INDIA CHINA Connect

India is set to approve a $370 million manufacturing investment by Horse Powertrain, backed by Geely (45%), Renault (45%), and Saudi Aramco (10%). It marks one of the largest Chinese-linked auto ventures since 2017. Hybrid engine production will begin at Renault’s Chennai facility, strengthening India’s automotive manufacturing footprint.

Amazon will invest an additional $13 billion in AI and cloud infrastructure, raising its India commitment for 2026–2030 to $48 billion. Over 20 fulfillment centers and 100+ delivery stations are launching this year. With cumulative investments from 2010–2030 surpassing $88 billion, Amazon is deepening its India expansion across logistics and digital infrastructure.

The company earmarked $21 billion for power expansion, targeting 45 GW in five years. Its nuclear division plans 10 GW by 2035. FY26 revenue rose 7.4% to $30.74 billion, with net profit at $4.88 billion. Ports, data centres, cement, and mining units are pursuing aggressive growth strategies to scale operations across diverse sectors.

India led global digital wallet adoption in 2025 with 440+ million app downloads, out of 1.8 billion worldwide. UPI processed 228.5 billion transactions worth $3.15 trillion. PhonePe topped downloads, while Google Pay and PhonePe dominated UPI usage. Young, mobile-first users drove high daily engagement, cementing India’s leadership in digital payments innovation.

Rupee depreciation is raising costs of Chinese imports. Most MSMEs continue trading in US dollars, while yuan adoption remains concentrated among large corporates. Experts argue localisation offers a stronger long-term fix, but economists caution against dependence on another foreign currency, highlighting risks of shifting vulnerabilities in India’s trade and financial ecosystem.

India exempted FPIs from tax on G-sec interest and capital gains, boosting chances of Bloomberg Global Aggregate Index inclusion. If a 1% weight is achieved, inflows could reach $25 billion. The rupee and bond yields reacted positively, while expanded FAR securities enhance long-term investor appeal, strengthening India’s financial market prospects.

UPI set new records in May 2026, processing 23.24 billion transactions — a 24% year-on-year rise. Transaction value hit $3.15 trillion, boosted by summer travel and IPL spending. Expansion across retail, small businesses, and rural India continues, while cross-border and credit integration efforts strengthen trust, cementing UPI’s role as India’s dominant digital payments backbone.

India’s hotel transactions surged 67% in 2025 to $567 million, with Q1 2026 alone reaching $345 million. Deals could approach $1 billion this year, placing India among APAC’s top five markets. Strong domestic demand and new investors drive momentum, while APAC hotel investments overall may exceed $13 billion in 2026, highlighting regional growth.

The Reserve Bank of India approved a record ₹2.87 trillion surplus transfer to the Centre for FY26, 7% higher than FY25. Its balance sheet grew 20.61% to ₹91.97 trillion, with net income at ₹3.96 trillion. Despite strong forex and G-sec earnings, higher provisioning limited surplus. The transfer, ~91% of budgeted non-tax revenue, eases fiscal pressure.

India’s electrical equipment industry could expand from USD 50 billion in 2025 to USD 195–235 billion by 2035. Domestic demand may hit USD 170–205 billion, with exports surpassing USD 60 billion. Projected 11–13% annual growth, driven by electrification and renewables, faces import dependence risks above 70%. Localisation and five-fold capacity expansion are vital for global competitiveness.

India has eased FDI rules, allowing overseas firms with up to 10% Chinese shareholding to invest automatically, except those incorporated in China or bordering nations. Beneficial ownership above 10% still requires approval, aligned with PMLA norms. Multilateral funds are exempt, RBI safeguards remain, and China’s FDI share in India stays modest at 0.32% historically.

India has ranked among the most resilient emerging markets since 2020, according to Moody’s. Stable credit spreads, currency, and bond yields during global shocks reflected strong foreign-exchange reserves and investor confidence. A credible inflation-targeting framework anchored policy stability, while early reforms enhanced shock absorption. Despite fiscal constraints, buffers and policy credibility continue to support India’s future resilience.

Jewellery has now been formally included under the FTWZ framework, completing the SEZ value chain. This enables secure storage, display, and trading of finished jewellery, streamlining logistics, easing compliance, and lowering supply chain costs. It strengthens India’s competitiveness against hubs like Dubai and Hong Kong, supports export growth toward a $130 billion market by 2030, and positions India as a global jewellery trading hub.

UltraTech has surpassed 200 MTPA domestic capacity, making it the largest cement producer outside China. With new units in Uttar Pradesh, Jharkhand, and Andhra Pradesh, global capacity stands at 205.5 MTPA. It doubled capacity in under seven years, powering India’s housing, highways, metros, and landmark projects. A ₹16,000+ crore capex aims to exceed 240 MTPA while advancing sustainability goals.

India’s electronics manufacturing surge is reshaping trade. Apple suppliers exported $2.5B in components to China in FY26, with exports projected at $3.5B versus $920M in FY25. PLI and ECMS programs boosted competitiveness, reversing trade flows. India now supplies China and could capture 30–35% of global mobile production, marking a pivotal shift in global supply chains.

India’s digital ad market could reach USD 19–22 billion by 2030, expanding at 10–15% CAGR. Globally, digital ads will surpass USD 1.2 trillion, forming 70–75% of ad spend by 2025. The US (46%) and China (24%) dominate, while India holds ~1%. Mobile, especially in-app ads, drives growth. AI, privacy, and first-party data will shape future leaders.

India’s 2026–27 growth forecast has been raised to 6.6% by the World Bank, highlighting resilience amid global volatility. Strong domestic demand supports India, while South Asia’s growth slows to 6.3% due to geopolitical and energy shocks. Risks include oil prices, inflation, tighter monetary policy, weaker remittances, and climate disruptions, with uneven outlooks across neighboring economies.

March 2026 e-way bills surged to a record 140.6 million, up 12.9% year-on-year, signaling strong commercial activity and improved GST compliance. Driven by year-end dispatches, inventory adjustments, and resilient demand, the rise may also reflect precautionary stockpiling amid global uncertainties. Increased goods movement could raise logistics costs, while digital GST reforms accelerate formalisation and tax transparency.

India’s exports hit a record USD 860 billion in FY 2025–26, rising from USD 825 billion despite global uncertainties. Nine trade agreements expanded market access, while reforms boosted investor confidence. Services, engineering, and electronics drove growth momentum. With resilience and integration strengthening, exports are projected to surpass USD 1 trillion in FY 2026–27, marking a milestone in India’s global trade trajectory.

China became India’s top trading partner in 2025–26 with trade worth $151.1 billion, though the deficit widened to a record $112.16 billion. Exports to China rose 36.66%, but imports stayed higher. The US slipped to second, with India’s surplus narrowing to $34.4 billion. Export and import trends showed mixed performance across major global partners.