{"id":87280,"date":"2026-02-02T00:00:00","date_gmt":"2026-02-02T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/mena-india\/2026\/02\/02\/this-afternoon-india-cuts-funding-for-iran-port-weighs-lifting-state-bank-fdi-cap-to-49\/"},"modified":"2026-02-02T00:00:00","modified_gmt":"2026-02-02T00:00:00","slug":"this-afternoon-india-cuts-funding-for-iran-port-weighs-lifting-state-bank-fdi-cap-to-49","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/mena-india\/2026\/02\/02\/this-afternoon-india-cuts-funding-for-iran-port-weighs-lifting-state-bank-fdi-cap-to-49\/","title":{"rendered":"THIS AFTERNOON: India cuts funding for Iran port; weighs lifting state-bank FDI cap to 49%"},"content":{"rendered":"<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Good afternoon, friends.<\/strong> India\u2019s national budget for FY 2027 has landed, setting off a whirlwind of headlines as investors and policymakers across the globe tune in.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>The big story today:<\/strong> India has raised public capital expenditure to INR 12.2 tn for FY 2027, maintaining state spending as the main driver of growth for another fiscal year. Manufacturing and infrastructure remain key priorities on the policy agenda. Economist Salman Anees Soz tells EnterpriseAM that this Budget signals continuity, not reinvention: big sectoral allocations without a new growth agenda.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>A<\/strong><strong>nd quietly<\/strong><strong>-<\/strong> New Delhi has cut all funding for Iran\u2019s Chabahar port, raising fresh questions over India\u2019s long-sought access to Central Asia and Europe, as US sanctions may force India out of the project.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Meanwhile:<\/strong> India and the Arab League have set an ambitious trade target of USD 500 bn by 2030, with a focus on green energy initiatives, startups, and tech innovation.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">All of that and more, below.<\/p>\n<p class=\"tag-border-left\">Watch this space <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <a id=\"wwtt1\"><\/a> <strong>CORRIDOR WATCH \u2014 <\/strong><strong>India<\/strong><strong> has made no budgetary allocation for the Chabahar port project in Iran in its latest budget, after setting aside INR 1 bn (USD 10.9 mn) last year<\/strong>, later revised to INR 4 bn (USD 43.6 mn), <a target=\"_blank\" href=\"https:\/\/www.theweek.in\/news\/middle-east\/2026\/02\/02\/decoding-indias-shocking-budget-decision-on-chabahar-port-tactical-freeze-not-a-retreat.html\" style=\"\">The Week<\/a> reports. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Why it matters: <\/strong>The port is being developed under a framework involving India, Iran and Afghanistan and has been positioned by New Delhi as a key maritime route to Afghanistan and Central Asia, bypassing Pakistan. The funding cut raises fresh uncertainty over New Delhi\u2019s long-planned access route to Central Asia, Russia and the EU following US sanctions against India\u2019s involvement in the port, imposed last year. India did secure a six-month sanctions waiver for the project which will expire in April. If the US sanctions persist, India may be forced to withdraw from the project. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>India has shifted financial obligations linked to the project<\/strong>, estimated at about INR 11 bn (USD 120 mn), to Tehran following new US trade and sanctions measures, while the Indian government maintains that \u201cexisting Chabahar is not an option,\u201d the news outlet added. The budget move has been described as a \u201ctactical freeze, not a retreat\u201d and India\u2019s foreign ministry said last month it was in talks with the US on issues related to the Chabahar project. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<hr style=\"height:2px;border-width:0;color:gray;background-color:gray\">\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">  <a id=\"wwtt2\"><\/a> <strong>FINANCE \u2014 <\/strong><strong>The<\/strong><strong> Indian government is holding inter-ministerial consultations to more than double the foreign direct investment ceiling in state-owned banks <\/strong>to 49% from the current 20%, <a target=\"_blank\" href=\"https:\/\/www.reuters.com\/world\/india\/india-holding-talks-raise-fdi-state-run-banks-49-finance-official-says-2026-02-02\/#:~:text=NEW%20DELHI%2C%20Feb%202%20(Reuters,Nagaraju%20told%20reporters%20on%20Monday.\" style=\"\">Reuters<\/a> reports, citing a senior finance ministry official. The proposal, still under discussion with the Reserve Bank of India, aims to aid public sector banks access fresh capital while the government retains a minimum 51% stake.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Why it matters:<\/strong> By narrowing the gap between public banks and private lenders (which are permitted upto 74% FDI), New Delhi is targeting passive institutional inflows, potentially exceeding USD 4 bn. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>In context: <\/strong>As Emirates NBD clears institutional hurdles for a <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/mena-india\/2026\/01\/21\/emirates-nbd-clears-hurdle-for-acquisition-of-indian-lender-rbl\/\" style=\"\">proposed USD 3 bn acquisition of Indian private lender RBL Bank<\/a>, the discussions to raise the 49% FDI cap are specifically designed to attract this exact profile \u2014 sovereign wealth pools from developed markets, including the UAE and Saudi Arabia, eyeing stable, long-term yield backed by the Indian state.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>As part of the Union Budget, Nirmala Sitharaman announced a high-level committee to review the banking system<\/strong> and chart reforms aligned with India\u2019s long-term economic vision toward 2047, citing stronger balance sheets, record profitability and improved asset quality. This comes amid rising foreign investor interest in India\u2019s financial sector. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<hr style=\"height:2px;border-width:0;color:gray;background-color:gray\">\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"> <a id=\"wwtt3\"><\/a> <strong>CAPITAL <\/strong><strong>MARKETS<\/strong><strong> \u2014 India is moving to tap diaspora pockets for its equity markets following sustained selling by Foreign Institutional Investors. <\/strong>A non-resident Indian (classified under Foreign Exchange Management Act) can acquire up to 10% of the stake in a listed Indian company, up from the current 5% of limit. Similarly, a group of non-resident shareholders can hold up to 24% equity in a listed firm, <a target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2026-02-01\/india-seeks-diaspora-capital-as-foreign-funds-pull-out-of-local-stocks?srnd=phx-india-v2\" style=\"\">Bloomberg<\/a> reports. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Why now? <\/strong>Foreign investors pulled more than USD 3 bn out of Indian equities in January, extending net outflows of over USD 18 bn recorded last year. The INR has fallen 2.3% so far this year, the weakest performance among Asian currencies over the period amid tepid foreign investors. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Why it matters: <\/strong>Wealth managers and alternative investment funds will target Indian diaspora and family-offices based in financial hubs including Abu Dhabi and Dubai for capital market investments. Diaspora investors are seen as longer-term capital allocators compared with global portfolio funds. <\/p>\n<div class=\"row\">\n<div class=\"col-md-12 subscribe-box-panel\">\n<div class=\"\">\n<div class=\"title\">\n<h4 class=\"fw-lighter mb-10\">   Get <b style=\"font-weight: 700\">Enterprise<\/b> daily   <\/h4>\n<\/p><\/div>\n<p class=\"mb-10\">The roundup of news and trends that move your markets and shape corporate agendas delivered straight to your inbox.<\/p>\n<p>  <a target=\"_blank\" href=\"\/egypt\/en\/user\/NewsLetters\" type=\"button \" class=\"btn-green px-3 d-flex align-items-center\">Subscribe here<\/a>  <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">***<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">YOU\u2019RE READING EnterpriseAM MENA <> India, your C-suite briefing on the movement of trade, investment, people, and ideas along one of the world\u2019s most exciting corridors. Every Monday, Wednesday, and Friday at 2:30 pm UAE, we dive deep into the business, finance, economy, and policy headlines and trendlines that will move markets and set the tone for your day. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Were you forwarded this briefing? <\/strong><a target=\"_blank\" href=\"https:\/\/sub.ent.news\/mena-india\/\" style=\"\">Tap or click here to sign up without charge for your own<\/a><a target=\"_blank\" href=\"https:\/\/sub.ent.news\/mena-india\/\" style=\"\">copy.<\/a> <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">***<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\"> Happening today<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>India\u2019s<\/strong><strong> Foreign Minister S. Jaishankar will begin his 3-day visit to the US which will run through Thursday, 5 February.<\/strong> Jaishankar will attend a ministerial meeting on critical minerals convened by the US Secretary of State Marco Rubio while also holding talks on India-US trade agreement amid 50% tariffs imposed by President Donald Trump, according to <a target=\"_blank\" href=\"https:\/\/www.thehindu.com\/news\/national\/s-jaishankar-us-visit-critical-minerals-ministerial\/article70581812.ece\" style=\"\">The Hindu.<\/a> <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\"> The big story abroad<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>It\u2019s a quiet Monday morning in the global business press<\/strong>, with one story dominating the headlines \u2014 the gold and silver crash. <a target=\"_blank\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2026-02-01\/how-chinese-speculators-set-the-stage-for-gold-and-silver-crash?srnd=homepage-americas\" style=\"\">Bloomberg<\/a> is out with a piece looking at the role Chinese speculators played in the metals\u2019 rally and subsequent crash. The rally seen by gold, sustained over years by central banks hedging against potential losses from the USD, was intensified in recent weeks by a wave of buying from Chinese investors and equity funds. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Then came the selloff: <\/strong>As soon as the greenback started heading upwards, boosted by <a target=\"_blank\" href=\"https:\/\/enterpriseam.com\/egypt\/2026\/02\/01\/the-us-wants-american-companies-to-invest-in-egyptian-ports-but-geopolitics-not-economics-seems-to-be-driving-the-push\/\" style=\"\">news<\/a> of Kevin Warsh\u2019s nomination as Fed Chair, Shanghai cashed out its holdings in gold. The fallout saw the metal dropping at one point by more than USD 200 an ounce in ten minutes.<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Silver was another casualty of the sudden twist of fate<\/strong>, dropping by 27% on Friday \u2014 its biggest drop on record. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">^^ We have more on the rebound of the USD and gold crash in this morning\u2019s Planet Finance. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>CLOSER TO HOME- Egypt, Qatar, Turkey to broker US-Iran talks this week: <\/strong>The Trump administration is reportedly open to a diplomatic solution with Iran, as Egypt, Qatar, and Turkey work to broker a sitdown in Ankara this week, <a target=\"_blank\" href=\"https:\/\/www.axios.com\/2026\/02\/01\/us-iran-deal-talks-trump\" style=\"\">Axios<\/a> reported, citing sources it says are in the know. Negotiations would involve a meeting between White House envoy Steve Witkoff and high level Iranian officials to discuss averting the breakout of a regional war. <\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\">\n<p class=\"tag-border-left\"> Circle your calendar<\/p>\n<p style=\"padding:0;margin:0;line-height:1.15;orphans:2;widows:2;text-align:left\"><strong>Check out our full calendar on the web<\/strong> for a comprehensive listing of upcoming news events, national holidays and news triggers.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Plus: India taps diaspora investors as foreign funds exit local equities<\/p>\n","protected":false},"author":1,"featured_media":87281,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"newspack_ads_suppress_ads":false,"newspack_popups_has_disabled_popups":false,"newspack_sponsor_sponsorship_scope":"","newspack_sponsor_native_byline_display":"inherit","newspack_sponsor_native_category_display":"inherit","newspack_sponsor_underwriter_style":"inherit","newspack_sponsor_underwriter_placement":"inherit","ep_exclude_from_search":false,"_primary_brand":0,"newspack_featured_image_position":"","newspack_post_subtitle":"","newspack_article_summary_title":"Overview:","newspack_article_summary":"","newspack_hide_updated_date":false,"newspack_show_updated_date":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2403],"tags":[2494,2880,2498,2402,2505,2688,2659,2438,2467,2401],"brand":[],"newspack_spnsrs_tax":[],"class_list":["post-87280","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-what-were-tracking-today","tag-banking","tag-budget-2026","tag-capital-markets","tag-enterpriseam-india","tag-fdi","tag-foreign-portfolio-investors","tag-india-gcc-corridor","tag-investment","tag-policy","tag-what-were-tracking-today","wpautop","entry"],"acf":{"mongo_id":"3580423d-6a5f-4f4d-8670-cfad762b0bc5","order":"2","is_powered_by":false,"story_type":"4","photo_url":"https:\/\/ent.news\/2026\/2\/133.jpg","photo_position":"above","homepage_title":"","full_issue_title":"India drop funding for Iran port; government weighs 49% FDI cap in state banks","related_issue":[87278],"teaser":"Plus: India taps diaspora investors as foreign funds exit local equities"},"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.1 (Yoast SEO v27.1.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>THIS AFTERNOON: India cuts funding for Iran port; weighs lifting state-bank FDI cap to 49% - MENA India Corridors<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterpriseam.com\/mena-india\/2026\/02\/02\/this-afternoon-india-cuts-funding-for-iran-port-weighs-lifting-state-bank-fdi-cap-to-49\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"THIS AFTERNOON: India cuts funding for Iran port; weighs lifting state-bank FDI cap to 49%\" \/>\n<meta property=\"og:description\" content=\"Plus: India taps diaspora investors as foreign funds exit local equities\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterpriseam.com\/mena-india\/2026\/02\/02\/this-afternoon-india-cuts-funding-for-iran-port-weighs-lifting-state-bank-fdi-cap-to-49\/\" \/>\n<meta property=\"og:site_name\" content=\"MENA India Corridors\" \/>\n<meta property=\"article:published_time\" content=\"2026-02-02T00:00:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/i0.wp.com\/ent.news\/2026\/2\/133.jpg?fit=%2C&ssl=1\" \/>\n<meta name=\"author\" content=\"enterpriseam admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"enterpriseam admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/enterpriseam.com\/mena-india\/2026\/02\/02\/this-afternoon-india-cuts-funding-for-iran-port-weighs-lifting-state-bank-fdi-cap-to-49\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/enterpriseam.com\/mena-india\/2026\/02\/02\/this-afternoon-india-cuts-funding-for-iran-port-weighs-lifting-state-bank-fdi-cap-to-49\/\"},\"author\":{\"name\":\"enterpriseam admin\",\"@id\":\"https:\/\/enterpriseam.com\/mena-india\/#\/schema\/person\/ca597032db7e4db868359c123cec256d\"},\"headline\":\"THIS AFTERNOON: India cuts funding for Iran port; 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