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Cooling inflation fuels rate cut hopes: RBI may go beyond 25 bps in April, say foreign bank economists

Cooling inflation fuels rate cut hopes: RBI may go beyond 25 bps in April, say foreign bank economists

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Aastha Gudwani, India Chief Economist, Barclays Research sees the possibility of the RBI MPC delivering a non-standard, larger 35 basis points policy repo rate cut in the April meeting. “Our base case remains a 25 basis points cut, alongside a ‘neutral’ stance”, she added.India’s Headline CPI inflation softened to a seven month low of 3.6 per cent in February 2025, from 4.3 per cent in January, lower than consensus expectations. The decline in headline inflation was driven by a 2 percentage point decline in food inflation (21 month low) to 3.8 per cent year-on-year on the back of sequential contraction in vegetables and pulses prices.Some foreign banks expect a sub-4 per cent inflation print laying the ground for 50 basis points more cuts this calendar  year. If inflation stays aligned with the targets, monetary policy is likely to assume a growth supportive stance in the quarters ahead”.Foreign banks and brokerages see the latest soft inflation print in India paving the way for further RBI policy rate cuts with some even predicting a larger, non-standard 35 basis point cut in the April 9 MPC meeting. Beyond a 25 basis points cut in February, DBS Group Research expects another 50 basis points reduction in 2025. This will amount to half of the US Fed’s 150 basis points projection (100 bp delivered in 2024 and DBS Group Research baseline has two more cuts in 2H25), Rao said, adding that “a change in stance to ‘accommodative’ in April will not surprise us”.Since February 2023, the RBI has implemented one policy rate cut. On February 7, 2025, the RBI reduced the repo rate by 25 basis points, bringing it down from 6.5 per cent to 6.25 per cent. This marked the first rate reduction in nearly five years, following a series of rate hikes totalling 250 basis points between May 2022 and February 2023. Prior to this cut, the RBI had maintained the repo rate at 6.5 per cent since April 2023.Tanvee Gupta Jain, Chief India Economist at UBS said “We expect headline CPI inflation to average 4.2 per cent in FY26 (vs 4.7 per cent in FY25E). We maintain our view that there is scope for a further 50 bps cut in the report rate in this cycle, with the next one pencilled in for the April policy”. She also said that the Wednesday’s retail inflation numbers are likely to cement expectations for a back-to-back rate cut in April. “Dovish policy minutes, a downshift in annual growth this year and a sub-4 per cent inflation print lay the ground for 50 basis points more cuts this year, with the next move likely in April”, Rao said. Radhika Rao, Executive Director & Senior Economist, DBS Group Research said “With CPI inflation off the boil and real rates at ~230 basis points, the RBI monetary policy committee undertook a 25 basis points rate reduction in February. Santanu Sengupta, Chief India Economist, Goldman Sachs Research said “Overall, we lower our Q1 headline inflation forecast by 20 basis points to 3.9 per cent y-o-y, but maintain our CY headline inflation forecast at 4.2 per cent y-o-y”.

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Cooling inflation fuels rate cut hopes: RBI may go beyond 25 bps in April, say foreign bank economists
Cooling inflation fuels rate cut hopes: RBI may go beyond 25 bps in April, say foreign bank economists

She also said that the Wednesday’s retail inflation numbers are likely to cement expectations for a back-to-back rate cut in April. “Dovish policy minutes, a downshift in annual growth this year and a sub-4 per cent inflation print lay the ground for 50 basis points more cuts this year, with the next move likely in April”, Rao said. Radhika Rao, Executive Director & Senior Economist, DBS Group Research said “With CPI inflation off the boil and real rates at ~230 basis points, the RBI monetary policy committee undertook a 25 basis points rate reduction in February. If inflation stays aligned with the targets, monetary policy is likely to assume a growth supportive stance in the quarters ahead”.comment
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Aastha Gudwani, India Chief Economist, Barclays Research sees the possibility of the RBI MPC delivering a non-standard, larger 35 basis points policy repo rate cut in the April meeting. “Our base case remains a 25 basis points cut, alongside a ‘neutral’ stance”, she added.India’s Headline CPI inflation softened to a seven month low of 3.6 per cent in February 2025, from 4.3 per cent in January, lower than consensus expectations. The decline in headline inflation was driven by a 2 percentage point decline in food inflation (21 month low) to 3.8 per cent year-on-year on the back of sequential contraction in vegetables and pulses prices.Since February 2023, the RBI has implemented one policy rate cut. On February 7, 2025, the RBI reduced the repo rate by 25 basis points, bringing it down from 6.5 per cent to 6.25 per cent. This marked the first rate reduction in nearly five years, following a series of rate hikes totalling 250 basis points between May 2022 and February 2023. Prior to this cut, the RBI had maintained the repo rate at 6.5 per cent since April 2023.Some foreign banks expect a sub-4 per cent inflation print laying the ground for 50 basis points more cuts this calendar  year. “We are tracking March CPI inflation at 3.8 per cent, suggesting a sizeable undershoot of the RBI’s Jan-Mar forecast of 4.4 per cent y-o-y, paving the way for a 25 basis point cut in April”.Santanu Sengupta, Chief India Economist, Goldman Sachs Research said “Overall, we lower our Q1 headline inflation forecast by 20 basis points to 3.9 per cent y-o-y, but maintain our CY headline inflation forecast at 4.2 per cent y-o-y”.Foreign banks and brokerages see the latest soft inflation print in India paving the way for further RBI policy rate cuts with some even predicting a larger, non-standard 35 basis point cut in the April 9 MPC meeting. Beyond a 25 basis points cut in February, DBS Group Research expects another 50 basis points reduction in 2025. This will amount to half of the US Fed’s 150 basis points projection (100 bp delivered in 2024 and DBS Group Research baseline has two more cuts in 2H25), Rao said, adding that “a change in stance to ‘accommodative’ in April will not surprise us”.

Business

How Starlink’s partnership with Jio and Airtel affects India’s internet users

What are the details of Starlink and Indian telecom operators Airtel and Jio Platforms’ partnership agreement? In a surprise move by Elon Musk’s Starlink, partnerships were recently announced with Airtel and Jio Platforms to provide satellite broadband services in India. This agreement, subject to SpaceX being approved to sell Starlink in India, allows both telecom […]

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How Starlink’s partnership with Jio and Airtel affects India’s internet users

What are the details of Starlink and Indian telecom operators Airtel and Jio Platforms’ partnership agreement? In a surprise move by Elon Musk’s Starlink, partnerships were recently announced with Airtel and Jio Platforms to provide satellite broadband services in India. This agreement, subject to SpaceX being approved to sell Starlink in India, allows both telecom giants and SpaceX to explore how best to exploit each other’s strengths.

Jio and Airtel will offer Starlink solutions through their retail outlets and online storefronts.

Airtel Partners with SpaceX to Introduce Starlink's High-Speed Internet in India

Furthermore, they are currently exploring other areas of collaboration to bolster India’s digital ecosystem using each company’s infrastructures. What’s surprising here?Indian telecom operators had long opposed Starlink’s market entry without paying for spectrum rights. Both parties have frequently come into conflict over this matter, with Jio and Airtel favoring spectrum auctions while Starlink supports administrative allocation. Partnerships were announced before policymakers could come together and find a resolution, however this doesn’t signal an end of competition between Indian telcos and Starlink.

While this partnership strengthens Indian telcos’ positions that satellite services should be provided via their networks, Starlink can still offer satellite communication directly to consumers – as has already begun pilots in the US for providing broadband services directly on smartphones. Although Starlink may benefit from their partnership with Jio, there remain regulatory frameworks and spectrum allocation issues which have yet to be resolved. What part does the deal play in India-US negotiations given Musk’s links with President Donald Trump? Unfortunately there is no clarity. Musk is well-known to have attempted to enter India’s communications and electric vehicle markets. However, regulatory obstacles, including high import duties on electric vehicles (EVs) and spectrum costs have proven contentious issues. What does this mean for Indian Internet users? Starlink plans to provide high-speed, low-latency internet via satellite. Starlink can leverage Airtel and Jio’s infrastructure to reach underserved areas of India where traditional broadband networks are difficult or costly to deploy, helping close India’s digital divide. This partnership could serve as an avenue towards closing it. Airtel founder Sunil Mittal has coined this service, Sat-G, although its affordability remains uncertain when compared with mobile broadband. How does Sat-G compare with traditional mobile services?Traditionally, satellite communications have been deployed mainly as fixed broadband access points and backhaul infrastructure for telecom operators’s network services.

Technological advances now enable satellite providers to offer seamless broadband connectivity directly to users’ smartphones without the need for traditional cell towers. As it remains too soon to tell whether satellite communications tariffs will match terrestrial prices on a per-MB basis, this depends on various variables like spectrum costs. How Does Starlink Differ From Existing Satellite Broadband Services?

Currently in the US, Starlink charges between to 0 per month for speeds ranging between 20-250Mbps while traditional services such as T-Mobile Home Internet charge for speeds between 72-245Mbps.How Can Starlink’s Satcom Differ From Existing Services?India has historically used Geostationary Earth Orbit satellites primarily for imagery and direct-to-home broadcasting. Although these systems provide two-way communications capabilities, their limited use in two directions due to being located 36,000 km from Earth is an issue when providing mission-critical services that require instantaneous data access. Now, major players like Elon Musk’s Starlink and Jeff Bezos’ Project Kuiper are using satellites in Low Earth Orbit to provide high-capacity broadband at much shorter orbital distances – typically 160 to 2,000 km away – making these solutions suitable for mass deployment.

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Business

Malaysia Airlines Eyes Partnerships, May Revisit Cathay Pacific Plans

Explore Malaysia Airlines’ plans for joint business agreements with carriers and the potential revival of its partnership with Cathay Pacific.

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Malaysia Airlines Eyes Partnerships, May Revisit Cathay Pacific Plans
(Photo - X@MAS)

Malaysia Airlines is engaged in discussions with three carriers to establish joint business agreements (JBAs), with a potential resurgence of plans for a partnership with Cathay Pacific on the horizon.

Malaysia Airlines

Captain Izham Ismail, Managing Director of Malaysia Airlines and Malaysia Aviation Group (MAG), revealed the airline’s aspirations to develop multiple JBAs akin to its existing collaboration with Japan Airlines (JAL) within the Oneworld alliance.

Initially, Malaysia Airlines had sought to launch a joint business with Cathay Pacific, operating on a metal-neutral basis for flights connecting Hong Kong and Malaysia. However, these plans were shelved last year following an investigation by Hong Kong’s Competition Commission.

In a recent interview on the Window Seat podcast during Routes Asia 2024, Izham expressed ongoing discussions with three other carriers regarding joint business ventures. He emphasized the importance of JBAs as a strategic pillar for the airline’s future growth.

While remaining tight-lipped about the identity of the carriers involved, Izham hinted at a potentially aggressive approach to modeling joint businesses in the future. He also hinted at the possibility of revisiting the partnership with Cathay Pacific within the next 12 to 24 months.

The partnership between Malaysia Airlines and Japan Airlines commenced in July 2020, facilitating codeshares between Malaysia and Japan, including domestic flights. However, the collaboration with Cathay Pacific, announced in early 2022, faced regulatory scrutiny in Hong Kong.

Following an investigation by Hong Kong’s competition regulator, concerns were raised about potential violations of competition laws. Consequently, both airlines opted to withdraw their proposals, with the Competition Commission closing its inquiry in September.

Despite the setback with Cathay Pacific, Malaysia Airlines remains committed to expanding its international network through strategic partnerships. The ongoing discussions with multiple carriers underscore the airline’s determination to strengthen its position in the global market.

As Malaysia Airlines explores opportunities for collaboration, the revival of plans with Cathay Pacific presents a potential avenue for enhancing connectivity between Malaysia and key international destinations. With JBAs at the forefront of its business strategy, Malaysia Airlines aims to navigate the evolving aviation landscape with resilience and adaptability.

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Entertainment

Shah Rukh Khan’s Pathaan Enters Rs 100-Crore Club On Day 1 At Global Box Office.

Pathan Broke The Record Of KGF 2 In Advance Booking Itself.

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Shah Rukh Khan’s Pathaan Enters Rs 100-Crore Club On Day 1 At Global Box Office.
Photo:- Shah Rukh Khan /Pathaan Movie

Pathaan 100 Cr Entry: Shah Rukh Khan’s Pathan Released Worldwide Yesterday On January 25. Pathan Broke Everyone’s Record On The First Day. Pathan Has Earned 100 Crores Worldwide. Pathan Is Getting A Stormy Response From All Over The World. So Pathan Has Entered The 100 Crore Club On The Very First Day. Shah Rukh Came To The Big Screen After 4 Years And Made A Record.

Pathan Broke The Record Of KGF 2 In Advance Booking Itself. And Now After The First Day Is Over, Pathan Has Also Thrashed Baahubali 2. Therefore, Pathan Has Become The First Film In India To Gross The Highest On Its First Day. Shah Rukh Khan And His Fans Are Rocking At The Box Office.

Shah Rukh Khan Made A Comeback After 4 Years With Pathan. The Action-Thriller ‘Pathan’ Finally Hit The Big Screens Yesterday On January 25. His Fans Are Thronging Theaters In Large Numbers To Support The King Of Bollywood. The Way ‘Pathan’ Has Set Records In Advance Bookings, It Was Expected That The Film Will Give A Blockbuster Opening At The Box Office. With Pathan Now Entering The 100 Crore Club, That Prediction Came True

Shah Rukh Khan Is Portrayed As A Raw Agent In The Movie Pathan. On This Occasion, Yash Raj Films Is Creating Its Own Spy Universe. Hrithik Roshan’s War And Salman Khan’s Tiger Are Also Part Of The Same Spy Universe. In The Movie Pathan, Salman Khan In The Role Of Tiger Is Shown Helping Shahrukh Khan In The Mission. Therefore, There Is A Possibility That Shah Rukh And Hrithik Will Come Together In Salman Khan’s Upcoming Movie Tiger 3.

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