Major recalibration in India’s energy market

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WHAT WE’RE TRACKING TODAY

India declines IEA call to tap strategic oil reserves

Good afternoon, readers. The war in the Middle East is triggering a significant recalibration in India’s energy markets as the Indian government invokes emergency powers to cut gas supplies to industrial customers. On the oil front, India is so far benefiting from a US sanctions waiver, with refiners scooping up 30 mn barrels of Russian crude.

Plus: India’s foreign minister has called for de-escalation in the conflict as the fallout from the war starts to impact the economic outlook.

Watch this space

OIL WATCH — India has reportedly rejected the International Energy Agency (IEA) proposal to release its 5.3 mn strategic oil reserves to the global oil market amid a steep hike in crude oil prices and supply disruptions in the GCC, Reuters reports, citing government sources.

Not our problem: The Indian government maintains that the crisis driving up prices is not their creation, insisting that the responsible parties must resolve the issue and bring costs down, government sources told Times of India. The government is likely to hold firm to its “India first policy,” the daily adds.

Why it matters: G7 finance ministers and the IEA held an emergency meeting this week to discuss a massive and coordinated release of strategic oil reserves, according to Bloomberg. India is not a member of the IEA and has no treaty obligations to release its reserves in coordination with the international community.

CAPITAL MARKETS —ICICI Asset Manager bridges India-GCC capital flows: ICICI Prudential Asset Management, one of India’s largest asset managers, rolled out its new office in Dubai International Financial Center (DIFC), targeting institutional and wealth investors across the GCC and Africa, according to Dubai Media Office. The new base will act as a hub for family offices, wealth funds, and private banks seeking exposure to Indian equities, fixed income, and multi-asset investments.

IN CONTEXT- The Middle East has been emerging as a hot investment base for India, bolstered by a raft of agreements inked earlier this year. The Abu Dhabi Investment Authority bought an undisclosed stake in ICICI Prudential Asset Management at the end of last year as part of a pre-IPO placement.

IT SERVICES — India’s technology industry body is urging companies to ramp up operational preparedness and cybersecurity as war escalates in the Middle East, as per an advisory by the National Association of Software and Service Companies (Nasscom). Business operations remain stable for now but there are risks of “sector-wide” disruption, cyber intrusions, and disinformation campaigns due to geopolitical uncertainty, Nasscom said.

Why it matters:Vulnerabilities in third-party vendors with Middle East exposure could trigger disruptions in the wider tech ecosystem, Nasscom warns, as Indian IT firms are vital to the Gulf economy. A breach could hurt service providers but also halt the execution of major projects and banking operations in the UAE and Saudi Arabia.

Sign of the times

INVESTMENT WATCH —India has eased foreign direct investment rules for countries sharing its land borders, the Press Information Bureau said. The rule previously mandated government approval for any investment from neighbouring nations, primarily aimed at China.

IN CONTEXT- India introduced the curbs after the 2020 border clash with China, which triggered a broader tightening of economic ties including bans on more than 200 Chinese mobile apps and heightened scrutiny of Chinese capital. Since 2020, capital flows from China essentially froze as hundreds of applications languished without resolution or were rejected.

What’s changed: The revised policy allows non-controlling investments up to 10% from land-bordering countries without government approval, subject to disclosure. Larger investments in key manufacturing sectors like electronic components, capital goods, and solar cells will be fast-tracked within 60 days if the majority shareholding and control remains with Indian citizens or entities at all times.

Why it matters:The easing is a tentative economic recalibration by New Delhi as it balances national security concerns with the need to attract capital and sustain industrial supply chains tied to Chinese manufacturing ecosystems. Critical sectors like EVs, electronics, and pharma, where India is heavily dependent on Chinese components, could likely see more interest through joint ventures and direct investment.

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Data point

8.2% — That is India’s share in the total amount of global arms imports, making it the world’s second-largest arms importer in 2021-25, as per a report by the Stockholm International Peace Research Institute. Imports were driven by security tensions with China and Pakistan, though the country’s overall arms purchases declined 4% compared to 2016-20.

Supplier shift: Russia remained India’s largest supplier, but its share fell sharply from 70% in 2011-15 to 40% in 2021-25, reflecting New Delhi’s gradual pivot toward Western partners such as France, Israel, and the US, alongside a push for indigenous defence manufacturing.

The big story abroad

It’s another morning with the front pages all about the US and Israel’s continued campaign against Iran, which saw the most intense night of aerial bombardment on Tuesday. Earlier today, Iran retaliated by launching attacks on central Israel and US military sites in Bahrain.

That said, Washington urged Israel not to launch further strikes on Iranian energy facilities, especially oil infrastructure, three unnamed sources told Axios. The Trump administration reportedly argued that such attacks would harm the Iranian public and jeopardize future US cooperation with Iran’s oil sector post-conflict. Washington also cautioned that these strikes could provoke retaliatory strikes against Gulf allies and their own energy sites.

Meanwhile on Wall Street: Microsoft has cemented its support for Anthropic’s lawsuit against the Pentagon, arguing that moves to punish the AI startup would be detrimental to the broader US tech scene.

Market watch

CURRENCY— Aggressive intervention: The Reserve Bank of India (RBI) is rapidly expanding its intervention across both currency and bond markets as rising oil prices could push inflation, widen the trade deficit, and put government revenues under stress, Bloomberg reports, citing analysts and traders.

Burning bns: Late Friday, the RBI announced a USD 10.9 bn open market bond purchase for this month to replenish liquidity and cap borrowing costs. This follows an estimated USD 18 bn to USD 20 bn the central bank sold in forex markets last week to prop up the sliding INR, analysts told Bloomberg.

The INR’s Slide: The geopolitical crisis has pushed the INR to record lows, breaching 92 to the dollar. Despite holding record foreign exchange reserves of USD 728.5 bn at the end of February, the RBI is being forced into a delicate balancing act to steady the currency without depleting its war chest.

Zoom out: Don't expect a relentless defense of the currency at any cost, as the central bank is likely to conserve its forex reserves given the uncertainty over how long the war will last.

Circle your calendar

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

India invokes emergency powers to ration gas amid Gulf supply squeeze

War fallout bears heavy on India’s energy markets: India has invoked emergency powers to slash industrial gas supplies and is pivoting to Russian oil under a temporary U.S. sanctions waiver while prioritizing household cooking gas needs as widespread shortages threaten to cripple the domestic economy.

Dwindling gas supplies?

The Indian government has invoked its emergency powers cutting gas supply to industries and commercial users to prioritize household supplies.

The Ministry of Petroleum and Natural Gas has ordered refiners to increase production of Liquified Petroleum Gas (LPG) to boost supplies for household use and critical non-household consumers like hospitals and educational institutions, according to a statement. The ministry has also directed retailers cut supplies to commercial clients:

The tea industry, broader manufacturing, and other large industrial consumers, will all see their supplies cut by 20%;
Supplies to fertilizer plants have been slashed by 30%;
Small industries and commercial users such as restaurants and hotels will also face a 20% cut.

That is not all, the states are imposing their own cuts: The western state of Gujarat has ordered halving gas supply to industries and cutting supply to fertilizer and milk processing plants by 40%, PTI reports.

Why it matters: India imports up to 90% of its gas supplies from the GCC, with 60% of its total demand met by Saudi Arabia, Qatar, and the UAE. With shipping disrupted in Strait of Hormuz and energy majors in the Gulf cutting production, the shortages are projected to worsen in the coming days.

Industries worried about the squeeze: Although the government says the country’s energy reserves are in a “comfortable position,” industrial consumers are already bearing the brunt as priority shifts to ensuring uninterrupted supplies to households. Around 20% of the restaurants and hotels in the financial capital Mumbai have shut down due to LPG shortage, and restaurant associations warn half of them could be forced to shutter if shortages persist, according to India Today.

Steel production hit: Small Indian steel producers are preparing to reduce production amid liquefied natural gas (LNG) shortages. Several mills in Gujarat, India’s largest gas-consuming region, said they may reduce production by up to 50% if supplies do not improve within a week after city gas distributor Gujarat Gas declared force majeure and curtailed industrial deliveries. Smaller mills relying on gas-based sponge iron production are particularly exposed to the supply squeeze.

MEANWHILE- India’s fertilizer producers are scaling back output after liquefied natural gas (LNG) shipments from Qatar were disrupted by the war. Companies including Indian Farmers Fertilizer Cooperative have reduced operations at some urea plants as gas availability tightens.

Oil money goes to Russia, for now

Reliance Industries, India’s largest refiner, has secured at least 6 mn barrels of Russian oil for March delivery, Reuters reports, citing industry sources. The move is a direct response to severe supply chain disruptions in the Middle East triggered by the ongoing Iran war.

The details: The transaction was cleared after Washington granted New Delhi a 30-day sanctions waiver last week for cargoes loaded by 5 March, allowing Indian refiners to promptly scoop up 30 mn barrels of Russian oil previously stranded at sea. Reliance acquired the Russian flagship grade Urals crude at a USD 1 markdown to a USD 1 premium against dated Brent.

The vulnerability: India, the world's third-largest oil importer, typically relies on the Strait of Hormuz for roughly 40% of its total oil imports, making the current Middle East war a critical threat to its energy security.

Meanwhile- The US has signaled to European allies that any further rollbacks on Russian oil sanctions will be highly tailored and primarily limited to Indian supplies, attempting to calm concerns after President Donald Trump hinted at easing restrictions to lower global prices, according to Bloomberg. During a call with G7 finance ministers, US officials stressed that the recently granted waiver — which allows India to import Russian oil currently at sea — is strictly limited in both time and scope.

Not without hurdles: State Bank of India (SBI), India’s largest lender, is declining to process payments for Russian oil, even after Washington issued a temporary sanctions waiver for Indian imports, citing uncertainty over how long the US concession will actually last. As India’s largest lender with a substantial global loan portfolio, SBI fears that facilitating these transactions could expose the state-owned bank to severe financial risks and reputational damage in international markets.

Other energy news

Tata Group-owned Air India will introduce higher fuel surcharges across domestic and international routes beginning today amid rising aviation turbine fuel prices, according to a company statement. The surcharge will apply to flights operated by Air India and its low-cost subsidiary Air India Express. Higher aviation turbine fuel prices since early March have increased cost pressures for airlines.

India urges restraint as tensions spill into maritime neighborhood

Call for de-escalation: India has called for “dialogue and diplomacy” to de-escalate tensions in the Middle East amid fears of a broadening conflict hitting its maritime neighbourhood.

The escalating US-Israel and Iran conflict carries direct implications for India, Indian External Affairs Minister S. Jaishankar told the Parliament on Monday, as per a statement. Prolonged instability could disrupt supply chains and energy flows, the minister said.

India permitted three Iranian naval vessels to dock at Indian ports following a US submarine attack on an Iranian naval warship near the southern coast of Sri Lanka on 4 March. The Iranian frigate, IRIS Dena, had recently joined the Milan naval exercise hosted by India in the Bay of Bengal, and was beginning its return to Iran.

Casualties: Iran said that 104 crew members aboard the warship were killed in the US attack and 32 others were injured. The Indian Navy launched search operations after a distress alert via Colombo’s Maritime Rescue Coordination Center.

Defense strategist decodes the strike

“The conflict has moved beyond the familiar chokepoint of the Gulf of Hormuz to the wider Indian Ocean,” Lt. Gen D.S. Hooda, defence expert and former Commander of the Indian Army’s Northern Command, told EnterpriseAM. The incident has heightened anxiety around the Indian Ocean becoming a contested battlespace, Hooda said.

An unusual spillover: Historically, US-Iran friction has remained concentrated around the Gulf. “The message being sent by Washington is that Iranian naval assets are not safe anywhere in international waters,” he added, describing the signal “as psychological as it is kinetic.”

Expect greater naval activity: The strike could heighten naval activity across the Indian Ocean, said Hooda, who expects the US to increase its presence. “Iran’s ability to project military power in the Indian Ocean is limited, so its activity will likely remain closer to its own shores.” However, others such as China could expand deployments if commercial shipping routes are threatened.

Energy routes under scrutiny: India will need contingency plans for potential disruptions to civilian maritime traffic, according to Hooda. The closure of Hormuz has already exposed the vulnerability of key shipping routes. “Any broader disruption to commercial movement across the Indian Ocean could directly affect India’s energy supplies and trade flows.” While the situation is not immediately critical, it presents longer-term strategic risks that require close monitoring, Hooda told us.

Conflict could hit India’s growth prospects: Moody’s

A prolonged conflict in the Middle East could transmit macroeconomic pressure to India through higher energy prices, inflation, and tighter financial conditions, potentially weakening growth and domestic demand, Economic Times reports, citing Moody's.

Diminished GDP forecast: An extended conflict could reduce India’s GDP growth by around 1%, while inflation could rise by 1.5-2 percentage points due to weakening demand, according to Moody’s. The shock would primarily pass through higher oil import costs, reflecting India’s structural reliance on crude supplies from the Middle East, the ratings agency said. India is among the Asian economies most exposed to oil price volatility, with crude imports accounting for about 3.6% of GDP.

Oil price threshold: The macroeconomic impact would likely remain limited if the conflict is short-lived and crude stabilizes near USD 89 per barrel. Sustained prices above USD 100 per barrel, however, could generate broader macroeconomic pressure.

Transmission channels: Higher energy import costs could weaken the INR , raise inflation, and widen India’s current account deficit, while authorities may expand subsidies to cushion households and businesses.

QIA & ADQ-backed Flipkart redomiciles to India as listing plans advance

Gulf SWF-backed Flipkart has shifted its holding company from Singapore to India, clearing a key hurdle ahead of its planned domestic stock market listing, Reuters reports. The Walmart-backed firm said it has received government approval for internal restructuring and to complete its redomiciliation ahead of its initial public offering.

Reverse migration gathers pace: Flipkart will join a growing list of Indian startups relocating their domiciles back to India from hubs such as Singapore. Many firms had earlier incorporated overseas to access global capital and lower tax burdens, but bullish domestic capital markets and stronger IPO prospects are now drawing them back.

Background: US-based retail giant Walmart owns a 77% stake in Flipkart, with other marquee investors including Qatar Investment Authority, Abu Dhabi Developmental Holding Company, Singapore’s GIC, Japan’s SoftBank, China’s Tencent, Google, and Microsoft. Founded in 2007, Flipkart has grown into a major rival to Amazon in India.

Adia-backed Greenko eyes listing

ADIA backed Greenko: New Delhi-based renewables firm Greenko Energies, backed by the Abu Dhabi Investment Authority, is weighing an IPO that could raise up to USD 1 bn, Bloomberg reports, citing unnamed sources. The firm, backed by Singapore’s GIC and Adia, held preliminary discussions with bankers for a potential listing as early as this year, though advisers have not yet been formally appointed.

The plan could test investor appetite as renewable energy stocks face tougher market conditions. This comes after Clean Max Enviro Energy Solutions fe ll 18% upon its market debut in February. Greenko operates about 11 GW of installed capacity across India, with another 20 GW under construction, and could shelve the IPO if market sentiment weakens.

IndiGo CEO Pieter Elbers steps down

Indian domestic carrier IndiGo said its CEO Pieter Elbers (Linkedin) has stepped down, citing “personal reasons,” according to an exchange filing. IndiGo co-founder Rahul Bhatia will oversee the carrier in the interim. The abrupt leadership change follows months of scrutiny over flight cancellations linked to pilot duty and rest rules.

Elbers joined IndiGo as CEO in 2022 after spending his earlier career at KLM Royal Dutch Airlines, including as senior vice president for network planning and alliances and later as chief operating officer. He oversaw IndiGo’s push into long-haul flying and a major fleet expansion, including record aircraft orders to widen the carrier’s international network.

Trump says Reliance to back USD 300 bn refinery proposal in Texas

Reliance in on Texas refinery

US President Donald Trump announced that India’s Reliance Industries is joining in on an estimated USD 300 bn plan for a new oil refinery at the Port of Brownsville in Texas, touting the project as the first new American refinery in about 50 years. Trump thanked Indian b’naire Mukesh Ambani’s Reliance, the country’s largest privately held energy company, though Reliance has not yet publicly confirmed its participation.

The proposed refinery is designed to process solely US shale oil. The project is being developed by America First Refining, which recently said it has secured a nine-figure investment from an unnamed “global supermajor” at a 10-figure valuation, and signed a 20-year agreement to purchase, process, and distribute US-produced shale crude. The facility is expected to supply domestic fuel markets while also boosting refined product shipments overseas.

Why it matters: If realized, the project would bolster US-India energy ties and give Reliance a supply chain immune from the geopolitical risks affecting its Indian operations.

Indian port grants relief for MENA-bound cargo

Jawaharlal Nehru Port, India’s largest container port, has announced a 100% waiver on ground rent charges for up to 15 days, covering Middle East-bound export containers stranded due to the ongoing crisis, according to a press release. The relief applies to shipments inside port terminals from 28 February or those gated in until 8 March.

Why it matters: For operators in MENA, it confirms that the backlog of Indian containers, ranging from industrial goods to temperature-sensitive perishables, is significant enough to require government-mandated relief.

IMF warns Middle East conflict could add 40 bps to global inflation

The IMF is sounding the alarm on a potential oil-led inflation spike, with the Fund's Managing Director Kristalina Georgieva warning on Monday that a sustained 10% increase in oil prices throughout the year would result in a 40 bps rise in global inflation, Reuters reports. “We are seeing resilience tested again by the new conflict in the Middle East,” Georgieva said, urging policymakers to “think of the unthinkable and prepare for it.”

Oxford Economics also sees global inflation rising by 0.3-0.4% in 4Q 2026, accompanied by a 0.1 percentage point dip in global growth. While energy price trajectories remain volatile, Oxford Economics anticipates that Brent crude will average USD 79 / bbl in 2Q 2026 — a USD 15 upward revision from February estimates — before potentially retreating as supply conditions normalize, according to a report seen by EnterpriseAM.

The most exposed regions: The UK and the Eurozone, due to their exposure to gas prices. The agency sees rising energy prices pushing UK inflation up by 0.5 percentage points in 4Q compared to previous forecasts.

What’s the prognosis on rate cuts? The Bank of England will likely avoid cutting interest rates at its March meeting — or beyond if energy prices remain elevated for long — though rate cuts could resume in April or June if energy prices retreat quickly. In the Eurozone, the European Central Bank (ECB) is expected to maintain interest rates at 2% throughout the year. The ECB might raise rates by 25-50 bps if the energy shock persists.

As for the US Federal Reserve, Oxford Economics’ forecasts remain unchanged, pointing toward potential interest rate cuts of 25 bps in June and September, given the energy shock is less likely to impact inflation.

MARKETS THIS MORNING-

It was another morning with Asia-Pacific markets opening in the green as oil prices dipped further on hopes that the International Energy Agency will release its largest-ever stock to keep prices under control. The Kopsi was leading gains, up 3.4%, with the Nikkei trailing behind.

Sensex	77,043	-1.4% (YTD: -8.2%)
NIFTY 50	23,924	-1.3% (YTD: -8.2%)
ADX	9,946	-0.5% (YTD: 0.04%)
DFM	5,859	-0.1% (YTD: -2.9%)
Tadawul	11,025	+0.8% (YTD: +4.1%)
EGX30	47,662	-0.2% (YTD: +14%)
Boursa Kuwait	8,015	+1.08% (YTD: -3.3%)
QSE	10,489	-1.6% (YTD: -0.8%)
S&P 500	6,781	-0.2% (YTD: -0.9%)
FTSE 100	10,308	-0.9% (YTD: +4.8%)
Euro Stoxx 50	5,761	-1.2% (YTD: +0.7%)
Brent crude	USD 92.3	+5.2%
Natural gas (Nymex)	USD 3.09	+2.4%
Gold	USD 5,188	+0.06%
BTC	USD 69,541	-2.1%

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

CALENDAR

MARCH

12 March (Thursday): ET Entrepreneur Summit & Awards 2026, Bengaluru.

19-22 March (Thursday-Sunday): Bharat Urja Manthan - Global Energy Conclave, New Delhi.

20 March (Friday): Eid Ul-Fitr.

23-25 March (Monday-Wednesday): Indiasoft 2026: International IT Exhibition & Conference, New Delhi

23-25 March (Monday-Wednesday): Smart Cities Expo, Bharat Mandapam, New Delhi.

23-25 March (Monday-Wednesday): PLASTIWORLD India 2026, Jio World Convention Centre, Mumbai.

27-29 March (Friday-Sunday): Vizag International SME Business Expo, Visakhapatnam, Andhra Pradesh.

31 March (Tuesday): Mahavir Jayanti.

Signposted to happen sometime in March 2026

Election Commission of India is expected to announce polling dates for elections in the states of Tamil Nadu, Kerala, West Bengal, Assam, and the union territory, Puducherry.

APRIL

3 April (Friday): Good Friday.

6-8 April (Monday-Wednesday): Reserve Bank of India’s Monetary Policy Committee Meeting

7-10 April (Tuesday-Friday), India Rubber Expo 2026, ITPO, Pragati Maidan, Delhi.

16-17 April (Thursday-Friday): Entrepreneur Tech & Innovation Summit 2026, Bengaluru.

22-24 April (Wednesday-Friday): RenewX 2026, Chennai Trade Centre, Chennai.

23-25 April (Thursday-Saturday): Rail & Metro Technology Conclave 2025, Bharat Mandapam, New Delhi.

29 April-2 May (Wednesday-Saturday): Bharat Buildcon 2026, Yashobhoomi, Dwarka, Delhi.

MAY

29 April-2 May (Wednesday-Saturday): Bharat Buildcon 2026, Yashobhoomi, Dwarka, Delhi.

1 May (Friday): Buddha Purnima.

26 May (Tuesday): Eid Ul-Adha.

JUNE

24-25 June (Wednesday-Thursday): India Homeland Security Expo 2026, Bharat Mandapam, Pragati Maidan, New Delhi.

26 June (Friday): Muharram.

Signposted to happen sometime in 1H 2026:

Signing of India-Qatar Free Trade Agreement (Details yet to be announced).
India-EU Trade and Technology Council Ministerial Meeting 2026, Brussels, Belgium.
India to host the BRICS Summit.

JULY

1-3 July (Wednesday-Friday): Seafood Expo Bharat 2026, Chennai Trade Centre, Chennai.

3-4 July (Friday-Saturday): Rail & Transit Expo (RailTrans) 2026, Bharat Mandapam, New Delhi

8-10 July (Wednesday-Friday): India Energy Storage Week 2026, New Delhi.

14-17 July (Tuesday-Friday) Bharat Tex 2026, 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.

8-11 September (Tuesday-Friday): Global Fintech Fest 2026, Mumbai.

17-19 September (Thursday-Saturday) : Semicon India Conference 2026, 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 2026, Dubai.

25 December (Friday): Christmas Day.

Signposted to happen sometime in 2H 2026:

Monsoon Session of Parliament, New Delhi is expected to be held between July-August. Dates yet to be announced.
Reserve Bank of India’s Monetary Policy Committee meeting for the September cycle. Dates yet to be announced.
India Mobile Congress 2026, New Delhi will likely be held in October. Dates yet to be announced.

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