In a week marked by dramatic power shifts and economic maneuvering across Asia, the region’s delicate balance is being tested on multiple fronts—from the ballot boxes of Bangladesh and Japan to the bustling ports of India and the fortified naval bases of Australia. At the heart of these developments is a single, looming force: China. Its influence—sometimes subtle, sometimes overt—has become a defining factor in the policies and partnerships shaping the future of the Indo-Pacific.
On February 8, 2026, U.S. President Donald Trump made a move that sent ripples through the global trade landscape. According to reporting by The Economic Times, Trump announced a significant relaxation of tariffs on Indian goods, reducing reciprocal tariffs from 25 percent to 18 percent and withdrawing a 25 percent penalty tariff tied to India’s decision to cut crude oil imports from Russia. This shift, while ostensibly about U.S.-India relations, has deep implications for India’s economic ties with China and its position in global supply chains.
India’s trade relationship with China is far more nuanced than the headline numbers suggest. While concerns about trade deficits and national security have long colored the discourse, large imports from China have, in fact, become a cornerstone of India’s industrial growth. As The Economic Times explains, "Large imports from China are no more a threat, instead, it becomes benign and tends to be indispensable to the growth of new industries in India, as well as a new face in the export basket." The last decade has seen a dramatic transformation: between 2014-15 and 2024-25, India’s electronic goods export share soared from 2.4 percent to 9.4 percent, with electronic goods leaping from seventh to third place in the country’s export basket.
Behind this surge is a complex web of supply chains, with China providing nearly 39.7 percent of India’s total imports of electronic goods—critical components like PCBs, display panels, and semiconductors. India’s electronics production has ballooned sixfold, from US$21.3 billion in 2014-15 to US$127 billion in 2024-25, making the country the second-largest mobile phone manufacturer in the world. This boom has not only redefined India’s export profile but also shifted the traditional pillars of its economy. Electronics and engineering goods now account for 34.4 percent of India’s total exports, up from 15.3 percent in 2000-01, while sectors like textiles and agriculture have slipped to just one-tenth of the export basket.
Trump’s tariff relaxation is poised to further accelerate this trend. By making Indian goods more competitive in the U.S. market—and exempting electronic exports from new tariff burdens—India is set to challenge Vietnam, which previously served as a conduit for Chinese goods seeking to avoid U.S. tariffs. Vietnam, despite accounting for a larger share of U.S. imports (4.0 percent in 2024, compared to India’s 2.7 percent), now faces a 45 percent transshipment tariff on rerouted goods. As The Economic Times notes, "Nearly 30.4 percent of Vietnam’s exports to the USA in 2022 were rerouted Chinese exports to avoid tariffs." With this loophole closing, India’s direct exports—especially electronics, which made up 17.6 percent of its U.S. shipments in 2024-25—stand to benefit.
Yet, as India navigates this economic opportunity, its strategic environment is becoming more volatile. Just across the border, Bangladesh is preparing for a pivotal election on February 12, 2026—the first since a student-led uprising ousted former Prime Minister Sheikh Hasina in August 2024. According to Reuters, India’s decision to shelter Hasina, despite extradition requests, has infuriated Bangladesh’s interim government, led by Nobel laureate Muhammad Yunus. This rift has prompted Dhaka to deepen its engagement with China and Pakistan, signaling a shift in regional alliances that could reshape South Asia’s power dynamics.
"India’s sheltering of Sheikh Hasina despite extradition requests has angered Bangladesh’s interim government led by Nobel laureate Muhammad Yunus," Reuters reports. The interim leadership, wary of India’s intentions and eager to assert its independence, has moved swiftly to bolster ties with Beijing. For China, this represents an opportunity to expand its influence in a region where it has long sought to counterbalance India’s dominance. The outcome of Bangladesh’s election could thus have far-reaching consequences, not only for bilateral relations but for the broader contest between Chinese and Indian interests in South Asia.
Meanwhile, the shadow of China looms large in Japan’s domestic politics. On February 8, 2026, Japanese voters went to the polls in a snap election where, as The New York Times puts it, "China is not on the ballot... but it looms large." Prime Minister Sanae Takaichi, known for her hawkish stance, made waves in November 2025 by declaring that Japan could intervene militarily if China attacked Taiwan—breaking with decades of official ambiguity. In retaliation, Beijing imposed restrictions on Japanese seafood imports, discouraged Chinese tourism to Japan, and threatened to limit the export of critical minerals essential to Japan’s high-tech industries.
This hardline approach has resonated with parts of the Japanese electorate, especially younger voters. "Japan should maintain a firm stance without making any compromises," said 22-year-old college student Aoi Nakamura, speaking to The New York Times outside a Tokyo polling station. But critics warn that Takaichi’s policies risk exposing Japan to economic coercion and could jeopardize vital supplies of rare earth minerals from China. Her supporters, however, hope that a decisive victory will send a clear message to Beijing that Japan will not be cowed by threats.
The Indo-Pacific’s shifting alliances are not confined to trade and electoral politics. In Western Australia, preparations are underway for a new chapter in U.S.-Australian military cooperation. As reported by The Wall Street Journal, the U.S. plans to deploy up to four nuclear-powered submarines to HMAS Stirling naval base by 2027, bringing American firepower closer to potential flashpoints involving China—especially over Taiwan. Australia is investing billions in the base and a nearby maintenance precinct, underscoring its commitment to the alliance and its strategic importance as a haven for U.S. submarines in the region.
The deployment is part of a broader effort to deter Chinese aggression and ensure that, should conflict erupt, the U.S. and its allies have the infrastructure and integration necessary to respond swiftly. The base at HMAS Stirling offers not just a logistical advantage, but a powerful symbol of the growing military integration between Washington and Canberra in the face of an increasingly assertive Beijing.
From the factories of India to the polling stations of Tokyo and Dhaka, and the fortified harbors of Australia, the Indo-Pacific is in flux. Economic opportunity, political upheaval, and military posturing are all being shaped by the gravitational pull of China—sometimes as a partner, often as a rival, and always as a presence that cannot be ignored.