The Cost of Disorder
“Do it For India”
India's Prime Minister has gone where few leaders dare: he asked 1.4 billion people to stop buying gold. Narendra Modi's appeal on Sunday, delivered from Hyderabad, was a blunt acknowledgment that the Iran war is now hammering Asia's third-largest economy. With crude import prices surging from USD 70 to USD 120 a barrel, the rupee sliding past INR 95 against the dollar, and foreign exchange reserves draining by nearly USD 7.8 billion in a single month, Modi framed private restraint as a national duty. His prescription is sweeping: work from home, carpool, take the Metro, postpone foreign travel for a year, and, most controversially, avoid buying gold.
The political backlash was instant. Rahul Gandhi, leader of opposition called the appeals "proofs of failure," accusing the government of shifting blame for its own diplomatic shortcomings onto citizens. Telangana gold traders, already reeling from 40-50 percent revenue drops, warned the call could be a "death knell" for an industry employing lakhs. Government sources hit back, citing Nehru's gold donation campaigns during the 1962 war. But Modi's core vulnerability is economic, not historical: with oil companies expected to hike pump prices soon, his appeal for patience may be tested long before a ceasefire in West Asia brings relief.
Trump's Beijing Hail Mary
US President Donald Trump and Chinese President Xi Jinping have begun their bilateral meeting at the Great Hall of the People in Beijing on Thursday morning (local time). A formal welcome ceremony preceded the talks, featuring a military honour guard, a band playing the US national anthem, and a delegation of senior American officials and business executives including Nvidia CEO Jensen Huang and Apple CEO Tim Cook.
Xi Jinping opened the formal session with remarks emphasising cooperation. He began by describing the turbulent global situation and stated that China and the United States "both stand to gain from cooperation and lose from confrontation," adding that the two nations should "be partners, not rivals." Trump has not yet made public remarks at the bilateral table as of this writing.
The visit is Trump's first to China since November 2017, and the first by any US president in nearly nine years. It was originally planned for early April but was postponed following the US and Israeli strikes on Iran in late February. The agenda is reported to include trade tariffs, rare earth exports, artificial intelligence, Taiwan arms sales, and the Iran war. Further sessions between the two leaders are scheduled for 15 May, with a working lunch before Trump's departure.
Canberra's Hard Road
Treasurer Jim Chalmers handed down the 2026–27 federal budget on 12 May, describing it as the most significant reform budget in over two decades. It is the first budget delivered following Labor's 2025 federal election victory.
The centrepiece measures address housing affordability. From 1 July 2027, negative gearing for residential property will be limited to new builds only; losses on established investment properties purchased after budget night will no longer be deductible against ordinary income. The 50 percent capital gains tax discount will also be replaced with inflation-linked indexation and a 30 percent minimum tax rate on real gains, applying to gains arising after 1 July 2027. Existing property holdings are exempt from the new arrangements until sold. Discretionary trusts will face a 30 percent minimum tax from 2028.
On cost of living, over 13 million workers will receive up to a AUD 250 annual tax offset from 2027. A AUD 1,000 instant tax deduction for workers is available this financial year. The budget also allocates AUD 3.1 billion to build 100,000 social homes and AUD 2 billion for housing infrastructure. The deficit for 2025–26 is forecast at AUD 28.3 billion, an improvement on earlier projections. Treasury expects inflation to peak near 5 percent, partly due to elevated global energy prices stemming from the Iran war.
Written by Sarthak Ahuja
May 15, 2026