📰Modi Spends His Bday Fending Off Doubters | Daily India Briefing

PM Narendra Modi turns 75, the unofficial retirement age of his party. India’s mutual fund industry to triple in size by 2032. The EU has unveiled plans for a deeper strategic partnership with India.

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Macro

• Indian drug makers have to start prepping for Novo Nordisk's ozempic patent expirations. Manufacturers will then be able to produce the basic ingredient for generics on ozempic, a market that will be worth $100 billion (₹8.6 trillion) by 2035. Indian API producers still face competition from China which produces 80 percent of global generic drugs.

Equities

• South African company Momentum debates an IPO for its Indian venture with Birla. Momentum focuses on insurance and is already planning on spending $58 million (₹4.9 billion) to grow further in India. Momentum’s homegrown rival, Sanlam, is also planning on expanding in India.

• Urban Co had the best opening day of any Indian IPO this year. The company raised $215 million (₹18.5 billion) due to institutional and retail demand for consumer technology companies. Urban allows for consumers to book services quickly online such as hairdressers or drivers, which is boosted by the cheap labor supply in India.  

• Microsoft-backed Groww makes a filing for an IPO as India's largest investment platform.It seeks $120 million (₹10.6 billion) with around 574 million shares and valuation of $8 billion (₹688 billion). At that level, it likely could raise far more than its goal; funds would go towards expanding cloud infrastructure, boost marketing, and strengthen its lending capital base.

Alts

• India is spending $570 million (₹49 billion) to help small steel companies decarbonize. Small firms create half of India’s steel output and with growing demand, the government is offering subsidies which scale on a certain amount of carbon reduction. The move also aids trade with the EU while hitting the 2070 zero carbon goal. Specifics have not been announced yet.

Policy

• Modi has fended off succession talks despite setbacks by centralizing support. Modi, now 75, faces pushback for his handling of domestic economic issues. Still, after strong state government performances for the BJP, Modi will likely remain until his term ends in 2029. 

• Trump and Modi are speaking to ease trade tensions with both leaders praising each other online. Trump said he had a wonderful talk with Modi and wished him a birthday; he also praised Modi’s domestic work and thanked him for helping end the Russia-Ukraine conflict. Modi responded by praising Trump’s efforts to bring about a peaceful end to the war. 

• Military ties remain strong with the US shown by an annual training exercise that was completed this week.Joint military exercises with Japan and the Philippines were also done this weekend, showcasing the strong US ties in that region to combat China. The weekend also gives hope that the Quad (India, Japan, the US, and Australia) will maintain strong ties in the short term.

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1. It’s Modi’s Birthday. He’s Spending it Fending Off Doubters.

Modi, now 75, has hit his party’s unofficial retirement age. Just over a year after suffering the worst electoral setback of his career, Indian Prime Minister Narendra Modi has reasserted his authority over his party, Bharatiya Janata Party or BJP, and its coalition allies. In the 2024 election, the BJP lost its outright parliamentary majority for the first time in a decade, fueling speculation about Modi’s future as he approached the party’s informal retirement age of 75. Party members openly wonder whether India’s most dominant leader in a generation might be forced to step aside, an unthinkable thought just a few years ago among BJP members.

That chatter has not materialized meaningfully yet. Modi has secured loyalty from coalition partners by offering cabinet posts and funding for flagship projects, while sidelining any talk of succession. Even within the BJP and the RSS—the Hindu nationalist group where Modi started as an entry-level foot soldier, and a grassroots force behind the BJP’s elector success—there is debate over leadership transitions. This highlights a deeper rift: While Modi often used to consult RSS leaders in his first term, today, most of them have been slowly removed from the prime minister’s inner circles.

The selection of a successor to RSS chief Mohan Bhagwat, who had floated the idea that leaders should retire at 75, has been delayed, reflecting the group’s cautious approach amid Modi’s continued dominance, and showing disagreement between Modi’s BJP circle and top RSS leaders about who should lead the alliance next.

Uncertainty about a successor is Modi’s opportunity. Still, his position is not unassailable. The economy is under strain, with growth slowing to its weakest pace in five years, the rupee near record lows, and Indian equities lagging peers. Foreign policy stumbles, including a tariff spat with Washington, have added pressure.

2. India’s Mutual Fund Industry to Triple by 2032

India’s mutual fund industry is expected to grow nearly threefold by 2032, driven by strong retail inflows and the rapid adoption of digital platforms, as per Jio BlackRock. 

Sid Swaminathan, CEO of Jio BlackRock Asset Management, said India is at an “inflection point” in household savings, with capital increasingly shifting from gold and property into financial markets. The trend has already propelled the mutual fund sector, with assets doubling in just five years to nearly $900 billion (₹79 trillion).

The surge is being driven by Systematic Investment Plans (SIPs), a popular way for middle-class Indians to invest. With an SIP, a fixed amount of money is automatically taken from a person’s bank account—usually every month—and invested into mutual funds. This makes it easy for households to steadily build long-term savings in the stock and bond markets, without needing large lump sums upfront. The most recent data shows SIP flows hitting $3.4 billion in July, a new monthly high.

India’s mutual fund boom shows how quickly household savings are moving away from gold and real estate into the stock and bond markets—and that shift matters for U.S. investors too. As more Indians invest through mutual funds, domestic capital flows make the country’s markets more stable and less dependent on foreign money. A deeper mutual fund base also gives Indian companies easier access to funding, which benefits U.S. multinationals and portfolio investors tied to those firms. And as financial investments grow household wealth, consumer spending rises, creating stronger demand for U.S. businesses selling into India’s massive and expanding market.

3. EU Pushes for Closer Defense and Trade Ties with India

The EU has unveiled plans for a deeper strategic partnership with India, underscoring its efforts to diversify trade links and expand global influence. The European Commission announced the new “strategic agenda” on Wednesday, outlining cooperation across defense, trade, technology, space, and migration.

Central to the agenda is Brussels’ commitment to finalizing a free-trade agreement with New Delhi this year, a deal that has been under negotiation for more than a decade. The EU also said both sides are “exploring the creation of an EU-India Security and Defence Partnership,” marking a significant shift in the bloc’s engagement with India beyond purely economic ties.

The announcement comes on the heels of EU trade commissioner Maros Sefcovic’s visit to New Delhi last week and follows U.S. pressure on the EU to impose tariffs on India and China over their Russian oil purchases. The bloc stopped short of aligning with Washington’s push, instead stressing its intent to “further engage with India on all aspects of countering Russia’s military aggression against Ukraine.”

The EU’s pivot toward India comes as the bloc seeks alternative partners in the face of strained relations with China and growing global economic uncertainty. For India, the proposed partnership offers a chance to deepen trade opportunities with Europe while bolstering its strategic standing at a time of heightened pressure from the United States over its ties with Moscow.

See you tomorrow.

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

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