India’s Coffee Kicks In: Growth, IPOs, And Dhols On Wall Street

From GDP surprises to tariff tussles, India's economy brews strong—but governance spills and monsoon curveballs demand a steadier hand.

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By Phynix

Phynix is a seasoned journalist who revels in playful, unconventional narration, blending quirky storytelling with measured, precise editing. Her work embodies a dual mastery of creative flair and steadfast rigor.

June 1, 2025 at 7:23 AM IST

Dear Insighter,

In 9th-century Ethiopia, legend says a goat herder named Kaldi watched his flock jitter joyfully after nibbling on red berries. Curious, Kaldi tried them too—kickstarting the global coffee revolution and, some claim, centuries of sharper minds, punchier philosophies, and revolutions.

This week, the world had its own Kaldi moment. No berries, but plenty of buzz—GDP surprises, policy-legal tussle, diplomatic whirlwinds, IPO jitters, monsoon curveballs, and a French presidential slap Macron shrugged off as ‘spousal banter’—proving context is everything.

India’s GDP growth hit 7.4% in the January–March quarter—above expectations, despite full-year growth moderating to 6.5%, the slowest in four years. Kalyan Ram explores this with former RBI Governor Dr. C. Rangarajan, who offers a wake-up shot: don’t get high on short-term numbers. Fiscal irresponsibility—diluting the 3% deficit cap—might inflate rates and crowd out private investment.

Rangarajan doubles down with a radical proposal: let states levy personal income tax. Not federal fragmentation, but fiscal maturity. India’s fiscal federalism, he argues, needs rewrite.

Alpana Killawala adds depth to this macro-mix, explaining that a profit-making RBI isn’t necessarily good news—it may reflect a poor fiscal record. The record "surplus" isn’t profit—it’s a loan from the RBI’s crisis-fighting buffer.

Beyond the bean counters, nature’s throwing its own curveballs. The monsoon arrived the earliest in over 25 years, says BasisPoint Groupthink. But like early risers who nap through the day, early monsoons don’t guarantee rain bounty—2009’s early arrival ended below long-term average. Volatility in weather could spoil crops, disrupt sowing, and spike food inflation.

And speaking of spikes, NSE’s unlisted shares have surged nearly three times to ₹2,300 in a year. The retail frenzy may push SEBI to greenlight NSE’s long-stalled IPO, warns Sanjay Mansabdar.

BSE’s trying a comeback too, writes Dev Chandrasekhar. Its bet? Factor-based indices to regain relevance in a market where NSE dominates 90% of equity derivatives.

In depository drama, CDSL’s stock got trimmed as SEBI’s “True-to-Label” regulation eliminated volume discounts. Krishnadevan V notes mutual funds and FPIs are fleeing—bad news for NSDL’s IPO dreams. Flat fees mean no more pricing arbitrage.

Then comes the IndusInd Bank mess. In an interview with Ranjana Chauhan, banking veteran Manoj Rane pulls no punches: “Who on the board understands what’s happening in the dealing room?” Turns out, not many. The bank sat on derivative losses for 15 months. Executives assured investors of profitability, quietly offloading shares instead.

Krishnadevan V adds: this isn’t just bad optics—it’s a governance crisis. Silence despite internal warnings shows either alarming apathy or active obfuscation. RBI has the power to remove boards—not just when banks go bust, but when public trust erodes.

In the real economy, cracks show in cookware. TTK Prestige, India’s beloved kitchen brand, posted a March quarter loss, writes Krishnadevan V. Rural demand, once 30% of sales, has shrunk as MFIs tighten lending. Even pressure cookers feel the heat.

While TTK battles headwinds, HAL’s engines are roaring—but not all that glitters is gold. The defence major’s stock has tripled in two years, backed by a ₹1.84 trillion order book. Krishnadevan V examines its evolution—from assembling imports to making indigenous platforms. But 90% government dependence means it’s a jet fueled by promises.

Meanwhile, across the Atlantic, another kind of Indian surge hit headlines—less fiscal, more festive. A video of a baraat, with nearly 400 people dancing at Wall Street in full desi regalia, went viral. If HAL is exporting jets, this was India exporting joy. Proof that soft power doesn’t always need a trade deal.

Ajay Srivastava delivers a killer insight: India actually runs a surplus with the US—just not in trade. While America logs a $44.4 billion goods deficit, it earns $80–85 billion annually from Indian students, digital services, IP royalties, and finance. This makes Trump’s tariff saga even more absurd. Why, asks Srivastava, should India rush into a US trade deal based on threats, not rules?

Nilanjan Banik writes that a US federal court ruled against presidential power to unilaterally impose sweeping tariffs. An appeals court has let them stay—for now—but the legal footing is weak.

Zooming out, Mohamed A. El-Erian asks: where is the US economic policy taking us? With wild swings in recession forecasts and bond yields, this year has seen policy-induced volatility of a rare kind. Paola Subacchi follows up with a warning: US fiscal irresponsibility is everyone’s problem. With debt now at $36 trillion (124% of GDP), Moody’s has downgraded its rating, joining S&P and Fitch. This isn't stock market drama—it’s bond market turbulence with global spillovers. Here’s why it matters.

Back home, Ranjana Chauhan calls for a gender reckoning. India must make her hustle count. Women spend 39% of their time on unpaid domestic work. India's female labour force participation sits at 41.7%, one of the lowest globally. Christine Lagarde said in 2015 that closing this gap could boost GDP by 27%. Let’s not leave half the talent pool at the sink.

Srinath Sridharan brings it full circle. India’s growth story must be human-centric. Skilling, healthcare, education—these aren’t soft goals. They’re productivity engines. GDP is the scoreboard, but the real game is human development.

So yes, Kaldi’s goats were on to something. The best brews—economic or otherwise—need more than buzz. They need balance, consistency, and a system where everyone gets a good cup.

Until next week, may your fiscal shots be sober and your coffee eternally strong,

Phynix