One state-run Indian company’s agreement to buy another company in Britain could have implications for its exchange traded funds (ETFs).

The offer is for Oil & Natural Gas Corp. to buy Britain’s Imperial Energy for $2.6 billion in cash, reports Jane Wardell for the Associated Press. The deal will help ONGC meet growing demand for fuel in India’s economy. Currently, about 70% of the country’s fuel needs are imported.

Imperial is an independent oil and gas exploration company with holdings primarily in western Siberia and Kazakhstan. ONGC is India’s largest oil and gas explorer.

India’s GDP growth is expected to slow to 8.1% in the second quarter after tight monetary policy dented demand, reports Reuters. It’s the slowest pace in almost three years.

In the past four years, India’s growth has averaged 8.8%, but rampant inflation has crept in and begun to slow things down. The rate of inflation is now above 12.5% – its highest point in 13 years.

• iPath MSCI India ETN (INP): down 44.5% year-to-date; ONGC is 2.8%
• PowerShares India (PIN): down 22.2% since March 5 inception; ONGC is 7.1%
• WisdomTree India Earnings (EPI): down 27.8% since Feb. 26 inception; ONGC 6.8%

Tags: Asia, Emerging Markets, Energy, EPI, India, INP, Oil, PIN