🧶 India’s Carpet Trade Unravels Under Tariffs

🌞 Good Morning, Chai Fam — Happy Monday!

The week is kicking off with a heady mix of policy, politics, and power moves. India’s GST 2.0 is about to hit wallets (and car dealerships), the US is juggling royal dinners and trade fights, and Indian startups from EV batteries to pickles are raising crores to scale. Meanwhile, Mercedes is gearing up for its best festive season yet, and Ikea is shrinking its stores to fit right into your city.

Grab your mug — today’s headlines are stronger than double masala chai.

📰 Chai Shots

• 🧵 India’s carpet trade unravels under tariffs: Trump’s 50% duty on Indian carpets has frozen shipments from Bhadohi, India’s “carpet city.” With millions of weavers out of work and rivals like Turkey and Pakistan poised to grab market share, the handwoven legacy faces an existential crisis. More in the Big Brew 👇

• 🚗 Car loans cancelled as buyers wait for cheaper rides: Public-sector banks are seeing a wave of loan cancellations as customers prefer to wait for vehicle prices to drop after the GST cut. With rates on small cars falling from 28% to 18%, buyers say savings outweigh minor cancellation charges. Some are even upgrading to higher-end models under 1,300cc thanks to the 10% effective price dip.

• 🧾 ITR portal groans under last-minute load: With filing deadlines closing in, the income-tax site is buckling under record traffic — logging 41.6 lakh users in a single day and 3.6 crore hits in two hours. Taxpayers report wildly mixed experiences: some download their AIS instantly, while others can’t get through for hours. Authorities advise clearing cache, trying different browsers, or logging in during off-peak hours, but frustration is mounting with the compliance clock ticking.

• 💸 GST 2.0 rollout hailed as citizen’s win: Finance Minister Nirmala Sitharaman declared that the sweeping GST reforms taking effect Sept 22 are a “victory for every Indian.” Nearly all goods once taxed at 12% will now fall into the 5% slab, lowering costs on everything from biscuits to shampoos. She emphasized that the timing — just ahead of the festival season — ensures benefits reach households immediately. 

📊 Market Masala

• 🚗 Markets cap a winning week: The Nifty wrapped Friday at 25,114, up 108 points, closing the week with a solid 1.5% gain. Autos, banks, and pharma stocks carried the rally, while analysts say the index could be building a strong base above 24,850.

• 🚘 Hyundai shifts into double gear: With domestic sales down 11% this fiscal, Hyundai leaned on exports to offset sluggish demand. Now, post-GST cuts, it expects both exports and domestic sales to fire together — powered by its new Talegaon plant that boosts capacity nearly 20% by October.

• 💎 Mercedes expects record festive sales: Mercedes-Benz India sees this Diwali season as its best ever, with GST cuts reducing sticker prices by 6–8%. But CEO Santosh Iyer warned that state road taxes — ranging 15–22% — remain a big hurdle and called for a national cap to ensure benefits reach end buyers.

• 🏗️ Vedanta bids big for Jaiprakash Associates: Mining major Vedanta has asked the Competition Commission of India to clear its plan to acquire 100% of debt-laden Jaiprakash Associates (JAL). Vedanta outbid Adani with a resolution plan valued at ₹12,505 Cr (net present), including an upfront ₹3,800 Cr payment and annual payouts of ₹2,500–3,000 Cr over five years — potentially taking the total deal value near ₹17,000 Cr. Creditors have claimed ₹57,000+ Cr in dues, with NARCL leading the pack.

🌏 Global Masala

• 🇺🇸 Fed rate cut looms as markets hover near records: Investors are betting 90% odds on a quarter-point cut at this week’s Fed meeting. Wall Street closed last week on fresh highs, gold hit records, and FedEx earnings will be closely watched as a bellwether for global trade. Tariffs remain a wild card, with Trump’s levies already adding to inflation.

• 🇩🇪 Europe’s auto giants try to catch up: At Munich’s auto show, Volkswagen, BMW, and Mercedes unveiled flashy new EVs to counter surging Chinese rivals. BMW touted its “superbrain architecture” built with Qualcomm for assisted driving, while Mercedes plastered ads across the venue to reinforce brand dominance.

☕ The Big Brew: India’s Carpet Industry on the Brink

India’s handwoven carpet sector, rooted in Bhadohi, Uttar Pradesh, is unravelling after the U.S. slapped a 50% tariff on imports. With 60% of exports headed to America, the impact has been devastating.

• 🧶 Exports at a standstill: No shipments to the U.S. in over a month. Industry veterans call this the worst crisis in 50 years, with orders frozen and margins wiped out.

• 👷 Jobs in peril: The industry supports 2.5 million workers, but layoffs are spreading. Experts fear 700,000 could lose work within two months if the tariffs persist.

• 🌍 Competitors circling: Rivals Turkey and Pakistan — facing just 15–19% U.S. tariffs — are poised to grab India’s market share, threatening long-term erosion.

• 💸 Cottage economy crumbling: Yarn suppliers, finishers, and daily-wage weavers are all suffering. Families are pulling children from school and migrating to other states for work.

What does this mean?

🧵 India’s carpet sector may be caught in tariff crossfire, but it’s far from defeated. 🇮🇳 New Delhi is holding its ground in trade talks, and optimism is building that a deal could ease the pressure. With unmatched craftsmanship and resilient exporters, Bhadohi’s rugs are hopefully able to keep flying the flag for India on the global stage. 🌍

🚀 Startup Scoop

• 📱 Hike bows out for good: Once valued at $1B, Hike has shut down entirely after India’s crackdown on real-money gaming derailed its pivot to Web3. CEO Kavin Bharti Mittal admitted that rebuilding abroad would have required a “reset not worth the capital.”

• ☀️ Zunroof adds ₹25 Cr from Godrej: Solar startup Zunroof secured another round from the Godrej Family Office, taking its stake above 70%. Zunroof designs and installs AI-powered rooftop solar systems and has expanded into smart-home IoT products.

• 🔋 PeakAmp powers up with ₹12 Cr: Gurgaon-based battery recycling startup raised seed funds from Caret Capital and others. It claims 99% efficiency in recovering lithium, nickel, and copper from used EV batteries and is building a reverse logistics network for collection and repurposing.

• 🥒 FarmDidi scales women-led pickles: D2C pickle brand FarmDidi raised ₹7 Cr from Samved Ventures and others. Built on empowering rural women (“Didis”), the brand has already scaled to 30,000+ monthly orders and ₹18 Cr ARR, becoming Amazon’s top pickle seller in India.

🎲 Chai Break Trivia

Did you know 🪑 When Ikea opened its first Indian store in Hyderabad in 2018, 40,000 people showed up on Day 1 — so many that the parking lot turned into a traffic jam, and police had to step in. Safe to say, India loves its meatballs and minimalist chairs.

🔮 What’s Brewing Next

• 📊 IPO wave incoming: Five issues open this week, led by Euro Pratik Sales’ ₹451 Cr IPO and SME plays like VMS TMT, TechD Cybersecurity, and JD Cables.

🍵 That’s a wrap for your Monday brew!

From carpets unraveling to cars getting cheaper and pickles going premium, today’s brew had it all. Stay caffeinated, stay curious, and let’s stitch the week together one headline at a time.🚀