Good morning. It is the middle of July, and between the monsoon, the market swings and a flurry of overnight deals, there is a fair bit to catch up on this morning.
In today's newsletter: India's most sweeping trade deal yet takes effect, a Gulf naval blockade rattles Indian markets, and TCS lands a $19 billion New York airport contract.
Sensex 77,054.94 DOWN 561 pts |
Nifty 50 24,052.05 DOWN 159 pts |
USD/INR 96.16 RUPEE DOWN |
Brent Crude $84.98 UP 2.0% |
Escalating US-Iran tensions and a fresh naval blockade in the Strait of Hormuz sent crude higher and dragged the Sensex and Nifty into the red, with PSU bank, realty and auto stocks leading the losses.
India's most comprehensive trade deal yet takes effect with the UK today
The India-UK Comprehensive Economic and Trade Agreement enters into force today, the most sweeping trade pact India has ever brought into effect. The UK will immediately scrap tariffs on 96.8 percent of its tariff lines, covering nearly 98 percent of trade value, while India eliminates duties immediately on goods worth 30.3 percent of trade value and phases out tariffs on another 47 percent over time.
Commerce minister Piyush Goyal called it the most comprehensive trade pact India has signed, and said immediate duty-free access on 99 percent of India's tariff lines will let textiles, leather, marine, engineering and processed food exporters compete without disadvantage. On the other side, Scotch whisky tariffs drop from 150 percent to 75 percent immediately before easing to 40 percent over a decade, and car tariffs fall from 100 percent to 10 percent under a quota.
The deal is projected to add £25.5 billion a year to bilateral trade in the long run, with Prime Minister Modi saying he was delighted the agreement would significantly boost trade and investment between the two countries.
This is the first big trade agreement India has actually implemented after years of talks with the EU, the US and others dragging on without a finish line. A working deal with a G7 economy gives New Delhi a template, and a talking point, for the tougher negotiations still stuck on the table.
Businesses only had 28 days between the deal's signing and entry into force to register for the tariff cuts, which means many smaller exporters and importers on both sides may not be ready to actually claim the benefits from day one.
The US resumes its Hormuz blockade, and Indian markets feel it directly
The ceasefire framework between the US and Iran has collapsed, and US forces carried out another round of strikes on Iran on Tuesday as Washington reinstated its naval blockade on ships entering or leaving Iranian ports. Iran responded by striking and disabling tankers in the Strait of Hormuz, and the UAE said Iranian missiles hit two of its tankers in Omani waters, killing one crew member.
The escalation is not an abstract foreign story for Indian readers this time. Brent crude jumped past $85 a barrel, and the reinstated blockade at the Strait of Hormuz, the route for roughly a fifth of the world's oil, pushed the Sensex down 561 points and weakened the rupee toward 96.2 to the dollar on Tuesday. Costlier jet fuel is also squeezing Indian carriers, with Akasa Air among those now seeking fresh capital to cope.
With diplomacy stalled and both sides trading strikes, Indian refiners and importers are bracing for another stretch of volatile oil prices just as the festive-season demand season approaches.
TCS lands the tech mandate for JFK's $19 billion new terminal
Tata Consultancy Services has been named the technology and innovation partner for New Terminal One at New York's JFK Airport, part of the Port Authority of New York and New Jersey's $19 billion redevelopment of the airport that includes two new terminals and a redesigned ground transport hub.
Under the deal, TCS will build and manage the terminal's digital infrastructure, from passenger processing and cybersecurity to AI-led operations, and will fold in its Cognix and ignio platforms to give airport and airline partners real-time visibility into baggage handling and security.
The financial value of TCS's slice of the project has not been disclosed, but a high-visibility, long-term US infrastructure win is a welcome headline for an Indian IT sector that has spent the past year fending off questions about AI disruption and slowing growth.
Breaking.exe
OneCard's new round. Credit-card startup OneCard is raising ₹72 crore in a Series D round led by Peak XV Partners, valuing the company at roughly ₹12,050 crore. |
Claude goes to school. Anthropic launched Claude for Teachers, giving verified US K-12 educators free access to its premium AI tools as labs race to win over classrooms. |
TBO Tek stake sale. Early backer Augusta TBO sold a 2.04 percent stake in listed travel-tech platform TBO Tek for about ₹327 crore, trimming its holding to 3.5 percent. |
Pangaea Revisited
Ukraine's missile coalition. A day after Russian missiles and drones killed at least 22 people in Kyiv, Ukraine and ten allied nations launched a coalition to counter Russia's ballistic missile threat. |
Taiwan flags new risk. Taiwan said China's new ethnic unity law could raise political risks for cross-strait exchanges by requiring Taiwan-linked activities to align with Beijing's agenda. |
Volkswagen's deeper cuts. Europe's largest carmaker confirmed it is weighing up to 50,000 more job cuts on top of previously reported reductions, as Chinese competition and tariffs squeeze its German plants. |
Also, Also, Also
Beauty's contract king. Jammu-based Naturis Cosmetics, a contract manufacturer for Nykaa and Plum, is raising ₹33.74 crore in its maiden funding round led by Sharrp Ventures. |
Sowing falls behind. India's kharif sowing area is running about 16 percent below last year at 531 lakh hectares, with rice and pulses acreage down as an uneven monsoon delays planting. |
Inflation runs hot. India's retail inflation accelerated to 4.38 percent in June, breaching the 4 percent mark for the first time in 17 months, while the trade deficit widened to $30.43 billion on costlier oil imports. |