INDIA CHINA Connect

Indian student interest shifted sharply in 2025, with Europe seeing strong growth as the US and Canada declined. US-bound Indian students dropped nearly 30% due to tighter visas and rising costs. European destinations grew 62%, led by Germany, Italy, and France. Lower tuition fees, better return on investment, and student-friendly immigration and work policies are driving Europe’s increasing appeal among Indian students.

India is considering linking UPI with Alipay+ to enable seamless cross‑border digital payments. This could allow Indian travelers to use UPI at millions of international merchants. While UPI processes around 18 billion transactions monthly and Alipay+ offers wide global reach, discussions signal cautious warming of India–China ties and remain subject to security, regulatory, and geopolitical scrutiny.

India's Union Budget 2026 proposes a tax holiday until 2047 for foreign cloud companies operating India-based data centres. The move aims to attract global investment and strengthen digital infrastructure. While global income of foreign providers is exempt, Indian resellers remain taxable. The policy is expected to boost data centre investment, job creation, and position India as a global cloud and AI hub.

India has become the second-largest overseas source market for US tourism, with travel volumes 40% above 2019 levels. Over two million Indians visited the US in 2025, marking a second year of strong recovery. Major 2026 events such as the FIFA World Cup and the US 250th anniversary are expected to boost growth further. India is also the second-highest spending market, delivering significant economic value to US tourism.

The long‑negotiated India–EU free trade agreement, launched in 2007, is nearing conclusion at the January 27 summit. Covering markets of almost two billion people, the deal seeks to expand trade and investment, strengthen supply‑chain resilience, and deliver gains in market access, exports, services growth, and strategic economic diversification amid global disruptions.

Temu’s cross‑border market share jumped from under 1% in 2022 to 24%, equaling Amazon worldwide. Amazon’s share has slipped as Chinese platforms expand. Shein remained stable, while AliExpress and eBay declined. Temu’s rise reflects low‑cost Chinese sourcing, heavy marketing, and fast global rollout, though upcoming US and EU regulations could alter competition.

Trump’s welfare data triggered online backlash, even though India was not among high-usage countries. Evidence shows Indian-Americans have low welfare dependence, high incomes and strong workforce participation. Despite being only 1.5% of the U.S. population, they contribute 5–6% of tax revenues and play outsized roles in innovation, leadership and job creation.

China has expressed support for deeper BRICS cooperation ahead of India’s 2026 chairship. Beijing backed India’s push to reform global institutions such as the UN, IMF and WTO, signalled through a Chinese envoy’s repost of India’s BRICS launch. India plans to prioritise multilateral reform, economic cooperation, a stronger New Development Bank and expanded people-to-people exchanges.

India has introduced the e‑B‑4 digital business visa for Chinese nationals, effective January 1, to ease travel for manufacturing and industrial professionals. Processed online in 45–50 days, it allows six‑month stays for technical, production and training work. The move reflects warming bilateral ties and aims to reduce skill gaps and production losses after years of strained relations between the countries.

India’s carmakers ended 2025 with record exports of about 858,000 vehicles, up 15% year-on-year, driven by strong demand from Africa, South America and West Asia. Strong manufacturing capabilities and cost competitiveness boosted growth, though future momentum hinges on trade policies. Automakers aim to double export share as India expands its global automotive footprint.

Big Tech firms are accelerating hiring and investment in India as tighter H-1B visa rules reshape global talent strategies. In 2025, FAAMNG companies added over 32,000 jobs, driven by demand for AI, data, cloud, and cybersecurity skills. With multibillion-dollar investments and selective hiring, India is emerging as a long-term global tech hub.

Vinod Khosla has backed Elon Musk’s call for a universal U.S. digital ID and stricter voter ID laws, citing India’s Aadhaar as a successful model that boosts convenience and reduces fraud.

Pranita Venkatesh, a Fijian American of Indian origin, has been sworn in as San Carlos’ youngest mayor following a unanimous council vote. Elected to the City Council in 2022, the former child psychologist brings experience in economic development, community service, and business, with priorities spanning public safety, childcare, housing, and economic stability.

China has launched an online visa system for Indian applicants, cutting paperwork and consulate visits. The portal supports tourist, business, student, and work visas, enables digital submissions, biometric scheduling, application tracking, and INR payments. The move aligns with gradual India–China normalisation, alongside resumed flights, eased visas, and renewed people-to-people exchanges.

Indian doctors are increasingly leaving the UK as rising taxes, high living costs, tighter immigration rules and limited job security outweigh the NHS’s traditional appeal. Visa numbers have dropped sharply, while better pay and clearer career paths abroad attract talent. Policy pressures, workforce competition and reduced entry routes are further shrinking opportunities for overseas healthcare professionals.

Tencent is accessing advanced Nvidia chips by renting overseas computing power through Japan‑based Datasection, bypassing U.S. export restrictions. The $12 billion arrangement relies on Datasection’s large AI data centers using Blackwell processors. The deal highlights policy loopholes, the rise of “neocloud” providers, and how Chinese tech firms are shifting AI workloads abroad.

A NITI Aayog report warns that India’s higher education system is deepening brain drain, with nearly 25 Indian students going abroad for every foreign student coming in. Rising outbound mobility, high financial outflows, and weak talent retention threaten innovation and development, prompting calls for “internationalisation at home” to strengthen domestic research, attract global talent, and retain skilled youth.

US lawmakers warn of worsening instability in Bangladesh after mob violence, political killings and attacks on minorities, including the lynching of Hindu worker Dipu Chandra Das. Regional fallout has followed. Meanwhile, rights groups urge global action on escalating abuses against Hindus in Pakistan, calling on the EU to condition trade benefits on accountability, enforcement, and protections for vulnerable minority communities.

India is now approving Chinese business visas within four weeks, reversing delays imposed after the 2020 border clash.

India ranked third globally in AI competitiveness in Stanford’s latest assessment, trailing only the US and China.