We reached our 20th issue together! While we celebrate, I want to thank you for subscribing to India Rising. Our community of Risers continues to grow and it’s great to have you with us!

This week's edition takes a look at how US tariffs could bring India and Europe closer, details on the FDIs three year high, and more must-know news.

New feature: I added a quick poll at the end of the issue. Help me improve by letting me know what you enjoyed the most in each issue and help us expand our reach by sharing India Rising with your network of friends, family and co-workers.

Got feedback? Just hit reply, I’d love to hear from you!

Over the past week, initial results of US-driven tariff negotiations with both the EU and India have been published. With the US announcement to impose 15% and 25% tariffs respectively, early responses by the EU and India suggest a closer partnership may develop and could accelerate progress on the India-EU Free Trade Agreement (FTA).

On Wednesday, President Trump announced a 25% tariff rate on India and additional penalties including for India’s oil imports from Russia. The announcement followed the 15% tariff rate for the EU that was agreed a few days earlier. While these tariffs are higher than anticipated, the Times of India reported that about half of India’s exports wouldn’t be impacted due to tariff exemptions.

While trade negotiations continue, the Indian government announced it will keep defending the country's interests, particularly regarding the agriculture and dairy sectors. Early signs indicate this includes exploring closer ties elsewhere, especially in defence, particularly after Trump called India, the fastest growing major economy and soon third largest globally, a "dead economy":

Growing ties and collaboration extend to the “new oil” as well: semiconductors.

Germany and India announced stronger collaboration and an innovation roadmap for joint semiconductor and microelectronics development. The announcement was made during the Fraunhofer Innovation and Technology Platform (FIT) 2025, a bi-annual event with senior attendance from government, research, and business representatives from both Germany and India.

The US-imposed tariffs were perceived negatively by both the EU and India. While negotiations continue and the US remains a key trade partner for both regions, recent developments show that Europe and India are exploring new opportunities and closer collaboration in parallel. An India-EU FTA could not only unlock this potential and provide stability for both regions alike.

Sources: Statista, Times of India, Bloomberg, The Economic Times, Moneycontrol, Business Today, bisinfotech

Foreign equity inflows to India hit a three-year high for the 2024-2025 period, with Singapore remaining the top source. Several European countries rank in the top 10, but major economies like Germany lag substantially behind others.

While international investments support India's infrastructure development and stimulate growth, they also promise high-quality returns. Overall foreign inflows reached USD 50 billion during fiscal year 2024-2025, a year-over-year increase of 13%. Total FDI, including equity inflows plus reinvested earnings and other capital, reached USD 81.04 billion and was 14% higher compared to the previous fiscal year.

The sources of investment are broadly distributed:

To put this into perspective: Germany, Europe’s largest economy, has invested only around USD 15 billion in India since April 2000 and lags far behind other European countries. The Netherlands, India’s 4th largest foreign investor, has invested USD 52 billion within the same time period; more than three times Germany's cumulative investment.

Singapore's position as a global financial hub has made it India's largest investor for seven consecutive years. Temasek, Singapore’s state-owned investment firm, targets a USD 50 billion portfolio in India and is on track to invest USD 10 billion by fiscal year 2026-2027.

One key contributor to the Netherlands' strong position is Amsterdam-listed investment firm Prosus. Originally from South Africa and known under Naspers, the investment firm has a history of successful investments in Emerging Markets and was an early investor in China's Tencent. Prosus now targets an investment portfolio of USD 50 billion in India and has been an investor in Swiggy and other Indian companies.

But also other European businesses continue betting big on India:

Foreign investments remain critical for India's maturing economy and provide significant potential for returns and market positioning in the world's soon-to-be third-largest economy. While there are examples of well-positioned European businesses, the total inflow and sources of foreign capital reveal that some economies, including Germany, appear to underestimate India's potential.

In my view, this represents a strategic miscalculation that should be corrected to avoid falling behind in one of the key markets of the future. As India's economy continues its rapid expansion, early and substantial investment positions will likely determine which countries and companies benefit most from this growth trajectory.

Sources: The Economic Times, Embassy of India in Germany, The Tribune, Times of India, Handelsblatt

Two weeks ago, Zinnov Confluence took place in Bengaluru. One of India’s largest and most influential Tech events is organised by Zinnov, a key enabler for multinational companies setting up their Global Capability Centers in India and Emerging Markets.

This year’s edition was fully focused on the impact of AI on global organisations.

Many leaders of European companies and their GCC heads joined, and you can find more details and links to video recordings here.

Your random facts and stories about India and the Indo-European friendship.

This week: the evolution of Indian English.

Enjoyed this issue? Share the newsletter with your network.

You can’t get enough or want to catch up on past editions? Follow the link!