Newspaper Summary 160526

 

Singapore Airlines’ investment in Air India is a long game: says CEO

FLYING HIGH. We are committed to supporting the Indian airline’s transformation, says Goh Choon Phong.

MOVING ON. Goh Choon Phong said Air India’s loss in FY26 was due to closure of Pakistan airspace and depreciation of rupee.

Singapore Airlines’ investment in Air India is a long game, said CEO Goh Choon Phong in a post-results conference call on Friday. He stated that Singapore Airlines backs Air India management’s transformation efforts and noted that the Indian carrier’s $2.6 billion loss (₹26,000 crore) in FY26 was due to external factors such as the closure of Pakistan airspace and the depreciation of the rupee against the dollar.

Singapore Airlines’ own net profit declined 56 per cent in FY26, weighed down by Air India’s weak performance. Singapore Airlines currently holds a 25.1 per cent stake in Air India and invested an additional ₹1,080 crore in the carrier last March.

CAPITAL INJECTION

When asked about further capital injection, Goh replied that this would need to be discussed with Tata Sons. He reiterated that Air India’s challenges are largely external but insisted the airline continues to make tangible progress. “It is going to be a long game. There will be no short cuts,” he added regarding the transformation.

Goh, who serves as Singapore Airline’s nominee on the Air India board, highlighted significant transformations in training, in-flight services, and lounges. He cited that Air India’s net promoter score has improved by 50 points, which he credited to these transformative efforts for customers. To support the transformation, Singapore Airlines has seconded two senior executives to Air India: Captain Basil Kwauk as Chief Operations Officer and Jeremy Yew Jin Kit as Head of Engineering.

MULTI-HUB STRATEGY

The investment in Air India is part of Singapore Airlines' multi-hub strategy, driven by its limited home market and lack of domestic operations in Singapore. The airline aims to capitalize on India’s long-term growth opportunities. Despite facing questions over Air India’s current performance, Goh remains optimistic. “This is a market that holds tremendous potential and is even more obvious today,” he asserted.

Monsoon to hit Kerala coast on May 26

DESPITE EL NINO. IMD says the South-West monsoon is expected to arrive 6 days before the normal onset date.

Prabhudatta Mishra New Delhi

RAIN ARRIVAL. Pre-monsoon clouds blanket the skyline in Thiruvananthapuram. The monsoon is keenly awaited this year amid the IMD’s forecast of below-normal rainfall.

The India Meteorological Department (IMD) on Friday said that the monsoon will hit the Kerala coast on May 26, which is six days earlier than its normal schedule of June 1 in the mainland. The IMD also said that the South-West monsoon is very likely to advance into the South Andaman Sea, some parts of the south-east Bay of Bengal and the Nicobar Islands on May 16, against the normal May 20.

“This year, the South-West monsoon is likely to set in over Kerala on May 24, with a model error of plus or minus 4 days,” the IMD said in a statement. This year’s monsoon is keenly awaited amid forecasts by the IMD of below-normal rainfall during the June-September season and predictions of a super El Nino.

‘CORRECT’ FORECASTS

The weather bureau said its “operational forecasts” (inclusive of error margin) of the date of monsoon onset over Kerala during the past 21 years (2005-25) were proved correct, except in 2015. “Advance of the monsoon over the Indian mainland is marked by monsoon onset over Kerala and is an important indicator characterising the transition from hot and dry season to a rainy season,” IMD said. As the monsoon progresses northward, relief from the scorching summer temperatures is experienced over the areas.

The IMD has been issuing operational forecasts for the date of monsoon onset over Kerala from 2005 onwards, based on a statistical model. The six predictors that are used are:

• Minimum temperatures over North-West India.
• Pre-monsoon rainfall peak over the South Peninsula.
• Outgoing long wave radiation (OLR) over the South China Sea.
• Lower tropospheric zonal wind over the equatorial south-east Indian Ocean.
• Outgoing OLR over the south-west Pacific Ocean.
• Upper tropospheric zonal wind over the equatorial north-east Indian Ocean.

Last month, the IMD predicted the monsoon to be 92 per cent of the long-period average. This is in view of the drought-bearing El Nino likely to emerge by July.

India’s goods exports rise 14% in April despite W. Asia disruptions; deficit up on import surge

Amiti Sen
New Delhi

Despite continued trade disruptions in West Asia, India’s merchandise exports started the new fiscal year on a strong note, rising 13.79 per cent year-on-year to $43.56 billion in April. This growth was propelled by strong performances in engineering goods, electronics, and pharmaceuticals.

According to the Commerce Department’s quick estimates, imports grew 10 per cent to $71.94 billion, driven by a massive 81.69 per cent surge in gold arrivals to $5.62 billion. Consequently, the merchandise trade deficit widened to $28.38 billion, up from $20.67 billion in March and $27.1 billion in April 2025.

NEW MARKETS

Commerce Secretary Rajesh Agrawal stated that higher global prices and market diversification, including expansion into African nations like Tanzania, buoyed exports despite the ongoing Gulf turmoil.

However, significant challenges remain. Pankaj Chadha, Chairman of EEPC India, pointed out that the engineering sector is facing a sharp increase in input costs and skyrocketing logistics expenses. Furthermore, steel and its related products continue to face high tariffs in the US, which is India’s largest export market.

India’s exports to West Asia saw a sharp decline of 28 per cent, falling to $4.16 billion in April from $5.78 billion a year earlier. Agrawal noted that the Gulf war and the Strait of Hormuz blockade have continued to restrict trade in the region. Imports from West Asia, including petroleum, also declined by 31.64 per cent to $10.47 billion during the month.

The US maintained its position as India’s top export market, with shipments totaling $8.48 billion. Exports to Singapore saw a dramatic increase to $3.2 billion (from $1.14 billion), while shipments to the UAE fell to $2.19 billion. China ranked as the fourth-largest export market, with shipments valued at $1.77 billion.

IMPORTS RISE

Goods imports from China, India's largest source, rose to $11.97 billion in April from $9.91 billion last year. Imports from Russia also increased to $7.36 billion. Conversely, imports from the US saw a marginal decline to $5.27 billion, and those from the UAE dropped to $4.07 billion. Imports from Saudi Arabia grew to $3.85 billion.

US TEAM COMING

A US team is expected to visit India in June for further talks on an interim trade agreement, though specific dates are not yet finalized. This follows a visit by the Indian side to Washington in April to discuss details of the interim pact and broader bilateral trade negotiations.

Delegation from BRICS nations visits GIFT City

Our Bureau Ahmedabad

The GIFT City on Friday hosted a delegation comprising representatives from BRICS nations, providing them with an overview of India’s evolving International Financial Services Centre (IFSC) ecosystem and the growing opportunities in cross-border finance, fintech, trade and global business services. The visit assumes significance as India holds the BRICS Chair for 2026 under the theme “Building for Resilience, Innovation, Cooperation and Sustainability”. India is also set to host the 18th BRICS Summit and related ministerial engagements during the year, according to an official release.

As part of the visit, the delegation was apprised of GIFT City’s development as India’s maiden IFSC and its emergence as a gateway for international financial services, global capital flows and foreign currency transactions from within India. Senior officials from GIFT City and the International Financial Services Centres Authority made a detailed presentation covering the city’s regulatory ecosystem, globally benchmarked infrastructure, business environment and sectoral opportunities across banking, capital markets, fund management, insurance and reinsurance, aircraft leasing, fintech and global capability centres.

Commenting on the visit, Sanjay Kaul, Managing Director and Group CEO, GIFT City, stated, “GIFT City is steadily emerging as a globally competitive financial and innovation hub, enabling international financial services and cross-border business from India. The visit by the BRICS delegation provided an important opportunity to showcase GIFT City’s integrated financial and urban ecosystem, and to exchange perspectives on areas such as cross-border investments, sustainable finance, fintech innovation and economic cooperation”.

India-Korea partnership needs deeper engagement

Reji K Joseph

The CEPA has not met the expectations of either side. India faces market access barriers, and Korean investments are falling.

During South Korean President Lee Jae Myung’s visit to India in April, he announced, with Prime Minister Narendra Modi, a Joint Strategic Vision for the India-Korea Special Strategic Partnership. The vision calls for expanding bilateral trade to $50 billion by 2030, speedy conclusion of the upgrade of the Comprehensive Economic Partnership Agreement (CEPA), in force since 2010, and cooperation in critical areas such as supply-chain resilience, green hydrogen and nuclear power.

This is an opportune time for the two economies to tap their complementarities. Korea is a manufacturing powerhouse, and India is determined to transform its manufacturing base. India offers an attractive alternative location for Korean firms looking to diversify their supply chains. India’s deep human-resource pool and software ecosystem also complement Korea’s hardware strengths — a natural fit for collaboration in semiconductors, electronics and artificial intelligence.

The key question, however, is why the existing CEPA has not met the expectations of either side. Three issues stand out:

MARKET ACCESS BARRIERS

One, Indian exporters face major market access barriers in Korea. Despite India’s rising share in global merchandise trade, Korea’s share in India’s exports has declined from 2 per cent in 2009 to 1 per cent in 2024, while India’s merchandise trade deficit with Korea has quadrupled from $4 billion to $16 billion.

A study at ISID has identified 26 product groups — including pharmaceuticals, textiles and apparel, marine products and leather — where India has a global comparative advantage but only a marginal presence in the Korean market. In pharmaceuticals, complicated import procedures make market access effectively impossible for Indian exporters: though India accounted for 3 per cent of global imports in 2024, its share in Korea’s imports was barely 1 per cent.

INVESTMENT SLOWDOWN

Two, the missing second wave of Korean investment is a serious concern. The first wave came in the 1990s, when Samsung, LG and Hyundai established their operations in India. Korean FDI accounted for close to 4 per cent of India’s inflows in that decade, peaking at 13 per cent in 1999.

The post-CEPA period was expected to bring a second wave, with expectations rising further in the wake of Make in India initiatives and the Production Linked Incentive (PLI) scheme. Yet Korea’s share in India’s FDI inflows over the last five years has been only about 0.7 per cent. Korea has been diversifying its outward investment as part of a broader restructuring of its supply chains: its manufacturing OFDI (Outward FDI) in the last two years is more than double pre-pandemic levels.

The Fast Track Mechanism set up by DPIIT and Invest India in March 2024 to address the grievances of Korean investors is a useful start, but much more needs to be done to end this elusiveness.

CEPA COMMITMENTS AND RULES OF ORIGIN

Three, Korea has long maintained that India’s commitments under CEPA have not been substantial — pointing to the deeper concessions in India’s other FTAs, for example CEPA with Japan. Korea has also flagged that India’s rules-of-origin requirements are unusually stringent and have deterred Korean firms.

On the first count, India is now better placed to make deeper commitments in the upgraded CEPA. The second is harder. India is seriously concerned about third-country routing through FTAs and has tightened its rules of origin accordingly. The notification of April 2025 has shifted the regulatory burden from compliance certificates issued by the partner country to a verification-based regime imposed on the importer. Korean conglomerates, whose procurement, pricing and supplier management are generally centralised at headquarters rather than at local subsidiaries, will find the new rules harder to navigate.

CONCLUSION

The Joint Strategic Vision has identified the right priorities and laid down a credible framework for transforming the India-Korea economic partnership. However, market access barriers facing Indian exporters, the missing second wave of Korean investment, and rules-of-origin compliance need immediate attention from policymakers in both countries.

The writer is faculty member, Institute for Studies in Industrial Development, New Delhi

Regulators as board leaders?

SN ANANTHASUBRAMANIAN & MS SAHOO

Moving from certainty of legal frameworks to ambiguity of markets requires a different approach.

In India’s evolving governance landscape, a quiet but significant trend has taken root: retired secretaries to the Government of India and former heads of statutory regulatory agencies are increasingly stepping into boardrooms as non-executive chairpersons, shaping the strategic trajectory of listed companies. The appeal is intuitive: who better to steer governance than those who have helped define and enforce it?. In an era of heightened scrutiny, their presence lends gravitas and reassures investors and stakeholders alike.

The transition from regulator to board leader is, however, not always seamless. Public office is typically defined by hierarchy, guided by precedent, and oriented towards risk minimisation. The boardroom, in contrast, demands strategic judgment, commercial foresight, and the ability to guide rather than direct. The chairperson’s role extends beyond compliance to shaping the firm’s long-term direction, mentoring management, and balancing prudence with enterprise. The issue, therefore, is not one of intent or integrity, but of institutional fit and role adaptation.

UNDERSTANDING THE SHIFT

This shift is best understood as a change in institutional logic rather than capability. Moving from the certainty of legal frameworks to the ambiguity of markets requires a different orientation: from enforcing rules to enabling outcomes, and from formal authority to influence exercised through engagement. Governance in this setting depends not on past designation, but on the capacity to interrogate assumptions, contribute to strategy, and exercise independent judgment. Absent these attributes, even the most distinguished appointments risk becoming symbolic rather than substantive.

Moving from regulator to board leader involves a shift from adjudication and enforcement to strategy and performance. The point is not about competence, but about context: expertise is domain-specific, and institutional roles require recalibration when carried across settings. This gap is not universal, but where it exists, it tends to be specific. It often lies in areas such as capital allocation, industry structure, and competitive positioning, as well as in the softer skills of boardroom engagement: questioning, dissent, and consensus-building.

These distinctions become most visible in decision-making styles. Public officials are accustomed to operating within clearly defined authority structures, where decisions are backed by ministerial responsibility. Boards, however, are deliberative bodies that rely on collective reasoning, where accountability is direct and cannot be externalised. Effectiveness depends less on authority and more on persuasion, listening, and constructive challenge. Without conscious adaptation, hierarchical instincts may sit uneasily within a collaborative governance environment.

REGULATORY OVERHANG

A related concern is the risk of a regulatory overhang. Boards led by individuals steeped in regulatory culture may exhibit excessive caution. While this strengthens compliance and reduces downside risk, it may also constrain strategic flexibility in sectors where innovation, speed, and calculated risk are essential. The result is not governance failure, but a potential imbalance between prudence and enterprise that may affect competitiveness, at the margin.

It is equally important to recognise that past performance in public office is not a reliable predictor of effectiveness in competitive markets. Unlike regulatory roles, where outcomes are often episodic and compliance-driven, corporate leadership is continuously tested by market performance, capital allocation decisions, and quarterly expectations. The metrics, rhythm, and accountability structures differ in material ways.

That said, it would be reductive to view such appointments sceptically. Former public officials bring valuable strengths in governance discipline, crisis management, and public accountability. These attributes can significantly enrich board deliberations, particularly in regulated sectors. The question is not whether they add value, but how that value can be fully realised.

IMPROVING OUTCOMES

The answer lies in calibration. One way to improve outcomes is through structured sequencing. Former regulators could first serve as independent directors, gaining exposure to business models, competitive dynamics, and boardroom processes, before assuming chair positions. This, in turn, raises a broader institutional issue: the effectiveness of independent directors themselves. While views may differ on how well the institution has delivered on its promise, one principle remains uncontroversial: no role of consequence can be performed effectively without preparation.

If independent directors are expected to exercise judgment, oversee complex management structures, and challenge corporate strategy constructively, they must be equipped accordingly. This requires more than familiarity with law or finance; it calls for capabilities in strategic thinking, risk assessment, communication, scepticism, and ethical reasoning, regardless of whether they come from public service or private sector, as each brings distinct strengths but also potential blind spots. The recent regulatory emphasis on structured training and capacity-building is a positive step, but it may not be sufficient to meet the demands of increasingly complex corporate structures.

It is time to reconceptualise independent directorship, and, by extension, board leadership, as a profession in its own right. This would entail structured induction, continuous professional development, and certification through rigorous assessment, without grandfathering. Crucially, it must be anchored in a stringent conflict-of-interest framework, including cooling-off periods and robust fit and proper evaluations. It would also require clearer standards of accountability for contribution, not just conduct. Without such professionalisation, expectations will continue to outpace outcomes.

Within such a framework, the role of former regulators as Chairmen becomes easier to situate. Their experience remains valuable, but the effectiveness depends on preparation, sectoral understanding, and integration into a board culture that balances regulatory wisdom with commercial acumen. The journey from a full-time regulator to a part-time chairman is not merely a change in position; it is a shift in mindset and mode of engagement. Those who navigate this transition successfully can strengthen boards and contribute meaningfully to corporate India; those who do not may remain distinguished, but not decisive.

As India’s governance architecture matures, the focus must move beyond credentials to competence, and beyond optics to outcomes. The objective is not merely to populate boardrooms with experience, but to ensure that such experience translates into effective oversight, strategic insight, and sustained value creation.

The writers are former President and former Secretary, respectively, of the Institute of Company Secretaries of India.