India digs in with Trump’s punitive tariffs about to take effect

Good morning and welcome back to FirstFT Asia. In today’s newsletter:

• India digs in ahead of Trump’s tariffs

• Australia blames Iran for antisemitic attacks

• The unsustainable boom in India’s Silicon Valley

• Should you thank ChatGPT?

India is holding firm on its long-standing ties to Moscow as US President Donald Trump’s punitive tariffs over New Delhi’s purchases of Russian oil are set to take effect later on Wednesday. Here’s what you need to know.

Looming deadline: Hopes are dimming that Trump, who threatened to double levies on Indian exports to 50 per cent last month over New Delhi’s purchases of Russian oil, will lower or postpone the tariffs before Wednesday’s deadline. A planned visit to New Delhi by US trade negotiators this week was called off, Indian officials said. A draft notice published on Monday said the extra tariff would hit Indian goods after 12.01am on Wednesday, eastern US time (09.30am Wednesday, India).

India and Russia’s ‘political comfort’: Amid the stalemate with Washington, top Indian officials have made recent trips to Russia. Foreign minister Subrahmanyam Jaishankar met President Vladimir Putin last week in Moscow, where Indian national security adviser Ajit Doval was also warmly received. Putin is expected to visit India later this year.

“There is a political comfort in the relationship with Russia which is quite different from the flip-flops and the cyclical relationships we’ve had with the Americans,” said Pankaj Saran, former Indian ambassador to Russia. Read more about Moscow’s significance to New Delhi.

• More trade news: Bargain ecommerce platform Temu has resumed shipping goods from Chinese factories directly to US consumers, following a trade truce between Washington and Beijing.

Here’s what else we’re keeping tabs on today:

• Economic data: Australia reports July inflation data and China releases industrial profit figures for the month.

• Nvidia results: Wall Street’s faith in the artificial intelligence boom will be put to the test when the $4tn chipmaker unveils its quarterly earnings report.

Five more top stories

1. The US has said it is prepared to provide intelligence assets and battlefield oversight to any western security plan for postwar Ukraine as well as take part in a European-led air defence shield for the country, European and Ukrainian officials said. The US offer represents a significant shift in stance from the Trump administration — which earlier this year ruled out any US participation in protecting post-conflict Ukraine.

• Ukraine news: Young men will be allowed to leave Ukraine after the government changed its border crossing rules, modifying a law introduced after Russia’s full-scale invasion.

• EU defence: A 70-year-old Dutch biologist, nicknamed the “peatland pope”, believes salvaging drained wetlands is a cost-effective way to keep Vladimir Putin’s forces out of Europe.

2. The Australian government has accused Iran of being behind a spate of violent antisemitic attacks in the country and ordered the expulsion of its ambassador from Canberra. Australia blamed Iran’s Islamic Revolutionary Guard Corps for being involved in at least two attacks last year, including the firebombing of a synagogue in Melbourne and an arson attack on a delicatessen in Bondi, Sydney.

3. Trump’s move to fire Federal Reserve governor Lisa Cook has triggered bets of lower near-term interest rates, but higher inflation in the future, as worries grow over the US president’s attack on the central bank. The gap between long and short-term yields climbed yesterday to its widest in three years.

• ‘Unprecedented’: Trump’s moves against the institutions that have upheld the US economic establishment for decades have unsettled investors.

• Opinion: The Fed’s independence and role in the international financial system could hang on Cook’s fate and experience with US judges, writes Chris Giles.

4. Nissan shares tumbled 6.3 per cent yesterday after its second-biggest shareholder Mercedes-Benz offloaded its entire 3.8 per cent stake in the embattled Japanese auto producer. The German carmaker’s pension fund sold shares worth about ¥47.83bn ($323mn), piling pressure on Nissan as it fights to execute a turnaround plan.

5. French borrowing costs rose to their highest since March and a stock sell-off continued yesterday, as investors reacted to the prospect of a government collapse as soon as next month. Prime Minister François Bayrou on Monday called a confidence vote for September 8 over his deficit-cutting budget proposals.

The Big Read

In Bengaluru, southern India’s booming tech hub, the campuses for companies such as Google and Microsoft feature multi-cuisine canteens, crèches and gyms much like their Silicon Valley counterparts. But unlike in California, these swanky offices lack access to piped water, and the typical weekday commute can take almost four hours. It has become one of the starkest illustrations of the country’s struggles to build the infrastructure necessary to keep up with explosive growth in Bengaluru’s tech sector.

We’re also reading . . . 

• US politics: The FT visited Bethlehem, Pennsylvania, to try to understand the rightward shift in the former steel city at last year’s US election.

• Thank you, ChatGPT: How polite should we be to machines? Stephen Bush explains why we should watch our manners.

• Four-day work week: The Netherlands is emerging as a case study for the advantages and trade-offs of cutting workplace hours, writes Sarah O’Connor.

Graphic of the day

Disruption to seabed gas pipelines and telecoms cables has focused military planners’ minds on finding ways to protect underwater assets that are crucial to modern economies. Narrowing the gap are some of the world’s best-known defence companies, which are investing heavily in cutting-edge technologies for navies around the world.

Take a break from the news . . . 

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