INDIA CHINA Connect

During May-August 2025, US F-1 visas for Indian students plummeted by 62% due to enhanced screening, social media checks, and stricter visa regulations. Despite India and China being the largest international student groups, OPT programs face scrutiny over jobs, wages, and employer incentives. Continued declines may impact global student flows and US university enrolment.

India's GDP is projected to reach $5.1 trillion by FY29, per IMF. The government's strategy emphasizes agriculture, manufacturing, MSMEs, infrastructure, services, and exports. Key growth enablers include digitalization, skilling, innovation, and energy security, with a focus on semiconductors, clean energy, and advanced manufacturing. This push aligns with India's Viksit Bharat 2047 vision.

India faces a jobs challenge, not with unemployment, but with a scarcity of secure, well-paid positions. Only 23.6% have salaried jobs; the rest are self-employed or casual laborers. Predominantly small firms restrict productivity, wages, and career growth. Labor laws hinder scaling. Reforms are needed to increase formal jobs and enhance worker mobility.

China aims for semiconductor self-reliance by developing domestic DUV lithography machines, reducing foreign dependency. Conversely, India seeks to integrate into the global chip supply chain rather than replace it. Tata Electronics’ discussions with ASML could enhance India’s manufacturing reputation. As China localizes, ASML might view India as a growth market, offering equipment supply chain opportunities.

Salary-only taxpayers now represent just 42%, indicating a rise in multiple income streams. Young filers under 25 are at the forefront, with 76% reporting diverse earnings. Capital gains reporting increased to 39%, showing broader retail market engagement. Business income filings surged to 26%, fueled by freelancing and entrepreneurship. Tax filing integrates into wealth management strategies.

India's MSME procurement economy is valued at $1.31 trillion, with 80.4% of MSMEs anticipating digital procurement to boost growth within three years. Challenges include price volatility, supplier management, and credit access. Businesses prioritize flexible payments, GST invoices, broader selection, and quicker delivery. Digital platforms have significant growth potential, as only 30–40% of procurement is currently online.

Mainland China's cumulative FDI in India is $2.51 billion, while Hong Kong leads with $4.90 billion. Revised Press Note 3 rules set a 10% beneficial ownership threshold and clearer approval norms. Hong Kong received 13 approved FDI proposals totaling $64.25 million for FY2025-26. India aims to balance foreign investment facilitation with national security oversight.

Indian pharma needs to shift from relying on generics to focusing on original innovation and drug discovery. Liberalization boosted firms like Dr. Reddy’s in APIs and biosimilars, yet India lost API leadership to China due to its state-backed support. Satish Reddy advocates for stronger regulation, funding, research infrastructure, and academia-industry collaboration, with a dedicated procurement fund for innovative medicines.