分类： business

Long before the sun rises over Mumbai’s crowded street markets, small business owner Mansi Kadam starts prepping vada pav, the city’s beloved spicy potato snack, for her daily stream of customers. When it comes to one core ingredient, Kadam refuses to compromise: she only uses Tata salt. When asked if she would ever consider switching to another brand, her answer echoes a decades-old Hindi advertising jingle ingrained in generations of Indian consumers: “If it’s salt, it has to be Tata.”

Kadam knows almost nothing about the high-stakes confrontation unfolding in the boardrooms of the Tata group, one of India’s oldest, largest, and most culturally influential business empires, whose product portfolio stretches from humble table salt to cutting-edge enterprise software. But her unthinking, lifelong loyalty highlights the core question now facing the conglomerate: can one of India’s most trusted household brands survive a very public battle over leadership, corporate governance, and strategic control without damaging its hard-won reputation?

The conflict has erupted between two key pillars of the Tata structure: the board of directors at Tata Sons, the group’s central holding company, and Tata Trusts, the philanthropic entity that holds a majority stake in the business. At the heart of the standoff are two critical, interconnected decisions: the proposed initial public offering of Tata Sons and the reappointment of current Tata Sons chairman N Chandrasekaran. The vast majority of the Tata Sons board, including the group’s largest minority stakeholder the SP Group, has thrown its support behind both moves.

But Noel Tata, chairman of Tata Trusts and the half-brother of iconic former group chairman Ratan Tata, has publicly opposed both resolutions. He argues that taking Tata Sons public would dilute the group’s century-old commitment to philanthropic impact, and he is pushing to overturn both decisions at the conglomerate’s upcoming annual general meeting.

Shriram Subramanian, founder and head of InGovern Research, an independent corporate governance advisory firm, explained the core of the rift in an interview with the BBC. “When we say this is a governance crisis, it’s a misalignment of interests between the board [of Tata Sons] and the shareholders [Tata Trusts],” he said. While Subramanian does not expect an immediate hit to the Tata brand’s public image, he has raised concerns about whether the fractured leadership can effectively steer the group through growing market and operational challenges.

The current tensions have been building since the death of Ratan Tata in 2024, who named Noel Tata his successor in his will after decades at the group’s helm. For most Indians, Ratan Tata’s personal commitment to public good and steady leadership became inseparable from the Tata brand itself. His passing sparked nationwide mourning, and industry analysts agree it left a significant leadership void that has yet to be filled, both internally and in the public eye.

According to the Tata group’s official website, Brand Finance has ranked Tata as India’s most valuable brand every year since 2018, a testament to its decades of reputation-building. Tata Sons, the central holding entity, is described by the group as the “fastener keeping the many disparate elements of the whole together.” Tata Trusts, which manages seven individual philanthropic endowments that collectively own the group’s controlling stake, is widely seen as the conglomerate’s moral compass, guiding all business units on social impact and charitable giving. For generations of Indian consumers, this combination of commercial success and public-minded leadership has built a reservoir of public trust that few corporations anywhere in the world can match.

Today, that trust is under strain as the two core entities find themselves on opposing sides of a public fight. “Once upon a time, there was a unified audience which said the Tatas are good people with good governance. Today, the opinion is divided,” said Harish Bijoor, an independent business and brand strategy consultant based in India. While most everyday consumers like Kadam remain unaware or unbothered by the boardroom dispute, the conflict has sharply polarized other key stakeholders including investors, business partners, and employees. Some frame the rift as a naked power play, others as a genuine debate over the group’s founding values, but there is little consensus on which side holds the moral high ground, Bijoor explained.

“This conflict has brought the Tatas into conversations everywhere, which is not good as they have always liked to be out of it,” he added. For its entire history, the Tata group has intentionally kept a low profile, both around its philanthropic work and when resolving internal disputes. The BBC reached out to the Tata group with detailed questions about the current conflict, but received no response.

Founded by Jamsetji Tata in 1868, the Tata group grew dramatically under JRD Tata, who transformed it from a family-run collection of businesses into one of the world’s first professionally managed large conglomerates. Ratan Tata later drove the group’s global expansion, leading a wave of high-profile international acquisitions that established Tata as a global player. Today, the group boasts a combined market capitalization of more than $260 billion, employs hundreds of thousands of people across more than 100 countries, and counts industries from steel to automotive to digital services among its holdings.

This is not the first time the group has weathered controversy. It has faced public protests over large industrial projects, regulatory scrutiny of its telecom division during India’s 2G spectrum allocation scandal, a high-profile public dispute with Japanese telecom giant Docomo, and ongoing questions about the operational performance of Air India, which the group acquired in 2021. Some of its biggest business moves have drawn criticism, most notably Tata Steel’s troubled 2007 acquisition of European steel giant Corus, though other overseas bets including Tetley Tea and Jaguar Land Rover have been enormously successful and cemented the group’s global footprint.

The group’s most high-profile previous internal crisis came in 2016, when the Tata Sons board abruptly removed Cyrus Mistry as chairman and reinstated Ratan Tata as interim leader. Mistry, an heir to the SP Group, had originally been selected for the role by a selection committee led by Ratan Tata himself. The ouster sparked a four-year legal battle that ultimately ended in 2021, when India’s Supreme Court ruled in favor of the Tata group.

Last month, veteran Indian journalist Sucheta Dalal wrote in a column for Moneylife magazine that the Tata group has “weathered serious governance storms” in the past, and has long enjoyed “special privileges available to no other business group” – a reference to the unique tax exemption granted to Tata Trusts for its controlling stake in Tata Sons – thanks to its reputation for integrity built over 150 years. Most long-time Tata observers agree with that assessment.

Morgen Witzel, a fellow at the Exeter Centre for Leadership who authored a book on the Tata brand in 2010, noted that the group’s trust is built on far more than advertising. In an email interview, he pointed to decades of on-the-ground investment in communities across India: in Jamshedpur, Jharkhand, where Tata built India’s first integrated steel plant and the country’s first planned industrial city, the group provides free healthcare and education to residents of hundreds of surrounding villages. Watchmaker Titan, a Tata subsidiary, supports employees who leave the company to launch their own small businesses. Tata Motors’ Pune facility has helped thousands of local women launch their own entrepreneurial ventures.

“It is the concatenation of all of these things that builds trust because people see that, by and large, Tata is there to serve their needs rather than just take their money,” Witzel said.

But unlike past controversies, which were largely external or rooted in one-on-one disputes, the current rift is a fundamental divide at the very top of the organization. What began as a private boardroom disagreement has increasingly spilled into public view, with Tata Sons and Tata Trusts clashing through public legal notices and competing official statements. Venu Srinivasan, vice-chairman of Tata Trusts and a nominee director on the Tata Sons board, has called for an independent investigation into alleged governance lapses at some Tata Trust entities, claims that the trusts have outright denied.

Noel Tata has put forward two alternative proposals to avoid a public listing of Tata Sons. First, he has suggested that the Tata Sons board buy back a portion of the SP Group’s minority stake, a move he frames as a “fair and equitable solution” to the SP Group’s demand to monetize its holding. Second, he has proposed restructuring Tata Sons by merging two existing business units into the holding company, a change that would alter how the Reserve Bank of India classifies the entity and potentially let the group avoid mandatory listing requirements.

It remains unclear whether Noel Tata can gather enough support to pass his proposals, as he has not yet consolidated the same level of personal authority and influence that Ratan Tata held over decades. Subramanian argues that Ratan Tata’s iconic status and the manner of the succession itself contributed to the current crisis. “Ratan Tata’s larger-than-life image is, to some extent, the reason behind the current conflict. Everyone was deferential towards him and his successor was known only after his death through his will,” he said. Had Ratan Tata overseen a public, planned transition of power during his lifetime, Subramanian added, the handover would likely have been far smoother.

Bijoor, the brand strategist, has called on the group to publish a full public “white paper” outlining the dispute and its final resolution, arguing that the group’s long-held reputation for transparency demands openness. “They stood for transparency, and they must never shed that,” he said.

How one of India’s most influential corporations manages these internal tensions will go a long way toward defining its future. The outcome of the dispute is being closely watched across India’s entire corporate sector, where Tata’s governance standards and ethical business practices have long been held up as a gold standard for other firms to follow.

A major new flashpoint has emerged in EU-China trade relations, after Beijing rejected a European Union demand to voluntarily cap Chinese hybrid vehicle exports to the bloc, raising the immediate prospect of steep new EU tariffs on hybrids that have until now avoided the extra duties applied to pure electric vehicles from China.

According to reporting from the *Financial Times*, China turned down Brussels’ proposal that Chinese automakers limit their collective share of the EU’s hybrid market to roughly 15%, down from the current level of more than 33%. Following Beijing’s refusal, the European Commission is now evaluating the imposition of temporary safeguard tariffs — a measure that does not require formal proof of unfair trade practices, two unnamed diplomats told the outlet. Under the draft plan, Chinese hybrid imports within a fixed quota would enter the bloc under standard existing terms, but any shipments exceeding that cap would be subject to steep additional duties.

Bloomberg reported Wednesday that Brussels views new hybrid trade restrictions as a test case that could eventually be expanded to other sectors running large bilateral trade imbalances with China. On Thursday, October 8, European Trade Commissioner Maros Sefcovic began two days of negotiations with Chinese Commerce Minister Wang Wentao in Beijing, in a last-ditch effort to resolve the standoff before EU leaders take up the issue at the European Council summit in Brussels scheduled for October 15 and 16. The summit meeting comes as EU officials characterize the bloc’s daily bilateral trade deficit with China, which hits roughly €1 billion (US$1.15 billion), as economically unsustainable.

The current dispute follows the EU’s October 2024 decision to impose five-year countervailing duties ranging from 7.8% to 35.3% on Chinese-made battery electric vehicles (BEVs), added on top of the bloc’s standard 10% import tariff. In response to that move, Beijing implemented retaliatory anti-dumping measures targeting European brandy, pork, and dairy products. Critically, the EU’s 2024 BEV probe and subsequent tariffs excluded hybrid models, which remained subject only to the baseline 10% tariff. Over the past two years, leading Chinese automakers including BYD and Chery shifted their European export strategy toward hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs), rapidly capturing market share in the bloc while BEV shipments faced punitive new levies.

To clarify, HEVs are non-plug-in hybrids that recharge their small onboard batteries via the gasoline engine and regenerative braking, while PHEVs feature larger batteries that can be charged directly from the power grid and allow for longer all-electric driving ranges. Eurostat data underscores the explosive growth of Chinese hybrid imports into the EU: imports of Chinese PHEVs rose from 56,706 units in 2022 to 217,764 units in the first seven months of this year alone. Over the same period, Chinese HEV imports jumped from just 659 units to 160,662 units. This growth has accelerated sharply in recent months: monthly Chinese HEV imports to the EU climbed from 23,711 units in May to 32,797 units in July, with the total monthly value of these shipments rising from €335.6 million to €489.4 million.

Chinese trade and automotive analysts have roundly criticized the EU’s request for a voluntary export restraint (VER), arguing that it is fundamentally unfair and a violation of global trade rules. “The EU’s so-called voluntary export restraint tramples on international trade rules, and China will not accept it,” wrote a Zhejiang-based columnist writing under the pen name “Automobile Observe.” “Brussels is playing word games. An outright ban or unilateral tariff hike would clearly violate World Trade Organization rules, so it is instead pressuring China to voluntarily limit its own exports.”

She noted that Chinese PHEV exports to Europe grew 155% year-on-year in 2025, far outpacing the 12% growth recorded for pure electric models, a trend that reflects European consumers choosing high-value Chinese hybrids over less competitive European offerings. Financial institutions including Morgan Stanley have already predicted that the EU will extend its anti-subsidy duties from pure EVs to HEVs and PHEVs. “The EU wants to extend the tariffs on pure EVs to hybrids and give its slow-moving legacy automakers more time to catch up,” she added. “Chinese automakers can easily bypass these new tariff barriers by setting up local assembly plants within the EU.”

In March of this year, the European Commission unveiled the Industrial Accelerator Act (IAA), a sweeping “Made in Europe” industrial policy proposal. Under the IAA, all publicly funded or subsidized EVs and PHEVs sold in the bloc would be required to be assembled in the EU, with at least 70% of non-battery components sourced from local European suppliers. The legislation also introduces screening for non-EU investments exceeding €100 million in strategic sectors, tying regulatory approval to requirements for technology sharing and increased local sourcing. Investors from designated EU free trade partners are exempt from these screening rules, but China is not included on that list. If approved by the European Parliament and EU member states, the EV and PHEV local content rules will take effect around mid-2027, with the remaining provisions entering into force on January 1, 2029.

Another Chinese industry commentator, writing from Liaoning under the pen name Xingwan, argued that new EU export quotas or tariffs will not stop Chinese automakers, as many have already begun building production facilities within the bloc. For example, BYD’s €4 billion Hungarian manufacturing plant is targeted to produce 300,000 vehicles annually and is set to begin mass production in the fourth quarter of 2026. “EU policymaking moves far too slowly to keep up with Chinese industry,” Xingwan wrote. “Brussels makes policy on a yearly timetable, while Chinese firms can adjust their production and supply chains every month. Chinese automakers have spread their production capacity across Europe, Mexico, and Turkey, so no single EU measure can stop their expansion.”

Even so, Xingwan acknowledged that the IAA’s 70% local content requirement and foreign investment restrictions do create new headwinds for Chinese brands. If Chinese-built vehicles no longer qualify for EU consumer subsidies, they could lose their key competitive price advantage. In the long term, Xingwan added, Chinese automakers that operate factories within the EU will become increasingly integrated into the bloc’s production ecosystem, facing growing pressure to share proprietary technology and source more components from European suppliers.

This is not the first time that major Asian automakers have faced Western market access restrictions over rapid export growth. From the mid-1970s onward, Japanese automakers faced similar squeeze measures in Western markets: Britain capped Japanese auto market share at roughly 11%, while France limited it to around 3%. The US pressured Tokyo to voluntarily curb auto shipments and maintained a 25% tariff on imported light trucks. In 1981, Japan agreed to a voluntary cap on auto exports to the US that remained in place until 1994, and in 1991, Tokyo and Brussels reached a similar agreement that capped Japanese auto exports to the European Community until 1999. Those restrictions ultimately expired as Japanese automakers built local plants and hired local workers in Western markets, and Japan still exports conventional gas-powered vehicles and hybrids to the US and EU today.

China has repeatedly pushed back against the EU’s new trade push, reaffirming its commitment to fair open trade. “China-EU economic and trade relations are mutually beneficial in nature, not a zero-sum competition,” Chinese Foreign Ministry spokesperson Guo Jiakun said on September 18, when asked about the EU’s request to cap Chinese hybrid market share at 15%. “We hope the EU will honor its commitments to market openness and free trade and observe WTO rules. We will closely follow the EU’s moves and take all necessary steps to protect the legitimate and lawful rights and interests of Chinese businesses.”

This trade standoff between the EU and China comes as the US has already implemented far stricter restrictions on Chinese vehicle imports. Washington imposed a 100% tariff on Chinese EVs in 2024 and has since banned Chinese software and hardware in connected vehicles on national security grounds. In a September 11 Fox News interview, US President Donald Trump said, “We don’t allow Chinese cars into the US, and we never have. If China wanted to come in and open a plant to build their cars here, I’d be okay with it — Japan does it, and they hire our people. But I don’t want Chinese automakers building cheap cars in Mexico and shipping them across the border.” Ahead of Chinese President Xi Jinping’s September 24 visit to the White House, Ford, General Motors, and the United Auto Workers union all urged Trump to maintain restrictions blocking Chinese automakers from full access to the US market.

In a move that has sent ripples through the global AI and investment communities, Nvidia-backed AI data centre developer Firmus has pulled the plug on what was set to be one of the largest initial public offerings (IPO) in Australian history. The company announced Friday that shifting market conditions and widespread volatility convinced its leadership that moving forward with a public listing would not serve the best interests of either the firm or its existing shareholders.

When Firmus first unveiled its IPO plans earlier this year, the offering was projected to value the company at more than $30 billion (£22.65 billion), a valuation that immediately raised red flags among large institutional investors. One major investment firm confirmed to the BBC it had already opted out of participating in the offering specifically over valuation concerns, and UniSuper, one of Australia’s largest pension funds, also joined the list of non-participants.

UniSuper Chief Investment Officer John Pearce told the BBC that while Firmus has a strong value proposition as a key infrastructure player in the fast-growing AI sector, its proposed pricing failed to match its underlying fundamentals. “Firmus indeed has a compelling story. It just doesn’t have a compelling valuation,” Pearce said in an investor update, adding that the fund also shared concerns that Firmus would need to take on substantial new debt to fund its aggressive expansion pipeline. Pearce also noted that the Australian Securities Exchange (ASX) sorely needs high-profile new growth listings like this one, calling the withdrawal disappointing for the exchange.

Headquartered across the Asia-Pacific, Firmus designs, builds and operates cutting-edge liquid-cooled data centres, which the company brands as “AI factories” built specifically to power large-scale AI model development and deployment. Its client roster includes two of the biggest names in global AI: OpenAI and Meta, with operations currently spread across Australia, Singapore and other key APAC markets. Beyond Nvidia, the startup counts global investment giants Blackstone and Jane Street among its major backers. When contacted by the BBC, Blackstone declined to issue a statement, while requests for comment have also been sent to Nvidia and Jane Street with no immediate response.

Going forward, Firmus said it will shift its focus to raising new capital from private market investors, and will re-evaluate alternative paths to a public listing or continued private ownership down the line. “We will provide additional information to shareholders as those options progress,” the company said in a statement.

The collapse of Firmus’s IPO comes at a moment of growing investor scrutiny over the hundreds of billions of dollars in capital flooding into the AI sector, where questions around long-term profitability and return on investment remain largely unanswered. Phillip Wool, chief research officer at Rayliant Investment Research, described the planned Firmus listing as a key test of institutional investors’ ongoing willingness to pour capital into early-stage AI infrastructure. “Investors in Firmus would be buying into a company that is still in its early stages and is likely to need to borrow large sums of money,” Wool explained, adding “It’s more like a bet on a dream.”

Australia has emerged as a hotspot for AI data centre investment in recent years, drawn by the country’s abundant access to low-cost clean energy, ample natural gas reserves, and large available parcels of land for large facilities. OpenAI CEO Sam Altman highlighted this potential earlier in 2024, saying Australia could position itself as a global leader in the AI data centre sector if it prioritizes the industry. Currently, more than 160 data centres operate across the country, with dozens more in planning stages, even as local communities have raised pushback over the facilities’ high energy consumption and noise pollution.

The withdrawal of Firmus’s offering also aligns with a broader trend of caution around AI public listings this year. In September, Altman announced OpenAI itself would not pursue an IPO in 2024, citing ongoing concerns over AI safety that made a public debut ill-advised at this stage. Despite that, both OpenAI and rival AI developer Anthropic are reportedly planning blockbuster future listings that could value each firm at more than $1 trillion. Just this week, two major AI-linked stocks, Nvidia and Oracle, dropped in U.S. trading after reports emerged that OpenAI’s 2024 revenues have come in below earlier analyst projections, deepening market jitters over overinflated AI valuations.

A high-stakes public dispute has erupted over SpaceX’s Starlink satellite internet venture’s delayed entry into India, with Tesla and SpaceX CEO Elon Musk directly pointing fingers at Indian billionaire Mukesh Ambani, alleging that the tycoon’s business empire is using its influence to block Starlink from securing final regulatory approval.

The controversy began on a Wednesday, when Musk took to social media platform X to claim that unnamed “certain oligarchs” were holding a “monopolistic chokehold” over Indian internet consumers. Without naming any individual initially, he added that blocking Starlink’s launch amounted to “a crime against the people of India.” The next day, Musk doubled down on his claims, specifically naming Ambani, whose Reliance Industries conglomerate owns Jio, India’s largest mobile network operator. In a provocative post on X, Musk asked, “Is Ambani the real boss of India?”, questioning why Starlink had not received its final license despite spending five years complying with all Indian government regulations and holding operating licenses in more than 165 countries globally.

India’s Ministry of Communications quickly pushed back against Musk’s accusations, issuing a statement clarifying that the regulatory framework for satellite communications is fair and non-discriminatory. The ministry noted that three major players — Starlink, Eutelsat OneWeb, and Jio Satellite Communications — are all at the same stage of the approval process, with all three awaiting final security clearances and spectrum allocation before they can roll out commercial services. “The suggestion that the framework or its application is unfair or discriminatory is baseless and misconceived,” the ministry said, declining to name Musk directly.

As of press time, neither Mukesh Ambani nor Reliance Group has issued a public response to Musk’s claims, and the BBC has reached out to both parties for additional comment. Bharti Airtel, another major Indian telecom provider that is also prepping its own satellite internet launch, has also been contacted for comment.

Intriguingly, the public rivalry between Musk and Ambani masks a pre-existing business partnership between their companies. Back in March 2024, both Reliance Jio and Bharti Airtel signed formal agreements with SpaceX to distribute Starlink equipment and services across India, pending government approval. The two domestic firms also noted at the time that they would explore opportunities for shared network infrastructure with Starlink.

The dispute unfolded against the backdrop of the 2024 India Mobile Congress held in New Delhi, where senior executives from all three companies gathered to outline their satellite internet plans. Akash Ambani, chairman of Reliance Jio Infocomm and son of Mukesh Ambani, told attendees that his firm was developing its own indigenous satellite communications technology and was also working through the regulatory approval process. When pressed by reporters for a response to Musk’s allegations, Akash Ambani declined to engage, only saying “We want to be heads down and deliver value to our Indian consumers.” Sunil Bharti Mittal, chairman of Bharti Airtel, also confirmed that his company’s satellite internet project remains pending government approval.

Lauren Dreyer, SpaceX executive leading Starlink’s global business operations, told the conference that Starlink has spent years collaborating with Indian regulators and has built customized security controls into its network to meet India’s national requirements. Security concerns have long been a central sticking point for Starlink’s entry into the Indian market. Back in 2024, Indian law enforcement recovered unauthorized Starlink equipment during two separate operations: a drug smuggling probe in the remote Andaman and Nicobar Islands, and a counterinsurgency army operation in the northeastern state of Manipur. At the time, Musk pushed back against suggestions that the equipment was active, noting that Starlink had never turned on commercial service in India, so the recovered hardware could not have connected to its satellite network.

Beyond regulatory and security hurdles, questions also linger about Starlink’s ability to deliver affordable service to mass Indian consumers, especially low-income households in rural regions. India is one of the world’s largest and fastest-growing internet markets, but connectivity access remains deeply uneven, with large swathes of remote and rural areas still lacking reliable high-speed infrastructure, laying fiber optic cables and building mobile towers in these regions is often prohibitively expensive for domestic telecom firms.

Musk has repeatedly argued that Starlink’s low Earth orbit satellite technology is uniquely positioned to bridge this digital divide, writing on X this week that “Starlink in India would enable high-speed, affordable internet connectivity for those who can’t afford current prices or who don’t have a connection at all!” However, Starlink has not yet announced official pricing for the Indian market, and industry analysts point to existing pricing structures in other markets that suggest service may be out of reach for many ordinary Indian households. For context, Starlink’s residential plans in the United States start at $55 per month, not including upfront equipment costs, which would be far beyond the average budget for most rural Indian households.

The ongoing trade and strategic rivalry between the U.S. and China has entered a new, high-stakes phase in the global aviation sector, as Washington has tightened controls on licensed aircraft component exports to the Commercial Aircraft Corporation of China (Comac), the state-owned manufacturer behind the C919 narrow-body passenger jet. The core source of concern among Chinese industry analysts is that these incremental restrictions could pave the way for a full ban on the U.S.-sourced LEAP-1C engines that the C919 program currently depends on for mass production.

According to Reuters reporting from October 1, the Trump administration has deployed China’s reliance on American aviation suppliers as a negotiating tool in ongoing trade discussions, as Washington pushes Beijing to loosen its dominant control over global rare earth mineral supplies — critical inputs for everything from jet engine components to defense technology. Official U.S. actions over recent weeks include capping the volume of parts eligible for export licenses to Comac to prevent the manufacturer from building up a reserve stockpile, and slowing the processing of existing export license applications for C919-bound components. Administration officials are also currently reviewing a proposed regulatory change that would lower the bar for restricting exports of core aviation parts including landing gear, with a draft rule already adding a new licensing requirement for aviation hydraulic fluid.

Chinese industry commentators note that curbs on secondary components like landing gear and hydraulic fluid would pose minimal near-term disruption, even for Chinese airlines that operate large Boeing fleets. Analysts point out that Boeing has enormous stakes in the Chinese aviation market — which is projected to demand 8,000 to 9,000 new passenger jets over the next 20 years — and would face severe losses from any retaliatory Chinese policy that cut off Boeing access to Chinese orders. “China may not need to worry too much about whether the U.S. will use Boeing parts to restrict its aviation industry. The first to panic over such a policy would clearly not be China but Boeing, the pride of American industry,” wrote a Henan-based columnist pen-named Global War Dispatch. He added that Boeing’s lobbying team would almost certainly pressure U.S. lawmakers to roll back any restriction that directly threatens the manufacturer’s core commercial interests.

The real threat, analysts agree, is a full cutoff of LEAP-1C engine exports. CFM International, a joint venture between U.S.-based GE Aerospace and France’s Safran, has been the exclusive Western engine supplier for the C919 since Comac selected the LEAP-1C for the program in 2009. As a growing competitor to Boeing’s 737 and Airbus’ A320 families, the C919 is seen as a long-term threat to Western aviation market dominance, giving U.S. manufacturers and policymakers incentive to block its expansion, Global War Dispatch noted. If the U.S. does cut off engine supplies, China’s only short-term solution would be to accelerate the deployment of its domestic CJ-1000A engine, which most analysts do not expect to enter full commercial service before 2027 at the earliest.

Shaanxi-based columnist Evening Breeze explained that until the CJ-1000A reaches full production maturity, a U.S. engine ban would create immediate bottlenecks for C919 mass production. “The CJ-1000A engine still cannot fully replace the LEAP-1C, and there is still a gap before a domestic engine can take over. In the short term, mass production of the C919 will inevitably hit a bottleneck,” he said. Evening Breeze added that while U.S. export restrictions will ultimately push China to speed up development of fully domestic aviation supply chains, the strategy carries long-term risks for Washington: once China achieves full domestic engine independence, Western manufacturers will lose all leverage and face far stiffer competition in the global aviation market.

The C919 secured Chinese airworthiness certification in September 2022 and launched commercial passenger service in May 2023, marking China’s first domestically developed narrow-body passenger jet to compete directly with established Western models. This is not the first time the U.S. has used engine exports as a bargaining chip in trade talks with China. In 2025, after Beijing restricted rare earth exports in response to new U.S. tariffs, Washington suspended all export licenses for Comac engines and other key components. The suspension was lifted just five weeks later after the two sides reached a rare earth supply deal in London, but regulatory changes required regulators to review engine license applications individually rather than in batches, extending approval times to two to three months per application. As Bloomberg reported in September 2025, Comac was forced to cut its 2025 delivery target from 75 jets to just 25, and ultimately only delivered 15 jets — a 40% miss of the revised target, and barely an improvement over the 13 jets delivered in 2024.

Today, U.S. frustrations remain high because China has not followed through on commitments it made under the 2025 trade truce to increase rare earth exports to the U.S. Just days ahead of the September 2026 Trump-Xi summit in Washington, U.S. Treasury Secretary Scott Bessent raised the issue directly with Chinese Vice Premier He Lifeng during a meeting in New York on September 20. Recent Chinese customs data bears out U.S. concerns: rare earth magnet shipments to the U.S. dropped 21% month-over-month to 512 metric tons in August 2026, and China recorded zero U.S.-bound shipments of yttrium — a critical material for heat-resistant coatings in jet engine turbine blades — in three months this year.

Washington has adopted a two-pronged strategy to address the rare earth shortage. In the long term, the administration is working to build alternative rare earth supply chains outside of China: since July 2026, Trump has barred U.S. defense contractors from using minerals sourced from adversary nations starting in January 2027, restricted exports of tungsten scrap and battery waste, and committed over $2 billion to support domestic and allied rare earth production projects. In the short term, Washington is using tariffs and tightened aviation part export controls to pressure Beijing to increase rare earth shipments, and extended the current trade truce for only two months, pushing negotiations out to January 10, 2027.

Shortly after the Bessent-He meeting in New York, Aerospace Knowledge magazine editor-in-chief Wang Yanan published an online photograph of a CJ-1000A engine mounted on the left wing of a Y-20 military transport plane, taken during the engine’s first successful certification test flight in June 2026. Since public sharing of photos of Chinese military aircraft requires official government approval, the publication was widely interpreted as a deliberate signal to Washington that China’s domestic engine development program is progressing.

Opinions among Chinese analysts are split on how quickly the CJ-1000A can fully replace the imported LEAP-1C. Some optimistic analysts predict the engine will secure certification in 2027, and that once domestic mass production is achieved, any Western attempt to cut off C919 supplies will backfire, costing Western suppliers access to the world’s fastest-growing narrow-body aviation market for decades. But other analysts caution that major technical and regulatory hurdles remain before the CJ-1000A can enter full commercial service.

Hubei-based analyst David noted that while the CJ-1000A has completed ground testing, it is still far from matching the proven reliability of the LEAP-1C. “The CJ-1000A has entered the final stage of airworthiness certification, but that does not mean it will be installed and put into commercial use right away. Passing tests in the lab is a long way from carrying passengers safely every day,” he said. To date, the CJ-1000A has completed 6,142 hours of extreme ground testing designed to simulate 10 years of in-service wear, while LEAP engines have already logged 88 million hours of real-world commercial operation, with a documented reliability rate of 99.95%.

David outlined three major remaining hurdles the CJ-1000A must clear before full deployment: first, securing a formal type certificate, which completed technical review in May 2026 but has no set issuance date; second, obtaining a production certificate, which is not expected before 2027 at the earliest, as building a small number of functional prototypes is very different from mass producing hundreds of reliable, consistent engines; and third, securing final installation approval, which requires a full supplementary certification process because fitting a new engine to the C919 counts as a major design change. As a result, David projects that a full switch to domestic engines for the C919 will not happen before 2030, with the CJ-1000A expected to operate alongside imported LEAP-1C engines for years even after it enters service.

A walk through any neighborhood toy store in India offers a small but revealing snapshot of the world’s most lopsided bilateral trading relationships – that between New Delhi and Beijing. Six years ago, New Delhi made a bold move to protect domestic manufacturing and block low-quality goods, jacking up import tariffs on foreign-manufactured toys from 20% all the way to 70%. At the time, retailers pushed back hard, arguing local producers could never match the price, variety and accessibility of imported Chinese products. But the combination of steep tariffs and stricter quality control standards has yielded unexpected success. By 2024, Indian toy imports had plummeted by a third, dropping from nearly $300 million in 2020 to just $100 million, while domestic toy exports surged from $129 million to $200 million over the same period. Most notably, India cut its reliance on Chinese toy imports dramatically, rolling back Beijing’s once-dominant 70% share of the local toy market.

This rare win in the toy sector stands out as an outlier, however. Across nearly every other part of the bilateral trade relationship, India’s attempts to rebalance a rapidly growing asymmetry with China have fallen flat. Even after 2020’s deadly Galwan Valley border clashes shattered diplomatic relations, prompting New Delhi to impose a wave of anti-dumping duties and ban high-profile Chinese apps including TikTok, India’s trade deficit with Beijing has exploded from $44 billion in 2020 to a staggering $112 billion in 2024. Exports to China have yet to rebound to pre-pandemic levels, even as total imports from China have doubled over that same period.

“India’s economic dependence on China continued to deepen while political, security, and investment ties were at their lowest point,” explained Kevin Zongzhe Li, a Washington-based Fellow at the Asia Society Policy Institute’s Centre for China Analysis, in an interview with the BBC. Ajay Srivastava, a leading analyst with the Delhi-based Global Trade and Research Initiative (GTRI), warned that the imbalance poses growing strategic risks. “China now supplies over 30% of India’s industrial imports, and India depends on it for more than 100 critical products. And the imbalance is worsening,” Srivastava said. If current import growth rates hold, Srivastava projects the bilateral deficit could jump to $134 billion by next year, giving Beijing substantially more economic and political leverage over India’s industrial sector.

Following years of frosty relations, ties between the two Asian giants have begun to thaw in recent months. On the sidelines of the September BRICS summit hosted in Delhi, Chinese President Xi Jinping and Indian Prime Minister Narendra Modi jointly committed to addressing the two nations’ persistent structural trade imbalances and strained supply chain links. But industry analysts and trade experts warn that correcting the imbalance will be an extraordinary challenge, given how deeply embedded Chinese imports have become in the foundation of India’s industrial economy.

Unlike the finished consumer goods that dominated Chinese imports a decade ago, today India relies most heavily on China for critical intermediate inputs that power its own domestic manufacturing. While New Delhi has successfully cut imports of finished goods such as smartphones and solar panels – India now assembles more than a quarter of the world’s iPhones domestically – most of this production remains dependent on Chinese-sourced components. This pattern holds across a wide range of core industrial sectors, from industrial machinery and battery raw materials to specialty chemicals, solar cells and manufacturing equipment. Data from the Observer Research Foundation (ORF), a leading Delhi-based think tank, shows that electrical machinery and electronics alone account for 36% of total Indian imports from China, followed by industrial machinery and mechanical appliances at 21.7%, with organic chemicals and plastics also claiming large market shares.

“Their interruption would not merely affect consumption; it would disrupt production itself,” noted Soumya Bhowmik, a Fellow at ORF’s Centre for New Economic Diplomacy. Bhowmik explained that this deep reliance on Chinese inputs highlights the fundamental difficulty India has faced in replacing foreign components with domestic manufacturing capacity.

Beyond the structural need for intermediate inputs, several broader macroeconomic trends are pushing more Chinese goods into India’s market. China is currently grappling with massive excess production capacity across sectors from steel and solar panels to electric vehicles, as its cooling domestic economy cannot absorb all of the output Chinese factories produce. As a result, Chinese manufacturers have increasingly turned to overseas markets, selling goods at discounted prices to clear inventory. Analysts project China’s annual total trade surplus will top $1 trillion for the second consecutive year in 2024. Much of this excess output is flowing to India, which is simultaneously expanding its own domestic manufacturing base across multiple sectors, while Western nations have imposed new tariffs and trade restrictions that redirect Chinese exports away from Atlantic markets, Srivastava explained.

On the other side of the imbalance, Indian exporters still face major barriers to accessing the large Chinese market. “Indian products face a variety of tariff and non-tariff hurdles in China that make it difficult to scale exports,” Li said. “If normalisation [of ties] continues without a serious push for reciprocal market access, India risks a situation where the political relationship improves but the economic dependency stays the same.”

Trade analysts say that a long-term solution to both reducing unnecessary imports and boosting export performance will require India to strengthen its domestic manufacturing fundamentals. Srivastava noted that this calls for targeted, sector-specific industrial policy and improvements to core infrastructure – including affordable energy, accessible business credit, efficient logistics networks and consistent regulatory frameworks – all areas where India still lags behind global competitors.

New Delhi has recently relaxed foreign direct investment rules that could open the door to expanded Chinese investment in India, but Srivastava argued that these new investments will require careful screening. “Investment that merely expands distribution networks or assembles products using Chinese parts could increase imports and deepen dependence. Approvals should therefore prioritise technology transfer, local value addition, domestic component production and exports from India,” he said.

In the short term, experts say India could narrow the gap by targeting expanded exports to China in high-potential niche sectors. Li pointed to pharmaceuticals as a natural fit, given China’s rapidly aging population and growing demand for affordable healthcare products. But Li also cautioned that niche export opportunities alone cannot close a $112 billion deficit. “The key question is whether Beijing is ready and willing to make concessions on market access as part of the broader normalisation. Alternatively, India will need to find its own leverage to force that conversation,” Li said.