📰So, why now? | Daily India Briefing

This week, India made a landmark push to usher in global capital into its country. It’s something the country’s leaders have long talked about, but have only all-of-a-sudden have acted on. Why now?

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Macro

• GST cuts are boosting consumer demand by finally filtering to store shelves. Prices have come down while seasonal demand is in effect. That being said, the Nifty FMCC gauge is heading for its worst year since 2008 and is flat since 2023.  

• Raw sugar futures are down 25 percent in 2025 on news that India is exporting 1.5 million tons of it. Food Secretary Chopra said additional shipments may occur though the minimum sale price would rise. Indian production jumped 28 percent this year and is expected to rise another 26 percent next year.

Equities

• AI investment makes Bharti Airtel and Jio potential winners as internet providers. Both should boost user stickiness and ride the medium-term effects of AI scaling internet use in the country. 

• RRP, rising 55,000 percent in the last 20 months, is an example of AI speculative excess. The company has reported 2 full time employees in its latest annual report, has negative revenue, and a tiny float. SEBI is now investigating the company for wrongdoing.  

• Practo, a digital health platform, is planning its 2026 IPO. The company is moving its holding company location back to Bengaluru from Singapore to raise in 2H26. It operates in 22 countries by helping patients find and book doctor appointments. 

• ICICI Prudential jumped 19 percent after its $1.2 billion (₹108.2 billion) IPO. The company had bids for 39x the shares being offered which helps underscore the growing demand for the mutual fund industry. Less than 7 percent of households have mutual fund or ETF exposure.

Alts

• Insurance opening up also applies to the pension sector. Pensions were also capped at 74 percent ownership before insurance opened up, which added another $177 billion (₹16 trillion) of possible investment opportunities. India’s pension system is rated as one of the weakest in the world.   

• Adani is in talks with Uttar Pradesh to build 8 200 MW small modular nuclear reactors. The company needs to find riverside sites; after approval, the project will take 5-6 years to complete.

Policy

• India and Oman signed a FTA on 98 percent of Oman's goods and 78 percent of India's. New Delhi is only protecting dairy, tea, coffee, and bullion. India has been working on building relationships with the gulf states like the UAE and wants an FTA with the Gulf Cooperation Countries.  

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So, why now?

This week, India made a landmark push to usher in global capital into its country. It’s something the country’s leaders have long talked about, but have only all-of-a-sudden have acted on. 

Specifically, this week’s move to privatize nuclear facilities and allow foreign investors to own up to 100 percent of insurance companies is an enormous reversal of India’s decades-long dogma that the state must run highly-important industries. And while the moves have been long anticipated, this week’s actions beg the question: why now?

The insurance industry is pivotal to India’s financial markets: the industry is fast-growing, the tenth-largest globally, and premiums are often invested in stocks and bonds until pay-outs to customers need to be made. Reforming the industry allows for the tens of billions of dollars in insurance premiums to be more astutely invested, bringing more rigor and sophistication to India’s markets. Right now, the insurance market has been dogged by inefficiency, poor risk-management, and thus a failure to keep pay-outs to match premiums.

Parliament also passed legislation limiting liability in nuclear facilities, opening up private investment to the tune of over $200 billion (₹18.1 trillion) in long term opportunities. Funding nuclear energy will help keep India’s weak electrical system strong enough to support high-single-digits of GDP growth and power the $67.5 billion (₹6.1 trillion) of confirmed investments for AI data centers through the next 5 years. Together with insurance liberalization, India is finding various sources both domestically and internationally to fund its infrastructure and social capital needs. 

Another source of funding has been with Japanese financial institutions, which have announced billions in deals across banks and shadow banks which lend in rural and urban areas to all incomes. By opening the door to foreign capital, but also giving them access to intricate industries that need funding the most, India is walking the talk.

Of course, the United States’ shocking 50 percent tariffs have forced New Delhi to accelerate plans to clean up its economy and financial markets. The unintended positive consequence of America’s policy is that India is now finally unlocking foreign capital that has long-waited patiently behind a closed door. Attracting foreign capital — especially American — also puts pressure on the Trump administration to carve out a trade agreement so that American companies continue to grow without being weighed down by the country’s own tariffs. 

The other reason for reform has been the long-term duration of the capital being attracted. India is fulfilling its social and infrastructure demands while getting abundant capital that is being locked up for years if not decades. Having assured cash is necessary to fund larger, multi-year projects that India needs right now. The difference in short term and long term capital is clear just with the stock market. Foreign investors have sold $24.8 billion (₹2.2 trillion) of Indian equities this year which domestic SIPs and retail investors have absorbed, but insurance, nuclear, and tech investments keep firms attached to India for far longer making it a safer form of investment.

See you tomorrow.

Written by Yash Tibrewal. Edited by Shreyas Sinha.

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