ASIA PACIFIC EQUITY RESEARCH: INDIA FIRST TO MARKET

Research evidence excerpt

ASIA PACIFIC EQUITY RESEARCH: INDIA FIRST TO MARKET

Asia Pacific Equity Research

India First to Market 15 July 2026

Top Stories

India Trade: June deficit widened on higher imports (Toshi Jain)

2Q current account deficit expected at 1.4% of GDP

June's trade deficit came in above expectations at $30.4bn (J.P. Morgan: $25.6bn, consensus: $26.5 bn), widening

from $28.2bn in May (Figure 1). The surprise was largely driven by higher oil imports. Due to timing effects, the recent softening

in oil prices has not yet fed through: net oil imports were broadly unchanged at $14.5bn (vs $14.3bn in May). With oil prices

cooling, oil imports should ease in coming months. However, the magnitude of the decline may be smaller than the drop in

prices suggests, as inventory rebuilding could support higher import volumes. That said, uncertainty around oil prices remains

high due to recent events in the Middle East.

India Autos (Amyn Pirani/Nick Lai)

What does China’s overseas expansion mean for India? Lessons from other markets

Overseas expansion has become one of the dominant themes driving the equity story for China Auto stocks. CYTD 2026,

China overall PV sales have declined 6% YoY but exports have grown 72% YoY (accounting for 38% of volumes in June 2026).

Europe is the largest export destination (37%) followed by Asia (30%) and South America (17%). Chinese OEMs have a minor

presence in India due to a combination of high import duties as well as restrictions on direct investments. This could change at

the margin due to the JSW group’s partnerships with MG Motor (SAIC) and Chery as well as new launches planned by BYD.

India is also reportedly set to approve an investment from Horse Powertrain (backed by China’s Geely group). We believe that