📰Countdown to Friday Begins | Daily India Briefing

Maharashtra is on track to become India’s first $1 trillion state economy by 2030. President Trump’s “Liberation Day” tariffs of 36 percent on all Indian imports go into effect this Friday, unless a trade deal is reached. India’s Finance Ministery warns the country’s exports will take a hit with weakening global demand.

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Macro

• Indian refiners are expanding oil purchases beyond Russia, sourcing from countries like Azerbaijan, Nigeria, and the UAE amid new EU sanctions on Moscow. While not a full shift, the diversification reflects growing caution as sanctions tighten and market conditions evolve.

• India’s rupee and bond markets remain cautious ahead of a pivotal week marked by the U.S. Federal Reserve’s policy decision and the August 1 tariff deadline. Traders are closely watching for signals on rate cuts and U.S.-India trade developments.

Equities

• Microsoft has suspended services to Nayara Energy, India's second-largest private oil refiner, due to EU sanctions tied to its Russian shareholder Rosneft. Nayara has filed a lawsuit in Delhi, calling the move unjustified under Indian or U.S. law and warning of disruptions to critical operations.

• Adani Green Energy’s Q1 profit jumped 60 percent year-over-year, driven by a 45 percent surge in generation capacity and strong solar power sales. The company plans to triple its capacity to 50 GW by 2030, with battery storage and hydro projects as key strategic focuses.

• Tata Sons expects a regulatory extension on its mandatory IPO deadline and is not planning a near-term share sale. A delay would hinder the Shapoorji Pallonji Group’s plans to sell its 18.37 percent stake to reduce debt.

• Shares of Kotak Mahindra Bank fell over 6 percent after its quarterly earnings missed estimates, raising concerns about rising bad loans and weakening asset quality. Analysts expect credit costs to remain high in fiscal 2026 due to stress in the retail commercial vehicle segment and limited buffer provisions.

• Tata Consultancy Services will cut 2 percent of its workforce, about 12,200 jobs, in FY2026, mainly affecting middle and senior management. The move reflects rising AI adoption, cost pressures, and weak tech demand amid global uncertainty.

• Arvind Fashions reported a 20 percent rise in quarterly core earnings, driven by new store openings and strong demand for premium apparel from affluent consumers. Revenue grew 16 percent as the company continues to expand its higher-priced offerings and online reach.

• JK Paper's first-quarter profit fell 42 percent due to higher raw material costs and pressure from cheap imports. Despite the decline, the company announced the acquisition of Borkar Packaging to strengthen its position in the folding cartons segment.

• IndusInd Bank returned to profitability in Q1 after a major accounting lapse led to its biggest-ever loss in the prior quarter. Despite a 68 percent drop in profit year-on-year, the bank is implementing strict cost controls and progressing with leadership changes.

• GAIL (India) reported a larger-than-expected 31 percent drop in quarterly profit due to a sharp rise in input costs despite steady demand. The fall was worsened by a government cut in low-cost domestic gas supply, raising raw material expenses.

Alts

• Life Insurance Corp. has partnered with Wall Street banks to hedge $1 billion (₹86.7 billion) in liabilities through bond forward rate agreements. This move reflects the insurer’s growing role in India’s evolving financial markets and rising demand for long-term bonds.

• India’s Bangalore International Airport plans to raise over $535 million (₹48 trillion) through a second tranche of 15-year bonds by early October, following a similar bond sale earlier this month. The AAA bonds will offer a comparable 8.15 percent coupon and be privately placed.

• Petronet LNG, India’s top gas importer, is seeking a $1.4 billion (₹120 billion) loan to help fund a major petrochemical plant expansion in Gujarat. The company plans to invest $3.5 billion (₹300 billion) over the coming years, including a new LNG terminal in Odisha.

Policy

• Jane Street Group has requested more time to respond to India's securities regulator SEBI over allegations of market manipulation. The firm disputes SEBI's findings and is engaging constructively, having already set aside $558 million in escrow while the investigation continues.

• Indian forces killed three suspected militants in a gunfight in Kashmir as military operations continue in the Lidwas area. The incident comes amid parliamentary debate over recent strikes on Pakistan following a deadly April terror attack that killed 26 civilians.

• In Assam, India, authorities have intensified evictions of Bengali-speaking Muslims ahead of state elections, accusing them of illegally occupying government land. Critics condemn the actions as politically motivated and discriminatory.

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1. Maharashtra Eyes $1 Trillion GDP Milestone

Maharashtra, India’s economic juggernaut, is on track to become the country’s first $1 trillion (₹86.7 trillion) state economy by 2030, according to a new Morgan Stanley report. With a current GDP of $536 billion (₹46.5 trillion), already larger than most South Asian economies, Maharashtra’s trajectory is reshaping India’s macro narrative from the state level up.

The state's ascent rests on five core pillars: industrial strength, global capital, services expansion, export prowess, and fiscal solidity. It contributes 22.5 percent of GVA from manufacturing, dominating auto, pharma, and refined petroleum. Services now comprise 64 percent of output, with Mumbai emerging as a capital magnet for global capability centers, hosting over 730, the most in India.

Foreign direct investment tells its own story. Maharashtra pulled in $19.6 billion (₹1.7 trillion) in FY25, nearly 40 percent of all FDI into India. It’s also India’s second-largest exporter, with outbound trade worth over 13 percent of its GDP, spanning chemicals, machinery, and electronics.

Crucially, Maharashtra’s fiscal health remains intact. A low debt-to-GDP ratio, strong human capital indicators, and growing investments in green infrastructure signal a model of resilient, inclusive growth.

As India chases a $7 trillion (₹607.1 trillion) economy by 2030, Maharashtra’s trillion-dollar march will be a litmus test of state-led macro momentum, where infrastructure, capital, and human capacity converge. From local to global, the state is fast becoming India’s flagship engine in the age of geoeconomic decoupling and green industrialisation.

2. Countdown to Friday

This Friday, August 1, U.S. President Donald Trump has promised that his “Liberation Day” tariffs from April 2 will finally go into effect. At the time, the White House proposed a 36 percent tariff on all imports from India (10 percent baseline tariff, and an additional 26 percent “reciprocal” tariff). Without a trade deal in place, this Friday, India could see the devastating tariff rate put in place.

The recent sell-off in Indian equities has cast a shadow over the optimism surrounding a potential India-US trade deal. The Nifty 50 dropped nearly 400 points from its weekly high, closing below the crucial 50-day exponential moving average of 24,900. Broader indices like the Nifty Midcap 100 and Smallcap 100 were also down over 0.8 percent and 1.2 percent respectively, as investors grew wary of the unresolved nature of the trade deal and looming tariff threats under former President Trump’s administration.

Analysts warn that even if the India-US deal is finalized, it could be overshadowed by a dramatic increase in US import tariffs. SEBI-registered analyst Avinash Gorakshkar noted that any agreement must meaningfully benefit India’s IT, pharma, and textile sectors—industries at risk if the deal lacks adequate concessions. Gorakshkar also reminded investors that the average US tariff was just 2.5 percent as of December 2024. Now, expectations point to rates ranging from 15 percent to 20 percent—levels not seen since the 1930s.

Geojit’s Chief Strategist VK Vijayakumar emphasized the importance of relative tariffs, noting that countries like Indonesia and Vietnam are already facing duties of 19 percent to 20 percent. India may not be exempt. Meanwhile, Finance Commission Chairman Arvind Panagariya offered a more optimistic view, calling the proposed deal a “game changer” that could pave the way for similar agreements with the EU, unlocking broader access for Indian exporters.

The next few days could define the U.S.-India trade relationship for years to come.

3. Global Slowdown Poses Risks to Indian Exports.

India’s Finance Ministry has flagged rising concerns over weakening global demand and lingering trade uncertainties, warning that they could drag down the country’s export performance in the coming quarters. In its July monthly economic report, the ministry said that a slowdown in global growth, particularly a contraction of 0.5 percent in the U.S. economy in the first quarter, may weigh heavily on Indian exports.

India’s merchandise exports fell to $35.14 billion (₹3.0 trillion) in June, down 9 percent month-on-month and barely changed from a year earlier. This marks the weakest export performance since November 2024, when shipments dropped to $32.11 billion (₹2.8 trillion).

Despite these headwinds, the ministry maintained that India’s macroeconomic fundamentals remain resilient. However, it cautioned that geopolitical tensions, global trade fragmentation, and uncertainty over U.S. tariff policy add further risk to the external sector.

The report comes as the RBI faces a changing inflation landscape. Retail inflation dropped to a six-year low of 2.1 percent in June, well below the RBI’s projection of 3.7 percent for FY2025-26. RBI Governor Sanjay Malhotra recently said the central bank had “won the battle against inflation,” but emphasized that achieving durable price stability remains an ongoing objective.

As India navigates trade challenges and seeks to maintain economic momentum, policymakers are likely to focus on supporting domestic demand while ensuring external resilience amid a softening global environment.

See you tomorrow.

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

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