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Hello, it’s Ganesh Rao, writes from London. This week, I consider how the Israeli-Iran conflict was a reminder of India’s vulnerabilities that arise from the crisis.
The Brahmos missile system accepts the rehearsal in full before the parade of the Republic of 2025, in the Kartaviy route on January 20, 2025 in New Delhi, India.
Raj k raj | Hindustan Times | Gets the image
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A great story
Over the last week, India’s economy looked at the ravine.
Geopolitical tensions in the Middle East could beat the country. Instead, India found a war in Israeli-Iran to improve its defensive sector.
Two countries in the Middle East agreed to ceasefire On Wednesday, after the US bombing campaign said by US President Donald Trump ALITARIAL Iranian nuclear ambitions. Oil prices have abandoned their short income, removing India from the abyss. But the episode emphasized the many vulnerabilities of India.
India no longer buys Iranian oil, but 40% of the total raw material is still transit along the narrow watering path of the mountainuz, one of the The most important in the world for the first time in the world. Any violations would mean serious economic cases for the country.
For each increase in raw price by $ 10 per $ 10, Inflation of Consumer prices of India can rise to 35 basic points, while economic growth can decrease by 30 basic points, according to the SBI research analysis.
Madan Sobis, Chief Economist of the Bank of Baroda, most state -owned banks belonging to the state in India, repeated that it was estimated, warning that, while a 10% hike was driving, a steady price above $ 100 per barrel may have a great influence “.
The conflict also puts a New Delhi in a dense place between Iran’s investments – in particular, the Chabahar’s port, which is managed by Indian companies – And his deep and growing defensive relations with Israel.
India is the only largest buyer of Israeli weapons that accounts 34% of its protection imports, reports A March 2024 report Stockholm International Peace Studies.
Last India “Sindoor operation‘Against Pakistan, running after April attack belligerent in Jamma and KashmirIt reveals the depth of this dependence on the import of weapons, according to the investment bank Jefferies. The operation used a mixture of old Russian transmission and new Israeli equipment, including missile observation systems, Spyder and Barak-8.
Shortly after Russia invaded Ukraine, India found that Moscow, historically, became unreliable. The Russian production defense was aimed at Moscow’s own needs in the war in Ukraine, which caused significant delays in the program of military modernization of India.
Worse, analysts note that Russian equipment, such as the T-90s, which is the main product of the Indian army, in Ukraine is “insufficient”.
Turn to internal protection
India, of course, did not want to suffer another delay in the purchase of weapons, were the Iran-Israel conflict to drag.
This created an urgent need for India to turn. However, the transition is more likely to take years, if not decades, since 90% of India’s armored vehicles and 70% of its combat aircraft were Russian origin as of 2023, Bernstein’s research said.
“I think that undoubtedly the situation will increase the desire and conviction that all countries should increase their defense, which was initiated from the Russian invasion of Ukraine,” said Anna Malholland, head of the shares developing in promotions, at Pict Asset Management. The new market of the firm has India as the second largest distribution.
“The Middle East, though not new, will probably increase the determination of people and commitment to the increase in the defense budgets,” she added.
The opportunity with the crisis
From this crisis, India made it possible to grow internal protection.
JPMorgan analysts have identified recent geopolitical Bharat Electronics. About 38%increased this year.
“The sustainable stream of orders, increased geopolitical risks both in India and in the world, and the strong medium-term growth prospects … with healthy (capital profitability) should continue to lead to transformation, in our view,” said Atuli Tivava JPMorgan, the bank’s executive director, in the note on June 23.
The most sensitive sign of this turn is the “Project Kusha”-Hunter Alternative in India Russian S-400 Air Defense System, in which Bel is a key development partner. “It is expected that this program will make a significant contribution to the long-term book orders as soon as the contracts are finalized,” Tiwari Jpmorgan added.
India is unlikely to become a lonely client for these companies. Newdelli is also focused on the production of protection as an export industry. It is aimed at double exports up to almost $ 6 billion a year by 2030, Jefferies reports.
– Michael Bloom in CNBC made a report.
Top Election TV on CNBC
DHIRAJ NIM of Anz notes that while the recent rise in oil prices is a decrease in risks for Rupee, the “shaky” ceasefire between Iran and Israel helped to stabilize the moods of investors and improve the closest currency forecast.
Frederick Noiman, Chief Economist of Asia in HSBC and Tim Seymur, CIO in Seymour Asset Management, consider them as undervalued, and Korea, India, Vietnam stands out.
Need to know
India will produce $ 100 billion. This is, according to Proseus CEO, one of the largest technological investors in the world. Proseus was put in The most technology firms in IndiaFor example, Payu Payment Services and E -Commerce Meesho Company.
A mixed picture for the Indian economy. The Indian Reserve Bank noted that factory activities and services in May remained healthy but Padge of cities slowed down sharply.
Capital injection for Air India. During the financial year in India 24-25 years, Tata Sons and Singapore Airlines Pumped in 9.588 Rupees of Rupees ($ 1.1 million) in the airline. Air India deals with A tragic plane crash June 12.
– Yeo Boon Ping
What happened in the markets?
A Nifty 50 reached the maximum of 2025 in 25 549 points. Investors rushed to the stock after easeing tensions. The index added more than 2% from last week and has received more than 7% today.
The 10-year Indian Government’s bond yield has shifted below 3 basic points compared to last week and is now trading by 6.27%.
What happens next week?
June 30: India Industrial Products in May
July 1: manufacturer of industrial gas Ellenbarrie Industrial Gases IPO, construction agency Globe Civil Project IPO, India PMI production in June
July 2: IPO provider HDB Financial Services loans
July 3: Indian PMI services in June
