India continues energy diversification despite easing Hormuz bottlenecks

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WHAT WE’RE TRACKING TODAY

THIS AFTERNOON: India cargoes clear Hormuz; RBI steadies INR

Good morning, friends. We are halfway through the week, with an issue focused on easing supply-chain bottlenecks, alongside new defense and financial milestones across the corridor.

Energy supply chains are showing signs of life, as 11 India-bound vessels carrying crucial crude and fertilizer cargoes successfully cross the Strait of Hormuz. At the same time, India is actively diversifying its energy mix and pushing US LPG imports to record levels this month.

The UAE is in early-stage talks to acquire India’s BrahMos cruise missiles and Akashteer air-defense systems, marking a major test of New Delhi’s defense export ambitions.

**A QUICK PROGRAMMING NOTE- EnterpriseAM is taking a publication holiday on Friday and will be back in your inboxes on Monday afternoon. Until then, enjoy the long weekend.

Without further ado, the news…

India cargoes clear Hormuz route

A total of 11 India-bound vessels carrying crude oil and fertilizers have crossed the Strait of Hormuz since 17 June, signaling some movement through the Gulf route after US-Iran peace talks, the External Affairs Ministry (MEA) said in a briefing on Tuesday. Four of those fertilizer cargoes totaled around 0.18 mn tons, including about 92k tons of urea, 55k tons of diammonium phosphate (DAP), and 32k tons of sulfur, Business Standard reports.

Traffic update: Among the 11 ships were three Indian-flagged crude tankers carrying about 285k tons of crude each, one foreign-flagged crude tanker, and six foreign-flagged bulk carriers carrying fertilizers. The MEA said vessel movement had resumed in both directions, but 10 Indian-flagged vessels were still in the Arabian Gulf region.

India has also sent two vessels back into the Arabian Gulf for the first time since the Iran war disrupted shipping through the Strait of Hormuz in February, signaling a gradual normalization of maritime traffic. The vessels have successfully crossed the Strait of Hormuz, External Affairs Ministry spokesperson Randhir Jaiswal said, though he did not disclose details about the ships or their cargoes.

Why it matters: Hormuz and the Red Sea are critical to India’s fertilizer supply chain, making Gulf shipping disruptions a risk to the country’s farm supply. The latest vessel movement points to some easing on the Hormuz route, but India is still monitoring developments in the Middle East and says its energy sourcing will be guided by national interest. India has lined up urea supplies from Oman, Egypt, and Algeria. DAP and other nitrogen, phosphorus, and potassium fertilizers are arriving through the Red Sea route from Morocco, Egypt, Jordan, Tunisia, and Saudi Arabia.

RBI’s forex intervention

The Reserve Bank of India (RBI) sold a net USD 8.9 bn in the foreign exchange market in April as the country’s central bank moved to arrest the INR’s slide, triggered by higher crude oil prices, rising global bond yields, and the Iran war.

The central bank’s monthly bulletin data showed that the RBI purchased USD 16.2 bn and sold USD 25.2 bn during the month. Notably, the net USD outflow was less than the USD 9.8 bn sale seen in March.

IN CONTEXT- The INR touched a record low of nearly 96.96 per USD ⁠last month. However, the RBI’s decision to dip into its foreign exchange reserves, along with various policy measures to attract foreign capital, has helped smooth currency volatility. It trades below the 95 per USD mark. With a sharp plunge in the INR, India’s foreign exchange reserves fell to a yearly low of USD 698.4 bn in April.

Gold holdings unchanged. Meanwhile, the RBI’s physical gold holdings remained unchanged at 880.5 tons, though the value of these holdings declined amid a fall in gold prices globally.

Ras Laffan explosion kills 12 Indians

Among the 13 people killed, 12 were Indian nationals in an explosion at Qatar’s Ras Laffan Industrial City, the Indian Embassy in Doha said on X, citing Qatari authorities. The incident took place at the Barzan local gas supply facility operated by QatarEnergy LNG, injuring 66 people. Qatar’s Interior Ministry said the incident was caused by a technical malfunction during operations, with no leaks detected and no threat to public safety or the surrounding environment.

Data point

INR 350 bn (USD 3.65 bn) — that is the amount foreign portfolio investors (FPIs) poured into Indian government bonds this month, PTI reports. The rise came after New Delhi exempted FPIs from income tax on interest income and capital gains from these securities, a move aimed at drawing more foreign capital into India’s bond market.

The big story abroad

The latest update in the US-Iran war is a familiar one, with the US senate moving to end the conflict, mirroring a move by the House earlier this month. The largely symbolic decision signals growing reluctance among Republicans to back the war, just as the Trump administration is expected to petition Congress for tens of bns of USD to fund the conflict.

The selloff continues: Chipmaker equities saw losses amid a wider selloff yesterday, as investor confidence wanes amid expectations of rising interest rates and worries over the massive scale of Big Tech’s AI investments. Leading the drop were Micron and Qualcomm. Industry giant Nvidia also shed 4.1%, pulling its total market capitalization under the USD 5 tn mark.

Equities are on track to recover during today’s session, with Asia-Pacific markets already setting the stage — South Korea’s Kospi is up 2.7% this morning as investors buy the dip. US futures are trading higher as signs of increasing traffic crossing the Strait of Hormuz keeps oil prices down.

SpaceX raised USD 25 bn by issuing senior unsecured notes within two weeks of its blockbuster IPO. The company said it will use the proceeds to fully repay a bridge loan, cover associated fees, and fund general corporate operations.

Meta under scrutiny: Washington is reportedly pressuring Meta to submit its AI models for voluntary review in what seems to be an attempt to tighten oversight of the US AI scene. The pressure on Meta — the last holdout among major AI firms — echoes the government’s directive for Anthropic to restrict access to its programs earlier this month.

The young generation’s plan: As we inch closer to the largest transfer of wealth in history, the question of how the younger generation will spend the USD 83.5 tn estimated to be inherited over the next two decades is one on wealth managers and financial institutions’ minds. UBS tells CNBC that the shift may divert inherited wealth away from traditional family assets, especially real estate, as younger heirs diversify their holdings across different asset classes and global markets.

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India ramps up US LPG imports to record levels

India’s imports of liquefied petroleum gas (LPG) from the US are set to exceed 1 mn tons in June, a record high, as refiners turn to alternative suppliers following disruptions to Middle Eastern energy flows during the war, Reuters reports.

The new calculus: India is now expected to import up to 1.2 mn tons of US LPG in June, compared with 648k tons in May — a 77.5% m-o-m surge. Imports from the UAE are also recovering, with June volumes expected at 300-400k tons, while Kuwait is set to supply around 45k tons.

Why it matters: Before the conflict and the temporary closure of the Strait of Hormuz, about 90% of India’s LPG imports came from the Gulf, with total imports averaging around 2 mn tons per month. LPG imports fell to just 696k tons in April, before recovering to 1.1 mn tons in May. The surge reflects emergency spot-market purchases as the government prioritized uninterrupted cooking gas supplies for households despite higher costs.

Demand management eases pressure: To offset supply risks, India asked refiners to maximize LPG production, prioritize household distribution, and accelerate piped-gas connections. The measures have already reduced LPG consumption by 15-20%, industry sources told the newswire.

State-run refiner Indian Oil Corporation Ltd (IOCL) received no bids for the three tenders it floated last week, seeking vessels to transport crude oil and liquefied petroleum gas (LPG) cargoes from ports within the strait, as shipowners remain reluctant to sail through the strait until there is greater clarity on security conditions, The Economic Times reports.

“No one wants to take a risk as yet of ⁠going into the strait. Most ship owners are in wait-and-watch mode as they want clarity on ‌the terms of getting into the strait,” a shipbroker told the news outlet.

The details: IOCL was looking to ship around 45k metric tons of LPG between 30 June and 4 July from the ports of Ras Laffan in Qatar, Mina Al Ahmadi in Kuwait, and Ruwais in the UAE. IOCL invited bids for three ‌tenders to charter a very large gas carrier (VLGC), a very large ‌crude carrier (VLCC), and a Suezmax.

Sound smart: A VLCC carries 2 mn barrels of oil, a VLGC can hold about ‌45k metric tons of LPG, and a ‌Suezmax carries about 1 mn barrels of oil.

Taking stock: India imports more than 40% of its crude oil and 60% of LPG through the Strait of Hormuz. Qatar remains a key supplier of LPG, which is primarily used as a cooking fuel by Indian households.

UAE eyes India’s BrahMos and Akashteer systems

India could be next on the UAE’s defense shopping list: The UAE is in early-stage talks to buy India’s BrahMos supersonic cruise missile and Akashteer automated air-defense system as Abu Dhabi accelerates arms procurement and diversifies beyond its traditional Western suppliers after the Iran war, Reuters reports, citing sources familiar with the discussions. The talks are “progressing fast,” one Indian source said.

What’s on the table: BrahMos is a 290-km-range missile that can be launched from land, sea, or air, while Akashteer connects data from multiple systems to respond to aerial threats. Akashteer could complement the UAE’s US-made THAAD and Patriot defenses, while BrahMos would add another strike option alongside its ATACMS missiles.

Affirming warm and robust bilateral trade ties which saw a “major upswing, and in that upswing, the defense partnership also plays an important role, and that also has strengthened and deepened, so that is where we are in our defense partnership,” External Affairs Ministry spokesperson Randhir Jaiswal said.

IN CONTEXT- Against the backdrop of a defense trade imbalance, we broke down how India-UAE defense trade remains largely driven by sporadic aerospace and maritime transactions rather than a broad-based manufacturing or weapons procurement partnership.

Why it matters: A broader supplier base would give the UAE “more strategic autonomy” without antagonizing Washington, ACLED analyst Pearl Pandya said. The talks fit Abu Dhabi’s wider push to bring more defense manufacturing in-house through foreign partnerships beyond the US, including a UAE-India framework agreed to in May to deepen industrial collaboration and technology sharing.

Watch this space: Any BrahMos missile sale would require Russian approval as a joint developer of the weapon, although one source said Moscow’s ties with Abu Dhabi make that unlikely to be a hurdle. India also has a history of reported export talks that do not result in agreements, so this one is far from done.

RBI sees inflation anchored despite energy shock

India’s Middle East-linked energy shock has not yet become a broad inflation problem at home, the Reserve Bank of India (RBI) said in its June bulletin (pdf).

Inflation print: Consumer price index inflation rose to 3.9% y-o-y in May, up from 3.5% in April, but remained below the RBI’s 4% target. The pass-through to domestic prices has been limited so far, although higher fuel and input costs could show up in consumer prices in the coming months, the central bank suggests.

Why it matters: India’s inflation is still below the RBI’s target, giving the central bank room to keep rates on hold for now. But that cushion depends on how fuel prices, commodity markets, and the monsoon move from here.

Monsoon watch: The RBI notes that deficient rainfall could weigh on farm output and rural demand, even as foodgrain stocks remain above buffer norms. If Middle East tensions stay contained, the monsoon could become the next major risk to the economy, QuantEco Research economist Vivek Kumar told Bloomberg.

Petrol and diesel prices have risen by 7.4% and 8.4% since May, adding an estimated 36 bps to headline inflation. Higher energy prices are also showing up in commercial LPG, industrial raw materials, chemicals, and rubber and plastic products, which could feed into consumer prices.

Policy read: The RBI’s Monetary Policy Committee held the repo rate at 5.25% at its June meeting and retained a neutral stance.

India’s private sector kept expanding in June, but the pace slowed as demand softened and companies flagged rising fuel prices, gas shortages, and competition as drags on new work, according to preliminary data from the HSBC Flash India Purchasing Managers’ Index (PMI) (pdf).

“Private sector activity eased a bit in June. Growth of manufacturing output softened a tad as inventory-building lost steam after a few hectic months. New export orders remained resilient and the order-to-inventory ratio ticked up, pointing at resilient manufacturing activity down the line. Input costs across the private sector rose, but at the slowest pace in five months,” HSBC Chief India Economist Pranjul Bhandari said.

By the numbers: The services business activity index fell to 57.3 from 59.8, marking a 17-month low. The manufacturing PMI slipped to 54.5 from 55, a three-month low.

Energy spillover: Fuel prices and gas shortages are showing up as business constraints. Cost pressure eased for a third straight month, but companies still reported higher chemical, food, fuel, gas, metal, and utility costs.

Energy shock puts FY 2027 earnings forecasts at risk

The fallout from the Iran war is expected to dampen corporate earnings during 1H FY 2027, as soaring energy prices squeeze margins across sectors, as per a Nuvama report (pdf). The brokerage firm assesses that the impact will vary by industry, depending on pricing power, competitive intensity, and the ability of companies to pass costs on to consumers.

The hit varies by sector: Automobile manufacturers have largely absorbed the increase in input costs, directly compressing profitability, while consumer-facing sectors like paints have passed on expenses through price increases, leading to weaker demand and slower sales growth.

India’s next challenge may come from weakening domestic demand. “Income dynamics are weak across agents (households, corporate, and government), making them cautious on capex spending,” the report says, despite Gulf oil and shipping risks receding.

“Nonetheless, a new tailwind that could help is the undervalued INR. Nearly two-thirds of India Inc.’s top line is directly or indirectly linked to global trade. A weaker INR thus boosts earnings,” the brokerage points out.

Meaningful earnings growth is unlikely even in 2H FY 2027, as several growth tailwinds begin to fade. Tailwinds that supported the previous fiscal year’s 9% growth, such as reductions in indirect taxes, are fading, while “El Niño [will] hurt farm output and thus rural consumption,” Nuvama says.

Why it matters: Sovereign capital, asset managers, and family offices across the UAE and Saudi Arabia have increased their exposure to India, expecting sustained high-growth earnings, but Nuvama argues that the 19% bottom-line growth forecasts remain disconnected from underlying fundamentals. “A competitive INR and some spillovers of global AI capex boom are some of the offsets. However, it is insufficient to accelerate earnings,” Nuvama notes, leaving the current estimates vulnerable to further downgrades.

What’s next: The sectors currently operating at cyclical low margins could see a recovery once the impact of the oil shock mellows and margins begin to revert toward historical averages.

Meta to invest USD 900 mn in Cred, names founder Shah as WhatsApp’s new global head

Meta Platforms has appointed Kunal Shah (LinkedIn) as the new global head of WhatsApp. Shah is the founder of Bengaluru-based fintech startup Cred, where Meta will also pour USD 900 mn as part of the appointment, as per a post on X.

WhatsApp taps India leadership: Shah, who founded Cred in 2018, will succeed Will Cathcart, who is moving to another role within Meta after seven years leading WhatsApp. The appointment speaks to India’s growing strategic importance to Meta, as WhatsApp serves more than 500 mn users in the country.

What Cred brings to the table? Cred operates a members-only platform for high-credit-score consumers, offering payments, lending, ins., wealth management, and lifestyle services. The company serves 17 mn monthly users, processes more than 40% of India’s credit card repayments, and manages over INR 240 bn (USD 2.5 bn) in lending assets for partner institutions.

Apar locks Saudi base oil supply from Aramco’s Yanbu facility

Apar adds Saudi supply link: Indian power and energy equipment manufacturer Apar Industries is locking a new Saudi Arabia supply link after its wholly owned Saudi subsidiary signed an agreement with Saudi Aramco Base Oil Company to source base oils from Yanbu, Business Standard reports.

The agreement gives Apar a Saudi supply base for transformer oils and other specialty oils, adding a Gulf supply link to a company that already operates plants in India and the UAE and sells to more than 140 countries.

India-based real estate and investment company Oswal Greentech is setting up a Dubai subsidiary to undertake property development in the UAE, Business Standard reports. Oswal Greentech plans to put AED 40 mn (INR 1.03 bn) into the subsidiary for land purchases and construction of residential and commercial projects.

Investment plan: The company will own 95% of the unit through AED 38 mn worth of shares, while Shael Oswal, Oswal Greentech’s vice chairperson, will hold 5% through AED 2 mn (INR 51.8 mn) worth of shares. No project pipeline, land acquisition, or launch timeline was disclosed.

India-based engineering and mobility company Greaves Cotton has incorporated a wholly owned subsidiary, Greaves International Trading FZE, in Dubai, according to a stock exchange filing. The new entity will operate in the engineering industry and support Greaves Cotton’s overseas trading and distribution operations. Greaves Cotton will hold 100% of the subsidiary.

Private debt in GCC hit USD 4.1 bn last year — overtaking venture capital for the first time

Private debt has quietly overtaken venture capital as the Gulf's dominant startup financing tool for the first time as non-dilutive capital becomes increasingly attractive in a global VC environment that remains cautious, according to a report by Stride Ventures.

GCC private debt deployment hit USD 4.1 bn in 2025, up 8.2x from USD 500 mn a year earlier, according to the report. For the first time, structured credit outpaced venture capital in the region’s startup funding mix — VC deployment came in at USD 3.3 bn, out of USD 7.4 bn in total tracked startup investment.

Fintech’s dominance is striking even within private debt — the sector accounted for 95.5% of total GCC deployment, or USD 3.9 bn, with the rest spread across agritech, proptech, SaaS, and logistics. The concentration signals that the market is still early: fintech’s large, legible cashflows make it the obvious first home for structured credit, but the playbook hasn’t yet spread to other sectors at scale.

A lot of the funds are targeted toward Saudi: Saudi Arabia accounted for roughly USD 3.9 bn of the region’s total private debt deployment — about 95% — driven by a handful of very large transactions. Tamara pulled in USD 2.4 bn, Lendo USD 740 mn, and Deem USD 400 mn. The UAE was a distant second at USD 211 mn, with CredibleX (USD 100 mn) and Kitopi (USD 50 mn) among the larger transactions. Bahrain saw USD 22 mn in private debt transactions.

Growth credit still dominates: The entire volume of venture debt deployed across the GCC from 2018 to 2025 — USD 2.8 bn — was surpassed by growth credit activity in 2025 alone, which came in at USD 3.9 bn. Venture debt in 2025, by contrast, stood at just USD 249 mn.

Founders are using this capital offensively, not defensively. The report’s founder survey is telling: 54% of respondents said they used private debt for growth and expansion, while 36% used it to bridge between equity rounds. Working capital optimization and runway extension each came in at 27%. Only 9% cited M&A or capex.

Who’s driving the market? GCC policymakers surveyed by Stride identified dedicated private credit funds as the most active players, ahead of international cross-border lenders, government and DFI institutions, and non-banking financial services firms and specialty lenders.

Sensex	77,102	+1.1% (YTD: -9.5%)
NIFTY 50	24,048	+0.9% (YTD: -7.9%)
ADX	10,048	+0.2% (YTD: +0.5%)
DFM	6,132	+0.4% (YTD: +1.4%)
Tadawul	11,046	+0.1% (YTD: +5.2%)
EGX30	51,823	+0.1% (YTD: +23.9%)
Boursa Kuwait	8,743	+0.2% (YTD: +5.3%)
QSE	10,380	-0.2% (YTD: -3.5%)
S&P 500	7,365	-1.4% (YTD: +7.6%)
FTSE 100	10,430	+0.01% (YTD: +5%)
Euro Stoxx 50	6,221	-0.1% (YTD: +7.4%)
Brent crude	USD 75.5	-1.9%
Natural gas (Nymex)	USD 3.2	+0.7%
Gold	USD 4,088	-1.4%
BTC	USD 62,583	+0.4%

The values in the table above are listed according to the market position as of 3:30pm IST / 2pm GST.

CALENDAR

24-25 June (Wednesday-Thursday): India Homeland Security Expo, Bharat Mandapam, Pragati Maidan, New Delhi.

26 June (Friday): Muharram.

JULY

1-3 July (Wednesday-Friday): Seafood Expo Bharat, Chennai Trade Centre, Chennai.

3-4 July (Friday-Saturday): Rail & Transit Expo (RailTrans), Bharat Mandapam, New Delhi

3-4 July (Friday-Saturday): SOMS International Exhibition & Conference, Gandhinagar, Gujarat.

8-10 July (Wednesday-Friday): India Energy Storage Week, New Delhi.

14-17 July (Tuesday-Friday): Bharat Tex, New Delhi.

22-24 July (Wednesday-Friday): Rail & Metro Technology Conclave, Bharat Mandapam, New Delhi.

AUGUST

15 August (Saturday): Independence Day.

26 August (Wednesday): Prophet Mohammad’s Birthday.

SEPTEMBER

1-3 September (Tuesday-Thursday): India Energy Week, Dwarka, New Delhi.

1-6 September (Monday-Saturday): Dubai Fashion Week, Dubai Design District.

7 September (Sunday): Opec+ meet to discuss production policy for October.

7-9 September (Monday-Wednesday): iPHEX 2026 International Pharmaceutical Exhibition, Bharat Mandapam, New Delhi.

8-11 September (Tuesday-Friday): Global Fintech Fest, Mumbai.

9 September (Tuesday): Envision 2025, Atlantis, The Royal, Dubai.

17-19 September (Thursday-Saturday): Semicon India Conference, Yashobhoomi, Delhi.

OCTOBER

2 October (Friday): Gandhi Jayanti (Mahatma Gandhi’s Birthday).

20 October (Tuesday): Dussehra.

NOVEMBER

24 November (Tuesday): Guru Nanak Jayanti.

DECEMBER

8-11 December (Tuesday-Thursday): Expand North Star, Dubai.

25 December (Friday): Christmas Day.

Signposted to happen sometime in 2H 2026:

Monsoon Session of Parliament is expected to be held in July/August in New Delhi (TBA);
Reserve Bank of India’s Monetary Policy Committee meeting for the September cycle (TBA);
India Mobile Congress will likely be held in October in New Delhi (TBA).

JANUARY 2027

30 January-3 February (Saturday-Wednesday): Printpack India, India Expo Centre, Greater Noida (Delhi NCR).

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