
This is a summary of the report, download the PDF for the full report
Strengthening ties
Over the past year, India has jumpstarted efforts to strengthen trade and investment ties with various global partners, including Europe, Asia Pacific, and West Asia, with more discussions in the pipeline. Conclusion of key bilateral free trade agreements (FTA) will help broaden economic linkages, beyond the traditional focus on its largest export destinations.
This pivot reflects a structural transition from protectionism toward deep integration into global supply chains. Beyond the immediate dismantling of prohibitive import duties, the overarching benefits of these finalised pacts lie in their ability to stimulate massive investments, deeply integrate Indian MSMEs into global value chains, and safeguard sensitive domestic industries through calibrated exclusion quotas.
Counting on potential
The India–North Asia trade corridor sits at the intersection of manufacturing, technology, and geopolitical realignment. Although global trade faces greater fragmentation, production networks across Asia remain deeply interconnected. North Asia (representing eight countries, including China, Hong Kong SAR, Taiwan, and Japan) remains the region's manufacturing and technology hub, with India assuming a larger role in final assembly, domestic demand, and investment.
Stronger trade and investment linkages with India will create new opportunities across sectors, including manufacturing-heavy electronics, machinery, automobiles, and critical minerals. Notably, India’s import intensity for intermediate inputs for strategic industries, such as electronics (second biggest import item), semiconductors, electric vehicles, and rare earth industries is relatively high. For instance, 90-95% of inputs for the semiconductor industry are currently met through imports , while others range from 50%-90%. In line of these dependencies, India has moved to introduce institutional reforms, aggressive physical infrastructure builds, and targeted industrial incentives, which is likely to help to alter the calculus. The country plans to build the semiconductor value chain worth $120-150bn within the coming decade.
India’s trade with the North Asian region is led by linkages with China, Hong Kong, Japan, and South Korea. Taiwan carries most potential.
Trade and investment analysis
North Asia’s importance in India’s trade profile has risen, with its share of total trade increasing from 12-13% in the early 2000 at $11.8bn to around 20% in FY2025-26 at $249bn. That share has been largely steady over the past decade. China and Hong Kong dominate the region’s trade linkages with India, accounting for roughly three-quarters of North Asia-related trade in FY2025-26, of which China alone represented about 60%, followed by Japan at around 11%. India has entered trade pacts with Japan and South Korea, not the rest. Japan has the biggest share of FDI into India in this group.
This is a summary of the report, download the PDF for the full report
GENERAL DISCLOSURE/ DISCLAIMER (For Macroeconomics, Currencies, Interest Rates, Digital Assets or Commodities)[1]
The information herein is published by DBS Bank Ltd and/or DBS Bank (Hong Kong) Limited (each and/or collectively, the “Company”). It is based on information obtained from sources believed to be reliable, but the Company does not make any representation or warranty, express or implied, as to its accuracy, completeness, timeliness or correctness for any particular purpose. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained herein does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. The information herein is published for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate legal or financial advice. The Company, or any of its related companies or any individuals connected with the group accepts no liability for any direct, special, indirect, consequential, incidental damages or any other loss or damages of any kind arising from any use of the information herein (including any error, omission or misstatement herein, negligent or otherwise) or further communication thereof, even if the Company or any other person has been advised of the possibility thereof. The information herein is not to be construed as an offer or a solicitation of an offer to buy or sell any securities, futures, options or other financial instruments or to provide any investment advice or services. The Company and its associates, their directors, officers and/or employees may have positions or other interests in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking or financial services for these companies. The information herein is not directed to, or intended for distribution to or use by, any person or entity that is a citizen or resident of or located in any locality, state, country, or other jurisdiction (including but not limited to citizens or residents of the United States of America) where such distribution, publication, availability or use would be contrary to law or regulation. The information is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction (including but not limited to the United States of America) where such an offer or solicitation would be contrary to law or regulation.
[#for Distribution in Singapore] This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) which is Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 65-6878-8888 for matters arising from, or in connection with the report.
DBS Bank Ltd., 12 Marina Boulevard, Marina Bay Financial Centre Tower 3, Singapore 018982. Tel: 65-6878-8888. Company Registration No. 196800306E.
DBS Bank Ltd., Hong Kong Branch, a company incorporated in Singapore with limited liability. 18th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
DBS Bank (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability. 11th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong SAR.
[1] This disclaimer may not apply if the applicable assets fall within the definition of 'financial instruments' that are set out in Article 2(1) EU MAR (e.g. financial instruments that are traded on a regulated market, MTF or OTF, etc.). Section C of Annex I of MiFID2 specifies these 'financial instruments'.