India

Indian Council for Research on International Economic Relations | English | AcademicThink | Jan. 9, 2026 | UndeterminedEmployment

State financing is crucial for economic growth at the sub-national level in India, yet the gender inclusivity of these funds remains underemphasized. A policy brief stemming from the third roundtable of the Network on Economic Policies for Women-led Development (EPWD) highlights the need to view public finances through a gendered lens, focusing on how centre-to-state financing can better support women’s empowerment.

Key insights from the roundtable involving policymakers, academicians, and practitioners indicate that while India has made legislative and policy advances in women’s empowerment, there is significant room for improvement. Recommendations include expanding gender budgeting, increasing women’s representation in political leadership to ensure funds target women’s needs effectively, and reallocating state finances to support women’s transition from agriculture into manufacturing and service sectors.

The Economic Times | English | News | Jan. 9, 2026 | UndeterminedBudgets-Budgeting

The Indian economy in 2026 is positioned at a strategic inflection point amid global geopolitical shifts, with rare earth elements (REEs) emerging as critical resources for future industries such as electric vehicles, renewable energy, semiconductors, defence, and electronics. India holds the world's third-largest rare earth oxide reserves at 6.9 million tonnes, yet its 2024 production was only 2,900 tonnes, placing it seventh globally. This gap is due to structural issues, including strict regulations related to the radioactive element thorium found alongside India's rare earth deposits and a lack of private sector participation.

India’s current vulnerability lies not in mining but in processing and refining capacity, which is dominated globally by China, controlling 90% of refining and nearly all heavy rare earth processing. India’s minimal refining infrastructure forces reliance on imports despite its large reserves, limiting its economic and strategic leverage in the sector. Developing a robust rare earth ecosystem could significantly boost India’s domestic industries, create high-value jobs, and reduce import dependence, while positioning India as a key global supplier amid efforts to diversify supply chains away from China.

The government has responded by launching the Rs 16,300 crore National Critical Mineral Mission to expand exploration, processing, recycling, and coordination. Legislative amendments have centralized control over critical minerals, including rare earths, to the Union government, expediting mining lease approvals and inviting private sector bids for the first time since decades of public sector dominance. However, cautious industry response and block cancellations indicate prevailing commercial and regulatory risks, including issues with radioactive by-products.

To develop domestic downstream capabilities, the government introduced a Rs 7,280 crore incentive scheme to build rare earth permanent magnet manufacturing capacity and a Rs 1,500 crore scheme promoting recycling of critical minerals, contributing to a circular supply chain. Despite policy momentum, investment remains cautious due to high capital costs, technical challenges, regulatory uncertainty, and insufficient assured demand, highlighting the need for risk-sharing and long-term policy clarity.

Looking ahead to Budget 2026, further targeted fiscal measures are anticipated to accelerate processing and refining, including viability gap funding, long-term offtake guarantees, and procurement commitments aimed at sectors like EVs, defence, and renewable energy. Increased funding for research and technology development in rare earth separation, refining, and recycling is expected, alongside support for integrated rare earth industrial clusters to enhance value chain efficiency. With adequate policy support, investment incentives, and institutional reforms, rare earth elements have the potential to become a major power-lifter sector for India in the coming decades.

CNBC | English | News | Jan. 9, 2026 | Shifting Geopolitical Alliances

James Zimmerman, returning for a fifth term as chairman of the American Chamber of Commerce in China in 2026, expresses cautious optimism about U.S.-China relations this year. He notes that the past decade has been characterized by an "experiment" in competition, decoupling, and de-risking between the two economies, which he believes has not been successful. Zimmerman emphasizes the need for renewed, ongoing dialogue and engagement to foster clarity, reduce misunderstandings, and stabilize the relationship, highlighting the importance of President Trump’s expected visit to China in April as a potential positive turning point.

Despite discussions about decoupling, Zimmerman points out that many U.S. companies remain deeply integrated with China due to its critical role in global supply chains and markets. While diversification is occurring, wholesale decoupling is not evident. He advocates for addressing intellectual property protection and national security concerns with balanced perspectives, urging both sides to avoid framing every foreign investment or enterprise as a threat. Increased people-to-people exchanges and high-level visits are encouraged to improve mutual understanding post-pandemic.

AmCham China's agenda for 2026 revolves largely around the anticipated U.S.-China engagement expected during President Trump’s visit, with hopes for agreements or memorandums of understanding, although a grand bargain is unlikely given time constraints. There is optimism that visionary leadership could steer the relationship towards mutual benefits for both nations’ businesses, workers, and consumers.

Additional insights in the newsletter include expectations of continued U.S.-China tech co-dependence amidst competition, with easing export controls and cross-border deals in 2026. China’s property market is projected to face a 10% decline in prices and sales due to a consumer shift toward rentals. China condemned a recent U.S. attack on Venezuela, urging the release of Nicolás Maduro. In 2025, Chinese automaker BYD surpassed Tesla in global battery-electric vehicle sales. Chinese tech companies also showcased their products at the Consumer Electronics Show in Las Vegas.

On the markets, Chinese stocks near four-year highs, supported by Beijing’s push in AI development, with Goldman Sachs forecasting further but slower equity gains in 2026. However, Hong Kong’s Hang Seng Index dipped due to losses in technology and energy sectors. Upcoming economic data releases include December CPI, PPI, and trade statistics.