THIS AFTERNOON: India’s export safety net for the Middle East stays on

Good afternoon, friends, and happy Wednesday to you. The news out of the corridor is that things are winding down rather than ramping up. India has begun rolling back wartime measures such as fuel rationing, curbing exports, and pump price hikes, as the Hormuz crisis eases.

Our big story today looks at what the crisis leaves behind on the supply side. India’s scramble for LPG cargoes briefly made the US its largest supplier of the cooking fuel, but analysts are telling us Gulf exporters have little reason to panic, as there aren’t enough reasons to replace supplies from the region.

Plus: Gulf remittances to India remained steady at the peak of the Iran war. Jai Dadi commences construction work at its Egypt plant.

Export risk cover extended for the Middle East

India is extending enhanced credit risk cover for Middle East-linked export shipments until 30 September 2026. The extension gives exporters more time to access government-supported credit risk cover for consignments exposed to Middle East disruption. It applies to shipments meant for delivery to or transshipment through the region, according to India’s Commerce Ministry.

The cover: Exporters availing the support can get credit risk cover of up to 95%, compared with the normal cover of 85-90% offered by India’s state-owned export credit insurer. The government is bearing the cost of the additional cover.

Why it matters: The extension keeps protection in place for exporters moving goods through the India-MENA corridor as regional logistics and payment risks continue.

Remittances from the Middle East to India jumped 70% y-o-y to about USD 16 bn in April, the second month of the conflict, according to a monthly economic review report issued by the Indian government (pdf).

Gulf’s dominance: The six GCC countries anchor India’s foreign remittance corridor, accounting for roughly 38% of all money sent home by overseas Indians. The UAE is the biggest contributor, followed by Saudi Arabia, Kuwait, Qatar, Oman, and Bahrain. These flows have become an increasingly important cushion for the country’s external finances, especially in the face of foreign investors’ exodus.

The numbers: Foreign remittances hit a record USD 155.1 bn in FY 2026, up from USD 135.4 bn in FY 2025, reinforcing the Gulf’s role not just as India’s energy partner but also as a critical source of foreign exchange and economic stability.

Losing steam: India’s Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, slipped to 54.2 in June 2026 from 55.0 in May, marking the second-weakest reading since mid-2022. A reading above 50 signals expansion.

The survey pointed to slower growth in new orders, output, and employment, although easing input cost pressures offered manufacturers some relief.

“The moderation suggests demand has cooled slightly after the earlier surge linked to the Middle East conflict,” Pranjul Bhandari, chief India economist at HSBC, said. Growth slowed, with international sales recording their weakest increase since March 2023. “Meanwhile, both the input and output price indices declined, pointing to softer inflation pressures as geopolitical disruptions begin receding,” she added.

Why it matters for the Gulf: India remains one of the GCC’s largest export markets outside hydrocarbons, from petrochemicals and metals to industrial inputs used by domestic manufacturers. A moderation in factory activity could temper demand growth for some Gulf exports, though the PMI suggests the sector is still expanding at a healthy pace rather than contracting.

Data point

7.5 GWh — That is the capacity India’s operational battery energy storage system has reached, as storage begins supporting evening peak demand, Hindu Businessline reports, citing HSBC Global Investment Research.

Storage is already in use: Battery and pumped storage projects supplied around 4.5 GW during peak evening demand of 240 GW on 2 June.

India has around 42 GWh of storage projects under construction and another 40 GWh already awarded. HSBC expects more capacity additions over the next three years as developers build storage around renewable energy projects.

Why it matters: India’s battery storage buildout mirrors a wider Gulf shift toward pairing solar with batteries to manage evening demand. The UAE is pairing a 5.2 GW solar project with a 19 GWh battery system, while Saudi Arabia is targeting up to 48 GWh of storage capacity by 2030, underscoring that storage is becoming central to renewable-heavy grids across the India-MENA corridor.

The big story abroad

How yesterday’s talks between the US and Iran unfolded: US negotiators Jared Kushner and Steve Witkoff held “positive” talks with regional leaders in Qatar, indicating that technical talks are proceeding. This followed reports that Tehran’s representatives would refuse to meet the envoys, with Iranian officials saying the terms of the ceasefire must be sorted out before tackling the issue of the Islamic Republic’s nuclear program.

International dailies are zeroing in on US President Donald Trump’s annual financial disclosure, which reveals at least USD 1.4 bn in earnings from crypto and crypto-related ventures. The report highlighted almost USD 600 mn made from sales by World Liberty Financial, a crypto firm co-founded by Trump, his sons, and Witkoff.

Wall Street just finished its best quarter since 2020, as optimism over a long-lasting peace agreement for the US-Iran conflict bolsters investor confidence. The S&P 500 closed up by 0.8% at around 7.5k, while the Dow Jones rose 0.3% at 52k.

Chip stocks also had a good quarter — they closed out their best quarter ever, jumping 88% during the three-month period. We have more in this morning’s Planet Finance, below.

Meanwhile, in the AI world: Anthropic launched Claude Science, an AI ​research workbench which integrates tools and computer resources geared towards scientists and researchers. It can render artifacts like 3D protein structures, genome tracks, and chemical structures.

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