📰“ALL THINGS NOT GOOD!” | Daily India Briefing

Trump slaps India with 25 percent tariff, throwing a wrench in trade negotiations. India surpasses China as the top U.S. smartphone supplier. India’s banks and major institutions are pouring billions into investments.

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Macro

• Emerging-market assets declined as strong U.S. economic data dampened hopes for rate cuts and Trump announced a 25 percent tariff on India. The MSCI EM currency and equity indexes slipped, with traders awaiting the Fed’s policy signals amid growing global trade uncertainty.

• India-U.S. trade talks have broken down over disagreements on agricultural market access, with India resisting U.S. pressure to open its farm and dairy sectors. In response, President Trump announced a 25 percent tariff on Indian goods starting August 1.

Equities

• Mukesh Ambani’s Jio Financial Services will raise $1.8 billion (₹158.3 billion) through a share sale to its founders, boosting firepower to challenge rivals in India’s financial services sector. The funds will support expansion into asset management, insurance, and broking, following recent ventures with Allianz and BlackRock.

• IndiGo's quarterly profit fell 20 percent due to border-related airport shutdowns and reduced travel sentiment following an Air India crash, despite a 12 percent rise in passenger traffic. The airline missed revenue estimates and saw costs rise 10 percent, but remains focused on international expansion with new routes and aircraft orders.

• Reliance Industries is in talks with regulators to float just 5 percent of Jio in a potential IPO that could raise over $6 billion (₹525.5 billion), aiming for India’s largest-ever listing. The move may frustrate early investors like Meta and Google, who may face limited exit options due to the small float.

• NSDL’s $458 million (₹40.1 billion) IPO was fully subscribed within hours of launch, fueled by strong investor demand amid India’s retail investing boom. The depository, which holds 86 percent market share, is listed as IDBI Bank, and NSE is reducing its stake to meet regulatory caps.

• Punjab National Bank plans to revive business loan growth by focusing on project financing in infrastructure, smart metering, and renewable energy. Despite strong growth in small business and retail loans, overall business lending lagged in Q1.

• JB Chemicals reported an 8.9 percent rise in Q1 profit, driven by strong domestic demand, especially in chronic and acute care drugs. Revenue rose 14.5 percent year-over-year, supported by growth across its formulations and contract manufacturing businesses.

Alts

• Ola Electric is in early talks with lenders to raise about $116 million (₹10 billion) through high-yield debt to fund working capital, as it deals with falling shares, safety issues, and widening losses. Potential lenders are reportedly seeking interest rates of 17.5 percent–20 percent, treating it as special situation financing.

• Schneider Electric will buy the remaining 35 percent stake in its India joint venture from Temasek for $6.4 billion (₹560.6 billion) in cash. The deal boosts Schneider’s control in a key market and awaits regulatory approvals.

• Knowledge Realty Trust plans to raise up to $1.4 billion (₹120 billion) via bonds and loans in the next three months to refinance expensive debt. The newly listed REIT, backed by Blackstone and Sattva, holds about 40 percent of India’s REIT market by asset value.

Policy

• The US and India successfully launched the co-developed NISAR Earth-observation satellite to aid climate monitoring and disaster response. The mission, which follows increasing NASA-ISRO collaboration, underscores India's growing role in global space efforts even as trade tensions with the US escalate.

• Pakistan rejected India's claims linking it to the deadly April Kashmir attack, calling the allegations baseless and fabricated. The denial follows Indian Home Minister Amit Shah’s statement in Parliament that militants killed by security forces carried evidence tying them to Pakistan, amid ongoing bilateral tensions.

• Jane Street has requested six more weeks to respond to India’s market manipulation allegations, but may only receive four, as SEBI reviews its plea. The request follows a temporary trading ban lift and announced plans to argue its trades were driven by retail demand.

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1. “ALL THINGS NOT GOOD!” Says Trump, Announcing 25 Percent Tariff on India

In a move that threatens to derail an already fragile trade relationship, U.S. President Donald Trump announced a sweeping 25 percent tariff on all Indian exports to the U.S. starting August 1st, citing India’s “obnoxious” trade barriers and close energy ties with Russia. The announcement caught markets off guard, sending the rupee tumbling to a five-month low and erasing gains in Nifty 50 futures.

Trump posted to Truth Social, “Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country. Also, they have always bought a vast majority of their military equipment from Russia, and are Russia’s largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE — ALL THINGS NOT GOOD! INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST.”

India had hoped to avoid steep duties through months of bilateral negotiations and tariff restructuring, with high-level trade talks gaining traction earlier this year. But Trump’s sudden escalation undercuts that optimism. While Vietnam and Indonesia secured tariffs below 20 percent, India finds itself isolated, facing the highest rate among key Asian peers.

The tariff, combined with Trump’s threats of “secondary sanctions” over India’s Russian oil purchases, significantly raises the geopolitical stakes. India currently sources more than a third of its crude from Russia and around 36 percent of its weapons, a longstanding strategic posture that now risks economic blowback.

New Delhi reaffirmed its commitment to a “balanced and fair” trade deal, but also signaled a more defensive stance to protect its domestic sectors. Economists warn that the tariff will hurt India’s export competitiveness and investor confidence, particularly if exemptions on electronics and pharma are phased out. As one analyst put it: “The trade deal may not be dead, but it’s on life support.”

It is worth noting that India maintained the highest tariffs of any major economy (before President Trump entered office this January; now the U.S. will take that spot), making it a difficult trade partner that is slow to integrate into global supply chains. If Trump can force India’s tariffs down, he will, ironically, make India a more competitive member of global free markets — a win for the Indian economy long term.

2. India Surpasses China as Top U.S. Smartphone Supplier

French sporting goods giant Decathlon has announced plans to double its sourcing from India to $3 billion (₹260.9 billion) by 2030, making the country a cornerstone of its global supply chain strategy. The move reflects a broader shift in multinational manufacturing as companies recalibrate sourcing away from China amid rising costs, geopolitical tensions, and supply chain diversification imperatives.

India currently accounts for about 7–8 percent of Decathlon’s global sourcing, and that figure is set to rise to 15 percent over the next five years. This expansion will be driven by high-margin, high-demand segments such as footwear, fitness gear, and technical textiles, areas in which India has been steadily building manufacturing scale and quality.

Decathlon's pivot underscores a growing macroeconomic trend: global brands are increasingly leveraging India not just as a consumer market, but as a competitive production hub for both domestic and export demand. The retailer’s commitment to generating over 300,000 direct and indirect jobs highlights the spillover effect on India’s labor markets, industrial ecosystems, and regional economies.

This development comes as India aggressively promotes its “Make in India” and PLI (Production-Linked Incentive) schemes to boost manufacturing in textiles, footwear, and electronics. As Western firms seek cost-efficient alternatives in a more fragmented world trade order, India’s demographic dividend, improving logistics, and policy tailwinds are making it an increasingly attractive supply chain node in the global economy.

3. India’s QIP Boom Accelerates

India’s equity markets are powering a wave of fast-track fundraising, with Qualified Institutional Placements (QIPs) surging as companies rush to capitalize on rich valuations and ample liquidity. Leading the charge: SBI, whose $3 billion (₹250 billion) offering drew nearly $11.4 billion (₹1 trillion) in demand, signaling deep institutional appetite.

In July alone, over 40 firms, primarily banks, have announced QIP plans totaling more than $9.2 billion (₹800 billion), putting India on pace for one of its strongest years ever for this capital-raising tool, according to Prime Database.

The QIP structure has gained favor for its speed and regulatory simplicity. Unlike IPOs, QIPs allow listed firms to raise funds from professional investors in weeks, not months, enabling quicker balance sheet fixes and growth funding amid buoyant markets.

Banks like Axis Bank, IDBI Bank, and IndusInd Bank account for over $5.7 billion (₹500 billion) of the announced issuance. Their capital raises come as they bolster buffers for credit growth and regulatory compliance. Meanwhile, industrials and infrastructure firms, including Reliance Power and Amber Enterprises, are tapping demand to deleverage or invest.

Yet, the rush of supply raises a market absorption risk. The Nifty 50 has cooled slightly in July after a four-month rally, with geopolitical and trade tensions creating headwinds. Still, institutional investors appear willing to deploy capital, particularly when valuations are high and issuance windows are short-lived.

See you tomorrow.

Written by Eshaan Chanda & Yash Tibrewal. Edited by Shreyas Sinha.

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