Aug 30: India-Japan ink $68B pact, Reliance shares big plans in AGM

Good morning! Picture this, you’re on about your day, enjoying that packet of Magic Masala you’ve earned after a hard day’s work and you get a call from an unknown number. It’s Trump asking for donations to a MAGA Super PAC. Don’t hang up, it might literally be him. In what is Chinese-hacker-wet-dream territory, the US President reportedly continues to use his personal phone to contact people including international leaders from the Oval Office. The habit may have stumped Modi as well who reportedly missed 4 calls from Trump in the midst of the tariff anban. Can’t blame him, these scam calls are outta control.

Now, let’s get into the Dispatch! 🚀

Today’s reading time is 6.5 mins.

Indian stock market fell for the third consecutive session primarily due to continued concerns about tariffs, almost wiping out Sensex’s gains year to date.

At the 48th Annual General Meeting of Reliance Industries Ltd. (RIL), Chairman Mukesh Ambani, joined by family, laid out an ambitious vision for the group’s next decade of growth. The announcements spanned FMCG, AI, clean energy, healthcare and a much-awaited confirmation of Jio’s IPO timeline.

FMCG and Retail Expansion: Isha Ambani confirmed that Reliance Consumer Products Ltd. (RCPL), the FMCG arm, will become a direct subsidiary of RIL. The aim: ₹1 lakh crore in revenue over five years. RCPL will also be Reliance’s “blueprint” for expansion into apparel, electronics, and other high-value categories. Reliance Retail, which posted revenues of ₹3.3 lakh crore, is being positioned as a “national movement,” with in-house brands like Independence (grocery), Avaasa (fashion), and Kelvinator (electronics).

Jio IPO in 2026: Mukesh Ambani made the headline announcement of the day: Reliance Jio will file for its IPO in the first half of 2026, subject to regulatory approvals. He called it a “very attractive opportunity for all investors,” noting Jio’s capability to create value at par with global tech giants. With regards to JioHotstar Akash Ambani added that they are now preparing to take its services beyond India, signalling an international push.

AI and Reliance Intelligence: Mukesh Ambani also unveiled Reliance Intelligence, a new wholly owned subsidiary to spearhead India’s AI revolution. The company will build green-powered, gigawatt-scale data centres and deliver AI services for consumers, enterprises, and national sectors. Partnerships in AI were also front and centre:

Clean Energy and Industrial Investments: Anant Ambani outlined Reliance’s New Energy ecosystem, with giga-battery factories (launching 2026), a solar project three times Singapore’s size, and 3 million tonnes of green hydrogen capacity by 2032. On industrial projects, RIL is investing ₹75,000 crore in expansions, including:

Healthcare and Social Impact: Nita Ambani announced a new 2,000-bed medical city in Mumbai, integrating AI-powered diagnostics and global-standard care, alongside “Jeevan,” a paediatric wing at H. N. Reliance Hospital. She also reaffirmed Reliance Foundation’s role in India’s bid to host the 2036 Olympics, and shared that Reliance Foundation’s initiatives now reach 87 million people across 91,500 villages.

Financials and Legacy: Mukesh Ambani underlined RIL’s transformation into a Fortune 40 global powerhouse, generating $200 billion in value within India. In FY25, RIL crossed $125 billion in annual revenues, with ₹81,309 crore net profit and ₹2.8 lakh crore exports. 

Market reaction: Despite growth talks all around, shares of RIL ended 2.3% lower on the day as investors remained cautious due to the ongoing uncertainty.

Net net: India’s economy expanded at a faster-than-expected pace in the April–June quarter of FY26, with GDP rising 7.8% year-on-year, based on data released by the Ministry of Statistics on Friday. The growth rate, a five-quarter high, comfortably beat RBI’s forecast of 6.5% and consensus market expectations of around 7%. This marks the second consecutive quarter of outperformance.

Services Drive Upside: The bulk of the upside came from the services sector, which clocked 9.3% growth, the highest in two years. Within services Financial, Real Estate and Professional Services expanded by 9.5%, while Public Administration, Defence and Other Services surged 9.8%, reflecting robust government spending.

Agriculture, Manufacturing Support Expansion: The agriculture sector grew below average by 3.7% but more than double compared to last year’s 1.5% growth in the same quarter. Manufacturing expanded 7.7%, a sharp improvement over the 4.8% growth in the previous quarter, offering key support to overall growth. Mining and utilities lagged, with Gross Value Added in “Mining & Quarrying” contracting due to heavy rainfall disrupting activity. Electricity, gas, and water supply also saw weak growth of just 0.5%, reflecting reduced demand. Additionally, construction activity slowed to 7.6%, a nine-quarter low.

Real vs Nominal: Nominal GDP (which does not account for inflation or deflation) slowed to 8.8% over April-June, compared to 10.8% in the previous quarter. This is because India’s consumer inflation continued to ease in July, dropping for a ninth straight month to 1.55%, below analysts’ estimates, to its lowest level since June 2017.

Full year growth: Experts estimate that Growth for the full year is still likely to average around 6.5%, even after factoring in tariff headwinds - illustrating India’s position as the world’s fastest-growing large economy.

Shrimp shocker: India's shrimp exports could fall by 15-18% this year, as the U.S. has jacked up its import tariff to a huge ~58%. This hits a market that makes up 48% of India's shrimp exports. 

₹ troubles: The Indian rupee hit a new low of 88.19 against the dollar, a 61-paise drop due to US tariffs on Indian exports, weak domestic stocks, and foreign fund outflows. 

Ethanol backlash: India's push for 20% ethanol-blended fuel is sparking backlash from drivers who report lower mileage and engine damage, as most vehicles aren't E20-compatible. Automakers are also concerned.  

Maharashtra’s MoU milestone: Maharashtra's government has signed 17 MOUs worth ₹33,768 crore with a plan to create 33k+ jobs in electronics, steel, solar, EV buses/trucks, and defence. The state is promising a smooth experience with a single-window "Maitri" portal and a new five-year plan to cut power tariffs.  

Grow goes public: SEBI has cleared Groww's IPO, aiming to raise $700 million - $1 billion at a $7-8 billion valuation. In FY25, the company had a ₹4,056 crore revenue and ₹1,818 crore PAT, with over 12.3 million active clients.

Mega Deal: PM Modi on Friday secured a landmark investment pledge of up to ¥10 trillion ($68 billion) from his Japanese counterpart Shigeru Ishiba, as India and Japan deepened economic and security cooperation in the face of rising global trade uncertainty. The pledge, to be realized over the next decade, will come largely through Japanese private sector investment in India and marks one of the largest commitments by Tokyo toward a single partner nation. It comes just days after the United States imposed a steep 50% tariff on Indian goods, the highest for any Asian economy, amplifying the urgency for New Delhi to diversify trade and investment ties.

Economic Security Pact: The investment is part of a broader economic security pact that spans semiconductors, critical minerals, artificial intelligence, clean energy, and space cooperation. The two governments also launched initiatives to support startups and expand collaboration in next-generation technologies.

Infrastructure and People-to-People Ties: The two sides reaffirmed commitment to the Mumbai-Ahmedabad bullet train project, a flagship symbol of bilateral cooperation. They also agreed to facilitate the exchange of 500,000 workers across industrial sectors over the next five years, deepening economic linkages beyond capital flows.

Meta’s Billion-Dollar Problems: Mark Zuckerberg’s push to build Meta’s Superintelligence Labs with billion-dollar pay packages may be faltering, with key hires from OpenAI, DeepMind, and Google quitting within months. While Meta sought to lure frontier researchers with money, rivals like OpenAI and Anthropic appear to be gaining talent by offering purpose.

Thailand Ousts Youngest PM: Thailand’s Constitutional Court has dismissed Prime Minister Paetongtarn Shinawatra for an ethics violation, ending her tenure just a year after taking office. In a leaked phone call, the now ex-PM was heard pandering to Cambodia’s former leader when both countries were on the brink of an armed border conflict.

Alibaba’s Hits & Misses: Alibaba reported a 26% surge in cloud revenue to 33 billion yuan ($4.67B), far above expectations, driven by its aggressive AI push. However, weaker e-commerce growth dragged overall revenue below estimates, missing by 2%.

BYD Profit Slumps: BYD’s quarterly profit dropped nearly 30% from a year ago, its first fall in over three years, amid China’s crackdown on EV price wars that squeezed margins across the industry.

PepsiCos $585M Deal: PepsiCo raised its stake in Celsius Holdings to about 11% through a $585 million investment, strengthening its position in the energy drink market.

Canada’s Economy Shrinks: Canada’s economy contracted for the first time in nearly two years, shrinking 1.6% in Q2, its steepest drop since the pandemic. Exports plunged 27% due to US tariffs, while business investment fell 10.1%. 

Indri’s rise and history: Indian single malt whisky, Indri, has been named the world's fastest-growing single malt for the second straight year, selling 2.04 million bottles, or 170,000 cases, in 2024. Terrible history: Indri’s founder Siddhartha Sharma aka Manu Sharma is the person who shot and killed Jessica Lal in 1999, was convicted in 2006, and acquitted in 2020 on good behaviour.

ISRO’s space-map: ISRO has a new roadmap for space, which includes a crewed Moon base by 2047, a human lunar mission by 2040, and 3D-printed Mars dwellings. A new 119m high spaceship - the Lunar Module Launch Vehicle - will carry 80t of payload to Lower Earth Orbit by 2035 to support these missions. 

RBI to IMF: Former RBI Governor Urjit Patel is now IMF Executive Director for a three-year term, succeeding Krishnamurthy Subramanian. The IMF’s executive board is composed of 25 directors elected by member countries or groups of countries (constituencies). Mr. Patel will represent India’s constituency, which also includes Bangladesh, Sri Lanka, and Bhutan. Prior to this, Mr. Patel served as VP Investment Ops at the Beijing-based Asian Infrastructure Investment Bank (AIIB).

THAT’S ALL FOR TODAY!

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