Gogra-Hot Springs Disengagement Begins, At India’s Expense; August Trade Gap Early Warning Of Currency And Forex Worries
Draft of anonymisation guidelines abruptly removed, quarter of YouTube takedowns from India, SC grants bail to Kappan, India 3/4 into IPEF, should the colonial term ‘curry’ be banned from menus?
A newsletter from The Wire & Galileo Ideas | Contributors: MK Venu, Seema Chishti, Siddharth Varadarajan, Sidharth Bhatia, Sushant Singh and Tanweer Alam | Editor: Pratik Kanjilal
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Snapshot of the day
September 9, 2022
Pratik Kanjilal
A Supreme Court bench headed by Chief Justice of India UU Lalit granted bail today to Malayalam journalist Siddique Kappan, who has been in custody since October 2020, while on his way to Hathras to report on the gang rape and murder case. After release from prison in UP, he must remain in Delhi for six weeks.
India has fallen to 132nd position, two down from 2020, out of 191 countries in the 2021 Human Development Index, according to a report released by UNDP. India’s HDI value of 0.633, lower than its value of 0.645 in the 2020 report, places it in the medium human development category. India ranked 130 among 189 countries in the 2020 Human Development Index. The HDI measures progress on three key dimensions of human development ― a long and healthy life, access to education and a decent standard of living. It is calculated using four indicators ― life expectancy at birth, mean years of schooling, expected years of schooling and the gross national income per capita.
Vernon Gonsalves, accused in the Bhima-Koregaon case ― for which trials are yet to begin, though the accused have been in jail for over two years ― is on oxygen support after contracting dengue in prison. His wife, lawyer Susan Abraham, said that he should have been admitted to hospital “long back”.
India will join three of the four pillars of the Indo-Pacific Economic Framework for Prosperity at its first in-person ministerial summit in Los Angeles, reports the Hindustan Times. New Delhi has decided to become part of the resilient economy (supply chain), clean economy (decarbonisation and infrastructure), and fair economy (anti-corruption and tax) components of the framework, but it will not join the connected economy (trade) pillar of IPEF.
Compared with August 2019, before the pandemic, total vehicle retail sales in August 2022 fell 7.45%. Passenger vehicles grew 41% and commercial vehicles 6%. The two-wheeler segment, which is affected by the rising prices and cost of ownership, causes concern ― sales were down 16%.
In a brief statement, India and China yesterday announced that their frontline troops have begun disengagement from Patrol Point-15 (Gogra-Hot Springs area) in eastern Ladakh where the Indian Army and the People’s Liberation Army (PLA) have been locked in a lingering standoff for over 28 months. Lt Gen HS Panag (retd) had warned last year that “in the worst case, we have agreed to a de facto buffer zone in the entire Kugrang River Valley and the routes leading north to LAC. As a best case, two separate buffer zones could have been negotiated north of the Kugrang River along the two routes beyond PPs 16 and 17 up to the LAC. In either case, the buffer zones are entirely in areas that were under our control and which we actively patrolled up to April 2020.”
Disengagement of Indian and Chinese soldiers from friction points on LAC in the Ladakh sector had been stuck for over a year, with the last breakthrough in August 2021 when the two armies pulled back their forward deployed troops from the Gogra sector (PP-17A). Resolution of outstanding problems at the border, at Depsang and Demchok, has been elusive until now. This disengagement comes just days before the SCO summit in Uzbekistan on 15-16 September, which PM Narendra Modi and Chinese President Xi Jinping will attend.
An RTI reply has confirmed that the food licence of the controversial Goa cafe Silly Souls was issued to a company controlled by Smriti Irani’s husband. Documents obtained by advocate Aires Rodrigues from the state’s Food and Drug Administration have placed a question mark over the Union minister’s affidavit to the Delhi High Court denying any connection with the Silly Souls Cafe and Bar in Assagao. It has been established that the application, complete with company board resolutions, was made online and approved after a site visit on June 26, 2021.
Russia was the largest source of crude oil imports to India in June, according to OPEC. The data, which is released with a lag, showed that Russian imports accounted for 24% of total crude imports. The others included Iraq and Saudi Arabia, which together account for another 36%. Before the Russian attack on Ukraine Iraq, Saudi Arabia and the UAE were the top three exporters to India.
A draft document listing guidelines for the anonymisation of data was unexpectedly removed from the IT ministry’s website on Tuesday, about a week after it was put up for public feedback. This is the third time this year that a public consultation process has been summarily interrupted. Civil society groups criticise the government’s apparent “disregard” for the consultation process. Titled ‘Guidelines for Anonymisation of Data (AoD)’, the document was released on August 30 and was to remain open for comments until September 21. Anonymisation refers to removing or masking personal identifiers from data. However, several civil society and advocacy groups have questioned the utility of such guidelines without a data protection law prescribing criminal penalties for major breaches.
India accounted for more than a quarter of videos removed worldwide by YouTube for violating community guidelines in the quarter ending June, shows YouTube’s ‘Community Guidelines Enforcement Report’ for Q2 2022, released on September 8. YouTube removed 1.3 million videos in India during the quarter, followed by 445,148 in the US.
While addressing a gathering in Bijnor last week, UP Chief Minister Adityanath claimed that no riots had occurred in the state in the past five years. But National Crime Records Bureau data shows that UP recorded 35 communal riots in 2017-2021. The Adityanath government took office in March 2017.
The Economic Offences Wing has searched PC Singh’s house and office in Jabalpur after registering a cheating case last month, on a complaint alleging financial misconduct in running an educational society.
Meghalaya Governor Satyapal Malik waxed sarcastic about Modi renaming Rajpath. “There was no need to change the name of Rajpath, as it was not a British given name. Since the Prime Minister does some inauguration every third day, he has done it today too.”
Red rag to China bull: Dalai Lama wants to visit Tawang
After his month-long visit to Ladakh, Tibetan spiritual leader the Dalai Lama wishes to visit Tawang in Arunachal Pradesh. “I have a strong link to the people of the Himalayan region. I was recently in Ladakh and I hope to make a visit to Mön Tawang again soon,” the 87-year-old spiritual leader revealed during a prayer offered by five Tibetan organisations for his long life at McLeodganj on Wednesday. China is likely to object to his visit to Tawang, which is located south of the McMahon Line in Arunachal Pradesh, which Beijing wishes to control.
The Dalai Lama has visited Tawang seven times since 1983. His last visit was in 2017, when China had alleged that religious teachings had been engineered by New Delhi in an area which it refers to as ‘South Tibet’. Tawang, the land of the Mon people, houses India’s largest Buddhist monastery, of the Gelugpa sect of Tibetan Buddhist tradition ― the school associated with the institution of the Dalai Lama.
Government to take stake in Vodafone Idea
The government will acquire a stake in debt-ridden Vodafone Idea after the stock price of the company stabilises at Rs 10 or above. The Vodafone Idea (VIL) board has offered a stake at a par value of Rs 10 per share. According to the SEBI norm, acquisition should proceed at par value. VIL shares have traded below Rs 10 since April 19. The stock declined by 1.02% to Rs 9.68 on the BSE on Thursday.
The Finance Ministry had cleared the proposal in July. VIL has decided to convert about Rs 16,000 crore of interest liability payable to the government into equity which will amount to around 33% stake in the company, while the promoters’ holding will come down from 74.99% to 50%.
Talks with HNLC rebels begin unofficially
Meghalaya Chief Minister Conrad K Sangma has underscored that investigations by independent agencies will not impinge on the ongoing peace parley with the proscribed rebel outfit Hynniewtrep National Liberation Council (HNLC). The National Investigation Agency had filed a chargesheet against four HNLC leaders for carrying out an explosion at the staff quarters of Star Cements Ltd in the East Jaintia Hills district. Reminding that the Union government is directly involved in the peace process, he said the Ministry of Home Affairs (MHA) is well aware of the intricacies of the matter: “So whatever discussion needs to be made with MHA we will discuss (with them) but let me assure everybody that there will not be any hindrance or any kind of stumble or hurdle to the peace talks.” He said that talks at an unofficial level have already commenced to lay the groundwork.
India, biggest source of rice, imposes export duty
Today, the Union government imposed a 20% duty on the export of rice to calm domestic prices, and global effects are anticipated since India is the biggest exporter. Basmati and parboiled rice are exempt. In 2021-22, India exported over 21 million tonnes of rice worth Rs 72,000 crore. Non-basmati rice accounted for over 80% of export volume. India banned wheat exports in May, after a heat wave led to a lower harvest. “The levy will be imposed on the export of rice in the husk (paddy or rough), husked brown rice, semi-milled or wholly-milled rice, whether or not polished or glazed” (other than parboiled and basmati rice), said the Finance Ministry notification.
The Long Cable
August trade gap early warning of currency and forex worries
MK Venu
India’s trade data for August shows an unusual distortion. While imports grew at a high 37% there was negative growth of 1.5% in exports, and the trade deficit for August has widened to about $28.7 billion, from $11.6 billion in August 2021. The trade deficit widening by over two and a half times for August is worrisome because an expanding deficit on trade and current account would weaken the currency and the dwindling forex reserves historically accumulated by the RBI.
This is structurally inexplicable for exports to shrink when the economy is in recovery mode, as reflected in higher imports of capital goods and intermediates. There is always a strong correlation between imports and exports. For instance, during the economic boom of 2003-04 to 2008-09, imports grew at an average of 26% annually, and exports at 22%. Of course, the world economy was in a better shape then and global trade and investment flows were robust. Then came a period of relative de-globalisation of trade and investment, after the financial crises and world recession. In this longish phase ― from 2011 to 2019 ― trade flows slowed considerably. India saw its imports grow barely 4-5% annually from 2013 to 2019. Even exports stagnated at low single digits for this entire period.
The point is that imports and exports normally have a positive correlation. But strangely, the August data shows a rather wide divergence, with imports growing 37% and exports declining -1.5%. This is certainly unusual.
This could be because of several reasons. One, proffered by Commerce Secretary BVR Subrahmanyam, is that exports are sluggish because India has put curbs on a large number of export items like diesel, petrol, aviation fuel, wheat, steel and iron pellets. This week, an export tax of 20% has been imposed on non-basmati and non-parboiled rice, which account for over 80% of India’s total rice exports of 21 million tonnes.
There may be a political reason for imposing export curbs on wheat and rice. PM Modi is probably worried that unbridled exports may disrupt the domestic accumulation of food grain stocks, which will be needed in the run-up to the 2024 elections if food prices go out of hand. Similarly, he may also fear that higher steel prices could increase the cost of committed flagship welfare programmes like the PM Aawas Yojna for low cost housing. While these may be legitimate concerns, the net effect of curbs on exports of a large number of items, including energy, is a distortion in the equation between imports and exports.
Exports have also fallen because other emerging economies in Africa and Latin America which import from India are themselves facing hard currency constraints due to the dollar’s relentless rise after the Ukraine conflict. For instance, India is the biggest exporter of two-wheelers to Africa but this year, exports from Bajaj Auto, Hero Honda and TVS have shrunk by 15-20%.
The emerging global recession is also seriously impacting exports, but our domestically driven infrastructure growth is keeping imports up. In this scenario, India would need to keep a close watch on the growing gap between its rising imports and shrinking exports. It is to be noted that from April to August this year, India has shown a negative export growth of 35% with its largest trade partner, China, even as imports from China continue to grow at 28%. Another telling example of the huge divergence between export and import growth.
While energy imports are unavoidable, India should keep a close watch on imports of capital goods and intermediaries used for big industrial and infrastructure projects. These infra-related imports may drain dollar resources without producing immediate export growth to create necessary dollar earnings. This mismatch could create currency instability and undue stress on forex reserves in the short or medium term. Both the Centre and RBI need to be on high alert over the divergence between import and export growth. The August trade data is a warning signal.
Reportedly
Sansad TV CEO Ravi Capoor has been relieved of his duties at the end of his tenure, surprising many observers. It was widely assumed that as in the case of Rajya Sabha Secretary General PC Mody, whose term was recently extended, Capoor too would get an extension. Lok Sabha Secretary General Utpal Kumar Singh has been asked to manage Sansad TV as an additional responsibility. But the final word on Capoor’s career is yet to be written, say some. The buzz is that he could be the next CEO of Prasar Bharati, which has functioned under an ad hoc arrangement since the tenure of Shashi Shekhar Vempati ended two months ago. And if rumours of a proposed merger of Sansad TV and Doordarshan under Prasar Bharati have any substance, it would give Capoor a good chance to head the public broadcaster. Capoor, a retired IAS officer, was appointed CEO of Sansad TV in March last year following the decision to merge Lok Sabha TV and Rajya Sabha TV.
Prime Number: 82,000US missions in India have issued 82,000 student visas so far in 2022, higher than in any previous year, and Indian students received more American student visas than any other country.
Deep Dive
A list of some political yatras, along with hits and misses in terms of their impact.
Opeds you don’t want to miss
The laws that the BJP has gifted us after 2014, which criminalise beef, prohibit interfaith marriage, restrict access to citizenship for Muslims and have gutted Kashmir’s fictional autonomy, are shot through with churlishness and pettiness. However, they are not based on any political theory and are not intended to achieve anything other than to exclude and humiliate Muslims, writes Aakar Patel.
Himanshu writes that overall employment may have risen but we cannot deny the reality of rural distress.
Deepak Nayyar writes that becoming a developed nation by 2047 would depend on high growth rates which would be sustainable “only if economic growth creates employment which eradicates poverty and reduces inequality.”
New Delhi needs to acknowledge that its core challenge in Bangladesh is not Pakistan-sponsored Islamists or Chinese capital, but skewed ties with the people, writes Avinash Paliwal.
Alex Gatapoulas explains why INS Vikrant is no match for China. Its induction is a naval milestone but after all the delays, it starts its life virtually obsolete.
Like the Roma and Sinti of Europe, Indian nomadic groups were criminalised. After 75 years, the government must recognise their economic and social rights, writes Deepali Wighe.
Anirudh Kanisetti writes that cargo and other evidence from the Belitung shipwreck reveal the incredible interactions between mediaeval China, India and West Asia, including multicultural embassies, splendid gifts and even bureaucratic panic due to India’s overwhelming trade advantage in the 9th century.
After 25 years, another widespread emerging markets crisis is in the offing. India must worry too, writes Satyajit Das.
Lt Gen HS Panag (retd) writes that the 207-year-old tradition of Nepalese soldiers serving in the Indian Army’s Gorkha regiments faces an uncertain future due to the controversial Agnipath short-term recruitment scheme, denying India one of its strongest bonds with Nepal.
In their own ways, Rahul Gandhi, Nitish Kumar and Kejriwal are trying to collectively create a mahaul, or atmosphere, of anti-incumbency against Modi and his government, rather than worry about who the prime ministerial candidate might be, writes Archis Mohan.
The benefits of renaming streets and cities remain unclear while the poor shape of our civic infrastructure is obvious. Urban Indian life can do without needless battles of history, says Mint.
Listen up
The 44th Chess Olympiad in Chennai put the spotlight on the sport. India now has 75 grandmasters. Viswanathan Anand hopes that the buzz around the sport inspires the next generation of players.
Watch out
Mohammed Zubair, Siddique Kappan and Opposition politicians — what do they have in common? They’ve all been booked under sections of criminal law in which getting bail is rare (Kappan was granted bail today, almost two years after his arrest), and getting convicted is even rarer. The short answer: UAPA, Section 153A of the IPC, PMLA.
Over and out
The Paperclip recalls what may have been the strangest night in the eventful life of Queen Elizabeth II. In the words of her neighbour Jim Corbett in Kenya, “For the first time in the history of the world, a young girl climbed on to a tree one day a Princess and after having what she described as her most thrilling experience she climbed down from the tree next day a Queen – God bless her.”
The collection of recipes in Sarita Radhakrishna’s new cookbook shows the role of community in crafting local cuisine.
In Mother Jones, Indian cooks in the US bristle at the portmanteau term ‘curry’, which reflects the colonials’ ignorance of the diversity of Indian cuisine. One even proposes a ban on the word.
That’s it for today. We’ll be back with you on Monday, on a device near you. If The India Cable was forwarded to you by a friend (perhaps a common friend!) book your own copy by SUBSCRIBING HERE.