Business Daily – "Can Asia’s economic growth hold up in 2026?"

Host: Will Bain
Guests: Suranjana Tiwari (Asia Business Correspondent, BBC, Singapore), Arunjay Mukherjee (India Business Correspondent, BBC, Delhi)
Date: January 6, 2026

Episode Overview

In this forward-looking episode, Will Bain and his expert colleagues dissect the key economic challenges and opportunities facing Asian economies in 2026. Against the backdrop of a turbulent 2025—marked by intense geopolitical tensions, a sweeping wave of tariffs, and rapid shifts in global supply chains—this discussion explores how Asia’s heavyweight economies and emerging markets have responded. The episode also investigates trends in trade policy, labor migration, the tech and AI boom, and potential pivots for 2026, providing valuable context for anyone tracking Asia’s evolving economic landscape.

Key Discussion Points and Insights

Asia and the Aftermath of "Tariff Wars" (01:20–04:26)

• Tariffs Dominate the Narrative: 2025 saw relentless tariff escalations, dubbed by Will Bain as "bonkers" and "stuff of nightmares" by Suranjana Tiwari.
  • "There was phases in the last year where I was waking up and it was like another tariff, another sector that's being tariffed." – Suranjana Tiwari [02:49]
• Supply Chain Centrality: Asia remains the hub for global manufacturing, making it uniquely vulnerable yet also resilient in the face of trade shocks.
  • "The world's entire supply chains run through here... So you can imagine Trump's Liberation Day tariffs and all the tariffs that came after that have really caused some shock and really shaken up this region." – Suranjana Tiwari [03:05]
• Regional Response: Despite being a mix of emerging and established economies, Asia has adapted by seeking new trade partners (Middle East, Latin America, Europe) and negotiating competitive tariffs, with China positioning itself as a “more reliable partner” versus the US.

India’s Shifting Outlook and Trade Juggling (04:26–07:04)

• US-India Trade Breakdown: Expectations of a smooth India-US trade negotiation, aided by a close rapport between Modi and Trump, collapsed with the imposition of 50% tariffs.
  • "You had the 25% and then that additional 25% really came as that nail in the coffin, which I think India was not really expecting." – Arunjay Mukherjee [04:44]
• Bilateral Complexities: Despite diplomatic overtures, India remains protective of sectors like agriculture, dairy, and textiles, wary of exposing them to US competition.
• Diversified Partnerships: In retaliation to increasing US tariffs and failures in negotiation, India has visibly strengthened ties with countries such as Brazil, Russia, and China, signaling geopolitical diversification.

People, Visas, and the Mobility Squeeze (07:04–09:49)

• Anti-Immigration Ripple Effects: The tightening of US H1B visa rules creates enormous uncertainty for skilled Asian workers—India, China, the Philippines, South Korea are heavily impacted.
  • "We're going to see more of that anti-immigration, anti-foreign worker across the socioeconomic board." – Suranjana Tiwari [07:47]
  • "There's this big fear... people wondering whether they'll be able to go back to the US — people lining up at airports, trying to fly back." – Arunjay Mukherjee [08:52]
• Demographic Contrasts: While some Asian countries (Japan, South Korea) need immigrants to counteract aging populations, others (India) may seize the reverse flow of talent as a chance to boost domestic innovation (especially in tech and AI).

Technology, AI, and Competing for Supremacy (11:44–14:57)

• AI Investment Surge: India, once a passive player in AI infrastructure, is now attracting global heavyweights.
  • "Satya Nadella just here in India this week... big announcement for Microsoft's investment in AI." – Arunjay Mukherjee [12:24]
• Asia’s Tech Edge: The Asian region, thanks to its chip manufacturing, growing cloud/data capabilities, and government-supported investments, is positioning itself as the global backbone for AI development.
  • "The technology is being developed in the US, but it feels like the infrastructure is being developed here in Asia." – Suranjana Tiwari [13:31]
• Not Just AI: The buzz extends to sectors like electric vehicles and solar panels, with Asia increasingly challenging Western dominance.

Contrasts With Western Economies & Structural Challenges (14:57–16:58)

• Growth vs. Stagnation: Asia, buoyed by tech/manufacturing, is “in a very different situation” compared to the “stuck in the mud” feeling elsewhere.
  • "I see a lot of growth... there's huge growth drivers." – Suranjana Tiwari [15:22]
• Persistent Hurdles: Sluggish property sectors (notably in China), aging populations, low birth rates, and persistent unemployment are long-term hurdles. AI investments and manufacturing surge bring optimism, but economic vulnerabilities remain.
• India’s Resilience: India’s GDP growth remains robust (over 8% in the latest quarter), with upcoming government budget plans in February 2026 expected to address global shocks and local challenges.

Memorable Quotes and Notable Moments

• On trade tensions:
  • “It’s been a real diplomatic balancing act for these countries as well.” – Suranjana Tiwari [03:51]
• On India-US Relations:
  • "Despite all the optics, despite all the smiles and words... India looking at 50% tariffs... which I think India was not really expecting." – Arunjay Mukherjee [04:44]
• On the “brain drain” becoming a potential domestic lever:
  • "Perhaps India can turn that into an opportunity to have some more incentives here in India in terms of businesses in, for instance, the AI space." – Arunjay Mukherjee [09:27]
• On AI and infrastructure:
  • “All that investment, all those chips, all those large language models... the infrastructure, the cloud is happening here.” – Suranjana Tiwari [13:31]
• On optimism vs. challenges:
  • “There are constraints… but elsewhere, there’s a lot of optimism about growth going forward, partly because of these types of AI investments.” – Suranjana Tiwari [15:22]

Forward Look: Predictions & Underreported Stories (16:58–19:53)

• Next Year's Topic Predictions:
  • "Still going to be talking about trade and tariffs, especially if President Trump makes it to China in April... I think we'll still be talking about AI." – Suranjana Tiwari [17:18]
  • "The suspense about India, US Trade ties... I wouldn't be surprised if that suspense carries on till next December." – Arunjay Mukherjee [17:38]
  • "India, Russia and purchase of Russian oil... has been a very significant aspect of India’s imports, something that's irritated Donald Trump a lot." – Arunjay Mukherjee [17:58]
• Stories to Watch:
  • Autonomous Vehicles: "I think we're finally going to see them being deployed on roads... China is going to get there very soon, maybe this year." – Suranjana Tiwari [18:43]
  • Electric Vehicles & Air Pollution: "The EV space... especially that North India has been really struggling with, is air pollution, the worst in the world, which has definitely had a lot of long term economic impacts as well." – Arunjay Mukherjee [19:11]

Segment Timestamps

• Tariffs & Trade Shock: 01:20–04:26
• India/US Trade Breakdown & New Alliances: 04:26–07:04
• Migration, H1B Visas & Talent Mobility: 07:04–09:49
• AI, Tech Investment, and Asia's Role: 11:44–14:57
• Comparing Asia vs. West Economies: 14:57–16:58
• Predictions and Underreported Big Stories: 16:58–19:53

Tone & Closing Thoughts

Reflective, conversational, and forward-looking, the episode underscores Asia’s dynamism amid global volatility. While trade frictions and supply chain shocks have created formidable barriers, regional resilience, innovation, and strategic flexibility give Asia a guarded optimism for 2026—tempered by demographic and structural challenges, but energized by leadership in innovation, AI, and green technology.

Listen to the next episode for a deep-dive into the technology race with Zoe Kleinman and Lily Jamal. Subscribe to BBC Business Daily for more insights.