India

The Economic Times | English | News | Jan. 9, 2026 | Geopolitical Conflict and Disputes

The Indian Army is planning to acquire a family of indigenous loitering munitions capable of precise strikes deep into enemy territory, even in heavily jammed and spoofed environments. The project’s initial contract value is ₹2,000 crore, with expectations for significant expansion as the Army aims to equip multiple units with these systems for both shallow and deep cross-border strikes. The tender, to be issued soon under a fast-track procedure, will facilitate quick trials, shortlisting, and order placement within months, contrasting with the usual two-year timeline.

Two Indian companies will be selected to fulfill the order, which will be divided in a 60:40 ratio between the two lowest bidders who meet the specifications and clear trials. Major contenders with prior experience delivering similar systems include Tata Advanced Systems, Adani Defence, Solar Defence and Aerospace Ltd, and Newspace Research and Technologies. Additional likely bidders include Nibe Defence, Avision, and SMPP. This procurement aims to foster an industrial ecosystem for large-scale manufacturing of indigenous suicide drones.

The initiative aligns with Army Chief General Upendra Dwivedi’s vision announced last year to integrate drones and loitering munitions and establish specialized drone units. His "Eagle on every Arm" concept seeks to provide each soldier with drone capabilities, enhancing battlefield intelligence and strike precision.

Hindu Business Line | English | News | Jan. 9, 2026 | Geopolitical Conflict and Disputes

Pakistan and Saudi Arabia are engaged in talks to convert approximately $2 billion of Saudi loans into a deal for JF-17 fighter jets, jointly developed by Pakistan and China. This potential agreement follows a mutual defence pact signed last year and aims to deepen military cooperation between the two countries amid Pakistan's financial difficulties and Saudi Arabia's reevaluation of its security alliances.

The total deal is estimated at $4 billion, including an additional $2 billion planned for equipment beyond the loan conversion. Pakistani Air Chief Zaheer Ahmed Baber Sidhu recently visited Saudi Arabia for discussions on military cooperation. The JF-17 jets, tested in combat and used in Pakistan's 2025 conflict with India, are considered cost-effective and have attracted interest from multiple countries, including Saudi Arabia and Libya.

Pakistan is actively expanding its arms exports and defense industry, recently signing a large $4 billion arms deal with Libya and engaging in talks with Bangladesh for further JF-17 sales. The country views the success of its domestic weapons industry as crucial to its economic future, potentially reducing reliance on International Monetary Fund assistance. Pakistan currently operates under a $7 billion IMF program, supported in part by financial aid and loan rollovers from Saudi Arabia and other Gulf states.

The Economic Times | English | News | Jan. 9, 2026 | Geopolitical Conflict and Disputes

China has announced an immediate ban on exports of all items with potential military applications to Japan, a move triggered by Japanese Prime Minister Sanae Takaichi’s remarks on a possible military conflict over Taiwan. The rare-earth magnets made from neodymium, praseodymium, samarium, dysprosium, and terbium are the most visibly affected products. These magnets are essential components in a wide array of technologies, including electric vehicle motors, missile guidance systems, and wind turbines.

Despite China supplying about 80% of the world's neodymium magnets, Japan is highly prepared for such threats, having diversified its supply chains and built up stockpiles following similar disputes in 2010. Japan manufactures roughly half of the global supply outside China and has been relatively unscathed by past export restrictions. However, Japan still relies on China for about 70% of its rare-earth materials, particularly harder-to-source elements like samarium, dysprosium, and terbium.

China’s latest export crackdown contrasts with past incidents, such as last year’s trade dispute leading to supply negotiations with the U.S. Meanwhile, European and Indian industries have experienced supply disruptions. Although the intensified restrictions could pose challenges, a global effort to develop alternative rare-earth production facilities is accelerating. These new plants are emerging across continents—including in the U.S., Europe, South Korea, India, Australia, and Africa—supported by government incentives to reduce dependency on China.

Rare-earth production remains complex and often unprofitable without state backing, but the establishment of new facilities like Neo Performance Materials’ plant in Estonia and Solvay’s operations in France signal a broader diversification trend. This global expansion of rare-earth supply chains may undermine China’s long-term geopolitical leverage, contradicting its apparent strategy to wield rare-earth dominance as a strategic tool.