India faces US sanction in disguise

The United States has increased its tariff on certain Indian imports from 25% to 50%. President Donald Trump has called this new measure a “secondary” tariff, a term that is not formally used in trade policy but is similar to what is known in sanctions law.

Secondary sanctions are penalties placed on third parties that are seen as supporting actions the sanctioning country opposes. For example, if a US bank, port, shipping company, or other business is prohibited from dealing with the Russian financial system, a secondary sanction could make it illegal for non-US entities to engage in similar transactions as well, reports Bloomberg.

India is affected because the tariff is linked to its purchases of Russian oil. The stated goal of the measure is to pressure Russia to end the war in Ukraine. If that goal is not achieved, it is uncertain what additional steps the US might take toward India, which is currently the largest buyer of Russian seaborne crude oil.

The idea of calling the tariff “secondary” is unusual, but the US also has more conventional tools for sanctions, such as the Specially Designated Nationals list managed by the Office of Foreign Assets Control in the Treasury Department.

State-owned Indian refiners are already pulling back from the Russian trade. If they start showing up on the SDN list, it would become difficult for others to do business with them. No amount of nationalistic bluster can mitigate the seriousness of that threat. To lose access to the US currency or the Western-controlled banking system would be a far bigger setback than a 50% tariff. Even large Indian tycoons will not want to needle Trump. Russian crude has been the biggest source of oil for Mukesh Ambani’s refinery this year. His rival billionaire Gautam Adani doesn’t have any exposure to oil, but he has existing legal trouble with the US government. He also has a vast port network to protect, reports Bloomberg.

What’s the way out then? In an interview with Reuters, Brazilian President Luiz Inacio Lula da Silva, who’s also been handed penal tariffs of 50%, floated a trial balloon: a joint response by BRICS. Modi, who spoke on the phone with Lula for nearly an hour Thursday, is expected to head to China this month — for the first time in seven years. Marshaling a unified front to challenge Trump’s overreach might make sense to Lula, but ratcheting up the confrontation with Washington should hold no appeal for Modi.

Brazil’s biggest export market is China, with whom it has a US$49 billion trade surplus. India, on the other hand, sells just about $32 billion annually to Brazil, Russia and China — combined. The US buys nearly three times as much from it, in addition to providing tens of thousands of work visas each year to Indian techies. Washington also controls the student-visa pipeline for — amongst others — children of local politicians, bureaucrats, tycoons and bankers. Even if Modi wants to go on a collision course with Trump, the elite wouldn’t let him, reports Bloomberg.

Team Modi must switch its focus. What started off as a US-China trade and technology war has turned into a much bigger play for absolute American dominance. There is no point now in negotiating a discount on the 25% reciprocal tariff. Let that be handled as part of a broader trade deal. Getting the secondary tax cancelled in Trump’s three-week grace period has to be the more immediate goal.

Even if Modi succeeds in that limited objective, his political opponents won’t let him run a victory lap. “India, please understand: The reason Modi cannot stand up to President Trump despite his repeated threats is the ongoing US investigation into Adani,” Rahul Gandhi, leader of the opposition in parliament, wrote in a post on X. He went on to say that Modi’s hands are tied by AA. Gandhi, who often questions the outsize economic dominance of Ambani and Adani, refers to them in shorthand as AA — or A1 and A2.

Adani, the infrastructure czar, is facing criminal charges in the US for his alleged role in what the Department of Justice has described as a US$250 million bribery scheme involving a solar-energy contract. The Adani Group has refuted the allegations as baseless and said it’s fully compliant with all laws. It also denied a Wall Street Journal article in June that said that US prosecutors are investigating whether Adani’s companies imported Iranian liquefied petroleum gas, or LPG, into India through his flagship Mundra port, violating sanctions.

The businessman from Modi’s home state of Gujarat also denies receiving any favors from the government because of his long association with the prime minister. During his visit to the White House in February, Modi, who doesn’t comment on Adani at home, described the tycoon’s legal troubles as a “personal matter” that doesn’t belong to discussions between national leaders. This week, Adani stepped back from his role as executive chairman of the port business, which controls Israel’s Haifa terminal and is looking to expand in Europe. The company said the transition to a non-executive role, in which Adani will no longer count among key management personnel, was to ensure compliance with corporate governance norms. It “was long planned.”

The secondary tariff is just Trump-speak for a display of America’s power over non-Americans. Ambani’s oil-refining business is trying to diversify away from Russia, One of his units has paid a US$10 million “development fee” to the president’s real-estate firm, licensing the Trump name in Mumbai, according to the WSJ.

There is no other option. Trade disputes can still be taken to the World Trade Organization. In the realm of sanctions, might is the only rule — and the dollar the only currency. The likes of Lula and Modi can protest the former as much as they want, but no savvy businessman in their countries can do without the latter.

 

Iran completes overhaul of South Pars refinery

Overhaul of the fifth refinery of Iran’s South Pars gas field has been successfully completed, said Kambiz Sefati, manager of the refinery. The work was successfully completed without any incidents, thanks to the round the clock efforts of the staff and strict adherence to safety standards.

He added, "This remarkable achievement reflects the deep commitment of the refinery’s personnel to upholding the highest safety and operational standards."

The manager of the fifth refinery at the South Pars Gas Complex stated that "the issuance of over 5,700 work permits during the maintenance period reflects the extensive scope of activities and our strict adherence to safety procedures in authorizing necessary operations." 

He added, "Thanks to the round-the-clock efforts of all colleagues, particularly the HSE (Health, Safety, and Environment) team, we successfully navigated this critical period without a single incident."

Emphasizing the key factors behind this achievement, the manager said, "Conducting high-quality safety training for specialized maintenance personnel, holding briefing sessions to learn from past incidents in the oil industry, enforcing 24/7 monitoring at the site entrance to prevent unauthorized items, and continuous verification of all issued permits—especially hot work permits by the HSE team—were among our key measures."

Safati noted, "This major maintenance overhaul was meticulously planned and executed to ensure the refinery's full readiness for safe and stable production during the winter season." 

He emphasized, "In this regard, we leveraged the expertise of specialized maintenance teams and utilized the products and technical knowledge of Iranian knowledge-based companies."

Expressing gratitude for the relentless efforts of operational and support teams in maintaining maximum safety and efficiency, he described this achievement as "the result of solidarity and synergy among all personnel, reflecting the paramount importance of safety at this refinery."

South Pars gas field, which Iran shares with Qatar in the Persian Gulf water, is divided into 24 standard phases of development in the first stage. Most of the phases are fully operational at the moment.

The huge offshore field covers an area of 9,700 square kilometers, 3,700 square kilometers of which are in Iran’s territorial waters in the Persian Gulf. The remaining 6,000 square kilometers, called North Dome, are situated in Qatar’s territorial waters.

The field is estimated to contain a significant amount of natural gas, accounting for about eight percent of the world’s reserves, and approximately 18 billion barrels of condensate.

 

World leaders criticize Gaza takeover by Israel

World leaders have criticized Israel’s decision to seize control of Gaza City, warning the move risks exacerbating the already catastrophic humanitarian crisis in the Gaza Strip.

The Israeli security cabinet approved the controversial plan early Friday, marking a new escalation in the country’s nearly two-year-long war against Hamas.

The announcement from Israeli Prime Minister Benjamin Netanyahu’s office came after hours of debate among senior security officials.

The decision to move into Gaza City was made in light of Netanyahu’s earlier suggestions that the military would "take control of all Gaza," but also his claim that Israel had no intention of occupying the Strip permanently.

Saudi Arabia has strongly condemned, in the strongest terms, the Israeli occupation of the Gaza Strip, denouncing what it described as deliberate acts of starvation, brutality, and ethnic cleansing against the Palestinian people. In a statement on Friday, the Ministry of Foreign Affairs said, “The inhumane ideas and decisions adopted by the Israeli occupation authorities without deterrence once again confirm their disregard for the deep emotional, historical, and legal connection of the Palestinian people to this land, and for their rightful claim to it in accordance with international laws and humanitarian principles.”

British Prime Minister Keir Starmer condemned the move in strong terms, stating, “Israel’s decision to further escalate its offensive in Gaza is wrong and we urge it to reconsider immediately.”

“This action will do nothing to bring an end to this conflict or to help secure the release of the hostages. It will only bring more bloodshed,” Starmer said in a statement.

“What we need is a ceasefire, a surge in humanitarian aid, the release of all hostages by Hamas and a negotiated solution.”

Starmer added that Hamas can play no part in the future of Gaza and must leave as well as disarm. The Britain, he said, is working with allies on a long-term strategy to establish peace in the region as part of a two-state solution.

Finland’s Foreign Minister Elina Valtonen echoed those concerns, stating she was extremely worried about the worsening humanitarian conditions in Gaza. “We hope for an immediate Gaza ceasefire and the immediate release of Israeli hostages,” she said.

Australian Foreign Minister Penny Wong called on Israel to back down, warning that permanent forced displacement is a violation of international law.

US President Donald Trump commented earlier this week that the decision was really up to Israel and blamed Hamas for stalling negotiations.

"They didn’t really want to make a deal," he said.

UN High Commissioner for Human Rights Volker Türk slammed the move saying, “The Israeli government’s plan for a complete military takeover of the occupied Gaza Strip must be immediately halted.”

“It runs contrary to the ruling of the International Court of Justice that Israel must bring its occupation to an end as soon as possible, to the realization of the agreed two-state solution and to the right of Palestinians to self-determination,” he added.

Reactions within Israel were divided. Opposition leader Yair Lapid denounced the government’s plan, saying it went against the advice of military leadership.

"The plan is completely contrary to the position of the military and the defence establishment, without taking into consideration the burnout and the exhaustion of the combat troops," he said.

Chief of the General Staff Lieutenant General Eyal Zamir warned earlier on Thursday that the plan would endanger the lives of the hostages and further stretch the military.

Zamir has repeatedly clashed with the security cabinet in recent days, notably over the Gaza proposal.

Prior to the security cabinet session on Thursday, Netanyahu denied Israel had any intentions of permanently controlling Gaza in its entirety.

"We don't want to keep it. We want to have a security perimeter," the Israeli leader told Fox News. "We don't want to govern it. We don't want to be there as a governing body."

He said that Israel intends to hand over the Strip to a coalition of Arab forces that would govern it.

The announcement comes as humanitarian organizations continue to warn of severe conditions in Gaza, where widespread hunger and displacement are mounting daily.

The ongoing Israel-Hamas war in Gaza has displaced nearly the entire population of Gaza, destroyed over 60% of the enclave’s buildings and infrastructure, and brought most of its 2 million residents to the brink of famine.

PSX benchmark index up 3.08%WoW

Pakistan Stock Exchange (PSX) sustained its bullish momentum throughout the week on anticipation of strong earnings during the ongoing results season. The benchmark index touched its all-time high closing at 145,647 points on Thursday, but closed the week at 145,383 points, up 4,348 points, up 3.08%WoW, with meager decline in the last trading session.

Market participation improved with average daily traded volume increasing by 16.3%WoW to 653 million shares, up from 561 million shares a week ago.

Trade deficit for the month of July 2025 rose to US$2.8 billion, up 44%YoY.

Workers’ remittances for July 2025 also rose to US$3.2 billion, up 7%YoY.

Foreign exchange reserves held by State Bank of Pakistan (SBP) decreased by US$72 million to US$14.2 billion as of August 01, 2025.

Key sectoral developments included robust 30%YoY growth in cement dispatches for July 2025, while OMC offtakes reached 1.2 million tons, up 2% YoY.

On the international front, the Trump administration imposed an additional 25% tariff on India, raising reciprocal tariffs to 50%.

Other major news flow during the week included: 1) Pakistan gets 19% tariff after US drives a hard bargain, 2) SBP enhances housing finance limit for microfinance borrowers to PKR5 million, 3) ExxonMobil likely to come back for offshore venture, 4) Pakistan set to initiate dialogue with Qatar on LNG supplies, and 5) Budget deficit drops to 5.4% in FY25 from 6.8% for the same period last year.

Woollen, Jute, insurance, Tobacco, and Food & Personal Care were amongst the top performing sectors, while Synthetic & Rayon, Close-end Mutual Funds, Chemical, Sugar & Allied Industries, and Textile Weaving were amongst the laggards.

Major selling was recorded by Banks/ DFI with a net sell of US$18.8 million. On the other hand, Mutual Funds absorbed most of the selling with a net buy of US$22.9 million.

Top performing scrips the week were: AGL, NESTLE, UNITY, HBL, and BNWM, while the laggards included: GADT, PKGP, FABL, LCI, and IBFL.

According to AKD Securities, the market is expected to remain positive in the coming weeks, with further developments over circular debt expected to drive the market along with upcoming corporate results remaining in the limelight.

The benchmark index is anticipated to sustain its upward trajectory, with a target of 165,215 points by end December 2025, primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.

The top picks of the brokerage house include OGDC, PPL, PSO, FFC, ENGROH, MCB, FCCL, KOHC, INDU, and SYS.

Pleasing Trump may annoy Saudi Arabia

Energy diversification is smart, but foreign policy tact is essential.

Importing US crude oil may please US President Donald Trump, but it could also annoy Saudi Arabia, especially given the special relationship between Pakistan and the Kingdom, which includes:

Long standing energy ties
Saudi Arabia is Pakistan’s largest crude oil supplier, often providing oil on deferred payment (US$3 billion oil credit facility renewed multiple times).

Financial assistance
Saudi Arabia has provided billions in loans, deposits, and grants to support Pakistan’s economy, particularly during IMF negotiations.

Strategic alignment
The Saudi-Pakistan relationship is not just economic but also political and military, including defense cooperation and labor remittances.

Though, to begin with import of crude oil from United will be small, the move could strain ties between Pakistan and Saudi Arabia.

Geopolitical optics
Importing US crude might be seen as Pakistan pivoting westward, especially if framed as part of a larger US trade deal.

Loss of market share

Even a 10% reduction in demand from a long-time buyer like Pakistan might raise commercial and symbolic concerns.

Trust and alignment issues

If the decision isn't communicated diplomatically, Riyadh may perceive it as ungrateful, especially if deferred payment oil continues.

Not necessarily a rupture

Scale is limited
Pakistan is not replacing Saudi oil. The pilot phase is just 10% of imports. It's a diversification move, not a shift in allegiance.

Economic logic
The US crude provides lighter grades and higher gasoline yield, improving domestic refining output. If positioned as a technical decision, it’s easier to justify.

Diplomatic communication
Pakistan can explain this as part of energy diversification—a common practice by many countries—and reaffirm its strategic ties with Riyadh.

Pakistan should do:

Step	Why it matters
Engage Saudi leadership in advance	Avoid surprises and reassure that US crude is a supplement, not a replacement
Reaffirm oil diplomacy	Continue or even expand the deferred payment arrangement with Saudi Arabia
Highlight refining needs	Explain that lighter crude grades improve fuel mix, not reduce strategic ties
Balance optics	Avoid appearing to pivot entirely toward US or using this purely as a bargaining chip in US trade diplomacy

 

Bottom Line

Importing US crude could cause diplomatic unease in Saudi Arabia—especially if it's perceived as Pakistan drifting from its long-standing partner. But the impact can be minimized through: 1) Transparent diplomacy, 2) Economic rationale, and 3) Strategic reassurance

 

Israel using US munitions to attack Gaza schools

The Israeli military has “illegally and indiscriminately” used US munitions to attack school shelters in Gaza, killing hundreds of people, Human Rights Watch (HRW) says, reports CNN.

The US-based campaigners’ report, “Gaza: Israeli School Strikes Magnify Civilian Peril,” was published Thursday.

Israel’s campaign following the Hamas-led attacks of October 07, 2023 has made the vast majority of Gaza’s 2.1 million people homeless – forcing many to flee their neighborhoods in search of civilian infrastructure.

Israel has frequently said its strikes on school facilities in Gaza target embedded Hamas fighters. But HRW said it only found seven instances where the military published details of alleged militants killed – and highlighted two strikes, which killed nearly 50 people, where they found no evidence of any military target.

Such attacks would violate international law because schools and other educational facilities are civilian objects and protected from attack, HRW said. They lose that protection when used for military purposes or are occupied by military forces. But the use of schools to house civilians does not alter their legal status.

HRW called on the US and other governments to halt arms sales to Israel, given the “clear risk” that weapons might be used to commit or facilitate “serious violations” of international humanitarian law.” Washington’s supply of arms to Israel has made the US “complicit” in their lawful use, the group said.

“Israeli strikes on schools sheltering displaced families provide a window into the widespread carnage that Israeli forces have carried out in Gaza,” Gerry Simpson, associate crisis, conflict and arms director at HRW, said in the report. “Other governments should not tolerate this horrendous slaughter of Palestinians merely seeking safety,” added Simpson.

The Israel Defense Forces (IDF) said it “operates exclusively on the grounds of military necessity and in strict accordance with international law.”

“It must be emphasized that the report blatantly ignores Hamas’ systematic pattern of unlawfully embedding its’ military assets, including weapons and ammunition in, beneath, and in proximity to densely populated civilian areas, and cynically exploits civilian infrastructure for terror purposes,” the IDF added.

“Specifically, it has been well documented that Hamas exploits schools and UNRWA facilities for its military activities by building military networks beneath and within schools; establishing command-and-control centers within them, launching attacks toward IDF forces from them, and imprisoning hostages in them.”

The military said it takes “feasible precautions” to mitigate harm to civilians as much as possible and “regrets any harm caused to uninvolved civilians.”

Israeli attacks on school shelters in Gaza have killed at least 836 Palestinians and injured another 2,527 people, as of July 18, HRW reported, citing the UN’s Office for the Coordination of Humanitarian Affairs (OCHA).

HRW investigated two such attacks where it identified the use of US munitions. The agency said it reviewed satellite imagery, photos, and videos of the attacks and their aftermath, as well as social media and interviews with eyewitnesses.

CNN has previously reported on the use of US weaponry in deadly strikes and has reached out to the State Department for comment on the HRW report.

On July 27, 2024, the Israeli military launched at least three strikes on the Khadija girls’ school in Deir Al-Balah, central Gaza. At least 15 people were killed.

Then on September 21, Israel struck Al-Zeitoun school, northern Gaza. At least 34 people were killed.

“Can you imagine, a building full of displaced people leveled in the blink of an eye?” a journalist cited in the HRW report said. “I saw people with serious and more minor injuries, and then saw human remains on the ground.”

The allegations chimed with repeated human rights warnings that Israel’s 22-month bombing and siege has rendered much of the enclave uninhabitable.

HRW said attacks on school shelters have diminished access to refuge, exacerbated reconstruction challenges, and disrupted education among a pre-war population of more than 2.2 million people – where half of those are under the age of 18.

At least 97% of schools in Gaza have sustained damage, the UNICEF-led Education Cluster reported in August. Efforts to rebuild destroyed homes in Gaza could take until 2040, the UN said in May. The level of destruction is so extensive that it would require external assistance on a scale not seen since 1948, the agency added.

At least 61,158 Palestinians have been killed in Gaza, the Ministry of Health there reported on Wednesday. At least 193 people have starved to death, including 96 children, the ministry added.

One Palestinian student told CNN that days spent going to university have been replaced by a brutal struggle for survival repeated displacement, and severe hunger.

“The war came and destroyed everything,” Raghad Ezzat Hamouda, 20, told CNN on Wednesday.

“I lost my ambitions and dreams,” added Hamouda, who is displaced with nine family members in Tal Al-Hawa, central Gaza. “Gaza has become uninhabitable. (There are) no homes, no schools, no universities, no infrastructure... Just ashes.”

 

 

 

Israeli command centers come under attack in Gaza

According to Tehran Times, the Al-Qassam Brigades, the armed wing of Hamas, announced they have shelled an Israeli command and control site near Dar al-Arqam School in the al-Tuffah neighborhood, eastern Gaza City, using multiple mortar shells.

In southern Gaza, near Khan Younis, the al-Qassam Brigades targeted another occupation regime’s command site in the Morag axis, using heavy-caliber mortar shells.

The resistance continues to confront Israeli occupation forces (IOF) that have invaded various parts of Gaza, launching strategic operations that have resulted in both human and material losses for the regime. 

In the al-Zannah area northeast of Khan Younis, al-Qassam forces attacked an IOF armored personnel carrier with a powerful barrel bomb, reportedly killing and injuring its crew.

The IOF has acknowledged injuries to soldiers including one in serious condition. 

Al-Qassam stated that, in coordination with the al-Quds Brigades, (the armed wing of Palestinian Islamic Jihad) and al-Nasser Salah al-Din Brigades (the armed wing of the Popular Resistance Committees), they jointly shelled a gathering of IOF soldiers and military vehicles north of Khan Younis, using heavy mortar fire.

The al-Quds Brigades, in collaboration with the Abu Ali Mustafa Brigades (armed wing of the Popular Front for the Liberation of Palestine), released footage of a joint operation that destroyed an IOF military vehicle. 

They also shared video of an attack targeting IOF soldiers with mortar fire, carried out in cooperation with the Ansar Brigades in the eastern Shujaiya neighborhood near Gaza City.

In a separate announcement, the Abu Ali Mustafa Brigades confirmed that one of their units successfully destroyed an IOF military vehicle using a pre-planted anti-armor explosive device. The operation took place in eastern Shujaiya and reportedly caused casualties among the IOF crew.

Meanwhile, the al-Aqsa Martyrs Brigades claimed responsibility for targeting a group of IOF soldiers and military vehicles with mortar shells east of al-Qarara, northeast of Khan Younis.

In response to these developments, the Israeli military confirmed that one of its officers was also wounded in southern Gaza.

This escalation comes amid reports of an impending IOF military plan for a full-scale invasion of Gaza again. The proposal is expected to be discussed in a cabinet session on Thursday, although the Israeli military has reportedly expressed opposition to the plan, warning of the significant risks involved.

The Hebrew newspaper Yedioth Ahronoth has reported that the Israeli government’s rehabilitation department is currently treating around 80,000 wounded soldiers.

Among them, approximately 26,000 are suffering from psychological disorders. The report highlights a growing mental health crisis within the Israeli military, noting a noticeable rise in suicide cases among soldiers.