Category: Beyond

Gold prices in India surged to an all-time high on Monday, with domestic rates reaching Rs 1.19 lakh per 10 grams as investors increased allocations to bullion amid seasonal buying and mounting global uncertainty.

Silver traded in tandem, touching multi-year highs as demand from both retail and investment channels rose ahead of the festival season and amid safe-haven flows.

Market reports said the single-day move reflected a confluence of firm festive demand, technical buying and broader international cues that pushed both spot and futures contracts to fresh peaks.

Global markets showed parallel strength, with spot gold surpassing the $3,900-per-ounce mark as investors sought refuge from geopolitical and economic instability, and expectations grew for further interest-rate reductions by the U.S. Federal Reserve.

Spot gold climbed close to $3,958.57 an ounce on October 6, reflecting heightened safe-haven buying amid conflicts overseas, concerns about the U.S. political landscape and renewed central-bank purchases.

Reports noted that robust inflows into physical gold exchange-traded funds and central-bank buying had supported the international rally.

On India’s domestic platforms, futures and spot markets advanced with similar momentum. Multi Commodity Exchange contracts and local spot quotations moved to record levels as traders priced in sustained demand through October and the approaching Diwali festival, while a softer rupee amplified rupee-denominated gains.

Market snapshots showed sharp intraday moves, with trade reports pointing to single-day increases of several thousand rupees in benchmark quotes as liquidity and appetite for physical metal firmed, and as participants adjusted positions in response to global cues and domestic buying.

Analysts noted central bank purchases and ETF inflows of nearly 588 tonnes through September had underpinned the rally. Forecasts suggested continued upside into Diwali, with some estimates placing gold near Rs 1.20–1.22 lakh and silver around Rs 1.5 lakh in the coming weeks if current trends continue, driven by a combination of seasonal purchases and ongoing safe-haven demand.

Observers pointed out that the prospect of lower U.S. interest rates weakens the opportunity cost of holding non-yielding bullion, a dynamic that has encouraged both institutional and retail allocations.

Silver’s rally was particularly notable in regional trading centres, where prices were reported to have reached around Rs 1.50 lakh per kilogram in some domestic markets and about Rs 1.48 lakh per kg in other spot quotations.

In U.S. dollar terms, silver approached levels not seen in decades, driven by a mix of retail buying for jewellery and gifts, industrial demand, and speculative flows.

Commodity dealers in key hubs reported brisk activity in both wholesale and grey-market channels, and analysts pointed to constrained supplies together with renewed investor interest as contributors to the sharp move.

Intermediaries and trade bodies signalled mixed expectations for consumption through the season. Several industry reports suggested record-high prices might curb discretionary purchases of jewellery, yet historically strong cultural and ceremonial demand around Diwali and the wedding season could sustain baseline volumes.

Analysts monitoring futures and spot flows said volatility was likely to remain elevated in the near term as markets balance profit-taking, fresh buying and reactions to macroeconomic developments.

For consumers and small buyers, the rapid rise in benchmark prices translated into higher retail rates across cities, with local premiums and taxes further affecting final jewellery costs.

Market participants said that while investment demand — including coins, bars and ETFs — was a major driver of the recent leg up, consumer purchases for festivals continued to play an important role in supporting physical demand in India.

Traders advised caution as liquidity conditions and geopolitical developments remained notably fluid.

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India’s aviation regulator has stepped in to monitor a sharp rise in festival-season airfares after domestic carriers announced the deployment of 1,762 additional flights to meet Diwali demand. The Directorate General of Civil Aviation (DGCA) has asked airlines to expand capacity and keep fares “reasonable” as millions of passengers plan travel around the festival, a move officials say is aimed at preventing exploitative pricing during one of the busiest travel periods of the year.

Airlines including IndiGo, Air India, Air India Express and SpiceJet have been urged to boost seat supply across key domestic routes, with the regulator coordinating closely with carriers to ensure the additional schedules are timed to ease peak-date congestion rather than simply capitalise on demand spikes.

The DGCA’s direction follows widespread reporting of double-digit percentage increases in fares on popular city pairs as travellers book return trips for family reunions and holiday breaks.

Industry officials said the extra 1,762 flights are intended to provide immediate relief on chokepoint routes where inventory shortages were pushing the lowest available fares far above typical levels.

While airlines argue that dynamic pricing reflects market realities — higher demand, seasonal aircraft utilisation and rising operating costs — regulators and consumer advocates have warned that unchecked surges can place an unfair burden on middle-class families who travel for festivals.

The DGCA has also highlighted non-price measures intended to improve traveller outcomes, including better management of airport slot use and monitoring of how carriers allocate seats across fare bands.

Officials say they will maintain an online monitoring mechanism that allows passengers to track fares and flag suspected instances of unreasonable pricing, though they stopped short of imposing direct caps, noting that India has not regulated airline fares since the mid-1990s.

Market watchers caution that adding flights is only a partial remedy: capacity increases must match route-level demand and be sustained through the peak window. If airlines concentrate the bulk of extra flights on a handful of busy sectors, relief will be uneven and some regional travellers could still face steep tickets.

Travel agents say early-bird windows have already closed on many routes, and last-minute booking pressure typically magnifies price volatility.

Passengers planning Diwali travel are being advised to compare itineraries, consider alternate airports and flexible travel dates, and watch for last-minute seat releases as carriers adjust schedules.

The DGCA’s intervention, while measured, signals growing regulatory sensitivity to festival-time pricing and reflects lessons from earlier events such as the Mahakumbh and other mass gatherings, when targeted capacity additions helped moderate fare spikes.

As the peak travel days approach, the regulator said it will continue to engage airlines to ensure the announced 1,762 flights translate into accessible, affordable seats for as many travellers as possible.

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India’s foreign exchange reserves fell by $2.334 billion to $700.236 billion for the week ending September 26, 2025, according to data released by the Reserve Bank of India (RBI) on October 3.

This follows a previous week’s decline of $396 million, bringing the total reserves down from $702.57 billion.

The decrease was primarily due to a significant drop in foreign currency assets, which decreased by $4.393 billion to $581.757 billion.

These assets, expressed in dollar terms, include the effect of appreciation or depreciation of non-U.S. currencies such as the euro, pound, and yen held in the foreign exchange reserves.

The decline in foreign currency assets is attributed to the depreciation of these currencies against the U.S. dollar, impacting the overall value of India’s reserves.

In contrast, India’s gold reserves increased by $2.238 billion to $95.017 billion during the same period. This rise in gold holdings reflects a strategic move by the RBI to diversify its reserve assets amid global economic uncertainties.

Gold is considered a safe-haven asset, and its inclusion in the reserves provides a hedge against currency fluctuations and geopolitical risks.

Additionally, Special Drawing Rights (SDRs) declined by $90 million to $18.789 billion, and India’s reserve position with the International Monetary Fund (IMF) decreased by $89 million to $4.673 billion.

These reductions are part of the overall decline in the reserve components, indicating a tightening of liquidity in the international financial system.

Despite the recent declines, India’s foreign exchange reserves remain substantial.

As of September 26, the reserves are sufficient to cover approximately 11 months of merchandise imports and can cover about 95.4% of India’s outstanding external debt as of the end of March 2025. This indicates strong external sector resilience and a healthy buffer against global financial uncertainties.

The recent depreciation of the Indian rupee, trading near its all-time low, has been influenced by regional weakness across Asian currencies and ongoing trade tensions with the United States.

The rupee opened at around 88.74-88.78 per dollar on September 30, close to last week’s record low. These pressures have led to significant equity outflows, with foreign investors pulling out $1.8 billion last week, over $300 million of which occurred on Monday alone.

The RBI has been actively intervening in the currency markets to curb the rupee’s decline and maintain market stability.

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A coalition of industry associations has delivered a rare public rebuke to President Donald Trump’s recent decision to impose a $100,000 fee on new H-1B visa applications, news agency Bloomberg has reported. 

In the letter, sent two weeks after Trump announced the change, groups representing semiconductor manufacturers, software companies and retailers warned that the fee threatens to “crimp a crucial talent pipeline of foreign skilled workers” and leave key positions across sectors unfilled. 

The document implored the administration to pursue reform of the H-1B system in collaboration with industry, rather than layering on what it described as burdensome costs.

Signatories included prominent organizations such as the Business Software Alliance, SEMI (the semiconductor industry association), the National Retail Federation, the Entertainment Software Association and the Information Technology Industry Council. 

The letter was careful to acknowledge Trump’s broader goals of encouraging U.S. investment, even as it cautioned against unintended consequences of the visa overhaul.

The industry objection comes in response to a White House proclamation unveiled on September 19, which mandates that any new petition for an H-1B visa filed after September 21 must be accompanied by a $100,000 fee. The administration has defended the policy as a tool to curb abuse of the system and protect American workers. 

Immigration attorneys and policy analysts have already flagged significant uncertainty in how the policy will be applied, and whether it may deter companies from sponsoring foreign talent. 

Some legal opinions suggest the fee could have a chilling effect, particularly on small- and mid-size firms that rely on the H-1B program to fill specialized roles. The proclamations and agency memos also appear to exempt existing H-1B holders and pending petitions filed before the deadline, but ambiguity remains over whether extensions or travel by current visa holders might trigger the new fee.

Beyond U.S. trade and technology firms, the change has echoed internationally. India’s IT industry association, NASSCOM, warned that the fee could disrupt operations of Indian firms that send talent to U.S. branches and unsettle the global talent market. Meanwhile, banking and financial firms are evaluating whether they may shift more work offshore, an outcome predicted by Bloomberg in coverage of potential moves by Wall Street firms.

The U.S. Chamber of Commerce has also joined the chorus of concern, urging the administration to rescind the proclamation. In a letter to Cabinet officials, it argued the fee “will impede economic growth,” harm startups and reduce the capacity of U.S.-educated foreign nationals to contribute to the domestic economy. 

Legal challenges to the fee began almost immediately. A federal lawsuit filed in San Francisco by a coalition of unions, educators and healthcare staffing firms argues that Trump overstepped his authority by imposing such a fee without Congressional backing and violated procedural norms. Plaintiffs are seeking a court injunction to block the policy’s implementation. (Reuters)

As the dust settles, the letter from business groups underscores mounting pressure from U.S. corporate America to temper immigration changes.

If the administration continues to defend the $100,000 fee unchanged, it risks alienating key industries that rely on global talent to drive innovation, growth and competitiveness.

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Union Finance Minister Nirmala Sitharaman on Friday highlighted India’s determination to achieve 8% GDP growth despite mounting global economic challenges, emphasizing that tariffs and geopolitical tensions are reshaping the international economic landscape.

Speaking at the Kautilya Economic Conclave 2025, Sitharaman noted that while global trade disruptions are significant, India’s growth remains anchored in strong domestic fundamentals.

The Finance Minister pointed out that rising tariffs, sanctions, and decoupling strategies are altering global supply chains, creating uncertainties for international trade. She acknowledged the impact of recent measures, including the U.S. doubling tariffs on Indian imports to 50%, which has affected export competitiveness.

Yet, she stressed that India is well-positioned to absorb external shocks due to its resilient economic structure and diversified domestic demand.

Sitharaman reiterated that achieving 8% growth is crucial for India’s vision of becoming a developed nation by 2047. She clarified that this target does not imply economic isolation but rather emphasizes self-reliance while maintaining active participation in the global economy. According to the Finance Minister, India’s growth strategy balances strengthening internal markets with engaging international trade and investment opportunities, ensuring long-term sustainability.

To mitigate the impact of global economic disruptions, the government has committed to a record infrastructure spending program for the fiscal year ending March 2026. This initiative, amounting to over ₹11 trillion, is intended to stimulate domestic demand, support job creation, and enhance connectivity across regions. The Reserve Bank of India has also maintained its policy rate at 5.5%, signaling potential monetary easing in the near future to sustain investment and consumption.

Sitharaman underscored the importance of reforms and strategic planning to navigate external pressures. She highlighted India’s capacity to adapt to shifting global dynamics, including realignment of supply chains and diversification of trade partners. While acknowledging that global uncertainties may affect growth projections in the short term, she remained confident that India’s focus on infrastructure development, investment in human capital, and policy stability will help sustain long-term economic expansion.

The Finance Minister’s remarks come amid broader global economic volatility, where tariffs and trade restrictions are increasingly influencing the flow of goods and capital. Analysts note that while external pressures may temper growth, India’s domestic consumption, technological adoption, and policy support remain strong drivers of economic momentum.

Sitharaman concluded by reaffirming the government’s commitment to creating a conducive environment for investment, innovation, and enterprise, stressing that India is prepared to meet its growth ambitions despite the evolving global trade landscape.

She emphasized that maintaining policy stability, boosting infrastructure, and supporting key sectors are central to ensuring that India not only weathers external shocks but continues on its path toward sustainable, high-quality growth.

With India targeting an ambitious 8% GDP growth, the government’s proactive measures and focus on domestic resilience aim to shield the economy from global turbulence while positioning it for long-term development.

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Gold futures in India surged to record levels on Wednesday, driven by a combination of global market trends and heightened investor demand for safe-haven assets following the U.S. government shutdown.

Domestic December gold contracts on the Multi Commodity Exchange (MCX) rose ₹535, or 0.45%, to reach an unprecedented ₹1,17,800 per 10 grams.

February futures extended gains for a fifth consecutive session, climbing ₹617, or 0.52%, to a lifetime high of ₹1,19,055 per 10 grams.

Silver futures also posted notable gains. The December contract jumped ₹2,699, or 1.89%, to a fresh peak of ₹1,44,844 per kilogram, while the March 2026 contract surged ₹3,980, or 2.77%, touching a record ₹1,47,784 per kilogram.

Analysts pointed to the shutdown in Washington, coupled with weak U.S. labour data, as the primary triggers for the sharp rally in precious metals.

According to experts in the Indian commodities market, the government closure has intensified concerns over delays in key economic indicators, including the upcoming nonfarm payrolls report.

This uncertainty has strengthened expectations that the U.S. Federal Reserve may cut interest rates in its forthcoming policy meetings, further supporting bullion prices.

Global markets mirrored the domestic trend, with Comex December gold futures crossing the $3,900 per ounce mark for the first time, reaching $3,903.45. Silver prices also climbed, hitting a peak of $47.81 per ounce for December contracts.

Market observers noted that the dollar index, which measures the strength of the greenback against a basket of six major currencies, remained subdued at 97.62, down 0.16%. A weaker dollar makes gold and silver relatively cheaper for investors using other currencies, reinforcing demand.

Traders and analysts emphasized that the duration of the U.S. government shutdown will be a key factor influencing the bullion market in the near term.

They also highlighted that market participants are increasingly pricing in the likelihood of a Fed rate reduction, with some projecting additional cuts later this year.

The latest gains in precious metals reflect a combination of geopolitical uncertainty, expectations of monetary easing in the United States, and robust demand for hedging instruments amid global economic volatility.

With both domestic and international markets reacting sharply to U.S. developments, gold and silver have emerged as preferred investment options for risk-averse investors seeking stability.

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The agreement aims to promote long-term capital for productive capacity building, explicitly excluding foreign portfolio investment.

The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) officially came into effect on October 1, 2025.

Signed on March 10, 2024, this agreement marks India’s first free trade agreement with four developed European nations: Switzerland, Norway, Iceland, and Liechtenstein.

TEPA is a comprehensive 14-chapter agreement covering various aspects of trade and economic cooperation. It includes provisions on market access for goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access for services, intellectual property rights, and trade and sustainable development.

Notably, it incorporates binding commitments for investment and job creation, a first in any free trade agreement signed by India.

Under TEPA, EFTA countries have committed to increasing foreign direct investment (FDI) in India by $100 billion over the next 15 years.

This investment is expected to generate 1 million direct jobs in India, focusing on sectors such as manufacturing, renewable energy, life sciences, and digital transformation.

The agreement aims to promote long-term capital for productive capacity building, explicitly excluding foreign portfolio investment.

In terms of market access, EFTA has offered India access to 92.2% of its tariff lines, covering 99.6% of India’s exports. This includes 100% of non-agricultural products and tariff concessions on processed agricultural products.

India’s offer to EFTA covers 82.7% of its tariff lines, accounting for 95.3% of EFTA’s exports. Sensitive sectors such as pharmaceuticals, medical devices, processed food, dairy, soy, coal, and certain agricultural products have been protected under the agreement.

TEPA also provides enhanced opportunities for India’s services sector. India has offered commitments in 105 sub-sectors, while EFTA countries have made commitments in 128 sub-sectors (Switzerland), 114 (Norway), 107 (Liechtenstein), and 110 (Iceland).

The agreement facilitates mutual recognition agreements (MRAs) in professional services such as nursing, chartered accountancy, and architecture, enabling Indian professionals to access EFTA markets more easily.

It also improves access through digital delivery of services, commercial presence, and greater certainty for entry and temporary stay of key personnel.

Intellectual property rights (IPR) are another significant aspect of TEPA. The agreement ensures IPR commitments at the World Trade Organization’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) level.

The IPR chapter with Switzerland sets high standards, addressing India’s interests in generic medicines and concerns related to patent evergreening.

TEPA emphasizes sustainable and inclusive development, aiming to foster transparency, efficiency, simplification, harmonization, and consistency in trade procedures.

It also focuses on employment, skills, and technology collaboration, accelerating the creation of direct jobs for India’s young workforce and facilitating access to world-leading technologies in precision engineering, health sciences, renewable energy, innovation, and research and development.

The agreement is expected to unlock opportunities across a wide range of industries.

With EFTA’s offer covering 92% of tariff lines, Indian exporters in sectors like machinery, organic chemicals, textiles, and processed foods will enjoy significantly improved access to EFTA markets. This will enhance competitiveness, reduce compliance costs, and accelerate access to EFTA markets.

In the agriculture and allied goods sector, India’s exports to EFTA are concentrated, with guar gum accounting for over 70% of the export basket in 2024-25.

Other exports include processed vegetables, basmati rice, pulses, fresh fruits, cereal preparations, and grapes. Norway and Switzerland together account for over 99% of India’s agri-exports to EFTA. The agreement is expected to reduce tariff barriers and expand India’s share in key commodities.

In the services sector, TEPA is expected to boost India’s services exports in areas of core strength such as IT and business services, cultural and recreational services, education, and audio-visual services.

EFTA’s services offers better access through digital delivery of services, commercial presence, and improved commitments and certainty for entry and temporary stay of key personnel.

The agreement also includes provisions for mutual recognition agreements (MRAs) in professional services such as nursing, chartered accountancy, and architecture, creating new avenues for Indian professionals in EFTA markets.

The India-EFTA Trade and Economic Partnership Agreement (TEPA) is a significant milestone in India’s trade relations with Europe.

It enhances market access for goods and services, strengthens intellectual property rights, and fosters sustainable, inclusive development, while supporting initiatives like “Make in India” and “Atmanirbhar Bharat.”

The agreement is expected to have a positive impact on India’s economy by attracting investment, creating jobs, and expanding trade opportunities.

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