The week in charts: US tariff wrath, inflation outlook, India-US defence deal

Mint

5 days ago

From the additional 25% tariffs imposed on India by the US, to lower inflation projections by the Reserve Bank of India, to a potential deal worth billions between India and the US, here are this week's news in numbers:
Tariff wrath
Days after imposing a 25% tariff on Indian imports, US President Trump announced an additional 25% penalty tariff for trade ties with Russia. This brings India's total reciprocal tariff burden to 50%, placing it among countries facing the highest US tariff rates.
This has also led to a huge trade disadvantage for India compared to many of its peers that are facing 19-30% tariffs. India has called the move unfair and said it would take 'all actions necessary" to protect its national interests.
Policy pause
The Reserve Bank of India (RBI) on Wednesday left the policy repo rate unchanged at 5.5% despite lowering its inflation projections for the full year by 60 basis points. The decision came against the backdrop of an outsized 50-basis-point cut in June and an expectation of higher inflation in the fourth quarter of the current fiscal year.
Retail inflation has been below the medium-term target of 4% for five months now, but is expected to have already bottomed out. However, inflation risks may have to be weighed against the risks emerging from higher US tariffs going forward.
Defence diplomacy
$850 billion: That's the value of the direct market access Indian companies would gain if the reciprocal defence procurement agreement (RDPA) with the US is finalized. India and the US are negotiating this landmark deal that would open each country's defence procurement market to the other, Mint reported.
The agreement would enable Indian defence manufacturers to sell components and technologies like spy satellites directly to the US. Companies would be able to partner with American entities without cumbersome government approvals. An official announcement is likely within a year, but it would also depend on the current trade climate.Labour shift
Demand for rural jobs under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) fell to a 10-month low of 16.6 million in July as a good monsoon pulled millions of workers back to agricultural fields. The drop was sharp from 28.83 million in April, 28.83 million in May, and 27.56 million in June. The July decline reflects the typical mid-year dip when agricultural activity attracts more labour from public works under the job guarantee scheme, indicating signs of continued rural economic resilience.
Flourishing firms
The share of companies recording quarterly losses declined significantly in the April-June quarter, showed a Mint analysis of 1,047 BSE-listed companies. The share of loss-making firms declined sharply to 16.4% in Q1 FY26 from 20.5% in the preceding quarter.
With this, the share hit a five-quarter low. This became possible as 110 companies in the sample flipped their fortunes by recording profit in Q4 FY25 compared to only 75 in the previous quarter. Notable turnarounds included Quess Corp, a leading workforce management firm, which posted a ₹52.71 crore profit after a ₹81.26 crore loss in Q4.
Crude calls
547,000: That's the barrels per day increase in oil production expected from the Organization of Petroleum Exporting Countries and allies (OPEC+) for September. This represents the latest call to hike output to regain market share as concerns mount over potential disruptions in Russian supply amid sanctions.
The US and the EU have intensified pressure on India to halt Russian oil purchases, aiming to force Moscow into Ukraine peace negotiations. OPEC+, which produces half the world's oil, had curtailed production for years to support prices.
Growth momentum
India's services activity reached an 11-month high in July, driven by rising new business, strong demand and robust export orders. The HSBC services purchasing managers' index (PMI) climbed to 60.5 in July, marginally up from 60.4 in June and 60.3 in the same month last year. The index has been above the 50-point threshold separating growth from contraction for over two years. Meanwhile, manufacturing activity surged to a 16-month high of 59.1 in July, buoyed by strong output and job creation across industrial sectors.
Chart of the week: Regional divide
India's prosperity race is divided. Western and southern states dominate in per capita income due to robust industrial and IT sectors, while the traditionally poor states—Bihar and Uttar Pradesh—continue to lag, showed the latest available state-wise data on per capita net state domestic product (NSDP).