India-GCC resume trade pact talks

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WHAT WE’RE TRACKING TODAY

Reliance resumes Venezuelan crude; Tata Power on the look out for nuclear reactors

Good afternoon, readers, and happy Friday. We close the week with many updates on trade and energy. India’s largest refiner is tilting towards Venezuelan crude amid US pressure to cut down Russian imports, and the Tata Group is pivoting towards nuclear power.

On the trade front, India and the Gulf Cooperation Council have resumed talks on a trade agreement after two decades. While India is doubling down on trade pacts, its deficit with FTA-partner nations is expanding, raising eyebrows in New Delhi’s power corridors. We interviewed a leading Indian economist to explain why India’s FTAs are not contributing to higher exports.

Plus: India emerged as a top source of foreign investments into the UAE in 2025, surpassing American capital allocators.

All of that and more, below.

Watch this space

ENERGY — Reliance Industries, India’s largest refiner, has reportedly taken a cargo of nearly 2 mn barrels of Venezuelan crude, marking its first such purchase since mid-2025, Bloomberg reports, citing a person familiar with the transaction.

Supply diversification: Indian refiners continue to diversify crude sourcing amid US pressure to halt Russian imports.

Why it matters: For Gulf suppliers, the signal is that India’s shift away from Russian oil does not necessarily allow them greater market share in India’s crude basket as refiners are keen to explore alternative sources.

MEANWHILE: The Kremlin says India can choose to buy crude from any supplier and its diversification is “not new”, after US President Donald Trump announced that New Delhi had agreed to halt purchases of Russian oil and buy more Venezuelan crude. Moscow says it has received no communication from India about stopping Russian oil imports.

Context: India meets about 88% of its crude demand through imports and had been taking in over 2 mn bpd of Russian crude in recent months, although flows eased to about 1.1 mn bpd in January.

ENERGY — Tata Power is evaluating three potential sites across different Indian states for future nuclear power projects, as India prepares to open the sector to private and foreign participation. The assessment follows parliament’s approval in December of a landmark bill that would allow private and foreign companies to enter nuclear power generation, marking a shift in India’s tightly controlled nuclear sector.

Why it matters: The opening of the sector also comes as New Delhi steps up international partnerships in civil nuclear technologies. In January, India and the UAE agreed to explore cooperation in advanced nuclear systems, including large reactors and small modular reactors, as part of a broader energy and technology agenda between the two countries.

Early-stage planning: Tata Power is assessing smaller reactor technologies, including small modular reactors, and is in talks with the Department of Atomic Energy and state-run Nuclear Power Corporation of India as well as multiple foreign technology partners.

MONETARY POLICY — The Reserve Bank of India (RBI) kept its policy repo rate unchanged at 5.25%, as improving trade prospects with the US and Europe eased external pressures on the economy, as per an RBI press release. The RBI’s monetary policy committee unanimously voted today to hold rates, retaining a “neutral” stance that indicates policy stability — halting an aggressive easing cycle that saw 125 basis points in cuts since February 2025.

Why it matters: The de-escalation negotiations with the US along with trade pacts with Oman and EU reduce tariff uncertainty, support export growth, and give the central bank room to pause its easing cycle while focusing on liquidity management and financial stability at home.

While global headwinds intensified, the conclusion of trade agreements augured well for India’s outlook, RBI Governor Sanjay Malhotra said. Inflation remains benign, with full-year averages near 2%, and future policy moves will depend on evolving growth and price dynamics.

What’s next: We keep an eye on the RBI’s April meeting for a full-year inflation forecast.

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Happening next week

India and the US are expected to issue a joint statement on the proposed bilateral trade agreement next week, with the first tranche of the pact almost ready, ANI reports. The joint statement will be signed virtually, while a formal pact is being drafted and is likely to be signed by mid-March. India will begin reducing duties on select American goods after the joint statement, though the first tranche carries no investment commitments.

The big story abroad

The broad selloff hitting AI stocks, crypto, and even safe havens like silver and gold, is capturing everyone’s attention this Friday morning. The S&P 500 fell 1.2% yesterday, marking its third straight decline, while the Nasdaq saw its deepest decline since last April. Meanwhile, crypto had its worst day in years, falling to its lowest point at USD 63.2k since the crash in 2022 and wiping all of the gains it had made since US President Donald Trump’s inauguration.

Even after markets closed, Amazon plunged 8% on news that it plans to invest USD 200 bn this year alone on data centers, chips, and other equipment.

Concerns that the rout is also extending to debt markets are also starting to mount, with the prices of loans issued by some software firms falling in recent weeks.

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-GCC trade agreement coming?

India and the GCC inked terms of reference to formally launch negotiations for a trade agreement, Indian Commerce Minister Piyush Goyal said in a post on X, reviving talks that had stalled two decades ago.

By the numbers: Bilateral trade between India and the GCC rose to USD 178.7 bn in 2025, driven by energy imports. India runs sizable trade deficits with key partners such as the UAE, Saudi Arabia, and Qatar, raising the economic stakes of a broader regional agreement.

Why it matters: India has already secured economic pacts with the UAE and Oman. A bloc-wide agreement would mean that New Delhi could secure similarly attractive terms with the rest of the bloc, which could cut down the regulatory red tape that complicates logistics for Indian firms operating across the KSA-UAE-Oman axis.

The UAE-India CEPA, which came into force in 2022, has helped double merchandise trade to a record USD 100.06 bn in FY 2024-25 from USD 43.3 bn in FY 2020-21. Non-oil trade, the primary target of the agreement, surged 15% within the first two years, reaching USD 57.8 bn. The two also inked a raft of agreements last month, spanning defense, energy, and advanced tech.

Possible outcomes: India will likely seek out easier movement for its white-collar workforce, while the GCC may seek technical expertise in its domestic manufacturing push. Plus: Food processing, infrastructure, petrochemicals and information and communications technology are sectors that are expected to benefit from an India-GCC trade agreement, Goyal said.

Why trade agreements aren’t expanding India’s exports

As India doubles down on freetrade agreements (FTA) with key bilateral partners, widening trade deficit with FTA-partner countries is worrying policymarkers in New Delhi. Niti Aayog, the government of India’s think tank and policy advisory arm, has flagged that the trade deficit with FTA partners ballooned by 59.2% y-o-y in 1H FY 2026 (Apr-Jun 2025), according to its Trade Watch report.

The pattern: Imports from these FTA-partner nations grew by 10% reaching USD 65.3 bn in 1H FY 2026, while Indian exports to the same countries contracted by 9% — falling to USD 38.7 bn, as per the report.

India’s widening trade deficit with its FTA partner countries is rooted in structural asymmetries rather than short-term demand shocks, Abhijit Mukhopadhyay, senior economist at Chintan Research Foundation, told EnterpriseAM. With a total of 26 FTA partners, many of India’s earlier FTAs were signed with partners where trade deficits already existed.

Take the case of UAE: The imbalance is being shaped by commodity-heavy trade rather than broad-based export strength. In FY 2025, India’s imports from the UAE stood at USD 62.2 bn, nearly double its exports of USD 35.1 bn, resulting in a deficit of roughly USD 27 bn.

India’s trade deficit with the UAE reflects weak diversification rather than a breakdown in the relationship, Ajay Srivastava, founder of the Global Trade Research Initiative, told EnterpriseAM. Trade is dominated by energy and precious metals, particularly gold and silver routed through Dubai as a trading hub, making much of the deficit artificial in origin. To move sustainably towards the USD 200 bn trade target by 2032, “both sides must pivot from commodity flows to a narrow set of high-potential manufactured goods and services.

Plugging the leak: While FTAs are meant to narrow such gaps through export growth, India’s experience has been the opposite. The trend shows India’s inability to scale labour-intensive and medium and small enterprise-heavy exports such as textiles, leather, gems, jewellery and chemicals, according to Mukhopadhyay.

Asian friends tense up: Exports to the Association of Southeast Asian Nations (Asean), India’s largest FTA partner until the recent EU pact, dropped a staggering 16.9%. Mukhopadhyay deems renegotiation of the Asean FTA “absolutely necessary” to undercut China’s dominance and intense price competition from economies like Singapore, Thailand, and Vietnam, which India has historically struggled to offset.

New Delhi is redirecting its trade diplomacy towards Europe and MENA. Newer trade pacts are increasingly being pursued with countries where India already runs small trade surpluses, rather than chronic deficits, Mukhopadhyay noted.

The Gulf opportunity: Greater trade liberalization with GCC nations could help rebalance India’s export mix, Mukhopadhyay said. This can be done by favoring labour-intensive sectors (manufacturing, engineering, autos, machinery) and services (IT, healthcare, education, construction) over input-dependent ones (petroleum, gems). As petroleum trade plateaus, Gulf exporters such as Saudi Arabia, the UAE and Iraq are likely to pivot towards petrochemicals, green fuels and downstream energy investments in India.

Rethinking templates: India needs to start looking away from broad, deeply liberalising FTAs towards calibrated preferential or sector-specific agreements, particularly with Middle Eastern and Latin American partners, suggests Mukhopadhyay.

Trade deficits are not inherently problematic if they deliver cheaper, high-quality inputs for domestic manufacturing, he said. “Where that condition is absent, future agreements need to approach with caution to avoid embedding long-term imbalances.”

India leads in FDI investments in the UAE

The UAE attracted a record USD 33.2 bn in greenfield foreign direct investment in 2025, a 78% jump y-o-y with India emerging as a top source of inflows, according to a new report (pdf) by Emirates NBD.

Who’s investing? India leads with USD 12.6 bn capital invested across 275 projects. This includes New Delhi based Erisha E Mobility’s USD 10 bn smart manufacturing investment in Ras Al Khaimah. The US followed with USD 10.3 bn, anchored by major data center and AI infrastructure investments from the likes of Microsoft, while the UK topped project count albeit with smaller average ticket sizes.

Where the money landed: Dubai remained the main hub by activity, attracting 1.2k projects — 81% of the total — worth USD 8.5 bn. The emirate saw the most FDI projects in 1H last year, for the eight consecutive time. However, it was Ras Al Khaimah that took the top spot for capital inflows, drawing USD 10.6 bn across just 17 projects — propelled by a USD 10 bn smart manufacturing investment. Abu Dhabi secured 180 projects worth USD 5.2 bn, while Sharjah attracted USD 1.8 bn across 46 projects.

The UAE’s AI drive is evident in the sector breakdown. Capital inflows were dominated by automotive equipment manufacturing and communications, reflecting mega investments in EV manufacturing, data centers, and AI infrastructure. By contrast, business services led by project count, accounting for 28% of all projects, pointing to continued strength in services-led expansion.

Zooming out: Over the 2021-2025 period, the UAE attracted USD 98.4 bn in cumulative greenfield FDI across 5.6k projects, equivalent to a 32.3% CAGR in announced capital, reinforcing its position as one of the fastest-growing FDI destinations globally.

Who were we keen on? Once again, last year was marked by several high-value projects on the outflow side, which brought total outbound UAE FDI across 365 projects to USD 109.2 bn, up 51% y-o-y. MGX’s investment for a data center campus in France made it the highest recipient for capital values, followed by the US, thanks to Damac’s USD 20 bn data center commitment and Emirates Global Aluminium’s USD 4 bn aluminum plant.

Background: 2024 set the base

As we reported, the UAE ranked first globally for greenfield FDI relative to GDP in 2024, scoring 14.26 on FDI Intelligence’s Greenfield FDI Performance Index — more than 14x the inflows expected for an economy of its size. That strength came despite a 33% y-o-y drop in project value to USD 14.5 bn, even as project volumes rose 2%.

Kuwait’s Menzies lands at India’s Bengaluru airport

USD 225 mn contract at India’s Airport: Kuwait-based Agility’s subsidiary Menzies Aviation has received the green light to provide ground handling services at India’s Kempegowda International Airport Bengaluru (BLR) starting in April –– under a 15-year contract valued at USD 225 mn, according to a statement on the ADX (pdf). The firm announced plans to simultaneously pour USD 9 mn to upgrade and modernize its ground support equipment at the airport.

Menzies is expanding onto the tarmac: The firm initially formed a joint venture with operator Bangalore International Airport (BIAL) –– named Menzies Aviation (Bengaluru) Private Limited (MABPL) –– to handle cargo operations and expand air cargo services at the airport back in 2023. The JV aimed to boost capacity by an additional 40k tons by 2030 and become the sole operator at a new domestic cargo facility.

Why does the move matter? It capitalizes on the growing India-MENA traffic. Regional airliners, such as Etihad Cargo and Bahrain’s Gulf Air, have increased frequencies to the airport over the last few years. The airport also recently added new destinations to regional urban centers, including Dammam, Riyadh, Jeddah, and Kuwait.

Menzies sweated for this. Menzies has been locked in law-related friction with its former partner, Bobba Aviation, over cargo and ground-handling mandates since their original JV expired. By securing this independent license, Menzies effectively ends the split-service era at BLR — integrating its 1.7k cargo team with 1k new ground-handling hires.

StarAgri launches warehousing platform in the UAE

StarAgri launches non-agri warehousing platform in the UAE

Mumbai-based agritech and warehousing services firm StarAgri has launched a warehouse management and collateral technology platform, Stocyard, for the UAE market, targeting non-agricultural commodities such as chemicals, steel, aluminium and hardware, Hindu Businessline reports. The platform is positioned for non-agri commodity storage and collateral management.

UAE rollout backdrop: StarAgri operates more than 2.2k agricultural commodity warehouses across around 400 locations in India, with a total storage capacity of 5.08 mn tonnes and utilisation of about 73%. Its digital trading platform, Agribazaar, has facilitated more than 12 mn tonnes of trade valued at over USD 1 bn.

India to share cross-border crypto data

India will begin sharing cross-border crypto-asset transaction data with foreign tax authorities, after joining the OECD-led Crypto-Asset Reporting Framework (CARF), Economic Times reports, citing a senior official.

What changes now? From 1 April 2027, crypto platforms and other reporting entities will face a daily penalty of INR 200 for failure to issue crypto-asset transaction statements, and a fixed penalty of INR 50k for incorrect reporting or failure to rectify errors, under the Income-tax Act, 2025.

Across the Gulf: Several Gulf jurisdictions are aligning with the OECD’s Crypto-Asset Reporting Framework, which will standardize cross-border crypto tax-data exchanges across the region. The UAE signed an agreement with CARF in September 2025, with implementation set to begin in 2027 and the first automatic exchange of crypto-asset tax data expected in 2028. Bahrain has also committed to implementing the framework on a similar timeline, with the first exchanges anticipated in 2028.

Data centers took the FDI crown last year

As expected, 2025 was the year of the data center, as a digital infrastructure push led the communications sector to topple renewables as the segment seeing the most greenfield FDI globally, according to FDI Intelligence. Total FDI inflows came in at USD 1.3 tn, the fifth-highest figure on record.

Data centers did the heavy lifting for the communications sector, bringing in a record USD 319.7 bn — jumping from USD 184 bn the year before — and accounting for nearly 50% of the 129 mega projects of the year.

AI’s pull didn’t stop there — its infrastructure lifted FDI levels across other sectors. Investments into semiconductors came in at a record USD 138 bn last year.

A dip for renewables: The renewables sector was the second-largest FDI recipient, despite inflows falling 26% y-o-y to USD 193 bn. Green hydrogen, clean tech, and wind all saw commitment dips while solar power remained a bright spot, bringing in USD 75 bn, albeit still less than the previous two years.

Elsewhere, real estate attracted a decade-high USD 102.8 bn, up from USD 96 bn the year before, projects in aluminum and steel buoyed the metals sector’s USD 62 bn allocation, LNG boosted fossil fuels’ contribution of USD 54 bn, and chemicals made a comeback with USD 33 bn. Automotive manufacturing and electronic components both saw their inflows drop.

Our take: Investors are retreating from speculative, long-horizon green hydrogen projects as regulatory hurdles and uncertain revenue models stalled development — and as the focus shifts toward the physical infrastructure underpinning the global AI race. Investors are now prioritizing immediate AI computing capacity assets over future energy technologies.

This might not last long, though. Soaring data center demand is set to increase electricity consumption, turning these facilities into major bottlenecks for aging grids. The next wave of FDI is expected to give special attention to renewable projects designed exclusively to power AI campuses, rather than general grids. This strategy could push countries with abundant, low-cost power, such as the UAE and Saudi Arabia, to use their energy surplus in drawing digital investments from grid-constrained Western markets.

MARKETS THIS MORNING

Asian markets were not immune from the sell-off hitting global markets, with South Korea’s tech-heavy Kospi leading losses in Asia with a 5% decline, and others a sea of red. Over on Wall Street, futures point to another volatile trading day after Amazon’s shares fell in after-hours trading.

Sensex	83,347	+0.04% (YTD: -2.24%)
NIFTY 50	25,647	+0.02% (YTD: -1.85%)
ADX	10,535	-0.11% (YTD: +5.55%)
DFM	6,674	-0.01% (YTD: +10.5%)
Tadawul	11,188	-1.35% (YTD: +6.65%)
EGX30	49,739	+0.2% (YTD: +18.9%)
Boursa Kuwait	8,109	-0.30% (YTD: -2.3%)
QSE	11,355	-0.2% (YTD: +5.5%)
S&P 500	6,798	-1.2% (YTD: -0.69%)
FTSE 100	10,304	– 0.05% (YTD: +3.8%)
Euro Stoxx 50	5,939	+0.24% (YTD: +2.3%)
Brent crude	USD 67.44	+1.43%
Natural gas (Nymex)	USD 3.50	-0.17%
Gold	USD 4,861	+1.7%
BTC	USD 65,630	-8.1%

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

CALENDAR

FEBRUARY

2-8 February (Monday-Sunday): IndOman International Film Festival, Muscat.

3-6 February (Tuesday-Friday): ChemTECH World Expo, Jio World Convention Centre, Mumbai.

9-10 February (Monday-Tuesday): Pune International Business Summit (PIBS), SL Kirloskar Convention Center, JW Marriott, Pune.

14-18 February (Saturday-Wednesday): IHGF Delhi Fair (Spring), New Delhi.

16-20 February (Thursday-Friday): India-AI Impact Summit, Bharat Mandapam, New Delhi.

25 February (Wednesday): World Sustainable Development Summit, Taj Palace, New Delhi.

MARCH

4 March (Wednesday): Holi.

12 March (Thursday): ET Entrepreneur Summit & Awards, 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: 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, Jio World Convention Centre, Mumbai.

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.
Canadian Prime Minister Mark Carney’s visit to India.

APRIL

3 April (Friday): Good Friday.

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

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

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

MAY

1 May (Friday): Buddha Purnima.

26 May (Tuesday): Eid Ul-Adha.

JUNE

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

26 June (Friday): Muharram.

Signposted to happen sometime in 1H 2026:

Signing of India-Qatar FreeTrade Agreement (Details yet to be announced).
India-EU Trade and Technology Council Ministerial Meeting, Brussels, Belgium.

AUGUST

15 August (Saturday): Independence Day.

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

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.

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