📰GIFT City Goes Global, Retail Investors Rack Up Losses, India to Cut Cooking Gas Imports

Good afternoon, 

Welcome to the best way to stay up-to-date on India’s financial markets. Here’s what’s in today’s newsletter:

• GIFT City’s NSE gets its first foreign currency equity listing,

• Retail investors lose a trillion rupees,

• and India plans to cut gas imports.

Then, we close with Gupshup, a round-up of the most important headlines.

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—Shreyas, [email protected]

Market Update.

GIFT City’s First Foreign Currency Equity Listing.

India’s GIFT City is poised to mark a significant milestone as NSE IX prepares to secure its first equity listing denominated in a foreign currency this quarter. The move signals India’s broader push to position Gujarat International Finance Tec-City, a flagship project under Prime Minister Narendra Modi, as a credible global financial hub rivaling Dubai and Hong Kong.

NSE IX CEO Balasubramaniam said the exchange is initially targeting unlisted companies, including Indian firms with foreign holdings and startups based in Silicon Valley or Delaware. A successful foreign-currency listing could offer Indian corporates a fresh route for tapping overseas capital while trimming currency conversion and hedging costs, key factors for companies with global expansion plans.

For India’s macro landscape, the development underscores the deepening sophistication of domestic capital markets. Historically, Indian firms have relied on instruments like ADRs and GDRs to raise funds offshore. A robust pipeline at GIFT City could bring some of that fundraising back under an Indian regulatory umbrella, broadening liquidity pools and deepening foreign participation.

The promise of tax incentives, including exemptions on securities transaction and capital gains taxes, adds to GIFT City’s appeal for global investors wary of higher frictional costs elsewhere. As SEBI works alongside the International Financial Services Centres Authority to iron out regulatory gaps, market watchers expect more Indian blue-chips to test dual listings or separate dollar floats, accelerating India’s integration with global capital.

Retail Investors Lost a Trillion Rupees.

India’s retail investors racked up losses exceeding $12 billion (₹1 trillion) in equity derivatives in the past year, underscoring persistent risks to household savings and market stability despite regulators’ efforts to rein in speculative trading. This is a sharp jump from the previous year’s $8.7 billion (₹748 billion) loss, and part of a staggering $33 billion (₹2.8 trillion) in cumulative losses over four years.

The data highlights how India’s surging retail participation in equity derivatives has become a double-edged sword for the market. Small traders now make up over a third of premium turnover in options, but repeated warnings about the high-risk nature of derivatives have failed to dampen activity.

Market reaction was swift: shares of exchanges like BSE fell as much as 9 percent on fears that SEBI may tighten trading rules further. Brokerages such as Angel One and 5Paisa Capital also saw declines on concerns that any additional curbs could squeeze volumes and fee income.

The spike in retail losses puts a spotlight on India’s broader financial inclusion challenge, balancing democratized access to markets with stronger investor protection, as household savings remain vital for driving long-term capital formation and sustaining economic growth.

India Plans to Cut Cooking Gas Imports.

India is planning to source about 10 percent of its cooking gas imports from the US starting in 2026, marking a strategic shift in its energy basket as it seeks to hedge geopolitical risks and rebalance its trade relationship with Washington. The world’s third-largest oil importer currently relies on the Middle East for over 90 percent of its liquefied petroleum gas (LPG) needs, a vulnerability policymakers have been eager to address as domestic demand climbs steadily by 5–6 percent annually.

This pivot comes as India aims to boost total US energy purchases by $10 billion (₹857.4 billion), supporting its broader goal of reaching $500 billion (₹42.9 trillion) in bilateral trade with America by 2030. The move is also timely: Chinese tariffs on US propane have opened arbitrage opportunities for Indian refiners to secure cheaper cargoes. To sweeten the deal, India plans to eliminate import duties on US propane and butane, making American LPG more competitive despite higher freight costs.

For India, diversifying LPG supply mirrors its efforts to broaden crude sourcing beyond the Middle East and Russia, which have dominated its energy imports for years. With state-run retailers like IOC, BPCL, and HPCL still providing subsidised LPG to millions of households, securing stable, affordable supply is both an economic and political priority.

In the macro picture, shifting part of its LPG supply to the US strengthens India’s energy security, cushions it against regional tensions, and helps narrow its persistent trade deficit with its top strategic partner. As India’s household energy demand rises alongside urbanisation, this diversification will be key to balancing affordability, reliability, and its broader geopolitical calculus.

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Gupshup.

Macro

• India’s power demand fell nearly 1.5 percent year-on-year in the June quarter, marking its first decline since the pandemic due to a cooler summer that curbed air conditioning use. The drop hit coal-fired plants hardest, while renewable generation surged, highlighting climate-related challenges in forecasting energy needs.

• Indian farmers have expanded sowing of monsoon crops as of July 4, with rice acreage up 7.4 percent and pulses jumping 35 percent year-on-year amid above-normal rainfall. The boost in planting, especially for pulses and oilseeds, raises hopes for a strong harvest season if favorable weather continues.

• India’s rupee lagged most emerging Asian currencies as tariff threats from the US weighed on sentiment. Despite hopes of a trade deal with Washington, traders expect further weakness, with the rupee hitting its steepest drop in two months amid BRICS tensions.

• India’s supply of affordable homes priced under $58,000 (₹5 million) has dropped to its lowest level since 2018, according to Knight Frank. Rising costs and tight price caps are pushing developers to shift focus toward premium housing, squeezing options for budget-conscious buyers.

• Fund managers are betting on Indian banking and consumer stocks to outperform this year as the RBI’s aggressive rate cuts lower funding costs and boost spending. BlackRock, Aberdeen, and Smartsun Capital say the monetary easing will improve sector earnings and drive India’s $5.4 trillion (₹463 trillion) stock market despite its rich valuations.

Equities

• Ola Electric is in crisis mode just a year after its blockbuster India IPO, with deepening losses, shrinking market share, and mounting product issues like scooter fires and faulty parts. Founder Bhavish Aggarwal is scrambling to stabilize the SoftBank-backed startup, but investors remain wary as Ola’s early ambitions clash with harsh market realities.

• Indian equity benchmarks edged higher on Tuesday, supported by strong gains in financial stocks, especially private banks like Kotak Mahindra Bank. However, broader market weakness and caution over U.S. tariff policy limited overall upside.

Alts

• India’s Kerala state is seeking $1.1 billion (₹94.3 billion) in damages from MSC Mediterranean Shipping Co. for environmental harm caused by the MSC ELSA 3 fuel spill in May. The High Court has ordered the seizure of another MSC vessel’s container until the company deposits the reparation amount, with a case review set for July 10.

• Jio BlackRock plans to disrupt India’s mutual funds market by launching nearly a dozen low-cost equity and debt funds this year. The JV aims to cut investor costs by using Jio’s vast digital network to bypass traditional distributors and offer small-ticket, direct investments.

Policy

• India’s markets regulator SEBI will boost surveillance to crack down on derivatives manipulation, its chairman said after barring Jane Street for index manipulation. The move comes as India’s booming derivatives market, the world’s largest by volume, faces tighter rules to curb speculative excess.

• Pakistan’s army chief Asim Munir has rejected India’s allegation that China actively supported Pakistan’s military during their May conflict. He called the claims “irresponsible and factually incorrect,” amid ongoing regional tensions and China’s close ties with Islamabad.

See you Wednesday.

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

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.