Morning Brief: Canadian PM Justin Trudeau To Resign This Week; India Poised To Lead Emerging Markets In 2025; Deals For Rafale Fighters, Scorpene Subs Reach Final Stage

Here's a roundup of the must-read stories to kickstart your day.

Canadian PM Justin Trudeau To Resign This Week: Report

Canadian Prime Minister Justin Trudeau is expected to announce his resignation as Liberal Party leader, possibly as early as Monday, according to a report by The Globe and Mail. Citing unnamed sources, the report suggests Trudeau may step down before a crucial national caucus meeting on Wednesday (8 January), although the exact timing of his departure remains uncertain. It is unclear whether Trudeau plans leave immediately or stay on as prime minister until a new leader is selected.

Trudeau, who took charge of the Liberal Party in 2013 and helped it recover from a historic defeat, faces growing pressure as polls predict a significant loss to the Conservatives in the next federal election. A poll conducted by Ipsos found that only 28 per cent of Canadians believe Justin Trudeau deserves to be re-elected.

Trudeau’s anticipated exit comes as his government’s standing, both at home and abroad, crumbles. His unsubstantiated allegations against New Delhi of “foreign interference” have been strongly refuted by India. In an unusually sharp response, India has accused Trudeau of using theatrics to divert attention from his domestic challenges, a rare departure from New Delhi’s typically measured diplomatic tone. With Trudeau’s popularity in free fall and his government in disarray, the writing seems to be on the wall for the man once celebrated as a symbol of progressive politics.

India To Lead Emerging Markets In 2025

Goldman Sachs has forecast India to be one of the top-performing emerging markets in 2025, citing its strong macroeconomic fundamentals. The country’s stability is supported by improved trade terms, effective inflation control, and reliable domestic risk capital. With earnings growth expected at 18-20 per cent annually over the next 4-5 years, India’s private sector investments, corporate balance sheet improvements, and rising consumer demand are key drivers. The country’s reduced volatility compared to other emerging markets justifies its premium valuation. Despite global influences, such as US and China policies and geopolitical factors, India’s policy reforms and strong market position continue to boost investor confidence.

Deals For Rafale Fighters, Scorpene Subs Reach Final Stage

Prime Minister Narendra Modi is expected to visit Paris in February for the Artificial Intelligence Action Summit hosted by French President Emmanuel Macron, coinciding with the finalisation of two major defence deals worth over $10 billion. The agreements include the purchase of 26 Rafale-M fighter jets for the Indian Navy’s aircraft carriers and three additional Scorpene-class submarines. Approval from the Cabinet Committee on Security (CCS) is anticipated in the coming weeks, with Navy Chief Admiral Dinesh K Tripathi stating that the deals are in their final stages.

The Scorpene submarine order will continue the partnership between Mazagon Dock Shipbuilders Limited and France’s Naval Group, with five of the six submarines from an earlier contract already inducted. The sixth, Vagsheer, is set to be commissioned on January 15 in Mumbai, in the presence of PM Modi, along with two other naval platforms.

Other Developments

Bangladesh Crisis Boosts Indian Apparel Exports

The ongoing political crisis in Bangladesh has led global brands like Tesco, Decathlon, JCPenney, GAP, and Walmart to inquire more about Indian apparel exports, with expectations of higher exports in early 2025. To seize opportunities from Bangladesh’s instability and US tariffs on China, industry leaders are calling for government action, including the urgent rollout of the PLI 2.0 scheme, a revived technology upgrade plan for micro-industries, and continued export support. India’s apparel exports have already risen 11.39 per cent year-on-year to $9.85 billion between April and November 2024, with textile exports also showing growth. Both sectors are outpacing the overall export growth of 2.17 per cent.

Centre May Ease Rules For Interest-Free Capex Loans For States

The government is considering relaxing conditions for its 'Special Assistance for Capital Investment' scheme, which offers 50-year interest-free loans to states for capital expenditure. This move aims to accelerate disbursement in the final quarter of the fiscal year to encourage higher state spending on infrastructure and other projects. The decision follows a slowdown in GDP growth to 5.4 per cent in the September quarter, the lowest in nearly two years, attributed to reduced government spending and declining urban consumption. Eased conditions are expected to enable states to access these funds more easily and boost overall capital expenditure, supporting economic growth. Officials have indicated that the changes will focus on streamlining reforms required to qualify for the loans, prioritizing quick implementation.

Ukraine Launches New Offensive In Russia's Kursk

Russia announced on Sunday that Ukraine launched a counter-attack in the Kursk region, where Russian forces have been attempting to dislodge Ukrainian troops for the past five months. Ukrainian forces, having breached the border in early August, have maintained a foothold in the area, which could be a key leverage point in future peace negotiations. The Russian Ministry of Defence reported that Ukrainian troops launched an assault with tanks and armoured vehicles to counter Russian advances but claimed to have repelled two attacks. However, Russian war bloggers noted that Ukrainian forces had put pressure on Russian units, causing them to fall on the defensive. Ukrainian President Zelenskyy stated that both Russian and North Korean forces in the region had suffered heavy losses, including the loss of a battalion near the village of Makhnovka.

From The States

Bihar: Prashant Kishor Detained Amid Hunger Strike

Jan Suraaj chief Prashant Kishor was detained by Bihar Police on Monday while on an indefinite hunger strike at Patna's Gandhi Maidan. Kishor had been fasting since Thursday last week, demanding the cancellation of the combined (preliminary) competitive exam conducted by the Bihar Public Service Commission (BPSC) on December 13, citing alleged irregularities. Protests escalated after the government announced a re-examination, which Kishor argued was an admission of errors in the original test. He urged Chief Minister Nitish Kumar to address the students' concerns promptly. The exam has faced controversy over allegations of question paper leaks, which the BPSC has denied.

Karnataka: Congress Meet Amid Shivakumar's Absence Sparks Speculation

A dinner meeting on January 2, attended by select ministers of Karnataka's Congress government, has fuelled political speculation as Deputy CM D K Shivakumar, a key challenger to Chief Minister Siddaramaiah, is away on vacation. The meeting, hosted by Public Works Minister Satish Jarkiholi, a Siddaramaiah ally, was part of ongoing gatherings of senior ministers primarily from backward communities. These meetings, involving ministers from the Scheduled Caste, Scheduled Tribe, and OBC communities, are seen as a strategic move to counter Shivakumar's rising influence within the party. The gathering adds to the intrigue surrounding the Congress leadership in Karnataka.

Stay tuned for more insights throughout the day.