Sitharaman said the proposed fund would help the government address disruptions such as supply chain interruptions and sudden economic stresses while maintaining stability in public finances.

The stabilisation fund is intended to provide the government with additional fiscal headroom during periods of volatility in global markets or trade flows, Sitharaman told lawmakers.The proposal comes as the government seeks parliamentary approval for gross additional spending of 2.81 trillion rupees.

According to Sitharaman, part of the additional expenditure will be offset by savings and higher receipts from various ministries and departments.She said the proposed spending adjustments would not increase the government’s overall expenditure beyond the levels outlined in the federal budget.

Sitharaman also proposed additional fertiliser subsidies amounting to about 192.30 billion rupees to cover higher spending under the nutrient-based subsidy policy and payments for urea subsidies.

India’s fertiliser subsidy bill has come under pressure following disruptions to supply routes linked to tensions involving Iran, particularly around the Strait of Hormuz, a key corridor for global fertiliser shipments.

The disruption has pushed up prices for crop nutrients such as urea and ammonia, increasing import costs for major buyers including India.

Sitharaman said the government would ensure there was no shortfall in funds for fertiliser subsidies for farmers.

The data comes as Hanoi continues months-long negotiations with Washington over a trade agreement, with talks complicated by the widening trade gap and disagreements over tariff levels the United States wants to impose on Vietnamese goods, officials have said.

According to U.S. figures, Vietnam’s trade surplus with the United States reached $19 billion in January, the largest among all U.S. trading partners. It was followed by Taiwan, Mexico and China.

Vietnamese exports to the United States rose 53% from a year earlier to exceed $20 billion in January, the data showed. During the same period, U.S. imports from China dropped by 46%.

Vietnam’s surplus with the United States has been larger than China’s since the second quarter of 2025 and was second only to Mexico in the previous three quarters. For the full year 2025, Vietnam’s trade surplus with the United States totaled $178 billion.

Vietnam’s export growth to the United States has accelerated as higher tariffs on Chinese goods reduced Beijing’s direct shipments to the U.S. market.

At the same time, Vietnam’s imports of Chinese goods many used in manufacturing products for re-export reached record levels in January, according to Vietnamese data.

The administration of Donald Trump has repeatedly accused Vietnam of serving as a transit point for Chinese goods bound for the United States, which may face lower duties when labeled as “Made in Vietnam.”

Under U.S. rules, goods deemed to have been illegally transshipped can face tariffs of up to 40%. However, the White House has not yet specified the criteria it will use to determine whether exports constitute illegal transshipment.

Washington launched new investigations this week into Vietnam and other countries over possible unfair trade practices.The United States imposed tariffs of 20% on Vietnamese goods in August.

After the U.S. Supreme Court struck down Trump’s global tariffs as unlawful in February, the White House introduced a temporary 10% global tariff for 150 days.

The decision represents one of the most significant adjustments to India’s investment screening regime since New Delhi tightened scrutiny of foreign capital from neighbouring countries following the confrontation along the disputed Himalayan frontier. The earlier restrictions had sharply slowed Chinese investment into India and complicated business ties between the two Asian powers.

Government officials have said the easing will apply to selected sectors, though authorities have not detailed the full scope of industries affected. The move forms part of a broader effort to stabilise bilateral relations that have gradually improved since diplomatic and military engagements helped ease tensions along the border.

India introduced stringent investment screening rules in April 2020, requiring government approval for all foreign direct investment from countries sharing a land border with India. The policy applied most prominently to Chinese firms and was framed by New Delhi as a safeguard against opportunistic takeovers of Indian companies during the economic disruptions caused by the COVID-19 pandemic.

The measure followed a deterioration in relations after a deadly clash between Indian and Chinese troops along their disputed frontier in June 2020. The confrontation led to the most serious military standoff between the two nuclear-armed neighbours in decades and triggered a broad reassessment of economic engagement.

Shortly after the clash, India banned 59 mobile applications linked to Chinese companies, including TikTok, WeChat and UC Browser, citing national security concerns. The ban marked a major escalation in India’s technology restrictions on Chinese firms and was followed by additional curbs affecting telecommunications equipment, infrastructure projects and digital services.

The heightened scrutiny of Chinese investment had a tangible impact on cross-border business activity. Several proposed projects by Chinese companies faced delays or failed to receive regulatory clearance under the tighter rules.

In July 2022, Chinese automaker Great Wall Motor abandoned plans to invest $1 billion in India after it was unable to obtain government approvals required under the post-2020 investment screening framework.

A year later, India rejected a separate $1 billion investment proposal from Chinese electric vehicle manufacturer BYD, again citing security concerns linked to foreign investment from neighbouring countries.

The stalled investments underscored the broader chill in economic ties that followed the border confrontation. While trade between the two countries continued at significant levels, new investment activity from Chinese firms slowed sharply amid regulatory barriers and heightened political sensitivity.

Industry groups and manufacturers had raised concerns that the restrictions were complicating supply chains and delaying industrial projects that relied on Chinese capital, components or technical expertise.

Relations between India and China began to stabilise after the two sides reached an agreement in October 2024 on patrolling arrangements along the disputed frontier, effectively ending a four-year military standoff.

Diplomatic engagement expanded gradually after that agreement, paving the way for a series of economic and travel-related policy adjustments.In July 2025, the government think tank NITI Aayog proposed allowing Chinese companies to acquire up to a 24% stake in Indian firms without requiring security clearance. The proposal was aimed at reducing approval delays created by the post-2020 screening system while maintaining oversight of sensitive sectors.

The diplomatic thaw became more visible in August 2025 when Prime Minister Narendra Modi travelled to China for the first time in more than seven years. The visit signalled renewed engagement between the two governments at a time when geopolitical tensions between China and the United States were rising.

Further steps toward normalising economic ties followed later in the year. In October 2025, the two countries agreed to resume direct commercial flights after a five-year suspension that had disrupted travel and business links.

By December 2025, India began issuing more business visas to Chinese professionals, a move intended to address shortages of technical staff at factories and industrial facilities that had reduced output and delayed projects across several sectors.

Economic considerations have increasingly influenced India’s approach to managing its relationship with China. Indian companies and state-run enterprises have faced supply constraints in areas where Chinese equipment and technical support remain widely used.

In February 2026, India began easing restrictions on the purchase of certain Chinese industrial equipment, allowing state-owned power and coal companies to import machinery in limited quantities. Officials said the policy change was intended to address shortages that had slowed energy and infrastructure projects.

The latest move to relax investment restrictions is seen as part of this broader recalibration. While the government has not announced a full reversal of the screening framework introduced in 2020, officials have indicated that selected sectors could receive greater flexibility for foreign capital.Trade between the two countries has remained robust despite diplomatic tensions, with China continuing to be one of India’s largest trading partners.

However, investment flows have lagged behind trade volumes since the regulatory tightening.Analysts say the evolving policy stance reflects India’s attempt to balance economic needs with security concerns related to strategic industries and infrastructure.

Government officials have not provided detailed guidance on the sectors covered by the eased investment rules or whether additional regulatory safeguards will accompany the policy shift.

Japanese minister Ryosei Akazawa said the request was made during talks with U.S. Commerce Secretary Howard Lutnick as Tokyo sought assurances that the latest tariffs announced by U.S. President Donald Trump would not undermine the terms agreed in last year’s bilateral trade deal.The United States in February imposed a new 10% blanket tariff on imports that could rise to 15%, a move that has generated fresh uncertainty about global trade flows and the tariff rates facing importers under existing agreements.Akazawa said both governments reaffirmed their commitment to the bilateral trade framework agreed last year, which established a baseline 15% tariff on nearly all Japanese imports into the United States. That agreement had reduced duties from 27.5% on Japanese automobiles and avoided an initially proposed 25% tariff on most other goods.concerns over new tariff framework“We requested that Japan’s treatment under the new tariff rules would not become less favourable than what was agreed last year,” Akazawa said, referring to the potential impact of the newly introduced blanket levy on Japanese exporters.He said the tariffs could otherwise raise costs for certain Japanese products shipped to the United States, though he declined to provide details on specific sectors or how Washington responded to Tokyo’s request.The discussions reflect concerns in Tokyo that changes to U.S. tariff policy could alter the balance achieved in the previous agreement, which was designed to stabilize trade relations between the two countries.investment and economic cooperation discussed.

Akazawa said the talks also covered projects linked to Japan’s pledge to invest $550 billion in the United States, an initiative aimed at deepening economic cooperation between the two economies.He said the two sides discussed collaboration in areas including energy and critical minerals, sectors that have become increasingly important to supply chain security and industrial policy in both countries.The discussions come ahead of a planned visit by Japanese Prime Minister Sanae Takaichi to Washington on March 19, which officials expect will include further talks on economic ties and investment cooperation.U.S. statement focuses on economic tiesThe U.S. Commerce Department said in a post on X that Lutnick and Akazawa met to discuss strengthening economic ties following last month’s investment agreement between the two countries.The department did not mention Japan’s concerns about tariff treatment under the new U.S. import levy.The tariff measures introduced by the Trump administration have prompted governments and businesses to reassess the implications for global trade agreements and supply chains, particularly for export-dependent economies such as Japan.

Countries within the Gulf Cooperation Council import up to 90% of their food, making the stability of shipping routes through the Gulf critical for supply flows. Analysts say prolonged disruption could begin to strain inventories, particularly if commercial shipping and aviation routes remain restricted.Dependence on Hormuz trade routeMore than 70% of food supplies entering the GCC region pass through the Strait of Hormuz, according to Neil Quilliam of Chatham House. The narrow waterway linking the Persian Gulf to global shipping lanes is a key artery for trade and energy exports.“With over 70 percent of GCC foodstuffs being imported through the Strait of Hormuz, Gulf states face shortages if the war persists,” Quilliam said. He noted that governments across the region have taken steps in recent years to diversify suppliers and build strategic reserves to cushion short-term disruptions.However, those measures may provide only temporary relief if the conflict continues. “While GCC countries have taken steps to diversify suppliers and ensure sufficient stores to withstand disruption, this can only last several months,” Quilliam said. “At this point, price increases and longer lead times will start to hit the markets.”Saudi Arabia seen as overland hubAnalysts say land routes through Saudi Arabia could become a crucial alternative supply channel for neighbouring states if maritime bottlenecks intensify.Commodities analyst Ishan Bhanu said the closure or disruption of major logistics hubs could quickly affect supply chains. “The biggest immediate effect will be due to the blockade of Jebel Ali Port, serving about 50 million people,” Bhanu said.In such a scenario, countries including Qatar, Kuwait and Bahrain could effectively become dependent on land-based transport routes through Saudi Arabia for essential food imports. Analysts say this would significantly increase logistical complexity and transportation costs.

The port of Jebel Ali in Dubai is one of the region’s largest trade hubs, acting as a distribution centre for food and consumer goods across the Gulf.Strategic reserves and market responseDespite the risks, Gulf authorities say supply levels remain stable for now. The United Arab Emirates has said its strategic reserves of key food and consumer goods can cover between four and six months of demand.Officials have also urged residents to report unjustified price increases through a government hotline designed to prevent market manipulation during periods of uncertainty.Retailers across the Gulf say supermarket shelves remain largely stocked, although suppliers are taking longer to replenish certain products as logistics chains adjust to the evolving security situation.

Iranian missile strikes targeting Gulf areas since Saturday triggered brief bouts of panic buying in some supermarkets, highlighting the sensitivity of regional markets to geopolitical tensions.“Perception of risk matters, and even if stocks are sufficient now, public runs on supermarkets can spook the public,” Quilliam said.