India's farmers can seize the free trade agreement opportunity but there is work to do.
Oil prices dip after Donald Trump says he will talk to Iran.
The gold and silver story, what happened?
And finally, what are the top-level budget numbers looking like?
India-US Trade Deal
And finally, here's the big news that we've been all waiting for, including the stock markets of course. US President Donald Trump on Monday announced that India and US have finalised a trade deal.
Ahead of the announcement, according to a Times of India report, Trump spoke to Prime Minister Modi and the deal comes after several months of negotiations in between which the Donald Trump administration had slapped a 50% tariff on Indian exports to the of which 25% of those tariffs for India's crude oil trade with Russia which the US claimed was indirectly financing Russia's war against Ukraine. Trump announced this as always on social media platform Truth Social and he said it was an honour to speak with Prime Minister Modi of India this morning. He's one of my greatest friends and a powerful and respected leader of his country.
He spoke about many things including trade and ending the war with Russia and Ukraine. He agreed to stop buying Russian oil and to buy much more from the United States and potentially Venezuela. Trump also said this will help end the war in Ukraine which is taking place right now with thousands of people dying each and every week.
And he also said that out of friendship and respect for Prime Minister Modi, as per his request, effective immediately, we agreed to a trade deal whereby the United States will charge a reduced reciprocal tariff, lowering it from 25% to 18%. And they will likewise move forward to reduce their tariffs and non-tariff barriers against the United States to zero. And the Prime Minister was also committed to buy American at a much higher level, that's the Indian Prime Minister buying American-American, in addition to over $500 billion of US energy, technology, agriculture, coal, and many other products.
President Trump also said that our amazing relationship with India will be even stronger going forward. And then he said that Prime Minister Modi and I are two people that get things done, something that cannot be said for most. And he thanked everyone for their attention to this matter once again, as always.
And his sign off, stay tuned.
The Fall And Rise
If investors were palpitating on Sunday, then they were heeding collective sighs of relief on Monday after the market recovered considerable ground.
Now, there are some reasons and we'll come to that. But the fact is that the budget has not really done anything for the markets in the near term, as the markets would have expected, and they often actually do not even get. But the Sensex and Nifty did see a sharp rally on Monday's trade as investors digested those budget proposals, including a securities transaction tax hike on derivatives, including from most investor views, that's institutional investor views, that the impact would be minimal or such increases do little to solve the original problem, which is to make it tougher for traders to speculate.
And that was another day of choppy trading with some wild swings. The Sensex closed up 943 points to 81,666, while the Nifty 50 was up 262 points to 25,088. Now, we still have some ground to recover from the losses of Sunday.
But let's see on Tuesday, the markets like we said appear to have digested as summit predicted the negative news of an increase in securities transaction tax on futures to 0.05% from 0.02%, while a levy on options premiums has been raised to 0.15 from 0.10. Now, the other negative non-news, of course, was the fact that there was no relief on long-term capital gains or LTCG tax for sale of shares. Now, that is something that was never actually mentioned or suggested by anyone in government, but it was rising expectation given the fact that markets have been on a weak footing. But the bigger news, of course, is not the Indian stock markets, but global commodity markets where prices of gold and silver are swinging so wildly that most investors will quite likely run from this asset at least for some time.
So, if metals look dangerous for now, then stocks might look better. Though to switch so seamlessly between them would call for a level of trading expertise, which by definition most people would not have. And then there are those signals, including statements that hinted towards the closure of the US-India trade deal.
But like always, we will wait to see the final outcome. And then stocks fell world over, including on Wall Street, with some recovery as well on Monday, with S&P 500 futures at that point, that's in the morning, looking at a fourth day of reclines as both metals and stocks were down. A report in Bloomberg said that Bitcoin was at about $77,500 and that stocks across Asia, particularly South Korea's Kospi, which is a bellwether for the AI trade, fell about 5%.
Gold lost almost 10%, but then picked up. Silver sank about 16% before reversing most of it. And crude oil, which we will come to in a moment, fell about 5% after Trump said that Washington was speaking with Iran.
So, on Monday, gold futures were about $4,650 a troy ounce and silver about $79 an ounce. To give you a sense on where it could have gone, we were at $5,600 almost and heading to $6,000 an ounce of gold. But that's something that's unlikely to happen immediately.
So let's recap what happened in the metals market. A sudden and massive sell-off on Friday sent silver prices crashing and gold futures to their biggest one-day dollar decline on record, the latest twist of wild trading that has left precious metals swinging like neem stalks, according to the Wall Street Journal. As we all know, gold and silver have been rising like they were going out of fashion and supply, pulling in more speculators than ever before.
The fact that both retail and institutional investors, including countries and central banks, are buying gold and silver in an effort to de-dollarise their exposure obviously amped up the speculative interest. And then the music stopped, or maybe paused. The fall started around the time reports started suggesting that President Trump would nominate former Federal Reserve Governor Kevin Walsh to succeed Jerome Powell as chair of the central bank.
The Wall Street Journal says Walsh historically has been more concerned with higher inflation than slower growth, which soothed Wall Street fears that the Fed would succumb to Trump's push to lower interest rates. So Trump effectively would be bringing in someone who would not do what he's been asking Jerome Powell to do, is my sense from this. But anyway, investors worried about the future of the dollar in a need of higher inflation had piled into precious metals in recent months, powering what has become known as the deep basement trade, says the Wall Street.
So eventually this is what happened. Silver prices fell 31%, their sharpest drop since March 1980. And the shocking statistic is this, that the size of the drop, that's about $35, was about the price of an ounce of silver as recently as June.
And the history of silver prices is quite interesting because they've traded above $40 an ounce for only a handful of brief periods before last year. And then there is the China factor, which perhaps was not so known that speculators in China have piled on to gold and silver. And then there is the China factor when it comes to gold.
A report in Bloomberg says the gains were driven by a wave of buying from Chinese speculators from individual investors to large equity funds venturing into commodities that has lifted metals from copper to silver to fresh records. And as prices soared, or rose, commodity traders piled in even further. The scenes were reminiscent of 1979, 1980, the only other time in modern history that the markets have seen such dramatic swings in price, says Bloomberg.
The Outlook
With the stock markets having regained some ground lost on Sunday, it's a good time to see what brokerages are saying at this point. Most are of course downplaying the impact of the increased STT on futures trading, which the government says is to deter speculative trading and of course make some additional tax revenue at the same time. A report in Business Standard, which sums up some of those reports, says Goldman Sachs said policymakers continue to prioritise macro and market resilience over near-term growth spurts.
This is evident from the steady fiscal consolidation and timing of the STT hike, mostly aimed, as we said, at curbing speculation, even at the cost of near-term upside. Goldman also says the softer fiscal drag in the budget along with steady capex spending was largely in line with their expectations and supports their fundamentally constructive view on Indian equities driven by earnings growth recovery to mid-teens. They however do anticipate near-term risk on valuations given already weak foreign sentiment catalysed by the unexpected timing of the STT hike, though on the medium term they see opportunities in areas of strategic importance and new infrastructure including digital infrastructure, data centres, biotech, transportation corridors, nuclear power, and critical minerals.
Those are of course all the keywords you heard in the union budget speech on the 1st of February. Morgan Stanley says, in the same Business Standard report, that a likely boost to capex, services sector growth, and AI, along with slightly slower than expected fiscal consolidation, will support most likely the 26-27 earnings, also helped by increased demand for equities through buybacks, on which obviously there has been a new tax treatment. And according to them, they are overweight financials, consumer discretionary, and industrials.
Franklin Templeton says the hike in STT on derivatives on futures and options is likely to have negative impact on market volumes, which could, or rather will, have an adverse impact on the income of exchanges and brokers, of which there are of course quite a few listed ones. Franklin Templeton also says that though growth inflation dynamics appear reasonable, the higher borrowings for 27, that's fiscal year 27, are likely to keep pressure on bond yields. They also say that long-term equity investors may stay invested in broad diversified strategies like flexi-cap, multi-cap, multi-factor, and large and mid-cap equity funds. That's Franklin Templeton, which is of course a fund house saying that. And they also say that those seeking smoother outcomes during volatility may choose hybrid options like multi-asset allocation or balanced advantaged funds to balance risks across asset classes.
Trump Talks Down Oil
Oil prices fell more than four percent on Monday after u.s president Donald Trump said Iran was seriously talking to the United States, signalling a de-escalation of tensions with Iran, an organisation of petroleum exporting countries member. A stronger dollar also weighed on prices, according to Reuters, which added that Brent crude futures were down to about 65.98, so just under 66, while west texas intermediate was at about 61.8 dollars per barrel. Now Brent and west texas intermediate fell after posting their biggest monthly increase since 2022 in January, and that of course happened because risks of a military strike on iran receded after trump's weekend comments. In January, Brent had risen 16 and WTI had risen 13. Trump had repeatedly threatened Iran with intervention if it did not agree to a nuclear deal or continued killing protesters, according to a Reuters report which sums this up.
The Macro View
The central government has held down spending in its annual budget for 26-27, as income and consumption tax cuts announced in the past year weighed on revenues. The government will target a debt to GDP ratio of 55.6 percent for 26-27, resulting in a fiscal deficit of 4.3 percent of gdp, according to the finance minister, who said this on Sunday. Low nominal gdp growth has weighed on government revenue and corporate earnings growth. Federal government revenue is expected to rise 5.7 percent, while net tax revenue is seen growing at seven percent in the coming year. On expenditure, the focus continues to be on creation of infrastructure, with the capital expenditure budget raised to a record 12.2 trillion rupees, of which roads and railways will account for a bulk, about 47, according to estimates reported by Reuters.
I reached out to Prasanna Tantri, associate professor of finance and the executive director of the centre for analytical finance at the Indian School of business, and I began by asking him to sum up the macro numbers from his vantage point.
INTERVIEW TRANSCRIPT
Prof. Prasanna Tantri: As I've told you last time, the single most important indicator that I look at is government expenditure to GDP. Now, good thing is the revised estimate, if you look at, it's 49.6 lakh crore on a GDP of 356 lakh crore, it's 39.5 percent. Even better news, you know, last year, the actual number we actually only have for FY25.
As you know, this is still a revised estimate, the year is going on. That is like 46.5 lakh crore, which was supposed to be, if you go B for that budget estimate, was 48 lakh. So, government is cognisant of the fact that this whole government, you know, you can't be in a stimulus mode all the time, you know, government cannot push the economy forward, you know, no economy has grown only on government expenditure, you know, during COVID it made sense.
That's not the way you get to exceed Bharat and they understand it. That's a big takeaway for me. Because this debt to GDP is a very misleading thing, you know, you can reduce fiscal deficit by taxing the hell out of people.
That is not the way, you know, you want to reduce fiscal deficit. What the government has amazingly done, I am really happy that tax revenue has gone down and expenditure has gone down. If you see the more compared to budget, tax revenue is 2 lakh crore lower, overall gross tax revenue and the expenditure has gone down overall.
You know, if you see from only from a central and the number you said 55 percent, as a consequence of see, it's important how you achieve 55 percent. You can get low debt to GDP in several ways. Inflate the economy, your debt to GDP will be lower.
Just create heavy inflation, surprise people. Your debt to GDP will fall to nothing. You can achieve low debt to GDP by taxing people.
You can achieve in several ways. That should be an outcome. That cannot be a target.
Target should be government expenditure. You know, Milton Friedman has told us long, long back, you know, we miss all of this. From fiscal deficit, we move to this.
It's the same thing. But even though it is not their target, they have done a very good job. And next year, if you see the number 53 and a half lakh crore over 390 lakh crore is 13 percent.
And I am very sure going by the trend, they will not spend 53 and a half lakh crore. I can go on scheme wise where they put in 60,000 crore and spend nothing. So there is no way they are going to spend.
I think they are reaching their limits. It may not be deliberate also. So I guess next year expenditure, if we talk next year, it will be not 53 and a half, it may be 52.
And if I take it as 52, it's 13 percent of GDP. Now, the best of the best times, India reached, you know, the best was like 12 and a half. So I think we are going there, which is quite good in my view.
Having said that, a big joker in the park here is state governments. You know, state government borrowings. And again, I'm not blaming any political party, as you know, every political party now is, you know, they have their own definition of freebies, but everybody is doing it.
So state government borrowing, if you see RBI report on state finances is likely to touch 29 percent. Now, although the centre is going to come to 55, if states go from 27 to 29, the overall debt to GDP is only going to increase. I don't see how.
I understand central government's point of view, they made it 55. But what matters for interstates is the overall debt to GDP. And that's why the yield has moved up today, as you know, eight basis point.
30-year has been going up for some time now. 10-year, you know, 60 basis point increase in 10-year over last like six, seven months, while repo rate has gone down, should realise RBI should not get and make the mistake of cutting rates now. You know, they have a very wrong view of real rates.
You know, Govind, you read economic survey, they're saying real rates are high. No, real rate is nominal rate minus expected inflation. The inflation number you have is for last year.
What matters is from here on what happens. So RBI's official expectation is like 3.4% and repo is 5.25%. Now, if you cut from here, I don't understand this whole argument of we are growing at 8% but still we need stimulus. So I think RBI should wait for state governments to be more disciplined.
But having said that, I think central government has done its part. Committing 4.5 years ago and delivering it, I think finance minister requires a lot of credit for it. You know, I don't think in do this, this kind of discipline.
But having said that, because of state governments, all of this gets nullified. So on an average, I am not like super enthusiastic as far as outcome is concerned. While I am willing to give a lot of credits to central government, but then states will nullify this.
So I think we'll have more doubts, higher interest rates, you know, whether or not whatever RBI does, it's immaterial for long term.
Govindraj Ethiraj: Right. And you said that you're happy that tax revenue is down.
Why is that?
Prof. Prasanna Tantri: Because otherwise think if you cut tax rate and unleash tax terrorism, what's the point? You know, the real thing is you should let more money in the hands of people.
And this argument that, you know, it'll have multiplier effect and all that. But then if you cut government expenditure, that will offset each other. The whole idea is to withdraw from the economy as much as possible and let the private sector come in.
And government role should be wherever there is market failure. I'm not saying there should be no government intervention anywhere. Health insurance, of course, go for it.
Or rural roads. Or even in infrastructure, where long term projects, where private markets are not very good. It makes total sense.
But government as an engine of growth, it doesn't work. You know, we have seen this. How long we keep talking about, you know, another recovery, another sometime, you know, this has been quite some time now.
I think what government is doing, although their rhetoric is infra and all that, actually even in infra, I think if you see the numbers carefully, they have cut 1,20,000 crore of state government infrastructure spending. Last year, if you see BE was 4,28,000 crore to states for infra spending, the RE is 3 lakh crore. That's where I was a bit disappointed.
You know, all of this cut is through state governments.
Govindraj Ethiraj: Capital expenditure has obviously risen and quite sharply, more than 10%. So how does that square with what you've been saying so far?
Prof. Prasanna Tantri: Last three years, it's a very nice pattern going. You know, I'm sure you have seen it enough earlier also with Chidambaram and all. BE, it goes up.
Yes. I don't have to spend. Look at what happened.
Look at RE. Look at the number there, where you have in the budget at a glance, CAPEX for state governments, grand, 4,28,000 crore. And look at that was BE, last year BE.
Look at revised expenditure, 3 lakh crore, 1,20,000 crore cut. So that's the biggest cut that they have achieved.
Govindraj Ethiraj: It's a cut or is it projects that are not going through or.
Prof. Prasanna Tantri: Whatever, you understand, I think they have reached the limit. Whatever it is, it's a good thing. I am not saying it's a bad thing.
I told you, I want this to be cut. Because there's no point in building airports to nowhere or using taxpayer money to fund Vande Bharat. Doesn't make sense at all.
But I think this is a good thing. But they have cut. So let's see.
I don't think last three years, Infra spending, although it is historically high, but last year's trend has already reversed. People will know maybe five years from now, that the RE is consistently lower than BE. You check it.
You know, it is even last year also, it was supposed to be 11.5. Look at the RE, it's 10.9. And you will see actuals, I think will come at 10.5. So while it's nice for headlines, right, it's gone up. But two years later, nobody cares. I'm more concerned with actuals, whatever they may announce.
But I think I understand you have to manage because in India now there is a belief that as long as you classify some expenditure as Infra, it is good. Whatever it is, there are careful studies, there is no such tax has a much bigger multiplier than the spending. Infra makes sense only when it is responding to a market failure.
You do it for the sake of it, it is not useful. You know, health insurance has a much higher multiplier. Ayushman Bharat, for instance, has a much higher multiplier than any road that you make.
So research, for instance, you know, one area of another on Infra also positive thing is defence. That I like it. You know, the defence has a huge multiplier, defence research.
There is nothing within Infra which has as large multiplier as defence research. I hope that money will go for research. That part, again, it's a B, I don't know what will happen in actual spending.
680 to 780, that Infra is good. But on an average, I think, you know, they have been very frugal and cut and that's a good news. But if your audience is looking at the overall macro picture, you know, they are not voters, right?
If they were to go to central government, they have done a good job. But overall macro, state government matters. And there, things have become worse.
So, you know, 29% if they borrow, whatever half percent finance minister cuts, if they keep adding, it's going to offset the whole thing and we are dead to GDP will remain at historical high levels.
Govindraj Ethiraj: Right. Prasanna, we've run out of time. Thank you so much for joining me.
Prof. Prasanna Tantri: Thank you.
The Union Budget and Agriculture
The union budget has allocated about 163 000 crores, or 1.63 lakh crore rupees, for agriculture, with a broad focus on upgrading farm practices and enhancing livelihoods collectively. According to a report put together by earlston young, the reforms reflect a strategically integrated approach, broadening farmers income avenues, deepening rural economic participation, and embedding technology and market access as co-drivers of sectoral advancement.
The economic survey 2526 emphasises that agriculture is vital for achieving vixit bharat, fostering inclusive growth, and enhancing livelihoods. Vixit bharat is a developed India. Over the last five years, the average annual growth rate in the agriculture and allied sector has been about 4.4 percent at constant prices, according to that EY report. Now the economic survey highlighted that agriculture and allied activities account for about one-fifth of national income and employ nearly 46 percent of the workforce. It also pointed out that allied segments like livestock, fisheries, and horticulture are emerging as strong growth drivers, going beyond traditional crop production.
The question from the core post point of view, of course, is how does the budget stack up, given India's signing of several free trade agreements with the European Union and the United Kingdom. While agriculture is out of most of this, could there be an opportunity. I reached out to Rajesh Sinha, independent director at sahadri farms post harvest care limited and former managing director of NEML, that's NCDX e-markets, who also helped build national platforms in agriculture procurement, and i began by asking him what were his takeaways from the union budget.
INTERVIEW TRANSCRIPT
Rajesh Sinha: I think this budget is more or less a continuity budget, and considering the geopolitical situations, the budget has focused mainly on preparing India from a perspective of increasing its global competitiveness. And a lot of effort has been given on infrastructure, but pointing to the specific context that you're really referring to, the preparedness of India for the FT. We did expect a lot more emphasis on preparing Indian agri-industry and food industry for the European FTAs, because it not only opens their market to us, but our own farmers and our own manufacturers also get to face a competition that they've never seen before.
To that extent, for example, we have GI tags. While they're effective, they're not as effective as PDO or PGI indications in Europe, right? To that extent, we did expect that there would be some announcements on making our manufacturing industries in food, as well as in testing, inspection, and certification infrastructure, strengthening of these infrastructures in India, in the budget.
I would say that's a missed opportunity. And could some of this happen outside the budget as well? Yeah, absolutely.
I think that's one of the other features that we have seen this budget going in last few years, where a lot of decisions are taken, and it doesn't wait for budget. So I think as we go forward, it's likely that such decisions will be taken in the future.
Govindraj Ethiraj: Right. But what you're saying is that this whole testing and quality infrastructure has to be in place, or it has to be upgraded ahead of these imports and exports opening up?
Rajesh Sinha: Yes, because we hardly have two seasons. Let's say we consider that in the next 12 months, the entire EU FTA will get ratified by all the countries and it will come into effect, let's say by January 2027. Now, if you look from a farmer's perspective, the crop is already in the field right now.
Then we have a season when there are no crops, then there would be monsoon. So we are effectively having only one season to prepare. So there are three things going.
One is the testing, then is the inspection, and then is the certification. While we are quite ahead in the certifications as far as NPOP goes, that is on the organic certification side, we have done a lot of work, especially in agri commodities, millets, as well as in fruits and vegetables. But we have not extended it beyond that.
And that's where I think the major opportunity and challenge lies. It has to be done on a country basis. Every state has to follow a set process.
Farmers have to understand that yes, this is the way to go. There's no alternative to it.
Govindraj Ethiraj: Got it. You also referred in a note that you had put out to the economic survey where they said that we should treat Indian consumers as premium buyers and produce the best quality.
So and similarly, you're also saying that India's farmers can thrive globally, but only if we compete on quality, transparency and innovation. So could you elaborate on how that would pan out?
Rajesh Sinha: From my field experiences also, I can say there are certain farmers and villages where they have a separate field for their own consumption and a separate one for when they sell it. That's a mindset.
And I would say there are two legs to it. One, the government of India is the largest buyer of the major food grains. And there are various mechanisms to ensure that we continue to, you know, we do not fall short on the food security.
Now, they are in a very sweet spot to do something called safe food, means poorest of the poor in the country would get access to the safe food. To that extent, entire testing, inspection and certification at farmlands across the country for major crops can be done. So that's the one aspect of it.
So the quantum of food grains that we buy and then further distribute under PTS, there's a huge room to create that as a model. And, you know, the scale at which it is, any economics will work. So that's one piece.
And that would also make us at the centre of export economy, where we can export any kind of grains we produce. That goes for even cereals like paddy, wheat, millets, maize, anything. Right.
That's one. Second leg of it is that globally, the buyers are treating Indian consumers as a premium customer. You can see the quality of apples.
This I'll give you illustrated with just one example. We try to do a marketplace where we set the time the fruit is out of the tree. Once it is plucked within a couple of hours, it will go into a temperature control vehicle.
And then that vehicle will come all the way to the consumption centres. If it has to go to an airport, it has to fly like that in the container. It has to be sealed.
Now, the challenge is if it is done that way, our apples will remain juicy forever. It doesn't happen. There is no one who is saying apples are temperature control stuff.
Any temperature beyond 23, 24 degrees, 2 percent juice goes away. So by the time it reaches us. So we are not treating our consumers at par.
Whereas look at the apples that come from abroad. They would have travelled for months before it comes to our plate and they're still great. So our consumers today are not the same that we used to be possibly five years ago.
We are capable and willing to pay a very high price for a quality produce. If our farmers, if our farmlands, our value chain players do not take that market, the premium market will be taken by somebody else from outside us. The same goes for the premium cheese.
You see that dairy, while everything has been excluded, premium cheese that we do not use has been excluded. That gives us the indication. As we go forward, if we do not come up to the terms treating our own consumers, be it in the public distribution system or in the normal retail, these young people are global.
They understand what they want to consume and they're capable and willing to spend the money. So either we keep the consumers or we let it go. It's a choice.
And I would say in a way it's also a compulsion.
Govindraj Ethiraj: Right. And you talked about the testing, inspection and certification. Obviously, some or a good amount of this infrastructure is already in place.
Where are you seeing the investment that's called at the scale that you're referring to and who will typically do the investment or how would it be split?
Rajesh Sinha: So to be fair, I think we are doing a lot of work. Every state government is creating a state specific committee where all the industry players as well as major thought leaders are there in those committees. Right.
Today, the investment is done by the exporter. So let's take the example of grapes. It's a shining success story.
You have 10,000 farmers from Sayadri farms. That's how it started. And now it's one of the largest grape export.
But outside Sayadri, there are more number of farmers. Now, who will make that investment? So today, what are we saying?
We are saying if we have to export to Europe, we are treating them as the premium customer. Look at the consumption that we do in India. If we have to look at India, we would be a deficit producer country in lychees.
We don't even get enough of it. We will be a deficit producer in quality grapes. We don't get enough of it.
Go to the far lands and you know, we don't get that quality. But for our own consumers and producers, we are not giving the best quality produce. And it's not only about the exporters who has to invest.
I think there has to be a national programme, something on the lines of national biopharma initiative that has been taken. We should be looking at a national agri-certification initiative with a certain allocation that potential clusters across the states and districts like ODOP we have done. Similarly, we can look at one horticultural produce or one agri-produce like we have done for fisheries.
We are doing it for poultry and dairy. We need to do it for horticultural produce and food gains as well. So maybe a national certification body, something similar on those lines could really be done.
Govindraj Ethiraj: Got it. Rajesh, we've run out of time. Thank you so much for joining me.
Rajesh Sinha: Thank you.
