Taaha Wakuwala

In March 2025, India and New Zealand initiated negotiations for a Free Trade Agreement, which were successfully concluded by December 2025, making it one of India’s fastest-negotiated FTAs. The pact reflects a shared commitment to strengthen economic ties and achieve commercially meaningful outcomes within a remarkably short period. For international businesses, the India–New Zealand FTA expands market access and tariff advantages, positioning New Zealand as a strategic gateway to the wider Oceania and Pacific Island markets. Beyond trade in goods, the agreement opens up avenues in services and skilled mobility, highlighting India’s role as a dependable talent source across priority sectors. Moreover, the FTA sets the stage for collaboration in emerging and specialised domains, including AYUSH, wellness, and services such as Yoga instruction, culinary expertise, and creative professions. Altogether, it exemplifies India’s evolving trade strategy, integrating market access, services, skills, and long-term economic partnership. Tracing Growth in India-New Zealand Trade Relations Over the years, India and New Zealand have nurtured a steadily deepening trade relationship, making New Zealand India’s second-largest trading partner in Oceania and its 11th-largest global partner in two-way trade. Although bilateral trade remains selective in scale, its strategic importance has risen alongside growing commercial and demographic connections. During 2023–24, total bilateral trade reached USD 1.75 billion, reflecting sustained engagement in both goods and services. New Zealand’s status as a high-income, globally integrated economy with a per capita income of USD 49,380 and total imports and exports of USD 47 billion and USD 42 billion respectively in 2024 further highlights its stability and sophistication as a market in the Oceania region. New Zealand’s outward investment orientation reinforces this bilateral dynamic. With nearly 8% of its GDP invested abroad annually and total overseas investments amounting to USD 422.6 billion as of March 2025, the country represents a valuable source of global capital and long-term partnerships for emerging economies like India. Adding to trade and investment flows, India’s diaspora of approximately 300,000 people representing nearly 5% of New Zealand’s population serves as a durable economic and cultural bridge. This community supports demand for Indian goods and services while facilitating business continuity, talent mobility, and cross-border cooperation, forming a solid foundation for the FTA. Key Benefits of the India–New Zealand FTA The India–New Zealand Free Trade Agreement provides a comprehensive suite of advantages aimed at deepening trade, promoting services, and supporting cross-border investment. Its provisions enhance predictability, improve market access, and foster long-term operational viability for businesses in both markets. Tariff Liberalisation The FTA introduces a calibrated tariff framework that balances full export access with domestic safeguards. From the Entry into Force, Indian exports gain 100% duty-free access to New Zealand, providing immediate clarity and competitiveness for manufacturers and exporters. India has reciprocated by offering access on 70.03% of its tariff lines, while 29.97% remain on an exclusion list to protect sensitive sectors. Among the liberalised lines, 30% receive immediate duty elimination, covering products such as wood, wool, sheep meat, and raw leather hides. A further 35.60% of tariff lines will be phased out over 3, 5, 7, and 10 years, including petroleum oils, malt extracts, vegetable oils, selected electrical and mechanical machinery, and peptones. An additional 4.37% of products, such as wine, pharmaceutical products, polymers, aluminium, and iron and steel articles, will see reduced tariffs, while 0.06% including honey, apples, kiwi fruit, and milk albumin fall under tariff rate quotas. Key sensitive items explicitly excluded by India include dairy and dairy derivatives, most animal products, select agricultural commodities, sugar, fats and oils, arms and ammunition, gems and jewellery, and certain copper and aluminium products. This structure provides foreign enterprises with predictable timelines, clear access, and a balanced liberalisation approach that aligns with long-term trade strategies. Mobility and Education The FTA introduces a structured framework for talent mobility, highly relevant for companies seeking skilled, globally mobile professionals. For the first time, New Zealand has signed an Annexe on Student Mobility and Post-Study Work Visas, ensuring long-term policy certainty. Indian students may work up to 20 hours per week during studies, with post-study work options of up to three years for STEM bachelor’s and master’s graduates and four years for doctoral graduates, strengthening the talent pipeline. The agreement also creates dedicated professional pathways, including a quota of 5,000 visas for skilled Indian professionals for stays up to three years across priority sectors such as IT, engineering, healthcare, education, and construction, alongside recognised Indian professions including AYUSH practitioners, yoga instructors, chefs, and music teachers. A Working Holiday Visa quota of 1,000 places annually further supports short-term mobility and early-career exposure. Together, these measures enhance workforce planning and cross-border talent strategies for enterprises. Services The FTA delivers New Zealand’s most extensive services market access offer to date, reinforcing its relevance for service-led enterprises. Commitments cover 118 service sectors, providing enhanced certainty and non-discriminatory treatment for Indian providers. Moreover, Most-Favoured Nation treatment extends across 139 sectors, ensuring that any future liberalisation granted to other partners automatically benefits India. Investment and Market Access Gains Anchored by a long-term investment commitment, New Zealand plans to invest USD 20 billion in India over 15 years, signalling confidence in India’s growth and operating environment. For foreign businesses, this represents deeper capital integration and expanded opportunities across manufacturing, infrastructure, and services sectors. On market access, New Zealand provides immediate zero-duty access on all 8,284 tariff lines from the Entry into Force, boosting competitiveness for Indian exporters. Previously applied tariffs of around 10% on roughly 450 key lines including textiles, apparel, leather, ceramics, carpets, automobiles, and auto components will be removed, reducing New Zealand’s average applied tariff from 2.2% to zero. These steps enhance trade efficiency, margins, and scalability for cross-border operations between the two countries. Gains for Agro-Tech The FTA encourages agri-technology collaboration, with New Zealand committing to Action Plans for kiwifruit, apples, and honey to enhance productivity, quality, and grower capabilities in India. Cooperation includes Centres of Excellence, improved planting material, grower training, and technical support covering orchard management, post-harvest practices, supply chains, and food safety. These measures … Read more

On 18 December, India and Oman officially signed the Comprehensive Economic Partnership Agreement (CEPA), marking a significant milestone in deepening economic and investment ties between India and the Gulf region. The agreement provides extensive tariff reductions for Indian exports, opens up access across 127 services sectors, and introduces a smoother framework for the movement of skilled professionals. Together, these measures reflect a commitment to regulatory transparency and more efficient cross-border operations. The CEPA carries strategic significance beyond trade. It is only the second bilateral free trade deal Oman has signed, after the United States, positioning the country as a key partner in India’s export strategy. The agreement also strengthens the longstanding economic interdependence between the two nations, as India continues to import vital petrochemical and energy resources from Oman, ensuring supply security and fostering long-term economic alignment. What Makes India-Oman CEPA Unique This CEPA stands out due to the extensive market access it provides, setting a high benchmark for India’s recent trade agreements. Indian exporters now enjoy zero-duty access on 98.08% of Oman’s tariff lines, which accounts for around 99.38% of India’s exports by value. This broad tariff elimination offers immediate cost benefits for export-oriented businesses. Beyond tariff cuts, the CEPA promotes predictable and commercially viable operations. By combining liberalisation of goods with access to services and supportive frameworks, it enhances certainty for multinational companies considering Oman as a regional hub and India as a scalable production base. The agreement is more than a trade facilitation tool—it provides a platform for strategic investment planning, regional market penetration, and supply chain optimisation between India and the Gulf. Types of Trade Agreements Type of Agreement Description Free Trade Agreements (FTAs) Binding treaties that reduce or remove tariffs, quotas, and trade restrictions; often include trade facilitation, IPR, and investment terms. Preferential Trade Agreements (PTAs) Reduce tariffs selectively on certain goods without fully eliminating trade barriers. Comprehensive Economic Partnerships/Cooperation (CEPAs/CECAs) Broader than FTAs, covering trade in services, investment, and regulatory collaboration. Bilateral Investment Treaties (BITs) Focus on protecting and promoting investments, including fair treatment and dispute resolution mechanisms. Regional Trade Agreements (RTAs) Agreements among multiple countries in a region to promote economic integration and trade facilitation. India’s Expanding FTA Network The India–Oman CEPA is part of India’s growing series of bilateral trade agreements aimed at improving market access and integrating with global supply chains. Recent milestones include the Comprehensive Economic and Trade Agreement with the United Kingdom and the 2024 pact with the European Free Trade Association (covering Switzerland, Norway, Iceland, and Liechtenstein). India has also secured key deals in the Indo-Pacific and Middle East, such as the ECTA with Australia and the CEPA with the United Arab Emirates, both signed in 2022. Building on this progress, India is negotiating with the European Union and the United States, reinforcing its path toward deeper global trade integration. Current India–Oman Trade Relations India and Oman already maintain a strong and growing trade relationship, providing a solid foundation for the CEPA. As of September 2025, India’s exports to Oman reached USD 515 million, while imports were USD 467 million, yielding a trade surplus of USD 47.3 million. Year-on-year, exports grew 30.7%, from USD 394 million to USD 515 million, and imports increased by 7.39%, reflecting steady commercial engagement. The trade portfolio is concentrated in energy and industrial goods. India’s top exports include petroleum products worth USD 303 million, iron and steel products at USD 24.3 million, and processed minerals at USD 23 million. This complementarity provides a robust base for future diversification and scaling under the CEPA. Sector-Specific Gains Under CEPA The agreement delivers significant advantages across sectors, particularly through wide-ranging access for Indian goods. Zero-duty access on 98.08% of Oman’s tariff lines, representing 99.38% of India’s exports by value, immediately enhances competitiveness and reduces costs for exporters. Labour-intensive sectors like textiles, leather, footwear, gems and jewellery, engineering goods, plastics, furniture, agricultural products, pharmaceuticals, medical devices, and automobiles will benefit from preferential treatment, fostering export growth and employment across MSMEs, artisan clusters, and women-led enterprises. For global companies sourcing or manufacturing in India, the agreement enhances the viability of India-based supply chains serving the Gulf region. Textiles, which constitute a large portion of India’s exports, are likely to gain from improved price competitiveness. More broadly, the CEPA supports India’s strategic aim of diversifying trade in West Asia and reducing reliance on traditional markets. Oman’s interest in emerging sectors such as food processing and space technology also opens avenues for long-term, high-value economic collaboration. The agreement also introduces predictability for trade and supply chain planning. Tariff concessions and reduced exposure to future barriers allow multinationals to make long-term decisions regarding regional hubs, procurement, and export-oriented production. With Oman’s strategic location and India’s manufacturing scale, the CEPA serves as a platform for regional market access, supply chain efficiency, and sustainable growth. Key Features of the India–Oman CEPA The agreement, signed in Muscat, offers mutually beneficial market access. Oman provides duty-free access on 98.08% of its tariff lines, covering 99.38% of India’s exports by value, while India liberalises 77.79% of its tariff lines, accounting for 94.81% of imports from Oman. This reciprocity increases trade predictability and reduces cross-border cost friction. Oman’s strategic location enhances the agreement’s value, acting as a gateway to the GCC, Eastern Europe, Central Asia, and Africa. Its existing FTA with the United States provides additional access advantages, making the CEPA relevant for multinational companies seeking diverse market opportunities through the India–Oman corridor. Commodities: Coverage and Exceptions Indian exporters benefit from near-complete tariff elimination in Oman, improving cost competitiveness and positioning India as a preferred sourcing base for Gulf markets. Multinationals can leverage India’s manufacturing and procurement capabilities to supply Oman and surrounding regions more efficiently. India has maintained a selective approach for certain sensitive products, either excluding them or phasing in tariff reductions. This approach safeguards domestic priorities while ensuring overall balance, giving companies clarity on import exposure and supply chain planning into India. Implications for Companies in Oman India liberalises tariffs on a substantial … Read more

As global companies reconsider where to allocate capital amid supply-chain realignments, geopolitical uncertainties, and tighter financial conditions, India continues to emerge as a resilient and strategically significant investment destination. Looking ahead to 2026, the outlook for foreign direct investment (FDI) in India is shaped not by a single sector or reform, but by the country’s broader positioning within global value chains. With FDI inflows reaching around USD 384 billion in the calendar year up to September 2025 and continuing to grow annually, India is increasingly viewed not only as a vast domestic market but also as a hub for regional operations, export-oriented manufacturing, and global services delivery. This article explores what the FDI landscape in India might look like in 2026, highlighting recent policy shifts, sectors poised for growth, and trade agreements influencing investor decisions. Why India’s FDI Proposition Remains Attractive India’s investment appeal has evolved over time. Earlier, narratives focused mainly on scale and cost advantages. Today, regulatory transparency, market access, and predictable long-term policy directions are equally significant to investors. Over the past year, the government has demonstrated a clear commitment to remaining competitive in attracting global capital. This includes selectively opening sensitive sectors, strengthening oversight where necessary, and leveraging trade agreements to enhance India’s integration with developed markets. For many international investors, this combination of openness and regulatory discipline is a compelling differentiator. Policy Developments Shaping the 2026 Outlook Expansion of the Insurance Sector A key development under scrutiny is the proposed increase in the foreign ownership limit in the insurance sector from 74% to 100%. Once implemented, this would allow foreign insurers to fully own their Indian operations, subject to domestic investment requirements and regulatory supervision. For investors, this is more about committing capital long-term than entering the market quickly. Given the capital-intensive nature of insurance, greater ownership flexibility makes India a more attractive destination for global insurers seeking to strengthen their presence rather than rely indefinitely on joint ventures. A Practical Shift in Investment Protection India has also begun revising its approach to investment treaties. Rather than applying a uniform framework across all agreements, future bilateral investment treaties are expected to be negotiated on a country-specific basis. This reflects a pragmatic approach, enabling India to tailor commitments according to strategic relationships while providing investors with greater assurance that treaty protections align with commercial realities rather than rigid templates. Foreign-Owned and Controlled Entities (FOCE) Framework Another significant change is the introduction of the FOCE framework. Essentially, Indian companies effectively controlled by foreign investors even through indirect or layered structures are now considered foreign-controlled for regulatory purposes. For multinational corporations, this has practical implications. Downstream investments, corporate restructuring, and internal share transfers may now trigger foreign investment rules that previously were assumed not to apply. While compliance obligations increase, the framework brings clarity by reducing interpretational ambiguities that historically caused uncertainty in transactions. Clarifying FDI-Prohibited Sectors In 2025, regulatory certainty improved with clarifications regarding FDI-restricted sectors. Authorities confirmed that companies in these sectors can issue bonus shares to existing foreign shareholders as long as overall ownership percentages remain unchanged. These clarifications, reinforced by amendments to FEMA rules, close a long-standing compliance gap and reduce the risk of retrospective scrutiny on legacy transactions. Simplified Capital Market Access via SWAGAT-FI For institutional and portfolio investors, SEBI’s SWAGAT-FI initiative is a notable advancement. From June 2026, eligible foreign investors can access Indian capital markets through a single-window digital onboarding system. By eliminating redundant registration and compliance steps, SWAGAT-FI is expected to enhance efficiency and accessibility, particularly for low-risk, long-term institutional capital. Sectors Likely to Draw the Most FDI in 2026 Businesses entering these high-growth sectors often require expert regulatory guidance and strategic structuring to ensure compliance from the outset. Working with a Company Registration consultant in India can help streamline approvals, documentation, and market entry with greater clarity and efficiency:  Services and Global Capability Centres Services continue to form the backbone of India’s FDI narrative. Global firms are expanding technology hubs, shared services centres, and R&D operations across Indian cities. The attractiveness lies not only in talent availability but also in India’s deepening integration with global services trade frameworks. New trade agreements enhancing data flow certainty, professional mobility, and IP protections are positioning India as a prime location for high-value services, moving beyond traditional back-office roles. Digital Consumption and Platform-Led Growth India’s digital economy now extends far beyond metropolitan areas. Rapid adoption of e-commerce, digital payments, and online services in smaller towns is significantly broadening the consumer base. For foreign investors, this opens opportunities not only in consumer-facing platforms but also across the supporting ecosystem, including logistics, fulfilment, fintech infrastructure, and data-driven services. Robust deal activity and public listings indicate continued confidence in this sector through 2026. Export-Oriented Manufacturing Manufacturing is becoming a central pillar of India’s FDI strategy. While domestic demand remains strong, the focus is increasingly on production for export. Incentives, infrastructure improvements, and tariff reductions under trade agreements are enhancing the economics of manufacturing for global markets. Sectors such as electronics, automotive components, chemicals, and industrial equipment are benefiting from this synergy between trade and investment policy. For many global manufacturers, India is now a key component of a “China-plus-one” or diversification strategy rather than a standalone investment. Trade Agreements Bolstering Investor Confidence India’s recent trade agreements play a subtle but significant role in shaping FDI flows. The India–EFTA Trade and Economic Partnership Agreement, for instance, includes long-term investment and job creation commitments. Similarly, the India–UK trade deal enhances access not only for goods but also for services and professionals, supporting cross-border business expansion. Together, these agreements improve predictability by clarifying market access, lowering tariff barriers, and aligning regulatory standards with those of developed economies. Compliance Remains Key Despite broadly investor-friendly policies, compliance continues to be critical. Sectoral caps, land-border restrictions, and approval requirements remain applicable in sensitive areas. Foreign investors must also stay vigilant regarding valuation rules, reporting timelines, and downstream investment obligations under FEMA. With regulatory scrutiny intensifying alongside liberalisation, careful planning and disciplined execution are … Read more

On August 12, 2025, the Union Cabinet approved four new semiconductor manufacturing projects under the India Semiconductor Mission (ISM). These facilities will be set up in Odisha, Punjab, and Andhra Pradesh, marking a major step toward strengthening India’s semiconductor ecosystem. The newly approved plants are intended to bring advanced chip fabrication and packaging capabilities to different regions of the country. This geographic distribution of investments highlights the government’s focus on balanced regional growth, while also advancing India’s vision of creating a resilient semiconductor supply chain. The four projects, proposed by SiCSem, Continental Device India Private Limited (CDIL), 3D Glass Solutions Inc., and Advanced System in Package (ASIP) Technologies, together involve an investment of around ₹4,600 crore. They are projected to create jobs for 2,034 skilled professionals, while boosting the broader electronics manufacturing ecosystem and generating numerous indirect job1 opportunities. Industry Focus of the Approved Proposals The newly sanctioned semiconductor projects are designed to strengthen India’s expertise in chip fabrication, advanced packaging, and discrete device production, addressing key gaps in the nation’s electronics ecosystem. In line with the India Semiconductor Mission, these initiatives aim to reduce import reliance, build supply chain resilience, and encourage technology transfer through international collaborations. Alongside advancing priority industries such as automotive, renewable energy, defence, and consumer electronics, the projects are expected to generate high-value jobs, support ancillary sectors, and contribute to India’s economic growth by positioning the country as a competitive force in the global semiconductor industry. Odisha: In Bhubaneswar, SiCSem Private Limited, in partnership with UK-based Clas-SiC Wafer Fab Ltd., will establish India’s first commercial Silicon Carbide (SiC) compound semiconductor fabrication plant with a capacity of 60,000 wafers and 96 million packaged units per year. The facility will serve advanced applications in automotive, renewable energy, and industrial electronics. Additionally, 3D Glass Solutions Inc. will set up a state-of-the-art packaging and embedded glass substrate facility in Info Valley, deploying technologies like glass interposers, silicon bridges, and 3D Heterogeneous Integration (3DHI) modules. With annual capacity of nearly 70,000 glass panel substrates, 50 million assembled units, and 13,000 3DHI modules, this unit will support sectors such as defence, AI, high-performance computing, RF, photonics, and automotive electronics. Andhra Pradesh: Advanced System in Package (ASIP) Technologies, in collaboration with South Korea’s APACT Co. Ltd., will set up a semiconductor facility with an annual output of 96 million units. Its products will target fast-growing markets like mobile devices, set-top boxes, automotive electronics, and consumer electronics. Punjab: In Mohali, Continental Device India Private Limited (CDIL) will scale up its discrete semiconductor facility to produce high-power components such as MOSFETs, IGBTs, Schottky diodes, and transistors in both silicon and silicon carbide. With a capacity for 158 million units annually, the facility will directly serve EVs, charging infrastructure, renewable energy, power conversion, industrial electronics, and communications. Together, these projects mark a major boost to India’s semiconductor landscape, featuring the country’s first compound semiconductor fabrication plant and an advanced glass-based packaging unit. They complement India’s fast-growing, government-backed chip design ecosystem, ensuring stronger integration into global supply chains. Foundation of India’s Semiconductor Growth: Past Project Approvals With these recent approvals, the overall number of sanctioned initiatives under the India Chipmaking Mission has increased to 10, attracting cumulative investments of around INR 1.60 lakh crore across various regions of the nation. This milestone highlights India’s accelerating journey toward building a robust semiconductor ecosystem, bolstering its position in international value chains while advancing innovation, employment, and economic growth within. Date of Approval Company Location Investment Output Capacity June 2023 Micron Technology Sanand, Gujarat ₹22,516 crore ATMP Facility, with phased ramp-up. February 2024 Tata Electronics (TEPL) in partnership with Powerchip Semiconductor Manufacturing Corp (PSMC) of Taiwan Dholera, Gujarat   ~₹91,000 crore 50,000 wafers/month February 2024 CG Power & Industrial Pvt Ltd in partnership with Renesas & Stars Sanand, Gujarat ~₹7,600 crore 15 million chips/day February 2024 Tata Semiconductor Assembly and Test Pvt Ltd Morigaon, Assam ₹27,000 crore 48 million chips/day September 2024 Kaynes Semicon Pvt Ltd Sanand, Gujarat ₹3,307 crore 6.33 million chips/day MAY 2025 HCL-Foxconn JV Jewar, Uttar Pradesh ₹3,700 crore 20,000 wafers/month August 2025 SicSem Private Limited Bhubaneshwar, Odisha ₹2,066 crore 60,000 wafers/year August 2025 3D Glass Solutions Inc. Bhubaneshwar, Odisha ₹1,943 Cr 70,000 Glass panels/year August 2025 CDIL (Continental Device) Mohali, Punjab ₹117 Cr 158 million units /year August 2025 ASIP (Advanced System in Package Technologies) Andhra Pradesh ₹468 Cr 96 million units /year Government Initiatives to Boost Semiconductor Design and Skilled Workforce India has offered significant design resources and support to numerous academic institutions alongside 72 start-ups, encouraging innovation and developing the next wave of semiconductor professionals. In July this year, the Electronics and Information Technology (MeitY) approved multiple chip design initiatives from startups, small firms, and educational institutions, targeting uses such as security systems, smart devices, networking equipment, plus microprocessor IP solutions. Progress under this initiative has already been notable: several startups have obtained venture capital, while companies have finalised prototype tape-outs through international foundries, and institutions have built 20 chip models at the Semiconductor Laboratory in Mohali, Punjab. Supported by a budgeted outlay of INR 8.03 billion, this scheme provides nearly 50 percent expense coverage for designing and prototyping (limited at INR 150 million) and performance-based incentives of roughly 4-6 percent on net sales over five years (restricted at INR 300 million). Altogether, these measures are laying a solid foundation for skilled workforce development plus a self-reliant design ecosystem, vital towards sustaining India’s future semiconductor ambitions. Conclusion In summary, the India Semiconductor Mission (ISM) has quickly emerged as a key pillar of the country’s technology agenda, with 10 sanctioned projects drawing investments of over INR 1.60 trillion and covering vital domains such as fabrication, packaging, and discrete device production. Alongside these industrial achievements, government-supported programs in chip design, prototyping, and talent development are building a strong innovation pipeline across academia and startups. Collectively, these initiatives are not only reducing import dependence and reinforcing supply chain resilience but also positioning India as a rising hub in the global semiconductor ecosystem, driving long-term economic growth, … Read more

Introduction: Relations between India and China seem to be improving following the trip of Chinese Foreign Minister Wang Yi to New Delhi, where he jointly co-chaired the 24th round of the Special Representatives’ meeting with India’s National Security Advisor Ajit Doval. The visit resulted in a series of steps aimed at easing tensions and restoring trust after more than five years of strained relations. Among the most notable actions were the decision to reopen border trade routes and boost cross-border investment flows, creating fresh opportunities for businesses on both sides. Discussions are additionally progressing to resume border commerce in locally produced goods, signaling a positive development in bilateral ties. Both sides have suggested reopening designated trade points along their shared border. This could give access to cost-effective goods, enable businesses to leverage shared manufacturing capabilities, and broaden market opportunities for producers on both sides. India’s participation in the Shanghai Cooperation Summit The Shanghai Cooperation Council is a two-day gathering that brought together more than 20 leaders from non-Western countries, serving as a platform to highlight China’s goal of shaping a new global security and economic framework. Prime Minister Narendra Modi attended the recently finished Shanghai Cooperation Organisation (SCO) meeting in China, marking his first trip to the country in seven years. On the sidelines of the summit, he engaged in a bilateral discussion with President Xi Jinping, offering a valuable opportunity to further dialogue and cooperation between the two countries. At the summit, Prime Minister Modi stressed regional stability, security, and sustainable development, framing India’s SCO plan around Security, Connectivity, and Opportunity. He underlined that peace and conversation are vital for prosperity and for building more constructive India-China ties. On August 31, Modi and President Xi emphasized that India and China should collaborate on development rather than competing. Improved relations could enhance trade, attract investment, and increase confidence, benefiting India’s infrastructure, technology, and manufacturing sectors while giving China greater entry to India’s fast-growing consumer market. The Tianjin Declaration of the SCO Council further emphasised commitments to bolster cooperation in artificial intelligence, reaffirming that all countries have equal rights to develop and utilise AI. Such collaboration could accelerate the development of more advanced and cost-effective AI models, facilitating broader adoption across key sectors like healthcare, logistics, finance, and manufacturing. This, in turn, may help lower operational costs, boost productivity, and create new investment opportunities, supporting sustainable growth among member states. Supporting this vision, President Xi pledged that China will continue to share the opportunities of its vast market and implement its action plan for high-quality economic and trade cooperation within the SCO framework. For India, this offers an opportunity to expand bilateral economic ties by aligning on trade and development initiatives under the SCO umbrella. Enhanced cooperation in areas such as market access, supply chain integration, and cross-border investment could strengthen engagement, further consolidating the positive momentum in India–China relations.  Top outcome of the Special Representatives’ and SCO summit dialogue: Both sides agreed to maintain engagement through diplomatic and military channels. Prime Minister Modi emphasised the importance of a fair, reasonable, and mutually acceptable resolution to the boundary issue, highlighting dialogue and peaceful negotiations. Prime Minister Modi welcomed the progress made since his last meeting with President Xi in 2024, noting constructive steps in bilateral engagement. India expressed its readiness to work constructively with China, signalling a willingness to expand cooperation. India and China agreed to resume direct passenger flights and update the Air Services Agreement, simplifying visa procedures to promote trade, tourism, and broader cross-border interaction. Discussions included plans to revive trade through key border passes such as Lipulekh, Shipki La, and Nathu La, potentially enhancing economic opportunities and improving local connectivity. At the SCO Summit, both leaders reaffirmed that India and China should be seen as development partners rather than rivals, signaling a commitment to closer collaboration. The Tianjin Declaration of the SCO Council reaffirmed commitments to strengthen cooperation in artificial intelligence, with significant potential to reduce costs, boost innovation, and generate new investment opportunities across member states. President Xi pledged that China would share the opportunities of its vast market and pursue high-quality development of economic and trade cooperation within the SCO framework, creating fresh avenues for bilateral economic engagement with India. The summit highlighted three key pillars of India’s engagement within the SCO framework -Security, Connectivity, and Opportunity, underscoring peace and regional stability as essential for sustainable prosperity. Focus on the border and bilateral co-operation. During his two-day visit to New Delhi, Chinese Foreign Minister Wang Yi highlighted that India and China should view each other as partners. This visit marked only the second high-level engagement between the two nations since 2020, emphasising its importance in ongoing efforts to rebuild and strengthen bilateral relations. Wang Yi held talks with India’s External Affairs Minister S. Jaishankar on August 18, 2025, and was scheduled to meet Prime Minister Modi on August 19. He remarked that India-China bilateral relations are progressing on a “positive trend” toward deeper cooperation. The visit also yielded concrete outcomes, with Wang assuring that China would resume supplying critical commodities to India, including fertilisers, rare earth minerals, and tunnel boring machines (TBMs), which are vital for India’s agriculture and infrastructure development. Global attention on India-China engagement An improvement in India-China relations holds considerable global significance, given the economic and strategic weight of both countries. As Asia’s largest emerging economies and key players in multilateral platforms like BRICS, closer cooperation between India and China could bolster regional stability, open new opportunities for trade and investment, and enhance joint efforts to tackle global challenges such as climate change, supply chain resilience, and sustainable development. India-China trade activities over the year India-China trade has steadily increased over the years, though the trade balance has continued to favour China, with India heavily dependent on imports of essential goods such as electronics, machinery, and industrial inputs. In FY24, the total value of imports from China reached US$101.74 billion. India-China Trade Relation Year-on-Year (Values in USD Billion) Trade Activities 2020-2021 2021-2022 … Read more

Introduction Prime Minister Narendra Modi’s recent visit to Tokyo marked a new phase in India–Japan relations. The two-day visit occurred at the invitation of Japanese Prime Minister Shigeru Ishiba. As part of efforts to strengthen the next-generation economic partnership, Japan placed greater emphasis on supporting green energy initiatives in India, a move that helps reduce India’s reliance on imported oil and coal and brings the country closer to its 500GW renewable energy target by 2030. During the summit, both Prime Ministers welcomed the continuation of high-level exchanges, including ministerial and parliamentary interactions, which underscored the mutual trust and depth of the India–Japan relationship over the years. Over the last decade, the partnership has grown substantially across multiple sectors, including security, defence, trade, investment, commerce, science and technology, skills development, mobility, as well as cultural and people-to-people ties. The Prime Ministers also highlighted that India and Japan have set up more than seventy dialogue mechanisms and working groups, facilitating ongoing collaboration across various ministries and agencies. This sustained engagement has led to increased mutual investments, improved technology transfer, and stronger integration into global supply chains. India’s participation at the 15th India-Japan Annual Summit At the recently concluded 15th India-Japan Annual Summit, both Prime Ministers emphasised enhancing strategic, economic, and technological cooperation. A key highlight was the announcement of the India-Japan Economic Security Initiative, aimed at strengthening bilateral collaboration in economic security, securing and reinforcing supply chains for critical goods, and advancing cooperation in emerging and strategic technologies. Priority sectors include telecommunications, pharmaceuticals, critical minerals, semiconductors, and clean energy. The Prime Ministers welcomed the launch of the Dialogue on Economic Security, covering Strategic Trade and Technology, and directed their respective Foreign Ministries to expedite policy-level exchanges to identify concrete projects and outcomes in strategic sectors, in partnership with industry and academia. Both sides also agreed to safeguard high-technology trade while jointly addressing export control challenges. Over time, this collaboration is expected to attract foreign investment to India, foster innovation in emerging industries, and strengthen India’s role as a dependable partner in global high-tech trade and industrial supply chains. To highlight ongoing cooperation, an Economic Security Factsheet was released, showcasing projects in strategic sectors. Initiatives promoting business-to-business collaboration were endorsed to encourage Indian and Japanese companies to diversify and strengthen supply chains. Additionally, the signing of a Memorandum of Cooperation in the Field of Mineral Resources is set to enhance partnership in critical minerals and create expanded business opportunities. Strengthening partnership India-Japan relations have consistently gone beyond commercial ties. Over the years, the partnership has spanned major infrastructure projects, including the Mumbai-Ahmedabad bullet train, defence cooperation in the Indo-Pacific region, and close coordination in multilateral forums. These initiatives highlight the enduring positive and strategic relationship that India has fostered with Japan. The recently concluded summit, along with Japan’s pledge of ₹6 lakh crore as an investment target in India, underscores the shared commitment to deepening the bilateral relationship. This substantial investment is expected to enhance economic cooperation, facilitate technology transfer, and broaden collaboration in strategic sectors such as infrastructure, clean energy, and emerging technologies. Through this significant commitment, Japan demonstrates its confidence in India’s growth potential while strengthening the long-term partnership and mutual prosperity between the two countries. Strengthened Ties: Key Results of the India–Japan Summit India–Japan Joint Vision for the Next Decade: India and Japan have outlined a 10-year strategic vision to enhance bilateral cooperation across eight key areas: economic partnership, economic security, mobility, sustainability, technology, health, people-to-people ties, and state-prefecture collaboration. The initiative aims to boost trade, investment, sustainable growth, innovation, talent mobility, and cultural exchange, reflecting both countries’ commitment to shared security and long-term prosperity. Action Plan for India–Japan Human Resource Exchange: India and Japan agreed on a plan to facilitate the exchange of 500,000 people over five years, including 50,000 skilled and semi-skilled Indian workers moving to Japan. This initiative addresses Japan’s workforce requirements while offering Indian professionals global exposure, skill development, and stronger bilateral connections. Memorandum of Cooperation on Joint Crediting Mechanism (JCM): India and Japan signed an MoC on the JCM to accelerate the deployment of decarbonising technologies, products, systems, and infrastructure. The initiative supports India’s greenhouse gas reduction targets while promoting sustainable development. MoU on India–Japan Digital Partnership 2.0: India and Japan inked an MoU to advance cooperation in the digital sector. The agreement focuses on strengthening digital public infrastructure, developing digital talent, and promoting joint R&D in emerging technologies such as artificial intelligence, the Internet of Things, and semiconductors. Memorandum of Cooperation in Mineral Resources: India and Japan signed an MoC to enhance supply chain resilience in critical minerals. The agreement includes collaboration on advanced processing technologies, joint investments in exploration and mining, and coordinated efforts for stockpiling essential minerals. Private Investment Target of JPY 10 Trillion: Japan pledged to mobilise JPY 10 trillion (₹6 lakh crore) in private investment in India over the next decade, focusing on infrastructure, manufacturing, technology, clean energy, and innovation. This investment is expected to drive growth, generate employment, strengthen supply chains, facilitate technology transfer, and expand bilateral trade. India–Japan Economic Security Initiative: India and Japan launched the Economic Security Initiative to enhance supply chain resilience in strategic sectors such as semiconductors, clean energy, telecommunications, pharmaceuticals, critical minerals, and other emerging technologies. An Economic Security Fact Sheet was issued highlighting ongoing cooperation. The initiative aims to strengthen India’s access to critical technologies, attract Japanese investment, diversify supply chains, and boost India’s economic security and global technological competitiveness. Sector Impact of the 15th India-Japan Annual Summit Semiconductors: Building on the existing CEPA framework, India and Japan have deepened their collaboration in the semiconductor sector. In July 2023, India’s Ministry of Electronics and Information Technology (MeitY) and Japan’s Ministry of Economy, Trade, and Industry signed a Memorandum of Cooperation under the India-Japan Semiconductor Supply Chain Partnership to strengthen supply chain resilience. The recent summit further highlighted the strategic importance of semiconductor cooperation, with leaders from both countries advancing collaboration in semiconductors, artificial intelligence, robotics, green energy, and space technologies. Green Energy: … Read more