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Good to have you with us today. India has suspended import duties on cotton.
But how much is that going to help? If the Indian farmer community is going to suffer, end of the day, the entire economy is going to suffer.
So it's a short-term benefit that we might be getting.
And yes, you're right. It is my industry which has been pressuring the government to do this.
The American importers ground down by tariffs on coffee.
If we have to shrink, we'll shrink and if we have to shrink to the point where we go out of business, there's nothing I can do about it.
And the British government backs down in a battle with Apple.
But first, India has suspended import duties on cotton until the end of next month after pressure from industry groups.
The move to exempt them from these 11% levies is seen as a relief for the textile industry, which is facing a steep fall. a 50% tariff on shipments to the US.
India exports about $10 billion worth of textiles to the US each year.
We'll go live now to a market in central Delhi where we find my colleague Davina Gupta.
Davina, explain this. Why have they done it?
Well, Andrew, I think the answer is here in this market itself because it's a bustling market.
It's 8pm in the night and there are lots of vendors. who are still selling bedsheets and clothes and skirts and shirts.
And all of them are made in small cities in India.
And they are cotton, made from cotton. And cotton is an important ingredient.
But it has been, India has been... producing cotton.
It's among the largest producers and also among the largest importers of cotton.
That's to meet demand for these garments.
And what India has done right now is to ensure that it's importing cotton at a cheaper rate.
The destination from which it imports cotton is Brazil, African countries, but more importantly...
US. And US forms a large share of those that imported cotton.
And by doing this, India is giving a signal. to America that it's willing to lower and open some sectors of its economy.
And it's willing to do this business with the U.S. if there can be a larger trade deal that can be negotiated.
With this, because America has often complained that India has high tariffs and it is trying to protect its agriculture sector.
It's not lowering tariffs there. So with this. move, India is signalling that in some parts it's ready to cede ground.
And just to explain the supply chain that I've been learning about today, a lot of the cotton is imported from the US and then a lot of the... manufactured garments are sold back to the US.
And of course, that's where the tariffs will hurt.
Absolutely. I mean, that's an important bit what you're talking about, Andrew, because textile is one of those sectors where...
India exports quite a lot to the US and with this move it's trying to lower trying to give some incentives to its own textile manufacturers which are facing 25% of tariffs from the 7th of August that were implemented and additional 25% which comes in the category of secondary tariffs.
And just to explain to our listeners, those are tariffs which the US is imposing on India because of its crude purchase from Russia.
They go into effect on the 27th of August.
For now, we do know those negotiations between India and US, which are supposed to take place, have been postponed.
So India is trying to also give some breathing room. to its textile manufacturers by lowering this import duty on cotton, giving them cheaper input. for making garments and other textiles.
But it's not enough, is what many textile manufacturers are saying to me.
We'll come back to you in a second, Davina.
I've been talking to Pankaj Agrawal, who's the chief executive of the No Name Company, which makes clothing. and he's been giving me his reaction to the temporary removal of these import duties on cotton. fine.
It's a small blip because it's only till September for now.
And in any case, it is not going to impact us much If you look at it in the context of the United States, because of the tariffs in the US, US happens to be also the country from where predominantly we would import cotton, if we would.
If we lower the entry for them, whereas they don't do it for us, in any case, we are facing almost an embargo as far as the US is concerned.
We will not be able to do any business there.
So your cotton usually comes from the US.
Does that mean you have to source it from somewhere else now to carry on?
No. India itself is a huge cotton manufacturing country.
We grow a lot of cotton. And the only thing is that our acreage is not very good or the yield is not very good.
So when we import from the US, for example, the prices are much lower.
So as a matter of fact, if the government were to do this, it would very, very seriously impact the Indian farmer community, which I am very surprised as to why the government has even done I understand that India's government has been under pressure from people in your industry to make the sector more competitive, so it's... decided to go with the demands being made of it to take off these import taxes.
Are you saying that's a bad idea? You are absolutely right.
It is going to be in our benefit as a garment manufacturer.
But if you look at it from a holistic perspective, ultimately it will come back to us. if the Indian farmer community is going to suffer end of the day the entire economy is going to suffer So it's a short-term benefit that we might be getting.
And yes, you're right. It is my industry which has been pressuring the government to do this.
Where do your governments end up going once they're manufactured?
It's mostly to the US. So almost 30% of what everybody makes goes to the US or used to go, I would say.
And otherwise, it's Europe and UK. And obviously, the US exports are now subject to tariffs.
And they are. So that entire business is going to not just suffer.
As I said earlier, I think it's an embargo.
At 50% tariff, it is not practical to do any business.
So people in the US will source their supplies from elsewhere.
And what about other markets that you could... exploit more you say you sell quite a lot into europe as well is the potential to grow that side of the business yes of course we have already been exporting to the european countries earlier And we are by force now going to have to look at that more closely. including the UK.
We have recently signed an FTA with the UK.
It helps both countries. In our case, of course, it will help us to grow our exports to the UK.
We have to look at Europe, we have to look at Japan, we have to look at our own domestic economy.
That's fairly big itself. Do you think there's any hope of India's government being able to negotiate a better deal with the US on tariffs?
I do not think there is anywhere in the world who can tell what Donald Trump will negotiate or not negotiate.
We will know ultimately when it happens.
At the moment, it looks tough. And is that something that would be a priority from your point of view?
Would you call on the government to do anything they can to try and get a better deal?
Or do you think they're wasting their time?
A better deal is in the interest of everybody.
A better deal is in the interest of the Americans as much as it is for us.
That's Pankaj Agrawal, who's suspicious, I think it's fair to say, of this measure and how much it's going to benefit his business and India's economy.
Alongside all of this, Pankaj is very much focused on the relationship with the US, but actually there's quite a few developments...
Davina Gupta in Delhi today in terms of relations between India and China.
The Prime Minister, Narendra Modi, talking about it just in the last few minutes.
Yes, Andrew. India has been welcoming China's Foreign Minister Wang Yi.
And it's a significant moment because both countries have been locked in a frosty relationship to say the least from 2020. where there was a border dispute and there were deadly clashes along the border where at least 20 Indian soldiers died. at least four Chinese soldiers were killed as well and from there on we'd seen travel ban, tourist visa ban, we'd seen a cross-border land trade ban and even The popular Chinese app TikTok was banned in India.
From there on now, India is trying to normalize relationship with China.
And all of this leads down to one person, as Pankaj was mentioning, which is the US President Donald Trump.
It seems to be like the law of unimpeded. tended consequences because of the tariff threats with China.
China has also, by the way, slapped higher levies on American cotton. and India facing those higher levies as well.
Both countries are now trying to realign and reset their relationship.
China remains India's second largest partner.
So, Wang Yi coming to India, there have been talks about opening up cross-border trade. starting direct flights.
And also China exporting rare earth metals, which is crucial for India's auto industry, fertilizer, which is crucial for India's agriculture industry, agriculture sector.
So there have been these conversations which were on pause for the past five years alongside India's Prime Minister has been now invited to China to attend the Shanghai Cooperation Organization Summit. which will happen by the end of this month.
And that is, again, significant in these geopolitical tensions because it will be his first visit to China in seven years.
And that's where he could meet Chinese President Xi Jinping and take these talks forward.
Davina Ndeli, thank you. Live now to Fiona Sincotta, Senior Market Analyst for Citi Index.
Fiona, let's just focus on the additional tariffs. which the US hasn't introduced yet but are due in a few days.
This is all about India. and Russia trading oil.
But of course, all relations with Russia are up in the air at the moment.
So who knows how that's going to play out?
Yes, exactly. As you pointed out, this is sort of a US punishing India for purchasing Russian oil.
They've sort of been accused. or accused India of profiteering from Russian oil by buying oil cheap refining it into gasoline or diesel and then selling it on to countries that have sanctioned Russian oil, such as Europe.
And so India has actually become one of the or the largest importer of Russian oil at 1.5 million barrels a day in July.
That's ahead of China. So a massive sort of importation of Russian oil there.
But as you said, this is a very live situation and we are seeing signs of progress potentially in moves towards peace in Russia and Ukraine.
So this could all be changing anyway. More stories with Fiona coming up.
That's the story in India. Tariffs are also having an impact on businesses worldwide.
In the US, of course, Erin Delmore, our business correspondent who's based in New York, has been looking at one sector beginning to feel the pinch, coffee. with US imports of coffee beans from Brazil now facing tariffs of 50%.
This is a bag of 50 pounds of Brazilian French roast.
It would have been 147.50 before the tariff. and 359.50 after the tower.
Peter Longo's Puerto Rico importing company has been a staple on New York City's bleaker street since 1907.
A bestseller is Cafe Blend. It's reliant on Brazilian beans.
They're now subject to a 50% import tax thanks to President Trump's tariffs.
The amount of the tariff is so large that it's going to really affect the price of the coffee.
So, for instance, if we're selling coffee for $15.99 and there's a 50% tariff, That coffee is going to go up another $8.
That's going to be in the 20s. That's crazy.
People won't buy it. You know, $30 a pound.
That's ridiculous. That's going to kill the market for Brazilian coffee, which is, I guess, the purpose.
They want to punish Brazil for whatever reason.
So they're putting a draconian tariff on it.
More production at home will mean stronger competition and lower prices for consumers.
President Trump is remaking the global trade world order through tariffs, charging importers like Peter a fee to bring products in from other countries.
The goal is to get foreign countries to lower trade barriers and to make foreign-made products more expensive so that American-made products are more competitive and eventually preferred.
That, in turn, would spur more manufacturing and production of goods right here in the USA.
But coffee isn't really grown in the US.
It can't be. It's a tropical fruit that grows in a narrow strip of land around the equator.
It does grow in some parts of Hawaii and Puerto Rico and a tiny slice of Southern California.
But that's not enough to supply the 450 million cups of coffee Americans drink every day.
And so virtually all of it has to be imported.
That's why tariffs on coffee producing countries and especially those 50% tariffs on Brazil, which provides around a third of all coffee consumed in the U.S., is making life hard for importers and sellers like Peter.
Horribly stressed. Horribly stressed. It keeps me up at night because you have to try to figure out a way to manage your cash flow to anticipate what's coming.
The stakes were high before tariffs were even announced.
Back in February, the global price of Arabica coffee hit its highest point on record.
Even though that's come down a bit, roasted coffee cost consumers 15% more last month than it did a year prior.
All of that puts pressure on sellers like Peter.
This is how I make my living. So if we have to shrink, we'll shrink.
And if we have to shrink to the point where we go out of business, there's nothing I can do about it. and we'll do the best we can.
But he's betting that that morning cup of joe is something people will keep shelling out for, even if it costs them more.
I need three double espressos just to be conscious.
And I know my customers are very ritualized when it comes to their coffee.
They enjoy it. It's something they... look forward to.
So I don't think coffee is going away. Three double espressos.
Well, this is World Business Report with Andrew Peach here on the BBC World Service.
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Now, the US Director of National Intelligence, Tulsi Gabbard, has put on social media that the UK is no longer asking Apple... to provide a backdoor to its encrypted user data, which in her words would have enabled access to the encrypted data of American citizens. encroaching on their civil liberties. has not yet had any formal communication from either the US or UK governments.
Emily Taylor is the chief executive of Oxford Information Labs and the co-founder of the Global Signal Exchange.
I asked Emily why the UK wanted this access in the first place.
Thank you. It's very difficult to comment because the order that is supposed to have been raised by the UK government is secret.
Nobody's seen it. And neither the UK nor Apple have commented on its content.
But it is an order under the UK's surveillance laws. that enable the government to request access to secret content, encrypted content. for the purposes of investigating serious crime or other security threats.
And assuming that Tulsi Gabbard's post is right and it's now being dropped, what do you make of that?
Well, if it's confirmed, it is a big climb down for the UK.
And I guess it was inevitable because what was supposed to be a secret order has blown up into a huge international incident.
Apple sued. It withdrew its strongest privacy protections from the UK.
Even WhatsApp, art rival, was supportive.
And even the White House waded in. So the odds were stacked against the UK.
And not just on a rhetorical level, but also on a technical level.
Technical capability notices have always been very controversial provisions.
Nobody really knew how they would work in practice.
Because the technical community always argue that you can't just give somebody a backdoor to encryption just for your friends.
If you're weakening encryption, it actually weakens it systemically for everybody.
So it's actually not helping security in the end.
It's weakening it. These arguments have been raging and going around in really bad circles for 30 years.
There isn't a winning position anywhere.
And I think probably many people, me included, would be like, well, why do I have to pick a side here?
Clearly we need protections like encryption.
We need it for our banking, our communications.
We need privacy. But we also do need the protection of the law against criminality.
And that is a fight that democracies in fact worldwide...
The fight against cybercrime is one that we are losing at the moment.
Apple are going to withdraw some. encrypted services from the uk did that happen and if it did will they now be restored I believe it did happen that the service is called the Advanced Data Protection Service. and it provided end-to-end encryption to its customers.
And that means that even Apple as the provider wouldn't know what was said in those communications.
It wouldn't have access to that encrypted content.
Only the sender and the receiver of those communications would know what was said.
Seems to me the big takeaway here is when governments go up against tech giants, tech giants win.
I think the conclusion I reach from this is, can we please reframe this debate? and get away from circular firing squad type arguments where good actors who are working in good faith are unable to reach agreement.
Actually, the fight against online harms and threats is a huge burden for societies.
And this is an opportunity now for people to get around the same side of the table and explore what is possible. in terms of collaboration between the public and private sectors without having to break encryption.
That's Emily Taylor from Oxford Information Labs.
Let's look at some of today's other stories now with Fiona Sincotta from City Index and Home Depot.
It's the world's largest retailer. But what news about Home Depot today?
Yes, that's right. So the share price is actually trading 4% higher. after they reported quarterly earnings.
And they actually missed out on sales and earnings forecast, but they did reiterate and stick by their full-year outlook.
So the fact they stuck by their full-year outlook has given confidence to investors.
But I think we just need to be a little bit wary because obviously sales and earning missing forecasts could be an indication that consumers aren't actually spending as much as be expected and are indeed spending less.
Now, we do have more earnings out this week from those big retailers such as Lowe's, Target and Walmart.
So we're going to be watching their numbers closely as well to see whether there are any more clues as to whether consumers are indeed spending less.
Why have Intel shares jumped today? Yeah.
So, Intel is up around 10%. And this is after the Japanese investment bank sorry, investment giant SoftBank said that it was buying a $2 billion stake in the US chipmaker.
Now, this is a US chipmaker, which is in the middle of a turnaround push as well.
And the news was really well received by investors who had been a little bit concerned that the Trump administration may have been interested in taking a stake.
But that's actually been ruled out now. This time yesterday, we were focusing on aviation.
One of the stories we looked at was this Air Canada strike action.
Looks like that's over. Yes, four days of strike action over.
So we've seen Air Canada, again, the share prices up slightly today on the news as the... as they will resume flight service following an agreement with the unionized flight attendants, ending that strike. strike and that was the first strike by the cabin crew in 40 years but it was serious enough for Air Canada to withdraw Q3, their third quarter and full year earning guidance.
And they expect full restoration of flights within a week.
So that's why we're seeing recovery in the share price today.
All right. Thanks for now, Fiona. We go back to a topic now we've talked about a lot on World Business Report, weight loss medication.
The Danish pharmaceutical giant Novo Nordisk has halved the price of its diabetes and weight loss drug, Zempik. for uninsured patients in the US.
The price coming down to $500 instead of $1,000 per month This in contrast to news just a few days ago that the manufacturer Eli Lilly is increasing the price of its drug Manjaro in the UK by... as much as 170%.
So what's going on with these prices? Dr Sophie Dix is Head of Medical Affairs for the online pharmacy MedExpress and a former employee. of Eli Lilly.
Zempik is the same medication as Wegovi and Wegovi is available for weight loss in the UK and does show marked clinical efficacy, it reduces weight and it also shows cardiac protection.
Now, I guess what all this shows is what demand there is for these medications developed by drug companies who are there... to make a profit and we're seeing that play out people really want this and the market is in part competing between companies in part trying to settle on And what's an appropriate price point?
These are very popular drugs at the moment.
And I think the important thing here is that these drugs are very much portrayed in the media as fat jabs or skinny jogs jabs and they're heavily stigmatized And the reality is that these are actually life changing medicines that have huge health benefits beyond weight loss.
So it's important that the prices remain low and remain affordable. particularly with the length of time that it's going to take the NHS to be able to roll out medications.
The effect of big price increases could be that some people suddenly stop taking the medication. or it could be that people want to carry on with the medication and source it in a less safe way.
So we really, really advocate that if patients are concerned that they reach out to their provider We have one of the largest team of clinicians and pharmacists in the sector who can all advise on people's individual preferences.
It's really important that people don't turn to the black market for supply because fundamentally they won't know what's in that vial that they're given.
Even if it contains the active ingredient, they don't know how it's been stored, how it's been manufactured.
So it is inherently toxic. unsafe to take these medications if they've not been provided through a legitimate regulated source.
And is there a lack of supply, bearing in mind how much demand there is in so many countries?
At the best of our knowledge, not at the moment.
Supplies are strong. We are seeing a surge in orders. but have no concerns at the moment around supply from either Lilly or Novo.
You'd imagine that demand would just grow and grow and grow in many parts of the world.
So it'd be a difficult demand for supply to keep up with.
Yep. And we have seen that there have been shortages in the past.
Understand that companies have massively increased their manufacturing capability.
It's also important to note that there are other companies, there are going to be new medications coming out in the next few years, which will also impact increase the competition in the sector and potentially give more options to patients for their weight loss journey.
That's Dr Sophie Dix, Head of Medical Affairs at the online pharmacy MedExpress.
Fiona Sincotta from City Index is still with me.
First of all, how are the companies doing?
There are huge price fluctuations that we're talking about, but how are Eli Lilly and Novo Nordisk faring as organisations?
Yeah. So, I mean, we've seen a slight rebound in Novo Nordisk share price today, but I think Overall, it has been under a lot of pressure.
We've seen the share price down around 45% so far this year.
And that's because it's been really caught up in several headwinds, including concerns over sort of import taxes into the US. also increased competition.
And so that's sort of why we've been seeing that fall in the share price, which is a reflection of how that company is holding up against its peers.
Eli Lilly, on the other hand, has been holding up a little bit better.
Obviously, I think the fact that it's in the US. does mean that it's benefited or it's performed better in light of Trump's trade tariff policies.
And so we've actually seen the share prices just down around 9% this year, which is likely to do with the level of competition and potential for cheaper alternatives. coming out in the coming years.
So overall, though, these are still companies that are closely watched by our clients.
And is this just a young market? Is that why we're seeing all this fluctuation, increased competition prices all over the place?
Is it just because it's still relatively new?
Yes, I think there is an element of price discovery here.
As we mentioned, not only for the medication itself, but then obviously that also then reflects into the share price as well.
This is something that's really been a boom over the last, what, 12 months, 18 months, maybe at a push.
It is very much in price discovery mode.
We're trying to sort of get that price point where demand is matched.
But also, this is also an industry which is seeing massive developments.
You know, we don't know what's going to be coming.
There's going to be likely cheaper alternatives coming sooner rather than later.
Fiona, thanks so much for being with me today.
I really appreciate it. Fiona Sincotta, Senior Market Analyst at Citi Index.
There's more about some of the stories we've been talking about. over Apple encryption and Intel shares at bbc.com slash news.
From me, Andrew Peach, thank you for being with us.
