India

Livemint | English | News | Jan. 23, 2026 | UndeterminedTrade Issues and Numbers

US President Donald Trump expressed optimism about the prospects of the India–US Bilateral Trade Agreement (BTA), stating that the two countries are “going to have a good deal.” He praised Indian Prime Minister Narendra Modi as a close friend and respected leader while acknowledging ongoing tough negotiations, particularly over tariffs and geopolitical issues related to Russian oil imports. Trump highlighted India’s recent reduction of oil purchases from Russia in response to US pressure but noted that tariffs remain a point of contention.

The proposed BTA aims to more than double bilateral trade between India and the US, targeting USD 500 billion by 2030 from the current USD 191 billion. Talks first began during Modi’s Washington visit in February 2025, with multiple negotiation rounds since. Despite tensions, India’s Ministry of External Affairs affirmed that talks have not stalled, emphasizing ongoing commitment from both sides to reach a balanced and mutually beneficial trade agreement.

MEA spokesperson Randhir Jaiswal rejected claims that Modi did not engage sufficiently with Trump, confirming frequent communications between the two leaders in 2025. This followed comments by US Commerce Secretary Howard Lutnick, who suggested Modi was reluctant to engage directly with Trump, which he said contributed to higher tariffs and delays in the trade deal.

Hindu Business Line | English | News | Jan. 23, 2026 | UndeterminedEconomic Growth

In 2025, India experienced a rare "Goldilocks" phase characterized by moderate and resilient economic growth alongside subdued inflation, supported by stable macroeconomic fundamentals despite global volatility. The Reserve Bank of India’s cumulative 125 basis points repo rate cuts and fiscal, monetary, and regulatory policies have fostered this growth environment, leading to a prediction-defying Q2 FY26 GDP growth of 8.2 percent. Both urban and rural consumption contributed, with rural demand boosted by good monsoons and government incentives. Manufacturing output grew impressively by 9.1 percent in Q2 FY26, driven in part by the Production Linked Incentive (PLI) program, which attracted investments totaling ₹2 lakh crore and generated over 12.6 lakh jobs.

Government capital expenditure remains the primary growth driver, while private capital expenditure is gradually picking up, supported by strong corporate balance sheets, easier banking conditions, and growth in corporate bond markets, which reached $642 billion by March 2025. India’s economic trajectory is fueled by comprehensive reforms including GST rate rationalization, income tax rationalization, labor code streamlining, and policies focusing on clean energy and energy self-reliance. The Insolvency and Bankruptcy Code (IBC), implemented nine years ago, has been pivotal in resolving ₹12 lakh crore of stressed debt and reducing non-performing assets, thereby improving the ease of doing business and enhancing investment attractiveness.

The investor base expanded notably in 2025, with increased participation from younger generations, women, and households in tier-2 and tier-3 cities, reducing dependency on foreign capital. Monthly Systematic Investment Plan (SIP) flows highlight growing retail investment, which supports capital formation and wealth creation. However, foreign portfolio investors showed caution, with net outflows of around $10.4 billion in 2025, exerting pressure on the Indian rupee. Regulatory initiatives such as SEBI’s ‘India Market Access’ platform and RBI’s proposal to expand External Commercial Borrowings framework aim to improve global investor participation and access to capital.

Looking ahead to 2026, India is expected to shift from policy intent to tangible outcomes with ongoing policy easing, regulatory clarity, and FDI openings in insurance and nuclear energy sectors supporting sustained growth. The financialisation of savings and increased capital expenditure in sectors like electronics manufacturing services and defence are anticipated to drive the next investment cycle. Strengthened corporate balance sheets, rising credit demand, and improved earnings position India to leverage its structural advantages and emerge as a significant global growth engine amid ongoing global uncertainty.

Express Tribune | English | News | Jan. 23, 2026 | Geopolitical Conflict and Disputes

The Ministry of Water Resources informed Pakistan's National Assembly that India unilaterally suspended the 1960 Indus Waters Treaty in April 2025 following a militant attack in held Kashmir. This suspension has led to a significant reduction in water flow in the Chenab River, threatening approximately 1.45 million acres of agricultural land under the Upper Chenab Canal and an additional 3.19 million acres under the Chenab Canal. The lowered water availability is expected to severely impact agriculture and livelihoods dependent on these river systems.

India has not responded to concerns raised by Pakistan and United Nations experts regarding this suspension, despite a December 16, 2026 deadline set by the UN for India to explain its actions. A UN report released in December 2025 warned that any disruption of the treaty might severely affect millions of people in Pakistan who rely on the Indus River system for drinking water, agriculture, and food security.

Hydrological data from December 2025 revealed an extraordinary reduction in the Chenab River flow, with measurements dropping well below historical minimums. Satellite imagery showed significant changes in reservoir surface area at Baglihar during this period, indicating alterations in water storage or flow. Pakistan formally sought explanations from India over this unusual water reduction, highlighting growing tensions over water-sharing and resource management under the treaty.