Dragoman Digest

‍India’s private investment cycle returns

The rebound is narrowly concentrated

Proposed capital projects in India totalled 14.3 trillion rupees (US$150 billion) in the April-June quarter, up from 11.3 trillion rupees a year earlier, led by AI data centres (DCs) and nuclear power. The pickup follows a decade in which government did much of the investing while companies repaired their balance sheets, a restraint which Finance Minister Nirmala Sitharaman repeatedly criticised. Bank lending to industry – a gauge of investment appetite – grew 19.2 percent year-on-year in June, three times the June 2025 pace. Unlike the previous 2003-2011 investment cycle, however, which ran on debt and ended in a years-long bad-loan crisis, this one is largely self-funded. 65 percent of capital spending last fiscal year came from retained profits and less than a quarter from domestic debt.

A handful of sectors – DCs, renewable and conventional power, crude oil, and metals – account for most announcements. Nuclear only opened to private capital last December. These are all industries which the government has promoted as pillars of self-reliance, an agenda Prime Minister Narendra Modi reiterated on Independence Day last month. Meanwhile, earnings at India’s 500 largest listed companies grew 22 percent in the June quarter, the fastest in three years, strengthening balance sheets. Consumer demand, lifted by last year’s tax cuts, and cheap inventories cushioned the energy price shock from the Iran war. Neither support will endure, nor will the flattering effect of a weak rupee on exporters, and analysts say fresh fiscal stimulus may be needed to sustain earnings.

Outside the favoured sectors, demand is less robust and mostly limited to suppliers like makers of wires, cables, specialty steel, and small equipment. Spreading investment across the economy would likely require deeper reforms than India has enacted to date, including greater public spending on education and R&D. The test of the coming years is whether the investment rush seeds a self-sustaining cycle, or whether corporate India will be forced to wait for more comprehensive reforms.

Europe is falling further behind the US and China in the critical minerals and rare earths race

Unless the EU is willing to commit funds to demand-side measures, the gap will likely only widen

European officials have warned that the EU is losing ground to the US in its efforts to secure critical minerals supply. Since January 2025, the US government has announced US$10.1 billion in critical minerals and rare earths equity investments and stood up a range of policy initiatives including the Project Vault stockpiling mechanism. While the US frames its critical minerals efforts as collaborative, this message is not resonating in Brussels: one official was adamant that the EU “cannot be fooled by negotiations” with the US. Such scepticism was borne out in early 2026 when President Trump’s proposed annexation of Greenland sent stocks of US-linked critical minerals companies in the territory skyrocketing, with one industry CEO noting that “increased US involvement in Greenland is a positive”.

The EU’s critical minerals efforts are guided by the 2024 Critical Raw Materials Act, which set non-binding benchmarks for increased self-reliance by 2030, including the objective for 40 percent of the bloc’s strategic minerals demand to be processed within the EU. The EU followed up in 2025 with the RESourceEU Action Plan and €3 billion in funding. In theory, the plan spans stockpiling, as well as the designation of strategic projects and associated assistance for permitting, investment, and offtake. But analysis published by the European think-tank ODI Global in June 2026 found that, of the 60 projects designated as “strategic”, 40 percent show no evidence of any financial commitment, public or private. Likewise, fewer than a third had announced any offtake agreement, with roughly half of that output destined for buyers outside the bloc.

To strengthen the demand-side support that is crucial to getting projects into production, the EU is setting up a European Critical Raw Materials Centre “inspired by the Japanese model”. The Japan Organization for Metals and Energy Security (JOGMEC) has in many ways set the standard for patient, strategic offtake agreements. It backed Australian critical minerals producer Lynas in 2011 with a decade-long offtake agreement and US$250 million in financing and has reinvested in Lynas at multiple stages. JOGMEC and Lynas recently signed an offtake agreement lasting to 2038. The EU is still waiting on as-yet unpublished legislation to convert the Centre from a “matchmaking” mechanism into a body with formal legal and budgetary backing. In the meantime, the US is not standing still. US national champion USA Rare Earth recently signed a 15-year offtake deal with French rare earths processor Carester.

Türkiye seeks a foothold in Syria’s energy sector

Türkiye’s early diplomatic engagement with Syria provides an advantage, but Ankara will face stiff competition

Since Bashar al-Assad’s ousting in 2024, Türkiye has moved swiftly to capitalise on Syria’s reconstruction. An early patron of Syria’s new President Ahmed al-Sharaa during the civil war, Türkiye has been the most active outside power in Damascus, providing military aid, economic support, and political backing. In 2025, Ankara signed an MoU with Damascus to comprehensively reform its security apparatus, around the same time Turkish firms joined a Qatari-led US$7 billion consortium to build gas-fired and solar power plants.

Recent agreements between Damascus and state-owned Turkish oil company TPAO provide further evidence of Ankara’s attempts to convert political influence into commercial outcomes. TPAO is now ready to begin exploration of Syria’s onshore and offshore oil reserves, which have remained largely untapped after more than a decade of civil war. The prospective oil work is accompanied by the commissioning of new infrastructure linking the Turkish and Syrian grids. Türkiye is already Syria’s largest trade partner, with bilateral trade up 42 percent to US$3.75 billion in 2025.

Yet, Syria has no intention of being wholly reliant on Türkiye. Cognisant of Ankara’s capital constraints and ambitions to dominate Syria, Damascus has also looked to the Gulf’s petrodollars. Gulf states pledged US$28 billion towards reconstruction in 2025. Deals struck by Saudi Arabia, the UAE, and Qatar have effectively divided the economy between them, focused on telecommunications, ports and real estate, and power generation and banking, respectively.

The UAE’s growing influence in Africa

The UAE is vying to be the most important economic actor in Africa

The retreat of Western donors has created an opening for other foreign powers across Africa, and none has been more consequential than the UAE. Abu Dhabi has projected power across the continent through interlocking commercial, industrial, and security arrangements. Its ventures range from a US$34 billion green energy project in Mauritania, to huge farms in Sudan and mining rights throughout Guinea and the Democratic Republic of the Congo. By some estimates it is now Africa’s largest source of capital, having announced more than US$168 billion since 2017. Many of these are announcements rather than binding commitments, so the figures warrant caution. Still, the UAE and Saudi Arabia account for most of the US$100 billion in non-oil trade between Africa and the Gulf.

Ports came first. Dubai’s DP World and Abu Dhabi Ports now operate or are developing terminals and inland freight hubs in 13 African countries. The most contentious deal is DP World’s 30-year lease of Berbera, in the breakaway region of Somaliland. The port complex, which fronts the Gulf of Aden, includes a 250 km highway link to landlocked Ethiopia and an airstrip, alongside port terminals and a nearby naval base.

Yet this entrenchment has prompted pushback. In Sudan, the UAE has been trenchantly criticised by human rights groups and Western intelligence agencies for its support of the paramilitary Rapid Support Forces, which appears to have allowed the UAE additional access to Sudan’s gold. In 2025, the value of Sudanese gold passing through the UAE exceeded US$1 billion, with most of the country’s 40-tonne artisanal production sold via Dubai. Saudi Arabia and Egypt have also sought to limit the UAE’s reach in Sudan, backing the rival and internationally recognised Sudanese Armed Forces.