Good afternoon, friends. India’s macro story is holding its stride, but the oil map beneath it is shifting.

The big story today: Indian refiners are bracing for a sharp drop in Russian crude as US pressure mounts. We spoke to an industry expert to understand what the loss of sanctioned barrels means — and why Middle East producers are poised to gain — just as Reliance denies claims of receiving fresh Russian cargoes in January.

ALSO- India is set to lap Gulf peers on growth, with GDP projected at 6.9% in FY 2027. Tax cuts, trade pacts, and domestic buffers will cushion the blow from global headwinds. In other macro news, services momentum cooled in December and inflation is tamed, for now.

All of that and more, below.

Watch this space

TRADE — State Bank of India (SBI), the sole Indian bank operating in Israel, has secured approval to settle bilateral trade with Israel in INR, Press Trust of India reports. Using the Special INR Vostro Account mechanism — the same architecture established with the UAE in 2023 — Israeli exporters can now receive direct payments in INR, effectively bypassing the USD for cross-border transactions.

This mirrors the INR settlement architecture already in place with the UAE, with India looking to push for a standardized INR corridor across its key MENA partners. With over 40k Indian workers in Israel, SBI is streamlining INR accounts to capture the flow of remittances.

An FTA catalyst: This precedes a high-stakes freetrade agreement between India and Israel, negotiations for which will take place later this month.

SEMICONDUCTORS — The northern state of Uttar Pradesh has implemented incentives to attract investments of INR 30 bn (USD 360 mn) or more from semiconductor manufacturers as part of efforts by the state to build a high-end manufacturing base, Hindu Businessline reports. It also approved standard operating procedures for Global Capability Centers as it sharpens its pitch as an investment destination.

Why it matters: If you are a MENA-based tech firm looking to set up a back-office or a fabrication facility in India, Uttar Pradesh just became significantly cheaper than Bengaluru or Hyderabad on an operational basis. By offering 10-year power and tax subsidies, the heartland state is trying to undercut the established tech hubs of southern India like Visakhapatnam and Thoothukudi.

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Data point

USD 8.5 bn — this was the value of institutional investments in the Indian real estate sector in 2025, a 29% y-o-y increase, riding a sharp year-end surge amid soaring domestic participation, as per Colliers India. Domestic institutions more than doubled deployments to USD 4.8 bn, amounting to 57% of inflows, while foreign inflows eased 16% to USD 3.7 bn.

IN CONTEXT- Gulf institutional investors are laser-focused on Grade A, income-generating office assets, specifically those ready to be packaged into Real Estate Investment Trusts, which alone drew USD 4.5 bn in 2025.

Happening this week

India and the EU will hold high-level talks in Brussels from 8-9 January to push forward negotiations on a long-negotiated freetrade agreement, as both sides look to resolve outstanding issues and accelerate closure, Press Trust of India reports. The agreement is likely to be signed around 26 January during a visit by European Commission President Ursula von der Leyen to New Delhi.

The big story abroad

Uh, did the US just *literally* steal Venezuela’s oil? Oil tankers are moving from the US towards Venezuela to begin loading stranded Venezuelan oil after US President Donald Trump said Venezuela will hand over some 30-50 mn barrels of oil to the US. The sale of the cargoes could be worth around USD 3 bn at current prices.

What he said: “That money will be controlled by me, as President of the United States of America, to ensure it is used to benefit the people of Venezuela and the United States,” Trump wrote in a post on his Truth Social platform.

^^ The must-read on the topic: Trump: Venezuela to turn over 30-50 mn barrels of oil to US

And the White House is now saying that military force is on the table in its bid to “acquire” Greenland. ““President Trump has made it well known that acquiring Greenland is a national security priority of the United States, and it’s vital to deter our adversaries in the Arctic region,” White House press secretary Karoline Leavitt said. “The president and his team are discussing a range of options to pursue this important foreign policy goal, and of course, utilizing the US military is always an option at the commander-in-chief’s disposal.”

Her remarks came after White House Deputy Chief of Staff Stephen Miller channeled his inner Balon Greyjoy, saying, “Nobody’s going to fight the United States militarily over the future of Greenland. … We live in a world, in the real world … that is governed by strength, that is governed by force, that is governed by power. These are the iron laws of the world since the beginning of time.” See more in the New York Times and the FT.

Closer to home:

  • Saudi Arabia has opened up its capital markets to foreign investors in a move set to bring in more liquidity ahead of a deep 2026 IPO pipeline.
  • The Qatar Investment Authority participated in Elon Musk’s xAI’s USD 20 bn series E funding round, alongside Nvidia and Cisco. (Reuters)
  • Clashes between civilians and police in Iran amid a wave of protests that took the country by storm as of last week have left 29 dead and more than 1.2k people arrested. (Bloomberg)

Market watch

Deutsche Bank topped the league table for arranging USD bonds for Indian borrowers in 2025, displacing Standard Chartered’s 17-year reign, but the win comes in a declining market, Bloomberg reports.

Indian companies’ USD bond issuance plummeted 37% to USD 8.3 bn in 2025 as a weak INR and punishing hedging costs pushed corporate treasurers to return home. While offshore sales withered, local currency debt hit a record USD 151 bn.

Deutsche Bank secured its lead by leaning into high-stakes agreements for issuers like Vedanta Resources and Muthoot Finance. It acted as sole arranger for the country’s largest private credit financing of USD 3.4 bn for the Mumbai-based conglomerate Shapoorji Pallonji.

Why this matters: For MENA-based allocators and bankers, the standard Indian USD bond is becoming a rarity. The market is bifurcating — issuance is moving onshore to the INR market, while the offshore space is emerging as a playground for private credit plays. Deutsche Bank’s ascent suggests that success in India’s bond market now demands a risk appetite for complex credits that traditional incumbents appear to be ceding.

Circle your calendar

German Chancellor Friedrich Merz will make his first official visit to India from 12-13 January, as New Delhi looks to strengthen economic engagement with Europe amid growing trade frictions with Washington. The two-day trip is expected to focus on trade, investment, defence, and technology cooperation, according to a foreign ministry statement.

Check out our full calendar on the web for a comprehensive listing of upcoming news events, national holidays and news triggers.

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