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🏦 RBI set to announce liquidity and co-lending rules

PLUS: India’s Russian oil dilemma

Author

Ruchirr Sharma
August 05, 2025

Good morning. India and cricket - the dream time 🔥 

Ruchirr Sharma & Shatakshi Sharmaa  

TABLE OF CONTENTS

MARKETS

🇮🇳 India

indicates per gram rate in Delhi | Stock data as of market close 04/08/2025

  • Indian markets rallied, led by gains in metal, IT, and auto stocks amid optimism over the RBI’s policy meeting.

🌍️ International

Stock data as of market close 04/06/2025

  • US markets bounced back sharply. This rebound was fueled by hopes for a Federal Reserve rate cut following weak jobs data, alongside strong corporate earnings that helped restore investor confidence after the previous week’s losses.

POLICY

Banks are bracing for a midweek shake-up.

On Wednesday, the Reserve Bank of India is expected to unveil two major policy moves following its three-day monetary policy meeting. While repo rate changes always grab headlines, this time the spotlight is on liquidity and lending.

First up is a revised liquidity management framework. This governs how the RBI injects or absorbs money from the banking system. With inflation easing and credit growth patchy, banks are hoping for more flexibility — perhaps a friendlier stance on repo-based operations or a more predictable calendar for liquidity infusions.

Next is the final word on co-lending norms. This refers to partnerships between banks and non-bank lenders to offer joint loans, often aimed at underserved sectors like MSMEs or rural borrowers. Banks want clarity on risk-sharing, capital treatment, and reporting structures. The new norms could either supercharge credit delivery or bog it down in red tape, depending on how they're framed.

Why it matters: Liquidity tweaks affect how easily banks can lend, and at what cost. Co-lending rules determine how efficiently credit reaches those who need it most.

The takeaway? While interest rates grab attention, it’s these structural levers that will decide whether India’s financial plumbing flows freely — or gets stuck at the valves.

RUSSIA OIL

India just hit pause - not on Russian oil, but on reacting to US pressure about it.

Despite US President Donald Trump slapping a 25% tariff on Indian goods (and threatening more), India hasn’t told its oil refiners to stop buying Russian crude. Officials say refiners are still free to buy from whoever they want, and so far, Russia’s discounted barrels are too good to pass up.

Here’s the context: Russian oil now accounts for about one-third of India’s imports. Buying it has saved India billions in foreign exchange, especially as inflation and energy demand climb. But the US isn’t thrilled. Trump publicly blasted India’s continued partnership with Moscow, both in energy and defense, and claimed he “heard” India was cutting off Russian oil. Not quite.

Behind the scenes, Indian refiners have been asked to explore backup plans, including sourcing more expensive oil from the Gulf, but it’s mostly just scenario planning. No formal pivot yet.

So what’s next? New Delhi is trying to walk a tightrope, keeping energy prices manageable, avoiding more US penalties, and preserving strategic ties with Russia. PM Modi and Putin remain on good terms.

The broader takeaway: India’s foreign policy is increasingly defined by energy pragmatism. Cutting off Russian crude isn’t just a geopolitical move, it would hit wallets back home. For now, India’s approach remains clear: keep all options open and don’t blink unless you have to.

GENERAL OVERVIEW

🗞️ Bite-sized summaries

🇮🇳 India pushes back at Trump’s tariff threat over Russian oil - India has firmly rejected U.S. President Donald Trump’s accusation that it is profiting from cheap Russian oil, calling the criticism “unjustified and unreasonable.” The Ministry of External Affairs defended India’s energy trade as essential for affordable fuel access, and pointed out that the U.S. and EU also maintain significant trade with Russia — from LNG to fertilizers to uranium. Trump has threatened steep tariff hikes on Indian goods and criticized India’s ties with Moscow. New Delhi, however, asserted it will act in its national interest, warning against selective outrage amid complex global energy realignments.

🚀 Dhruva Space to launch first commercial mission with Australian payloads - Hyderabad-based space startup Dhruva Space is set to deploy its first commercial mission, LEAP-1, in Q3 2025. Using its homegrown P-30 satellite platform, the company will launch AI and hyperspectral imaging payloads for two Australian firms — Akula Tech and Esper — aboard a SpaceX Falcon 9 rocket. This Indo-Australian partnership signals Dhruva’s global ambitions and growing U.S. support. The P-30 platform was earlier qualified on an ISRO mission in 2024. Dhruva’s LEAP program also bundles real-time mission control through its proprietary command suite and Ground Station-as-a-Service, positioning it as a full-stack satellite solution provider.

HEADLINES

🧑‍🍳 What else is cookin’?

What’s happening in India (and around the world 🌍️)

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That’s all for today folks - have a lovely day and we’ll see you tomorrow.