The catch in India’s Gulf power cable

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WHAT WE’RE TRACKING TODAY

THIS AFTERNOON: New Delhi seeks safe passage of India-bound tankers

Good afternoon, friends. Hormuz risk is flaring back up this morning and India is weighing diplomatic outreach to Iran to free at least nine stranded tankers as attacks on shipping resume, while Jaishankar wraps a four-nation Gulf tour in Oman after stops in Qatar, Bahrain, and Kuwait.

Our lead story today is the subsea power cable India wants to lay to the UAE — and why the economics might run backwards. India is proposing an undersea cable to the Gulf costing an estimated USD 4.7 bn, aiming to become a power exporter. But an energy economist tells us the real opportunity isn’t bulk export at all.

Plus: Mumbai-listed SEPC is eyeing to acquire a controlling stake in Abu Dhabi’s Avenir International, buying its way into Adnoc-pre qualified status. Both the IMF and the ADB trimmed India’s near-term growth outlook this week, pinning the cut on post-war energy costs.

India reconsiders Iran talks to secure Hormuz passage

India is considering diplomatic engagement with Iran to secure safe passage for at least nine India-bound tankers stranded in the Arabian Gulf as renewed attacks threaten shipping through the Strait of Hormuz, Bloomberg reports, citing unnamed sources.

Shipping risks persist: The government is monitoring vessel movement, which are carrying crude oil and LPG, and will engage with Iranian authorities over the safety of Indian seafarers.

Why it matters: Multiple Indian seafarers were killed and injured in the US and Iran strikes on commercial vessels throughout the conflict. Since the war began in late February, only about 50 India-bound vessels have crossed the waterway, leaving Indian refiners dependent on alternative suppliers and more expensive cargoes.

Meanwhile, India’s External Affairs Ministry expressed deep concern over the renewed escalation and attacks on commercial vessels transiting the Strait of Hormuz, warning that the developments could hinder critical energy and trade flows, as per a statement.

Maritime risks are back: New Delhi called on all parties to exercise restraint, de-escalate tensions, protect civilians, and ensure the uninterrupted flow of energy supplies and commerce. “We urge the parties to return to dialogue and diplomacy to achieve a peaceful and lasting solution to the conflict,” the Ministry said.

RBI renews push for crypto curbs

The Reserve Bank of India is yet again “leaning towards prohibiting” cryptocurrencies, and advocating to completely bar domestic banks from taking any exposure to crypto assets particularly private stablecoins, Reuters reports, citing access to internal government documents.

The concerns: The RBI sees cryptocurrencies as a threat to financial stability, monetary sovereignty, and tax compliance, as per the newswire. At the same time, India’s Income Tax Department believes transactions routed through offshore exchanges and private wallets are difficult to trace, leading to tax evasion. Fewer than one-quarter of the 645k individuals who traded cryptocurrencies in FY 2023 disclosed those transactions in their tax filings.

Why it matters: India has an estimated 39 mn crypto investors, holding around USD 2.1 bn in digital assets. A ban on digital assets may drive Indian investors toward the regulated digital ecosystems, including Dubai's Virtual Assets Regulatory Authority, and Abu Dhabi Global Market.

Emirates adds A380 to Dubai-Delhi route

Dubai-based carrier Emirates will deploy its Airbus A380 on the Dubai-Delhi route from 25 October, making Delhi its third route for A380 in India after Mumbai and Bengaluru, according to a company statement. The aircraft will operate one of Emirates’ daily Dubai-Delhi services in a four-class layout, adding A380 service to one of the busiest India-UAE aviation corridors.

Delhi upgrade: The airline’s three other daily services on the Delhi-Dubai route will be operated by retrofitted Boeing 777 aircraft, also in a four-class layout, making Premium Economy available across all daily Emirates flights between Dubai and Delhi. Emirates plans to offer Premium Economy to five more Indian cities by October end.

Emirates serves nine routes to India with 167 weekly flights to Dubai and onward connections to almost 140 destinations.

The aircraft upgrade comes as UAE carriers have limited room to add India flights under bilateral seat caps, pushing them toward larger aircraft and premium cabins on existing routes to bolster revenues. With the help of protectionist policies pushed by New Delhi, the Indian carriers are expanding into the Gulf markets even as carriers like Emirates have lobbied for easing of seat limits.

Data point

USD 1.5 bn — That is the amount State Bank of India has raised so far through foreign-currency deposits under a special initiative for overseas Indians launched last month, Bloomberg reports.

What’s new: The inflows follow the Reserve Bank of India’s decision to provide full hedging-cost support to banks raising three- to five-year foreign-currency deposits after the war, in a bid to tap diaspora savings to bolster FX reserves. The scheme could prove especially attractive for wealthy overseas Indians, family offices, and investors in Gulf financial hubs such as Dubai and Riyadh.

The big story abroad

The US-Iran tit-for-tat continues, but at least technical talks are still on, according to a US official who spoke to Bloomberg on condition of anonymity. Talks had stalled this week while Iran held funeral rites for former Supreme Leader Ali Khamenei, and tensions had escalated as the US hit roughly 90 targets on Wednesday night, framing the strikes as degrading Iran’s capacity to threaten shipping in the Strait of Hormuz, while Iran retaliated against US bases in Kuwait, Bahrain, and Qatar.

Iran says the US also hit its rail network — overnight strikes damaged a bridge on the Gorgan-Incheh Borun line in Golestan province, a corridor linking Iran to Turkmenistan and Kazakhstan, disrupting passenger service to Mashhad just as Khamenei’s coffin arrived for burial there. Strikes were also reported on power transmission infrastructure in Chabahar and Konarak in the southeast.

The conflict is squeezing diesel markets: Russia’s new export ban — a response to Ukrainian drone strikes that have knocked out close to half its refining capacity — has combined with renewed Hormuz risk to push US diesel prices up 13%, and diesel futures in London up 14%.

Meanwhile, Fed chair Kevin Warsh named five external task forces stacked with names like Mervyn King and Marc Andreessen to reshape Fed communications, the balance sheet, data collection, AI-era productivity, and inflation targeting — a sign that he’s moving ahead with an overhaul of the Fed’s communications framework with recommendations due to the FOMC by year-end.

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Why India’s plan to wheel power to the Gulf may have the economics backwards

Chasing the sun: India is proposing to lay a 1.6k km long subsea power transmission cable connecting to the UAE at an estimated cost of INR 400 bn (USD 4.7 bn), Business Standard reports citing Power Minister Manohar Lal Khattar. New Delhi aspires to become a power exporter, wheeling its 23 GW “unsigned capacity” to the power-hungry Gulf. An expert tells us that the commercial and operational logic points the other way.

“There is a difference between having capacity on paper and having reliable exportable power at the exact time it is needed…The question is not just whether India has surplus power in aggregate, but whether it has firm, dispatchable surplus that can be supplied without affecting domestic reliability,” Vibhuti Garg, director at the Institute for Energy Economics and Financial Analysis (IEEFA), tells EnterpriseAM. IEEFA is a US-based think tank that works on the energy transition and Garg is an energy economist.

The Gulf already has some of the cheapest solar power on the planet and is building domestic renewable capacity at scale — buying Indian power and paying for a long-subsea-cable transmission premium on top would have to beat that, Garg argues. “If it is only about bulk power, then it has to compete with very low-cost solar in the UAE. The transmission cost of a long subsea cable will add to the delivered costs,” she says.

The real opportunity lies in exploiting the time difference between the two countries, Garg argues. India’s solar output collapses into its evening demand peak, when the sun is still up over the Arabian Peninsula. “That can create an opportunity for power to flow into India during peak hours. Similarly, India could export power during periods when it has surplus renewable generation.”

The project’s economics could improve if it is designed as a two-way interconnector rather than one-way export line, as envisioned by the Indian government. “The economic case depends on what product the cable is meant to provide. If it is just electricity, the economics may be difficult. If it is firm clean power, grid balancing, energy security and strategic diversification, then the value proposition becomes broader,” Garg says.

Possible to engineer?

High-voltage direct current (HVDC) technology is already used for long-distance power transmission and is the likely option for a subsea link. But the India-UAE route would still need marine surveys, landing-point selection, onshore grid connections, grid-impact assessment, repair planning and outage management. “So I would say the engineering is plausible, but it is not simple,” Garg says.

Etihad Water and Electricity, the state utility serving the Northern Emirates, has commissioned a techno-economic study for the undersea interconnector. The study should define route, capacity and — the real tell — whether the commercial model is built around one-way exports or two-way balancing. Building undersea transmission lines will take several years after the project is deemed commercially viable.

Besides the technical know-how, the project also needs clarity on who buys the power, how tariffs are set, who owns the cable, how outage risk is handled and whether revenues are backed by contracts. “The important thing is that projects like this need to move from promises to execution…whether it happens within the next decade will depend on how quickly these issues are resolved,” she says.

A purely merchant model may be difficult because the capital cost is high, Garg argues. “Some form of long-term offtake, utility-backed arrangement, sovereign support or concessional finance may be needed to make it bankable.”

SEPC to acquire UAE’s Avenir International

Mumbai-listed SEPC is eyeing a 90% stake in Abu Dhabi-based firm Avenir International Engineers and Consultants through a share swap transaction. SEPC’s board has approved the USD 183 mn acquisition which will mark its expansion into the UAE’s oil and gas engineering industry, as per an exchange filing (pdf).

Why pick Avenir? The M&A provides SEPC access to Avenir’s pre-qualifications with Adnoc — credentials that can substantially improve its ability to bid independently for large oil, gas and infrastructure EPC contracts in the UAE and the region.

The details: The transaction will be executed through a preferential share allotment of 1.5 bn equity shares at INR 10 apiece to Avenir’s shareholders and will be completed by December this year, subject to shareholder and regulatory approvals.

Who are they? Founded in 2000, SEPC Limited is an engineering, procurement and construction (EPC) firm that executes large industrial and infrastructure projects. While its operations have been concentrated in India, the company has executed projects across the Middle East, Africa, and Southeast Asia.

This is SEPC’s second acquisition in the Gulf: In 2024, a SEPC unit acquired a 75% stake in Bahrain-based Almoayyed Electrical Equipment & Instrumentation Systems which provides it with an operating platform in electrical and automation systems for energy projects across the UAE and Bahrain.

The latest acquisition shows Indian engineering firms are willing to take the acquisition route to secure an established foothold in the region’s EPC industry. Recently, Mumbai-based MAN Industries acquired Saudi Arabia’s National Pipe Company for USD 102 mn, gaining full ownership of one of the Kingdom’s API-certified manufacturers.

IMF and ADB both trim India’s growth outlook, pinning the cut on post-war energy costs"

Growth trimmed: India remains the world’s fastest-growing major economy, but two multilateral organizations – the International Monetary Fund (IMF) and the Asian Development Bank (ADB) – have turned more cautious on the near-term outlook, citing rising energy costs and global uncertainty after the Iran war.

What changed: India may grow at 6.4% in 2026, as against earlier projection of 6.5% seen in April, as per the IMF’s latest World Economic Outlook Update. The country’s economy, however, is seen growing at a rate of 6.7% in 2027. The Fund said strong private consumption and service activities should continue to underpin growth despite a challenging external environment.

The ADB, however, is more bearish in its outlook and has trimmed the FY 2027 growth forecast to 6.6% from 6.9% in its recent Asian Development Outlook report. It attributed the slowdown to higher crude oil prices and transportation costs following the Middle East conflict, warning that elevated energy prices could erode real incomes and weaken consumer sentiment. The ADB also raised its FY 2027 inflation forecast to 5.2%.

The bigger picture: The downgrades are modest, but they reflect the growing impact of external risks on India’s economy. As a major energy importer, India is vulnerable to oil price shocks and geopolitical disruptions in the Gulf, even as resilient domestic demand continues to underpin long-term growth prospects.

^^We have more on IMF’s growth forecast for the MENA region in this afternoon’s Planet Finance.

Saudi’s cashless drive boosts the fintech firm’s ME expansion plan

The Saudi Central Bank (Sama) has authorized Indian payment infrastructure firm TotalPay to operate as an e-commerce payment technical service provider, Arab News reports. The approval makes it the first Indian fintech firm to secure specific authorization to deploy payment gateway and payment orchestration architecture to merchants across the Kingdom.

What is TotalPay? Founded in 2022, the firm claims to serve more than 1.5k businesses and has processed over USD 1 bn in payment transactions. TotalPay’s orchestration tech allows high-volume enterprises to dynamically route transactions across multiple processing banks to eliminate downtime and reduce per-transaction fees.

Why it matters: The licence is a key milestone in TotalPay’s Middle East expansion strategy, with plans to invest in tech, partnerships, and payment infrastructure across Saudi Arabia and the wider MENA region. The approval comes as Saudi accelerates its shift toward a cashless economy under Vision 2030.

RSA Global to develop JNPA empty container yard

RSA Global to run JNPA yard: UAE-based logistics firm RSA Global will develop and operate a 62-acre empty container yard at Nhava Sheva port under a 30-year license, Business Standard reports. Nhava Sheva — India’s largest container port near Mumbai, along the western coast — is operated by Jawaharlal Nehru Port Authority (JNPA).

The rollout: The facility will be used for storage and yard operations for empty containers, including dry boxes, reefers, ISO tanks, out-of-gauge and project-cargo equipment, and collapsible containers. The project will be developed in three phases with the first phase of operations beginning within 20 days and reaching full capacity by May 2027.

Oman detention revives Mahadev case

Indian authorities will seek to extradite Sourabh Chandrakar, the promoter of the illegal Mahadev Online Book wagering app, after he was detained in Oman by the Royal Oman Police, PTI reports, citing officials. The detention followed an Interpol red notice sought by Indian law enforcement including the Enforcement Directorate (ED) and state police.

Case background: The ED has described Mahadev as an illegal international online wagering network that operated through multiple platforms and domain names. The ED alleges that Mahadev’s wagering business involved proceeds of crime worth INR 60 bn (USD 628 mn). In March, the agency attached assets worth INR 17 bn (USD 178 mn) — most of them in Dubai — belonged to Chandrakar and his accomplices. Chandrakar and co-founder Ravi Uppal have denied the allegations.

Why it matters: Chandrakar’s detention gives Indian authorities another chance to pursue his custody after a previous attempt in the UAE did not lead to his return. He was detained in Dubai in 2024 and later released. Officials are now seeking either extradition or deportation from Oman.

IMF now sees MENA economy contracting 0.5%

The IMF marginally trimmed its 2026 global growth forecast to 3.0%, down from 3.1% in April, in its latest economic outlook report (pdf) — but MENA saw a much sharper downgrade. The region is now expected to contract by 0.5% this year, a 1.6-percentage-point downward revision and the single largest cut of any grouping in the entire report. 2027 projections tell the opposite story on both counts: global growth rebounds to 3.4%, and MENA sees the most aggressive growth of all at 7.3%.

That’s despite Saudi Arabia and Egypt’s expected growth this year. Saudi Arabia is seen growing 1.7% for 2026 — though that’s still a sharp 1.4-percentage-point cut from April — on the back of more diversified export routes than Iraq, Kuwait, and Qatar. Meanwhile, Egypt is seen growing 4.6%, an upward revision of 0.4 percentage points from April’s forecast.

Behind the downgrade: Iraq, Kuwait, and Qatar — the producers most exposed to the war’s disruption of energy output, transport, and the Strait of Hormuz — are projected to contract sharply this year, before penciling in “double-digit expansions” in 2027 once exports normalize.

The IMF frames 2026 as two opposing forces — a negative supply shock from the Middle East war and a positive demand shock from the global AI and technology investment cycle. Globally, the two are roughly offsetting each other, which is why the world number only slipped a tenth of a point. But the offset isn’t evenly distributed. Economies plugged into AI-related trade and manufacturing are seeing upgrades even when they’re energy importers. On the other hand, economies directly exposed to the war and not plugged into that tech cycle are seeing some of the sharpest cuts in the entire report.

The oil math behind the downgrade got more expensive, not cheaper. The Fund’s reference forecast assumes crude averages USD 89.27 a barrel in 2026 — 9% above the roughly USD 82 it assumed in April — before easing to USD 78.70 in 2027. The whole forecast rests on the Strait of Hormuz beginning to reopen this month and returning to pre-war conditions by March 2027. The IMF itself frames the risks around that timeline as more balanced than in April, but still tilted to the downside.

BACKGROUND- We flagged the fragility behind this exact picture a day before the IMF’s numbers landed. Oxford Economics had the global second-half acceleration at 3.1% annualized, contingent entirely on the US-Iran truce holding, and put the odds of that truce surviving at 50-50.

MARKETS THIS MORNING-

Asian markets were mostly in the green this morning, driven by a tech equity rally that has spilled over from the US. South Korea led gains, with the Kospi rising over 4.6%, Japan’s benchmark Nikkei gained 2.4%, Hong Kong’s Hang Seng was up 0.4% and China’s CSI 300 up 0.3%. Over on Wall Street, futures are edging lower following yesterday’s rally.

Sensex	77,579	+1% (YTD: -8.9%)
NIFTY 50	24,209	+1% (YTD: -7.3%)
ADX	9,926	+0.4% (YTD: -0.6%)
DFM	6,022	+0.5% (YTD: -0.4%)
Tadawul	10,808	-0.4% (YTD: +3%)
EGX30	52,312	+0.5% (YTD: +25.5%)
Boursa Kuwait	8,769	+0.1% (YTD: +5.6%)
QSE	10,090	-0.8% (YTD: -6.2%)
S&P 500	7,544	+0.8% (YTD: +10.2%)
FTSE 100	10,485	+0.1% (YTD: +5.5%)
Euro Stoxx 50	6,273	-0.1% (YTD: +8.3%)
Brent crude	USD 75.9	-0.47%
Natural gas (Nymex)	USD 2.9	-1.1%
Gold	USD 4,112	-0.7%
BTC	USD 64,414	+1.8%

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

Oman visit caps India’s Gulf diplomacy amid regional tensions

India’s External Affairs Minister S. Jaishankar is in Muscat, the final stop of his four-nation Gulf tour that also covered Qatar, Bahrain, and Kuwait.

Jaishankar was received by Sheikh Ahmed Al Maskari, the director general at Oman’s Foreign Ministry. The two leaders are expected to hold talks around deepening the bilateral engagement between the two countries.

On Wednesday, the Indian foreign minister met the top leadership of Kuwait to discuss the India-Kuwait Strategic Partnership spanning defense, energy, trade, investments, and regional security.

He also called on Crown Prince Sheikh Sabah Al-Khaled Al-Sabah, Defence Minister Sheikh Abdullah Ali and Foreign Minister Sheikh Jarrah Jaber Al-Ahmad. India and Kuwait elevated relations to ‘Strategic Partnership’ during Prime Minister Modi’s visit to Kuwait in December 2025.

Why it matters: The Oman visit is part of New Delhi’s broader diplomatic outreach to deepen engagement with Gulf partners. While the visits have not yielded any new agreements, it signals India’s intent to maintain close political relations with Gulf partners amid regional hostilities.

The numbers: India’s economic linkages have strengthened with the Gulf Cooperation Council over the last few years with bilateral trade reaching USD 178.5 bn in FY 2025, accounting for 15.4% of India’s total global trade.

CALENDAR

JULY

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.

Dates TBA: Monsoon Session of Parliament, 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 Pharma 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).

5-7 October (Monday-Wednesday): Reserve Bank of India’s Monetary Policy Committee meeting for the October / September policy cycle.

7-10 October (Wednesday-Saturday): India Mobile Congress, Yashobhoomi, New Delhi.

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.

JANUARY 2027

30 January-3 February (Saturday-Wednesday): Printpack India, India Expo Centre, Greater Noida (Delhi NCR).

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