Good morning, friends. This is the week our corridor story stopped being five separate stories.

Modi heads to Abu Dhabi on Friday — not Riyadh. The PM's five-nation tour kicks off with the UAE on 15 May, then Europe. Anyone watching the Hormuz numbers can read this as a crude-and-LNG diversification swing, dressed as diplomacy.

The INR closed at 95.62 yesterday, a record low. Delhi's PMO, the Finance Ministry, and the RBI are war-gaming an emergency FX toolkit we last saw in 2013. The difference driving it? Not the Fed, but a Gulf war. Charan Singh, former research director at the RBI, tells us the INR is headed for 100/USD.

Quietly relevant aside: We caught two former Indian ambassadors to Oman this week. Muscat has gone from “important relationship” to “structural Hormuz bypass” in under 90 days. The Cepa goes live 1 June.

On deck: RBI weekly FX reserves data Friday, whether state refiners move on pump prices before Modi lands, and our corridor stress-test piece Friday that brings it all together.

Riyadh to Mumbai. Abu Dhabi to Singapore. Dubai to London. Cairo to Shenzhen.

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Happening tomorrow

Brics foreign ministers gather in New Delhi tomorrow for a two-day meeting that will test the bloc's ability to find a common line on the Iran war — with India, as 2026 chair, sitting in the most exposed seat. External Affairs Minister S Jaishankar will chair the talks at Bharat Mandapam, and visiting delegations are scheduled to call on Prime Minister Narendra Modi, the Ministry of External Affairs confirmed yesterday.

Who’s at the table: Russian Foreign Minister Sergey Lavrov has confirmed attendance, and South African Foreign Minister Ronald Lamola arrived in Delhi yesterday. Other delegations are en route.

Why it matters for the corridor: Of Brics’ 11 members, four are corridor economies — Egypt, Iran, Saudi Arabia, and the UAE. Add India as host and the bloc that meets in Delhi tomorrow is, in effect, the corridor sitting around one table. Iran has urged India to use the platform to build consensus against US-Israeli actions, Reuters reports — and Tehran is already at odds with fellow Brics member the UAE on the war's framing. India is pushing for a joint statement anyway, even as several Brics economies absorb war-driven energy costs.

What's next: Whether Delhi can deliver a joint statement is the meeting's first real test of the bloc's coherence under pressure. Sessions run Thursday and Friday, with opening remarks streamed on DD News and the MEA YouTube channel.

Muscat is having its moment

Oman went from zero to USD 545.72 mn of crude exports to India in a single month. Indian refiners shifted part of their Gulf sourcing to Muscat in March due to positioning, as Omani terminals sit outside the Strait of Hormuz with direct Arabian Sea access, Moneycontrol reports, citing Commerce Ministry data. The 646% y-o-y jump tracked a parallel collapse elsewhere — Iraq down 66.67%, Saudi Arabia down 46.78%, and US barrels down 43.65%.

The scale: India’s total crude imports fell 35.5% y-o-y to USD 9.53 bn in March, down from USD 14.77 bn a year earlier — the clearest indication of how severely the Iran conflict has disrupted flows. Russia held its position as India’s largest single supplier at USD 3.25 bn, but even Russian shipments were down 19.37% y-o-y.

Why it matters for the corridor: Saudi Aramco took the sharpest hit of any major supplier — nearly half its Indian volume was wiped away in a single month. If the March pattern holds, FY 26 volume planning needs to be redone across the Gulf, and producers who can route around Hormuz — like Oman and the UAE via Fujairah or the Adnoc pipeline — will gain at Saudi's expense.

What's next: April Commerce Ministry data lands in late May — that’s when we’ll see whether the Oman switch has been flipped on permanently or for one month only. If disruption continues, the next test is whether Saudi Arabia, the UAE, and Qatar can keep barrels moving to Indian refiners without a sharp rise in freight, ins. and delivery costs.

^^ We have more on the incoming India-Oman CEPA in the news well below.

The emergency signal is now policy

New Delhi raised import tariffs on gold and silver to 15% from 6% Tuesday, Reuters reports, citing government orders. That's a 2.5x jump in one move, and it makes bullion the first import line formally targeted after Prime Minister Narendra Modi urged households to avoid gold purchases for a year.

Why it matters: Gold is the import Delhi can curb fastest without disrupting industrial supply chains. India imports nearly all the gold it consumes, making it a major USD drain as crude prices, shipping disruption, and INR pressure squeeze the external account. The tariff hike comes on top of a recent 3% IGST that pushed April gold imports to a near 30-year low. The 15% duty is designed to extend that effect. India's annual gold import bill runs at nearly USD 45-50 bn — even a 15-20% volume reduction is USD 7-10 bn in FX saved.

Dubai is the pressure point. India’s gold bar imports from the UAE rose to USD 16.5 bn in 2025 from USD 6.7 bn in 2023, while the UAE's share of total Indian gold imports climbed to 28% in 2025 from 7.9% before the India-UAE trade pact. A 15% Indian duty widens the incentive for grey-market flows — a risk that had subsided after India cut duties to 6% in the FY 25 Budget, but which industry officials suggest is now poised for a resurgence, according to Reuters.

Investment demand was strong before the tariff hike, with Indian gold ETF inflows rising 186% y-o-y in the March quarter to a record 20 tons. Higher landed prices will hit formal-entry imports and jewellery volumes. Senco Gold MD and CEO Suvankar Sen told Economic Times volumes may fall 10-15%, even if values hold on higher prices.

What's next: May gold import data lands mid-June — the test of whether the 15% duty hits volumes as hard as the 3% IGST did.

Fuel shock reaches flight schedules

Air India is cutting about 100 international flights a day for three months from June — the first hard route-level response to a fuel-cost shock that has already rattled Indian aviation stocks and now threatens the Gulf-corridor capacity Indian carriers spent two years building. The carrier is suspending Delhi flights to Chicago, Newark, Singapore, and Shanghai while reducing frequencies to San Francisco, Paris, and Toronto, Economic Times reports.

The math: Jet fuel hit USD 162.89 / bbl for the week ending 8 May, up from USD 99.40 / bbl at end-February — and fuel is up to 40% of airline operating costs. Pakistan's airspace closure is compounding the hit, with North America flights now refuelling in Vienna or Stockholm.

Why Air India first: Air India is more exposed than low-cost IndiGo on long-haul, where extra fuel burn and stopovers hit margins fast. With accumulated losses above INR 200 bn (USD 2.1 bn), pressure on Tata Sons and Singapore Airlines to cut is mounting. A senior airline official told the news outlet the carrier is “not recovering even the operating cost on most flights.”

What's next: The cruel symmetry — the fuel shock pricing Indian carriers out of long-haul is coming from Middle East energy markets, even as Gulf hubs remain central to the long-haul connectivity Indian carriers can't easily replace. The UAE is consistently among the top destinations for Indian outbound. The first cuts spare the Gulf — the test is whether the next round does too.

Exim Bank steps up to fill the gap

The Export-Import Bank of India (Exim Bank) will raise INR 995 bn (USD 10.5 bn) in FY 27, Managing Director Harsha Bangari told Reuters on Monday. The fundraise lands as the war-led energy shock, a weakening currency, and forecasts of a widening current account deficit pressure the external account — and as private lenders scale back Gulf exposure.

Why it matters: Exim Bank finances India’s Lines of Credit program, which underwrites overseas infrastructure and trade across the Gulf and Africa — any project backed by Exim is effectively shielded from the war-risk premiums that are now repricing private Gulf-linked agreements. The state is stepping in to underwrite trade finance just as risk appetite among India's private lenders recedes. It keeps Indian export flows into the corridor underwritten even as private-sector trade finance dries up. The state is filling the gap the banks are leaving.

The corridor cycle: Gulf institutions pulling back from Indian private credit may end up funding India’s state-backed export financing instead — recycling petrodollars into the same corridor they are de-risking elsewhere. Roughly USD 3.5 bn of the total raise will be sourced overseas through bilateral and syndicated loans, and a raise of this scale will likely be syndicated internationally, with the Gulf as the obvious source of overseas capital. Financial centers in Dubai, Abu Dhabi, and Riyadh are key buyers of sovereign-adjacent Indian debt.

What’s next: We’ll be keeping an eye on the syndication structure when the raise launches — the geographic mix of participating banks will be the cleanest signal of where Gulf appetite actually sits.

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The big story abroad

Today’s papers are buzzing with business updates. US inflation hit a three-year high in April, coming in at 3.8% thanks to the war-triggered rise in energy prices.

Wall Street is unsettled by these figures. Investors are wagering on continued inflation growth, expecting average annual inflation to level out at 2.7% over the next five years. Investors are hedging against this risk by trading standard US treasuries alongside treasury inflation-protected securities.

But US stock markets don’t seem rattled by the (seemingly endless) conflict. The S&P 500 has been hitting fresh high after fresh high, most recently crossing the 7.4k mark for the very first time at Monday’s close, even as oil prices stayed elevated. Some suggest the US market remains resilient against the Hormuz blockade due to oil independence and strong tech earnings as key drivers of investor confidence.

Markets will be closely watching the Trump-Xi summit. US President Donald Trump is kicking off his visit to Beijing today, during which he will meet Chinese President Xi Jinping to discuss trade relations and the ongoing crisis in the Strait of Hormuz.

GameStop’s eBay takeover is a no-go: Online marketplace eBay turned down GameStop’s USD 56 bn acquisition bid, expressing concerns over financing and leverage, the video game retailer’s governance, and operational risks of the combined entity. GameStop CEO Ryan Cohen has been courting GCC sovereign wealth funds to bridge the equity gap for the transaction.

In the AI world, Anthropic is in early negotiations to raise over USD 30 bn in new funding, paving the way for its largest funding round yet. The round is expected to wrap up by the end of May, one source told Bloomberg.

JPMorgan Chase has pushed further into the crypto world, submitting paperwork to set up its second tokenized money market fund. The entity plans to issue digital tokens on the ETH blockchain to represent shares in its portfolio of treasuries and repurchase agreements.

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