International Relations and Trade Issues - Newspaper Summary

 The sources reveal that International Relations and Defence matters are highly intertwined with the Global and Indian Economic and Business News environment in October 2025, manifesting primarily through significant trade tensions, bilateral negotiations leveraging economic tools (especially energy and agriculture), and robust defense modernization efforts in India.

I. Geopolitical Conflicts and Economic Leverage

US-China Trade and Rare Earths Weaponization

The overarching global economic context is defined by escalating US-China trade tensions.

• Trade Conflict: The "game of mutually assured disruption" between the US and China is highlighted. Tensions have flared up, with the US threatening an additional 100% tariff rate on Chinese goods starting November 1.
• Rare Earths Monopoly: China continues to leverage its near-monopoly over rare-earth minerals (producing around 90% of global refined supply) as a key geopolitical and economic tool. China recently tightened restrictions, requiring companies making magnets abroad using Chinese rare-earth materials to seek permission before exporting. This dominance was achieved through decades of strategic tactics, including government financial support, encouraging the acquisition of foreign rare-earth assets, and preventing foreign companies from buying Chinese deposits.
• US Response: Washington views China's control as a threat and is aggressively seeking reliable partners, including India, to build alternative supply chains. The US is investing in domestic rare-earth production and purchasing output to withstand low-priced Chinese mineral influx. This tension is accelerating US readiness to finalize trade deals with allies like India.
• Supply Chain Disruption Risk: Moody’s Ratings cautioned that new US tariffs on transshipped goods could disrupt Asia-Pacific supply chains, including India’s, due to deep links with China, worsening export compliance challenges for Southeast Asian nations.

India's Bilateral Negotiations and Energy Politics

India’s foreign and trade policies are highly focused on managing relations with the US and Russia, primarily concerning energy and tariffs.

• India-US Trade Deal (BTA): India and the US are "closing in on a much-awaited trade deal" aimed at slashing the punitive US tariff on Indian exports from 50% down to 15-16%. This proposed tariff reduction is contingent upon political clearance in sensitive areas like agriculture and energy.

  • Russian Oil as a Sticking Point: The US demands that India gradually reduce its imports of Russian oil. State-run oil marketing companies may be informally advised to diversify crude sourcing toward the US. This US pressure appears to be influencing procurement patterns, as Reliance Industries Ltd (RIL) bought Middle Eastern crudes last week and may place more orders, suggesting Western pressure against Russian flows may be starting to impact its procurement. India saved a modest $3.8 billion in FY25 due to narrowing discounts on Russian crude.
  • Agricultural Concessions: India may agree to allow higher imports of non-genetically modified (GM) American corn and soymeal into its markets to meet rising domestic demand from poultry, dairy, and ethanol industries. However, domestic experts caution that allowing soymeal imports would not benefit the domestic sector and could push down domestic prices. Furthermore, a Rajasthan High Court order prohibiting the import and sale of GM food until specific regulations are framed could complicate Indo-US trade talks.
  • Trade Timing: The finalization of the BTA is aimed for announcement at the ASEAN Summit later in October between President Trump and Prime Minister Modi, though official confirmation of their participation is pending.

• Russia and Ukraine Conflict: The war remains a major point of tension.

  • US Military Aid (Tomahawks): US President Donald Trump has repeatedly said he wants to end the Ukraine war. Washington is "mulling over a possibility of arming Kyiv with Tomahawk missiles," seen as a potential military game changer and a lever on Moscow. However, Trump seems to have had second thoughts, citing concerns about depleting American stockpiles and fearing the measure "could mean a big escalation". The Kremlin stated it is unclear when a summit between Trump and Russian President Vladimir Putin would take place.
  • Russian Oil Exports: Russia's seaborne crude shipments climbed to the highest in 29 months in the past four weeks, although they may be close to a peak due to seasonal downturns, increased refinery runs, and damage repair from drone strikes.

• China’s WTO Complaint against India: China formally filed a complaint at the WTO against three key Indian Production Linked Incentive (PLI) schemes related to batteries, automobiles, and EVs. China argues these schemes are conditional on the use of domestic goods over imported goods and discriminate against Chinese products, violating WTO agreements (SCM, GATT 1994, TRIMs). India’s internal view is that these schemes are intended to develop domestic manufacturing in new technology areas, allowing developing countries policy space to support infant industries.

India's Regional and Global Diplomatic Engagement

• EU Strategic Agenda: All 27 European Union (EU) member nations unanimously backed a new strategic agenda with India, aiming to significantly ramp up ties in key areas including defence, trade, technology, connectivity, and sustainability. They aim to finalize a balanced and ambitious free trade agreement (FTA) by the end of the year.
• Afghanistan Mission Upgrade: India announced the upgrading of its technical mission in Kabul to the status of a full-fledged embassy, underscoring its resolve to deepen bilateral engagement with Afghanistan in areas of mutual interest, development, humanitarian assistance, and capacity-building initiatives.
• Sri Lanka FDI: The Adani International Port Holdings Pte Ltd (India) investment in the Colombo West International Terminal (CWIT) was cited as the largest contributor to Sri Lanka’s FDI inflows in the first nine months of 2025, demonstrating renewed investor confidence in the region.

II. Domestic Defence and Aerospace Sector

Naval Modernization and Strategy

The sources highlight the Indian Navy’s focus on operational readiness, indigenization, and embracing advanced technologies.

• Navy Commanders’ Conference: The biannual conference is scheduled to address critical topics including naval operations, training, resource availability, and operational readiness against contemporary threats.
• Technology Integration: A key focus is the integration of Artificial Intelligence (AI), big data, and machine learning (ML) into combat strategies to enhance sustained and seamless operations.
• Maritime Dominance: The central objective is to sharpen the Navy's capability to counter emerging threats and reinforce maritime dominance across the Indian Ocean Region (IOR) and the Indo-Pacific.
• Indigenization Push: The Navy leadership will review the push for indigenization and innovation through the Make in India initiative, committing to reducing reliance on foreign military hardware for shipbuilding and weapon systems.
• Cochin Shipyard Expansion: Public sector Cochin Shipyard Ltd (CSL) is planning further investments, including a large Block Fabrication Facility (BFF) at Vallarpadam, requiring an investment of around ₹3,000 crore, to expedite ship construction by producing steel blocks.

Air Force Procurement and Indigenous Production

• S-400 Missile Procurement: The Ministry of Defence is expected to consider the Indian Air Force’s (IAF) plan to procure missiles worth approximately ₹10,000 crore for its S-400 ‘Sudarshan Chakra’ air defence systems. India had a deal with Russia for five S-400 squadrons, three of which are operational, with two delayed due to the Russia-Ukraine conflict.
• Indigenous Trainer Aircraft (HTT-40): Hindustan Aeronautics Ltd (HAL) will start delivery of the indigenous Hindustan Turbo Trainer-40 (HTT-40) aircraft from February 2026, following a six-month delay due to supply disruptions of engines from US-based Honeywell. The HTT-40 project is a key indigenous effort aimed at replacing the Swiss-origin Pilatus PC-7 MkII. HAL is boosting the domestic aerospace ecosystem by outsourcing nearly 38% of the components to private vendors (MSMEs). The company is also seeking military and US FAA certifications to enhance the aircraft's export potential.