India’s energy bill surges by 50%

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WHAT WE’RE TRACKING TODAY

RBI scrambles to stem INR’s slide

Good afternoon, lovely people. We’ve finally reached the end of a very busy week. It’s a brisk, headline-heavy day as shifting energy dynamics take center stage.

PM Modi is urgently pushing for alternative energy sources to combat a staggering 50% surge in national energy bills with ongoing Gulf shipping disruptions forcing India to take tough measures for its energy security. These overarching macroeconomic pressures and supply chain uncertainties are already echoing through the markets, including roadblocks to the highly anticipated Reliance mega IPO.

RBI scrambles to stem INR’s slide

The Reserve Bank of India (RBI) is putting together policy measures to stabilize the INR after it slid to a record low of nearly 97 against the greenback yesterday, Bloomberg reports, citing sources it says are in the know.

The options on the table include an interest rate hike ahead of or during the 3 June monetary policy review meeting, additional USD liquidity swaps, and overseas fund-raising measures. India’s benchmark policy rate currently stands at 5.25%. USD mobilization through non-resident Indian deposit schemes and a potential sovereign USD bond issuance are also on the cards.

Why it matters: Such deposit schemes could attract as much as USD 50 bn (INR 4.8 tn) in inflows. If the RBI pulls an out-of-cycle rate hike or a sovereign USD bond, the cost of capital in India resets. For Gulf allocators and MNCs, the narrowed US-India interest rate differential could make Indian fixed-income assets lucrative again, but at the expense of squeezing domestic corporate margins.

Liquidity operations gather pace: The RBI announced a USD 5 bn (INR 480 bn) swap auction to inject liquidity and support FX reserves, with more such measures likely. Foreign investors already offloaded a record USD 22.9 bn from Indian equities in 2026, intensifying pressure on domestic assets.

PMI holds largely steady

India’s private sector growth held its ground in May despite the ongoing Middle East conflict weighing heavily on internal demand, exports and travel, according to preliminary data from HSBC India Purchasing Managers’ Index (PMI) (pdf). The composite PMI clocked in at 58.1, virtually flat from 58.2 in April, keeping it comfortably above the 50-mark that separates growth from contraction.

“Manufacturing activity eased marginally as the rates of expansion in output and new orders moderated, while growth of new export orders softened markedly. Yet, the Manufacturing PMI remained broadly in line with its long-run average, supported by continued inventory building,” HSBC’s Chief India Economist Pranjul Bhandari said.

The split: The manufacturing PMI slipped to 54.3 in May, down from 54.7 in April. However, a resilient services sector helped cushion the blow, with the services index edging up slightly to 58.9. Factory output growth decelerated to its second-slowest pace since mid-2022, as firms pointed to competitive pressures, softer demand, travel disruptions, and the regional war as major drags on sales.

Why it matters: Indian businesses are getting squeezed on two fronts: demand and costs. New export orders across the private sector expanded at their most sluggish pace in 19 months. Concurrently, input inflation surged to its second-highest level in nearly three years, largely driven by the manufacturing sector. Companies absorbed the brunt of these costs to stay competitive, with output prices rising at their slowest rate since January.

War spillover: The Middle East war is now showing up beyond oil prices and sliding INR. The PMI data points to stress in export demand, factory activity and input costs leaving domestic services to shoulder the private sector growth.

Maruti cars will get more expensive

Maruti Suzuki is the latest automaker to pass the buck to consumers. One of India’s largest carmakers will hike vehicle prices by up to INR 30k (USD 312) starting in June, according to a stock exchange filing (pdf). The price bumps will vary across different models, reflecting a broader strategy to offset persistently high input costs and inflationary headwinds.

Maruti’s portfolio runs from entry-level hatchbacks to premium sport utility vehicles, the impending price increases will impact Maruti's lower-end segment. The company had warned last month that surging petrol prices could hurt demand from price-sensitive buyers for entry-level cars. The risk is now more immediate after state-run fuel suppliers raised petrol and diesel prices last week. Maruti now joins its peers Tata Motors, Mahindra & Mahindra and Hyundai India, which have already announced price hikes, Reuters notes.

Why it matters: The price hike shows the economic fallout from the war is trickling directly to consumer goods. India’s auto industry body had already warned that the war could hit production, input costs and freight rates. For automakers, the test is whether they can pass on mounting costs without killing demand from the price-sensitive buyers.

Happening this week

The US Secretary of State Marco Rubio will begin his four-day visit to India tomorrow to discuss energy, trade and defence ties with Indian officials. His itinerary includes a visit to Kolkata, Agra, Jaipur and New Delhi, as per a release. Rubio will attend Quad foreign ministers’ meeting on Tuesday alongside his Indian, Japanese and Australian counterparts.

The big story abroad

The business press is squarely focused on AI this morning. SpaceX’s IPO prospectus is still getting attention, while OpenAI reportedly could be following suit with its own confidential prospectus as soon.

Trading frenzy ahead? The prospect of both of those hitting the Nasdaq this year as it also introduces “fast entry” rules that could see them join the Nasdaq 100 in just 15 days means there could be an AI “trading frenzy” that could see up to USD 95 bn in US tech stocks sold by passive investors to make way for the new stocks, the Financial Times reports.

Meanwhile, also in AI land, foreign private equity firms are buying out of China’s data center sector amid regulatory pressures, with Princeton Digital Group looking to sell USD 1 bn in assets.

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Modi calls for alternative energy sources

Prime Minister Narendra Modi ordered immediate contingency plans to mitigate severe energy disruptions caused by the Middle East war and the Strait of Hormuz blockade in the cabinet's first meeting of the year, Press Trust of India reports. He directed ministers to aggressively explore alternative energy sources and fast-track structural reforms to insulate the economy from external supply shocks.

The prime minister’s directive comes as the war takes a toll on India’s energy import bill. Despite crude oil import volumes falling 4.3% y-o-y in April to 20.1 mmt, the total import bill soared by 50% y-o-y to USD 16.3 bn, as per data from the Petroleum Planning and Analysis Cell. This stark divergence, driven by a sharp escalation in global crude prices amid the ongoing Strait of Hormuz blockade, reflects the war’s severe strain on the country's trade balance.

LNG imports plummeted 30% to 1.9 bn cubic metres, dragging down the import bill to 900 mn from USD 1.2 bn a year earlier primarily due to lower consumption — triggered as the government cut supplies to commercial and industrial consumers.

Why it matters: While India tapped alternate supply sources to feedstock its oil demand even at steep prices, the lack of alternatives for gas imported from the Gulf region prompted rationing measures which wiped a significant chunk of the gas demand. Demand for natural gas declined by 16.7% y-o-y, while LPG sales fell 12.7% y-o-y in April due to the supply restrictions. Allocation for the commercial sector remains at 70% of their total utilization capacity as bottled gas was diverted to household usage.

Venezuela now a key swing supplier

Venezuela has leapfrogged Saudi Arabia and the US to become India’s third-largest crude supplier. Refiners like Reliance Industries are scrambling to keep the taps flowing amid regional disruptions, pushing Venezuelan shipments up to 417k bbl/d in May, a significant jump from 283k bbl/d in April, Economic Times reports, citing Kpler data.

IN CONTEXT- Venezuelan imports have roared back to life after sitting at zero for nine months. Indian refiners resumed imports after Washington rolled back export restrictions in February following the capture of President Nicolás Maduro following which Reliance acquired a license from US administration to import oil from the oil.

Why it matters:With Iranian cargoes halted again and Iraqi volumes still constrained, Venezuela has become an increasingly important stopgap supplier for Indian energy security. Imports from Saudi Arabia nearly halved in April, due to shipping disruptions and higher prices. While most Indian refiners can process limited quantities of heavier Venezuelan crude, it is particularly suitable for Reliance’s advanced Jamnagar refinery. This allows India’s largest refiner to cut down purchases of costlier MENA barrels and gain an edge against the state-run rivals.

Meanwhile, the Donald Trump administration is nudging India to buy more energy from the US and Venezuela as Secretary of State Marco Rubio heads to India for a four-day visit beginning Saturday. The visit aligns with Washington’s broader push to deepen energy ties with New Delhi, with Rubio touting Iran as a “great partner” and signaling a readiness to bump US energy exports to historic levels, NDTV reports.

“We also think there's opportunities with Venezuelan oil,” Rubio told the media while announcing that Venezuela’s interim President Delcy Rodríguez is slated to visit India next week to hash out new oil sales agreements.

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

A transition without transit

India’s exposure to Gulf shipping disruptions is testing a central assumption in its energy transition: whether imported gas, much of it coming in from a volatile Middle East, can reliably aid India in its decarbonization goals. For years, liquefied natural gas (LNG) and liquefied petroleum gas (LPG) were billed as cleaner alternatives to coal that would not compromise the country's energy security.

That narrative is now facing a reality check. “It’s highly unlikely for these fuels to become central to India’s climate transition,” Anubha Aggarwal, India analyst at the Center for Research on Energy and Clean Air, tells EnterpriseAM. “LNG is seen as a transition fuel for industry in a limited way,” largely due to high costs and heavy import dependence, she noted. While LPG is critical for domestic and commercial cooking, its industrial applications remain narrow, she added.

Gas was never the bridge

India’s LPG consumption took a 16% hit in April amid shipping bottlenecks, squeezing small and medium enterprises, particularly in the hospitality sector. But any pivot away from gas is likely a stopgap, Anubha notes. Sectors operationally wired for gas or LPG cannot easily revert to coal, even under prolonged supply stress.

Gas accounts for a small fraction — 6.4% of India’s energy mix — and price constraints will keep it that way. “India has no plans to build new gas-based power plants,” Anubha says, pointing instead to battery storage and grid modernisation as the preferred pathway. Even within the power sector, roughly 10 GW of gas-based capacity is deployed for peak demand balancing, not baseload generation.

Policy response opts for two parallel tracks

During the war, India managed to partially de-risk from Gulf chokepoints without overhauling its fuel mix. Before the conflict, Qatar supplied 40% of India’s LNG, followed by Oman (16%) and the UAE (13%). While the war severely dented overall Gulf imports, shipments from Oman climbed to 30%, insulated by its bypass of the Strait of Hormuz. Between February and April, India doubled sourcing from Nigeria and Angola while locking in additional supplies from the US, Australia, Mauritania, and Indonesia.

The import bill demands gasification

A domestic substitute? Coal gasification — long lingering on India’s policy agenda — is gaining renewed urgency, targeting the utilization of 100 mn tons of coal by 2030, according to Anubha. However, gasification remains commercially challenging: It is capital-intensive, and India is still testing whether indigenous technologies can efficiently process the country’s coal with high ash content.

IN CONTEXT- Last week, India approved a INR 375 bn (USD 3.9 bn) scheme to scale up coal gasification in a clear directive to reduce dependence on imported fuels. The plant will gasify 75 mn tons of coal annually, backed by state support covering up to 20% of capital costs.

Why it matters: Coal gasification aims to reduce India’s INR 2.7 tn (USD 28.8 bn) import bill for energy feedstocks, industrial chemicals, and agricultural inputs by converting domestic coal into syngas. This can then be used to locally produce critical inputs like hydrogen, ammonia, urea, liquid fuels, and other chemicals.

India is already building past gas

Rather than derailing climate targets, Gulf volatility could accelerate India’s shift toward direct electrification, Anubha argues. “If India continues its current rate of renewable capacity addition, alongside grid modernization and battery storage, it will deliver the biggest gains in emissions reduction.”

For India-MENA energy ties, that raises a question. “It’s over-reliance on fossil fuels that has led to this crisis,” Anubha notes, highlighting that countries with higher renewable penetration are better insulated from price shocks. If resilience is the goal, she cautions against doubling down on fossil interdependence.

What's next? “It's very unlikely that the nature of consumption will shift to other fossil fuels in any substantial way. We expect things to go back to the way they were once the ongoing fuel crisis is over,” she explains.

MAN Industries snaps up Saudi’s National Pipe Company for USD 102 mn

Mumbai-based carbon steel pipe manufacturer MAN Industries has acquired Saudi Arabia’s National Pipe Company (NPC) in a transaction valued at USD 102 mn (INR 9.8 bn), as per an exchange filing. The acquisition gives MAN Industries full ownership of Kingdom’s API-certified large-diameter carbon steel pipe makers with operations in Dhahran and Al Khobar.

Why it matters: NPC has supplies to major regional energy and infrastructure projects and lists Qatar Petroleum, Kuwait Oil Company, Saipem, Subsea7 and Larsen & Toubro among its clients. NPC boasts a 430k mtpa of pipe manufacturing capacity, long-standing relationships with Saudi Aramco and a debt-free balance sheet. Rather than exporting into Saudi Arabia, MAN is embedding production capacity directly within the Kingdom while building access to a global client base.

Nayara and Shell shed market share after hiking pump prices

Rosneft-backed Indian fuel retailer Nayara Energy and the Indian arm of UK-based Shell lost ground in April after raising pump prices, while buyers moved to state-run fuel retailers that kept prices lower for longer, The Economic Times reports. Nayara saw its petrol sales fall 30% and diesel drop 46%, while Shell’s petrol sales gained 4% even as its diesel volumes shed 77%.

Why it matters: The fuel shock is splitting India’s retail market. Nayara and Shell are giving up volumes to limit losses, while state-run retailers are absorbing revenue losses in exchange for market share. Consequently, public-sector retailers saw sales for both petrol and diesel rise nearly 9% in April as consumers migrated away from pricier private pumps.

Reliance BP Mobility — the fuel retail joint venture between Indian conglomerate Reliance Industries and UK-based BP — moved in the opposite direction, with petrol sales up 23% and diesel up 4.5%.

Price control cracks: The shift follows a broader loosening of India’s fuel price controls. State-run fuel retailers have raised petrol and diesel prices twice in a week, after a four-year price freeze began giving way under higher crude costs. The hikes remain modest compared to gains in crude, and for now, state-run firms are absorbing part of the fuel-price shock to shield consumers.

Reliance mega IPO hits roadblocks

Reliance Industries delayed plans for the USD 4 bn (INR 384 bn) listing of Jio Platforms as the war continues to rattle Indian equity markets, Bloomberg reports, citing unnamed sources. Jio Platforms is the telecom unit of the Indian conglomerate backed by Gulf SWFs, including Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi Investment Authority (Adia), and Mubadala.

War slows down momentum: While Reliance Chairman Mukesh Ambani originally pledged a listing in 1H 2026, a compounding Indian stock market rout and heavy foreign investor outflows have forced a pause on what was set to be India’s largest-ever IPO, expected to raise USD 4 bn.

Valuation concerns abound: The worsening selloff in Indian equities may not fetch an adequate valuation for Jio. Reliance wants to offer attractive returns for existing investors while generating enough momentum for a blockbuster listing. That goal would be easier to achieve in a booming market. Reliance also wants to avoid pricing Jio below its nearest rival Bharti Airtel.

Why it matters for MENA: Reliance had previously scrapped plans for an offer-for-sale, which would have allowed early backers (PIF, Adia, and Mubadala) a rewarding exit, as they collectively hold bns of USD in Jio. The Gulf SWFs are now staring down a forced, long-term hold in a volatile climate. So even though the IPO remains under active consideration, no formal launch date has been finalized.

What’s next: Reliance Industries’ plan — to invest USD 17 bn to build a 1.5 GW data center cluster in southern India’s Visakhapatnam — was poised to provide Gulf investors with a high-capacity follow-on vehicle to deploy capital into the AI infrastructure layer. The coming weeks are likely to shape investor confidence around the future trajectory of the conglomerate’s telecom and digital businesses.

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

Capital Group’s USD 2 bn bet on Adani

Capital Group shifts focus to Adani: The US-based investment firm Capital Group has poured upwards of USD 2 bn into three Adani Group entities in recent weeks, while cutting its holdings in Reliance Industries, Bloomberg reports. The capital injection spans Adani Ports, Adani Power, and Adani Green Energy.

Adani Ports leads the charge: Capital Group snapped nearly 2% stake in Adani Ports on 5 May for INR 74.8 bn (USD 776 mn) through open-market transactions, according data cited by Bloomberg. It has similarly scooped up 1.5-2% stakes in both Adani Power and Adani Green Energy through continued market purchases.

A clean slate in the US: The buying spree comes on the heels of a regulatory reset for the Adani Group that clears a significant overhang for US investors. The US Department of Justice recently moved to dismiss criminal fraud charges against Gautam Adani, while the US Treasury Department settled a sanctions-related probe into Adani Enterprises for USD 275 mn.

The other side of the rotation: To make room for the Adani acquisitions, the Capital Group pared its Reliance exposure — it held about 142 mn Reliance shares at the end of March, down from about 500 mn six years earlier, according to Bloomberg’s analysis. Reliance Industries shares have shed 8.36% over the past year, while Adani Power gained 94%, Adani Green (35%) and Adani Ports (25%).

Why it matters: For Gulf investors, the shift signals the preferred option of foreign investors among the two Indian giants — Adani businesses are tied to India’s infrastructure buildout and energy transition, offering lucrative returns.

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

What April’s PMIs are telling us about prospects for global growth this year

The impacts of the US-Iran war are showing up across the world — but most of all in the Eurozone. Cost pressures are weighing on manufacturing and services segments the most, with factory activity dipping in all tracked indexes bar one, Bloomberg reports. Economists are now starting to talk about a potential recession hitting several economies, as well as a general stagflation trend, as central banks find themselves caught between stubborn inflation and a crumbling growth outlook.

The most affected countries: The euro area’s PMI is at its lowest since 2023, with manufacturing activity in France nosediving and the region’s biggest economy, Germany, economy set to contract in 2Q as its non-oil sector activity remains in contraction territory. Across the Eurozone and the US, a stock-building surge continues as firms try to get ahead of disruptions in the Strait of Hormuz.

It was a similar picture in Australia, which saw its PMI contract for the second month straight in April as factory activity stalled and services slumped.

In context: The Eurozone — as an energy importer — is particularly exposed to energy prices, with the European Commission now expecting the region’s growth to come in at 0.9%, down from 1.2% it forecast in November. Other economists expect a “technical recession,” Bloomberg says, as the specter of stagflation also hangs over the region.

REMEMBER- The PMIs also painted a negative picture for the Gulf, though not for exactly the same reasons. Business activity resumed in most countries, but a dent in demand and reduced client activity weighed on performance, along with a rise in costs, which were being passed on to consumers.

On the more resilient side: India and Japan both saw manufacturing activity continue to grow, though further energy squeezes are clouding the outlook for Japan.

The readings are making central banks’ jobs difficult. With the prospect of inflation ticking up to 4% in the next few months, “the growing signs of the region slipping into an economic downturn [is creating] a deepening dilemma for policymakers,” S&P Global Market Intelligence’s Chris Williamson said.

Interest rate hikes are looking likely, even if they come at the expense of economic growth and lead business activity to stagnate further or even contract. The likelihood of a cut triggered investors to offload government bonds, sending long-term yields to over 20-year highs.

Sensex	75,440	+0.3% (YTD: -11.4%)
NIFTY 50	23,728	+0.3% (YTD: -9.1%)
ADX	9,659	+0.2% (YTD: -3.3%)
DFM	5,683	+0.4% (YTD: -5.9%)
Tadawul	11,027	+0.3% (YTD: +5.1%)
EGX30	52,090	+0.3% (YTD: +24.5%)
Boursa Kuwait	8,599	+1.4% (YTD: +3.5%)
QSE	10,379	+0.2% (YTD: -3.5%)
S&P 500	7,445	+0.1% (YTD: +8.7%)
FTSE 100	10,480	+0.3% (YTD: +5.5%)
Euro Stoxx 50	6,005	+0.7% (YTD: +3.6%)
Brent crude	USD 105	+2.7%
Natural gas (Nymex)	USD 3	-0.6%
Gold	USD 4,533	-0.53%
BTC	USD 77,238	-0.4%

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

The India-Italy pact

India and Italy elevated bilateral relations to a “special strategic partnership” that outlines a roadmap for cooperation across trade, tech, defense and connectivity, as per an External Affairs Ministry press release. Both sides reaffirmed plans to raise annual bilateral trade to EUR 20 bn by 2029, up from EUR 14.25 bn in 2025.

Last leg of the five-nation tour: The announcement comes in light of the talks in Rome between Prime Ministers — Narendra Modi and Giorgia Meloni — describing it as the highest level of engagement between the two countries.

Tech-tok: Quantum technologies, AI space and civil nuclear cooperation emerged as key growth sectors, as well as plans for a new India-Italy innovation centre linking startups and research institutions. The pact focuses heavily on manufacturing, energy transition, bilateral investment, and the India-Middle East-Europe Economic Corridor.

CALENDAR

MAY

27 May (Wednesday): 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.

1-6 September (Monday-Saturday): Dubai Fashion Week, Dubai Design District.

7 September (Sunday) Opec+ meet to discuss production policy for October.

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

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

9 September (Tuesday): Envision 2025, Atlantis, The Royal, Dubai.

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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