Daybreak - Trump's tariff spree and what it means for India

Episode Date: February 28, 2025

In this episode we fill you in on some of the biggest business and tech stories from around the world. We’ll talk about US President Donald Trump’s trade war threat and what it means for India and why Meta is suddenly doubling down on its Indian market. Finally we will take you through some of our favourite offerings from The Ken’s newsroom this week. Check out the stories and podcasts we mentioned in this episode: Netradyne made a $1.3B business out of surveilling drivers. Now, it must focus on driverless carsNutgraf: Here's how the Swiggy, Zomato monopoly could crack Two by Two: Airtel fights spammers. And Truecaller's business model.

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio recording, episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Hello and welcome to daybreak. I'm Snickda. And I'm Rahil. And in this episode, we're going to be filling you in on some of the biggest business and tech stories from around the world. We'll talk about US President Donald Trump's trade war threat and what it means for India.

why matter is suddenly doubling down on India? And finally, we'll take you through some of our favorite offerings from the Ken's Newsroom this week. Less than a month after he was sworn in as President of the United States for the second time, Donald Trump unveiled an economic plan that, if and when enacted, will fundamentally change how countries do business with one another. And on trade, I have decided for purposes of fairness

that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America, we will charge them no more, no less. And Trump spared no one, not even America's allies. He said everybody would have to deal with these reciprocal tariffs. It is a full frontal attack on free trade as we know it. And, unfortunately, India even landed up getting a special mention in the middle of all this. But traditionally, India is right at the top of the top of the president.

pack pretty much there are a couple of smaller countries that are actually more but india's a very very they they charge tremendous tariffs i remember when harley davidson couldn't sell their motorbikes into india because of the fact that india the tax was so high the tariff was so high and uh harley was forced to build i guess they built i don't know that was a while ago but i think they built a factory in india in order to avoid paying the tariffs and that's what people can do with us they can build a factory here, a plant or whatever it might be here, and that includes the medical, that includes cars, that includes chips and semiconductors, that includes everything. If you build here, you have no tariffs whatsoever.

Within hours of Trump's big announcement, PM Modi was at the White House for some damage control. The trip was on the cards ever since Trump's swearing-in ceremony early January, but with Trump going on a tariff spree, the need of the hour was clear. India needed to avert a full-blown trade war and secure some concessions during the trade deal negotiations. But in a press conference after the two leaders met, Trump made it clear that he was not going to budge.

Now, if you're wondering why Trump keeps calling out India about tariffs, here's what the current scene is. India charges a little over 15% duty on American products. And how much does the US charge on Indian products? Less than 4%. So you see where Donald Trump's frustrations lie. The actual imposition of these U.S. tariffs will likely happen only after the 1st of April. But between now and then, the U.S. Trade Department is figuring out what it will mean for each country.

In this segment, we unpack why Trump wants to impose these tariffs in the first place and what it means for India. I always say tariffs is the most beautiful word to me in the dictionary. Trump has always been a big proponent of tariffs. He's been speaking about imposing these really strict import duties throughout his campaign trail. So in some ways, this didn't really come as a surprise to anyone. But what is interesting is how he's going about it. He's not just singling out America's competitors like China. He is coming after everybody.

In fact, all of this actually started when he threatened to impose 25% tariff on America's closest trading partners and allies. Canada and Mexico. We're on time with the tariffs, and it seems like that's moving along very rapidly. We've been mistreated very badly by many countries, not just Canada and Mexico. We've been taken advantage of. We were led by, in some cases, fools, because anybody that would sign documents like they signed where they were able to take advantage of the American people, like has happened over the last long period of time, except for a little four-year period that took place

four years ago. Tariffs are Trump's way of undoing what he believes is years of unjust and unfair treatment by other countries. His argument is simple. The rest of the world has been taking the U.S. for granted. They've been breaking the rules. And now the U.S. is finally hitting back. And ultimately, it all comes down to fixing the trade deficit.

That's the difference between the value of all the goods being imported into the country and the value of all the goods that are being exported to the rest of the world. The big problem that Trump is trying to address is this. The U.S. currently has a trade deficit of about $1 trillion, while China, again, its biggest competitor, is sitting pretty with a trade surplus of more than $1 trillion. So now, over the next month or so, the U.S. is undertaking a massive exercise.

It is recalculating the U.S. tariff rates for each country product by product. So what does this mean for India? Well, for starters, in the latest union budget, basic customs duty cuts were introduced on more than two dozen items. The average customs duty was reduced from 11.66% to about 10.66%. Tariffs are being brought down, tariffs are being simplified, and also tariffs, the basket which consisted of so many different tariffs for so many different commodities are now reduced.

Now, that is a clear sense. sign that India is working towards shaking off this bad reputation of being a high-tariff economy. But after Trump's announcement, it'll probably have to reduce them even further. The fear is that the hike in tariffs by the US could end up weakening the Indian rupee and India's resolve to become self-reliant and Atma-Nirbhar will also end up taking a hit in the process. So, the focus for India at the moment is to balance the trade, meaning make some big ticket imports the U.S. to reduce the deficit.

In the past five years, India's imports from the U.S. have been growing at a much slower pace compared to its exports. After the pandemic, India's goods trade surplus with the U.S. doubled. As of 2023-20204, it stood at well over $35 billion. And that's what it is likely to solve for in the near future. It'll probably start by buying more goods like defense equipment or gas from the United States. Now, most analysts have said that India is pretty safe, at least in the short term, because it has a more inward-looking, domestically inclined economy. But in the long run, it could most certainly pose a risk to its long-term trade strategy, especially since the

U.S. is its largest export destination. For us, regular folk, we will probably see U.S. goods become much cheaper in the near future. But the flip side of this is that domestic consumption may take a beating. But India also has to start thinking beyond the US. And it actually is. Just this week, New Delhi restarted negotiations with two big ticket trade deals with Britain. If that works out, it will be India's first full-fledged agreement with a Western country. India is also set to hold trade talks with the president of the European Commission.

Arsula Wanderline. And considering that tariffs have also caused some tensions in the transatlantic relationship between the U.S. and Europe of late, trade opportunities with India are all the more lucrative for the EU at the moment. Next up, Mehta's big move in India. We are currently on Mehta's careers website

and we're looking at its job openings in India. You see, turns out there are a whole bunch of them in Bangalore. ASIC engineer design, software engineer product, software engineer AI transport, director engineering are some of the roles that we can see. It goes on and on and on for five pages. Meta is hiring for more than 40 roles here in India. You see, the tech giant is all set to open a brand new office in Bangalore.

And this is not going to be just another sales or marketing hub. This time, it's all. about engineering and product development. Meta's diving headfirst into India's crazy talented tech pool to build solid engineering teams right here. And this marks an important shift for Meta's operations in India. In fact, you could even say that it is a bit late to the party. Other big tech companies like Google, Microsoft and Amazon already have set up massive engineering

hubs in the city. Google even recently opened a campus called Ananta in the city. Bangalore. It is a fancy one and a half million square foot space where over 5,000 employees are going to be working on everything, from Android to cloud. Now, out

of all the roles that are open, the engineering director role is perhaps the most important. The person will be responsible for crafting strategies to hire and build foundational engineering teams to shape the future of Meta's engineering presence in the country.

Meta's also seeking software engineers to develop next generation products aimed at connecting the next billion people. These engineers will also work on creating new features that facilitate billions of interactions every single day. Some folks on LinkedIn have actually gone on to spill the beans about this whole initiative being driven by META's enterprise engineering team. That is the team that builds internal tools to boost productivity across the company. And there is more.

Meta is also looking for hardware engineers to work on things like data centers and AI, just like Microsoft. In fact, our colleague Abirami wrote a fascinating report on how Microsoft is targeting Nvidia's AI chip empire with an army of Indian engineers. We'll add the story link to the show notes of this episode. So for meta, the expansion isn't just about tapping into India's vast tech talent. it's also a strategic move to strengthen its engineering capabilities. But why now? Well, India is a massive market for meta,

with billions of users across its platforms, Facebook, WhatsApp, Instagram. By building a strong engineering team here, they will probably create products and features that actually make sense for Indian users. More local the innovation, the better the user experience. But you also have to see this development in the context. context of what the company is doing globally.

In recent years, Meta has undergone restructuring, including massive layoffs across various teams. In fact, while it is hiring Cure in India, meta laid off 5% of its workforce, which was more than 3,500 people in the US. So to sum it up, meta is not just expanding, they're doubling down on India in a big way. But that also means navigating India's strict antitrust guidelines. And that is a is a whole other story for another day. Coming up next, Tesla's new autopilot feature in China. The USEV giant has started offering

some of its advanced self-driving functions for its cars in China. So now, Tesla owners in China will be able to tap into features like autopilot to navigate city streets. Now, this was a long time coming. For the last few years, the company's been unable to launch what it calls

its full self-driving capabilities in the country. It's been running into a bunch of regulatory hurdles, largely because of China's very strict data and privacy laws. But now the company has finally been able to roll out these features. In a notification on its app, Tesla said that capabilities will include automatic lane changing depending on speed and route, as well as detecting traffic lights at intersections and deciding whether to turn. An in-car camera will also monitor drivers' attention.

And that's what got us excited. Because if you've been listening to Daybreak regularly, you may recall us talking about an AI company that specializes in just that. Monitoring drivers to see if they are paying attention. We are talking about Netadine. The nearly decade-old startup founded by two Stanford alumni of Nish Agarwal and David Julian recently became India's first unicorn of 2025. This was after it raised $90 million in a series' deal.

funding. Its origin story is straight out of Silicon Valley lore. It all began with one's crappy prototype. They duct taped a smartphone to the windshield of a car and hooked it up to an Nvidia GPU. The idea was to be able to film the driver as they navigated traffic and to generate safety alerts and feedback like slow down or distracted driving. Today, that crude prototype has morphed into a compact device with a built-in GPU, up to four cameras. and a disembodied voice alerting drivers not to crash the vehicle. And it is used by 3,000 customers across eight countries, including the likes of Amazon, Shell, Indian Oil and Green Line mobility.

One fine day a couple months ago, the Ken reporter Abiramiji found herself in the backseat of one of Natradine's test cars in Bangal's Whitefield neighbourhood. And in a recent episode of Daybreak, we spoke about her experience and the biggest challenge facing natadine today. Autonomous vehicles, the kind that don't need a driver at all. We will add a link to the episode in the show notes. And on that note, we have two great podcast episodes from the Ken's Newsroom for you to check out this weekend.

Stay tuned. In the latest edition of his popular newsletter, NutGraf, our colleague Praveen Gopalakristen posed an intriguing question. How will Swiggy and the next? Zomato get disrupted. Disruption is inevitable. And we don't have to look back too far in history for examples of duopoly's being disrupted

by newer, smaller companies. After all, we know how Misho came along and disrupted Flipkart and Amazon. Or, in the right hailing space, how Rapido and Namayatri mounted a serious challenge to Uber and Ola. So, the question Preveen sought to answer is simple. In the food delivery space,

who will be the Misho or Namayatri? that will ultimately take on and defeat the Swiggy Zomato doably. As all platforms go, Swigy and Zomato are exactly and strikingly similar to Flipkart and Amazon or Uber and Ola. All of these are companies who have built the business from the ground up over the past decade using a business model that made a lot of sense in the 2010s in a market that was expansionary. The one difference is that Swiggy and Zomato's food delivery business, especially Zomato, are slowly starting to generate profits

which kind of puts them in a slightly relatively better position. This is probably why the zero commission disruption hasn't come for them yet. But I don't expect this to last for too long. In this edition of Nuttgraph, which you, by the way, can listen to

on all streaming platforms, Praveen gives away the strategy that will be Zomato and Swiggy, undoing. We will link the podcast to the show notes of this episode. I think we can all agree that everyone's lives would be way better if you were just rid of spam calls and messages, but unfortunately, we don't live in that reality. And so, most people end up relying on caller ID apps or services to save themselves from the whole ordeal. In September last year, Bharty Airtel launched a spam-fighting network free of cost to all users who have a

voiceover LTE-enabled smartphone. Airtel says if its AI-powered systems come across a call or a message that seems sketchy based on call patterns, frequency, duration and several other parameters, it is then able to flag them as suspected scam. But like any anti-spam service, it's been showing a few cracks, all of which have consequences for both businesses and customers. Which probably explains why Airtel has also taken the probabilistic route. Rather than the deterministic route when it comes to displaying. Airtel is not dependent on feedback. Airtel has implemented a system without feedback.

It's a non-transference system. See, what TrueCaller is doing is too close dependent on your database. So you will not be storing something nonsense in your address book. Even if you have, somebody else will not do it. So it's relying on that. But Airtel is having so-called ML system, machine learning system, based on certain behavior which is like a reward system.

You know how the machine-like models are trained? So it has defined its own reward system. That was a clip from 2x2, a premium podcast by the Ken. To access the complete episode, you can buy a separate subscription on Apple. Or if you're already a subscriber of the Ken, you can also find it on our app.

For those of you who are not, we have a shorter, free version of the episode available on all podcast platforms. You'll find all the details you need in the show notes of this episode. And with that, it's a wrap. Thank you for listening and have a great weekend.