📰India’s Infrastructure Growth Slows | Daily India Briefing

Happy Diwali! Today’s deep dives: Reliance Industries, India’s largest private refiner, has stepped up crude purchases from the Middle East. India’s core infrastructure output grew at its weakest pace in three months in September. U.S. Senate delays sanctions on Russian oil buyers.

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1. Reliance Boosts Middle East Oil Buys

Reliance Industries, India’s largest private refiner, has stepped up crude purchases from the Middle East, signaling that U.S. pressure to curb Russian oil imports is beginning to reshape its sourcing strategy.

Traders said Reliance recently bought at least 2.5 million barrels of Middle Eastern grades, including Iraq’s Basrah Medium, Qatar Land, and Al-Shaheen, and is inquiring about additional supplies with similar characteristics to Russian crude. While the company routinely sources oil from the region, the recent wave of spot buying marks an unusually active shift, according to people familiar with the matter.

Reliance has been India’s single largest buyer of Russian crude since the Ukraine war began, taking advantage of discounted prices to feed its massive Jamnagar refinery complex. But after weeks of diplomatic talks, U.S. officials said New Delhi has begun reducing Russian oil imports by roughly half, part of broader efforts to limit Moscow’s wartime revenues.

The pivot comes ahead of new European Union sanctions set to take effect in January that will restrict imports of fuel refined from Russian crude, potentially complicating Reliance’s product exports to the bloc.

Reliance declined to comment on the purchases, which come as India seeks to balance access to cheap energy with growing Western scrutiny of its oil trade and expanding strategic ties with Washington.

2. India’s Infrastructure Growth Slows to Three-Month Low in September

India’s core infrastructure output grew at its weakest pace in three months in September, signaling a slowdown in industrial momentum as declines in coal, gas, and refinery production offset strength in steel and cement.

The index, which tracks eight key industries and makes up 40% of overall industrial output, rose 3% year-on-year last month, compared with a revised 6.5% in August and 2.2% in June, government data showed Monday.

Coal production fell 1.2% after expanding 11.4% in August, while natural gas output slipped 3.8%. Refinery products also declined 3.7%, reversing a 3% gain the previous month. Crude oil production contracted 1.3% after a modest rise in August.

In contrast, steel production surged 14.1% year-on-year, maintaining double-digit growth on the back of robust construction activity. Cement output rose 5.3%, while electricity generation increased 2.1%. Fertilizer production grew 1.6%, slowing from a 4.6% rise in August.

For the April–September period, infrastructure output expanded 2.9% from a year earlier, down from 4.3% growth in the same period last year.

The weaker print underscores uneven momentum in India’s industrial recovery amid global trade headwinds and high energy costs. Economists expect the RBI to monitor these figures closely ahead of its December policy review, as policymakers balance slowing growth with imported inflation risks tied to oil price volatility.

3. US Senate Pauses Russia Sanctions Bill, Giving India Crucial Breathing Room

The U.S. Senate’s decision to delay a sweeping sanctions bill targeting Russian energy buyers has given India a temporary reprieve as it balances ties between Washington and Moscow.

The bill, which could have imposed tariffs of up to 500% on imports from nations purchasing Russian oil, threatened to hit India hard, particularly as it remains one of Moscow’s largest crude customers. The pause, announced by Senate Majority Leader John Thune, will hold until after Trump’s planned meeting with Russian President Vladimir Putin.

For New Delhi, the delay eases short-term pressure. Indian refiners like Reliance and IOC have already begun cutting Russian crude purchases amid diplomatic talks, while exploring more Middle Eastern and U.S. supply. The Senate’s move gives India space to continue this gradual diversification without destabilizing domestic fuel prices.

It also offers breathing room in ongoing U.S.-India trade negotiations, which had soured under Trump’s 50% tariffs on Indian goods. With sanctions off the table — for now — momentum could rebuild toward a broader trade pact.

Still, the pause may prove temporary. If post-summit sanctions advance, India could again face a difficult choice between safeguarding energy security and aligning more closely with Washington’s geopolitical demands.

See you tomorrow.

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

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