Rupee rises 31 paise to close at 85.31 against US dollar
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The Hindu
an hour ago
- The Hindu
US passes 1% levy on foreign remittance tax: How will it impact Indians?
The U.S. Congress passes Donald Trump's 'One Big Beautiful Bill' on Thursday (July 03, 2025). The legislation, which takes effect on July 4, 2025, introduces a 1% levy on remittances made through cash, money orders, or cashier's cheques. It targets international money transfers made by non-U.S. citizens, including green card holders and temporary visa workers like those on H-1B or H-2A visas. The proposed levy will not be applicable to U.S. citizens. India stands as the world's top remittance recipient. Other major recipients include Mexico, China, the Philippines, France, Pakistan and Bangladesh. 'The proposed U.S. tax on remittances sent abroad by non-citizens is raising alarm in India, which stands to lose billions in annual foreign currency inflows if the plan becomes law,' the Global Trade Research Initiative (GTRI) said. GTRI said that the loss would tighten the supply of U.S. dollars in India's foreign exchange market, putting modest depreciation pressure on the rupee. In a relief to Non-Resident Indians (NRI), the tax rate was originally set at 5%, but was reduced to 1% in the final version of the Bill. The Bill also exempts remittances made from 'an account held in or by a financial institution' and those 'funded with a debit card or a credit card issued in the United States'. How does it impact India? Reserve Bank of India data shows the U.S. is the largest source of remittances to India, accounting for 27.7% or $32.9 billion of the remittances that flowed into the country in 2023-24. In States like Kerala, Uttar Pradesh, and Bihar, millions of families rely on remittances to cover essential expenses like education, healthcare, and housing. 'A tax on remittances would certainly dent the remittances coming into India,' a government official told The Hindu. 'But the government has not yet made an assessment of what that dent will be.' The official also added that India has also not yet taken a call on whether to approach the U.S. for some relief in the matter or not.
New Indian Express
2 hours ago
- New Indian Express
Pakistan's biggest Murree brewery is evolving from its 165-year-old liquor legacy
RAWALPINDI: A pungent fug of malt and yeastiness hangs over Murree Brewery, Pakistan 's biggest and oldest producer of alcoholic drinks. The company is an outlier in a country where alcohol is outlawed for everyone except non-Muslims, who make up some 9 million people out of 241 million. Pakistan, an Islamic republic, banned booze for Muslims in the 1970s. Murree Brewery has strong financials despite the prohibition, thanks to its history, scant competition and a small, thirsty and predominantly elite consumer base. But the government exerts significant control over the sale and marketing of alcoholic beverages through red tape and high taxes, pushing brewery chairman Isphanyar Bandhara to expand the company's footprint in Pakistan's non-alcoholic drinks industry, which, although bigger, is more crowded and less lucrative. 'Even I tell my staff of about 2,200 that we cannot sit on our laurels by selling alcohol,' said Bandhara, the third generation of his family to run the 165-year-old business that was founded by the British. 'It's a restricted market, so we have to rely and focus more on the non-alcoholic side. That's where I think I would like to flex my muscles and take credit, rather than being a liquor baron.' The brewery already manufactures energy drinks, juices and malted beverages, but they are not as well known as products from big international brands. However, this part of the business is registering double-digit growth, and Bandhara wants to cash in on the country's youth bulge. Around 64% of the population is under 30.
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Business Standard
3 hours ago
- Business Standard
Gold may rally to $3,400 on tariff fears; deadline extensions to cap upside
Gold: Caught between trade war and encouraging US data Gold performance: On July 3, traders, anticipating a weak US nonfarm payroll report, as the ADP employment report, released a day earlier, had for the first time since 2023 shown a decline in number of jobs, pushed spot gold to $3365 -- highest since June 24 -- amid subdued US Dollar and US yields. However, the yellow metal tumbled on a surprisingly encouraging US job report. The metal traded between $3,310 and $3,365 during the day. At the time of writing this article, the metal was changing hands at $3329, down 0.9 per cent on the day. The MCX August contract at ₹96,778 was down nearly 0.6 per cent. Data roundup: US nonfarm payroll (June) was largely reassuring as US employers added 1,47,000 jobs versus the expectation of 1,06,000 jobs, which belied the fears of job losses as portrayed by the ADP report released on Wednesday. Two-month payroll net revision stood at 16,000 as the unemployment rate unexpectedly slid from 4.2 per cent to 4.1 per cent versus the estimate of 4.3 per cent. However, the decline in the unemployment rate has been driven by job seekers, especially foreigners, leaving the workforce pool due to deportation, lack of job opportunities, etc. Labour force participation rate edged lower from 62.4 per cent to 62.3 per cent (forecast 62.4 per cent). Average hourly earnings rose 0.2 per cent m-o-m and 3.7 per cent versus the respective forecast of 0.3 per cent and 3.80 per cent. ISM Services Index crept back into an expansion territory after a month as the largest component of the US economy posted a reading of 50.80; thus, beating the estimate of 50.60 as new orders expanded, though services employment contracted more than expected. Tariff developments: US Treasury Secretary Bessent said on July 3 that President Trump will decide whether to extend the July 9 tariff hike deadline. Earlier on July 2, the US and Vietnam finalised a trade deal in principle under which Vietnam will pay 20 per cent tariffs on its US exports, whereas the US will pay 0 per cent tariffs on its exports to Vietnam. In addition, the US imposed a 40 per cent tariff rate on Vietnam's transhipments, which is likely to make Chinese goods exported through Vietnam to the US costlier. It is to be noted that a significant share of Vietnam's exports to the US include goods like AirPods, phones, etc, assembled with Chinese parts in Vietnam's factories. As per the Lowly Institute (Sydney), 28 per cent of Vietnamese exports to the US were made up of Chinese components in 2022. Chinese exports to Southeast Asia have surged this year. China is assessing the US-Vietnam deal and has warned against clauses harming its business interests. China is speeding up the approval rate earth exports to European companies. Trump scores a major economic policy victory: The US House passed Trump's $3.4 trillion tax cut and spending bill, which is positive for the metal on deficit concerns. Dollar Index and yields: The US Dollar Index fell to a fresh cycle low of 96.377, the lowest since February 2022, on July 1, on Fed rate cut notions. The Index, at the time of writing, was hovering around 97.14, up nearly 0.5 per cent on the day as US data boosted the Greenback. US 10-year yields, which slumped to 4.18 per cent on July 1, the lowest since May, rose for the third straight day and were noted at 4.35 per cent, up nearly 2 per cent on the day, as July rate cut hopes faded on stronger than expected US job and ISM services report. ETF: Total known global gold ETF holdings rose to 90.506 MOz on July 2 as holdings remain at nearly 2 high and are up 9.24 per cent YTD. COMEX gold inventory: COMEX gold inventory at 37.048 Moz is down around 17 per cent from the record high of 45.072 Moz in April. UBS survey on gold: As per a UBS Group AG Survey of nearly 40 central banks, the share of central bank reserve managers who see the geopolitical weaponisation of FX Reserves as an investment risk has increased from 32 per cent in 2024 to 49 per cent in 2025. Nearly 52 per cent of central banks intend to add gold over the next year. Upcoming data: The US data calendar is quite light next week; the major attraction will be the FOMC minutes of the June 18 FOMC meeting, which will be released on July 9. China's PPI and CPI data (June) will be released on July 9. Gold outlook: Key US data released this week has allayed fears concerning the nation's economic health to some extent, as the monthly job report and PMIs turned out to be reasonably strong, which has reduced the July Fed rate cut possibility to zero. Rebound in the US Dollar Index and yields will exert downside pressure on the metal, which would be boosted further due to healthy risk appetite as US stock Indices are at record highs. However, traders will closely monitor trade deal developments as the July 9 deadline approaches. Friction arising between the US and its key trading partners during deal negotiations will support the metal. China has already expressed its concerns over the US-Vietnam trade deal. Thus, gold is caught between the impact of strong US data and the possibility of trade friction as trade negotiations continue. In such a scenario, gold is likely to trade between $3292 (₹95,700) and $3370 (₹98,000). The next major resistance is at $3400 (₹98,800). Next support is at $3247 (Rs 94,400)/$3228 (Rs 93,800). Trump extending the July 9 deadline will be heavy on the yellow metal. In that case, a decline to $3200 (Rs 93,000) is possible. The preferred strategy is to sell with a stop loss above $3370.
