Inside India - 12-May-26

0:02 Welcome to this Tuesday edition of Inside India.

0:04 I'm Sri Jagaraja.

0:06 The headlines.

0:07 Markets are mixed and oil prices continue

0:10 to march higher after President Trump said

0:12 the Iran ceasefire is on quote life support ahead of his visit to China.

0:19 Indian Prime Minister Narendra Modi will

0:21 be traveling to the United Arab Emirates

0:23 and Europe at the end of this week to shore up trade and energy ties.

0:27 A day after calling on citizens to limit travel and fuel usage,

0:34 Prime Minister's Prime Minister Mod's bid to calm the currency markets are

0:38 having the opposite effect as the rupee slides past 95 to fresh lows.

0:47 Well, here in Tokyo,

0:49 this bag of chips is being tossed around like a hot potato today,

0:53 which means that Japan not only has currency intervention on its

0:57 mind as it hosts the US Treasury Secretary Scott Besson.

1:01 Details are coming up.

1:12 Great point from Carrie.

1:14 And inflation really is the gorilla in the room right now.

1:17 We will be getting a read on the inflation picture in India later

1:22 on today and then of course US inflation data later on in the day.

1:26 In the meantime, let's get a snapshot of how markets in Asia are performing.

1:30 I've got to say the optics from the Middle East are not looking positive.

1:33 President Trump says the ceasefire with Iran is on life support.

1:37 Oil and the dollar are moving higher and even the mighty AI rally seems

1:43 to be pausing in the Asian markets and uh of course US inflation data.

1:48 We will get that later on in the day.

1:51 So that's really going to inform uh the macro and the markets moving forward.

1:55 The price of oil that's extending gains amid persistent concerns

1:59 about prolonged supply disruption with Australia Hall still effectively shut.

2:05 President Trump saying he was not impressed with Iran's

2:09 response with wide gaps remaining on some key issues.

2:15 It's unbelievably weak.

2:18 I would say I would call it the weakest right

2:21 now after reading the piece of garbage they sent us.

2:24 I didn't even finish reading it.

2:26 They said I'm not going to waste my time reading it.

2:29 I would say it's one of the weakest right now.

2:32 It's on life support.

2:33 They understand these are all medical people.

2:36 Dr.

2:36 Oz, life support is not a good thing.

2:38 Do you agree?

2:39 I prognostic.

2:40 I would say the ceasefire is on massive

2:43 life support where the doctor walks in and says,

2:47 "Sir, your loved one has approximately a 1% chance of living."

2:54 And we are watching the Japanese yen as US Treasury Secretary

2:57 Scott Bessant is in Japan meeting with Finance Minister Katayyama Satsuki.

3:02 Currently uh this is where the exchange rate is standing

3:05 at 15760 but currency is not the only matter being discussed there.

3:12 Carrie Jorgi is in Tokyo and joins us now.

3:15 Uh Carrie let's just kick off with the currency

3:17 markets want to know if this meeting

3:19 is going to result in any kind of coordinated

3:21 action to weaken the dollar yen exchange rate.

3:24 Are we getting a cl any clarity on that?

3:28 Well, I think judging by the comments from the finance minister,

3:32 um it suggests that they are aligned

3:34 and that the US has greenlighted the Japanese authorities reported

3:40 uh massive intervention during the so-called golden week holidays

3:44 uh but has stopped short for now of joining

3:46 in some kind of coordinated effort even if that includes

3:50 rate checks which doesn't involve any kind of actual

3:52 money uh but puts a deeper stamp on the US

3:56 approval for any kind of move like this.

3:58 Now, there was a little bit of nervousness,

4:00 especially because this all happened during Golden Week when a lot of the forex

4:03 traders were on holiday here and it wasn't much of one for them.

4:07 Um, but there is a lot more at stake than the currency uh issue.

4:10 But I think because it is Scott Bessant

4:13 and because he used to work with George Soros

4:15 who betted famously uh against the dollar yen

4:18 when it was moving the other direction towards 80,

4:21 I think um the market was even more

4:24 nervous about what kind of comments could emerge.

4:26 Now Katyasan investment had dinner last night after he landed.

4:30 They're meeting at the finance ministry.

4:32 But that's not the only person he's meeting.

4:34 He's meeting with the prime minister as well ahead

4:36 of this critical uh bilateral meeting between US and China.

4:40 But as I pointed out, I mean this is really where it's happening.

4:44 I mean this bag of chips Kalby even

4:46 the chief deputy chief cabinet secretary made a comment

4:50 on this because every single local newspaper shri is

4:52 talking about this and in two weeks time this colorful

4:55 Kalby bag which everyone knows is going to turn

4:57 into black and white because the company says there's

5:00 not enough ink to to color or to print

5:04 on these plastic bags because of the NAFTA shortage.

5:08 I mean, I keep talking about NAFTA,

5:09 but this is really a a blind spot in terms of energy policy.

5:14 And the government has said they're going to conduct what they call a hearing,

5:19 which is when something critical happens and they

5:21 call the companies and say what's going on.

5:22 And for the time being, they're saying no, no, no, we've got enough NAFTA.

5:26 But on the ground, companies are telling you a different thing.

5:29 And it's not just Colby.

5:30 I mean, you hear it almost every day that some companies saying, "Oh,

5:34 we don't have enough packaging for for for the bread

5:36 that we sell in the stores." And even other companies,

5:39 not just Kalby, is saying that that they might go

5:41 to black and white or use less color on their packaging.

5:43 So, you know, we're hearing different

5:45 things from corporate Japan and government Japan,

5:48 which is a little bit of a worry,

5:49 but also presses the point that Japan really wants to coordinate um

5:54 how it presents itself uh ahead of this big uh meeting in Beijing.

5:59 And this is such a problem

6:01 for India to depreciating currency exacerbates inflation

6:06 on the imported side and we're going

6:08 to be discussing that later on in the program.

6:11 Inflation really is this uh gorilla in the macro room at the moment.

6:16 Carrie, thank you very much indeed for that.

6:18 Indian Prime Minister Narendra Modi will embark

6:21 on a five-nation tour later this month,

6:24 visiting the United Arab Emirates and several European countries

6:27 as rising oil prices put pressure on India's economy.

6:31 The trip comes amid growing concern over the impact

6:34 of the Middle East conflict on India's energy imports,

6:37 inflation, and foreign exchange reserves.

6:40 In the UAE, Modi is expected to focus on energy cooperation

6:44 and regional developments during talks with President Muhammad bin Zed al-Nahan.

6:49 He will then travel to the Netherlands, Sweden, Norway,

6:52 and Italy to strengthen trade and investment ties

6:55 following India's recent trade agreement with the European Union.

6:59 The visit also follows Prime Minister Mod's call for fuel conservation

7:04 and lower imports as India grapples with higher global energy costs.

7:11 India markets will join us in less than 40 minutes.

7:13 Let's give you a glimpse of futures and see what they are indicating.

7:17 By the way, we closed off below 24,000 yesterday.

7:20 If you look at the benchmark nifty50 23,850.

7:25 It looks as though Indian equities are in line for more selling.

7:30 And as I said, it's not the best stuff looks when

7:33 you have the dollar rising and oil rising at the same time.

7:37 And as we discussed earlier,

7:39 the optics from the Middle East are not particularly good,

7:42 especially when President Trump says the Iran ceasefire is on life support.

7:47 So that's the backdrop.

7:48 The Indian rupee sliding past 95 to the US dollar to fresh lows.

7:54 953 is where we stand.

7:56 The US dollar uh pardon me, rupee selling picked up steam on Monday

8:01 after Prime Minister Narendra Modi's comments

8:04 to conserve foreign exchange had the opposite

8:07 effect and ended up spooking traders.

8:10 Traders indicating that the RBI may have wavered

8:14 into the market to intervene via state-run banks and the weakness

8:18 of the rupee is leading many to raise their calls for a rate cut by the RBI.

8:24 Here's what Tim Mo of Goldman Sachs told us

8:27 about their estimates of the Indian economy going ahead.

8:31 India is more immediately sensitive to higher oil prices and that's being

8:36 manifested in some of the changes we've made to our economic forecast.

8:39 So I'll just enumerate a few of them.

8:42 We've taken our GDP forecast down by close to a percent.

8:44 We've raised our inflation forecast.

8:46 We've raised our fiscal deficit forecast.

8:48 We've weakened our Indian rupee expectation relative to the dollar.

8:52 and we think that the RBI will need to hike

8:54 50 basis points as a kind of a precautionary measure.

8:58 We're also watching for April inflation data due later today.

9:02 Headline CPI is expected to edge closer to the central bank's 4% target

9:07 as higher fuel costs linked to the Iran

9:10 conflict begin feeding into consumer prices.

9:13 A Reuters poll of economists forecasts April retail inflation

9:18 at around 3.8% up from 3.4% 4% year-on-year in March.

9:24 Now, uh let's get a better understanding

9:27 of the way forward in terms of India's macro challenges,

9:32 inflation and uh this entire narrative about the rupee

9:36 depreciation bring in I'm delighted to say Duvari Sabaro,

9:40 former governor of the Reserve Bank of India.

9:43 Sir welcome uh to the program.

9:46 First of all, is India heading towards a rupee crisis?

9:52 No, I don't believe so.

9:53 The short answer is is someone who wants this point.

9:57 It's true that the rupee has been under pressure has been under

10:00 pressure in fact even before the current conflict because of capital outflows.

10:06 Added to that has been the pressure from the current

10:08 account over the last two months since the war.

10:12 uh higher import prices, subdued exports and possibly lower remittances uh if

10:18 the Middle East economies continue to be hit.

10:23 So the current account is going to be under pressure

10:25 that's exerting additional pressure on the but I believe we

10:28 are far from a crisis that I think there are

10:31 enough instruments there's enough weaponry available to manage this pressure.

10:37 I would say I don't I don't think it's a crisis.

10:39 I see.

10:41 What should the prudent policy approach at the RBI therefore be?

10:48 Are they taking all the right steps or do

10:52 they need to be bolder and consider a tightening bias?

10:58 I agree to some on my part policy,

11:01 but they've done some things in the past several weeks.

11:04 They've intervened rather heavily in the foreign exchange market.

11:08 Uh they've also restricted some foreign exchange exposures of banks.

11:14 Uh presumably does have some impact but the rupee

11:17 continues to fall because the fundamentals are driving it down.

11:22 The RBI has several instruments available to manage the rupee.

11:26 There is always the first line of defense is foreign exchange intervention.

11:32 There's macrocredential policies, capital controls and ultimately if necessary

11:37 the very blunt instrument of monetary

11:40 policy but I don't believe that uh we are in a crisis.

11:45 The RBI perhaps will tighten but I don't think

11:50 there's a very clear case for tightening at the moment.

11:53 Tightening might help in restraining outflows but I

11:57 think that'll be help at the margin.

11:59 So RBA will have to navigate uh this balance between

12:03 protecting growth and stability and fighting inflation very very carefully.

12:12 In fact in a recent interview you said that the rupee should

12:15 be allowed to weaken to send the right price signals to the economy.

12:21 In other words let market forces work it out.

12:25 Can you explain to us the logic behind that sir?

12:29 Yeah, the logic is that as you said,

12:32 what I said was that if the fundamentals are driving the rupee down,

12:36 the average should let the rupee fall.

12:38 Uh because uh you know one silver lining in this conflict

12:44 has been that India entered

12:46 the crisis with relatively strong growth fundamentals.

12:49 Growth was strong, inflation was benign,

12:51 but the concern has been the current econ deficit.

12:55 current econ deficit which is 1% of GDP last year is expected to widen to 2%

13:01 or even beyond 2% because of higher imports subdued

13:06 exports possibly because remittances so I think there is

13:10 a strong case for the rupee to fall so

13:15 that there is uh there is demand consumption will

13:21 be restrained and volume of imports can be restrained

13:24 will act as a neutralizer for higher import prices.

13:28 So I think there is a strong case

13:30 for rupee depreciation to send the right price signals.

13:34 Also this is a negative terms of trade shock

13:36 and there is also a case for a rupee adjustment

13:40 because uh in a crisis like this the exchange

13:44 rate should be allowed to bear part of the adjustment.

13:47 That's the reason I believe I that's the reason I said

13:50 that the RBA should be less

13:53 interventionist and allow the repeated track fundamentals.

13:58 So any notion of a line in the sand,

14:01 any notion of a level a specific level in the exchange

14:06 rate that the RBI ought to defend is flawed policy.

14:12 Is it sir?

14:13 I don't believe the RBA targets a specific exchange rate or a PA.

14:18 Certainly the you know continuous secular downward movement is a concern.

14:23 100 dollar is a psychological choke point.

14:26 So RBI will be will be very conscious of that just

14:30 as the markets are just as the economy is.

14:33 But I believe that the if the depreciation happens gradually

14:37 I think the market and the market participants can withstand that.

14:42 uh I I believe that uh on the whole on the net India will benefit

14:47 from letting the exchange rate uh track fundamentals

14:51 and let some price signals pass to the market.

14:56 How much of rupee devaluation and and let's be clear here sir a lot

15:02 of this pressure on the rupee uh predates uh the crisis uh in the Middle East.

15:07 How much of how much of this is is structural?

15:13 Yeah, it is uh it is to some extent structural as you say.

15:17 You know over the last 35 years since India liberalized opened up

15:21 the external sector uh the main concern

15:24 has traditionally been the current account deficit.

15:28 What is the level of sustainable current account deficit?

15:32 Financing the current deficit through capital flows has been an important

15:36 concern but a secondary concern but over the last few years

15:41 the concern has shifted to capital flows because capital has been

15:45 flowing out of India that's been putting pressure on the rupee.

15:48 In fact some commentators have said

15:50 that the rupee has been the worst performing Asian

15:53 currency and capital has been flowing out I

15:57 believe because of both push and pull factors.

16:01 uh the the push factor is domestic which is that millions of retail

16:06 investors have come into the equity market which is stabilizing which is

16:10 stabilizing which is good but that's put upward pressure on valuation so foreign

16:15 foreign investors who look across global

16:18 markets look for opportunities everywhere do not

16:21 find much of a purchase in India that's the push factor the pull

16:25 factor is the attraction of investment in frontier technology ology most notably

16:31 AI biotechnology semiconductors renew that's been

16:38 investment India has been to so far

16:42 been a marginal player in this fontier technology so capital has been flowing

16:48 both because of push and pull factors and that as you

16:52 said is a structural factor intends to address that

16:56 so in other words so India needs to almost go

17:01 back to the drawing board and fundamentally rethink tax policy,

17:06 regulation, currency management as it's perceived by foreign investors.

17:14 It needs to go back to the drawing board with the make in India program.

17:19 Is that what you are advocating?

17:21 I think so.

17:22 I think so.

17:23 Look at look at currency management.

17:26 uh uh look at macroeconomic management,

17:29 inflation management, tax policy, predictability,

17:32 implementation of tax policy which is transparency,

17:36 uh consistency and interpretation of tax laws.

17:40 India should I think take stock of what

17:43 are the foreign investors concerns and address

17:47 them head on to find some fixes for the structural factors that you call them?

17:55 Let's bring it back to the data.

17:57 Uh Mr.

17:57 Subaru, how closely do you think uh policy makers

18:01 and Governor Malhhatra will be watching today's inflation numbers?

18:06 Well, they'll certainly be watching inflation number

18:08 especially because it is under such intense pressure.

18:11 I just saw that the the forecast is that it's

18:15 going to be 3.8% which is up from 3.4% last month.

18:19 But it's not just the number today but what the number

18:23 today tells about the about the trajectory of inflation going forward.

18:27 Yes.

18:28 Because if inflation persists for long enough,

18:32 inflation expectations harden and that can morph what

18:36 is today a supply shock into a demand shop.

18:40 And RBI is particularly concerned about what

18:43 this number and what people are actually experiencing

18:46 in the market by inflation that's going to do

18:49 to inflation expectations and actual inflation going forward.

18:53 Certainly RBI will be very very careful and be watching not just the number

18:58 but it's possible trajectory in the months

19:00 aheadde in a very very uncertain situation

19:03 and Governor Malhhatra has warned about the upside risks to inflation.

19:08 So quite clearly he is managing future expectations at what

19:13 point is that going to start materializing in the data?

19:19 Uh can you can you be more specific?

19:23 Yes.

19:23 At what point is the impact of higher energy prices,

19:29 higher fuel prices, higher fertilizer prices,

19:33 at what point is that going to start to look like an inflation problem?

19:38 At what point, Mr.

19:39 Subaru, is that is inflation going to get out of control?

19:44 That's at the heart of central banking because uh this is

19:47 a classic supply shock and uh the the playbook of central

19:52 banks is to look through a supply shock and that's

19:56 what most central banks have done so far so so has

19:59 the RBI but if the supply shock persists as it is

20:03 likely to because of uh there being no light at the end

20:08 of the tunnel as far the ceasefire is concerned there

20:11 will be a concern among all central banks particularly emerging markets,

20:15 particularly the RBI, that this supply shock can morph

20:19 into a demand shock as the governor actually alerted

20:24 in his last policy statement and therefore

20:27 RDA will have to act through monetary policy.

20:30 So I cannot really pinpoint at what point of time,

20:33 but they're going to look for another

20:35 inflation number before uh they start acting.

20:39 That's my reading at the moment.

20:41 It is concerning here though, isn't it?

20:43 Sir, fuel prices are capped for the consumer at a retail level for now.

20:48 Uh, food inflation may very well be a problem if there

20:52 is a prolonged dry spell and the monsoon rains don't come.

20:57 There are already supply issues related to fertilizer.

21:01 Rupy depreciation is creating imported inflation.

21:05 It's inevitable, isn't it, that India is going to face an inflation shock.

21:10 Yes, and this I would say inevitable but certainly it's a possibility

21:16 with a high probability but the RBA is going to look at the numbers

21:21 the trajectory and going to act is going to look at the exchange

21:25 rate as well because you cannot

21:27 disentangle the exchange rate and inflation management

21:31 we're going to look at the policy of western economies especially the US

21:35 how the dollar is behaving so if the rupee continues to uh weaken

21:42 RBI will probably uh raise interest

21:45 rates more for inflation for inflation management

21:50 certainly but also to manage or defend

21:53 the currency or actually to prevent outflows.

21:59 Yes.

21:59 You said that India faces a classic uh supply side challenge.

22:04 Is India facing a stagflationary environment of high inflation and lower growth?

22:11 Certainly not.

22:13 Uh you know there is inflation today is 3.4% well below the target of 4%.

22:19 Let's forget about the trajectory and growth is you know expected to be 7%.

22:24 Now it's been plot back a little bit but growing at 6 to 6.5%.

22:30 6 to 6.5% inflation at 3.4% 4% is by no means a stagflation situation.

22:36 It's concerning.

22:37 It's difficult uh especially because of the uh of the oil price

22:43 and the uncertainty but I don't believe that it is a stagflation situation.

22:49 So a final question if you were advising the RBI

22:53 and government today what would be your top priorities?

22:59 I would say that let the price of oil pass on to consumers because

23:06 there are limits to how much the RBI

23:08 and the government can withstand further pressure.

23:12 The Ruby is the government has cushioned some of the pressure by cutting

23:16 excise on fuel but there are limits stood up because of fiscal concerns.

23:21 In fact, the underlying message of the prime minister when he urged rest con

23:25 restraint yesterday was actually giving a signal

23:28 that there are limits to uh limits

23:30 to how much the government can push and for the RBI too I think

23:35 they should allow or depreciation of the rupee

23:39 because that's going to help restrain demand.

23:41 I'm not saying that they should push

23:43 the rupee on but let the rupee track fundamentals

23:46 and engineer the trajectory of the rupees journey

23:50 but not ma not not manage it excessively

23:55 so I'm very grateful for your insights and analysis uh today uh very grateful

24:00 for your time thank you very much there

24:04 former governor of the reserve bank of India

24:08 inside India is going to take a quick break and uh today Today on the show,

24:11 we are going to be speaking to Pronto,

24:13 an instant home services firm that's fast becoming

24:16 popular in the country and agrochemical firm UPL

24:20 Corporation on the back of their latest earnings

24:22 and the conundrum around a fertilizer shortage in India.

24:26 Don't miss those conversations.

26:38 Heat.

26:39 Heat.

26:40 N.

27:17 Heat.

27:18 Heat.

30:01 Welcome back.

30:02 We are counting down to the market open

30:04 in India and this is how we are shaping up.

30:05 Let's give you a glimpse of futures.

30:08 Nifty futures 23,722 indicated.

30:13 If that does materialize,

30:14 we're looking at uh a decline of about 100 points or so.

30:18 Considering we left off for the benchmark at 23,815

30:23 rupee continues to be under pressure against the US dollar.

30:27 We were talking about this with the former governor of the RBI.

30:31 95 5262 is where we stand.

30:35 From quick commerce to instant services.

30:38 Now India's ondemand home services are fast gaining steam.

30:42 Bengaluru based startup Pronto recently raised $20 million in a series B

30:47 funding round that doubled its valuation to $200 million in just two months.

30:53 Its latest funding round was backed

30:55 by Silicon Valley solo venture capitalist Lucky Groom.

30:59 Its other backers in its previous round

31:01 include General Catalyst and Bane Capital Ventures.

31:04 The company which competes against urban companies InstaHelp

31:08 and Snabit offers ondemand home services such as cleaning,

31:12 laundry, cooking and car washing.

31:14 Its daily bookings went from 3,000 in December to over 26,000 now.

31:20 According to a recent estimate by Bank of America,

31:23 India's instant home services market could grow to $18 billion by the year 2030.

31:29 Delighted to say Angelie Sardana joins us now, the CEO and founder of Pronto.

31:36 Angelie, welcome to the program.

31:37 And for viewers who are perhaps hearing about Pronto for the first time,

31:41 what problem are you solving and why is this the right time for the business?

31:48 Yeah, thank you for having me.

31:49 I think that the problem isn't just on the consumer side where

31:52 where consumers have difficulty and a lot of friction and accessing services.

31:57 Really the problem that we're attacking is

31:59 is overall labor market disorganization and inefficiency

32:03 which is the idea that you

32:04 know consumers have difficulty accessing these services.

32:07 But for workers the market is just as broken or even more broken.

32:11 Right?

32:11 So workers suffer from unemployment or underemployment

32:14 for many months out of the year.

32:16 There's income instability and there's lack of dignity, safety,

32:19 respect and just the basics that one would expect in a workplace, right?

32:23 And so we are building a a a tech- enabled scalable

32:26 platform which allows for the organization of of all unskilled informal

32:30 labor in India and we're starting with you know home services

32:34 and and this is absolutely the right time to start it.

32:36 I think you know obviously there's a confluence

32:37 of factors on the consumer side including

32:40 the rise of quick commerce but you also

32:42 see factors like you know Aadhaar and UPI both all of which are are are

32:46 the infrastructure which underlies you know a business like

32:49 this and which makes it possible and wouldn't

32:51 have been possible you know 10 years ago

32:54 that's interesting so the the business model essentially

32:58 is helping to develop the cleaning segment and bring

33:02 it out of the informal economy uh through

33:05 through upskilling and and and and other ways.

33:08 So just give us a sense, Anjali, what you offer your gig workers who are

33:13 practically all women since I have to say

33:17 cleaning and home help is associated with the lowest

33:21 wages in the informal economy and largely unregulated.

33:26 Yep, that's absolutely right.

33:28 And so I think when we started the business,

33:29 we had a core insight that you know consumers care about three things.

33:33 quality, safety, and reliability.

33:35 And just being an Uber style matching platform doesn't solve those things.

33:39 Instead, you have to develop and scale the highest quality supply pool,

33:43 which means caring for the retention of the workers on the platform,

33:46 which then means going and solving their problems first, right?

33:50 And so, one of the things we we designed our entire, you know,

33:53 operating model around is making sure that our workers

33:56 can have a sense of stability in their earnings, right?

33:58 So, they're not, you know, employees in the traditional sense.

34:00 They're gig workers, but they have an ability to to have, you know,

34:04 a projection and and and a and a high amount

34:06 of certainty into how much they're going to make at the end

34:08 of the month just based on how many how much

34:10 how many hours they're going to spend on the platform.

34:13 Additionally, you know, we we are offering them a formal legal income, right?

34:17 So, this is, you know, a sense of security where, you know,

34:20 the number that shows up on their app

34:22 is the amount that they're going to get paid.

34:24 there's no risk in, you know,

34:25 randomly getting all that money stolen or or or someone at the end of the month,

34:29 you know, refusing to pay you.

34:30 And there's a lot of security that comes with that, right?

34:33 So, you have access to, you know,

34:34 the financial infrastructure that exists for everyone else who's who's earning,

34:38 you know, a salary, which means taking out

34:40 real loans rather than going from a chit fund.

34:42 We also care for the safety of our professionals.

34:44 So, we have SOS uh kind of functionality built into their app where,

34:48 you know, if they press a button, someone arrives in 10 minutes to help them.

34:51 We offer them health insurance.

34:53 We enroll them in all their government programs which they're,

34:56 you know, entitled to.

34:57 We offer them self-defense training.

34:59 So, there's a whole host of things that we offer for them.

35:03 Isn't it unrealistic though Anelie and even

35:07 perhaps inhuman to expect someone to be

35:10 summoned essentially within 50 minutes to clean

35:13 someone's home particularly in a city that you

35:16 and I know uh they could face delays on public transport getting to that home

35:23 and then they have to get through

35:26 security guards who could delay them even further.

35:30 That's a very important question.

35:32 And so there's two parts to this.

35:33 One is that the the time to to arrival,

35:36 that 10 minutes or that 15 minutes is more about the distance rather than,

35:40 you know, an unreasonable expectation or an expectation of speed, right?

35:44 And so the average professional is only a couple hundred meters away

35:48 from the location where you know a customer

35:50 is booking from which means that it's very possible to walk the distance between

35:54 where they where they receive that booking

35:56 and the customer's location and in in under 10 minutes or under 15 minutes.

36:00 The second part of it is that we're not penalizing them,

36:03 you know, if it takes them, you know, a while to get through the the guard

36:06 at the at the apartment complex or society, right?

36:09 Or or it takes them a while for, you know, the customer to open the door, right?

36:12 And so we're tracking more around when they arrive

36:14 to the society or they arrive to the customer location,

36:17 not about when the actual job is started.

36:19 And the second part of it is that there's

36:21 a huge amount of grace period built into it.

36:23 And so I think that we've been very careful in the way we

36:26 construct our operating model to make sure that no one is is unfairly penalized.

36:31 Yes, Angelie, I wanted to get into what

36:33 you said about stability in uh in earnings.

36:36 And uh I was discussing this earlier

36:38 with the former governor of the Reserve Bank of India.

36:41 An inflation shock could very well be looming in India

36:44 and we'll see what the official April data says.

36:48 But by association, that may mean a cost of living crisis.

36:51 That may mean demand for higher wages.

36:53 Are you open to adjusting uh payments for your gig workers uh

36:58 on the Prop Pronto platform if need be to to keep up and match inflation?

37:04 We absolutely are.

37:05 Right.

37:05 Right.

37:06 And so there's a couple parts of this.

37:07 One is that already the the professionals on our platform make

37:10 50 to 100% more than they made before joining the platform.

37:14 So we already see a large uplift

37:16 in earnings just from professionals joining the platform, right?

37:19 And the second part of it is that you know we

37:22 are going to be profitable in in the long run, right?

37:24 So call it three years, five years from now,

37:26 we'll be a very profitable business,

37:28 but that's not going to come from squeezing our professionals, right?

37:30 So, so there's a there's a way

37:32 to make money in this model which doesn't require,

37:34 you know, lowering the the earnings for our professionals.

37:39 Thanks for that, Angelie.

37:40 And let's get on to the operational side of the business.

37:42 How challenging is cash burn in what's becoming quite an intense competitive

37:47 envir environment where you need to offer uh substantial discounts to customers.

37:52 And Pronto isn't the only game in town, is it?

37:55 There's there's Snabit and uh there are others.

38:00 Yes, I mean absolutely.

38:01 So, we've seen our burn per order come down by over

38:05 60% in in just the last quarter and and so,

38:08 you know, last month we we were burning around,

38:10 you know, call it 350 to 360 rupees per per order.

38:13 And and so we've seen that come down over time and we continue to see declines

38:17 come and that's a lot from from fixed

38:19 cost leverage and we've said from, you know,

38:21 from the very beginning that we are going

38:22 to be the lowest fixed cost per booking player, right?

38:25 There there are sides um to it where like you know

38:27 your your your costs per booking um or or the partner

38:31 payout per booking which are you know less

38:33 in your control but what is in your control is is

38:36 the fixed cost base and we're very focused on being

38:38 that lowcost fixed cost per booking player and and and that ultimately

38:43 goes into the DNA of the company and what we've

38:45 seen is we're we're very aggressive and we're well capitalized.

38:47 we have, you know, all the money that we've

38:49 raised in in both the series B and B1 are

38:52 still in the bank and and we're going to be

38:53 very aggressive in deploying it and aggressive in scaling.

38:56 And we think that now is the right time to to to, you know,

38:59 press the gas in terms of c cash deployment.

39:03 And you've gone from 3,000 bookings a day

39:05 at the beginning of December to now over uh 26,000.

39:11 Is there upside to that, Angelie?

39:12 What does that number look like in the next 3 to six months perhaps?

39:17 Yeah, I think we are we are very focused on on on hitting,

39:19 you know, 70,000 bookings per day in in in the summer.

39:23 So, you know, call it early July.

39:24 We plan to be, you know, at 70,000 bookings per day.

39:27 And and we plan to be very aggressive in scaling up from there.

39:30 And, you know, we we've seen a lot of share gain,

39:32 you know, just in the last quarter.

39:34 And and we expect to to increase share very meaningfully over the next quarter.

39:38 And so, we we expect to scale, you know,

39:40 if we think about 3,000 at the beginning

39:42 of December to actually now over 28,000.

39:45 I think the number you have is is about a week

39:46 updated right you know from 3,000 to 28,000 the pace at which

39:50 we grew and we think the next you know call it

39:53 6 months are going to be an even more aggressive scaling path.

39:57 Angelie what's customer behavior uh taught you

40:00 that surprise you the most after you launched.

40:04 Yeah I think so there's ultimately three use cases for this service.

40:08 One is you know ad hoc my house help is missing for the day.

40:12 That's a one to three times a month use case.

40:15 Second is supplementary which is you know I have

40:17 a househel she doesn't have time to do everything.

40:19 This is a semi-regular topup that I get you know uh

40:22 to do all the things that she doesn't have time to do.

40:24 And then the third is primary which is this is my only househel service.

40:28 Making that transition from ad hoc emergency backup to supplementary

40:33 or primary requires quality and that is the most important thing.

40:37 Quality is what how you drive frequency from a customer.

40:40 And that ends up being super important because essentially your your ad

40:44 hoc use case is only call it one to three times a month.

40:46 That's effectively, you know, call it two times out of 30 or 115th, you know,

40:50 of of wallet share versus if you're in primary, you can actually capture 100%.

40:54 And what we found is that if you focus on quality,

40:57 and quality is something that compounds,

40:58 if you scale from 10,000 to 50,000 professionals on your platform,

41:02 and then you decide that quality matters, it's too late, right?

41:05 you'd have to retrain everyone or turn the entire supply base.

41:08 And so what we found is that if you can focus every

41:10 day on quality and and and and let it compound over time,

41:14 you can unlock a a significantly larger TAM.

41:17 And what we've seen is that already has played out in in our user

41:20 base where our top 1% of users are using us 23 plus times a month.

41:24 Top 10% are using us 9 plus times a month.

41:27 And the top 10% of users contribute 40% of bookings on the platform.

41:31 And so what we've seen is a very heavy power user split.

41:34 And that only comes from focusing on quality.

41:37 Angelie, final question.

41:38 If we were to have this conversation uh three years from now,

41:42 and I'd really hope that we do, what would success uh look like uh for Pronto?

41:48 Yeah, I think I' I've said this from the very beginning,

41:50 but Pronto is not building, you know, another home services company.

41:53 We're building something much bigger, right?

41:55 So, we are building a platform which is going

41:57 to organize and formalize all unskilled informal labor in India.

42:02 And I think three years from now what success would

42:04 look like is is going into our large our first

42:06 large you know non-cleaning vertical right and so we see

42:10 you know a huge portion of the opportunity in in terms

42:12 of organizing labor actually in the B2B segment and and so

42:16 going after at least one of the first big

42:18 B2B B2B verticals uh where there's a large pool of unskilled

42:22 informal labor is is is what success would look like.

42:27 Angelie, it's been a pleasure talking to you.

42:28 Thank you very much indeed for joining us on the program today

42:32 Angelie Sardana there from Pronto.

42:35 Thank you.

42:37 Now we are counting down to the market open in Mumbai.

42:40 We're back in two short minutes.

45:01 Indian markets are coming online and this is where the nifty50

45:04 is standing 23,735 down by just a fraction of 4/10en of percent

45:11 but it's the Indian rupee that continues to be under siege

45:15 down by about 3/10en of a percent against the US dollar.

45:20 Exchange rate standing at 95 555.

45:24 Let's take a look at some of the movers in the Indian markets today.

45:27 Private equity investors PXV partners SEOA and Rabbits Capital

45:32 are set to pair their stakes in Billion Brains,

45:36 the parent company of stock brokerage firm Grow

45:40 through a block deal worth almost $500 million.

45:42 That transaction involves selling around

45:45 4.3% of the company's outstanding equity.

45:48 The shares down by 5 a.5%.

45:51 Let's take a look at shares of Indian

45:53 jewelry makers which are doing it quite tough today.

45:57 Sky Gold down the heaviest by almost 2%.

46:01 Shares were down on Monday as well after Prime Minister Modi urged citizens

46:06 to avoid buying gold for a year

46:08 to help protect the country's foreign exchange reserves.

46:11 Mod's remarks came alongside broader calls for fuel conservation,

46:15 reduced travel and lower imports as India looks

46:18 to manage the impact of rising commodity and energy prices.

46:24 Now let's bring in shares of UPL.

46:27 Uh the shares surged on Monday.

46:30 The stock is down by about 2% today after

46:33 the agrochemical firm posted stronger than expected fourth quarter results.

46:37 The company also surpassed its projections for financial year 2026.

46:42 Looking ahead, the company expects momentum

46:44 to continue into the current quarter,

46:46 forecasting revenue growth of 10 to 14% and EBITD DAR growth of 14 to 18%.

46:54 Meanwhile, its international operating arm reported a 20% rise in quarterly

46:58 revenue driven by volume growth

47:00 and favorable foreign exchange trends across geographies.

47:04 Results come as agrochemical and fertilizer firms continue

47:07 to navigate higher imports and freight costs linked

47:11 to ongoing tensions in the Middle East which

47:13 have pushed up global fertilizer and commodity prices.

47:18 Let's get into this from UPL's point of view.

47:21 Mike Frank joins us now, CEO of UPPL Corporation.

47:26 Mike, great to have you on the program.

47:28 First of all, how much pricing power does UPPL realistically have today?

47:35 Good morning and great to be with you today.

47:38 As you mentioned, we did release our earnings yesterday.

47:40 We were very pleased with a with a strong year across all

47:43 of our business platforms last year

47:45 and and bringing strong momentum into uh our FY27.

47:49 Look from a pricing power standpoint when I think about our our global

47:53 crop protection business you know our business is made up of some uh

47:56 post patent business uh that's approximately 60% of our our mix where

48:01 the uh you know I would say the the pricing power is is uh

48:05 you know a very competitive dynamic where we compete against you know other

48:09 generic uh and post-patent uh manufacturers

48:12 in our differentiated and sustainable business which

48:15 is about 40% of our mix we've got more pricing power and these are

48:18 technology ies that that add significant value to our to our farmer customers.

48:22 In our seeds platform,

48:24 I would say we've got a very strong germ plasm base where you

48:27 know pricing power is is one of our key attributes in that business.

48:32 If crude oil and petrochemical derivatives

48:35 remain elevated because of this crisis

48:37 in the Middle East and disruptions around the straight of hormones,

48:40 how exposed is your cost base to that?

48:46 Yeah.

48:46 So when we we think about our platforms firstly our seed

48:48 platform is pretty much you know unaffected by by that situation.

48:52 Our speech chemical business and our global

48:54 crop protection business will is having an impact.

48:57 You know from a cost of goods standpoint we are

48:59 seeing some elevation based on uh raw material prices going up.

49:03 You know what we're doing at this point

49:04 in time is is we are increasing our prices uh

49:08 in in our global crop protection business and in our structured

49:11 chemical business to cover the uh the incremental cost.

49:15 uh you know so far I would say they're you know it's in the mid to to high

49:18 single digits is kind of what we're seeing

49:20 from a an impact standpoint uh but it depends

49:23 on the products you know some some of our products

49:25 are more energy intensive and some are less

49:27 and so each product has a unique dynamic that that uh

49:31 you know we're we're pricing into uh the marketplace

49:35 at this point Mike is there any evidence among uh your uh customers relating

49:42 to demand destruction Are are farmers buying less

49:47 because of higher prices further down the pike?

49:50 Is that a concern?

49:51 Farmer margins are being squeezed right now.

49:53 You know, primarily with the high fertilizer and fuel prices.

49:56 Uh that's a large part of their expenses

49:58 and that's really putting a squeeze on their margins.

50:01 You know, from a a crop protection standpoint,

50:04 you know, farmers once they plant the crop,

50:06 they need to control the pests, whether they be diseases, insects, or weeds.

50:10 And so, you know, we're expecting another

50:12 year of strong volume demand across the globe.

50:15 Uh, you know, crop acres will be flat to up on a year-over-year basis.

50:19 There could be some switching of crops to less fertilizer intensive crops.

50:24 And and in fact, we have some unique technologies in our biological business,

50:28 which really helps the plants uh utilize uh fertilizer more efficiently.

50:33 And so, we're expecting a strong demand

50:35 for some of those technologies this year.

50:37 With the high price of fertilizer,

50:39 farmers will be looking for technologies that help them

50:41 utilize the fertilizer that they do invest in more efficiently.

50:46 Mike, India is a core market and Prime Minister Modi

50:50 has recently openly urged farmers to use 50% less fertilizer,

50:57 which is astonishing really, and move towards more natural farming methods.

51:01 Does that have implications for UPPL?

51:05 Yeah, I would say again generally it has positive opportunities for us.

51:09 We have a number of technologies in our natural plant protection business.

51:12 A lot of them are are biologically based

51:15 and again these technologies really help the the plant

51:18 and the soil around the roots uh be healthier

51:22 and that allows the plants to utilize uh fertilizer more efficiently.

51:26 And so if farmers are using less fertilizer,

51:29 these tools become extremely important so the plants can still stay healthy.

51:34 they can withstand, you know,

51:35 if there's some extra heat or drought, uh they can,

51:37 you know, withstand those situations and still produce

51:40 a good harvest for the for the farmer.

51:42 But isn't there a risk that it's almost uh robbing Peter to pay Paul, uh Mike,

51:46 in the sense that it means perhaps

51:49 structurally slower growth for traditional crop protection chemicals?

51:56 You know, I wouldn't anticipate that.

51:58 Again, I think if if farmers are looking

52:00 for crops that maybe use less fertilizer initially,

52:04 that'll be one option that they'll look for.

52:07 And then secondly, once they plant the crop,

52:09 they'll make sure it has the right amount of fertilizer

52:11 so that it can grow uh you know, healthy.

52:14 But again, the technologies like in our natural plant protection business,

52:18 they're they're very economical and efficient for farmers.

52:22 Um and so again we expect to see

52:24 strong demand for those products because that will

52:26 help farmers that are cutting back on fertilizer

52:29 uh get a better return on investment.

52:32 And in terms of uh the buying patterns

52:35 from Indian farmers uh Mike are they prioritizing yields

52:39 at any cost or are they becoming more selective

52:42 in the usage of uh inputs because of input inflation?

52:49 Yeah, look, I think farmers think about a few things.

52:51 Firstly, they think about economics.

52:53 So that, you know, critical in their survival.

52:56 You know, in any given year, a farmer is investing 50 to 60%

53:00 of their net worth when they're planting that crop.

53:02 And so these are very important decisions for the farmers.

53:05 And so we think a lot about farmer resilience.

53:07 How do our technologies help the farmers, you know,

53:10 withstand uh all of the challenges that the crop

53:13 faces during the year from pests and and from weather?

53:16 And so that's where the, you know,

53:18 our business comes into play and that's what we do to help farmers ultimately

53:23 take risk out of the equation uh

53:26 so that that they're successful come harvest time.

53:28 That's that's a hugely important thing and and farmers take a lot of risk

53:32 and so we're all focused on you know how do we help them manage those risks.

53:36 Mike, I know it's been controversial, but does GMO,

53:39 genetically modified uh uh genetically modified agriculture

53:44 have a bigger role to play in India,

53:46 especially given climate pressures and food security concerns.

53:52 Yeah, look, I think, you know, getting back then to the seed business,

53:55 I think all kinds of seed technology,

53:57 whether it be genetically modified or or or now it's

54:00 it's more using new tool uh more sophisticated tools like

54:04 crisper tool and other gene editing tool that can be

54:07 very selective in helping uh plants uh have certain traits,

54:12 you know, that can that make the plant healthier and ultimately

54:15 help farmers achieve more yield to to feed a growing planet.

54:18 So, we do believe that, you know,

54:21 seed technologies and and we're investing uh in in in developing

54:26 our germp plasm with with state-of-the-art technologies to help farmers,

54:30 you know, be more successful and and again help them manage risk

54:33 but also help them produce uh higher yields which is also very important.

54:39 Mike, uh, a potential US India bilateral

54:42 trade agreement could have major implications for agriculture,

54:47 uh, access for US agricultural um, goods into India.

54:53 But politically, it's been very difficult.

54:55 It's been a very hard cell, isn't it?

54:56 Politically, very sensitive in India.

54:58 From UPPL's uh, perspective,

55:00 is this is this the deal that's going to get across the line?

55:03 And if it does, uh, is it an opportunity for you?

55:09 Well, look, I think you know the the tariff uh piece plays two ways.

55:13 Obviously, we have a large US business where we manufacture a number

55:17 of our products here in India and ship them to the US.

55:19 And so, at this point in time,

55:21 we're paying about a 10% tariff on all of our shipments from India to the US.

55:25 Uh we have an advantage over our Chinese

55:28 competitors that are paying at a higher rate.

55:30 So, from that perspective, that that's a good opportunity for us.

55:33 Look, we we think it's very important for farmers here

55:36 in India to to have the protections that they need.

55:39 Um, and so, you know, look,

55:41 we we're here the government completely understands that and ultimately

55:45 any uh trade deal is going to both protect

55:47 the farmer but also help uh producers and and manufacturers

55:52 like us be successful in in exporting to foreign markets, including into the US.

55:59 Mike, we got to leave it there.

56:00 So, it's been a fascinating conversation.

56:01 Thank you very much indeed for your insights and for joining us on Inside India.

56:06 Mike Frank there from UPPL call.

56:09 That's all the time that we have today on Inside India.

56:12 Do keep watching.

56:13 CNBC Access Middle East with Dan Murphy in Abu Dhabi is coming up next.