In the wake of the recent Pahalgam terror attack, India has implemented sweeping measures aimed at curbing cross-border movement. Central to these actions are 2 major decisions: the closure of the Attari-Wagah Integrated Check Post and the cancellation of SAARC Visa Exemption Scheme (SVES) privileges for Pakistani nationals. These steps underscore New Delhi’s resolve to adopt diplomatic and logistical responses to perceived national security threats.

Foreign Secretary Vikram Misri announced the measures, emphasising that those who have already crossed over into India via the Attari route with valid endorsements may return before May 1, 2025.

Closure of Attari-Wagah Border: A Trade Lifeline Severed

The Wagah-Attari crossing, located near Amritsar in India and Wagah in Pakistan, has long served as the only land-based trade corridor between the two nations. Despite a steady deterioration in bilateral relations over the years, the route remained open for trade in selected goods and facilitated limited passenger movement.

Exports from India via this corridor have included items such as soybeans, red chillies, chicken feed, plastic granules, and yarn. Pakistan, in turn, has exported commodities like rock salt, gypsum, dry fruits, cement, and herbal products. The route has also functioned as a key logistical channel for trade between India and Afghanistan.

In 2023–24 alone, the Attari Land Port, spread over 120 acres and connected to National Highway I, facilitated trade worth ₹3,886.53 crore, saw 6,871 cargo movements, and managed 71,563 passenger crossings. Its sudden closure is expected to disrupt not only bilateral trade but also regional supply chains.

According to the news reports, Pakistan imported $26.8 million worth of goods from India in February 2025—a 28% increase from the $20.94 million recorded in February 2024.

Cancellation of SAARC Visa Privileges for Pakistan

In a parallel move, India has revoked access for Pakistani citizens under the SAARC Visa Exemption Scheme. The SVES was designed to promote ease of travel among member states by exempting certain categories of individuals, such as parliamentarians, diplomats, and senior officials, from requiring visas for inter-country movement.

This revocation effectively dismantles one of the last remaining formal frameworks that enabled cross-border interaction, further straining regional cooperation under the SAARC umbrella.

Strategic Significance of the Moves

The decisions were announced following an emergency Cabinet Committee on Security (CCS) meeting. Alongside the border and visa restrictions, India has expelled Pakistani military advisors and pulled back its defence personnel stationed in Islamabad.

These developments signal a broader recalibration of India’s strategic stance towards Pakistan, moving away from people-to-people diplomacy and confidence-building measures to a policy shaped by hardline national security concerns.

Read More: Good News for Harley-Davidson Lovers: India May Drop Import Tariffs on Luxury Bikes in US Trade Talks

Conclusion 

While the primary objective of these measures is to address immediate security concerns, their ripple effects may be felt across sectors. Disruption in trade could hurt regional exporters and traders, and the breakdown of SAARC mechanisms may further isolate Pakistan from regional platforms.

Moreover, with the closure of the only active land route for bilateral commerce, the future of trade, even at reduced levels, remains uncertain unless alternative diplomatic channels are explored.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Foreign Portfolio Investors (FPIs) have reversed their stance on Indian debt, exiting to the tune of $2.27 billion in April 2025. This sharp withdrawal follows four straight months of consistent inflows and marks the most significant monthly outflow since May 2020. It is also the first net outflow from Indian debt since November 2024. This pivot underscores a change in global risk appetite, particularly toward emerging market debt instruments.

The Yield Spread Squeeze: India vs the US

One of the primary drivers behind the FPI selloff is the narrowing yield spread between Indian and US bonds. India’s ten-year government bond yield has fallen from 6.6% at the start of April to 6.33%, while its US counterpart has risen from 3.99% to 4.35% over the same period. This has brought the yield differential down to roughly 200 basis points — its lowest since September 2004. With shrinking returns on Indian debt relative to US bonds, foreign investors appear to be reallocating their capital.

Read More: Massive FII Sell-Off: $15.5 Billion Pulled Out in 2025, Market Cap Shrinks by $1.3 Trillion

Global Headwinds and Investor Risk Aversion

Global market conditions have been less than favourable in recent weeks. Persistent inflation in the US, fears of new trade tariffs, and a delay in anticipated rate cuts by the Federal Reserve have all contributed to heightened market volatility. These developments have pushed US bond yields higher, making them more attractive to investors compared to emerging markets, where returns are becoming relatively less competitive.

Regional Pressures and Profit-Booking

Apart from global forces, regional dynamics have also contributed to the outflows. Several Asian markets, including India, have witnessed profit-booking as investors reassess their exposure amid the changing macroeconomic environment. A deteriorating risk-reward profile has prompted FPIs to exit debt positions that were once favoured for their yield advantage.

Domestic Fundamentals Remain Supportive

Despite the FPI retreat, the underlying fundamentals of the Indian debt market remain resilient. Factors such as easing domestic inflation, a dovish outlook from the Reserve Bank of India (RBI), robust liquidity in the banking system, and active open market operations continue to support the market. Borrowing conditions for both government and corporate issuers remain favourable, suggesting that local demand for bonds may absorb some of the foreign selling pressure.

Conclusion

The recent FPI outflows from Indian debt illustrate the complex interplay between global and domestic factors. While India’s macroeconomic environment remains relatively stable, external pressures — particularly in terms of shifting global interest rates — are reshaping capital flows. Going forward, market participants will likely keep a close eye on US monetary policy developments, yield differentials, and geopolitical risks that could influence further investor behaviour in emerging markets.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

According to the news reports, Alphabet Inc., the parent company of Google, is realigning its manufacturing operations to navigate shifting global trade dynamics. Central to this shift is the decision to relocate a significant portion of Google Pixel smartphone production from Vietnam to India. This move is driven by ongoing tariff pressures, especially from the United States, and a broader ambition to diversify supply chains beyond China and Vietnam.

Vietnam’s Growing Trade Risk Sparks Urgency

Vietnam, which has been a cornerstone of Google’s Pixel assembly, is facing the threat of steep US tariffs, potentially as high as 46%. By contrast, Indian exports to the US could attract a relatively lower tariff of 26%. While these proposed tariffs are currently on a 90-day hold, companies are pre-emptively adapting to avoid disruptions.

This has made Vietnam less viable for export-oriented production in the short term, propelling Google to explore safer and more cost-efficient alternatives.

India Gains Ground in Google’s Pixel Plans

India is fast emerging as a strategic production hub for Google. In 2023, the company began assembling Pixel devices locally with help from Foxconn and Compal. This momentum has continued into 2024, with Dixon Technologies and Foxconn now producing around 43,000 to 45,000 units monthly at their Tamil Nadu and Noida facilities.

While the current output primarily caters to the domestic market, discussions are underway to scale production for exports, particularly to the US.

Read More: Dixon Hits 3-Month High, Rebounds 36% from April Low

Local Sourcing and Component Independence

As part of this transition, Google is exploring the localisation of several key components — including chargers, batteries, enclosures, and fingerprint sensors — which are still being imported. This shift towards domestic sourcing would not only lower production costs but also align with the Indian government’s ‘Make in India’ initiative.

Drawing Parallels with Apple’s India Strategy

Google’s approach mirrors Apple’s roadmap in India, which involves incrementally shifting high-end device assembly to local units. By doing so, tech giants reduce their exposure to geopolitical risks while also gaining from government incentives and a rapidly improving electronics manufacturing ecosystem.

In August 2024, the Pixel 8 began rolling out from Wowtek Technology India, a subsidiary of Bharat FIH (Foxconn), from a Tamil Nadu-based plant, signalling Google’s deeper manufacturing commitment to the region.

Conclusion

Looking forward, Google appears set to make India a major node in its global Pixel supply chain. Industry reports indicate Alphabet is preparing to expand export-oriented production from India and is also considering shipments to new international markets.

The strategy positions India as a key beneficiary of trade realignments, while giving Google a more agile and cost-effective manufacturing base amid global uncertainties.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

According to recent insights from Bloomberg and the Financial Times, the Trump administration is contemplating changes to its tariff policy targeting the auto sector. This comes in response to growing pressure from automakers who have flagged the potential for serious disruptions, including reduced profits, production delays, and job losses.

The auto industry, especially in North America, depends heavily on complex and interlinked supply chains. The current tariffs, particularly those involving steel and aluminium, have created overlapping layers of costs — a phenomenon known as “stacking” — which manufacturers argue puts them at a competitive disadvantage.

Potential Relief Measures Under Consideration

One of the proposals involves eliminating the stacking of levies. This would mean that automobiles and parts already hit by specific tariffs would not be subject to further duties stemming from broader steel and aluminium levies. Such a move could help manufacturers avoid double taxation on the same components.

Another option being explored is a full exemption for auto parts that comply with the US-Mexico-Canada Agreement (USMCA). While these parts currently face no tariffs, the administration had previously intended to tax the non-US share of their content. Dropping that plan could spare automakers from a complex and potentially costly administrative burden.

In a further possible shift, officials are reportedly evaluating whether to exempt auto parts imported from China from a separate 20% tariff. This tariff was part of a broader trade response to disputes surrounding fentanyl.

Industry and Political Implications

Although President Trump has not yet approved any of the proposals, the discussions suggest a willingness to recalibrate trade measures in light of economic consequences. The unpredictability of the administration’s past trade policies, however, means that these deliberations could still shift direction.

If implemented, these changes would be a welcome development for auto manufacturers across North America. With integrated supply chains and cross-border manufacturing being key to the region’s auto ecosystem, the removal or reduction of tariffs could help stabilise operations and safeguard employment.

Read More: Trump’s Tariffs and Their Impact on Consumer Prices: What to Expect

Conclusion

While no final decision has been made, the current policy discussions point to a possible softening of the US stance on auto industry tariffs. Should these measures be adopted, they could mark a turning point in the administration’s approach to trade, potentially alleviating pressure on an industry vital to both economic output and job creation across the continent.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.