The Core Report episode #869 examines the paradoxical trend of slowing FDI in India coinciding with a rapid expansion of Global Capability Centers (GCCs), which now generate nearly $100 billion annually. It also covers market reactions to Iran-US tensions, rising inflation, crude oil flow disruptions to Asia, and insights from 19 state budgets showing a shift in capital expenditure towards urban development and housing.
Summarized by Podsumo
GCCs in India have surged to over 2,117 centers, employing 250,000 AI professionals and accounting for 28% of global GCC AI talent, even as net FDI fell to $6.3 billion in 2025-26.
Crude oil flows to Asia are being reshaped by sanctions, with Asian countries increasingly turning to Russian and Venezuelan oil, while refineries face feedstock shortages due to the loss of medium-sour Middle Eastern crude.
A study of 19 state budgets reveals a post-COVID surge in capital outlay (51% above pre-COVID trends), but states are struggling to execute budgets, with only 65% spent by February 2026.
Hyundai expects 8-10% domestic sales growth this fiscal, driven by GST cuts and strong rural demand, planning $800 million investment to double capacity in Maharashtra.
Gold prices rose amid optimism for a potential end to Iran-US hostilities, while Brent crude futures hovered around $101, despite global oil stockpiles dropping by 4.8 million barrels per day
"Rather than viewing the FDI slowdown as a strictly bearish signal, perhaps it's better understood as a market evolution. Instead of a single stream of traditional capital inflows, India is evidently cultivating twin streams of investment, one focused on capturing the domestic consumer market and a rapidly expanding one focused squarely on harnessing its people."
"The amount of oil loss is that 1 billion barrels. If we are going to open the shell almost today, the oil also does not flow immediately and that 10 million barrels, but it doesn't come back immediately as well. There is an actual production shut in for many of these wells in the Middle East."
"In financial year 27, there are challenges of revenue because center's revenue is getting impacted because of excess U.T. cuts... So I do think while the intent of Budgeting remains great, in Finanjure 27 also you will see states under shoot the budget targets in terms of KPGs."