In This Economy: India’s Markets Are Open — But Not For Abuse

Happy Tuesday, Readers, 

India, notably absent from the latest US tariff letters, appears closer than ever to sealing the first tranche of a long-anticipated trade deal with Washington. The suspense around the so-called “holy deal” seems to be lifting — though recent signals from New Delhi hint at some turbulence behind the scenes.

Still, the strategic direction is unmistakable: India is positioning itself as a stable, reliable anchor in an increasingly volatile global economy.

But even as it courts capital and deepens alliances, India is drawing clear boundaries at home. This week, that took the form of a high-profile regulatory strike against one of Wall Street’s most sophisticated trading firms: Jane Street.

On to This Week’s Newsletter…

SEBI isn’t mincing words — or pulling punches. The regulator has imposed trading restrictions on Jane Street, accusing the firm of manipulative trades in India’s derivatives market — now the largest and fastest-growing in the world.

Jane Street had been flagged earlier by both SEBI and the NSE for suspicious trading patterns and was given a chance to respond. The firm didn’t clear the bar. Now, regulators have stepped in — decisively and publicly.

The message is clear: India is open for business — but if you’re here to bend the rules, don’t expect to stay long.

India’s derivatives market isn’t just large — it’s the largest on the planet, with retail investors driving record-breaking volumes.

SEBI has been tightening the screws on excess speculation: raising lot sizes, shortening expiry cycles, and sharpening oversight of algo- and AI-driven trading.

And with millions of young, first-time investors entering the market, the regulator isn’t just monitoring trades — it’s defending the long-term credibility of the system.

Jane Street can — and likely will — challenge SEBI’s findings. But the broader signal is impossible to miss: this is no frontier market. It’s deep, regulated, and unafraid to call out misconduct — no matter the name on the door.

India is walking a fine line — and doing it well. As the US trade deal edges closer and foreign capital flows deepen, SEBI’s action reinforces India’s positioning as both open and orderly.

This isn’t just about Jane Street. It’s about setting expectations.

If you want to be part of the India growth story — invest, scale, compete — great. Just follow the rules. Or step aside.

• Government plans MTNL asset sale without auction for state and central buyers, Aishwarya Patil reports.

• Retailers amp up deals and discounts to spur spending in early festive push, Sesa Sen reports.

• India-US trade talks hit a rough patch as deadline nears, Rishabh Bhatnagar reports.

• SEBI maintains close watch on F&O markets amid continued retail losses, sources tell Charu Singh.

• SEBI's Rs 4,844-crore order against Jane Street might have a Rs 15,000-crore G-Sec Guarantee, Charu Singh reports.

Billionaire Elon Musk has launched a new third party in the United States called the “America Party.” If it gains traction, it could challenge the country’s long-standing two-party system, which has remained unchanged for over a century. Despite being the world’s largest democracy, the US has not sustained a major third party since the early 1900s.

Until next week,
This is Shrimi signing off...