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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