📰KKR & Blackstone Expand in India | Daily India Briefing

KKR and Blackstone are making India the hub of Asian private equity. RBI faces increased pressure to cut rates. U.S. and India re-enter trade talks.

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Macro

• India’s stock fund inflows eased to $3.89 billion (₹334.3 billion) in August from a record July, as fewer new fund offers dampened demand. Debt funds saw sharp outflows, while hybrid and gold ETFs continued to attract investor money.

Equities

• Jaguar Land Rover confirmed some data was compromised in a cyberattack disrupting production and sales. The Tata Motors-controlled automaker is notifying regulators, investigating the breach, and may contact affected parties, while continuing to face tariff and rebranding challenges.

• Urban Co.’s India IPO was subscribed over three times on its first day, fueled by strong demand from retail and wealthy investors. The consumer tech startup aims to raise $216 million (₹19 billion), with the offer closing September 12.

• BYD is preparing a renewed push into India as warming Modi–Xi ties allow executives to visit after years. The company plans to launch its Atto 2 SUV under ₹2 million, seek expanded import approvals, and explore battery collaborations with Adani.

Alts

• Deloitte LLP has told its India staff to return to the office at least two days a week starting Oct. 1, warning that noncompliance will affect performance reviews. The mandate applies across seven offices supporting client work and back-office functions.

Policy

• India revised coal taxes by raising GST to 18 percent while scrapping a fixed levy, effectively lowering costs for users. The change boosts Coal India’s competitiveness, supporting its push to replace imports and offset weak demand from renewables and weather.

• India’s cabinet is considering a relief package for exporters hit by U.S. tariffs. Proposals include collateral-free loans, subsidized interest rates, and support for diversification into Africa and Latin America, funded partly from the 22.5 billion rupees export-promotion budget.

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1. KKR, Blackstone Help India Become Asia’s Private Equity Hub

Private equity giants like KKR and Blackstone are expanding their presence in India, with seven global funds now basing their Asia private equity heads or co-heads in Mumbai. Just five years ago, none had senior Asia roles anchored in India.

Together, these executives oversee at least $100 billion (₹8.8 trillion) in assets, according to Bloomberg calculations. The shift highlights how global capital is moving beyond China, with India offering a mix of strong economic growth, deepening capital markets, and expanding deal pipelines across infrastructure, manufacturing, and consumer sectors.

India’s private equity market has matured significantly, with larger deal sizes, a stronger buyout ecosystem, and multiple exit avenues. The country also captured 41 percent of private equity inflows into emerging and growth markets this year, overtaking China’s 34 percent.

Blackstone has about $50 billion (₹4.4 trillion) invested in India and calls it its best global market, while KKR has deployed roughly $11 billion (₹986.8 billion) and plans faster deployment ahead. Other major firms, including Brookfield and Advent International, are elevating India-based executives to regional or global roles.

2. RBI Faces Pressure to Act as Tariffs and Bond Yields Bite

India’s central bank is under growing pressure from exporters and bond traders to intervene as punitive U.S. tariffs and surging bond yields threaten economic stability.

Exporters battered by Trump’s 50 percent levy, which the government estimates could shave up to 0.6 percent off GDP this year, are urging the RBI to provide relief through currency management and favorable conversion rates. Meanwhile, bond traders are alarmed by a spike in sovereign yields, which hit a five-month high of 6.66 percent in late August, raising borrowing costs for the government despite otherwise low interest rates.

The government has already cut consumption taxes, forgoing $5.4 billion (₹480 billion) in revenue, and is preparing a support package for exporters. But these measures have fueled investor concerns about fiscal strain, leaving the RBI as the next line of defense.

Options on the table include stepping into the secondary market to buy bonds or rejecting bids at auctions to tighten supply. Analysts note the central bank has previously acted aggressively in times of stress, but Governor Sanjay Malhotra has so far taken a cautious approach, particularly with foreign exchange.

For now, the rupee has slipped 3 percent against the dollar this year, Asia’s weakest performance, giving exporters some cushion. But traders warn that prolonged inaction risks unsettling markets further, with inflation pressures limiting the RBI’s room to maneuver.

3. US, India Eye Trade Reset as Trump Plans Modi Talks

Trump said his administration is continuing negotiations to address trade barriers with India and that he would speak with Modi in the coming weeks, signaling a potential reset after weeks of friction.

Trump, who recently doubled tariffs on Indian imports to 50 percent, struck a softer tone, saying he was “certain there will be no difficulty in coming to a successful conclusion for both of our Great Countries.” Modi echoed the optimism, calling the U.S. and India “close friends and natural partners.” Shares in Mumbai rose over 0.5 percent after the leaders’ comments.

The two countries are now preparing to resume in-person trade talks this month, after negotiations were derailed in August. U.S.-India goods trade totaled $129 billion (₹11.4 trillion) in 2024, with Washington running a $45.8 billion (₹4 trillion) deficit.

Trump’s overture came as he pressed the European Union to impose tariffs of up to 100 percent on India and China, major buyers of Russian oil, in a bid to tighten pressure on Moscow. But EU diplomats said the bloc is unlikely to follow, citing legal hurdles and concern about derailing ongoing trade talks with New Delhi.

“While the statements by Trump and Modi signal a potential rapprochement, it is premature to assume a resolution will arrive swiftly,” said Madhavi Arora, economist at Emkay Global.

For Brussels, any move to penalize India with tariffs would risk undermining its long-sought trade deal with the South Asian nation, which officials said remains a priority.

See you tomorrow.

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

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