India signals belt-tightening as oil shock bites

Good morning, friends. The corridor is having an uncomfortable moment since Prime Minister Narendra Modi's address yesterday. Modi asked Indians to use less fuel, buy less gold, and defer overseas travel for a year — a Covid-era appeal a prime minister does not make casually. Brent at USD 106, the INR at a record-low 95.17, Trump rejecting Iran's latest peace proposal on Sunday over Hormuz.

SBI is also quietly closing the window on new Gulf lending until there's “some clarity,” with PNB doing the same. Our read: the country's largest state-owned lender has paused new GCC business, full stop.

Reliance has restructured the Jio IPO as a fresh-share issue, pulling the partial exit ADIA, Mubadala, and PIF had been planning around.

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The Hormuz workaround

A UAE-managed LPG carrier with a track record of moving Iranian cargo is sailing through the Strait of Hormuz under Indian colors. Tara Gas — owned by UAE-based Global Gas Inc. and managed by Dubai-based Matrix Maritime — is broadcasting Indian ownership and crew as it transits the strait, according to ship-tracking data, cited in Bloomberg. The vessel has previously carried Iranian LPG, including a shipment to China earlier this year.

Why it matters: India’s neutrality is being repriced as a commercial asset. With the US Navy having redirected dozens of vessels since its Hormuz blockade began in mid-April, ship managers are looking for diplomatic cover that neither Tehran nor Washington will want to pierce. Indian ownership and Indian crews are the most credible shield available — New Delhi has stayed studiously neutral amid the US-Iran war, and India is the Gulf’s largest Asian crude customer. If that posture works as a commercial hedge, it gets reused fast.

The routing tells you it’s deliberate. Tara Gas was moving northeast from waters off Dubai past Iran's Larak Island, a track consistent with a Tehran-approved corridor. Draft readings show the vessel fully laden, though the origin of the cargo isn't clear. The first test is whether it clears the strait. The harder test is the US Navy's Central Command in the Gulf of Oman.

What's next: If Tara Gas makes it past the Gulf of Oman without being turned back, expect Gulf-based ship managers to start re-flagging vessels and swapping in Indian crews quickly.

Faltering tailwinds

Indian aviation and travel stocks took a double hit on Monday — crude back near USD 105 / bbl driving up airline fuel costs, and Modi's appeal asking Indians to defer overseas travel for a year hitting the demand side.

^^ We have more on Modi’s appeal below in our Big Story Today

InterGlobe Aviation, the listed operator of IndiGo, fell more than 4% intraday to INR 4,321.05; SpiceJet dropped over 4% to INR 13.41. The selloff extended to the booking platforms, with ixigo, Yatra Online, Thomas Cook India and Easy Trip Planners off by up to 7%, Economic Times reports.

The MENA-India corridor is in the splash zone on both sides. The UAE alone is consistently one of the top three destinations for Indian outbound travel, and Gulf destinations sit at the centre of India’s outbound leisure and visiting-family-and-relatives traffic. If demand softens for a year, route economics on Gulf-India lanes go with it. And the same fuel shock that's pressuring Indian carriers is pressuring Gulf carriers flying the corridor in the other direction.

The margin math is brutal. Aviation turbine fuel is 30-40% of Indian airlines' operating expenses, so even a contained crude move bleeds straight into margins. The INR at a record low adds a second layer — fuel payments and aircraft lease liabilities are largely USD-denominated, so a weaker INR compounds the same shock twice.

The smartphone hedge

Smartphones have overtaken diesel, gems and textiles as India's single largest export commodity — and the UAE is the corridor's main beneficiary. India's total electronics hardware exports hit USD 48.2 bn in 2025, according to comments by IT Minister Ashwini Vaishnaw picked up by Hindu Businessline.

Why it matters: The UAE was the second-biggest destination for Indian smartphones, with India exporting USD 4.2 bn worth of smartphones to the UAE alone in 2025. Dubai also serves as a re-export hub into Africa and Central Asia, which means India's electronics push is reaching markets it doesn't sell into directly. India’s electronics components industry body warned that annual exports worth over 4 bn could be hit by the war, as the UAE, Saudi Arabia and Israel remain key markets.

Vaishnaw’s pitch is that India offers an alternative to Vietnam and China for global electronics buyers. Apple's India production share has risen sharply and Saudi Arabia’s manufacturing push is expected to draw on Indian component suppliers. The caveat? Much of India's smartphone export value still depends on upstream Chinese and Korean inputs, so the hedge is partial rather than clean.

What's next: India is bringing additional semiconductor capacity online by end-2026, and the government is positioning a micro-LED display push as the next bet. Whether either gets to commercial scale on the announced timelines is the open question. For the corridor, the nearer-term signal to watch is whether Saudi's manufacturing localisation programmes start drawing on Indian component suppliers in 2026 contracts.

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The big story abroad

The US-Iran stalemate crowds the front pages once again. President Donald Trump dismissed Iran’s response to Washington’s latest proposal, calling the demands “totally unacceptable.” Tehran reportedly floated moving a portion of its highly enriched uranium reserves to a separate nation and refused to decommission its nuclear infrastructure — this account was later denied by Iran’s semi-official outlet Tasnim.

Pakistan-Iran talks seem to have made some headway, with Qatar managing to export its first LNG cargo — bound for a Pakistani port — through the Strait of Hormuz since the conflict started. Islamabad reportedly expects three more vessels to ship Qatari LNG through the waterway in the coming days.

The regional conflict is set to dominate the agenda during Trump’s summit with Chinese President Xi Jinping in Beijing later this week. Both leaders have good reasons to resolve the Iran war, as it is taxing Trump’s domestic popularity and straining Beijing’s reliance on low-cost Iranian oil. Washington’s worries over AI and a proposed new dialogue with China are also reportedly on the table.

Meanwhile, in the world of AI: Alphabet has rapidly evolved into an AI powerhouse, significantly narrowing the valuation gap with chipmaking giant Nvidia. Analysts suggest that the strength of the Gemini model, combined with Google Search, Cloud, YouTube, and Waymo, positions the company as the primary contender to lead the next era of tech growth.

In a retrospective piece on the outgoing Federal Reserve Chair, Bloomberg chronicles Jerome Powell’s long battle to maintain the institution’s independence. Powell’s term saw heavy criticism from Trump, a probe from the Justice Department, and an unusual decision to stay on after his successor stepped up to assume the mantle.

Tags:

AVIATION Crude Energy Security India-UAE Corridor Manufacturing Shipping WHAT WE’RE TRACKING TODAY

THE BIG STORY TODAY

Modi's ration call

India's prime minister is asking citizens to use less fuel, buy less gold, and defer overseas travel for a year — a Covid-era appeal that signals just how much pressure the Iran crisis is putting on the Gulf-India corridor. With Brent at USD 106 / bbl, the INR at a record low of 95.17, and US President Donald Trump rejecting Iran's latest peace proposal on Sunday over Hormuz, Prime Minister Narendra Modi's message yesterday was blunt. “In the current situation, we must place great emphasis on saving foreign exchange,” he said (watch, run time: 19:00).

Why it matters

The Gulf's biggest Asian customer is engineering its own demand destruction. For producers like Saudi Aramco and Abu Dhabi National Oil Company, this complicates volume planning and erodes pricing power on term contracts with Indian refiners. And Modi's specific call to defer gold purchases for a year cuts directly through Dubai's bullion ecosystem — the conduit for India's diaspora and wedding-linked gold demand and India's second-largest import after oil. A sustained pullback hits the emirate's trading volumes and margins on top of cooling energy demand.

The asks: Cut fuel use, avoid gold, curb non-essential imports, work from home, switch to public transport, eat less cooking oil, defer overseas travel, and — most strikingly — farmers to cut fertilizer use by up to half. “Today, the demands of the times are such that if we restart these systems, it will be in the national interest,” Modi said.

Markets read it the way Modi intended

The INR slid 0.75% intraday to its record low before the Reserve Bank of India (RBI) reportedly intervened, with state-run lenders selling USD to stem losses. The Nifty 50 dropped over 1%. Defence Minister Rajnath Singh chaired an informal ministers' group today to review energy security, trade exposure, and market volatility — the kind of meeting governments hold when they're preparing for something.

Stockpiles are the under-reported pressure point. Global oil inventories drew down by 4.8 mn bbl / d between 1 March and 25 April — well beyond historical norms, per Morgan Stanley estimates cited by Bloomberg. India’s own oil inventories are at a 10-year seasonal low, down roughly 10% since the war began. The Petroleum Ministry insists refiners hold enough crude, yet state-run refiners say a meaningful share has already been burned.

The fuel-price freeze is the bill no one wants to pay. State-run refiners — Indian Oil, BPCL, and HPCL — are absorbing losses of up to INR 1.7 bn (USD 20 mn) per day, with total losses past INR 1 tn (USD 12 bn) over 10 weeks. Government duty cuts of about INR 14 bn (USD 170 mn) a month have softened the impact, but with global peers raising prices, a pass-through to consumers looks less like an if and more like a when.

The trade-off is brutal. Pass prices through and inflation spikes, potentially dampening remittance-linked consumption across the Gulf corridor. Hold the line and the INR keeps absorbing the shock, repricing every non-oil import from the Gulf — petrochemicals, plastics, fertilizers — and pushing refiners toward cheaper Russian crude or domestic alternatives.

What's next

RBI FX reserve data on Friday will show how hard the central bank has been defending the currency. Watch for sourcing shifts at Reliance, Indian Oil, and BPCL, as well as for any signal on pump prices. The ministerial cadence is its own tell — more meetings, more pressure.

SOUND SMART- The structural deadlock is unchanged. Until Iran drops its demand for sovereignty over the Strait of Hormuz — or Washington moves on it, which looks unlikely — there is no path to a durable agreement and no sustained relief for oil markets.

(** Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Tags:

India Focus India-GCC Corridor RBI THE BIG STORY TODAY

BANKING

SBI taps the brakes

India’s largest state-owned bank has paused new Gulf lending as the Iran crisis plays out — a sharper turn than the broader “Indian banks are cautious” framing in the Economic Times today and a signal for the MENA-India banking corridor. State Bank of India (SBI) Chairman CS Setty said the lender will take no new GCC business “until we get some clarity on the situation,” while continuing to run its existing book. Punjab National Bank (PNB) is doing the same.

Why does it matter? The corridor is tilting. Gulf sovereign capital is still flowing aggressively into Indian assets, with the UAE’s Abu Dhabi Investment Authority and Mubadala Investment and Saudi Arabia’s Public Investment Fund continuing to anchor the region's global investment strategy. Indian bank capital going the other way is not. The Iran crisis is widening that asymmetry — Gulf-to-India remains a green light, while India-to-Gulf is now at risk.

How exposed is SBI? Its overseas loan book is INR 7.42 tn — about 15% of its INR 49.32 tn asset base. The UAE and Bahrain together account for 14% of overseas loans, well behind the US (26%) and the UK (18%). Not enough to break the bank if the conflict drags on — but enough to be worth protecting.

PNB is in the same posture and has moved officials from Dubai back to India as part of business-continuity planning. The lender runs its Gulf book through the Dubai International Finance Center and handles international business from its Gift City branch in Gujarat. Indian Overseas Bank, which has no Middle East operations, says it's not directly affected but is seeing some overseas business slowdown.

The macro question is the more interesting one. SBI Research's own numbers (pdf) say every USD 10 / bbl increase in crude widens India’s current account deficit by 30-35 bps, lifts inflation by 35-40 bps, and cuts GDP growth by 20-25 bps. That’s the channel that matters — not the direct loan-book hit. India’s domestic economy is still doing the heavy lifting, with real GDP growth projected at around 7.2% in 4Q FY 2026 and 7.5% for the full year, before moderating to 6.6% in FY 2027 as geopolitical risk feeds through.

What's next: Setty flagged that a conflict could last five to six months and would start weighing on domestic macro conditions. SBI has not flagged any immediate asset-quality impact on its existing Gulf book.

(** Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Tags:

BANKING Finance India-GCC Corridor

IPO WATCH

Locked in

Gulf sovereigns' partial exit from Jio Platforms just got pulled. Reliance Industries has restructured its planned Mumbai IPO of its telecom-and-digital arm as a fresh-share issue rather than an offer-for-sale, sending the proceeds to Jio instead of existing shareholders, Reuters reports, citing sources. That removes the partial liquidity window that UAE’s Abu Dhabi Investment Authority (ADIA), UAE’s Mubadala Investment and Saudi’s Public Investment Fund (PIF) had expected to use.

Why it matters: The structure flip lands just as the US-Israel war on Iran has delayed Jio's draft prospectus filing and chilled appetite for new listings. Investors who'd lined up a near-term monetization route through India's public markets now have to wait — because a regional geopolitical shock the Gulf is sitting at the centre of has made that route harder to use. Jio is now a longer-term India hold for ADIA (which put in around USD 750 mn), Mubadala and PIF (around USD 1.5 bn), not a near-term liquidity event.

What changed: The earlier OFS structure would have let foreign investors collectively sell around 2.5% of Jio (roughly 8% of each holding). The new fresh issue is also around 2.5% — but the proceeds go to the company. Reuters cited one source as saying investors wanted to stay invested long-term anyway; the revised structure also conveniently removes the sell-down route that had been on the table.

Do the math: Jefferies valued Jio at around USD 180 bn in November. A 2.5% fresh issue at that valuation implies a raise of about USD 4.5 bn — above earlier expectations of up to USD 4 bn. Any pressure on the listing valuation, though, marks down Gulf investors' existing Jio exposure on the way in.

The wider cap table? Jio is backed by Meta, Google, Vista Equity Partners, KKR, General Atlantic and Silver Lake. None of them get an exit either.

GO DEEPER- Jio is separately building out a LEO satellite business with Middle East demand in view — relevant to how Gulf investors think about the long hold they're now committed to.

What's next: Jio is expected to file its draft prospectus within the next week or two, potentially pushing the listing to July, according to the Economic Times. It has hired 17 banks including Kotak Mahindra Capital, Morgan Stanley, JM Financial, Goldman Sachs, HSBC, Bank of America and Citigroup.

(** Tap or click the headline above to read this story with all of the links to our background as well as external sources.)

Tags:

IPO WATCH Jio Platforms Reliance Industries

ALSO ON OUR RADAR

Adani makes the AI-sovereignty pitch

Gautam Adani used the CII Annual Business Summit to argue India should build and own its AI stack at home — energy, data centres, compute, chips, networks and talent, PTI reports. The call comes on the heels of projections seeing AI-driven data centre demand rising from 5 GW by 2030 to nearly 75 GW by 2047.

The framing dovetails neatly with Adani Group’s own USD 100 bn data centre plan, its Google and Microsoft partnerships, and its 30 GW Khavda renewables project. The corridor question Adani didn't answer: how Gulf sovereign capital — currently the most aggressive non-Chinese non-US backer of AI infrastructure — fits into a "sovereign" Indian buildout. That's the more interesting story whenever someone gets it on the record.

Tags:

Adani Group ALSO ON OUR RADAR artificial intelligence Cloud infrastructure

PLANET FINANCE

It’s a chip off the Abu Dhabi block

The largest US tech IPO of 2026 — a UAE-backed AI chipmaker — will price an already overflowing book this week. Cerebras’ offering of 30 mn shares is already 20x covered, with the California-based business expected to raise its price range by USD 35 per share to USD 150-160 as early as today, Reuters reports, citing people it says are in the know. The top of the rumored range implies a market cap of roughly USD 34 bn at listing (up from USD 23 bn in February) and IPO proceeds of about USD 4.8 bn (up from USD 3.5 bn originally), by our math.

Read this as the moment US capital markets put a number on Abu Dhabi's AI thesis. UAE entities make up 86% of the AI chipmaker’s revenue. Mohamed bin Zayed University of AI, the research anchor of the UAE's entire AI strategy, accounted for 62% of the firm's 2025 top line, and Abu Dhabi-backed AI firm G42 accounted for 24%, according to the prospectus. G42 alone drove 85% of Cerebras’ revenue in 2024.

ICYMI- The AI chipmaker first filed to go public in 2024, but the Committee on Foreign Investment in the US opened a formal investigation into G42’s minority position over concerns that G42’s ties to Chinese tech companies could undermine US export controls and give Beijing access to advanced AI chips. The move was ultimately cleared after Cerebras restructured G42’s equity stake into non-voting shares with no board influence, following some diplomatic lifting by UAE national security advisor Tahnoun bin Zayed Al Nahyan.

The commercial tie-up runs deeper than any shareholding anyway. The semiconductor firm is also deploying AI infrastructure inside the UAE’s Stargate project — the cluster being built alongside Nvidia, OpenAI, and Oracle, which is set to be operational this year with an initial 200 MW capacity, ITP reports, making the case for Cerebras as the compute backbone of a sovereign AI strategy.

The pitch? Cerebras is a credible Nvidia alternative with wafer-scale chips, backed by OpenAI compute demand and AWS. The business printed headline net income last year — driven by a non-operating accounting gain — with its top line up 20-fold in three years, according to ITP. Whether the market is right to price in a smooth transition to a more global revenue mix — implied by the OpenAI and AWS agreements but not yet visible in the financials — is the open question underneath the 20x book.

A live test case for the model: If Cerebras’ IPO prices well and trades above offer, it validates Abu Dhabi's early wager on AI infrastructure and gives the UAE-backed play a clean read-through in public markets, ITP’s Pavneet Kaur argues. It also sets the “template” moving forward that GCC participation comes with tighter guardrails around control and access to sensitive US tech.

ADVISORS- Morgan Stanley, Citigroup, Barclays, and UBS are quarterbacking the transaction, among others.

MARKETS THIS MORNING-

Sensex	76,015	-1.7% (YTD: -10.8%)
NIFTY 50	23,815	-1.4% (YTD: -8.8%)
ADX	9,764	-0.7% (YTD: -2.2%)
DFM	5,841	-1.02% (YTD: -3.4%)
Tadawul	11,178	+0.5% (YTD: +6.5%)
EGX30	54,708	+0.1% (YTD: +30.7%)
Boursa Kuwait	8,614	-0.6% (YTD: +3.7%)
QSE	10,631	-0.3% (YTD: -1.2%)
S&P 500	7,398	+0.8% (YTD: +8.08%)
FTSE 100	10,253	+0.1% (YTD: 3.2%)
Euro Stoxx 50	5,885	-0.4% (YTD: +1.6%)
Brent crude	USD 103	+2.1%
Natural gas (Nymex)	USD 2.79	+1.3%
Gold	USD 4,669	-1.2%
BTC	USD 81,049	+0.2%

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

Tags:

Financial markets PLANET FINANCE

CALENDAR

MAY

26 May (Tuesday): Eid Al-Adha.

JUNE

15-17 June (Monday-Wednesday): Prime Minister Narendra Modi to attend G7 Summit in Evian, France.

18-21 June (Thursday-Sunday): Bharat Buildcon, Yashobhoomi, Dwarka, Delhi.

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;
India to host the Brics Summit.

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.

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

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

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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India signals belt-tightening as oil shock bites

Today at a glance

THIS AFTERNOON: UAE-managed LPG tanker sails Hormuz