Sectoral updates (India) - Newspaper Summary

 The Indian sectoral landscape in October 2025 is defined by strong domestic transformations and direct impacts stemming from the turbulent global economic and regulatory environment, specifically regarding oil supply, technological competition, and evolving trade relationships.

Sectoral Updates in the Context of the Global Landscape (Oct 2025)

1. Energy and Oil Sector: Impact of Geopolitical Sanctions

The key global disruption impacting India's energy sector is the imposition of full blocking sanctions by the U.S. on Russia's largest crude oil suppliers, Rosneft and Lukoil.

• Financial Hit: These sanctions are projected to increase India's crude oil import bill by 2%, equating to approximately $2.7 billion. Russia has been India's largest crude oil supplier since FY23, accounting for about 35% of total imported crude. The necessity to replace this discounted crude with market-priced oil from sources like West Asia will drive up costs.
• Supply Dynamics: The two sanctioned companies historically contributed about 1 million barrels per day (bpd) out of the 1.8 million bpd imported from Russia. Russian oil flow to major Indian refiners, including Reliance Industries (India's biggest buyer of discounted Russian oil), is expected to fall to near zero.
• Secondary Sanctions Risk: The U.S. Treasury Department warned that foreign financial institutions, including Indian refineries, risk facing secondary sanctions if they continue to conduct or facilitate significant transactions involving these Russian entities.
• Natural Gas: The natural gas sector experienced volatility, with short-term futures prices showing corrections in October, settling around $3.58 per million British thermal units (MMBtu) as of October 23.

2. Technology, AI, and Consulting: Driven by the Global AI Arms Race

The worldwide competition for Artificial Intelligence (AI) dominance is heavily influencing India's IT and talent markets.

• Global Investment Flows: Uniphore, an AI platform for business, successfully raised $260 million in Series F funding from global tech giants, including Nvidia, AMD, Snowflake, and Databricks. This capital injection is intended to accelerate innovation for its Business AI Cloud platform.
• Talent Acquisition: Global consulting firms, led by Accenture, are demonstrating a massive focus on India's top management talent. At IIM-Bangalore, management consulting accounted for a record 46% of all summer placement offers. This hiring spree reflects the global need for talent to advise companies worldwide on AI-driven business transformation.
• IT Services and Immigration Policy: Following the Trump administration's immigration crackdown (which includes proposals for steep fees for H-1B visas), Indian engineering services provider Tata Technologies plans to hire more local nationals in the US in reaction to the change in legislation.
• Digital Commerce: India’s quick-service economy is expanding rapidly, exemplified by the domestic home help quick services platform Snabbit, which has quietly reached an annualized run rate of approximately $11 million.
• Consumer Electronics/Smartphones: Despite the festive season boosting smartphone sales by 15% year-on-year, the overall market volume for 2025 is projected to remain below the 2021 peak due to long phone replacement cycles and reluctance among feature phone users to upgrade. This slowdown jeopardizes India’s goal of achieving a $500 billion electronics market by 2030.

3. Manufacturing and Trade: Dealing with Protectionism and Slowed Demand

India faces dual challenges of global trade fragmentation and domestic market weaknesses in its manufacturing sector.

• Trade Access (LDCs): India maintains a strong international role by offering one of the most comprehensive market access schemes globally for Least Developed Countries (LDCs) under the WTO framework, covering 94.1% of tariff lines. This access surpasses that offered by China and the European Union among developing economies, benefiting LDC exports in textiles and agricultural commodities.
• Trade Negotiation (US): India continues negotiating a bilateral trade deal with the U.S. to potentially reduce tariffs on Indian exports to 15-16%, down from a steep 50% tariff imposed partly for India's Russian energy purchases.
• Steel Industry Slump: Domestic steel prices have fallen to a nine-month low (for auto/appliance steel) and a near-five-year low (for construction steel). This is caused by weak demand from major infrastructure projects and domestic oversupply. Analysts warn that recovery hinges on a sustained pickup in construction and infrastructure demand, potentially after the festive season.
• Wires & Cables Resilience: Polycab India's wires and cables segment showed resilience with a 21% growth and significantly improved margins in Q2 FY26. This performance was boosted by robust demand in both the domestic market and export markets, successfully mitigating tariff-led uncertainties in the U.S., which accounts for 20% of its total exports.

4. Automotive and Clean Energy: The Decarbonization Push

Indian automakers are undertaking a massive transition, aligning with global shifts toward clean energy and tightening fuel efficiency norms.

• Clean Vehicle Targets: India's top carmakers have set an ambitious target for over half of their sales to come from electric vehicles (EVs), hybrids, and compressed natural gas (CNG) vehicles by 2030. Maruti Suzuki is targeting 75% clean fuel sales, with a major focus on CNG (35%) and hybrids (25%).
• Infrastructure Requirements: The necessary ramp-up of non-fossil energy capacity relies on an unprecedented demand for Battery Energy Storage Systems (BESS). To manage the life cycle, efficiency, and resource sustainability of these components, the creation of a foundational data backbone, termed "Battery Aadhaar," is proposed. This system would track and tag batteries across their life cycle, helping optimize recycling and supporting India's self-reliance in decarbonization. This alignment is critical as the EU prepares to implement its own battery passport standards in 2027.

5. Pharmaceuticals and Consumer Goods: Regulatory and Consumption Shifts

Domestic consumption was sensitive to policy changes, while the advanced healthcare sector faces new regulatory demands.

• Regulatory Control over Advanced Therapies: Due to the rapidly growing market (projected to reach $2.51 billion by 2033), India plans to introduce strict governmental control over advanced medical treatments such as gene therapy, stem cell therapies, and xenografts by amending the Drugs Rules, 1945. This measure is intended to ensure safety, guarantee quality standards, and protect patients from unverified claims.
• Anti-Obesity Market Competition: Eli Lilly entered a partnership with Cipla to promote its blockbuster weight-loss drug, tirzepatide (Yurpeak), intending to expand distribution beyond major cities. This move aims to capture market share in India's booming anti-obesity segment ahead of generics potentially entering the market in 2026.
• FMCG Consumption Disruption: The recent Goods and Services Tax (GST) rate cuts led to a transitory disruption in sales volumes for major Fast-Moving Consumer Goods (FMCG) players like Hindustan Unilever (HUL) and Colgate-Palmolive India in the September quarter. Consumers and traders deferred purchases anticipating lower prices, leading to inventory destocking, although HUL anticipates demand and volumes to stabilize and rise starting in November.