India's Ministry of Finance is considering scrapping curbs on Chinese Foreign Direct Investment (FDI) introduced in 2020 following border tensions. The Economic Survey suggests that FDI from China could help India boost exports and integrate into global supply chains, similar to the East Asian model. Currently, Chinese FDI accounts for less than 1% of India's total FDI inflows. While India has successfully replaced China in some sectors like smartphone manufacturing, experts argue that complete 'de-risking' without including Chinese companies in the manufacturing mix is difficult given China's dominance in global markets.
- Press Note 3 (2020) mandated government approval for FDI from countries sharing a land border with India, primarily targeting China.
- The Economic Survey 2023-24 suggests that attracting Chinese FDI is essential for India to become a global manufacturing hub.
- China's share of the US smartphone import market dropped from 60% in 2016 to 22% in 2024, with India and Vietnam gaining ground.
The recent visit of UAE President Sheikh Mohamed bin Zayed Al Nahyan to India has resulted in significant economic and security commitments. Both nations aim to double bilateral trade to $200 billion and have announced intentions to conclude a 'Strategic Defence Partnership,' the first of its kind for India in the region. The UAE is already India's third-largest trading partner and a key investor. However, India must navigate the complex regional 'cold war' between the UAE and Saudi Arabia, as well as tensions involving Iran and Israel that threaten connectivity projects like IMEC.
- India and the UAE are negotiating a framework for a first-of-its-kind Strategic Defence Partnership.
- The UAE is India's 3rd largest trading partner and 2nd largest export destination.
- Regional connectivity projects like IMEC and INSTC are threatened by ongoing Middle East tensions.
Former National Security Adviser M.K. Narayanan analyzes the 'Donroe Doctrine,' a modern iteration of the 1823 Monroe Doctrine under the Trump administration. This policy emphasizes US pre-eminence in the Western Hemisphere and a willingness to use 'shock and awe' tactics, as seen in operations against Venezuela. The doctrine signals a shift away from the post-1945 international order toward a 'free for all' in global commons. For India, this presents challenges regarding trade tariffs, relations with Russia and Iran, and the growing Chinese presence in the Indian Ocean and Southeast Asia, requiring careful diplomatic navigation.
- The 'Donroe Doctrine' is characterized as a 21st-century version of the Monroe Doctrine, asserting US control over the Western Hemisphere.
- The US National Security Strategy (NSS) aims to reassert dominance and deny competitors the ability to position forces near US assets.
- India faces a 'crossroads' due to US pressure on trade subsidies and its 'mini-lateral' initiatives like I2U2.
Former diplomat Syed Akbaruddin argues that global governance is shifting from large, stagnant forums like the UN and G-20 to smaller, more functional coalitions. As the UN remains weak and the G-20 faces domestic political pressures, India's best opportunities lie in 'diplomatic white spaces'—gaps in global leadership where no single power can take charge. India should focus on coalitions like the Quad and partnerships with the EU to deliver global public goods. The article emphasizes that success in 2026 will depend on making these 'small tables' work through practical cooperation rather than just ceremony.
- The European Union (EU) is represented as a 27-member bloc at India's 2026 Republic Day, signaling a shift toward institutional leadership.
- BRICS expansion has widened its reach but blurred its focus, requiring India to steer it toward practical outcomes like the New Development Bank.
- The Quad's focus on maritime domain awareness and resilient ports is a model for functional diplomacy that avoids great power rivalries.
The Reserve Bank of India (RBI) has proposed to the Union government that a plan to link central bank digital currencies (CBDCs) of BRICS nations be included in the agenda for the 2026 BRICS summit. This initiative aims to simplify cross-border payments and potentially reduce reliance on the U.S. dollar as geopolitical tensions rise. While the RBI clarifies that this is not a direct move toward de-dollarization, it builds on previous declarations for interoperability. Currently, all five main BRICS members—Brazil, Russia, India, China, and South Africa—are running CBDC pilot projects to enhance transaction efficiency.
- The proposal seeks to enhance interoperability between the payment systems of BRICS member nations to make cross-border transactions more efficient.
- Linking CBDCs could expedite international trade settlements and bolster the global usage of local currencies like the Indian Rupee.
- India's digital currency, the e-rupee, has already attracted 7 million retail users since its launch in December 2022.
German Ambassador Philipp Ackermann discusses the strengthening strategic partnership between India and Germany following Chancellor Friedrich Merz's recent visit. As the world's third and fourth-largest economies, both nations share interests in a stable, rules-based global order and resilient supply chains. Key pillars of cooperation include the proposed EU-India Free Trade Agreement and the Migration and Mobility Partnership Agreement, which facilitates the movement of skilled Indian professionals to Germany. The year 2026 will mark the 75th anniversary of diplomatic ties, providing an opportunity to deepen defense ties and people-to-people bonds. The partnership is seen as essential for mutual economic growth and addressing global challenges through biennial Intergovernmental Consultations.
- India and Germany are major economic heavyweights, currently ranked as the world's fourth and third-largest economies respectively.
- The Migration and Mobility Partnership Agreement aims to provide safe and predictable pathways for skilled Indian workers to enter Germany.
- A free-trade agreement between the EU and India is highlighted as a critical step for economic resilience and supply chain security.
The Trump administration has threatened a 10% tariff on European goods, potentially rising to 25%, to pressure Denmark into selling the autonomous territory of Greenland to the U.S. European leaders, including Emmanuel Macron and Keir Starmer, have condemned this 'neo-imperialist' approach as a violation of international law. The article warns that such 'bullying tactics' undermine the NATO alliance and degrade years of progress on transatlantic trade. In response, the EU may deploy its 'anti-coercion instrument' to protect member states from economic pressure. This internal conflict within the West could weaken the collective front against Russian aggression, highlighting the urgent need for enlightened leadership to preserve the rules-based global order.
- The U.S. is using trade tariffs as a geopolitical tool to coerce Denmark into selling the territory of Greenland.
- European nations view these unilateral actions as a violation of international law and a threat to the transatlantic alliance.
- The EU's 'anti-coercion instrument' is a potential counter-measure to limit the trade of major U.S. tech firms in response to tariffs.
India is facing significant diplomatic challenges as the US Trump administration threatens a 25% tariff on countries doing business with Iran. This move directly impacts India's multi-billion dollar investment in the Chabahar port, a crucial gateway for trade with Central Asia. While some reports suggested India might wind up operations, the Ministry of External Affairs (MEA) clarified that engagement with both the US and Iran continues. India currently holds a conditional sanctions waiver for Chabahar valid until April 2026. Analysts argue that maintaining strategic autonomy is vital for India's long-term economic and geopolitical interests in the region.
- Chabahar port is strategically located in southeastern Iran and is essential for India's connectivity to Afghanistan and Central Asia.
- The US has threatened additional tariffs on any country trading with Iran, complicating India's regional energy and infrastructure goals.
- India has invested billions of dollars in Chabahar to bypass Pakistan for land-based trade routes.
India is intensifying its 'minerals diplomacy' to secure critical minerals like lithium, cobalt, and rare earths, essential for the clean energy transition. New Delhi is pursuing bilateral and multilateral partnerships with resource-rich nations like Australia, Japan, and various African countries. The India-Australia Critical Minerals Investment Partnership has already identified five target projects. However, challenges remain, including China's dominance in the supply chain, US trade policy volatility, and the need for domestic midstream processing capabilities to reduce dependence on raw material exports and build long-term resilience.
- Critical minerals are vital for EV batteries, renewable energy infrastructure, and high-tech manufacturing.
- India is exploring joint ventures in Argentina through Khanij Bidesh India Limited (KABIL) with a ₹200 crore agreement.
- African nations like Namibia, Zambia, and Congo offer opportunities for lithium, rare earths, and copper exploration.
Recent US military action in Venezuela, aimed at capturing President Nicolas Maduro on 'narco-terrorism' charges and seizing oil assets, is criticized as a flagrant violation of international law. The article argues that this action violates Article 2(4) of the UN Charter, which prohibits the threat or use of force against the territorial integrity or political independence of any state. The breakdown of the balance-of-power concept, following the collapse of the Soviet Union, has led to unchecked exercise of power by the US. The author suggests that India needs a strategic military-industrial complex to counter such insensitive geopolitical shifts.
- The US action in Venezuela is seen as a violation of the UN Charter's prohibition on the use of force against sovereign states.
- The declaration to use Venezuela's oil wealth to compensate US companies is viewed as a breach of international norms.
- The article highlights the shift from a bipolar world to a unipolar one where the US exercises 'unchecked power' in pre-emptive strikes.
Article 6 of the Paris Agreement, made fully operational at COP29, provides a framework for international cooperation through carbon markets. It allows countries to transfer emissions reductions (ITMOs) to meet their climate goals. For India, this presents an opportunity to attract climate-aligned finance and advanced technologies. India has already entered a new era by operationalizing the Joint Crediting Mechanism (JCM) with Japan under Article 6.2. To maximize benefits, India must strengthen its domestic framework, streamline project clearances, and position itself as a supplier of high-quality carbon removals, such as Biochar and Enhanced Rock Weathering.
- Article 6 (A6) enables international cooperation through market mechanisms (6.2 and 6.4) to achieve Nationally Determined Contributions (NDCs).
- The Paris Agreement Crediting Mechanism (Article 6.4) replaces the Clean Development Mechanism (CDM) from the Kyoto Protocol.
- India's partnership with Japan under the Joint Crediting Mechanism (JCM) is an early example of Article 6.2 cooperation.
The year 2025 marked a period of 'interregnum' for the Quadrilateral Security Dialogue (Quad), comprising India, Australia, Japan, and the U.S. While the group maintained operational momentum through initiatives like the Quad-at-Sea Ship Observer Mission, it failed to convene a leader-level summit. The return of Donald Trump to the White House and leadership changes in Japan have introduced new strategic variables. Despite these shifts, the Quad remains anchored in its objective of ensuring a free, open, and inclusive Indo-Pacific, serving as a crucial platform for regional stability against Chinese expansionism.
- The Quad's primary objective is establishing and sustaining a rules-based order in a free and open Indo-Pacific.
- The group was originally formed in 2004 following the Indian Ocean tsunami but was revived in 2017.
- Operational successes in 2025 include the Quad-at-Sea Ship Observer Mission and the Ports of the Future Partnership.
U.S. President Donald Trump has moved to withdraw the United States from the UN Framework Convention on Climate Change (FCCC) and the Intergovernmental Panel on Climate Change (IPCC). This move effectively excludes the U.S. from the core multilateral climate diplomacy framework, including the Paris Agreement. The withdrawal will likely lead to a significant reduction in global climate finance, as the U.S. will no longer contribute to the Green Climate Fund or the Global Environment Facility. Furthermore, it weakens the scientific consensus-building process of the IPCC and may discourage other high-emission nations from meeting their climate commitments, potentially delaying global climate action.
- Withdrawing from the FCCC automatically removes the U.S. from the Paris Agreement and the annual COP negotiations.
- The U.S. will lose its ability to participate in the FCCC's reporting system for greenhouse gas emissions and progress tracking.
- The exit undermines global climate finance, specifically affecting the Green Climate Fund and the Global Environment Facility.
Recent U.S. legislative moves, including the Russia Sanctions Bill and focus on Venezuelan oil assets, reflect growing anxieties over the eroding hegemony of the U.S. dollar. Major consumers like China and India have deepened non-dollar trading arrangements to circumvent sanctions. India has imported substantial Russian crude, accounting for over 20% of its war-period exports, sometimes paying in yuan. The global energy transition towards electric vehicles, led by China, further challenges the traditional dollar-centric financial order. Additionally, the BRICS nations are contemplating parallel currency arrangements, signaling a historic transition in the architecture of global trade and finance.
- The petrodollar system, which underpinned the dollar's global centrality since the late 20th century, is facing erosion due to geopolitical shifts.
- India has imported over 20% of its crude oil from Russia since 2022 using non-dollar settlement mechanisms.
- China's dominance in the EV ecosystem represents a structural challenge to the financial architectures that supported U.S. dominance for decades.
Israel's decision to recognize Somaliland as an independent state marks a significant diplomatic shift in the Horn of Africa. This move challenges China's 'One China' principle, as Somaliland has established official ties with Taiwan. Strategically located along the Bab el-Mandeb Strait, Somaliland is a critical hub for global trade and security. While China views Somaliland as an 'inseparable part' of Somalia, the region's relative stability and democratic functioning contrast with Somalia's chronic insecurity. The recognition could trigger a geopolitical recalibration, potentially leading to hybrid warfare or economic coercion by China as it seeks to maintain its influence in the maritime corridor.
- Somaliland sits at the intersection of three core interests: the 'One China' principle, securing the Red Sea corridor, and great-power competition.
- The Bab el-Mandeb Strait is a vital choke point for global commerce, linking the Red Sea to the Gulf of Aden.
- China's first overseas military base was established in neighboring Djibouti in 2017 to ensure a permanent security presence.
In a significant blow to international climate efforts, U.S. President Donald Trump has announced the United States' withdrawal from the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC is the parent treaty for major agreements like the Paris Accord and the Kyoto Protocol. The White House described the treaty as "contrary to the interests of the United States." This move has been widely condemned by the European Union and other global partners, who have vowed to continue tackling the climate crisis despite the exit of the world's second-largest emitter.
- The UNFCCC was adopted in 1992 as a global pact to cooperate on reducing greenhouse gas emissions.
- The U.S. exit is part of a larger withdrawal from 66 global organizations and treaties.
- Climate experts warn that the absence of the U.S. will significantly hinder global climate action and funding for developing nations.
India has stated it will continue to lead and support the International Solar Alliance (ISA) despite the United States' decision to withdraw from the organization. The U.S. executive order identified the ISA among 66 "wasteful" international organizations. India, a founding member along with France, views the ISA as a critical platform for achieving global energy transition goals and mobilizing $1 trillion in solar investments by 2030. The alliance currently has 125 members and focuses on deploying solar energy solutions in least-developed countries and small island developing states.
- The ISA was conceptualized during COP21 in Paris (2015) by Prime Minister Narendra Modi and then-French President Francois Hollande.
- The U.S. withdrawal is part of a broader policy to cut funding for entities deemed contrary to U.S. interests.
- India maintains that the ISA has been successful in demonstrating the feasibility of solar solutions in over 95 countries.
US President Donald Trump has approved legislation empowering him to levy tariffs up to 500% on countries, including India, China, and Brazil, that continue to purchase oil or uranium from Russia. This move aims to increase pressure on Russia by cutting off its primary funding sources for the conflict in Ukraine. The bipartisan bill has significant support in both the Senate and the House. US Ambassador-designate Sergio Gor emphasized that ending India's import of Russian oil is a top priority, noting that India had previously "zeroed out" imports from Iran and Venezuela under similar pressure.
- The bill allows the US President discretion to set tariff figures above the existing 25% penalty.
- It specifically targets oil and uranium imports from Russia to squeeze its war financing.
- India is a primary focus due to its significant intake of Russian crude since 2022.
This analysis examines the U.S. operation to capture Venezuelan President Nicolás Maduro, arguing it violates international law. Under Article 2(4) of the UN Charter, the use of force is prohibited except for self-defense or UN Security Council authorization. The article contends that law enforcement is not a valid justification for cross-border military force. Furthermore, it discusses 'immunity ratione personae,' which grants heads of state absolute immunity from the criminal jurisdiction of foreign courts. The U.S. actions are described as a dangerous precedent that undermines the international rule of law and sovereign equality.
- Article 2(4) of the UN Charter strictly prohibits the use of force in international relations with very narrow exceptions.
- Heads of state enjoy personal immunity (immunity ratione personae) from foreign criminal jurisdiction under international law.
- The U.S. justification of 'law enforcement' for military intervention is not recognized as a valid exception for using force.
Despite trade tensions and tariffs, the U.S.-India relationship remains resilient through deep-seated institutional collaboration in defense and technology. Key frameworks like the 2023 INDUS-X and the Initiative on Critical and Emerging Technologies (iCET) drive this 'parallel track' of cooperation. A significant 10-year defense framework was signed in October 2025. While political summits like the Quad might face delays, bureaucratic and military-to-military engagements, including joint exercises like Yudh Abhyas and Malabar, ensure continuity. This institutional depth helps the partnership survive short-term political volatility and divergent national interests.
- Defense and technology agreements form the backbone of the resilient U.S.-India strategic partnership.
- The 2023 India-U.S. Defense Acceleration Ecosystem (INDUS-X) promotes co-production and co-development.
- Foundational agreements like LEMOA, COMCASA, and BECA facilitate logistical support and information sharing.
U.S. President Donald Trump claimed that India reduced its oil imports from Russia to 'make him happy' and secure a favorable trade deal. He threatened to impose 25% reciprocal tariffs if India continues its Russian oil purchases. Senator Lindsey Graham supported these claims, stating India's Ambassador requested relief from penalty tariffs during a meeting in December 2025. However, data indicates that while imports dipped between June and October 2025, they rose to a seven-month high in November. The Ministry of External Affairs has previously criticized unilateral U.S. sanctions as 'double standards' since the U.S. also purchases Russian resources.
- Trump claims PM Modi cut Russian oil imports to avoid 25% penalty tariffs and secure a trade deal.
- Senator Graham alleges the Indian Ambassador sought mediation to relieve these tariffs in late 2025.
- Trade negotiations between the U.S. and India have reportedly stalled despite temporary cuts in Russian oil imports.
Recent U.S. actions against Venezuela are unlikely to significantly impact India's energy security. Analysis shows that Venezuelan crude accounted for only 0.3% of India's total oil imports in the current financial year (up to November 2025). Since 2019, India has been steadily reducing its commercial engagement with Venezuela in response to U.S. sanctions. While Venezuela is an OPEC member with significant reserves, it currently produces a relatively small amount of crude compared to other global producers. Experts suggest that existing sanctions, geographical distance, and the heavy nature of Venezuelan crude already limit the trade relationship.
- Venezuelan oil imports constituted only 0.3% ($255.3 million) of India's total oil imports in the 2025-26 financial year up to November.
- India's oil imports from Venezuela peaked at $13 billion in 2013 but have drastically declined due to U.S. sanctions and commercial risks.
- Venezuela accounts for about 3.5% of OPEC's total oil exports and roughly 1% of global oil supplies, limiting its impact on global prices.
As 2026 begins, China faces a paradox of domestic economic challenges and assertive international projection. Despite a slowdown in growth (around 5%) and deflationary pressures, Beijing continues to project power through the 'Global South' and 'China Shock 2.0' in high-tech manufacturing. The article highlights the recalibration of U.S.-China relations under the 'America First' approach and the persistent friction in India-China relations. While some tactical stabilization occurred in 2025, core issues like the border dispute and China's support for Pakistan remain unresolved. India must navigate this by strengthening domestic capabilities and maintaining external balances while preparing for a long-term strategic competition.
- China's economic growth has slowed to approximately 5%, with persistent deflationary pressures and a struggling property sector weighing on confidence.
- The 'China Shock 2.0' involves aggressive exports of high-tech goods like electric vehicles and solar panels to compensate for weak domestic demand, causing global trade tensions.
- India-China relations saw tactical stabilization in 2025, but structural issues and border tensions, including the creation of 'buffer zones', continue to hinder full normalization.
The Maldives government has requested assistance from Indian companies to manage the recently upgraded Hanimadhoo International Airport. This request, made during the airport's inauguration, marks a significant shift in bilateral relations, coming a decade after the controversial ouster of the Indian conglomerate GMR from the Male International Airport project. The Airports Authority of India (AAI) has been tasked by the Centre to study the proposal for engaging Indian operators. India previously supported the redevelopment of Hanimadhoo airport with an $800 million line of credit issued by EXIM Bank of India.
- Maldives has invited Indian companies to manage the Hanimadhoo International Airport following its recent upgrade.
- The Airports Authority of India (AAI) is evaluating the request for engaging Indian private or state operators.
- The Hanimadhoo airport redevelopment was funded by an $800 million line of credit from India's EXIM Bank.