Newspaper Summary 010726

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India emerges as UK’s second biggest FDI investor, creating 12,700 jobs

By Yashaswani Chauhan New Delhi

India has been the second most important foreign direct investor into the UK in 2025-26, helping create thousands of jobs. This position is likely to improve further once the India-UK Comprehensive Economic and Trade Agreement (CETA) comes into force on July 15. The agreement, which provides duty-free access for nearly 99 per cent of Indian exports to the UK and expands market access across 137 services sub-sectors, is expected to encourage companies to establish a stronger presence in each other’s markets.

Investment Data Data from the Department for Business and Trade, UK, shows that Indian companies undertook 93 foreign direct investment (FDI) projects in the UK, creating 12,687 jobs. This makes India the second largest job-creating investor after the US, which generated 15,796 jobs through 239 projects. Germany, France, and the Netherlands followed at a considerable distance.

The UK is also emerging as an important destination for Indian overseas investments. Between May 2025 and May 2026, Indian companies undertook 830 overseas investment projects in the UK, making it the country’s fourth-largest investment destination after the US, UAE, and Singapore.

Momentum and Key Sectors This investment momentum had begun building even before the FTA. Earlier in February 2025, the UK government had announced a pipeline of Indian investments, including:

• Aaseya Technologies: €25 million
• Time Cinemas: €20 million
• Novigo Solutions: €12 million

Sector-wise, India’s outward investments continue to be dominated by financial, insurance, and business services (4,607 projects), followed by wholesale and retail (2,599), and manufacturing (2,369).

The FTA Factor Experts believe the FTA could strengthen this momentum by converting trade relations into long-term investments. Pallavi Bakhru, Partner at Grant Thornton Bharat, noted that while traditional sectors will remain dominant, the FTA is likely to widen the scope of bilateral investments.

“Digital and technology services, fintech, advanced manufacturing, healthcare and medical devices, professional services and clean energy are expected to emerge as key investment drivers, supported by enhanced services access, greater regulatory certainty and stronger cross-border supply chain integration," she said. The FTA is expected to not only deepen investment in established sectors but also accelerate collaboration in high-value, innovation-led industries.

Industry bodies also expect British investments into India to gather pace. Nirmal K Minda, President of Assocham, said improved market access, lower tariffs, and streamlined customs procedures would create a more predictable business environment. “British companies will surely look at increasing investment in India considering the rate of economic growth and magnitude of the consumption base,” he added.

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Indian refiners book oil supply for next 45 days

By Rishi Ranjan Kala
New Delhi

Indian refiners have stocked up on crude oil for the next 45 days, with Russia continuing as New Delhi’s top supplier and replacement barrels arriving from the US, Venezuela, Africa, and Oman. Indications suggest a buyer's market, driven by de-escalation in West Asia and an increase in Gulf cargos entering the market.

Supply Dynamics
Sources state that there is currently ample crude oil available as Ukraine’s drone attacks on Russian refineries have freed up more barrels for export. Additionally, a 60-day sanctions reprieve and a US-Iran MoU have seen supply return to the market, further bolstered by Saudi Arabia, the UAE, and Iraq pushing more barrels into the system.

“It’s a buyer’s market. For remaining August and September, refiners can buy Iranian crude, but it will depend on market dynamics and payment clarity,” stated a top official from a leading refiner.

Market Outlook
The sanctions reprieve allowing Iran to sell crude and refined products is set to end on August 21. While crude oil exports by Middle East Gulf (MEG) producers are recovering following the opening of the Strait of Hormuz, many analysts do not expect West Asian supply to be a major part of India's import basket for the rest of August and September.

Furthermore, India’s crude oil imports typically trend lower during the June to September rainy season.

Economy resilient but susceptible to energy, supply chain shocks: RBI

By K Ram Kumar Mumbai

The economy and the financial system continue to remain susceptible to geopolitical tensions and associated shocks despite headwinds from the West Asia conflict receding, according to the Reserve Bank of India’s Financial Stability Report. While India’s sound macroeconomic fundamentals provide ample buffers, the report highlighted that the economy remains exposed to energy price shocks and supply chain disruptions due to its high dependence on imported oil and other key commodities.

Resilience and Stability In his foreword to the report, RBI Governor Sanjay Malhotra stated that the economy and financial system have demonstrated remarkable resilience. “Strong growth, low inflation, healthy balance-sheets of financial and non-financial firms, and ample buffers have helped preserve macrofinancial stability,” he said, while committing to further strengthening the guardrails that protect the system from potential shocks.

External Shocks and Growth Malhotra acknowledged that the risk of adverse external shocks has increased, with geopolitical conflicts and fragmentation emerging as key challenges for policymakers. Despite these challenges, the economy recorded a strong growth of 7.7 per cent in FY26, supported by strong private consumption and fixed investment.

Outlook for 2026-27 High-frequency indicators for April–May point to continued resilience, suggesting that growth remained firm in the first quarter of 2026–27. However, the report cautioned that elevated oil and commodity prices, alongside weaker global growth, could adversely affect India’s domestic growth this year. The RBI has projected FY27 GDP growth at 6.6 per cent.

The report also warned that the fiscal deficit could come under pressure. Higher prices for energy and other commodities could adversely impact fiscal arithmetic due to a higher outgo on account of subsidies, excise duty cuts, and the limited pass-through of oil price increases.

India-Japan mobility partnership rolls along

By KE Seetharam

The forthcoming India–Japan Annual Summit in New Delhi from July 1-3, 2026, comes at a moment when both countries can move their partnership from infrastructure cooperation to strategic transformation. The summit is expected to review the full spectrum of bilateral cooperation, including the Mumbai-Ahmedabad High-Speed Rail (HSR) project, economic security, technology, supply chains, and industrial collaboration. This is considered the right time for Prime Minister Narendra Modi and Japan’s Prime Minister Sanae Takaichi to endorse a bold new idea: a Joint India–Japan Multi-modal Mobility 2036 Initiative.

Beyond the Bullet Train While the high-speed rail partnership is a visible symbol of trust, the next phase should go beyond the bullet train to build a seamless HSR-to-Airline and Logistic Mobility Corridor. This would link high-speed rail, airports, regional airlines, metro systems, logistics hubs, digital ticketing, tourism circuits, and clean-energy transport. Such a platform, featuring one ticket, one payment, and one baggage interface, would support India’s economic transformation and Japan’s long-term strategic engagement.

Japanese carriers such as Japan Airlines (JAL), ANA, ZIPAIR, Peach, and AirJapan can support this vision through expanded direct flights, airport operations, MRO (maintenance, repair, and overhaul), and cargo logistics. For India, this brings operational excellence and global connectivity; for Japan, it opens one of the world’s fastest-growing aviation markets.

Connecting Regions Integrated HSR-airport-regional airline systems can connect tier-2 and tier-3 cities to national and global markets, aiding MSMEs, food-processing zones, and medical tourism. With India’s 2026 aviation schedule already including regional carriers like Alliance Air, FLY91, Star Air, and IndiaOne Air, Japan can assist in making these links financially viable through efficient airport design and station-area development.

Tourism and Strategic Security Tourism serves as a central pillar, with Japan welcoming a record 315,100 Indian visitors in 2025. Better air links and integrated platforms can take tourists beyond major cities to lesser-known prefectures in Japan, while attracting more Japanese visitors to India's Buddhist circuits and wellness destinations.

Strategically, this multi-modal partnership aligns with the Joint Declaration on Security Cooperation, calling for deeper defense interoperability and maritime security. Civilian mobility systems can strengthen national resilience, supporting disaster response, humanitarian assistance, and emergency movement during crises in the Indo-Pacific.

Olympic Ambitions Finally, the partnership will strengthen India’s ambition to host the 2036 Olympic and Paralympic Games. Japan’s experience in crowd management, public safety, and major-event logistics can help India build an Olympic mobility model that leaves a permanent legacy, moving from "Bullet Train to Olympic-ready Bharat".

At the summit, the leaders could endorse a six-point framework to launch the 2036 initiative, integrate HSR with regional airlines, deepen Japanese airline participation, promote tourism, and link civilian mobility with Indo-Pacific security.

The writer is an Asian Development Bank Institute Fellow and an Associate Member of The Club of Rome.

Fujifilm India inks MoU for chip materials plant

Our Bureau Ahmedabad

Fujifilm India has signed a memorandum of understanding (MoU) with the Gujarat State Electronics Mission (GSEM) to explore setting up a “semiconductor materials production base” in Dholera. This marks the latest move by the Japanese company to tap into India’s rapidly growing semiconductor ecosystem.

The MoU was announced on Tuesday at the Vibrant Gujarat Regional Conference in Vadodara. Under the terms of the pact, Fujifilm India will collaborate with industry bodies and private companies to assist in strengthening the domestic semiconductor supply chain.

India-Peru FTA talks to resume after new govt takes office in Lima

By T E Raja Simhan Chennai

The negotiations for the proposed India-Peru Free Trade Agreement (FTA), which were expected to conclude by July this year, are likely to resume in the second half of 2026 after Peru’s newly-elected government takes office, said Javier Manuel Paulinich Velarde, Peru’s Ambassador to India.

The negotiations have been delayed following Peru’s recent presidential elections. The new government is scheduled to take office at the end of July and will first need to appoint ministers before resuming the trade discussions, the Ambassador told businessline.

“There is interest from both countries to continue the negotiations,” he said, expressing optimism that the talks would restart once the new administration is in place. So far, nine rounds of negotiations have been completed.

Latest Round The latest round of talks took place nearly a year ago, after which the country’s election campaign slowed progress. While the incoming government will decide the timeline for the next round, the Ambassador reiterated Peru’s commitment to moving the agreement forward.

The proposed FTA is expected to deepen bilateral trade and create new opportunities across sectors such as mining, pharmaceuticals, agriculture, renewable energy, and manufacturing. It is also intended to provide Indian companies with greater access to Peru’s abundant reserves of critical minerals.

Investment Opportunities Beyond the FTA, the Ambassador highlighted Peru’s vast mining potential, noting that the country has around $60 billion worth of mineral exploration and exploitation projects that present significant opportunities for global investors, including those from India.

Mega Port Project Indian companies were also invited to participate in Peru’s infrastructure development, particularly a proposed $6-billion mega port project. This would be the country’s second such facility after the Chancay port.

Sanmar Group evaluating sectors of growth, as engineering arm completes 50 years of JV with American partner

Our Bureau
Chennai

Sanmar Group is in the process of evaluating various sectors, including warehousing, that present growth opportunities in the future, Vijay Sankar, Chairman, The Sanmar Group, said. “At a group level, we are looking at a plan, that we will announce later this year, on areas where we are looking to grow. I think it will take us a few months to do this exercise,” he said.

Sankar was speaking at an event to mark 50 years of group company Sanmar Engineering, which was created by joint ventures with four American companies — Flowserve, Crane Company, Emerson and BS&B Safety. Of this, the JV with Flowserve is the oldest, completing a golden jubilee.

Between the four businesses, Sanmar Engineering delivers advanced products in the areas of fluid handling, industrial safety and flow control serving a range of industries including chemicals, refineries and petrochemicals, power and fertilisers. Thanks to ongoing investments, the companies have added capabilities over the years, Sankar said.

• Flowserve Sanmar is expanding seal system and gas panel capacity with a new plant at Thiruporur, near Chennai.
• Xomox Sanmar (Crane) is expanding capacity from 80,000 valves per year to 1.5 lakh valves per year at its facility in Viralimalai.
• Anderson Greenwood Crosby Sanmar (Emerson) is investing in advanced digital test benches and cryogenic testing facilities.
• BS&B India develops custom-engineered products in segments such as defence, space, nuclear power and more.

DEMAND TRENDS
Speaking on overall demand trends, Sankar said while capex growth has been a little slow in the last few years, the cycle is picking up.

On the JV track record, he stressed on the quality of relationship and understanding with partners, whereby Sanmar’s companies don’t export directly to third-party customers but only ship to the JV partners; likewise, the partners too do not sell into India, and do not come to India and set up a plant in Sanmar’s product ranges.

B Visweswaran, MD, Sanmar Engineering, said the market opportunity would be split into two — traditional energy security businesses and those where there are new opportunities. “For all the four businesses, the company follows high levels of localisation. It’s really make in India for India,” he said.

Banks, NBFCs can withstand losses under adverse scenarios: Report

By K Ram Kumar Mumbai

Stress test results conducted reaffirmed the resilience of banks and NBFCs to withstand losses under adverse scenarios and to maintain capital ratios well above the regulatory minimum at the aggregate level.

Projections and Scenarios The aggregate capital to risk-weighted assets ratio of 46 scheduled commercial banks may decline from 17.5 per cent in March 2026 to 15.6 per cent by March 2028 under the baseline scenario. It may further fall to 13.3 per cent and 13.0 per cent under adverse scenarios 1 and 2, respectively.

These tests attempt to project the capital ratios of banks under a baseline and two adverse macro scenarios over a two-year horizon. While the baseline scenario is derived from the latest forecast paths of macroeconomic variables, the two adverse scenarios are hypothetically stringent stress scenarios designed to test systemic stability.

TN can build a ₹37,000-cr defence electronics industry by 2040, says DRDO scientist

Our Bureau Chennai

Tamil Nadu has the potential to emerge as India’s defence electronics capital by 2040, with an annual production opportunity of ₹37,000 crore and exports of up to ₹10,000 crore. This strategic roadmap was presented by BK Das, DRDO Distinguished Scientist and Director General (Electronics and Communication Systems), at the CII TNDefX Conclave 2026.

Growth Drivers and Market Share The roadmap places Tamil Nadu at the center of India’s push for defence self-reliance. The state’s well-established electronics, semiconductor, aerospace, and automotive manufacturing ecosystems provide a unique advantage in developing next-generation defence technologies.

India’s overall defence electronics market is projected to expand to approximately ₹1.49 lakh crore by 2040. This growth will be driven by demand for:

• AI-enabled systems
• Electronic warfare
• Autonomous platforms
• Secure communications
• Space technologies

Tamil Nadu is realistically expected to capture 20-25 per cent of this national market.

Priority Product Segments Das identified six high-priority product segments for the state that could collectively generate between ₹34,500 crore and ₹37,000 crore in annual production by 2040:

1. Surveillance electronics
2. Autonomous systems
3. Radar and RF electronics
4. Electronic warfare systems
5. Secure communications and software-defined radios
6. Space electronics

Export Potential and Competitive Assets The state is also poised to become a significant exporter, with projected annual exports of ₹8,000-10,000 crore by 2040. Targeted markets include Asean, West Asia, Africa, South Asia, and Latin America.

To achieve this, Das proposed creating a network of specialised Centres of Excellence, building on the existing Tamil Nadu Defence Industrial Corridor. The state’s competitive assets include:

• Defence PSUs like BEL and HAL.
• DRDO facilities and a deep-tech startup ecosystem.
• Premier academic institutions such as IIT-Madras, Anna University, and NIT-Tiruchirappalli.

While specific details of upcoming programmes were not shared, Das indicated that numerous opportunities would soon emerge, benefiting companies across tier-I, -II, and -III supply chains.

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Kotak buys Deutsche Bank’s retail business

Frankfurt: Deutsche Bank said on Tuesday that Kotak Mahindra Bank would acquire its retail banking and wealth management business in India, as the German bank aims to streamline operations and redeploy capital. Kotak Mahindra stated the purchase price was approximately $30 million.

REUTERS