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Is India on the verge of a fuel crisis?
The Indian government, which had seemed to be managing its finances somehow, is now feeling the pressure.
Two hikes in less than a week.
It's World Business Report from the BBC World Service.
I'm Rahul Tandon.
As India raises fuel prices once again, we look at how it will impact one of the world's fastest growing economies.
And we'll find out why graduates at Arizona University booed the former boss of Google.
It's all to do with AI.
Now on this programme.
You will have heard us over the last couple of years talk about the country that has the title of being the fastest growing major economy in the world.
That, of course, is India.
But the question now that many people are asking is...
Could that be changing?
India gets a lot of its oil and gas from the Middle East, and the closure of the Straits of Hormuz has, as we have been telling you, driven up prices, which led to the Indian Prime Minister, Narendra Modi, saying this last week
We all must cut down how much petrol and diesel that we use here in India.
In cities that have metros, please use that.
We must all use public transport now.
Days after he made that speech, there was a hike in petrol and diesel prices.
That is unusual in India.
And on Monday, they were raised once again.
Not good news for Sudhanshu, who is filling up his car at a petrol station in the Indian capital, Delhi.
It was highly expected.
Of course, seeing the global scenario, it was expected that the prices will go up any day.
It was just that we were waiting for it.
Things will become expensive.
It will be difficult for us.
But unfortunately, you can't do much about it.
Price rises, of course, have impacts on all economies.
So what will this do to the Indian one?
A question for our Indian business correspondent, Arunadai Mukherjee, who's on a busy street in Noida.
Well, if I just look at all the traffic in front of me, it doesn't seem to have had too much of an impact, given the number of cars right in front of me.
But I think it is going to slowly start pinching the pockets of Indian consumers because they haven't been used to petrol or diesel hikes in a very long time.
The first hike came last week.
And then before that week could end, we've now got another petrol and diesel hike.
So I think there is a realization.
And this is perhaps the biggest indicator yet since the war began in the Middle East that the Indian government, which had seemed to be managing its finances somehow, is now feeling the pressure, which is why it is slowly starting to resort to taking these harder financial decisions and passing on some of that cost to consumers by hiking petrol and diesel prices.
Two hikes in less than a week, Rahul.
And one point I think to remind our audience of who don't know India as well as you do and obviously I've spent a lot of time there is when we're talking about the cars behind you.
It's very aspirational in India to own a car, isn't it?
Absolutely.
It is very aspirational and it's slowly increasing in terms of the sheer number of cars that we see.
It's tied to various auspicious occasions.
You've got the festival of Diwali.
People will go ahead and, let's purchase a new car.
It is also a symbol to, for instance... indicate to your neighbor or to your relatives that look you've arrived you've got a new job you know you know what i'm talking about so that is definitely there you've got companies coming out with different models you've got evs now you've got all sorts of compact suvs for people who can't afford suvs but want that look going for that slightly mid-range vehicle so it's It's definitely aspirational.
And when you've got fuel price hikes there, it is definitely going to start to pinch.
But what's interesting is that I've also been seeing an increase in electric vehicles.
And I think those people will be smiling the most at the moment.
Yeah, I've got family in Kolkata who have an electric vehicle and I can tell you they keep messaging about how happy they are of making that decision.
Here's something else somebody said to me, which is India.
You know, by 2030 could be the third largest economy in the world.
But at the moment, the prime minister is saying don't go on holiday.
Don't buy gold.
It's quite a contradictory message.
It really is.
And I think what was also interesting is that the opposition latched onto something that as soon as the Prime Minister made that appeal, he went on a massive foreign trip, on an official visit to Europe and other countries.
So they really questioned where are the priorities of the government.
But again, of course, the government's.
You know answer is that these are important political and diplomatic engagements but yes, there is definitely suddenly this a realization and an acknowledgement that look, we need some sort of messaging to the public, and how best to do it than to have Prime Minister Narendra Modi, who's been winning successive elections, to go ahead and lead from the front and make that appeal.
Talking about austerity, talking about ensuring that you conserve energy.
But I think the challenge is going to be whether that's actually possible.
And I think that's where we need to see how the politics and the messaging ties in with pure economics.
Because this is a country which roughly imports 90 of its crude oil and half its gas needs come from outside.
You've got oil, gas, fertilizer, gold imports pushing up demand for dollars.
Foreign investment inflows have weakened.
Exports are slowing down.
Foreign exchange reserves have fallen by $38 billion.
All of this is going to have a cascading impact Rahul, on GDP, on overall growth and that target that you mentioned by 2030 as well.
I suppose the question is are we looking at a short-term problem that India is facing because of what is happening in Iran and because so much of that gas and oil comes through the Strait of Hormuz?
And when that ends, do these troubles go away, or is this a much more long-term problem India is looking at?
So Rahul, I think it's going to be a bit of both, and I've spoken to analysts on both sides and I think there is a view that this is short-term and, if there is a resolution to the West Asia crisis, this could end very soon.
But I think the worry is that given the unpredictability...
And given everything else that has been happening in the run-up to this crisis, for instance tariffs, and the impact that has had on the Indian economy.
India is the most populated country in the world 14 billion.
You've got immense energy needs.
It could be a while before India sort of gets back to that normal.
So right now they're just figuring out how to tide over the crisis.
But I think, if this continues for a massive economy like India, which has set very ambitious targets and again a labor-intensive economy, an agriculture-heavy economy, it is definitely going to start feeling the pinch.
And I think you're starting to see the problems there.
Arun Adai there on the busy streets of Noi.
There's still many people in their cars.
But if those fuel prices continue to go up, maybe it'll be a little quieter on those streets.
So lots for the Indian Prime Minister Narendra Modi to think about.
He has just landed. in Italy, the final destination on his five nation European tour.
His penultimate stop was Norway, where he received a very warm welcome from the Indian community there.
The Indian prime minister used his trip to try and improve business ties with Norway.
They are both hoping to double trade by 2030.
I've been getting reaction to his visit from Ojan Červek Olsson, head of emerging markets at the Norwegian Seafood Council.
Well, we see India as one of our growing markets and a market that we see a big potential in in the years to come.
So, of course, this creates attention in Norway.
This gets the Norwegian seafood industry to open their eyes to India.
There are a lot of misconceptions, I think, about India.
A lot of people think it's a vegetarian country.
There are huge swathes of it that are vegetarian.
But I lived in Kolkata where rice and fish is the main dish.
And as incomes grow in India, there is a growing demand for products like salmon.
Are you seeing that?
Yeah, we are.
And we see that there's a growing demand for proteins as well.
And of course, salmon and also other kinds of fish are very good sources of lean protein.
So that's part of the reason why we see the huge potential there.
And I agree with you.
The vegetarianism is a big thing, but we have from different sources.
You have up to.
28 still 400 million people, but 28 that doesn't eat fish, which leaves a big, big chunk of the population as seafood eaters.
Well, it's a country of 1.5 billion people likely to be the third largest economy by 2030.
So massive potential there.
There was an agreement signed, which Norway is part of, between the European Free Trade Association in 2024 with India.
So, as it stands today, do you have to pay tariffs, or tariffs being paid, for Norwegian salmon going into India?
It still is for most of the products.
There are no tariffs for frozen whole salmon.
So that's the one that had zero tariffs from the get go.
But for other products like the whole fresh, which is our major product from Norway.
We still have tariffs and we will have tariffs until 2029, but they are sliding downwards.
So right now we have 19.8%.
What's your biggest challenge when it comes to salmon in India?
You've got competition from Scotland.
And also it is, when I've seen it on sale in India, it's expensive, isn't it?
It is.
And I think that's also due to the tariffs, right?
So one of the major issues we've seen have been that the prices is high on salmon within the seafood category in general.
But of course, the 30% or 33% tariff like we had makes it even more expensive.
So I think one of the main obstacles has been this.
It's been the price.
I'm not too worried about Chilean salmon or Scottish salmon or Australian salmon.
I think that the demand in India will grow, so there will be room for everybody.
But of course, there are other difficulties which are still there.
There are logistics issues.
It is, like you said, a very, very big country.
And the seafood consumers are not in one place.
So we have to reach them with with good logistics and good, fresh logistics throughout the country.
Yeah, they're dotted all around the country, the different states.
But on that point that you said there, you would prefer Indians to buy Norwegian salmon to Scottish salmon or Chilean salmon, surely?
Of course I did.
Of course I do.
Or else I think I would be out of a job.
We don't want to do that to you.
No, no, no.
But I still think that there is a potential for the overall increase in consumption of healthy, sustainably farmed seafood in India from other markets.
So I think the whole pie will get bigger.
Can I ask you a final question?
These are difficult times because of uncertainty in the world.
We're seeing fuel prices rise. quite quickly because of what's happening in Iran.
Is that affecting the Norwegian seafood business?
Yes, it is.
It definitely is.
Like you said, there's difficulties with transport.
There's difficulties now, of course, with everything going through the Middle East, both in Seafood for the Middle East but also seafood for Southeast Asia that typically would pass through.
There are tariff issues with the states.
So we've seen a drop in Norwegian exports to the states with the tariffs that came there.
What the Norwegian seafood industry has been very good at is to have many, many legs to stand on.
So they are in 150 different countries.
And that's also why markets like India, like other emerging markets in Southeast Asia, is going to continue to be important for us, because we need to spread the risk.
Urgen Olsen there, who is head of emerging markets at the Norwegian Seafood Council.
We're joined by George Conboy, chairman, of course, of Brighton Securities.
India facing problems, the Norwegian seafood industry facing problems.
We're going to hear from Kenya in a minute.
George, these fuel prices continuing to go up.
We've had the U.S.
Vice President J.D.
Vann saying progress has been made on peace negotiations with Iran.
That will be good news for many economies, won't it?
Yeah, and oil prices did go down a bit today, Rahul, based on the hope.
That that progress is real.
But we keep hearing that there's progress, that we're talking fighting, but not much is happening yet.
Markets don't have infinite patience.
No, they don't have infinite patience and economies don't have infinite reserves as well.
And that is one of the big problems that many economies are facing.
They are running down their oil reserves day by day.
Right.
It actually isn't horrible for the U.S.
No one here likes paying more for gasoline and diesel.
But the fact is we've got pretty good energy supplies.
So, from an economic standpoint, though it's not good for us, it's less worse for us than most other economies.
There we go.
Sometimes it's better to be less worse.
George, stay with us.
We're going to go to Africa now.
Because Kenya's government has cut diesel prices after anger over soaring fuel costs spilled onto the streets.
Roads from the Kenyan capital were blocked, tyres burned and public transport disrupted as that anger grew over fuel hikes driven by those supply pressures we were talking to George about from the Middle East conflict.
Authorities say at least four people died in the unrest while dozens more were injured.
A nationwide transport strike has now been called off for a week as negotiations take place.
Frederic Bonaventure on Iango is an Uber driver in Nairobi.
It has really affected us because generally the business that we are doing cannot increase anything, because even the clients are not there.
We are really, really finding it difficult because the rates still remain the same.
The way it used to be, maybe 130 shillings per litre, sometimes back and now it has gone up to 214 shillings per litre.
Small businesses and the agricultural sector also now feeling the effects.
Suzanne Mugaro is a farmer who's based in Nairobi.
The running costs are high with the increase in fuel pricing.
And we don't know how long this is going to last.
So for me, I have to make one of three choices is maintain the current level. at increased cost.
The plan was to expand, but at what cost again?
And the third option is to reduce production completely, which means that I may have to lay off the staff that I have.
The fuel taxes also affect things like electricity.
So all around, you're hit indirectly by the war.
So problems for farmers, problems for Uber drivers, as we heard there.
So what's the government doing about it?
Kenya's government spokesperson, Isaac Mwalu, says authorities are working to try and resolve this issue.
There are already ongoing talks between the ministries of finance energy, transport and the Matatu associations.
So therefore, we expect that there will be some negotiations and an agreement, because we all need this.
We need to transport Kenyans and to do business.
And the government wants the economy to continue growing, because that is how we are able to get taxes.
That's how we are able to finance our own development.
George, we heard that from the spokesperson for the Kenyan government.
When we have uncertainty in the world, it can have a huge impact on bond prices, which are important, aren't they, because they raise the cost of borrowing.
Are we seeing that at the moment?
Absolutely seeing that, Rahul.
I think Treasury's picked up to the highest yield we've seen in over a year.
I think it was January of 25, the last time they were this high.
It's bad news for the bond market.
And, in the absence of other news, it can be bad news for the stock market, because investors compete with their money.
They can best yield.
And if you're not going to see growth, you might seek income and you'll get it from bonds.
Yeah, that is what we're seeing in many parts of the world, particularly here in the UK at the moment.
Your With World Business report from the BBC World Service.
Their company's success helped build a nation.
The company is such a big part of Korea's economy.
But who are the family behind one of the world's tech giants, the major corporate empire that we now know today?
Samsung.
Inheritance Samsung from the BBC World Service explores the real-life dramas of the Lee family and their company Samsung.
All episodes available now.
Search for Inheritance Samsung wherever you get your BBC podcasts.
I'll see you next time. to how people file their tax returns online.
They're springing up around the world, but for people living near them, the impact can feel very real.
So, as the AI boom drives the need for ever more digital power, how do communities learn to live with data centres?
Gideon Long has this report.
I'm on the edge of a field just north of London.
It's a lovely spring day and the field is full of yellow flowers from the rapeseed crop that's planted here.
And I'm here because there's a plan to build a big data centre here, one of the biggest in Europe.
And some of the local residents from the nearby commuter town of Potter's Bar are not happy about it.
And with two of them, Ros Naylor and Adet Garvey.
Ros, what have you got against this plan?
You're losing a large part of the countryside south of Posbar.
You're using up a large amount of productive farmland that has produced agricultural crops for centuries.
And Adet, you live nearby.
What does this land mean to you and what will it mean to you if the data centre is built?
It'll be devastating.
There won't be our place to come to.
It'll just be another urban sprawl with warehouses and concrete, and our green space will be gone forever.
We need data centres.
They have to be built somewhere.
Yes, but building it on agricultural land is not the answer.
You can't eat data.
Odette, what about that argument, though, that we do need data centres?
I mean, I guess you use technology, you use mobile phones, you use computers, as we all do.
And there is an argument that we have to build these data centres somewhere.
So why not here?
I'm not against data centres.
It's just where we place them.
I thought I was going to stay here to retire.
And I don't think this is going to be the dream anymore when this is built.
Well, even you were saying earlier Odette, that she doesn't want to walk here anymore because the prospect of it makes her feel so sad.
We have to do archaeological digs as part of the planning process.
Right.
On the other side of the site, just a few hundred metres away, I meet James Tyler, the managing director for the UK at Equinix, the company that will build and operate this data centre.
Oh, my God, yeah.
The site looks very different here, not as pretty.
The rapeseed has been hacked down to stubble and you're much closer to the busy M25 motorway that surrounds London.
So James, just give me a sense of what this area will look like once the data centre is constructed.
At the moment it's an arable field, or clearly was used for agriculture.
There are electricity pylons here, there are trees, you can see the motorway from here.
What will it look like once the project is complete?
We'll build a number of data centres that will be very sympathetic to the local environment.
We'll be planting thousands of trees.
We'll keep at least 50% of the entire site as green.
And then we'll be building new pathways and making sure that the site really remains very accessible to the local community.
A lot of people say we need data centres, but why do they have to be built so close to London, in the southeast of England, which is already very heavily populated and heavily built on?
The business that Equinix is in is serving customers who need applications to be highly responsive.
And milliseconds matter, whether that's financial transactions, healthcare support systems.
The amount of time it will take information to travel from this data centre into central London, for example, over the fibre networks, is less than a millisecond.
And that really matters to our customers.
So building this data centre, let's say, on a disused industrial site in the north of England or, I don't know, in the north of Scotland or a remote part of England, that's just not going to work.
Well, for our customers, latency matters and proximity to economic hubs matters.
And what do you say to those people who have listened to your arguments and still say we need all the green space we can get and this shouldn't be built here?
I would say that the UK needs to continue to invest in very high quality data centre infrastructure if we want the economy to grow and thrive, because it underpins so much of our underlying economic growth.
Gideon there with that report on an issue that we are going to continue to talk about on this programme.
Right.
Sometimes it takes a while for a story to come to light and that is what happened with this one.
But wherever you are in the world I think you're going to see Quite a lot of chatter about it.
Last week, the former Google CEO, Eric Schmidt, was booed by students as he spoke about the rise of artificial intelligence during a speech at the University of Arizona's graduation ceremony.
Last December...
Time magazine selected its person of the year for 2025.
And it was this time, it was the architects of artificial intelligence.
Interesting.
Right.
You clearly could hear there they did not like that.
And you can understand why job losses to AI have been a cause for anxiety, especially for young graduates who are looking to enter the job market.
In fact, British Bank Standard Charter.
It's the latest major company to announce jobs losses because it's investing more money in AI, like those data centres we heard Gideon talking about earlier.
Emma LaPointe is a student at the University of Arizona and editor-in-chief of the university's newspaper, The Daily Wildcat.
Emma, thank you so much for joining us on the programmes.
You were at the ceremony not because you were graduating but, as we often do, to go and support friends who were
Tell me a little bit more.
Were you surprised when the booing started, when Eric Schmidt started talking about AI?
Honestly, I really wasn't.
This was kind of expected for different reasons.
There was a petition put out to have him removed as speaker, as people did not really feel like he best represented the views of students.
And so I think...
In the student body, we were definitely expecting some boos.
I was expecting it to be pretty dramatic, but it was a lot, yeah.
Look, I mean, he was there.
He's no longer Google CEO.
So maybe he might have taken the company in a different direction.
And it is driving a lot of growth for the stock market in the US.
But when you talk to graduates and you're one yourself, as you're going out in the job market, what sort of impact is AI having on your friends and yourself?
I'd say it's definitely causing some anxiety.
I definitely know students who use it for college work.
I feel like that shouldn't be ignored.
People definitely realize it.
It's definitely, you know, something that exists and is helpful.
But I also think there's definitely the fear of, right now, we're in a struggling economy.
People are not finding jobs.
They're struggling to find internships.
So I just feel like having that sort of speech that says in a positive light, AI is going to take over everything.
It's the new future.
It's going to sort of be as revolutionary as the computer was to a new student who might feel like Everything I studied for years is going to be taken over by AI.
It doesn't sound as promising or as hopeful.
So I think there's definitely just a lot of just fear and anxiety of sort of what this means and of not knowing what the future is going to look like.
I think that word anxiety is a good one, isn't it?
My daughter's.
You know she's at university at the moment and I know already she just started this year that she and many of her friends are worried about getting a job.
Is it the fear of what may happen or is it already happening?
I'd say at some level it's already happening.
Because AI sort of became a thing when I was first entering college or just sort of became a lot more widely available.
And so I feel like I've sort of seen...
How professors are trying to adapt to it.
There's no, as far as I'm aware, no university wide policy on how to treat things.
I mean, more is it more of the fear in the job market?
You know, you you're going to graduate, you're going to go and look for a job.
Do you worry about not getting one?
I would say so.
Yeah.
I think that a lot of people joke that they'll go get a master's instead, so they don't have to deal with that right now.
That's expensive in the US.
It's not cheap, is it?
Yes, it is.
But it's just, yeah, you kind of don't know where to go, what to do.
It feels like you apply to 100 jobs, you get nothing back.
Yeah, that is so depressing.
Stay with us.
George Convoy is still with us.
George, can you reassure Emma or do you share her fears?
Yeah, I think so.
You know, what we're finding is, of several hundred companies surveyed, three quarters of them said they were planning to hire more entry level workers to make use of AI than were going to lay off workers because of AI.
You have an unskilled worker.
You don't pay them as much, but they can be easily trained to use AI to become more powerful.
Just like when you have a chainsaw not hard to learn.
You're much more productive than using an axe.
We may see that.
There we go, Emma.
Bit of good news.
And, you know, AI could create a lot of jobs as well, couldn't it?
Mm-hmm.
Yeah, for sure.
I mean, I can definitely go in either way.
Yeah, sorry.
Yeah, no, no, no, no, no, no.
Well, listen, good luck.
When do you graduate?
I graduate in a year.
OK, well, listen, we're going to come back to you and we're going to ask you how that job hunt goes.
I mean, hopefully you won't have to apply for 100.
And just finally, quickly, you've got about 20 seconds.
Did Eric Schmidt, how did he respond to the booze?
Um, in all honesty, he just, he would sort of acknowledge them.
He'd say like I can hear you guys are super interested in what I'm saying, but he kind of moved past it as quickly as he could.
Okay.
Well, listen, good luck to you, Emma.
Thanks so much for joining us, George.
Thank you for all your contributions as well.
We'll be back.
Same time, same place, same time, even tomorrow.
Their company's success helped build a nation.
The company is such a big part of Korea's economy.
But who are the family behind one of the world's tech giants?
The major corporate empire that we now know today.
Samsung.
Inheritance Samsung from the BBC World Service explores the real life dramas of the Lee family and their company Samsung.
All episodes available now.
Search for Inheritance Samsung wherever you get your BBC podcasts.
