Category: Editorial

Title: Trade imbalance: on India’s merchandise exports

India’s merchandise exports, which shrank over 3% in 2023-24 — a year marred by multiple geopolitical and logistical disruptions to global trade — are off to a positive start this year, but only just. This April recorded outbound shipments worth $34.99 billion, reflecting a meagre uptick of 1.07% or $370 million from a year ago. As many as 17 of India’s top 30 export items reported year-on-year contractions, compared with 13 in the previous month. Significantly, these declines are over a weak base — in April 2023, goods exports had tanked 12.7% and 20 of the top 30 items had reported a fall in export values. The minor growth last month was largely driven by just four items, pharma, chemicals, electronics and, most importantly, petroleum products, which recovered from a 35% contraction in March, aided by the rise in global oil prices. On the flip side, the surge in oil and gold prices through April lifted the country’s goods import bill by 10.25% to over $54 billion. As a result, last month’s trade deficit was the highest in four months at $19.1 billion, and nearly 22.5% over March’s gap. If the OPEC+ club, which meets in early June, decides to extend output cuts, oil prices could well hit $100 a barrel. Moreover, a persistent global savings rush to gold as a safe haven, could keep pushing India’s favourite yellow metal’s prices higher. Apart from the deleterious effects of such a scenario on the domestic front (through higher fuel prices, for one), the trade balance and the rupee would be under pressure.

Global trade volumes, after tanking 1.2% in 2023, are expected to rise 2.6% this year, as per the World Trade Organization. The government is hopeful that India’s key markets in the western world clock lower inflation and improved growth rates, spurring a demand bounce. However, India needs to sharpen its approach to capitalise on such a bounce and ensure that any gains that may accrue will create wealth across the domestic economy. This requires addressing the challenges facing labour-intensive sectors such as garments and footwear, where the country has been losing out to rivals, including Bangladesh and Vietnam, in recent years. The downward trend for these sectors, as well as gems and jewellery, continued in April. Tackling concerns about product quality (in spices or drugs, for example) or allegations about labour or environmental concerns (aimed at booming shrimp exports) with greater vigour, is also critical. Moreover, agricultural exports, curbed in the battle against inflation, must be reinvigorated soon, given the healthy monsoon prospects. The next government must roll up its sleeves quickly to rev up the export growth engine and ensure trade balances do not turn unwieldy.

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Title: Crime and time: On election-time incarceration  

Any inconsistency in judicial decisions is bound to be seen as unequal application of rules. On the principle of parity, former Jharkhand Chief Minister Hemant Soren, who leads the Jharkhand Mukti Morcha, is arguably entitled to interim bail to enable him to campaign in his home State for the next phases of the general election, from May 20. Mr. Soren was arrested on January 31. It was only last week that the Supreme Court of India underscored the importance of the general election to grant bail to Delhi Chief Minister Arvind Kejriwal up to the end of the polls. Although the opinion was based on “the peculiarities of the person in question and the surrounding circumstances”, a principle did emerge from that ruling that key leaders could be allowed to campaign in the interest of electoral democracy. However, the Court chose the position that it first needs to hear the other side, the Enforcement Directorate in this case. Even though it favoured a hearing in the week beginning May 20, it agreed to an earlier date, May 17. It is a legal requirement that any order of bail can be given only after hearing the prosecution’s objections. In Mr. Kejriwal’s case, the Court heard and rejected the argument that freeing a political leader solely indeed for the purpose of canvassing votes during an election will amount to privileging the political class above other categories of people arrested for similar offences.

The Jharkhand High Court did not deliver judgment on the petition challenging Mr. Soren’s arrest for two months, resulting in a delay in his approaching the Supreme Court. Ultimately, it passed an order dismissing his plea on May 3, having reserved its verdict on February 28. It is true that no two cases are comparable. While the Delhi Chief Minister is facing the charge of bribery in exchange for adopting an excise policy favourable to some manufacturers, Mr. Soren is accused of laundering the proceeds of crime in the illegal sale of a parcel of land to acquire property in Ranchi. With the prosecution depending mainly on approvers’ statements against Mr. Kejriwal, and the agency banking on documentary evidence against Mr. Soren, there may be differences in the respective merits of their cases. The stringent provisions for bail in the Prevention of Money Laundering Act have the unfortunate effect of making courts consider the overall merits of a case at the bail stage itself. It is unfortunate that the relatively simple act of releasing the accused against bail bonds, with attendant conditions to safeguard evidence and prevent them from fleeing justice, has become politically sensitive. Election-time incarceration, which renders the playing field disadvantageous to the affected parties, adversely affects the democratic spirit.

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Title: Lame excuses: On Manipur and the ethnic conflict

It has been over three years since the coup d’etat in Myanmar in which the usurped junta absolute power and unleashed severe repression in order to clamp down on any demands for a return to democracy or granting more power to the marginalised ethnic identities in the civil war-prone country. Facing repression such as brutal bombing and the displacement of entire villages, many citizens, particularly those from ethnic minorities, have sought refuge in neighbouring countries including India. Many refugees from Myanmar’s Sagaing region and Chin State have fled the junta’s violent campaigns and headed to Mizoram and Manipur. While in Mizoram, refugees, of Chin ethnicity in particular, have been treated favourably, with the Mizo people regarding them as ethnic brethren, those in Manipur have not received such treatment from the government led by Chief Minister N. Biren Singh. Manipur has continued to conflate the issues related to the refugees fleeing Myanmar with that of cross-border drug trade. Ever since the ethnic violence between the Kuki-Zo community and the majority Meitei community last year, this refrain by the Manipur government, which has not hidden its preponderance to act as an ethnic majoritarian regime, has led to the stigmatisation of the refugees and policies that are in stark contrast to Mizoram’s humanitarian approach.

Moves such as seeking to end the Free Movement Regime, that is seen as favourable by the citizens of both countries, the announcement that India will fence the 1,643 km India-Myanmar border and Mr. Singh’s statement that 5,457 “illegal” migrants were found in Manipur’s Kamjong district should be seen in this light. The Chief Minister has repeatedly maintained that the conflict, which has killed more than 220 people, displaced over 50,000 people and resulted in injuries to thousands, besides creating a siege mentality among the Meitei and the Kuki-Zo communities, is a consequence of his government’s actions against “poppy cultivation” and “illegal immigration”. This is both an over-simplification and a biased view of the ethnic conflict that has raged in the State because of the inability of the Biren Singh government to rise above the ethnic fray and build confidence measures that could win the trust of the Kuki-Zo community. That the violence has been followed by the brazen militarisation of Manipuri society, in the hills and in the valley, with vigilante groups armed with sophisticated weapons, causing law and order problems, and impeding security personnel seeking to impose law and order, reflects even more poorly on the government. Unless there is a change, both in approach and in leadership in Manipur and the way it has treated the conflict, the situation will continue to fester.

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Title: Towards the endgame: on the fourth phase of the general election

In the fourth phase of the Lok Sabha election 2024, 96 constituencies voted on Monday. With this, the voting process in 23 States and Union Territories has been completed. So far, 379 constituencies have voted, which include all 25 seats in Andhra Pradesh and all 17 seats in Telangana on Monday. Polls were also held in the simultaneous Assembly elections in Andhra Pradesh, for all 175 seats and in Odisha, in 28 of 147. In these States, the BJP has had a blow hot, blow cold rivalry with ruling regional parties — the YSRCP in Andhra Pradesh and BJD in Odisha, in its elaborate plans to make some gains. Of the 96 seats up for the take in this phase, the BJP had won 42 in 2019, while the YSR Congress had won 22 in Andhra Pradesh, and the BRS nine in Telangana. The Congress held six. With no overarching theme defining the ongoing campaign in this general election, parties and leaders have been testing various slogans to rally voters around. Meanwhile, the Election Commission of India (ECI) and the principal Opposition party had an unsavoury exchange. Responding to Congress president Mallikarjun Kharge’s questioning of the delay in the release of voter turnout data, the ECI said people held such doubts in “contempt”. Mr. Kharge hit back saying it was “puzzling” that the ECI was not acting on “communal and casteist” statements by the Prime Minister and the BJP.

The BJP and the Congress have continued to mobilise voters largely around questions of religious and caste identities, respectively. A mischievous presentation of the demographic trends in the country by a government adviser came in handy for the BJP to make insinuations about Muslims with the aim of polarisation. The BJP continued to accuse the Congress of favouring Muslims. The Congress created trouble for itself as one of its advisers used racist vocabulary to describe India’s diversity. While aspersions against Muslims by the BJP about their population share were dressed up as a concern for their well-being, the Congress’s proclamation about diversity landed as racism. The interim bail given to Delhi Chief Minister Arvind Kejriwal by the Supreme Court of India facilitated his return to the campaign trail. Quick on his feet, Mr. Kejriwal has dragged the BJP into explaining that Narendra Modi would remain the PM even after completing 75 years of age in September next year. Mr. Kejriwal has claimed for himself the central position in the Opposition beyond the 2024 election, by putting forth a list of nationwide welfare guarantees. This has added to the tensions in the Opposition space, where a delicate, dynamic equilibrium holds together ideologically disparate forces.

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Title: Clickbait paper: On the EAC-PM working paper

A recent ‘working paper’ titled the ‘Share of Religious Minorities: a Cross-Country Analysis (1950-2015)’, by Shamika Ravi, a credentialed economist and member of the Economic Advisory Council (EAC) to the Prime Minister, and two co-authors, has sparked a political firestorm, dredging familiar anxieties of a decline in the proportion of Hindus in India’s population. Freely accessible, the paper draws on a dataset, Religious Characteristics of States Dataset, 2017 (RCS-Dem), where two U.S.-affiliated researchers have compiled an extensive dataset of religio-demographic changes in 167 countries. By defining ‘majority’ and ‘minority’ religions based on countries’ official census data, the RCS-Dem quantifies changes in the population of those professing a country’s major religion. There is no discussion on the causes or factors driving these changes. The current paper does little other than reproduce this data set, explain it, and highlight — what has been known since 2011 in India and discussed threadbare since — that the share of Hindus as a proportion of India’s population declined from 84.68% to 78% (1950-2015). Muslim proportion meanwhile has risen from 9.84% to 14%. They underline how most countries have seen their majority-religion adherents decline. They note that the Indian experience, vis-à-vis the proportional decline of Hindus, is unexceptional in the light of broad trends globally. They reiterate that they make no “…causal links between a specific state action and demographic shifts.” They note however that in the “immediate South Asian neighbourhood”, this 7% relative decline was second only to Myanmar’s 10% decline of the majority Theravada Buddhists.

From here the authors make, without analysis or data, a deduction. That the rise in Muslim numbers proved media reports and UN human rights reports (which they cite) of discrimination and violence against Muslims in India were false. They single out Pakistan and Bangladesh to underline that “demographic shocks” reduced the proportion of the largest minorities, Hindus, there. The authors thus break their own rule of not having a causative explanation of demographic change by ascribing rising Muslim numbers in India to “progressive policies and inclusive institutions.” The authors would then have to explain if India’s Parsi and Jain populations (whose numbers they reference) are declining due to hostile state policies. Given that prosaic explanations of declining fertility rates across religions and economic migration explain some of these known India trends, it is perplexing why the EAC would lend its sanction to a work that is at best incomplete, and at worst disingenuous.

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Title: Bipartisan rescue: On the U.S. House of Representatives and U.S. politics

In a rare display of camaraderie across the political divide, Democrats in the U.S. House of Representatives rushed to the aid of Republican House Speaker Mike Johnson and, alongside others from his party, saved his speakership from termination, by a vote of 359-43 in support of his continuance in that capacity. The threat to his role as the functional head of the lower chamber of the U.S. Congress came from far-right Republican lawmaker and unabashed supporter of former President Donald Trump, Marjorie Taylor Greene of Georgia, whose grouse with Mr. Johnson was that he had shepherded and seen through a bill to provide a $95 billion national security aid package to Israel, Ukraine and other U.S. allies in Asia, with the bill for military support to Kyiv coming in at $61 billion. “By passing the Democrats’ agenda and handcuffing the Republicans’ ability and influence legislation, our elected Republican Speaker Mike Johnson has aided and abetted the Democrats and the Biden administration in destroying our country,” Ms. Greene said, in a speech on the floor of the house that was booed by her fellow Congressmen. In March, Ms. Greene had filed a motion that would trigger a vote to remove Mr. Johnson, and earlier this week she had warned that she would be bringing that motion to a vote. While Mr. Trump is said to have complimented Ms. Greene in a post on the Truth Social platform, even he said that he believed that Republicans were “not in a position” to be voting Mr. Johnson out.

To a significant extent, the House has become the testing ground for factional supremacy within the ranks of the Republican Party, a simmering conflict that has intensified as the presidential election of November 2024 has drawn closer. The lower house witnessed a similar pattern of turmoil during the election of Mr. Johnson’s immediate predecessor, California Congressman Kevin McCarthy, who had to engineer no fewer than 15 rounds of voting to finally secure the Speaker’s chair. Ultimately Mr. McCarthy was dismissed from the role in late October 2023 when his tenure was abruptly ended by a motion to vacate foisted by members of the House Freedom Caucus. This ultra-conservative group has broadly backed the political agenda of Mr. Trump and routinely attacked ‘mainstream’ Republican lawmakers who have relied on bipartisan cooperation to get bills passed, including critical funding for U.S. allies. Even as Voting Day approaches fast from the horizon, moderate congressional Republicans are faced with the festering dilemma that to win their re-election bids they cannot be seen as spoilers who made it harder for Congress to forge critical bipartisan legislation, yet the popularity of Mr. Trump and the stubbornness of his House ideologues make it difficult for them to repudiate a more combative approach to politics.

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Title: A sob story: On onion exports :

Nearly six months after the Centre prohibited onion exports citing runaway prices and supply concerns, it put them back in the ‘free’ category last Saturday, with the caveat of a minimum export price of $550 a tonne, and a 40% levy on top. This marked the second significant policy change on onion exports over a span of 10 days. On April 25, 2,000 tonnes of white onion exports were permitted, if certified by the Gujarat Horticulture Commissioner. Coming days before Gujarat’s Lok Sabha vote this Tuesday, the move triggered an outcry about preferential treatment from the neighbouring State’s farmers. In a press release, the Centre explained that “purely export oriented” white onions entail higher production costs, and nearly one lakh tonne of onion exports had also been allowed that would help Maharashtra, the country’s largest onion producer. This did not cut much ice — only a few thousand tonnes of onions had actually been shipped under that export window.

It is no surprise that this conditional freeing up of exports comes just before Maharashtra’s onion farming hubs vote on May 20. Justifying the move, the Centre pointed to mandi prices stabilising at ₹15 a kilo since April, a fresh assessment that supplies are, in fact, adequate, and an assertion that the politically charged vegetable is perishable. State BJP leaders proclaimed this will ensure farmers get better prices and income. It is unclear if that will fructify — the floor price plus export duty formulation means exports are viable only at or over an estimated ₹64 a kilo. International onion prices have been easing after Egypt and Pakistan recently lifted their export curbs, much before India. With the latest norms expected to last at least till the next government takes charge, onion farmers will effectively face export curbs for almost a year, starting from last August when a 40% export duty was levied. Straddling the ‘consumer versus farmer’ dilemma is tricky, but some longer term context can guide policymaking towards a nuanced rather than a knee-jerk approach. Before food inflation spiked in the second half of 2023, onion prices had been falling for as many as 21 months till May. They rose about 30% through 2023-24, but from a 21% decline in the previous year. A Centre for Civil Society study reckoned that the average farmer lost 21% of annual income due to onion export bans between January 2015 and March 2020. If anything, the current streak of curbs after nearly two years of falling prices, does not send out a positive sowing signal for farmers. And that is neither good for curbing inflation nor meeting India’s aspirations to be the world’s food supplier.

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Title: In the frontline: On Rahul Gandhi contesting from Rae Bareli

Congress leader Rahul Gandhi has entered the electoral fray in the Hindi heartland too, ending a prolonged suspense just in time to file his nomination on May 3, in Rae Bareli, Uttar Pradesh. His grandfather, grandmother, and mother were among those who represented this constituency, located around 80 km south-east of the State capital Lucknow. Mr. Gandhi had lost the adjoining Amethi constituency in 2019, even as he won Wayanad in Kerala. He is seeking re-election in Wayanad, and had to decide whether to contest at all from the Hindi heartland and, if so, whether it had to be Rae Bareli or Amethi. He chose Rae Bareli, which was won by his mother Sonia Gandhi in 2019, who is now a member of the Rajya Sabha. A family loyalist has been fielded in Amethi. Mr. Gandhi has been vocal about his liking for Wayanad, and waited for voting there before the candidacy in Rae Bareli was announced. This reeks of a scheme, perhaps unintended, but certainly avoidable. A forthright and early decision would have been more appropriate for his stature, and respectful towards the electorates. His sister, Priyanka Gandhi Vadra, who has emerged as an impactful campaigner for the Congress across the country, chose not to contest, while her husband Robert Vadra’s embarrassing public demand for the party ticket has been overlooked by the party, and rightly so.

Mr. Gandhi has declared that resisting the BJP’s Hindutva politics and advancement of social justice are his life’s mission. That battle is being fought primarily in the Hindi belt and the western region of the country. Electorally and ideologically, the BJP derives its strength from those regions. While the BJP is focused in its efforts to expand in the south, the Congress is confused in its strategy to regain its lost glory in the Hindi States. By deciding to contest from Kerala in 2019, Mr. Gandhi made a strategic mistake of seeking refuge in a comfort zone. He had the opportunity to correct it by returning to the tough battle in U.P. this time, but he kept vacillating. Though it has been not done in the best manner, his entry could enthuse the Opposition in U.P. The Congress is in an alliance with the Samajwadi Party (SP) in U.P., and the decision of SP chief Akhilesh Yadav to contest the election from Kannauj could also help the alliance. Considering the dominance of the BJP in the Hindi belt, the Congress faces an uphill task. In the event of winning both Wayanad and Rae Bareli, Mr. Gandhi must retain the latter and make it clear that he is in the ideological war with the BJP for the longer term.

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Title: Eastern front: On the electoral battle in West Bengal  

The Bharatiya Janata Party (BJP) nurtures high hopes in West Bengal, where it won 18 of the 42 seats, and 40% vote share in 2019. This dramatic rise from two seats in 2014 gave the party the confidence to present itself as the principal opposition in the 2021 Assembly polls, but the Mamata Banerjee-led All India Trinamool Congress (TMC) stormed back to power for a third term. With 77 of the 294 Assembly seats, and a 38.1% vote share, the BJP came a distant second. This year, the polling in the State is spread across all seven phases of the general election, and the BJP is pulling out all stops in the hope it could improve its tally which could also compensate for any electoral loss elsewhere. The BJP is keeping the TMC on the defensivewith allegations of corruption, the land grab and sexual assault at Sandeshkhali, and the school recruitment scam. The Calcutta High Court terminated about 25,000 teacher appointments which is a shot in the arm for the BJP. The TMC’s campaign against the BJP is centred on New Delhi’s stoppage of funds to the State under central schemes and the Citizenship (Amendment) Act. It is also banking on its cash transfer schemes such as Lakshmir Bhandar for women. Highlighting the issue of women’s safety, the BJP has fielded a woman from Sandeshkhali, the constituency that saw reports of assault on women.

The BJP hopes to perform better in the districts of north Bengal, where it had won seven out of eight seats in 2019, while the Trinamool’s focus is more in the southern districts with a high proportion of Muslim voters. For this, the TMC is also battling the Left-Congress coalition. The alliance may turn out to be a factor in certain seats in the minority-dominated districts of Malda and Murshidabad, and the decision of the Indian Secular Front to walk out of the alliance is likely to work to the advantage of the TMC. The BJP is bringing up Ram Mandir, violence during Ram Navami processions and the illegal movement of people across the India-Bangladesh border. Polarisation of voters on religious lines had helped the BJP in the 2019 Lok Sabha election and the Trinamool in the 2021 Assembly polls, edging out the Left and Congress from the field. The Trinamool is also harping on the Bengali identity by presenting itself as its custodian and portraying the BJP as an interloper and being insensitive to the interests of the State. For the BJP, West Bengal is not merely about winning more seats but is also about expanding its foothold into a region that claims exceptionalism. Some of the earliest arguments for a Hindu polity had originated in Bengal, and this gives the BJP hope.

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