How India's Economy Works

In this episode of How India's Economy Works, host Puja Mehra speaks with trade economist Dr. Nisha Taneja, Professor at Indian Council for Research on International Economic Relations (ICRIER). They unpack what the latest export data really reveals. Why did some sectors thrive while others—diamonds, pharmaceuticals, petroleum products and jewellery—registered sharp declines? Why did exports to China unexpectedly surge? And what does this tell us about India's overdependence on the US market?
The conversation also examines whether India's recent free trade agreements can genuinely help exporters, why earlier FTAs failed to deliver the expected gains, and how non-tariff barriers, product standards and local market knowledge matter as much as tariff cuts. Dr. Taneja explains why the tariff shock has become a catalyst for a new export diversification strategy, prompting the government to launch an ambitious export promotion mission aimed at helping Indian firms enter new markets.
Tune in for insights on how Trump's tariffs reshaped India's export strategy, why diversification has become an economic necessity, and what India must do to build a more resilient export ecosystem.
CHAPTERS
(00:00) Introduction
(00:14) Why US Tariffs Didn't Hurt Exports
(03:27) Which Indian Sectors Lost Most
(05:31) China's Surprising Demand For Indian Goods
(06:52) How Exporters Found New Markets
(08:21) Can Free Trade Agreements Help?
(10:53) Lessons From Trump's Tariffs
(11:32) India's New Export Diversification Strategy
(14:17) Can Textile Exports Recover?
(14:57) Finding Markets Beyond America
(16:20) A Turning Point For India's Exports

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In this episode of How India's Economy Works, host Puja Mehra speaks with economist Renu Kohli, formerly at the Reserve Bank of India and the IMF and currently senior fellow at the Centre for Social and Economic Progress (CSEP). They talk about the recent depreciation of the rupee and why this episode may be different from previous currency shocks. Despite India's large foreign exchange reserves, the rupee has faced sustained pressure. Why?
Renu Kohli argues that the deeper issue lies not in India's trade balance but in the drying up of foreign capital inflows. She explains the difference between reserves earned through exports and what she calls "borrowed reserves", examines the decline in foreign direct investment, and discusses whether policymakers underestimated the structural nature of these pressures.
The conversation also explores the RBI's exchange-rate management strategy, the limits of using reserves to defend a currency, the impact of global capital flows, and why short-term measures can only buy time. Looking ahead, she outlines the reforms India may need if it wants to attract and retain long-term foreign investment in an increasingly competitive global environment.
What does the rupee's recent weakness tell us about India's place in the global economy? And what must change to ensure that external vulnerabilities do not become a lasting feature of India's growth story?
Tune in for insights on the rupee, foreign capital, forex reserves, and the structural challenges shaping India's economic future.

CHAPTERS
(00:00) Introduction
(01:04) Why Forex Reserves Didn't Prevent Rupee Weakness
(04:25) How the Current Shock Differs from 2013
(08:55) The Hidden Problem: Drying Foreign Capital
(13:33) Is This India's Most Serious External Vulnerability Since 1991?
(16:14) Did the RBI Misread the Nature of the Pressure?
(19:24) Should the Rupee Have Been Allowed to Fall Earlier?
(22:54) RBI's Short-Term Measures and Their Limits
(26:20) Can Policymakers Count on Global Capital Returning?
(29:29) Why India Is Struggling to Attract Foreign Investment
(32:19) What India Must Do to Secure Long-Term Capital Inflows

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In this episode of How India’s Economy Works, host Puja Mehra speaks with economist and Professor of Economics at SRM University, Dr. Parag Waknis to unpack one of the most important yet least understood documents in Indian policymaking, the RBI’s accounts. They explore how the RBI manages government debt, why it holds government securities on its balance sheet, and how these operations influence GDP, liquidity, interest rates and inflation.
The conversation examines the evolution from direct deficit financing to the current system of primary dealers, the significance of foreign exchange reserves, and the RBI’s use of tools such as open market operations and Operation Twist. Dr. Waknis also explains the relationship between government borrowing and central bank profits, and discusses whether these dynamics affect the RBI’s policy independence.
Tune in for insights into the institution at the heart of India’s monetary and financial system.

CHAPTERS
(00:00) Introduction
(00:14) Why the RBI Balance Sheet Matters
(03:54) Why Government Bond Auctions Fail
(06:15) How RBI Invests Forex Reserves
(08:28) Operation Twist and Borrowing Costs
(11:21) Why RBI Doesn't Fund Government Directly
(14:33) Currency Notes, Coins and Sovereignty
(16:35) What the Latest Balance Sheet Shows
(19:00) Government Borrowing and RBI Surplus
(21:27) Rising Government Debt on RBI Books
(24:18) Is India’s Bond Market Distorted?
(25:44) RBI Independence and Balance Sheet Risks
(27:47) Understanding the Monetary Policy Corridor
(32:54) Rules Versus Discretion in Monetary Policy
(34:49) RBI’s Conflicting Institutional Roles
(36:36) Why US Debt Markets Differ
(37:48) Key Takeaways on RBI Operations

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In this episode of How India's Economy Works, journalist and author Puja Mehra speaks with economist and former NITI Aayog Vice Chairman Rajiv Kumar about why India’s manufacturing sector continues to underperform despite decades of policy attention and repeated attempts to boost industrial growth.
India has long aspired to become a global manufacturing hub, yet manufacturing’s share in GDP has stagnated and labour-intensive sectors such as apparel, leather and food processing have struggled to expand. Drawing on Dr. Kumar’s recent writing and policy experience, the conversation explores why India has failed to build an export-oriented manufacturing economy, why scale and competitiveness remain elusive, and whether the country has become too dependent on the idea of a large domestic market.
They discuss the limitations of production-linked incentives, the persistence of protectionist thinking, and why Indian industry has often preferred domestic shelter over global competition. The episode also examines the contrasting experiences of China, Bangladesh and Vietnam, the role of state governments in export promotion, the challenges facing SMEs, and why labour-intensive manufacturing remains crucial for absorbing surplus workers from agriculture.
The discussion raises larger questions about employment, industrial strategy and India’s long-term growth model. Can manufacturing still become a major engine of jobs and exports? What would it take for India to double its share in global trade? And are policymakers, industry and states aligned enough to make that happen?
Tune in for insights on why India’s manufacturing ambitions continue to fall short — and what it will take to build a more competitive, export-driven economy.

CHAPTERS
(00:00) Introduction
(00:20) Manufacturing Slowdown
(01:01) Export-Led Growth
(02:53) India’s Market Myth
(03:57) Competing With China
(08:37) Rewarding Exporters
(11:51) Bangladesh Garment Success
(12:25) Why Factories Leave India
(15:13) Jobs And Textiles
(16:52) Manufacturing Wake-Up Call
(18:14) Employment Concerns
(21:02) Supporting Smaller Firms
(21:39) Lessons From China
(23:58) Rethinking PLI
(25:51) Bureaucracy And Industry
(26:31) Breaking Policy Silos

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In this episode of How India’s Economy Works, journalist and author Puja Mehra speaks with economists Arjun Jayadev and Amit Basole, authors of the CSIE working paper India's Labour Productivity Puzzle, about a troubling trend beneath India’s headline growth numbers: a sharp slowdown in labour productivity since 2017.
India remains one of the world’s fastest-growing major economies, employment levels have risen, and female labour force participation has increased. Yet, according to their latest research, workers today are producing far less than they would have if earlier productivity trends had continued. The conversation explores why this matters for wages, living standards, investment, and the broader health of the economy.
They discuss the rise of surplus labour, the difference between employment and productive jobs, and why much of the recent increase in work — especially for women — may reflect economic distress rather than opportunity. The episode also examines weak private investment, manufacturing stagnation, structural transformation, the limits of formalisation, and whether policies like infrastructure spending, digitalisation, and production-linked incentives are truly improving productivity.
The discussion raises a deeper question: can India sustain high growth if output per worker remains stagnant? Tune in for insights on why India’s growth story may be masking a deeper productivity crisis — and what it means for jobs, wages, and the future of the economy

CHAPTERS
(00:00) Introduction
(01:23) India’s Labour Productivity Slowdown Since 2017
(05:05) Why India’s Productivity Crisis Stands Out Globally
(09:32) How Growth Can Rise Despite Stagnant Productivity
(10:58) Surplus Labour and the Rise of Low-Quality Employment
(14:02) The Manufacturing Productivity Puzzle
(15:08) Low Wages, Weak Productivity, and Employer Incentives
(17:24) The Link Between Productivity and Wages
(18:35) Women’s Employment and Economic Distress
(20:40) The “Intensification of Dualism” in India’s Economy
(21:45) Formalisation Versus Informal Labour Expansion
(22:14) PLI Schemes, Policy Dynamism, and Missing Counterfactuals
(25:30) Cash Transfers and Structural Transformation
(27:00) Why Digitalisation Does Not Automatically Improve Productivity
(28:55) Conclusion and Final Thoughts

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