War threatens India’s auto exports and margins

Indian auto exporters are under strain as they struggle to ship their products to their core market: MENA+. Rising costs and disrupted export flows — longer transit times, higher freight and ins. premiums, currency volatility, and expensive raw materials — are weighing on manufacturers’ margins and could prompt “selective price hikes to partly offset cost pressures,” Rohan Kanwar Gupta, vice president at ICRA, tells EnterpriseAM.

MENA+ countries are vital export markets for India’s vehicle industry, making up 20-25% of overall exports and acting as a crucial gateway to Africa and beyond. “Any prolonged disruption due to the ongoing Middle East conflict could therefore moderate export volumes for Indian OEMs, especially if shipping timelines, container availability, or route visibility remain constrained,” Gupta notes. India’s passenger vehicle exports rose 17.5%y-o-yto 905k units in FY 2026, with demand steady across the Middle East, Africa, and Latin America.

A balancing act is in the works: Manufacturers will need to weigh hikes against the risk of dampening demand, likely leaning on cost controls, supply-chain adjustments, and alternate routing before passing the full cost burden onto overseas customers.

The outlook: The disruption could become a material credit risk if it leads to “sustained moderation in export volumes, margin compression, and elevated working capital intensity,” he tells us. However, Gupta thinks the risk has so far been limited to “intermittent supply-chain bottlenecks rather than an industry-wide production halt.”

Al Zaidi declares war on organized corruption in Iraq: Iraqi Prime Minister Ali Al Zaidi set up the Supreme Sovereign Council for Integrity, Oversight, and Recovery of Public Funds — a new council tasked with investigating and cracking down on organized corruption in government — after he said he was offered a USD 200 mn bribe by a government official to cover up for embezzlement in the Oil Ministry.

The backdrop: The announcement comes after Iraq’s deputy oil minister for refining affairs Adnan Al Jumaili was arrested Saturday on corruption charges, amid media speculation that Al Jumaili was the official that Al Zaidi referred to. Communications Minister Mostafa Sanad confirmed the arrest on his Facebook page, accusing Al Jumaili of embezzling ministry funds to finance political parties.

Some are cheering, others are skeptical: While some pundits are warning corruption in Iraq is too big and systemic to be combated with an investigative council and a single arrest, Al Zaidi’s allies are positioning the effort as crucial for the country’s economic reform. “Combating organized corruption is one of the essential conditions for the success of economic reform programs,” Al Zaidi’s financial advisor Mazhar Salih told INA. “[It] also contributes to raising the efficiency of resource allocation, improving the quality of public services, and increasing the state’s ability to mobilize non-oil revenues, which supports efforts towards economic diversification and financial sustainability,” Salid added.

Sign of the times

Libya’s efforts to expand brownfield production are proving to be a big windfall for the state-owned National Oil Corporation (NOC) amid sky-high global oil prices. The NOC generated some USD 4 bn in revenues from crude sales and royalties last May, its highest monthly figure in over 11 years, Chairman Masoud Suleiman said earlier this week. The May top line is a 48% m-o-m increase, and more than double January and February revenues, as well as 2025’s monthly average, by our math.

Background: Investors are returning to Libya’s oil and gas sector despite wider market risks linked to fragile security and banking accessibility, we previously reported. Investments in repairs and ramping up production in brownfield projects were likely helpful for Libya, which successfully raised production this year to 1.4 bbl / d — up from an average of 1.3 bbl / d in 2025. Libya targets producing some 1.6 bb / d in 2026, before ramping up to 2 bb / d in 2027.