Trade Wars, the Rupee’s Decline and Why Markets Miss Quiet Relief

Dear Insighter,

Have you ever watched a food show and felt something stir that had nothing to do with hunger? The flash of a wok, salt falling in slow motion, chaos resolving into a plated dish. Shows like Culinary Class Wars do that to you. You root for the black-spoon underdogs, admire the white-spoon masters, and suddenly care deeply about tofu. Thirty dishes from one modest ingredient, each carrying craft, memory and intent.

And then a master of temple food takes it further. No onion, no garlic, no theatrics. Just seasonal produce, fermentation, and the belief that what nourishes the body also steadies the mind. Watching the master, you realise food isn’t just fuel. It’s patience. It’s process. It’s faith in small, cumulative change.

Markets could learn something from that.

R. Gurumurthy argues they don’t. Markets are brilliant at pricing fear, and hopeless at pricing relief. They react to crashes, wars and panics, but struggle to value the quiet easing of uncertainty, the kind that doesn’t arrive with fireworks, but with fewer reasons to worry. If a credible peace were to emerge in Ukraine, not just a ceasefire but a thaw in sanctions and frozen assets, capital wouldn’t tiptoe back. It would rotate. Not in a frenzy, but in a sustained repricing of risk. These are “pleasant uncertainties” — not guaranteed, not dramatic, but underpriced precisely because they lack a gripping narrative.

That bias shows up closer home too. Babuji K traces the rupee’s long slide from about ₹63 in 2015 to nearly ₹90 today. It looks ugly on a chart, but this wasn’t a crisis-style collapse like 2011–13. It was a slow adjustment, cushioned by services exports, reserves and RBI’s volatility management. The message is uncomfortable but important: currencies can weaken without signalling distress, if the underlying financing is sound.

Chandrika Soyantar widens the lens to the yen carry trade — the invisible plumbing of global markets. Cheap yen funding has long powered investments across the world. When rates shift or the yen strengthens, stress appears first in FX, then leaks into everything else. What’s changing now is behaviour: Japanese households, nudged by NISA, are moving away from FX trading towards longer-duration investments in equities and bonds. If that sticks, future carry unwinds may be less violent, even as policy normalises.

Back in India’s credit kitchen, Rahul Ghosh says NBFC strains aren’t really about funding. A sector with a ₹55 trillion balance sheet doesn’t fail because one ingredient runs out. It fails when recipes are flawed and risk culture is weak. Funding stress is a symptom, not the disease. Fix models and incentives, and liquidity follows.

Banks, for their part, look well plated. K. Srinivasa Rao notes capital adequacy above 17%, NPAs at historic lows, liquidity buffers comfortably over norms. Yet the challenge lies ahead. Deposit growth has lagged credit demand for three years. Savings are chasing alternatives. In a softer rate cycle, appetite to lend will only rise. The system now needs not just strong balance sheets, but a deeper risk ecosystem.

Outside, the global pantry is turning hostile. Ajay Srivastava warns that 2026 could be rough for Indian exports. Goods are likely to stay flat under weak demand and renewed US tariff pressure; services may push total exports to around $850 billion, which is well short of the $1 trillion dream. India’s shipments to the US have already fallen sharply under the current regime. And yet, even in tight kitchens, some shelves are underused. In another piece, Srivastava points to New Zealand. India is a big global supplier of bakery products, yet barely shows up in New Zealand’s import basket. We sell them a few million dollars’ worth; China sells several times more.

Reform Compass thinks part of the problem is our own recipe book. India’s tariff structure has become a maze of exemptions, carve-outs and special pleas, where one sector’s input is another’s finished good. The result is discretion, lobbying and evasion. Their proposal is disarmingly simple: for most goods, a flat 5% basic customs duty, no exemptions.

But even the best recipe fails if you ignore who’s eating. Arvind Jha reminds us that India is not one dining room. Per capita incomes in Karnataka or Maharashtra are three to five times those in Bihar or Jharkhand. Yet policy assumes a level field. Capital follows ecosystems, not slogans. Diaspora money flows home as remittances, rarely as investment. Looser AIF norms and regional capital pools could turn savings into risk capital, giving poorer states a shot at escape velocity.

Abhishek Dey describes a vast creator ecosystem shaping billions in consumption, yet rewarding only a thin elite. Stars like Bhuvan Bam or Mridul Tiwari build empires, while thousands of creators hustle for crumbs, facing volatile incomes and short careers. Influence is democratised; income is not.

Employment schemes carry similar tensions. Nilanjan Banik looks at the VB-G Ram G Bill and MGNREGA’s mixed record. Uniform rules ignore India’s 88 agro-climatic regions. Allowing states to pause work during peak farm seasons makes sense. But funding patterns and institutional design still hurt weaker states.

Even when India cooked a miracle, it came with side effects. In a conversation with Krishnadevan V, G. Chandrashekhar points out that we’ve beaten “ship-to-mouth” hunger, yet built a protein crisis. Rice and wheat won the Green Revolution; pulses and oilseeds lost. We are the world’s largest producer — and importer — of pulses. Full bellies, weak bodies. Fixing it needs procurement reform, better trade infrastructure, and a serious push to make soy a cheap protein, not just animal feed.

Amitrajeet A. Batabyal adds a twist. The Green Revolution reshaped farm productivity into a U-curve: very small and very large farms do well; the middle gets squeezed. Technology changed who benefits. That means today’s interventions must be targeted, not nostalgic.

Infrastructure offers its own warning. TK Arun examines airport privatisation, where bids reward maximising payments to government, not minimising costs for passengers. If operators can later pass those costs on as user fees, travellers pay the bill. With plans to expand privatised airports aggressively, the risk is clear: revenue-first models without cost discipline breed captive customers, not efficient service.

Then there’s the tale of scale gone sour. Krishnadevan V dissects Urban Company’s first earnings as a listed firm. The core business was profitable; InstaHelp, its daily housekeeping bet, burned ₹440 million in a single quarter. Volume exploded, but so did losses. Moving from high-value, episodic services to low-value daily orders isn’t an add-on. It rewrites the economics.

Which brings us back to what temple food teaches us — small, disciplined choices, repeated over time, change outcomes. Markets, policies and platforms keep chasing big flavours like growth targets, tariff walls, blitzscaling, while underpricing the quiet gains from better design, simpler rules and patient adjustment.

Gurumurthy’s “pleasant uncertainties” sit at the heart of it. The rupee’s slow slide, not a crash. Carry trades adapting, not imploding. Banks strong but cautious. Exports grinding, not collapsing. None of these make for thrilling television. But together, they shape the next decade.

Food shows make us emotional because they remind us that joy is often crafted, not stumbled upon. That patience matters. That chaos can be tamed without drama. Perhaps if markets learned to value that — to price relief, not just fear — we’d build systems that simmer towards stability instead of lurching from fire to fire.

Until next time, may your dishes be perfectly seasoned.

Phynix

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