For the third consecutive year, India received remittances exceeding $100 billion. India has maintained its position as one of the leading recipients globally for more than 25 years, following the IT sector expansion in the 1990s, and has consistently held the top position since 2008, according to an ET report. The increase in services exports and movement of skilled professionals to developed nations in North America and Europe contributed to these transfers, complementing the traditional inflows from Gulf Cooperation Council (GCC) countries.

The flow of remittances correlates with employment situations in source countries and migration trends in recipient nations. The number of Indian international migrants has grown from 6.6 million in 1990 to 18.5 million in 2024, with their proportion in global migrants increasing from 4.3 per cent to over 6 per cent in this timeframe. Approximately half of all Indian migrants worldwide are located in GCC countries. An analysis in the Reserve Bank of India's monthly bulletin highlights that "The competitive edge and the penetration of Indian IT services overseas at the start of the century, the number of skilled emigrants to advanced economies, especially to the US, has risen significantly. Thus, besides the GCC, advanced economies have also emerged as a major source of inward remittances to India over the years". In 2024, Mexico secured the second position with inward transfers of $68 billion, whilst China ranked third with $48 billion in estimated inflows. India's remittances demonstrated remarkable growth at 17.4 per cent, substantially exceeding the global average growth projection of 5.8 per cent for the year.

The diaspora's financial contributions have increased by 63% since 2020 when the pandemic began. "The recovery of the job markets in the high-income countries of the Organization for Economic Co-operation and Development (OECD), following the onset of the COVID-19 pandemic, has been the key driver of remittances," according to a World Bank blog. Despite inflationary pressures in source regions including North America and Europe, the upward trend continues. "This is a reflection of dependents in India being more reliant on relatives," observed Madan Sabnavis, chief economist at Bank of Baroda. "Partly due to fall in domestic income as well as inflation being high". The Reserve Bank of India, which considers private transfers in the balance of payments as remittances, anticipates sustained growth. The central bank projects these inflows to reach approximately $160 billion by 2029.

Police said in a statement cited by the Reuters news agency that protesters from the Hindu nationalist group Vishva Hindu Parishad (VHP) set fire to an image of Aurangzeb in Nagpur. A police officer told Reuters that several members of Muslim groups then threw stones at police.

The situation escalated with violent groups torching vehicles and vandalizing homes, the Press Trust of India news agency reported.

The curfew has since been relaxed, however authorities have maintained tight security around Aurangzeb's tomb, around 450 kilometers (280 miles) from Nagpur.

The VHP denied accusations of engaging in any violence but said it wants the tomb to be replaced with a memorial for rulers from the local Maratha community.

Historical grievances

Some Hindu activist groups, which are often linked to Prime Minister Narendra Modi's Bharatiya Janata Party (BJP), have claimed that several mosques were built over Hindu temples centuries ago during the Muslim Mughal empire.

Shivam Thakre, a VHP youth leader, said that Aurangzeb was an "anti-Hindu" ruler.

"We will not rest until we see his grave completely demolished. If the government does not demolish it, angry people may raze it some day the way Babri Masjid was pulled down," Thakre told DW. His comment refers to the 1992 incident in Ayodhya in which the 16th-century mosque built in the memory of Mughal emperor Babur was torn down by Hindu extremists.

The mosque's destruction triggered communal violence that killed over 2,000 people, mostly Muslims.

How has the Bollywood film fueled tensions?

Tensions over the Mughal ruler intensified after the release of Bollywood movie "Chhaava," an action film that portrays the 17th-century Indian king Chhatrapati Sambhaji Maharaj as a hero who fights against Aurangzeb.

Devendra Fadnavis, the Chief Minister of Maharashtra — where the city of Nagpur is located — blamed the film's graphic portrayal of Sambhaji's torture and execution at Aurangzeb's orders for angering Hindu groups.

"Chhaava ignited people's anger against Aurangzeb," Fadnavis said, noting that the violence began after "rumors were spread that things containing religious content were burnt" by the protesters — referring to the Quran.

The film has been slammed by some movie critics for feeding into a divisive narrative that risks exacerbating religious rifts across India.

Since Prime Minister Narendra Modi took office in 2014, Hindu nationalists have successfully renamed several Indian cities, roads and other historical public places, from Muslim-sounding ones to Hindu-centric ones.

In recent years, the BJP-led federal government has revised history textbooks, reducing content on Mughal rulers in state-run schools.

Hindutva groups call Aurangzeb a "cruel" ruler, accusing him of demolishing Hindu temples.

At a 2022 event in New Delhi's Mughal-era Red Fort, Modi said: "Even though Aurangzeb severed many heads, he could not shake our faith."

Who was Aurangzeb?

Richard Eaton, who specializes in the history of pre-modern India, told DW that Aurangzeb both protected and attacked Hindu temples, motivated purely by politics, and not religion.

"Similarly, temples patronized by authorities who had once sworn loyalty to the state but subsequently rebelled were similarly liable to desecration."

"Conversely, he regularly ordered the protection of temples whose patrons were loyal to the Mughals. In this context, desecrating Aurangzeb's own grave is meaningless," added the author of the book "Temple Desecration and Indo-Muslim States."

The "blood-thirsty, Hindu-hating" version of Aurangzeb is inaccurate, said historian Audrey Truschke.

"In reality, Aurangzeb was an Indian king who, like many Indian kings before him, including Hindu rulers, protected and targeted temples depending on his perceived political interests," Truschke, author of the book "Aurangzeb: The Man and the Myth," told DW.

"Targeting temples for political reasons strikes many modern Indians as inappropriate, but Aurangzeb was part of the pre-modern world, and there is no purchase in judging the past by the standards of the present, especially unequally," she added.

"The current furor over Aurangzeb's modest grave … is fundamentally not about a king who died more than 300 years ago," the Rutgers University professor said. "Rather, it is about oppressing Indian Muslims and targeting their religious spaces in 2025."

Echoing Truschke, Delhi University professor and activist Apoorvanand — who goes by a first name — said that the rekindled hatred against Aurangzeb is "manufactured" by a systematic anti-Muslim campaign over the last few decades.

"This hatred is only supported and amplified by the media and the film industry," he told DW, adding that, "The destruction of the monuments by the Hindu mobs gives Hindus a false sense of victory against Muslims, taking revenge for their ancestors who were supposedly vanquished by Aurangzeb."

"It is also part of a longer drive to erase all Muslim imprints from the Indian identity: destruction of mazaars [Muslim shrines], mosques, monuments, changing names of places. It is part of the de-Islamification of India," said Apoorvanand.

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BJP MP from Unnao, Sakshi Maharaj, has created another political stir by claiming that the All India Majlis-e-Ittehadul Muslimeen (AIMIM) leader Asaduddin Owaisi had helped the BJP in the Bihar Assembly elections and would also help in the Assembly polls in West Bengal and Uttar Pradesh.

Over the past six months, foreign investors have withdrawn nearly $29 billion from Indian equities, marking the highest outflow recorded in any similar period.

The exit comes after India’s stock market surged to record highs in September 2024.

The Nifty 50 index has experienced a 13% decline since then.

Meanwhile, Chinese markets have attracted investors, driven by renewed optimism about government stimulus policies and the promise of growth in the artificial intelligence sector.

Hong Kong’s Hang Seng Index has surged 36% since late September, drawing in capital that was previously flowing into India.

Asset managers, including Morgan Stanley and Fidelity International, have been scaling back their exposure to Indian equities and reallocating funds to Chinese investments.

Economic conditions trigger a selloff

India’s stock market had been riding high on strong corporate earnings and economic growth, but slowing performance in key sectors has impacted investor sentiment.

Rising inflation and high interest rates have weighed on company profits, with Nifty 50 firms recording only a 5% earnings growth in the December quarter—marking the third consecutive quarter of single-digit expansion.

Prior to this slowdown, companies had enjoyed two years of double-digit profit increases, making the market particularly sensitive to any signs of weakness.

As a result, India’s stock market, previously considered an attractive destination for foreign investments, has seen a sharp correction.

Valuations had been exceptionally high, with global investors rushing to take advantage of the country’s growth potential.

However, concerns about a slower economic outlook have triggered a selloff, wiping out over $1 trillion in market value since September.

China attracts new inflows

While investors reduce their exposure to Indian markets, China has been regaining favor due to its aggressive economic stimulus efforts and recovering market sentiment.

Beijing has introduced a series of policy measures aimed at stabilizing its economy, including incentives to support technology companies and increased investment in artificial intelligence research.

A significant driver of this shift has been the success of Chinese startup DeepSeek, which has fuelled optimism in AI-related stocks.

With the Hang Seng Index rebounding strongly, institutional investors are increasingly viewing China as a more attractive option, particularly given the relative affordability of Chinese stocks compared to Indian equities.

For the first time in two years, China now holds a larger weight than India in Aubrey Capital Management’s portfolio, a shift that reflects broader market sentiment.

Asset managers are locking in profits from India’s stock market boom and reallocating capital to China and other emerging markets in Southeast Asia.

Can Indian stocks bounce back?

Despite the recent selloff, some investment firms remain optimistic about India’s long-term prospects.

While companies such as Morgan Stanley and Fidelity International have trimmed their positions, they still maintain an overweight stance on Indian equities.

Some analysts believe that the market correction presents an opportunity for long-term investors to re-enter at lower valuations.

However, further downside risks remain. If India’s economic growth continues to slow or corporate earnings remain weak, additional outflows could occur.

On the other hand, if inflation stabilises and interest rates ease, investor confidence may return, potentially reversing the outflow trend seen in recent months.

For now, global investors are closely watching economic indicators in both India and China to determine where their capital will flow next.

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China’s inbound foreign direct investment Yet rather than pulling back globally, Chinese companies are going outward, reshaping global production networks.India, meanwhile, is facing unexpected headwinds in its bid to replace China as the world’s factory.

Is China reshaping globalization on its terms?

The numbers tell a clear story. Data from Rhodium Group shows that China’s inbound FDI fell to $4.5 billion in 2024, its lowest in more than three decades.

But Chinese outbound FDI is taking off in a new direction.

Once focused on acquiring assets in the US, Japan, and Europe, Chinese capital is now flowing into greenfield projects, such as factories, battery plants, and industrial parks, in countries like Hungary, Mexico, Morocco, and Brazil.

In Europe, Hungary has become China’s favourite destination, receiving a $7 billion investment from battery giant CATL and a new BYD EV factory.

Morocco has emerged as a surprising hub for Chinese EV supply chains, leveraging its trade deals with both the US and the EU.

China’s strategy is more than economic.

It is using what some analysts call “industrial diplomacy,” selectively rewarding nations with FDI based on geopolitical alignment.

 

Source: Rhodium Group© Invezz

According to reports by MERICS, Chinese automakers have been instructed to expand in countries opposing EU tariffs on Chinese EVs, while withholding investments from those supporting them.

Why is India left out?

Beijing’s strategy shifts dramatically when it comes to India.

Despite India’s population overtaking China’s and its economy growing at 6.5% last year, Chinese firms are holding back.

Behind the scenes, Beijing has discouraged companies like BYD and Foxconn from expanding further in India, fearing it could accelerate India’s climb up the value chain.

Chinese export controls have quietly restricted key industrial inputs such as solar equipment, EV components, and electronics machinery bound for India.

Tunnel boring machines and even Foxconn’s equipment shipments have reportedly been delayed at Chinese ports.

The motive appears clear: prevent India from repeating China’s own 1990s success story.

That was when Western manufacturers flocked to China, helping it become a global powerhouse.

China sees India as the only plausible challenger to its dominance in manufacturing scale and labour-intensive exports.

India’s internal bottlenecks

Yet China is not solely responsible for India’s struggles. Foreign investors cite India’s domestic hurdles as a significant factor.

High import tariffs on components, rigid labor laws, and regulatory red tape have slowed momentum.

While Apple has shifted iPhone production to India, with 15% of its devices now assembled there, the company still lags behind its goal of 25%.

Strikes at Indian factories and inconsistent state-level regulations have created friction for global executives used to Vietnam’s predictable, centralized environment.

Vietnam’s electronics sector is now valued at $126 billion.

That is three times the size of India’s, despite India being over ten times larger in population.

Vietnam’s deep integration with China’s supply chains also makes it a natural stop for manufacturers pulling out of China.

Is India missing the China Plus One wave?

The China Plus One strategy, which aims to diversify global manufacturing beyond China, has largely benefited Southeast Asian nations.

Mexico, Vietnam, and Indonesia have absorbed much of the production shift, leaving India playing catch-up.

FDI into India’s manufacturing sector has been tepid.

According to Japan’s Chamber of Commerce, only one out of every ten Japanese companies that explore India follow through on their investment plans.

Taiwanese semiconductor firms have mostly bypassed India after assessing operational hurdles.

At the same time, China’s outbound greenfield investment has surged, particularly in Latin America, Southeast Asia, and parts of Europe.

Beijing appears to be crafting a new industrial network that preserves China’s control over critical technologies while pushing lower-value production abroad, but away from India nonetheless.

Could India still break through?

India’s policymakers are aware of the challenges. In recent months, the government has offered fresh incentives for electronics and semiconductor manufacturers.

Prime Minister Narendra Modi has also sought to fast-track a trade deal with Washington to reduce tariffs and boost India’s role as a production hub.

 

But India’s decentralized governance model and fragmented infrastructure continue to hold it back.

Foreign investors are increasingly asking if India will seize this rare opportunity or let Vietnam and Mexico solidify their lead.

The risk for China is that economic necessity may eventually outweigh geopolitics.

Despite Beijing’s warnings, many Chinese firms still want access to India’s market.

As noted in a report by the Observer Research Foundation, Chinese companies face a dilemma: pull out of India and cede ground to Western rivals like Apple and Samsung, or stay and risk building up India’s capacity to eventually rival China.

The post How China is quietly slowing India’s manufacturing growth appeared first on Invezz

 

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India has completed negotiations to purchase 26 French Rafale M fighter jets for its navy. As reported by the United24media portal, the $8.3 billion deal aims to replace the aging fleet of Russian MiG-29K and MiG-29KUB jets. The contract is set to be signed in April during the visit of the French Defense Minister to India.

France overtakes Russia in arms exports

According to a report by the Stockholm International Peace Research Institute (SIPRI), France has become the second-largest arms exporter in the world, overtaking Russia. French arms exports increased by 47% from 2019 to 2023. Meanwhile, Russian arms exports dropped by 47% in 2024 compared to 2022.

Despite the drop in exports, Russia remains the largest arms supplier to India, accounting for 38% of its exports. However, France is rapidly gaining significance, with nearly 30% of its exports directed to India.

Increased demand for Rafale

The manufacturer of the Rafale, Dassault Aviation, has noted a rise in global demand for its fighter jets due to the war in Ukraine and uncertainty regarding future U.S. military assistance to Europe. The company plans to deliver 25 Rafale jets and 40 Falcon aircraft in 2025.

However, France is experiencing production challenges. Dassault Aviation can produce 25 Rafale jets annually, whereas American company Lockheed Martin plans to deliver 190 F-35s in 2024. This highlights the differences in production capabilities between the two companies.

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 the 16th State Budget Chief Minister Siddaramaiah presented in the Legislative Assembly on Friday clearly showed that the guarantee-led model formed the core philosophy of the Congress government.

The overall Budget strategy seems to be aimed at enabling private sector investment while concentrating the State’s resources on the poor and the needy to ensure opportunities.Among other things, it set aside a whopping ₹1,56,117 crore for women and children-centric programmes, 38% of the total Budget outlay. The Budget provided financial support for five guarantees (₹51,034 crore) for achieving an equitable distribution of wealth.

No new taxes

The Budget announced no new taxes, except to increase the professional tax payable by salary and wage earners from ₹200 to ₹300 for February to align with the maximum limit of ₹2,500 a year.

Karnataka joined the elite club of States with the Budget size of over ₹4 lakh crore (₹4,09,549 crore) for the first time this year.

Uttar Pradesh, Maharashtra, and Tamil Nadu have already crossed the Budget size ₹4 lakh crore.

Like the previous Budget, the 2025-26 Budget has a revenue deficit, pegged at ₹19,262 crore. The borrowing is pegged at ₹1,16,000 crore, which is 28% of the Budget size.

For the betterment of the low salaried class, the Chief Minister proposed a slew of hikes in the monthly honorarium of guest lectures, ASHA and anganwadi workers, cooks working in government schools, Jain priests, chief grantis of Sikhs and Pesh-Imams of mosques, and archakas of temples.

For promoting women SHGs, the Budget proposed to set up Akka Cooperative Society in the State and ‘Akka café and canteen’ in district and taluk panchayat offices. It has proposed to provide 8% interest subsidy for loans up to ₹1 lakh for registered street vendors.

Interestingly, as legislators are constantly seeking funds for development of their constituencies, the Chief Minister’s Infrastructure Development Programme has been proposed in the Budget with ₹8,000 crore, focusing on minor irrigation, roads and urban infrastructure in all Assembly constituencies.

Rate of growth

On a positive note, the Budget pointed out that the farm sector registered a growth of 4% in 2024-25, after clocking a negative growth of 4.9% in 2023-24.

While the industrial sector recorded 5.8% growth (it was 7.7% in 2033-24), the service sector registered 8.9% in 2024-25. The State’s GSDP is poised to grow at 7.4% as against the nation’s 6.4%. Overall exports recorded a growth of 11.17%. Karnataka has contributed 8.4% to the national GDP in 2024-25.

Mr. Siddaramaaih took a dig at the Centre for its failure to compensate for GST loss, non-devolution of cesses and surcharges and lower tax devolution from the 15th Finance Commission. The decline from 14th Finance Commission to 15th Finance Commission is estimated at ₹12,000 a year.

In what the Opposition called “minority appeasement”, the government has allocated ₹4,500 crore for minority communities. The Budget allocated ₹4,300 crore for OBC programmes and ₹42,018 crore under the SC Sub-Plan and Tribal Sub-Plan.

For stimulating entrepreneurship in Tier-II and III cities/towns, it proposed a Local Economy Accelerator Programme with a grant of ₹1,000 crore and the industry status to the cinema sector.

The total receipts are estimated at ₹4,08,647 crore, while the total expenditure is estimated at ₹4,09,549 crore. The Budget outlay included revenue expenditure of ₹3,11,739 crore, capital expenditure of ₹71,336 crore and loan repayment of ₹26,474 crore.

The revenue deficit is estimated at ₹19,262 crore (0.63% of GSDP) and the fiscal deficit is estimated at ₹90,428 crore (2.95% of GSDP).

The total liabilities at the end of 2025-26 is estimated to be ₹7,64,655 crore (24.91% of GSDP). The borrowings and fiscal deficit have been kept within permissible limits of the Karnataka Fiscal Responsibility Act, 2002, and thus maintained fiscal discipline. Mr. Siddaramaiah has bet that Karnataka would turn revenue surplus next year.

The Chief Minister, who has suffered a leg injury, read a few paragraphs of the Budget standing in the House but later completed the speech seated.

Reservation for Muslims in government contracts

₹50,000 assistance for Muslim simple marriages

₹150 crore for infrastructure development of Waqf properties & graveyards

₹50 lakh for Muslim cultural programs

 New ITI college to be set up in Muslim-dominated areas

50% fee concession for Muslim students under KEA

Residential PU college for Muslim girls in Ullal town

 Increase in National & Foreign Scholarships for Muslim students

 Expansion of Bengaluru’s Haj Bhavan with additional buildings

 Self-defense training for Muslim girl students

The T-72 tank, first introduced in India in the 1970s, is the mainstay of the Indian Army's fleet. It operates about 2,500 such tanks fitted with a 780 horsepower (HP) engine.

The new acquisition of 1,000 HP engines will replace engines of the existing fleet to "enhance the battlefield mobility and offensive capability of the Indian Army", the ministry said in a statement.

The deal includes transfer of technology from Rosoboronexport to Indian state-owned Armoured Vehicles Nigam Ltd for licensed production of the engines.

India is the world's largest arms importer and Russia has been its top defence supplier for decades, although Moscow's ability to provide systems was damaged by its war in Ukraine, which has made New Delhi look more westward for suppliers.

The Chief Minister handed over his resignation to Manipur Governor Ajay Kumar Bhalla as the incumbent BJP government in the riot-hit state faces the possibility of a no-confidence motion and a floor test by the Congress-led Opposition. 

"It has been an honour to serve the people of Manipur so far," Singh said in his letter which was submitted to the Governor at the Raj Bhavan in the presence of other BJP leaders and MLAs. 

Biren Singh's resignation came soon after he met Union Home Minister Amit Shah in New Delhi and returned to Manipur. 

The BJP has 32 MLAs in Manipur Assembly, along with additional support from five legislators of the Naga People's Front and six from the JD(U).

Despite the withdrawal of support by ally Conrad Sangma's National People's Party, the BJP maintains a comfortable majority. However, there was speculation that MLAs advocating for a leadership change in the state might have defied the party whip in the event of a floor test.

The Congress holds five seats in Manipur's 60-member Assembly, while the opposition National People's Party (NPP) has seven legislators. Additionally, there are three Independent MLAs and two members representing the Kuki People's Alliance.

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Seizing on Oza's claims, AAP leader and Delhi Chief Minister Arvind Kejriwal tweeted, "If it is true, it reveals real face of BJP-Modi-Shah".