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📰India Buys Even More Russian Oil | Daily India Briefing
Three stories on Indian markets that you can't miss.


Canada and India to restore diplomatic ties. Risk premiums on investment-grade corporate bonds tighten to their lowest since 2007. India is set to increase its Russian oil imports in September.
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Macro
Indian companies are delaying expansion plans amid trade tensions and tariff uncertainty, Bank of America said. Firms are prioritizing debt repayment and refinancing, with M&A activity rising, while US tariffs and muted credit growth weigh on confidence and investment.
Record state borrowing is straining India’s bond market, lifting yields and driving up funding costs for companies and the federal government. With local governments expected to borrow $102.7 billion (₹9 trillion) this fiscal year, investors are favoring state bonds, deepening sovereign debt selloffs.
Indian small businesses are scrambling to offset Trump’s 50 percent tariffs by seeking buyers in Europe, Africa, and Asia. Many front-loaded shipments before the deadline, but with no government relief yet, exporters face tighter credit and slower growth.
India extended its cotton import duty exemption until the end of December to help its garment industry cope with steep U.S. tariffs. The move may lift global cotton prices but could hurt demand for local cotton, weighing on domestic prices.
Equities
India’s top online beauty retailer Nykaa is expanding overseas by launching Kay Beauty in the UK with Ulta-owned Space NK, marking its global push. The move aims to build international recognition and nearly triple sales of its in-house brands by 2030.
Adani Group is boosting women’s leadership by appointing family members to senior roles, part of its diversity and inclusion push. Srushti Adani and Diva Adani have recently taken charge of digital and airport business units, though critics question meritocracy.
India’s state-run National Aluminium Company (NALCO) will invest $3.43 billion (₹300 billion) over the next five years to build a new aluminium smelter and a coal power plant. About 180 billion rupees will go toward the smelter project in Odisha.
Alts
Billionaire Rakesh Gangwal raised $501 million (₹43.9 billion) by selling a reduced 1.96 percent stake in IndiGo, offloading 7.56 million shares through the Chinkerpoo Family Trust. The downsized deal, reportedly due to weak domestic demand, sent IndiGo shares tumbling 5.3 percent.
Policy
India’s central bank is weighing rules that would restrict shadow banks from running subsidiaries with overlapping businesses to reduce systemic risk. The RBI is especially concerned about large gold finance firms with microfinance arms that duplicate lending models.
Indian gaming firm A23 has filed the first legal challenge against the government’s ban on online money-based games, arguing they are skill-based and not gambling. The ban abruptly halted popular contests, putting the $3.6 billion industry’s future in doubt.
High U.S. tariffs and possible anti-dumping duties on Indian solar panels will choke exports to the country’s top market, deepening a domestic supply glut as project bidding slows. Analysts warn India may face solar overcapacity as soon as 2026.

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1. Canada, India Restore Ties as Both Brace for US Tariff Shock

Canada and India are moving to normalize relations, appointing new envoys after nearly a year of frozen diplomacy, just as both countries face escalating trade pressure from Washington.
Ottawa named Christopher Cooter, a veteran diplomat with 35 years’ experience, as its new high commissioner in New Delhi, while India tapped Dinesh Patnaik, currently ambassador to Spain, as its envoy to Ottawa. The announcements follow an agreement reached between Canadian Prime Minister Mark Carney and India’s Narendra Modi at the G-7 summit in June, signaling a desire to reset ties after a bruising diplomatic row.
The rapprochement comes at a critical moment. President Donald Trump has slapped a 50 percent tariff on Indian exports to the US, punishing New Delhi for continuing to buy Russian oil, while also raising tariffs on certain Canadian goods to 35 percent earlier this month. The tariffs are prompting both countries to strengthen trade diversification efforts, with Ottawa leaning more heavily on India as a partner, and New Delhi signaling that cooperation with Canada could help soften the blow from Washington’s measures.
“Restoring top-level diplomatic engagement is about more than symbolism; it’s about protecting economic interests,” Foreign Minister Anita Anand said. For Carney, the move underscores a pragmatic pivot: as US tariffs reshape global supply chains, Canada and India are working to turn strained relations into a shared front against trade disruption.
2. Bond Market Rally Leaves Investors Exposed to Thin Safety Margins
Global credit markets are flashing signs of exuberance as investors crowd into corporate debt, leaving only the thinnest of cushions against potential shocks.
Risk premiums on investment-grade corporate bonds have tightened to just 81 basis points, their lowest since 2007, compared with an average of 116 over the past five years. Even riskier securities, including subordinated bank bonds, are trading near record valuations, with some issues yielding less than comparable US Treasuries.
The rally is being fueled by a surge of demand from pensions, insurers and yield-hungry funds drawn to outright borrowing costs that remain historically high despite central banks cutting rates. “There’s so much capital chasing financial assets,” said Robert Cohen, head of developed credit at DoubleLine Capital. “The bargains get swept up pretty quickly.”
Emerging-market borrowers have also benefited, with dollar spreads dropping below 260 basis points for the first time in over a decade. In Asia, investment-grade dollar spreads have shrunk to record lows of 60 basis points, less than half their 10-year average.
Yet the hunt for yield is raising alarms. “When markets stop distinguishing between creditworthy borrowers and problem cases, liquidity, not fundamentals, is driving valuations,” said Guillermo Osses of Man Group.
Analysts warn the setup is fragile. If US growth slows as recent jobs and services data suggest, spreads could widen back toward 130–140 basis points. For now, though, fear of missing out is keeping investors all in.
3. India Set to Import More Russian Oil
Defying U.S. interests, India is set to increase Russian oil imports in September, as per Reuters’ exclusive reporting.
The move comes after the United States’ 50 percent tariff on Indian imports will result in India’s multibillion-dollar gains from discounted Russian evaporating.
Since 2022, India has saved an estimated $17 billion (₹1.5 trillion) by dramatically boosting imports of Russian crude, which now make up nearly 40 percent of its oil purchases. But new 50 percent US levies could slash Indian exports by more than $37 billion (₹3.2 trillion) this fiscal year, according to the Global Trade Research Initiative.
The tariffs, targeting sectors from textiles to gems, threaten hundreds of thousands of jobs and land a political blow to Prime Minister Narendra Modi ahead of elections in Bihar. Analysts warn the squeeze could also reset India’s strategic calculus: Moscow remains essential for defense and energy, yet the US is still New Delhi’s most important partner in countering China.
India has pushed back, accusing Washington of “double standards” for penalizing its oil trade while continuing to import Russian uranium and metals. China also far surpasses India in Russian oil imports, yet faces a lower tariff rate. Officials insist halting Russian crude, around 2 million barrels a day, would disrupt supply chains and send fuel prices soaring, with internal estimates warning global crude could spike toward $200 (₹17,515) a barrel.
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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.