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That's greenlight.com slash iHeart. Hello and welcome to World Business Report from the BBC World Service.
I'm Rahul Tandon. Plenty coming up on this edition.
We're going to tell you about a very large discovery by the oil giant BP in Brazil, one of the largest they've had in 25 years.
What will it mean for the flagging energy company?
And we'll talk about a new trend in India attending fake weddings.
We are embracing the Indian tradition, right?
Wearing our Indian attire is a bit unique than a regular pub night because everyone is running a pub night, but this is quite unique.
Plenty more on that to come. It was one of those days where there were a couple of big stories.
We could have started by looking at those increasing trade tensions between the US and India, and we will come to that story in about five or six minutes' time.
But we've talked a lot about tariffs on the programme, so we thought we'd start with this one. today.
He's already the richest person in the world, but Elon Musk is in line for another $29 billion, thanks to the board of Tesla, which wants to keep him focused on running the electric car firm.
The award, which comes after a court blocked an earlier pay package with almost double that, will boost his voting power and help prevent challenges from so-called activist shareholders.
Our New York business correspondent, Michelle Fleury, has been outside a Tesla showroom in Manhattan.
We've seen the company's share price fall around, what, 20% so far this year.
Obviously, there was controversy over some of his political comments and views, and that has kind of affected the company.
Now, I'm standing outside a showroom here in the meatpacking district in Manhattan, and it kind of offers you some clues as to why the board has done what it has.
In the window, there are the cars, the cyber truck, but also there is one of the robots, and that's the thing.
Everyone sees the future of Tesla as robots, robo-taxis and AI.
And the assumption of the board, and it's a view shared by many Wall Street analysts, is that Mr. Musk is crucial to delivering on that promise.
We wanted to hear from someone who's been an investor in Tesla and somebody who knows Elon Musk well.
So let's bring in a familiar voice on this program, Ross Gerber.
Well, I think they're trying to... sort of resolve the issues that were created in the original pay packages and sort of give Elon the money he feels he deserves.
But also because Elon is so focused on other ventures, you know, the perception is that this will help, keep him refocused on Tesla.
But I don't know if that's going to be the reality, but that's certainly the perception.
Why do you think it may not be the reality?
Do you think he's moving away, could probably focus a little bit more on SpaceX and some of those other companies instead?
Well, it's really XAI where his main focus is right now.
And I think that Elon's going to do whatever the heck he wants and he doesn't care.
So he feels he's owed this money. This isn't really like, oh, we're compensating you for the future.
And in fact, what they're talking about is in November creating another pay package for him on top of this $30 billion.
It will, though, give him greater voting rights.
And he's talked openly about that. One of the reasons he's worried about spending too much time on Tesla is that, you know, if activist investors come in and kick him out, what's the point of spending all that time there?
Yeah, that's true. But there isn't any activist investors that have like $200 billion to buy Tesla stock to own enough of it to do anything about it.
And the board has been 100% bought and paid for by Elon.
So this idea that activist investors could come in and kick him out is disingenuous.
It's really not actually a reality. I think what it's really about is he believes he's owed this money and Tesla board wants to give him the money. that he has perceived he's owed, and they will try to accommodate whatever his requests are because that's the way it works at Tesla.
But you think in the long run that actually what they've said to shareholders is, look, this will keep him focused on the company for the next two to five years.
It's not going to work as well as they say it is.
You know, Elon's going to focus on what he wants to focus on, and it's AI.
I think Tesla will become an important part of his AI and robotics future because he's pivoted the company away from climate-related businesses like EVs and batteries to robotics and Robotaxi, which really suits his AI desires, even though I don't think that's what's best for Tesla as an EV slash climate company.
And so what I think we're going to see is over time, Tesla is going to pivot more and more away from its core businesses into these much more speculative businesses, because that's what Elon wishes.
And eventually, what I think is that Tesla will end up acquiring XAI and he'll bring all these businesses under one roof.
We saw that $50 billion options refused by Accord in Delaware.
Is there a chance that shareholders, some shareholders unhappy with this could go down a legal route to prevent it?
They can try, but Tesla just added an independent board director this last year, and they could certainly argue that the board is not independent still.
And I would assume that these lawsuits will be filed.
But I think over time, it just becomes a sort of like waste of time process.
The board is going to do whatever Elon wants.
And so it's either you own the stock and accept this and just go along with it, or you sell the stock.
But expecting the board to represent minority shareholders is a foolish belief.
A lot of people would say it's a lot of money to keep someone interested in a company they should be interested in anyway, $23.7 billion.
Yeah, it's a lot of money for any human of any company to be paid for anything.
The fact of the matter is he did, you know, have a pretty incredible performance five years ago.
But now if you look at where Tesla's been over the last five years, and then you start looking at it from, let's say, the time he bought Twitter, from that point to the forward, Tesla's shareholders have really suffered.
And so, you know, I think this whole thing is craziness, like that the wealthiest man in the world deserves another $30 billion from the same shareholders that made him the wealthiest man in the world.
And that is needed to incentivize him to work at his own company.
I mean, it's just sort of like all craziness to me.
All craziness to Ross Gerber. Let's bring in Quyen Nguyen, Chief Investment Officer of Equity Strategies for research affiliates based in New York.
Ross Gerber says all craziness to him, but it shows you how valuable Elon Musk is to Tesla, doesn't it?
Yes, absolutely. He is very, very valuable to Tesla.
And, you know, I mean, in some ways, I mean, is it really craziness?
Because this is to partially make up for the options that the courts overturned back from 2018, right?
And those options, if he had been able to keep them, would be worth $87 billion today.
And so this $30 billion is sort of like...
In some ways, a down payment on those options, the older options, which are still being appealed in court.
So it's not necessarily clear to me that this is so, I don't know, unfair to shareholders, let's say, because –
And I suppose at the end of the day, whether it's fair to shareholders or not comes with performance over the next few years.
If we see the stock price rising, you know, hugely because Elon Musk is more focused on the company, it's value for money.
I think that's right. And I also think that what we are seeing is that Elon Musk's attention has been turning increasingly to A.I.
Right. So he's already gone out and formed a company called X.A.I., And if he doesn't maintain his focus on AI within Tesla and shifts it to XAI, Tesla shareholders could be losing out on that.
And so in some ways, this is a bid to make sure that Tesla will benefit from his vision or his business leadership in the AI space.
Yep, it's one of those stories, isn't it, where we can say with certainty that time will tell whether it is a good investment or not when it comes to Elon Musk.
Let's talk tariffs once again now. And of course, the US President Donald Trump, because he is threatening to increase the tariffs on India.
He announced 25% last week, so could be about to go a bit higher.
Here's our North of America correspondent, Namia Iqbal.
Donald Trump's really going after India.
There were some suggestions that there could be an imminent trade deal between the two countries, but that's not happened.
He hit India with tariffs of 25% last week, and now he's accusing India of basically fueling the war.
He's basically accused India of selling Russian oil for big profits, saying they don't care how many people in Ukraine have been killed by the Russian war machine.
Now, in terms of how much higher the tariffs could go, the White House hasn't said anything.
Yep, let's see how much higher they could possibly go.
Indeed, that has been very clear in the past few days.
It's been a story we've been following closely here on World Business Report about their relationship with Russia.
Randhir Jaiswal is a spokesperson for the Ministry of External Affairs in Delhi.
Any country or all the ties that we have with various countries, they stand on their own merit and they should not be seen from the prism of a third country.
As far as India-Russia relations are concerned, we have a steady and time-tested partnership.
Here on World Business Report, we have been speaking to Indian businesses over the past few days to get their reaction to the mounting trade tensions.
Let's remind you of one of them. Aurobindo Naik is one of India's leading tea buyers.
He told us that higher tariffs were bad for his business.
Definitely not. That's a growing market as far as India is concerned.
We will definitely bear the brunt. But I think the people who are really going to get hit hard is the American consumers themselves.
Tea is not grown in the US and to choose to tax the tea industry, it's only going to have an inflationary effect.
Let's get some more thoughts on today's development.
Milan Vyshnev is Senior Fellow and Director of the South Asia Programme at the Carnegie Endowment for International Peace.
Well, it's going to be very difficult. And we should remember that there's a history here.
The European Union, the United States, other countries in the West did not want to import Russian oil.
They switched to other suppliers. India decided to then import large quantities of Russian oil in part in an arranged understanding with the countries of the West that it would do so in order to not royal global oil markets.
Now, there was a price cap on what India could pay for that oil.
They didn't want other countries like the United States, did not want India contributing to massive windfalls for Russia.
So this was all choreographed. And so I understand it happened before the Trump administration, but this was all done with the understanding of most of the West, including the United States.
How much of that oil goes back to Europe?
Because India refines quite a lot of it.
And India's importing, what, 550 million barrels of oil from Russia every year.
So do you think Donald Trump's asking them to stop completely or just cut that number down?
It's very hard to say, right, because we've been getting a policy by tweet or policy by truth, I guess.
It's really hard to know. But I think at this stage, we are in a dangerous spiral because the past 25 to 30 years of U.S.-India relations, which have been built on a lot of goodwill and developing various confidence building measures and measures of trust.
Those are all now showing signs of rapid deterioration.
So the best advice I think one could give is that I think Modi and Trump need to have a direct phone call and try to hash some of this out, because I think this policy by competing tweets is going to take us nowhere fast.
You talk there about that strengthening relationship, and it's also a strengthening trade relationship, isn't it?
In 2024, the US was India's biggest trading partner, $129 billion of goods traded between the two of them.
So it's important for India not to have a huge tariff and lose some of that trade.
Well, I think it's huge for two reasons, right?
It's huge because the U.S. and India trade a lot with one another.
But it's also important because, you know, India is trying to be the alternative to China.
It wants to be the next hub for global manufacturing.
And if it has an uncompetitive tariff rate – and right now, I should just mention, it's higher than many other low-cost Asian economies – it puts India at a competitive disadvantage.
So, you know, this cuts right to the heart of Modi's economic development strategy, which is to make an India, to build up India's manufacturing capability.
So this is an existential crisis as far as the Indian economy is concerned.
A lot of people have talked about the bromance between President Trump and Prime Minister Modi.
What has happened to that bromance? Why has it faded so quickly?
I do think that there's something which has become very personal to President Trump, and that is President Trump believes that it was his intervention which was responsible for India and Pakistan putting down their arms several months ago and calling a ceasefire.
Pakistan has lavished praise on President Trump.
India has not done that. India has not publicly acknowledged Trump's role or any third party role at all.
That's in keeping with India's own history of not wanting third parties to intervene in metal and what they believe are domestic issues.
And I think this has really gotten under Trump's skin.
And this is part of the reason I believe he keeps mentioning the fact that he prevented nuclear war from taking place on the It is now politically very difficult for Modi to acknowledge the US role and Trump's role.
But I think he's going to have to find a way of massaging this because it's clear now that Trump is not willing to let this lie.
Yeah. Milind Vaishnav there with his thoughts on those rising economic tensions between what have been close allies.
Let's bring Kwe and Wen back in. Chief Investment Officer of Equity Strategies for Research Affiliates in New York.
It shows us, doesn't it, Kwe, that under Donald Trump, many of those trade relationships are changing quite quickly.
Yeah, I mean, he's definitely trying to remake the global order of trade.
The framework in which we've operated for the last, I don't know, 30, 40 years is changing.
And I think one of the problems that everyone is having is because he's governing by tweet or making policy by tweet, nobody really knows where all of this is headed.
Now, that is a good point. But we had the sort of D-Day, didn't we, on Friday.
We've got past that. The markets don't seem worried.
It's been a pretty good day again, hasn't it?
Well, yes. I mean, Friday wasn't a great day.
Today's, you know, a rebound and then some from Friday, I would say.
And I think what people are really looking at is they're saying, you know, the tariffs that are being put up aren't They're not great, right?
But they're not as bad as they could be.
Meanwhile, there's a lot of bullishness about AI out there.
Just back to the whole Elon Musk conversation.
But, you know, there are others who say, where do you think we are?
Who say, look, it's a bit of a bubble that's going to burst AI.
There comes a point where the markets can't just keep going up because of it.
Or can they? I think it probably can go up for a bit.
I mean, I think that when we have something as big a story or as big a potential as AI, what you really need is you really do need a bubble in order for us to be able to fully realize the potential of AI, right?
I mean, if you think about the internet bubble, the internet started out as basically, you know, shopping for CDs and books and sending emails.
And the internet has become so much more than that.
But in order for the internet to become so much more than that, you needed a massive bubble where people would actually invest the capital to develop something, to develop that killer app, right?
We don't know what that killer app in AI is going to be.
We need people to try to commit capital to it and to try to figure that out for us.
And of course, it's going to be a bubble.
You have to have a bubble to make that happen.
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Yep, that is true. Let's see what happens.
You are with World Business Report from the BBC World Service.
Let's move to Brazil now, or at least a few miles off the coast a bit, where the oil giant BP says it's made what it calls a significant discovery of oil and gas, its largest in 25 years.
It's being seen as a huge boost for the company, which has been trying to turn around years of underperformance.
Let's bring Edmar Almeida in, president of the International Association for Energy Economics.
He joins me now from Rio de Janeiro to explain what this all means.
Give us a sense, Edman, thank you so much for joining us, of the size and the scale of this discovery.
Thank you. Well, this is most probably a giant reservoir discovery.
This is an area which is located in the Pre-Salt area in Brazil.
The Pre-Salt is a basin where Several giant oil fields have been discovered in the last 20 years.
And most probably this would be another giant field.
And when we talk about giant field, we are talking about fields with more than 1 billion barrels of oil recoverable reserves.
So it could be a very important finding for BP and for Brazil.
Yeah. And let's start with BP first, and then we'll come on to the benefits of Brazil, if you don't mind.
It's important for BP because they've been struggling recently.
There's been a lot of uncertainty about what direction they're going to go in, turning their back a little bit on renewables.
So for the company, which has been having a bit of a tough time, it's good news.
Oh, yes, it's very good news because in these fields, BP has 100% share.
So usually when the companies explore in the offshore, they have other partners.
And so when they make big discovery, they have other companies taking the stake.
And here, BP has 100%. So if we are talking about a giant field with 100% share of BP, this could be a game changer for BP.
So all will depend on the confirmation of the size and quality of this asset.
Okay. Game changer for BP. What about Brazil?
When you have a huge discovery like this in a region, does that mean that we could see many other oil companies looking to come into this part of Brazil as well to see if there's other significant oil fields there?
Yes. I mean, PreSalt is a very, very attractive and well-known company. area of exploration in the world.
So the companies which are in the offshore, all of them, they know this area very well.
And they know that this is a very prolific area.
And the good news is that in the last five years, very few discoveries have been made in the British South.
So this is a very good area with lots of giant fields.
But in the last five years, it has been very difficult to find big fields, big reservoirs.
And when BP make this announcement that can bring the attention of companies for this area again, So that means that there is still some oil to be discovered.
And I think that this will be a renewal in the attractiveness of oil. result in Brazil.
Stay with us, Edmar, just for a minute, because I want to bring Kwe and Wen back in, who has been with us throughout the course of the programme.
We have seen Donald Trump talk about drill, baby, drill, focus on fossil fuels.
That's having an impact on other economies.
Other countries also now looking to exploit a little bit more some of their fossil fuels.
Yeah, absolutely. But I also think that this is another sign of how difficult renewables have been.
BP had been really focused on green energy, hasn't really paid off or it's been a tough go for them.
And now they've made this pivot and this discovery really sort of just underscores the success of their pivot.
Yeah, it certainly does, or hopefully the company thinks it may do.
Let us see what happens. Edmar, final thoughts from you briefly, if you don't mind.
We often talk about discoveries. Okay, that's the beginning of the process, but still a lot of work to go.
Oh, yes. I think that in order to know if this is something meaningful, we need to make tests to see how much oil can flow in each well and we need to understand better the type of hydrocarbon which is in this reservoir.
BP has said that there is oil, gas, and a lot of contamination in the gas, CO2.
So, all depends on how this different composition is, how much of oil, how much of gas and CO2 is in the reservoir.
If there is a lot of CO2, then this could be a bad thing for BP.
If there is few CO2, that could be a very good thing.
So it depends on very much on what is there and how easy it is to take it out.
Well, Edmar, what we'll do is we'll come back to you as this project continues and see how successful it actually is.
But a discovery that could really change the fortunes of BP.
Let's end by going back to India once again.
If you enjoy a wedding party but you don't know anyone who's getting married, help is at hand with a new trend of fake weddings.
Here's our reporter, the BBC's Davina Gupta.
Let's start by understanding that big fat Indian marriage image because these are multi-day affairs and they're expensive.
They're elaborate venues that are decked with flowers and lights.
Then there are musical nights where the bride and groom side dance dressed in fancy ethnic wear.
There's usually lots of food and drinks.
But this concept is about having a bride and a groom which are getting married.
Youngsters want a similar sort of immersive experience, but they don't want to go through the rituals of wedding.
So this is called fake wedding. In fact, I went to a posh club which had recreated this atmosphere and there were at least 50 people.
And I asked them what brought them there.
It's definitely a different experience. While we're going to a wedding with our family, we have a lot of things in our mind like dressing up properly and not being judged by our relatives.
So it's definitely amazing. We are embracing the Indian tradition, right?
Wearing Indian outfits, I would say it's a bit unique.
I always imagined a wedding without a bride and a groom, just for fun.
If you look at India's wedding industry, it's estimated to be worth over $130 billion, according to an investment advisory firm. right research.
So while the sector is booming, there are also constraints there because most weddings take place during the winter months, typically between November and March.
And we're talking about those North Indian weddings, and they're often at auspicious times if they're Hindu weddings, while the monsoon season is considered off-season.
At that time, many of these venues are free.
There are vendors like artisans who apply henna on people's hand or do flower decorations, and there are event planners, caterers, DJs who do music.
They're all available. They're dependent on earnings from these kind of events.
And this particular fake wedding, they're able to tap into these vendors at low costs.
And depending on the size of the crowd, those organisers of fake weddings can actually make a lot of money.
Davina, with that report, I have to say I like a good Indian wedding going to a rather big one. in November, which I am counting down the days to.
Thank you as well to Kwe and Nguyen for joining us through the course of the programme.
We'll be back with Business Matters in a couple of hours' time, where we will continue the conversation about weddings.
