📰BBB = Big Beautiful Bonds | Daily India Briefing

India gets a credit upgrade from S&P Global Ratings. India’s trade deficit surged to an 8-month high. India’s refiners are ramping up purchases of non-Russian crude

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Macro

• Ample monsoon rains have boosted reservoir levels, improving prospects for India’s winter crops and potentially leading to record food grain harvests, with the government supporting farmers through high-quality seed distribution to enhance yields.

• India’s wholesale prices fell 0.58 percent year-on-year in July, a sharper drop than June’s 0.13 percent decline, driven mainly by a 2.15 percent fall in food prices, with vegetables plunging 28.96 percent. Manufactured goods rose 2.05 percent, while fuel and power fell 2.43 percent.

Equities

• Glenmark Pharmaceuticals reported a 9 percent drop in Q1 adjusted profit, with sales down 5 percent, as price erosion in North America and Europe weighed on performance.

• Vodafone Idea appointed COO Abhijit Kishore as CEO, succeeding Akshaya Moondra on Aug. 18, and posted a smaller-than-expected Q1 loss of 66.08 billion rupees, helped by benefits from last year’s tariff hikes.

• Indian Oil Corp’s Q1 net profit more than doubled to $649 million (₹56.89 billion) but missed the $851.8 million (₹74.66 billion) estimate, as inventory losses weighed on refining margins.

• JSW Cement’s shares debuted 4 percent higher on the NSE, valuing the firm at $2.38 billion (₹208.6 billion), as investors backed its capacity expansion plans and entry into new regional markets despite broader market jitters.

• Amara Raja Energy and Mobility’s Q1 profit fell 21 percent, missing estimates as weak auto demand and rising expenses hurt margins, despite a 7 percent revenue boost from battery replacement sales.

Alts

• ​​India’s $4.9 billion (₹429.5 billion) National Investment & Infrastructure Fund aims to double assets under management to $10 billion (₹876.5 billion) in 30 months, driven by rising infrastructure demand and new fundraising across infrastructure and private markets.

• At least 46 people were killed and over 200 remain missing after sudden heavy rains triggered flooding in Chasoti, Indian Kashmir, sweeping away pilgrims and facilities along the Machail Mata temple route. The disaster follows last week’s Uttarakhand flood.

Policy

• India said its defense ties with the U.S. remain unaffected despite President Trump’s 50 percent tariffs, with a U.S. defense policy team set to visit New Delhi this month and the Yudh Abhyas joint military exercise planned in Alaska. Both sides are also working to hold their annual 2+2 defense and foreign ministers’ dialogue.

• An Indian delegation will visit Moscow Aug. 20–21 to discuss rupee-denominated trade and a possible free trade deal with Eurasian Economic Union nations, deepening BRICS ties amid U.S. tariffs on Indian exports.

• Chinese Foreign Minister Wang Yi will visit New Delhi on Aug. 18 for the first time in over three years to discuss reducing Himalayan border troop levels, resuming trade, and restoring ties as India-China relations thaw amid U.S. tariff tensions.

• Rahul Gandhi said India’s electoral system has “serious discrepancies” and vowed to challenge its integrity through public action or the courts, accusing authorities of adding fake voters, claims denied by the BJP and Election Commission.

• India has imposed anti-dumping duties on certain hot-rolled flat steel imports from Vietnam after a probe found significant injury to local mills, aiming to protect its steel sector from cheap shipments following a surge in imports.

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1. BBB = Big Beautiful Bonds?

S&P Global Ratings lifted India’s credit rating to BBB from BBB-, the first upgrade since 2007, providing a welcome shot of confidence as markets grapple with the fallout from U.S. President Donald Trump’s 50 percent tariff hike.

The 10-year benchmark yield dropped as much as 10 basis points to 6.38 percent, reversing part of this month’s selloff, while the rupee trimmed earlier losses. The upgrade reflects stronger economic fundamentals, resilient domestic demand, and credible fiscal and monetary policy frameworks, as per the agency said.

S&P projected GDP growth of 6.8 percent over the next three years, arguing that the tariff impact will be “manageable” given India’s consumption-driven economy. That assessment contrasted with market fears of a sharper slowdown, with estimates of a potential 1 percent GDP hit if exports to the U.S. slump.

While equity markets were little changed, bond investors welcomed the move as a sentiment stabilizer after weeks of foreign outflows and tariff anxiety. Analysts said near-term price action will hinge on progress in U.S.-India trade talks, but the upgrade could help anchor yields and attract longer-term capital.

“This is a timely reminder of India’s macro stability,” said Suyash Choudhary of Bandhan AMC. “It gives global investors a reason to stay engaged, even as the geopolitical noise remains loud.”

2. India’s Trade Deficit Hits 8-Month High

India’s trade deficit surged to $27.35 billion (₹2.1 trillion) in July, the widest gap since November, as import growth outpaced exports, driven by higher oil and gold purchases. The shortfall exceeded economists’ expectations of $21.5 billion (₹1.9 trillion) and marked a sharp jump from June’s $18.78 billion (₹1.6 trillion).

Inbound shipments rose 8.6 percent from a year earlier, fueled by a jump in oil imports. Gold imports more than doubled, reflecting seasonal demand and global price moves. The average price of India’s crude basket reached $70.95 (₹6,219) per barrel, the highest in the first four months of the current fiscal year.

Exports climbed 7.3 percent to $37.24 billion (₹3.3 trillion), but momentum faces headwinds from U.S. President Donald Trump’s 50 percent tariff on Indian goods, imposed after New Delhi continued buying discounted Russian oil. Bloomberg Economics estimates the measures could slash shipments to the U.S., India’s largest export market, by as much as 60 percent and shave about 1 percent off GDP.

Commerce Secretary Sunil Barthwal said India is “fully engaged” with Washington to resolve trade frictions. Meanwhile, exporters have been front-loading U.S.-bound shipments to mitigate potential losses. The widening trade gap, coupled with tariff uncertainty, could test India’s external balances in the coming months, even as policymakers seek to diversify export markets and secure more stable supply lines.

3. India Searches for Alternative Fuel Supplies

India’s refiners are ramping up purchases of non-Russian crude as geopolitical uncertainty clouds the future of discounted Russian oil imports. The shift comes ahead of a high-stakes summit between U.S. President Donald Trump and Russian President Vladimir Putin in Alaska on Friday.

Trump has demanded that New Delhi halt purchases of cut-price Russian crude, doubling tariffs on Indian goods as punishment. State-run processors, including Indian Oil Corp. and Bharat Petroleum Corp., have responded by securing September–October cargoes from the U.S., Brazil, and the Middle East, supplementing long-term supplies from Saudi Arabia. The kingdom will ship about 22.5 million barrels to India next month, the highest monthly volume since September 2024.

While private refiners such as Reliance Industries and Nayara Energy are expected to continue lifting Russian barrels under term contracts, state buyers are avoiding fresh spot purchases for October loading. Traders say Russian suppliers are already redirecting Urals crude toward China at discounted prices.

The rebalancing comes as Indian importers face growing reluctance from banks and shipping firms wary of possible U.S. secondary sanctions. Some buyers may turn to yuan payments and shadow-fleet tankers to maintain Russian flows.

India’s imports of Russian crude have surged since 2022, reaching 1.7 million barrels a day, nearly 37 percent of total purchases, by mid-2025. But with global supply still ample and Chinese demand soft, the country is hedging against supply disruptions that could follow this week’s summit.

See you tomorrow.

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

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Disclaimer: This is not financial advice or recommendation for any investment. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.