The article titled "Pyrrhic victory?" is a Mint Primer from the July 27, 2026, edition that examines the implications of Donald Trump's proposed tariffs on generic drugs.
Summary
Trump’s proposed phased tariffs on generic drugs aim to reshore manufacturing, but the plan faces skepticism over its viability. If implemented, Indian drugmakers face huge losses. The primer unpacks the stakes, the market’s importance, and potential mitigation strategies.
What did Donald Trump say?
On July 22, US President Donald Trump announced via social media that the US will impose 100% tariffs on generic drugs after two years, increasing to 200% after three years. The stated goal is to "reshore" generic drug production to the US, with penalties for companies that fail to build capacity within the specified period. Notably, generics were originally exempt from Trump's global pharmaceutical import tariff rollout in 2025.
Why is the US so important?
The US is the largest overseas market for India’s pharma industry, representing over one-third of pharma exports and a major share of profits for leading firms. In 2025, Indian drug exports to the US reached $9.7 billion, accounting for 37% of its total exports. While generics have thin margins, the US is critical due to its volume; India supplies nearly half of all generic prescriptions dispensed in the US.
What do industry experts say?
Analysts believe the two-year timeline for reshoring is unviable. It typically takes at least two years to set up a plant, followed by an additional 12–15 months for inspections and product approvals. Furthermore, because the US has lost its competitive edge in low-cost manufacturing, experts argue that producing large volumes of low-margin generics there would be economically unviable for drugmakers.
What are companies’ mitigation plans?
Most companies find shifting all manufacturing to the US to be unviable. While awaiting more clarity, firms like Dr Reddy’s have considered options such as technology transfers to outsource production to domestic US partners. However, the viability of these solutions in the US is questionable due to cost dynamics. Most leading drugmakers are already attempting to broaden their revenue sources to hedge against US-specific risks.
How have previous tariff talks panned out?
In 2025, Trump used similar tariff threats against innovator pharma firms as a bargaining tool to push for expanded US manufacturing and lower medicine prices. These talks also led to a "most favoured nation" pricing policy, urging companies to align US drug prices with those in other developed markets.
Ports are making electrifying progress on carbon reduction
By David Fickling
If there is one place you would have expected the march of electrified clean energy to be dragging its feet, it is ports. At harbours such as Singapore and Port Said, the growth of trade in goods through the 20th century was inextricably bound up with transporting and storing the fossil fuels that ocean-going vessels used for their power. Cargo shipping, responsible for about 3% of global emissions, tends to rank high on lists of "hard-to-abate" industries like aviation, steel, chemicals, and cement, which are so bound up with the carbon economy that they will resist the switch to clean alternatives until the bitter end.
Right now, the prospects of an energy transition here might seem remote. Ocean-going trade is in the midst of its biggest crisis in a generation, with the Strait of Hormuz closed off by the US and Israel fighting with Iran, and the conflict now spreading to a potential renewed blockade of the Red Sea by Yemen’s Houthi militia. And yet, when the dust settles, it is remarkable how quickly parts of the sector have been quietly going electric.
Almost all large gantry cranes—the vast metal structures that move shipping containers from deck to shore and around the port—are now grid-powered rather than dependent on engines. Smaller, more mobile rubber-tired gantries, which traditionally used diesel and accounted for an outsized share of emissions and particulate pollution, are headed in the same direction: in 2024, about 28% of sales were battery-operated, with a further 17% hybrid. At Konecranes, one of the biggest suppliers of such equipment, some 62% of sales last year were battery or hybrid.
These shifts take advantage of several factors common to all docks. The power requirements of the machinery to move cargo—gantries, forklifts, yard tractors, trucks—can be immense. The equipment often is in constant motion, meaning plugging it into a cable is not an option, but the distances covered tend to be small and route patterns fairly predictable, making it easy to mesh operations with the daily charging demands of battery power.
That means harbours are unusually amenable to a technological switch as battery technology improves. Ports as businesses are also well placed to upgrade their equipment; unlike road freight and container shipping, the sector tends to be profitable and stable, providing plenty of cash flow to invest in electrification for better long-term margins. Ports are also often quasi-monopolies that operate via concessions from the cities that host them, making them keen to reduce the nuisance their pollution causes to residents and voters.
The effects can be seen around the world:
- At Jawaharlal Nehru Port Authority near Mumbai, 90% of the truck fleet will be electrified by the end of this year.
- A fifth of cargo-handling equipment at the Port of Long Beach, near Los Angeles, is electric.
- Tuas, the world’s largest container terminal under construction in Singapore, is being designed almost entirely around grid and battery power.
Ships are plugging into the grid, too. Vessels once used to consume their own fuel when docked using auxiliary engines, which was carbon-heavy, but most Chinese and European ports now provide shore electricity through immense cables. Even water-going craft are starting to switch; tugboats are unusual in shipping because their most important attribute is not sustained power but instant torque, a fundamental advantage of electric-powered motors. An electric tug operating in Auckland since 2022 costs only half as much to operate as a diesel version, and Singapore started using its first electric tug models earlier this year.
Getting fossil fuels out of ships’ engines will be the hardest part, although even there small battery-powered container ships are entering service. Electrifying shore-based operations, however, is low-hanging fruit. Just 25 harbours handle about half of all container trade, and in total, there are only about 1,000 such ports on the planet. The strides they are making offer the world a test-bed for how battery-powered machinery could transform the global trucking and logistics industry that accounts for around 8% of the world’s emissions. Under our noses, a worldwide industrial ecosystem is rapidly switching to clean power.
Luxury boom lifts India into Swiss watchmakers’ top 15
By Varuni Khosla
As global exports for the Swiss watch industry soften, India is emerging as one of its brightest markets, fueled by first-time luxury buyers, expanding premium retail, and lower trade barriers. In the first six months of 2026, India imported 200,000 Swiss watches, a nearly 37% increase from a year earlier. The value of these imports rose more than 31% to 168.7 million Swiss francs (approximately ₹1,991 crore), according to the Federation of the Swiss Watch Industry (FH).
These gains propelled India to become the world's 15th-largest export market, up from 21st a year earlier, even as the industry’s global exports by volume fell 0.7%. Unlike mature luxury markets that depend on replacement purchases, India's market is expanding because more consumers are buying their first luxury watch, premium retail is growing, and global brands are bringing higher-priced collections to the country. Philippe Pegoraro, chief economist at the FH, noted that this growth is driven by increased demand from the rising purchasing power of the middle class and rising wealth, as well as the free trade agreement between Switzerland and India that took effect last October.
India and France were among the standout performers; while France posted 63.4% growth in value terms, most other major markets recorded only single-digit growth. A major catalyst has been the India-Switzerland Trade and Economic Partnership Agreement (TEPA), which came into force in October 2025 and is expected to gradually reduce tariffs on Swiss watches.
However, higher prices also inflated import values. Production costs were pushed up by a strengthening Swiss franc, soaring gold prices, and higher freight costs stemming from the West Asia conflict. Ashok Goel, managing director of Luxury Time Ltd, noted that despite these factors, volume growth remains healthy, with shipments of brands like Hublot and TAG Heuer growing by around 10-12%. Precious metal prices appreciated by 10-24%, which also impacted final watch prices.
The strongest momentum is at the top end of the market, with watches priced above ₹10 lakh remaining the fastest-growing segment. Consumers increasingly view these timepieces as appreciating assets and investment purchases, supported by a robust second-hand market. Pushpa Bector, group executive director at DLF Retail, stated that luxury and premium watches are seeing double-digit growth as newer retail projects attract luxury brands, reflecting continued premiumization. Raahuul Kapoor, co-founder of Luxury Ampersand Frolics, added that demand is also up because consumers today have access to a much broader assortment of expensive watches than ever before.
Clocking In
- France posted 63.4% growth in value terms and was also a standout performer.
- The Swiss franc strengthened against most currencies, which increased import values.
- Industry experts say watches priced above ₹10 lakh remain the fastest-growing segment.
- In April, TAG Heuer said it expects India to become its largest market across the MEIAT region.
RuPay credit on UPI rises, but profits remain elusive
By Salman S.H.
Bengaluru
RuPay credit cards on Unified Payments Interface (UPI) have cracked one of digital payments’ trickiest challenges—turning credit cards into an everyday payment tool. But their use for mostly low-value transactions has presented a new challenge for banks and fintech companies: higher engagement without a clear path to profitability.
RuPay credit cards linked to UPI account for nearly four in every 10 credit card transactions, but just about 8% of spending, according to a Bernstein estimate. RuPay credit card holders made 750 million transactions worth ₹63,825.8 crore in April-October 2024-25, per Union finance ministry data.
Changing User Behavior
Siddharth Mehta, co-founder of fintech Kiwi, noted that credit-on-UPI is changing how cards are used, with customers transacting more than 20 times a month, compared to four or five times for a normal card. Although the average ticket size is lower, the monthly spend per user remains in the ₹15,000 to ₹20,000 range because the high frequency offsets the smaller transaction sizes.
However, these low-value transactions can become operationally expensive. Ramanathan R.V., co-founder of Hyperface, explained that banks typically pay 25 to 50 paise to core card vendors for each transaction. When customers use cards for small daily payments of ₹50 or ₹100, these fees can squeeze economics before the issuer can monetize the account.
The Zero-MDR Challenge
Credit on UPI began after the Reserve Bank of India gave its nod in June 2022. Adoption was spurred by the National Payments Corporation of India (NPCI) providing nil merchant discount rate (MDR) on RuPay credit card transactions up to ₹2,000 at eligible small offline merchants.
While zero MDR keeps costs low for users, it squeezes the revenue of banks, fintechs, and card networks that maintain the ecosystem. To nudge adoption, the NPCI pays banks an incentive of 10 to 12 basis points on transaction values.
In contrast, for a conventional Mastercard or Visa swipe, a merchant typically pays an MDR of 2% to 3% (₹2 to ₹3 on a ₹100 transaction), which is split among the issuing bank, acquiring bank, and card network.
Path to Profitability
For issuers, the real challenge is whether these accounts mature into profitable relationships through interest, annual fees, late-payment charges, EMI conversion fees, or cross-selling insurance and loans. Zero MDR can only be absorbed if the card generates enough downstream revenue to offset the thin economics of frequent small-ticket usage.
Despite the profit hurdles, RuPay’s unique advantage is that it is currently the only credit card network that can be linked to UPI. This allows banks to acquire new customers and extend credit acceptance to millions of QR-code merchants beyond traditional card infrastructure. Experts note that RuPay is now closing in on Mastercard and Visa rapidly among new credit card customers.
Oil near $100 puts Fed, central banks in rates spotlight
Bloomberg
From Washington to London to Tokyo, central bankers are set to reveal just how worried they are about a return of oil to about $100 a barrel. Three days of Group of Seven (G7) rate decisions, starting with the Federal Reserve on Wednesday, followed by peers at the Bank of England and Bank of Japan, may show varying degrees of vigilance at the prospect of more energy-driven inflation, even if none is predicted to act on that for now.
Together with the European Central Bank’s signal of its readiness to hike interest rates again, investor bets point to possible moves as soon as September within much of that club, even if economists are less sure. Crude oil’s brief foray above the $100 level it last exceeded two months ago is just one of the potential inflation risks confronting policymakers.
Aside from gains in other energy categories such as gas, investors are honing in on the implications of massive investment in artificial intelligence, as well as US President Donald Trump’s bid to rebuild a wall of tariffs after setbacks at the Supreme Court. Global bond markets point to some alarm among investors, with yields having jumped across the G7. On Friday, the US 30-year yield was just below its highest since 2007.
Fed Decision and Suspense
The Fed’s 29 July rate decision is approaching with more suspense than many anticipated. While June consumer price data in the US came in much cooler than expected, that has been overtaken by renewed hostilities in West Asia. The resulting surge in oil prices has boosted expectations for dissent from some officials—possibly Dallas Fed president Lorie Logan and Cleveland’s Beth Hammack—who favour a rate increase now. It has also sparked widespread discussion over whether new chairman Kevin Warsh might surprise investors with a hike.
On Thursday, a day after the decision, policymakers will get an updated look at the state of economic activity and the Fed’s preferred inflation gauge. Government data is projected to show GDP rose at an annualized 2.1% pace in the second quarter, fuelled by consumers and business investment.
Global Outlook
The week is also busy for the Asia-Pacific region:
- Singapore: The central bank will announce its rate decision, offering a look at the slope of the currency band.
- Pakistan: The central bank will announce its policy rate.
- Japan: Friday brings a data dump including industrial output, retail sales, and inflation in Tokyo for July, which will guide the Bank of Japan's decision later that day.
- Australia: June data showed the labor market remains strong, upping expectations for more rate hikes.
- Trade Data: South Korea, Hong Kong, the Philippines, and Thailand will release trade stats. Asian countries have been reporting record export numbers almost every month due to the soaring AI trade, and July is expected to follow suit.
Over 250,000 people flee wildfires ravaging France and Spain
Bloomberg
More than 250,000 people have fled towns and villages across Spain and France as uncontrolled wildfires move closer to the major metropolitan areas of Madrid and Bordeaux, which together house over 8 million people.
Crisis in France
In southwestern France, authorities ordered the immediate evacuation of western suburbs in Bordeaux, a region famous for its wines. While Bordeaux’s airport remains operational, the scale of the disaster is immense:
- Evacuations: Approximately 197,000 people were evacuated in the Gironde and surrounding areas, with an additional 55,000 ordered to leave on Saturday night.
- Damage: Almost 98,000 hectares (242,000 acres) have been scorched, setting a new record for France.
- Containment Efforts: Interior minister Laurent Nunez warned that bringing the conflagration under control will be "long and very difficult". A total of 1,500 military personnel and an Airbus A400M transport plane have been deployed to assist.
- Tour de France: The final stage of the cycling race was cut short on Sunday to free up security forces for the fire emergency.
Escalation in Spain
In Spain, the situation is equally critical, with separate fires threatening to merge:
- Evacuations: 30,000 people were evacuated across Ávila province and the region west of Madrid, following 63,000 who were previously evacuated or told to stay indoors.
- Madrid Impact: Strong winds prompted the closure of main parks in Madrid. By Saturday morning, the city's west saw a sharp deterioration in air quality, with smoke reaching as far as the Royal Palace in the city center.
- Landmarks at Risk: Fires have already passed through a Nasa complex in Robledo de Chavela and a 12th-century monastery in Pelayos de la Presa.
- Official Response: Spanish Prime Minister Pedro Sánchez emphasized that the priority is saving lives, though unpredictable winds continue to pose a challenge.
International Support and Climate Factors
France and Spain have become the epicenter of an early and accelerated wildfire season in Europe, driven by successive heat waves that have baked vegetation and allowed flames to spread rapidly. Before this weekend, fires had already burned more than 329,000 hectares across the continent.
The European Union has joined the response, with five planes and two helicopters from its disaster response fleet deployed to France, and four additional planes sent to Spain. The bloc’s Copernicus Earth observation program is also providing emergency mapping to support local authorities.
Nepal seeks India nod on National ID
PTI
Nepal has requested India to recognise the National Identity Card (NID) as a valid travel document for Nepali citizens visiting the country. This move would allow the NID to be used alongside the existing citizenship certificate and passport, according to a senior official speaking on Sunday.
The Department of Immigration has forwarded the proposal to the Indian government through diplomatic channels. Spokesperson Tika Ram Dhakal stated, “We have already sent the proposal to the ministry of foreign affairs via the home ministry, and the foreign ministry has forwarded it to the concerned authorities of India”,.
The limits to India’s credit card boom
Plain Facts By howindialives.com Source: TransUnion Cibil
In the past decade, the number of Indians with credit cards has grown a good 3.6-fold—from about 14 million in March 2016 to 52 million in March 2026. More than 100 million cards are now in circulation, carrying outstanding balances of around ₹3.1 trillion. Yet credit card holders account for just 25% of individual borrowers in India, compared with about 80% in the US, suggesting significant room for expansion. However, a new report by TransUnion Cibil points to emerging strains: rising payment defaults are slowing credit card growth just as consumers increasingly turn to other forms of personal borrowing and digital lending.
Sub-prime risk
CIBIL classifies credit card users into four behavioural ‘personas’:
- Occasional users (18%): Use cards rarely, mainly for payments and reward points.
- Card-centric users (33%): Use cards as their main form of unsecured credit, particularly for short-term financing.
- Diversified users (12%): Use cards frequently while also accessing other personal loans, which makes them riskier.
- High-exposure users (10%): Use cards heavily alongside several other unsecured loans.
This final category of high-exposure users is the riskiest, with the highest share of ‘non-prime’ borrowers (those with a credit score below 750). Specifically, about 27% of these users have a credit score that makes them riskier.
Cards as choice
Consumers are increasingly likely to hold multiple cards and other unsecured products in their wallets, leading to a slowdown in the growth of new users. Those taking a card for the first time in the last 12 months now account for 11% of overall users, down from 20% in March 2020. These "new to credit card" (NTCC) consumers are using their first card as just one of many instruments to finance lifestyle needs; 59% of them are already servicing two or more other types of personal loans, compared to 41% a decade ago.
While the share of NTCC users has fallen sharply over the last two years, the share of users whose cards were issued 2-4 years ago rose by 12 percentage points. Consequently, post-pandemic borrowers now account for over a quarter of the total credit card base.
Outstanding balances and slowdown
Outstanding balances have expanded at an average annual rate of 24% over the past decade, but growth has not been uniform. Rapid issuance and spending between 2016 and 2020 was interrupted by the pandemic, which served as a turning point for rising defaults. Stress has persisted beyond the pandemic; between March 2020 and March 2024, the number of cardholders increased by 16 million, but in the following two years, that figure dropped to just 4 million.
This slowdown aligns with a broader build-up in consumer debt. The Reserve Bank of India (RBI) has flagged concerns over rising leverage, noting that consumer debt as a share of GDP surged from 39.2% in March 2021 to 45.5% in September 2025.
Stress points
Repayment behaviour is showing visible signs of strain. While overdue balances for three to six months have remained stable, the proportion outstanding for more than six months has steadily increased over the past two years.
Consumption-related loans now account for nearly half of household borrowing. However, the share of credit cards in overall household debt is actually declining because households now have a wider set of borrowing choices for personal consumption. Card balances as a share of overall consumer credit have declined by 10 percentage points over the last 10 years.
Upgrades & downgrades
According to the RBI’s financial stability report, a larger share of prime and above borrowers retained their risk categories in 2025-26 compared to the previous year. Furthermore, 50% of near-prime and 32% of prime borrowers moved into higher credit score categories. While these groups saw upgrades, prime-plus and super-prime borrowers experienced more downgrades, though they remained mostly within the higher risk categories. Given the increasing competition from other types of loans, there are questions regarding whether credit card penetration in India has already plateaued.
Five common mistakes in mutual fund investing
Starting a mutual fund investment journey is an important step toward financial planning. However, many investors make simple yet avoidable mistakes that can impact long-term outcomes. Investing is not just about selecting the right fund, but also about maintaining discipline, clarity and consistency over time. Being aware of common pitfalls can help investors stay aligned with their goals and make informed decisions.
Mr Investor: I’ve started investing, but I’m not sure if I’m doing everything right. What are some of the common mistakes that I should avoid?
Mr Mutual Fund: One common mistake is investing without a clear goal or time horizon. When investments are not linked to specific objectives, it becomes difficult to measure progress or make adjustments. Your investment time horizon—the period you plan to keep your money invested before you need to access it—is crucial in determining your strategies, as different time horizons require different approaches.
Another frequent mistake is reacting to short-term market movements. Markets naturally fluctuate, but making decisions based on temporary changes can disrupt long-term plans. Recognising these mistakes early can help you stay on track.
Mr Investor: I sometimes feel tempted to switch investments based on recent performance. Is that a problem?
Mr Mutual Fund: Frequent changes based on short-term trends can lead to inconsistent outcomes. Investments are generally more effective when you stay aligned with your original plan unless your goals or circumstances change.
Another important aspect is consistency. Irregular investing or stopping investments during market volatility can affect long-term outcomes. Structured approaches such as Systematic Investment Plans (SIPs) can help maintain discipline.
Mr Investor: I see a lot of recommendations online about “best performing funds.” Should I follow them?
Mr Mutual Fund: It is better to be cautious. What works for one investor may not suit another. Investment decisions should be based on your own goals, time horizon, and comfort with risk rather than generalised suggestions. Avoiding common mistakes does not require a complex strategy; it involves staying focused on goals, maintaining discipline, and avoiding impulsive decisions. Mutual fund investing works better when approached with patience and a long-term perspective.
Summary: Common Mistakes and Possible Approaches
| Mistake | What It Means | Possible Approach |
|---|---|---|
| Investing without goals | No clear purpose for investments. | Define specific financial goals so you stick to the investments until you have achieved your goals. |
| Chasing past performance | Selecting funds based only on past returns. | Focus on consistency and suitability so that market volatility won’t make you lose your sleep. |
| Frequent buying and selling | Reacting to short-term market movements. | Stay disciplined and aligned with time horizons and let the power of compounding do its work. |
| Lack of diversification | Concentrating investments in limited areas. | Spread investments across asset classes to diversify and mitigate risk. |
| Ignoring periodic review | Not checking progress over time. | Review and rebalance when needed to keep your investments intact with your goals. |
Note: This material is part of the Investor Education and Awareness Initiative by Canara Robeco Mutual Fund. Mutual Fund investments are subject to market risks; read all scheme related documents carefully.
