📰India to Cut Tariffs, Indian Oil Giant Moves Away from Oil

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:

• India is considering its biggest tariff cut in years, potentially slashing duties on over half of U.S. imports worth $23 billion,

• India’s largest oil explorer is diversifying away from crude oil,

• and Shapoorji Pallonji Energy is a private company trying to mend India-Brazil relations.

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

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—Shreyas, [email protected]

Market Update.

India May Cut Tariffs on U.S. Imports in Half.

India is considering its biggest tariff cut in years, potentially slashing duties on over half of U.S. imports worth $23 billion, Reuters reported. The move comes as a defensive strategy against new tariffs imposed by U.S. President Donald Trump, which could severely impact Indian exports.

Why Is India Doing This? Trump’s global tariff plan, set to kick in on April 2, is causing concern worldwide, including among U.S. allies. India, which exports $66 billion worth of goods to the U.S., estimates that 87% of its shipments could be hit with higher duties under these new rules. To prevent a trade war and keep its exports competitive, India is offering to cut tariffs on a significant chunk of U.S. goods, especially in sectors like machinery, electrical equipment, and food products.

The Trade-Off: Will the U.S. Play Ball? India's offer isn't unconditional. New Delhi wants something in return—relief from Trump’s impending tariffs. If Washington refuses, India might explore other options, like sector-specific negotiations rather than across-the-board reductions.

The Bigger Picture: A History of Trade Tensions Trade relations between India and the U.S. have been rocky for years. Trump has frequently called India a "tariff king," criticizing its high duties on American goods. India, for its part, has one of the highest average tariff rates among major economies—12%, compared to the U.S.’s 2.2%, according to WTO data.

Despite these tensions, both countries are looking for common ground. During his visit to the U.S. in February, Indian Prime Minister Narendra Modi agreed to start negotiations for a new trade deal. With U.S. officials arriving in India this week for talks, the coming days could determine whether a compromise is reached—or if tensions escalate further.

Markets reacted positively to the news. Lowering tariffs would mark a significant step toward India's economic liberalization, enabling domestic firms to import foreign goods, compete with global giants, and further integrate into the global supply chain. At Samosa Capital’s February live event, former RBI Deputy Governor Viral Acharya noted that a silver lining of the U.S. tariff war is that it could push India to abandon protectionist policies in exchange for trade concessions from the United States.

India’s Largest OIl Explorers Wants To Diversify Away from Oil.

India’s largest oil explorer, Oil and Natural Gas Corp. (ONGC), is implementing a multi-pronged business diversification strategy to reduce its dependence on crude oil and navigate volatile energy markets.

Refining: As part of its efforts to hedge against declining oil prices, ONGC is expanding into refining and petrochemicals. The company is planning to establish its first refinery with a focus on oil-to-chemicals, a move designed to counteract the expected decline in demand for diesel and gasoline due to the rise of electric vehicles. At the group level, ONGC already controls a refining capacity of one million barrels per day through its subsidiaries, Hindustan Petroleum Corp and Mangalore Refinery & Petrochemicals. 

In addition to refining, ONGC is increasing its presence in the liquefied natural gas (LNG) sector. The company is in the process of securing a regasification capacity of three million tons per year along India’s western coast. It is also in discussions with city gas retailers to establish long-term offtake agreements. Since LNG prices are linked to crude oil benchmarks, importing cheaper natural gas for the domestic market could help offset potential losses from oil price fluctuations.  

Renewables: Renewable energy is another pillar of ONGC’s diversification strategy. The company has set an ambitious target of reaching 10 gigawatts of renewable power capacity by 2030, nearly three times its current levels. To achieve this, it is planning to invite bids for the construction of one gigawatt of solar and wind power capacity for its own captive use.  

With the global energy landscape shifting towards cleaner and more sustainable sources, ONGC’s diversification strategy is aimed at ensuring long-term stability and profitability. The move comes as rising production costs and depleting oil reserves put additional pressure on its traditional business model.

Shapoorji Is Working to Mend India/Brazil Relations.

Shapoorji Pallonji Energy is making a direct appeal to the Brazilian government after Petrobras, Brazil’s state-run oil giant, unexpectedly canceled a tender for the construction of an oil production platform. The Indian offshore infrastructure company sent a delegation to Rio last week, seeking to reverse Petrobras’ decision, according to a source familiar with the matter. The Indian embassy is also closely monitoring the situation, given the broader economic and political ties between India and Brazil as part of the BRICS coalition.

Petrobras announced the cancellation of the tender for a floating production storage and offloading vessel (FPSO) in late February, citing a change in economic viability. The company is now considering reopening the bidding process under a build-operate-transfer model, where the contractor constructs and operates the vessel before eventually transferring ownership to Petrobras. The decision came as a surprise to Shapoorji, which was the sole bidder in the original process that began in August 2023.

In response, Shapoorji submitted a revised offer on March 16, aligning with Petrobras’ most recent price estimate for the FPSO charter at the Barracuda/Caratinga oilfields. The company is also exploring legal options to block a potential new tender if Petrobras decides to move forward with a different bidding process. 

Petrobras, in an official statement, maintained that the tender was revoked in accordance with legal procedures and said it would announce the outcome of Shapoorji appeal soon. Brazil’s Ministry of Mines and Energy referred all inquiries back to Petrobras. Shapoorji emphasized its commitment to finding a resolution that meets Petrobras’ strategic objectives while serving Brazil’s national interests. The company stated that the project represents a significant investment and could further strengthen economic and strategic ties between India and Brazil.

Gupshup.

Macro

• India's finance ministry and central bank officials will meet on March 26 to finalize the market borrowing plan for April-September, sources told Reuters. The government plans to raise $172.92 billion (₹14.82 trillion) in gross borrowing for the 2025-26 fiscal year.

• India has removed import duties on key materials for EV batteries and mobile phones to support local manufacturing and counter potential U.S. tariffs. The move is part of broader trade negotiations with Washington, as both nations work toward a tariff reduction deal.

• India will maintain its one-million-ton sugar export quota for the current season, with sufficient stockpiles to meet domestic demand for over two months before the next crop begins, easing concerns about supply shortages. Despite a drop in production, the country will not restrict exports, which had driven global sugar prices higher last week.

Equities

• India has ordered Samsung to pay $601 million in back taxes and penalties for misclassifying telecom imports between 2018 and 2021 to evade tariffs, a government order revealed. The case, one of India's biggest tax demands in recent years, accuses the South Korean giant of knowingly filing false documents, while seven of its executives face $81 million in fines.

• Ola Electric has settled a $3.1 million (₹267.5 million) payment dispute with vehicle registration agency Rosmerta Group, which led to an insolvency petition withdrawal. The company also addressed a data mismatch issue with government registration records, while its stock remains volatile since its August listing.

Alts

• Standard Chartered has hired three executives in India to expand its private credit business amid rising demand. The new hires, based in Mumbai, include former UBS director Ankit Raghav and two others joining leveraged finance and credit teams.

Policy

• Canada's spy agency warned that China and India are likely to interfere in the April 28 general election, with Russia and Pakistan also posing potential threats. Officials said hostile states, especially China, are increasingly using AI to meddle in democratic processes.

• India will eliminate its 6 percent digital ad tax from April 1, easing costs for U.S. tech giants like Google and Meta while addressing U.S. trade concerns. The move follows Washington's criticism of the levy as discriminatory and aims to strengthen trade ties.

• Japan supports stronger security ties with India and South Korea in the Indo-Pacific, emphasizing regional cooperation amid rising tensions with China. Tokyo sees multi-layered alliances as key to maintaining stability, though it has not confirmed plans to expand the U.S.-backed "Squad" security group.

See you Wednesday.

Written by 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.