India

Institute of Peace and Conflict Studies | English | AcademicThink | Jan. 22, 2026 | Geopolitical Conflict and Disputes

Japan’s Prime Minister Sanae Takaichi's statement that a Chinese military expedition against Taiwan would pose a "survival-threatening situation" for Japan marks the first explicit stance by a sitting Japanese prime minister on Taiwan. Despite criticism and protests from China, Takaichi has stood firm on her remark. In response, China has launched its ‘three-warfare’ strategy against Japan—public opinion, psychological, and legal warfare—and taken concrete retaliatory actions including cutting Chinese tourists to Japan, investigating Japanese seafood imports, restricting Japanese cultural products, and banning exports of critical dual-use rare earth elements to Japan, which heavily relies on China for these imports.

Chinese military activity near Japan has intensified, with incidents such as the December 2025 face-off between Chinese J-15 fighter jets and Japanese F-15s. The U.S. has not publicly supported Japan's stance; President Trump reportedly advised Takaichi against escalation. Nevertheless, Takaichi has deepened ties with Taiwan by sending emissaries and plans visits by other lawmakers, signaling a firm stand.

Takaichi’s position can be interpreted as an attempt to bolster her domestic political standing amid a thin parliamentary majority and a new coalition with the Japan Innovation Party, possibly ahead of a snap parliamentary election. Additionally, her approach reflects a broader shift toward a more assertive defense and security posture by Japan in the Indo-Pacific, including accelerated defense spending, constitutional revisions, and expanding security pacts and missile deployments with the Philippines and near Taiwan.

Her firm stance also comes amid a strained U.S.-Japan alliance and upcoming Trump visit to China in April 2026. Takaichi may be using the period before the visit to consolidate Japan’s aggressive regional posture and counterbalance Trump’s comparatively softer China policy. Overall, Takaichi’s Taiwan statement serves multiple purposes: strengthening Japan’s autonomous position vis-à-vis China, signaling resolve to the U.S., and solidifying her domestic political base, while the ultimate impact depends on Beijing’s responses, military risks, and the U.S. approach.

Hindu Business Line | English | News | Jan. 22, 2026 | UndeterminedEconomic Growth

India’s macroeconomic outlook entering 2026 appears strong with projected GDP growth above 7% for FY26 and steady inflation and interest rates. The banking sector shows resilience with low non-performing assets and solid corporate credit quality. Fiscal deficits are declining, public debt is stabilizing, political continuity is maintained, and structural reforms continue to be emphasized.

However, significant challenges have emerged, particularly the depreciation of the Indian rupee by over 15% against the British pound and Euro despite a contained current account deficit. This depreciation is mainly driven by capital outflows, with foreign portfolio investors withdrawing nearly $18 billion in 2025 and foreign direct investment sharply declining from $44 billion in FY22 to just $0.5 billion in FY25. This trend seems structural rather than temporary, as global capital flows favor developed economies like the US, Europe, and Japan, which are also focusing domestically due to geopolitical and strategic factors.

Trade dynamics have worsened as economic nationalism and tariff barriers increase globally. India’s expected benefits from trade agreements, such as positioning in the US “China+1” strategy, have diminished, with risks of losing export competitiveness. Rising domestic protectionism, such as higher import tariffs on steel and chemicals, may protect local industries short-term but could hurt long-term competitiveness and global value chain integration. The positive effects of new Free Trade Agreements are not yet evident.

The emerging trend toward self-reliance or “Atmanirbharta” could risk becoming inward-looking if not coupled with a robust export strategy and international market access. India’s growth depends on leveraging trade and foreign investment to scale domestic capabilities. Despite a stable growth narrative, concerns around weak capital inflows, currency weakness, and rising trade barriers necessitate a strategic reevaluation to maintain momentum.

Trilegal | English | AcademicThink | Jan. 22, 2026 | Regulation

The Competition Commission of India (CCI) released a report on October 6, 2025, detailing a market study on artificial intelligence (AI) and competition. The study examined the AI ecosystem’s structure and market dynamics, focusing on both AI system development and AI user industries like banking, insurance, retail, and healthcare. Conducted by the Management Development Institute, it highlighted potential antitrust concerns and recommended measures such as strengthening computing infrastructure, promoting open-source frameworks, and improving data repositories for startups. It also urged businesses deploying AI to conduct early-stage compliance assessments, including training on competition law principles and safeguards against collusion in algorithm design.

The CCI issued a clarificatory order regarding Rule 3 of the Competition (Criteria of Exemption of Combination) Rules, 2024, which exempts certain intra-group acquisitions from mandatory notification to the CCI. The ruling clarified that incremental share acquisitions within a group, which do not increase the group’s overall shareholding in a target company, qualify for this exemption. The case involved acquisitions within the Kedaara group in Lenskart Solutions Limited and Care Health Insurance Limited. This clarification provides important guidance on the interpretation and application of the exemption rules relating to intra-group restructurings.

The Ministry of Corporate Affairs (MCA) invited proposals for a market study to evaluate qualitative and quantitative thresholds for determining the scope of the draft Digital Competition Bill, 2024 (DCB). The study will assess the list of Core Digital Services (CDS), examine the implications of the DCB on competition and stakeholders, and evaluate the potential effects of the proposed ex-ante regulatory framework on startups and MSMEs. This initiative aims to provide data-driven analysis for the formulation and implementation of digital competition policies.