There is definitely some progress which seems to be made on the tariff deals that Trump has been signing and this time around it is EU. While we are of course awaiting when is going to be India’s turn, but it seems that negotiations are pretty hard, but how is it that you are reading into the market construct both US and of course India?
Rajeev Agrawal: So, in terms of how I am reading the market, it is quite clear that Trump is in the deal making mode, but he is really getting a lot of investments for the US which is interesting that EU had to actually go back and look at investing in the US which is really surprising to me that they are putting $750 billion in the US, that is quite surprising given their own investments that they have to do in the economy, but they are ultimately able to get 15%.
What we have to do now is see where India comes in because really there is not a lot of talk that is happening about India deal and that is to some extent a little bit of a concern at this stage. I just want to take that point ahead, it is a little bit of a concern now that the US has announced deals with major global economies and 15% for UK, 15% for EU, you have this 15% number that is gaining centre stage right now. Where do you think Indian tariffs could come down to? We at 26% right now. Do you think 15 could be a possibility for us?
Rajeev Agrawal: I am sure India is looking at that. India has been trying to have a favourable term. I do not think given some of the negotiations and the deal making that has happened. It looks that earlier India was shooting for 10%, clearly that does not seem like it is anywhere close at this stage, so that 10% to 20% is the range and the lower is obviously good. But the given the sort of deals that are happening, 15% looks like a nice round number at this stage and that is what India will end up. Very frankly at this stage the negotiations have to be, rather than at the official level it has to be at the top level between the leaders of both the nations, that is really what it will take to get the deal done.
Just wanted to have your take on the auto sector as a whole because it was Japan for which the 15% tariff has been announced and in the latest it is EU that will be going ahead with a 15% tariff on the cars itself. How do you see the sentiment shaping up for autos because 15% is indeed very less versus what was anticipated earlier. So, do you believe good times for the global automotive sector?
Rajeev Agrawal: Auto sector in my view is a little bit struggling especially in the new space, in the EV space, because in the US especially the EV industry has not picked up as much. And given the desire to not have as much subsidies, so in the US for example the federal subsidies are going to go away after September. So, in the new vehicle space, in the new technology space in autos, there will be struggle there. But in other areas, maybe in the traditional ice technology, maybe there will be a little bit more of a pickup, but overall autos will frankly not necessarily do as well unless and until we see the economies start picking up in a major manner.
So, where does that leave equity markets like India because it is pretty reflective in the price? We have been just range bound. Of course, the big concern is softness in earnings and we can see that clearly play out at least with, of course, it which was much expected, but individual cases within banks too now.
Rajeev Agrawal: So, as you pointed out earlier in the show, clearly it is not industrywide. It is player by player and some players are doing better than others and so it is quite interesting how different players are looking to grow but really struggling either on the credit side or in the particular segments that they are in.
Looking more at the overall Indian macro, I would think and the Indian markets, the big news for this week will definitely be the deal or no deal that we were discussing earlier and that could have a very sharp reaction either way depending on what happens. Apart from that as you have also said there are a lot of earnings that are coming out and those earnings will drive the market.