Hungary Approves Constitutional Changes Alongside Wide-Ranging Tax Reform

Hungary has introduced a significant package of constitutional and tax reforms that reshapes both the country’s legal framework and several aspects of its tax system. The measures combine institutional changes with fiscal reforms designed to satisfy commitments linked to the release of previously suspended European Union funding.

The constitutional amendment, which entered into force on 19 July 2026, is the seventeenth revision of Hungary’s Fundamental Law. Among its most notable provisions is the establishment of a National Asset Recovery and Protection Office, alongside changes affecting the Constitutional Court and the appointment process for the President of the Kúria, Hungary’s Supreme Court.

Constitutional Court Regains Wider Powers

One of the most significant legal developments is the removal of constitutional provisions that had limited the Constitutional Court’s ability to review legislation concerning the state budget, taxation, customs duties and other fiscal matters.

For more than a decade, the Court’s oversight of budget-related legislation was restricted to a narrow range of constitutional issues. Following the amendment, judges may once again examine whether fiscal legislation complies fully with Hungary’s Fundamental Law.

The change is expected to strengthen judicial oversight of future tax legislation and may provide taxpayers and businesses with broader constitutional grounds to challenge disputed fiscal measures.

Tax Changes Linked to EU Recovery Funding

Alongside the constitutional reform, Parliament adopted an extensive tax package implementing commitments associated with Hungary’s Recovery and Resilience Plan (RRP). The legislation forms part of the country’s efforts to meet conditions agreed with the European Union for unlocking previously withheld funding.

The package introduces a broad range of tax measures aimed at simplifying the tax system, adjusting preferential tax treatments and aligning several areas of Hungarian taxation with commitments made under the agreement reached with the EU earlier this year.

Among the reforms are changes affecting trust taxation, corporate tax incentives, retail taxation, value-added tax provisions and environmental charges.

CO₂ Quota Tax to Be Refunded

One of the most notable provisions reverses the carbon-emissions quota tax introduced under emergency legislation during the previous government.

The new law abolishes the levy with retrospective effect dating back to October 2023 and allows eligible taxpayers to recover amounts already paid together with statutory interest.

Businesses seeking reimbursement must submit their applications within 90 days after the legislation enters into force. However, the simplified repayment process is available only where taxpayers have not already pursued compensation through alternative legal channels.

Trust Taxation Revised

The legislation also reshapes the tax treatment of fiduciary asset management structures and private foundations.

The reforms are intended to establish greater tax neutrality while limiting opportunities for tax-free distributions. Under the revised framework, profits generated from assets transferred into trusts will no longer benefit from certain tax exemptions that previously became available after a defined holding period.

The National Tax and Customs Administration will also conduct systematic reviews of trust structures established within the applicable limitation period, with older arrangements scheduled for examination first before broader inspections begin in later years.

Corporate and Environmental Taxes Adjusted

The package introduces several additional fiscal measures affecting businesses.

Certain corporate tax incentives will be narrowed, while the gradual withdrawal of the Growth Tax Credit will continue. Amendments have also been made to VAT legislation, customs administration and local business tax rules governing corporate demergers.

Environmental taxation has also been strengthened through higher pollution-related charges, increasing costs for businesses subject to environmental load fees.

Wider Administrative Changes

Beyond taxation, the legislation contains amendments governing the organisation and operation of Hungary’s National Tax and Customs Administration, including provisions affecting its institutional structure and leadership.

Taken together, the constitutional amendment and accompanying tax package represent one of Hungary’s most significant legislative updates in recent years. While many of the fiscal measures are aimed at meeting EU funding commitments, the restoration of broader Constitutional Court oversight over tax legislation could have longer-term implications for the stability and judicial review of Hungary’s fiscal framework.

Source: CMS

Japan’s Silver Economy Creates One of Real Estate’s Fastest-Growing Investment Segments

Japan’s changing population profile is reshaping the country’s real estate market in ways that extend far beyond residential housing. As the proportion of older citizens continues to increase, developers, investors and healthcare providers are expanding their focus toward properties designed specifically for later-life living.

What was once regarded as a niche segment has become an increasingly important part of the investment landscape. Demand for accommodation that combines independence, accessibility and healthcare support is rising steadily, making senior-focused real estate one of the country’s most resilient long-term asset classes.

Demographic change reshapes property demand

Japan remains one of the world’s oldest societies, with nearly one-third of its population now aged 65 or above. Improvements in healthcare have extended life expectancy, while decades of low birth rates have reduced the size of younger generations entering the housing market.

This demographic transition is influencing every part of the property sector. Traditional family housing is experiencing weaker demand in many rural communities, while the need for homes that accommodate older residents continues to expand.

For developers, the opportunity extends beyond nursing facilities. Many retirees are seeking modern apartments that allow them to maintain an independent lifestyle while providing easy access to medical services, public transport and everyday amenities.

A broader range of senior housing

Japan’s senior living sector has diversified significantly over the past decade. Instead of relying solely on conventional care homes, the market now includes retirement communities, assisted-living residences, age-friendly rental apartments and mixed-use developments that integrate healthcare, retail and recreational facilities.

This evolution reflects changing expectations among older residents, many of whom remain active for longer and are looking for accommodation that supports independence rather than institutional care.

Properties designed with step-free access, wider living spaces, emergency response systems and shared community facilities are becoming increasingly attractive to both residents and investors.

Cities remain the primary growth markets

The strongest demand continues to be concentrated in major metropolitan areas, particularly Tokyo, Osaka and Nagoya, where access to hospitals, specialist healthcare and public transport is readily available.

High land values make development more expensive in these locations, but occupancy levels remain strong as older residents increasingly choose to live close to essential services and family members.

At the same time, suburban districts with excellent transport connections are emerging as attractive alternatives, offering larger development sites while maintaining convenient access to urban healthcare networks.

Labour remains the sector’s greatest challenge

While demand for senior accommodation continues to grow, expanding capacity is becoming increasingly difficult because of labour shortages.

Care providers across Japan face ongoing challenges in recruiting qualified staff, with competition for healthcare workers intensifying as the population ages. This has encouraged operators to invest in technology that can improve efficiency without compromising resident care.

Digital monitoring systems, automated administrative processes and assistive technologies are becoming common features in newly developed facilities. Although these innovations cannot replace skilled caregivers, they are helping operators manage rising demand more effectively.

Investors look beyond traditional residential assets

Institutional investors are increasingly viewing senior housing as a long-term defensive investment supported by structural demographic trends rather than short-term economic cycles.

Unlike conventional residential property, these assets combine real estate with operational expertise. Success depends not only on the quality of the building but also on the financial strength of the operator, the availability of qualified staff and the ability to deliver consistent care services.

As a result, investors are paying greater attention to operator performance, local demographics and healthcare infrastructure when assessing acquisition opportunities.

Vacant homes present selective redevelopment opportunities

Japan’s large inventory of vacant residential properties has prompted discussion about their potential role in addressing future accommodation needs for older residents.

In some communities, former family homes are being renovated and adapted into small-scale care facilities or community housing. These projects can preserve existing buildings while creating new uses that support ageing populations.

However, many empty homes are located in areas with limited healthcare services and declining populations, making large-scale conversion economically challenging. Successful redevelopment is therefore most likely where local demand, transport links and medical infrastructure already exist.

Looking ahead

Japan’s ageing population will remain one of the defining influences on its real estate market for decades to come. As demographic trends continue to reshape housing demand, the senior living sector is expected to attract increasing levels of development and institutional investment.

Future projects are likely to place greater emphasis on sustainability, accessibility and technology while creating environments that allow residents to remain independent for as long as possible.

For the property industry, the growth of senior living represents more than a response to demographic change. It reflects the emergence of a specialised real estate sector where healthcare, residential development and long-term investment strategies increasingly converge. As Japan continues to adapt to an ageing society, senior-focused housing is expected to play an increasingly important role in the country’s evolving property market.

Source: © CIJ.World Japan Research & Analysis Team

WING Acquires Olympia Development Site to Create New Mixed-Use District in Budapest

WING has completed the acquisition of the Olympia development project in Budapest from Atenor, adding a strategically located property complex with approximately 74,000 sqm of development potential to its portfolio.

The acquisition includes an operational Grade A office building, a structurally completed building and additional development plots located between Hungária Boulevard, Százados Road and Stróbl Alajos Street. WING intends to reposition the site into a mixed-use urban development combining residential, office, retail and community functions.

Under the current concept, the project will deliver more than 500 apartments, alongside the existing office accommodation and a range of retail and service facilities. The first phase will focus on converting the structurally completed building into more than 200 residential units, with construction expected to begin next year and completion targeted for 2028. Subsequent phases are planned to increase the total residential offering to more than 500 homes.

The residential component is expected to focus primarily on smaller apartments designed to meet growing demand from first-time buyers and young professionals seeking housing in well-connected urban locations.

Alongside the residential development, WING plans to retain the existing office building, which offers large floorplates of up to 2,500 sqm and benefits from strong public transport accessibility. The company believes combining office, residential and commercial uses will create a more active urban environment while improving the long-term attractiveness of the site.

Tibor Tatár, Head of Residential and Office Developments at WING Hungary, said the value of the acquisition lies not only in the existing assets but also in the opportunity to transform a well-located urban site into a development better aligned with current market demand. He added that the long-term objective is to create a district where residential, office and everyday services complement one another while contributing to the wider regeneration of the Százados neighbourhood.

The development plans also include improvements to the surrounding public realm. WING has committed to upgrading nearby pavements, creating additional green spaces and developing new community facilities. As part of its agreement with the local authority, the company will provide at least 300 sqm of space free of charge for public use. The municipality will determine its future function, which could include a nursery, community centre or healthcare facility.

The acquisition is consistent with WING’s strategy of investing in well-located assets with long-term value creation potential. Olympia joins a growing portfolio of Budapest developments that recently expanded through the acquisition of Capital Square, the Greenway project and the development site at 39 Váci Road, where KPMG’s future headquarters will be built.

Legal adviser to WING was Oppenheim Law Firm, while Atenor was advised by iO Partners and CMS Hungary. Financing for the acquisition of the existing office building within the project has been provided by K&H Bank.

Record Bengaluru Office Acquisition Highlights India’s Expanding REIT Market

India’s commercial property market has entered a new chapter following Brookfield India REIT’s agreement to acquire the Ecoworld office campus in Bengaluru for ₹13,125 crore (approximately €119.8 million) . The transaction, the largest office acquisition completed by an Indian real estate investment trust to date, demonstrates the increasing influence of listed REITs in shaping the country’s institutional office market.

The acquisition brings one of Bengaluru’s most prominent business campuses into Brookfield India REIT’s portfolio, significantly increasing the trust’s presence in India’s leading technology city. It also reflects the continued demand from global investors for high-quality office properties despite changing workplace strategies adopted by companies worldwide.

As institutional ownership of commercial assets continues to grow, transactions of this scale are becoming an important indicator of confidence in India’s long-term office market.

A Landmark Deal for the Office Sector

The Ecoworld campus occupies a strategic location along Bengaluru’s Outer Ring Road, one of the country’s most established office districts. Home to numerous multinational companies and Global Capability Centres, the corridor has remained a preferred destination for technology, engineering and financial services businesses seeking large, modern office space.

By adding the campus to its existing portfolio, Brookfield India REIT substantially increases both its operational footprint and the overall value of its assets. The transaction strengthens the trust’s position among India’s largest owners of institutional-grade office real estate while broadening its exposure beyond its existing markets.

The size of the acquisition also establishes a new benchmark for office transactions involving listed property investment vehicles in India.

Bengaluru Continues to Attract Global Capital

The deal underlines Bengaluru’s importance as the country’s leading office market. The city continues to attract occupiers because of its deep technology ecosystem, skilled workforce and expanding network of Global Capability Centres operated by international corporations.

For institutional investors, these factors translate into stable long-term demand for premium office space. Large integrated business campuses offering modern infrastructure, sustainability features and strong transport links remain particularly attractive as companies consolidate operations into high-quality workplaces.

The acquisition further reinforces Bengaluru’s position as one of Asia’s most closely watched commercial real estate markets.

REITs Take on a Larger Role

India’s listed REIT sector has developed rapidly over the past several years. Initially created to provide investors with access to income-generating commercial properties, REITs are now becoming major participants in large-scale acquisitions that were once dominated by private equity funds and global investment firms.

The Ecoworld transaction illustrates how these investment platforms have gained both the financial capacity and market confidence to pursue landmark assets while continuing to expand their portfolios through strategic acquisitions.

This evolution also provides developers with an effective avenue to monetise mature assets and recycle capital into new projects, supporting continued development across the commercial property sector.

Flexible Funding Supports Growth

One of the notable features of the acquisition is the financing approach. Rather than relying on a single source of capital, Brookfield India REIT is funding the purchase through a combination of borrowings, fresh equity and internal financial resources.

This balanced structure allows the trust to manage leverage while maintaining flexibility for future investments. The successful fundraising associated with the transaction also reflects continued interest from institutional investors seeking exposure to India’s office market through listed investment vehicles.

The ability to access multiple financing channels has become an important advantage as REITs compete for increasingly valuable commercial assets.

Setting the Stage for Future Transactions

The significance of the Ecoworld acquisition extends beyond one property. It demonstrates that India’s commercial real estate market has reached a stage where billion-dollar office transactions can be executed efficiently through domestic listed REITs.

As more developers seek to unlock capital from completed projects, similar transactions are likely to become more common. Investors are expected to remain focused on assets that offer strong occupancy, long-term lease income and locations supported by sustained business demand.

For the broader market, the deal sends a clear message that institutional ownership continues to deepen across India’s office sector. Premium business campuses are increasingly viewed not only as workplaces but also as long-term investment assets capable of delivering stable returns.

With demand from multinational occupiers remaining resilient and India’s technology sector continuing to expand, the country’s listed REITs appear well positioned to play an even greater role in the next phase of commercial real estate investment.

Source: © CIJ.World India Research & Analysis Team

Romania’s Property Market Faces Mounting Pressure as Cadastre Disruption Persists

Romania’s real estate and construction sectors are experiencing growing disruption as the prolonged outage of the National Agency for Cadastre and Land Registration (ANCPI) continues to delay essential property registration services. What initially appeared to be a cybersecurity incident has evolved into a wider challenge affecting businesses, financial institutions, investors and public infrastructure projects.

The Romanian College of Surveyors has urged the Government and Parliament to introduce emergency measures aimed at reducing the economic impact of the interruption, warning that thousands of professionals are unable to complete projects or receive payment despite continuing to meet their financial obligations. Comunicat Colegiul Geodezilor 31.07.2026.docx

Property Transactions Grind to a Halt

The interruption of ANCPI’s digital services has significantly slowed the processing of cadastral documentation required for property transfers, mortgage approvals and land registration. Without access to these systems, surveyors cannot finalise technical documentation, while notaries, developers and lenders are unable to complete many transactions that depend on official land records.

Industry organisations estimate that more than 10,000 authorised surveyors and companies are directly affected by the disruption. Although fieldwork and technical surveys can continue in many cases, projects cannot advance through the administrative stages needed for completion and payment. Comunicat Colegiul Geodezilor 31.07.2026.pdf

Government authorities have confirmed that the outage resulted from a cyberattack targeting ANCPI’s IT infrastructure. Officials have stated that the country’s central cadastral database remains intact, but rebuilding affected systems and restoring full digital services has proven to be a complex process.

Cash Flow Challenges Intensify

For surveying firms, the operational disruption has quickly become a financial one.

Many companies have already incurred the costs of carrying out surveys, employing staff, purchasing equipment and travelling to project sites. However, because completed work cannot be officially processed through ANCPI, invoices cannot be issued and revenues remain frozen.

At the same time, businesses continue to face payroll expenses, tax liabilities, loan repayments and equipment leasing costs. Professional organisations warn that prolonged delays could result in liquidity problems, reduced employment and the suspension of business operations across the sector.

Ripple Effects Across the Economy

The consequences extend well beyond surveying companies.

Property developers cannot complete acquisitions, banks face delays in mortgage approvals, infrastructure schemes encounter administrative bottlenecks and local authorities experience slower progress on public investment projects. Architects, engineers, legal professionals and construction contractors are also encountering delays as projects wait for the completion of mandatory cadastral procedures.

As a result, the interruption is beginning to affect multiple parts of Romania’s investment environment, particularly where land registration forms a prerequisite for financing, permitting or construction.

Industry Calls for Temporary Relief

In response to the ongoing disruption, the Romanian College of Surveyors has proposed a series of temporary measures designed to protect businesses until normal operations resume.

Among its requests are official recognition that project delays stem from circumstances outside the control of professionals, extensions to administrative and contractual deadlines, temporary suspension of penalties linked to missed deadlines, deferred tax obligations and financial support for firms experiencing significant revenue losses.

The organisation has also proposed temporary procedures that would allow documentation to be processed through alternative channels, together with a coordinated recovery programme to manage the large backlog expected once ANCPI’s systems become fully operational again. Comunicat Colegiul Geodezilor 31.07.2026.docx

Recovery Will Extend Beyond System Restoration

Even after digital services resume, industry participants expect processing times to remain under pressure as thousands of delayed applications enter the system simultaneously. Managing that backlog efficiently will be critical to limiting further disruption to the property market.

Authorities continue working to restore ANCPI’s digital infrastructure, while cybersecurity specialists investigate the incident and strengthen system resilience against future attacks.

The episode has highlighted how dependent Romania’s real estate sector has become on digital public services. For investors, developers and financial institutions, the challenge now extends beyond restoring technology to ensuring that administrative processes can return to normal without creating prolonged delays for property transactions and investment activity.

Japan’s Property Market Enters a New Chapter as Growth Becomes Increasingly Localised

fletcher@cijeurope.com
31 July 2026
Business, CIJ - Spotlight, Market Report

Japan’s real estate market is no longer moving in a single direction. Instead, it is evolving into a collection of distinct regional markets, where economic strength, population trends and investment activity increasingly determine local performance.

The country’s largest metropolitan areas continue to attract businesses, residents and international capital, while many smaller cities and rural communities are facing declining populations and weakening housing demand. This growing divergence is reshaping investment strategies and influencing where developers, lenders and institutional investors choose to allocate capital.

Metropolitan Areas Continue to Attract Investment

Tokyo remains the dominant force in Japan’s property market. Strong employment, extensive infrastructure investment and a steady flow of domestic migration have helped maintain demand for residential, office and mixed-use developments despite higher construction costs.

Large-scale regeneration projects in districts such as Yaesu, Toranomon, Shibuya and Shinagawa are creating new commercial centres that combine workplaces, housing, hotels, retail and public spaces. These developments continue to strengthen the capital’s appeal for both occupiers and investors.

Other major cities, including Osaka, Fukuoka and Nagoya, are also benefiting from corporate expansion, tourism and infrastructure improvements, although growth remains more moderate than in Tokyo.

Premium Housing Maintains Momentum

Demand for quality residential property has remained resilient in central Tokyo, where limited development land and rising construction costs continue to support pricing.

Luxury apartments have attracted attention from both Japanese buyers and overseas investors seeking stable assets in an established legal and financial environment. The comparatively weak yen has further increased Japan’s appeal to international purchasers looking for long-term investment opportunities.

While overseas buyers remain most active in the premium segment, domestic purchasers continue to account for the majority of housing transactions across the wider market.

Rental Market Regains Strength

Japan’s rental sector has also entered a period of gradual change. In central Tokyo, population growth and limited housing supply have contributed to stronger rental performance than the market experienced during much of the previous decade.

Institutional investors continue to increase allocations to multifamily residential assets, attracted by high occupancy rates and improving rental income. The sector has become one of the country’s most stable real estate investment classes, particularly for long-term income-focused investors.

Outside the largest cities, however, rental markets remain considerably weaker, reflecting slower population growth and lower household formation.

Regional Japan Faces Different Challenges

Away from the country’s major metropolitan areas, demographic trends continue to influence property performance.

Many regional municipalities are experiencing population decline as younger residents relocate in search of employment and educational opportunities. This has reduced housing demand in numerous communities and contributed to a growing inventory of vacant residential properties.

Local governments are responding through redevelopment initiatives, renovation grants and programmes designed to attract new residents, entrepreneurs and remote workers. While these measures have achieved positive results in selected locations, reversing long-term demographic trends remains a significant challenge.

At the same time, some regional cities are benefiting from new economic drivers. Semiconductor investment in Kyushu, tourism growth in Hokkaido and redevelopment projects in several provincial centres demonstrate that regional success increasingly depends on the strength of local industries rather than broader national trends.

Sustainability Shapes Future Development

Environmental performance is becoming a more important consideration throughout Japan’s property sector. Developers are placing greater emphasis on energy-efficient buildings, carbon reduction and resilient design, while investors increasingly evaluate long-term operating costs alongside financial returns.

Modern buildings that combine sustainability with earthquake-resistant construction are attracting stronger investor interest than ageing assets that require extensive upgrades. Consequently, refurbishment projects have become an important part of Japan’s property market, extending the life of existing buildings while improving their environmental performance.

Infrastructure Remains a Competitive Advantage

Japan’s extensive transport network continues to support real estate values in well-connected locations. New railway stations, urban regeneration schemes and improvements to public transport are helping create opportunities for both commercial and residential development.

Areas with strong accessibility continue to outperform locations where transport links and employment opportunities are more limited, reinforcing the importance of connectivity in investment decisions.

Outlook

Japan’s property market is entering a period where success will depend less on nationwide trends and more on local economic fundamentals.

Major metropolitan areas are expected to remain the primary destinations for investment, supported by redevelopment, international capital and resilient occupier demand. Selected regional cities with expanding industries are also likely to generate attractive opportunities.

Meanwhile, communities facing population decline will increasingly focus on regeneration, adaptive reuse and improving the quality of existing housing rather than expanding supply.

For investors, the Japanese market is becoming increasingly selective. The strongest prospects are likely to be found in locations that combine economic growth, modern infrastructure and sustainable development, while areas lacking these advantages may continue to face slower growth and weaker demand. Rather than one national property story, Japan is evolving into a market where local dynamics will determine long-term success.

Source: © CIJ.World Japan Research & Analysis Team

Europe’s Carbon Border Policy Forces Indian Exporters to Adapt

fletcher@cijeurope.com
31 July 2026
Environmental, Exports and Import, Politics

The European Union’s climate policies are beginning to reshape international trade, with Indian manufacturers among those facing new commercial realities. As Europe tightens environmental standards on imported goods, exporters selling carbon-intensive products into the EU will need to meet stricter reporting requirements while remaining competitive in one of their most important overseas markets.

The EU introduced its Carbon Border Adjustment Mechanism (CBAM) to ensure that imported products face a carbon cost comparable to goods produced within the bloc. The policy aims to discourage companies from shifting production to countries with less demanding environmental regulations while supporting Europe’s long-term objective of reducing greenhouse gas emissions.

The framework currently applies to sectors such as iron and steel, aluminium, cement, fertilisers, hydrogen and electricity. Following an initial reporting phase, the system is now moving towards full implementation, making emissions data an increasingly important part of international trade.

Steel Industry Faces the Greatest Challenge

Among India’s export industries, steel is expected to experience the largest impact. Many Indian steel plants continue to rely on production methods with relatively high carbon emissions, making exports more vulnerable to additional costs linked to Europe’s carbon pricing system.

Several economic studies suggest that Indian steel shipments to the European market could decline once the mechanism is fully reflected in trading costs. While estimates differ depending on the assumptions used, researchers generally agree that higher carbon-related costs will reduce the competitiveness of some Indian producers compared with manufacturers operating lower-emission facilities.

For companies that depend heavily on European customers, maintaining market share may increasingly depend on improving production efficiency and reducing the carbon footprint of manufacturing operations.

Aluminium Producers Also Under Pressure

The aluminium sector faces similar challenges. Producing primary aluminium requires large amounts of electricity, meaning the environmental impact varies significantly depending on the energy source used during production.

Facilities powered by cleaner energy sources are likely to be in a stronger competitive position than those relying on fossil fuel-generated electricity. As European buyers become more focused on embedded emissions, manufacturers with lower-carbon production processes could gain a commercial advantage.

Environmental Data Becomes a Business Requirement

The new rules place considerable emphasis on accurate emissions reporting. Exporters will need to provide detailed information about the carbon emissions associated with individual products rather than relying on broad sustainability commitments.

For many businesses, this means investing in emissions monitoring systems, independent verification and digital reporting processes. These additional requirements create new administrative and financial costs, particularly for companies that have not previously measured emissions at a detailed operational level.

European importers are also expected to place greater value on suppliers capable of providing reliable environmental data. As a result, transparency is becoming an important factor alongside price, quality and delivery performance when selecting manufacturing partners.

Smaller Businesses Could Feel a Greater Impact

Large industrial groups generally have greater financial resources to invest in emissions monitoring, specialised staff and cleaner production technologies. Smaller exporters, however, may find the transition more difficult.

Many small and medium-sized manufacturers already operate under pressure from higher financing costs, inflation and volatile raw material prices. Additional compliance expenses could further reduce profit margins and make participation in European supply chains more challenging.

This may encourage smaller businesses to collaborate with industry associations, technology providers and government-supported programmes to improve reporting capabilities while sharing compliance costs.

Limited National Impact but Significant Sectoral Effects

Although CBAM has attracted considerable attention, economists generally expect its effect on India’s overall economy to remain relatively modest because the mechanism covers only selected industries.

However, the impact is unlikely to be evenly distributed. Companies operating in sectors directly affected by the policy could experience higher production costs, tighter margins and increased competition, while businesses outside the covered industries may notice little immediate change.

For export-oriented manufacturers, the challenge is less about the national economy and more about protecting profitability within specific product categories where Europe remains an important customer.

Opportunity Through Modernisation

While the policy creates short-term challenges, it also provides an incentive for manufacturers to modernise operations. Investment in cleaner production technologies, renewable energy, improved energy efficiency and digital emissions monitoring can strengthen long-term competitiveness, not only in Europe but across global markets where sustainability requirements continue to increase.

Industrial companies that move quickly to improve environmental performance may find themselves better positioned to secure international contracts as buyers increasingly consider carbon intensity alongside traditional commercial factors.

As climate-related regulations become more closely linked with international trade, environmental performance is evolving from a compliance issue into a strategic business consideration. For Indian exporters, adapting to these new expectations may prove essential for maintaining access to one of the world’s largest and most valuable export markets.

Poland Introduces Sweeping New Insurance Distribution Rules

The Polish Financial Supervision Authority (Polish FSA) has adopted a comprehensive new set of recommendations governing insurance distribution, marking the most significant overhaul of the country’s regulatory framework in more than a decade.

Published on 29 June 2026, the new guidance replaces the regulator’s 2014 distribution guidelines and expands the framework from 12 recommendations to 29. The measures will take effect from 1 July 2027, while specific provisions relating to the savings component of life insurance products will be introduced a year later, on 1 July 2028.

Broader Impact Across the Insurance Market

Although the recommendations are formally directed at insurance companies, their practical impact extends well beyond insurers. The new rules will also affect insurance intermediaries operating in Poland, including agents and brokers based in other European Union member states that provide services in the Polish market either through local branches or under the EU’s freedom to provide services regime.

Recommendations covering intermediary oversight, remuneration, support and compliance obligations are expected to reshape relationships between insurers and their distribution networks, making Poland’s approach one of the more far-reaching within the European insurance sector.

Stronger Focus on Customer Value

A central element of the new framework is the requirement that insurance products deliver demonstrable value to customers.

The Polish FSA expects insurers to ensure that the expected value of claims and benefits remains proportionate to premiums paid. In general, products should generate expected claims and benefits worth at least 30% of anticipated gross premiums, while lower-cost insurance products are subject to a minimum threshold of 20%.

This value-based assessment, previously associated primarily with certain credit protection insurance products, will now apply across a much broader range of insurance products and distribution channels. Several specialist products, including large-risk insurance, annuities, insurance guarantees and selected pension products, remain outside the scope of these requirements.

For life insurance products that include an investment or savings element, regulators have also introduced a maximum annual cost impact threshold of 2.65%.

New Rules for Remuneration

The recommendations introduce enhanced governance over remuneration structures for employees, agents and distributors.

Insurance companies are expected to establish remuneration policies that promote customer interests rather than purely sales-driven objectives. Variable compensation and incentive schemes should increasingly incorporate qualitative performance indicators alongside commercial targets.

Suggested assessment criteria include customer complaints, satisfaction surveys, mystery shopping results, policy cancellations, reasons for rejected claims and outcomes of legal disputes, reflecting a stronger emphasis on service quality and customer outcomes.

Greater Oversight of Insurance Agents

The updated framework strengthens insurers’ responsibilities for supervising their distribution partners.

Beyond monitoring legal compliance and registration requirements, insurers are expected to provide agents with ongoing guidance, training and operational support. The recommendations also encourage corrective actions before disciplinary measures are imposed, creating a more structured framework for cooperation between insurers and intermediaries.

The regulator has also clarified that agents should have a clear basis for requesting assistance from insurers where necessary.

More Flexible Customer Needs Assessment

The Polish FSA has adopted a more practical approach to assessing customers’ insurance needs than originally proposed during consultations.

If customers decline to provide information needed for a needs assessment, insurers must explain the consequences of withholding that information rather than automatically preventing the sale. Companies are also required to maintain appropriate documentation demonstrating that recommended policies match customer requirements, while retaining flexibility over how those records are created across different distribution channels.

For policy renewals, insurers may continue using previously collected customer information provided customers are informed and given the opportunity to update their details.

In cases involving third-party or group insurance contracts, insurers must obtain sufficient information from the policyholder to assess the needs of the insured individuals or groups.

Renewals Face Additional Scrutiny

Before renewing policies or offering cover for a new policy period, insurers will be expected to review whether any product changes could affect the suitability of coverage for customers based on their previously assessed needs.

Industry Preparation Begins

The recommendations will operate under a “comply or explain” approach. Insurers choosing not to implement specific recommendations must notify the Polish FSA by 15 July 2027 and explain how they intend to meet the regulator’s supervisory objectives through alternative measures.

With implementation less than a year away, insurers are expected to begin reviewing product governance, distribution practices, remuneration structures and internal compliance frameworks to ensure readiness before the new regime comes into force.

While formally aimed at insurance companies, the breadth of the recommendations means that intermediaries, including cross-border operators active in Poland, are also expected to experience significant operational and compliance changes under the new framework.

Japan’s Rental Housing Market Gains Momentum as Long-Term Investment Focus Grows

Japan’s residential rental sector is strengthening its position as one of the country’s most resilient real estate asset classes, supported by changing demographics, evolving housing preferences and sustained investor interest. Rather than being driven by short-term market fluctuations, demand is increasingly underpinned by long-term structural trends that continue to reshape the country’s housing landscape.

Major metropolitan areas, particularly Tokyo, remain at the centre of this growth. Population movement towards large cities, combined with smaller household sizes and changing lifestyle choices, continues to support demand for professionally managed rental accommodation. At the same time, purchasing a home has become less of an immediate priority for many younger residents, extending the period during which they remain in the rental market.

These trends have encouraged developers and investors to expand the supply of modern rental communities designed specifically for long-term occupancy. New projects are increasingly incorporating energy-efficient features, improved communal facilities and layouts that better reflect the needs of today’s tenants, differentiating them from much of Japan’s ageing residential stock.

The investment appeal of the sector has also strengthened. Rental housing has consistently demonstrated stable occupancy and dependable income generation, characteristics that continue to attract both domestic institutions and overseas investors seeking lower-risk real estate assets. Compared with more cyclical property sectors, residential investments have generally shown greater resilience during periods of economic uncertainty.

Location remains one of the defining factors behind successful developments. Properties situated close to railway stations, business districts and established urban amenities continue to command strong demand from tenants, while redevelopment around transport corridors is creating new opportunities across Japan’s largest metropolitan regions.

The tenant base itself has become increasingly diverse. Young professionals, couples, families, students, expatriates and older residents all contribute to demand for rental accommodation, providing landlords with a broad and relatively stable occupancy profile. This diversity helps reduce reliance on any single demographic group and supports consistent leasing activity.

Another factor supporting the market is the ongoing replacement of older residential buildings. Much of Japan’s existing rental stock was developed decades ago and no longer meets the expectations of tenants seeking higher environmental standards, better amenities and improved living environments. Redevelopment is therefore playing an increasingly important role in modernising the country’s rental housing supply.

Institutional capital continues to view Japan favourably because the country’s residential market combines relatively predictable rental income with an established legal framework and access to financing that remains competitive by international standards. These factors have reinforced confidence even as interest rates have gradually begun to normalise.

Although Japan continues to face long-term demographic challenges, conditions in its largest urban centres tell a different story. Continued migration into major cities, combined with changing household formation and sustained demand for rental accommodation, is helping to support new residential investment despite a declining national population.

As investors continue to prioritise stable income-producing assets, Japan’s professionally managed rental housing market is expected to remain a key destination for capital. Ongoing redevelopment, improving housing quality and sustained urban demand are likely to keep the sector among the country’s strongest-performing areas of real estate over the coming years.

Europe’s Clean Industry Strategy Offers Insights for India’s Manufacturing Transition

As governments around the world seek to strengthen economic resilience while lowering emissions, industrial policy has returned to the centre of long-term planning. Europe has spent the past several years reshaping its manufacturing landscape through a combination of regulatory reforms, investment support and supply chain initiatives designed to accelerate the production of low-carbon technologies. While India’s economic priorities differ, Europe’s experience offers several practical lessons as the country expands its own clean manufacturing ambitions.

The European Union’s industrial transformation has evolved beyond climate objectives alone. Policymakers increasingly view domestic manufacturing capacity as essential for economic competitiveness, energy security and reducing dependence on imported technologies and critical raw materials. This broader strategy has been reinforced through legislation aimed at accelerating investment in strategic industries, streamlining project approvals and encouraging greater production of technologies such as batteries, solar equipment, wind components, electrolysers and carbon capture systems.

The approach reflects a growing recognition that reducing emissions requires more than ambitious environmental targets. It also depends on creating the conditions that allow manufacturers to invest with confidence while ensuring that supporting infrastructure, skilled labour and financing are available.

India is pursuing many of the same objectives through programmes supporting renewable energy manufacturing, battery production, electric mobility and green hydrogen. The country’s industrial base, expanding domestic market and relatively young workforce provide opportunities to develop competitive supply chains in sectors expected to experience significant global growth over the coming decades.

One of the strongest lessons from Europe is the importance of policy stability. Large industrial projects often require substantial capital and may take years before becoming operational. Investors therefore place considerable value on predictable approval processes, transparent regulations and long-term policy consistency. Delays involving environmental permits, land acquisition, electricity connections or transport infrastructure can increase costs and discourage investment.

Creating a more coordinated approval system could help India accelerate industrial development while maintaining environmental standards. Greater alignment between central and state authorities would also improve certainty for manufacturers planning large-scale facilities.

Europe’s experience also highlights the importance of creating demand alongside expanding manufacturing capacity. Building factories alone does not guarantee commercial success if markets for cleaner products remain limited or uncertain. Public procurement, product standards and certification frameworks can help encourage early adoption of lower-emission materials and technologies while allowing industries to scale production.

India has already introduced standards for classifying lower-emission steel and continues to expand policies supporting clean energy technologies. Similar approaches could encourage wider adoption of sustainable construction materials, electric public transport, energy storage systems and other products that contribute to industrial decarbonisation.

Infrastructure remains another critical factor. Manufacturing clusters require reliable electricity, transport links, ports, water supplies and digital connectivity. Emerging industries such as green hydrogen add further requirements, including renewable power generation, electrolysers, storage facilities and distribution networks capable of supporting industrial users.

Coordinated investment across these areas can reduce operating costs and improve competitiveness by allowing multiple companies to benefit from shared infrastructure rather than developing separate facilities.

Developing a skilled workforce represents another long-term challenge. As manufacturing technologies become more advanced, employers require technicians, engineers and specialists capable of operating increasingly sophisticated production systems. Expanding technical education, vocational training and industry partnerships can help ensure that workforce development keeps pace with industrial investment.

Innovation also plays an important role. Continued collaboration between universities, research institutions and manufacturers can accelerate the commercialisation of new technologies while strengthening domestic expertise in strategic industries.

Although Europe’s policy framework cannot be directly replicated, its experience demonstrates that industrial transformation depends on far more than financial incentives alone. Regulatory efficiency, infrastructure planning, workforce development, research capabilities and market creation all contribute to building a competitive manufacturing sector.

For India, the challenge is to integrate these elements into a coherent long-term strategy that supports economic expansion while reducing industrial emissions. Success will depend not only on attracting investment but also on creating an environment where businesses can scale production, innovate and compete internationally. As global demand for clean technologies continues to increase, countries that successfully align industrial policy with economic development are likely to strengthen both their manufacturing base and their position within future supply chains.

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