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Sri Lanka to hold talks with India, UAE to build new energy hub in May
Sri Lanka will start work next month on plans to develop an energy hub with India and the United Arab Emirates, the energy minister said on Friday, as the nation looks to leverage its strategic location to cement a recovery from a financial crisis.
The trio signed a deal to create the hub during a visit this month by India's Prime Minister Narendra Modi, the first global leader to visit the island since President Anura Kumara Dissanayake took office last September.
Dissanayake won an election with pledges of stability after the worst financial crisis in decades threeyears ago triggered runaway inflation, sent the local rupee into free-fall and forced the country to default on $25 billion of debt.
The hub in the eastern harbour city of Trincomalee will involve the construction of a multi-product pipeline as well as bunkering facilities and potentially a refinery.
It will also include development of a World War II-era storage tank farm partly owned by the Sri Lankan subsidiary of Indian Oil.
Representatives from state-run Ceylon Petroleum, Indian Oil and AD Ports will meet in Sri Lanka in late May to start discussions on a detailed business plan for the hub, said Energy Ministry Secretary Udayanga Hemapala.
"A joint project monitoring committee has been set up to oversee the development of the business plan and eventually finalise detailed proposals," Hemapala told Reuters.
President Dissanayake also discussed energy cooperation in Colombo this week with UAE Deputy Prime Minister and Foreign Affairs Minister Sheikh Abdullah Bin Zayed Al Nahyan, the president's office said.
Chinese state energy firm Sinopec has signed a deal to build a $3.2 billion oil refinery in Sri Lanka's southern port city of Hambantota.
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Hindustan Times
15 minutes ago
- Hindustan Times
How Modi govt mastered art of ideology and balance of power
On June 9, 2024, Narendra Modi took oath in the forecourt of the imposing Rashtrapati Bhavan for the third time as Prime Minister. The grand ceremony, marking the return of the Bharatiya Janata Party-led National Democratic Alliance to power, was held under the shadow of the BJP's diminished majority. For the first time since 2014, when it came to power at the centre with a brute majority, the BJP's numbers had fallen short of the half-way mark, and it had to rely on coalition partners to keep its juggernaut rolling. The election of 2024 was as much a story of the BJP's decline as it was of the resurgence of the opposition and the comeback of coalitions. If it felt vanquished, having shrunk from 303 to 240 in the 543 member Lok Sabha, the BJP didn't show it; instead, riding on support from allies, the Telegu Desam Party, the Janata Dal United and a cluster of smaller parties, it set about fulfilling its agenda. Soon after the oath ceremony, PM Modi put out a statement on X, '...I look forward to serving 140 crore Indians and working with the Council of Ministers to take India to new heights of progress.' The third term of the NDA began with the sceptics and its opponents alluding to the coalition compulsions and suggesting that given their history of changing partners, the allies could rock the boat sooner than later. The TDP had walked out of the NDA in 2018, citing the delay in granting special status to the Andhra Pradesh and the JDU broke ties with the BJP in 2013 and 2022. But as it completes one year in office, (and its 11th since 2014), the BJP has not only kept its friends close, but by deputing opposition lawmakers as India's ambassadors post Operation Sindoor, defanged the critics to a considerable extent. With the passage of contentious bills such as the one to amend the Waqf Board, it has also proved that its numerical strength (or the lack of it) in Parliament is not an impediment to carrying out its ideological agenda. Walking the tight rope of politics and coalition Although the BJP always referred to its government as a coalition of partners, in 2014 and 2019 it did not require support from other parties to form government. That changed in 2024, when the BJP won just 240 out of the 543 seats and was short of the halfway mark of 272. It had to rely on partners and the NDA with a tally of 293 staked claim to form the government. Party leaders concede that the coalition now is significantly different as the BJP has to ensure that its work goes on, while also ensuring that the impression is not that it is going an extra mile to appease alliance partners. Vinay Sahasrabuddhe, the chairman of the BJP's good governance cell said the perception that the BJP must adhere to coalition compulsions is wrong simply because there is no real disagreement. 'The harmony between the allies is remarkable. The partners know that they require each other, therefore, nobody is trying to call the shots, and the BJP too is in no mood to cede to the unreasonable demands of the partners. This harmony was not witnessed during the tenure of previous alliance governments,' he added. While powerful allies influenced policy in the decade-long tenure of the Congress-led United Progressive Alliance , the NDA under Atal Bihari Vajpayee too had to abide by the 'coalition dharma'. In 2000, Vajpayee, the PM had to travel to West Bengal to placate an angry ally, Mamata Banerjee, then the railway minister, after she opposed the government's decision to shut down sick public-sector units in the state. 'That has allies now are on the same page and if they have concerns, these are ironed out behind closed doors. The allies realise they need the BJP just as much as the BJP needs them... The union government has been generous in supporting infrastructure and development projects in Andhra Pradesh and Bihar,' said a senior party leader and functionary, speaking on condition of anonymity. In the annual budget Bihar was allocated projects worth ₹60,000 crore while Andhra is expected to get a similar amount for key projects such as Polavaram and the new capital in Amaravati. The allies in turn have supported contentious moves such as the Waqf amendment law and the bid to synchronise general elections with state polls, popularly called One Nation, One Election. Meanwhile, the BJP has done enough in subsequent elections to indicate that 2024 may have just been a blip. For instance, it bucked anti-incumbency to win assembly elections in Haryana and then, won a landslide victory in Maharashtra with its allies (the NCP and the Shiv Sena, although the BJP won the most seats and had the best strike rate). 'This was because people realised the benefits of allowing continuity of governance. The party also focused on strategising to win elections by invigorating the cadre at the booth level and calling out the opposition's narrative that sought to portray the BJP as anti-reservation,' said the leader quoted above. The party's ability to navigate choppy waters without creating controversy and taking politically expedient decisions was also noteworthy. 'No government removes its own chief minister... President's Rule was imposed in Manipur when it became clear that the situation on the ground demanded such a step. A state president was also removed to placate an ally,' the leader said. In March, the BJP replaced K Annamalai as the state unit president of Tamil Nadu, to pave the way for the return of the AIADMK into the NDA fold. Acrimony between Annamalai, a former IPS officer and the AIADMK, one of the BJP's earliest allies, was the main reason for the regional party's exit from the coalition in 2023. In February, following Biren Singh's resignation as CM, President's Rule was imposed in Manipur, where ethnic violence between the Meitei community and Kuki-Zo tribes in 2023 resulted in over 250 deaths and displacement. Continuity in policy making Social schemes such as subsidised housing, food and healthcare that became the pivot of the NDA's politics and policy since 2014 remained the focal point in the year that went by. In the first cabinet meeting on June 10, a plan to build 30 million houses for the rural and urban poor under the Pradhan Mantri Awas Yojana was sanctioned and ₹20,000 crore was set aside for disbursal to about 93 million farmers. The message was clear: allies or not, the BJP would continue to focus on welfarism. The BJP continued to flaunt its social welfare credentials and commitment to ensuring that the benefits of government schemes reach the 'last man in the queue', a concept called 'Antyodaya', preached by party's ideological father Deen Dayal Upadhyaya. The party deftly used Antyodaya to justify the government's decision to conduct caste enumeration along with the decadal census. In May, the cabinet committee on political affairs gave its consent to caste census, a key demand of the opposition and the BJP's own allies, the JDU and the Lok Jan Shakti Party. While the opposition hurried to claim credit for the announcement that came ahead of the Bihar polls later this year; the government claimed the count will help plan better for the marginalised. Addressing the CMs of NDA ruled states on May 25, PM Modi said it will be an exercise that is a step towards bringing the marginalised into the mainstream. Issues of ideological commitment were not sidestepped either. The opposition's strong resistance notwithstanding, the government was successful in getting Parliament's nod for the passage of the Waqf (Amendment) Bill. The BJP claimed the amendment was an example of balancing ideology with reform. 'The amendment freed Waqf properties from being run as fiefdoms. It sought to ensure the welfare of women and the poor, but it was painted by the opposition and those with vested interests as an anti-Muslim decision,' said the leader quoted above. The matter is now being examined by the Supreme Court. Multiple party leaders and said the government's focus on manufacturing and indigenisation, in addition to the thrust on infrastructure, has been a game-changer that has helped the BJP expand its foothold and consolidate its gains. 'There was a time when a mere reference to nuclear energy elicited sharp other countries including France want to work together with us on developing small modular nuclear reactors. Our prowess in defence production is being acknowledged, take BrahMos (missile), there are countries in South Asia that are now looking at India to buy...' said a second functionary in the government. After doing business with the Philippines, India is now negotiating a deal with Vietnam for the sale of the BrahMos supersonic cruise missile. 'The thrust to become AtmaNirbhar (self-reliant) has been a major shift in policy making. We are an attractive investment destination, we are a lucrative market, and we are also manufacturers and producers...,' the second functionary said. Sahasrabuddhe said in addition to transformative initiatives in Indian Railways, defense production, and other sectors, the new criminal laws with more indigenous content (Bharatiya Nyaya Sanhita 2023, Bharatiya Nagarik Suraksha Sanhita 2023, and Bharatiya Sakshya Adhiniyam 2023 that replaced British-era laws) have been seamlessly brought into force, and new trade deals have been signed, all of which have accelerated the India growth story. And it is for this reason the party wins popular vote, he said, adding that it is time to retire the impression that the BJP is solely election winning machine; its focus is actually on governance, he added. 'First, people have immense confidence in the PM. Secondly, development and welfare schemes are rolled-out with the commitment to ensure saturation. Under PM Modi, this government has mastered the art of implementation. Thirdly, the party is engaging with the people in a more substantive manner,' he said. Diplomacy and trade After PM Modi in his address to the nation asserted that 'terror and talks cannot go together' and indicated that there will be no rethink on putting the Indus Water Treaty in abeyance, the party and the government proclaimed that it was time to accept the new normal. Seven delegations of 50 lawmakers and former ministers from across the political spectrum and former diplomats were sent to 33 countries to shine the spotlight on the necessity and need for India's new counter-terrorism doctrine. 'Diplomacy is no longer left to just diplomats. The PM on his visits abroad, often tells the diaspora to leverage the soft power of diplomacy and become India's decision to send opposition lawmakers was a masterstroke to show how democracy is thriving in India. And we are getting a positive response from countries about Operation Sindoor,' said the second functionary quoted above. The functionary said efforts to revisit the IWT that lays down the water sharing contours between India and Pakistan have been made for decades owing to changes in the climate as well as demography, but it is for the first time that India leveraged its position to use the treaty along with the military strikes to signal its 'seriousness about national security'. Former Ambassador Ashok Sajjanhar said sending the delegations has conveyed to the world India's zero tolerance to terror policy. Referring to the April 22 terror attack that killed 26 civilians, as one that was traumatic for the country, he said the response of operation Sindoor from the 7 to the 10th of May was a remarkable success. '…Both on the 7th morning when Indian missiles were able to demolish and annihilate nine of the terrorist hideouts and strongholds both in the heart of Pakistan, as well as in PoK and then on the 10th morning, when Indian weaponry was able to attack 13 airfields of Pakistan and make them completely unserviceable. So, while on the 22nd, it was a very traumatic experience for the country, the manner in which the defence forces acquitted themselves so creditably that gave so much satisfaction to people.' He also credited PM Modi's two visits to the United States, his visit to France and Russia as measures that helped build bilateral ties. 'PM Modi's two visits to the United States, one last year in the term of President Joe Biden for attending the Quad Summit and the second in February this year within a month of President Trump taking over advanced the cause of India-US partnership and helped to strengthen the relationship in the area of trade, defence, geopolitical convergences,'he said. Modi' two visits to Russia and one to Ukraine, sent out the message that India acted as a bridge between the east and the west. The 'hiccups' that India faced in diplomacy, Sajjanhar said, 'was the unreliability and uncertainty' introduced by President Donald Trump in India-US relations. 'We will have to give a rethink on the relationship as we go forward. Of course, the United States will continue to be the most consequential and the most significant partner for India as far as defence, trade, technology, and geopolitics is concerned, but the level of trust between the two countries has been shaken,' he said. His reference comes in the wake of Trump's effort to take credit for the cessation of hostilities between India and Pakistan, and the hard bargain his administration has been attempting to drive on the trade front. On the trade and economic front, the government claims credit for policies that have catapulted India to the position of fourth largest economy in the world (which it will achieve at the end of the current fiscal). On May 24, BVR Subrahmanyam the CEO, of the federal think tank, NITI Aayog said, 'India is at a turning point.... it is at a take off stage... where it can grow very fast like many other countries in the world.' India's GDP is estimated to grow by 6.5% in FY 2024-25, (which is lower than the 9.2% in FY 2023-24) but the government is upbeat over several factors, including retail inflation being at 4.6% in 2024-25, which is lower than 5.4% in 2023-24. But while India remains the fastest growing economy in the world, geopolitical disruptions (such as the conflicts in Gaza and Ukraine) and the uncertainty in the global economy engendered by Trump's retaliatory tariffs pose challenges. The government is likely to be concerned about these, but a year after returning to power after the most competitive national elections since 2009, the BJP will take heart from its political and ideological successes over the past 12 months.
Hindustan Times
15 minutes ago
- Hindustan Times
Charting a disciplined path to sustain growth, manage fisc
Prime Minister Narendra Modi started his third term on June 10, 2024 by signing the release of ₹20,000 crore to 93 million farmers under PM Kisan Nidhi Yojana. The budget for 2024-25, presented the following month, announced an internship programme at 500 top firms for at least 10 million youth. And the latest budget, presented on February 1, 2025 gave significant income-tax relief to the middle class by effectively ensuring that people earning up to ₹12.75 lakh were outside the tax net. The fiscal deficit for 2024-25 came in at 4.8% (revised estimate), against a budgeted estimate of 4.9% -- indicating that none of these measures bust the bank. The budgeted fiscal deficit for this financial year is 4.4%. In effect, in its third term, the Narendra Modi government continued its emphasis on welfarism and growth, and on four key target groups -- farmers, women, young people, and the middle class. It also expanded its focus on trade, kept up its discipline on the fiscal deficit, and sought to stitch together a string of foreign investment deals. First, growth. The NDA began its 12th year in power with India continuing to be the fastest growing large economy in the world for the fifth year in a row. India is also set to be the fourth largest economy in the world by the end of the current financial year. India's GDP grew 7.4% in the fourth quarter of 2024-25, leading to 6.5% growth in FY25 despite severe global headwinds, including uncertainties in global trade because of the US' reciprocal tariffs. The growth in the January-March quarter was on account of all engines – manufacturing, services and agriculture, finance minister Nirmala Sitharaman said last week. 'India is sustaining this growth as the fastest growing economy now for the fourth year continuously without a break, thanks to the work of our small, medium and large industries, which are coming in and making sure our manufacturing capacity, our service capacity, are all intact. And agriculture has also sustained us,' she said. Next, trade, which was the unofficial theme of the year. India's economic growth momentum, its large middle-class consumer base, and its emergence as a reliable alternative to China in global supply chains were key reasons for all major economies flocking to forge bilateral free trade alliances. On the back of two FTAs – one with the United Arab Emirates (UAE) and the other with Australia in 2022 -- the Modi government finalised two major deals in its third term. The first was the India-European Free Trade Association (EFTA) free trade agreement. Iceland, Liechtenstein, Norway and Switzerland are the four members of EFTA. The deal – the Trade and Economic Partnership Agreement (TEPA) – is significant because it is expected to help India bridge a huge gap in the balance of trade, which is in favour of the European nations. During 2023, India's trade deficit with the EFTA states was more than $18.57 billion. The other significant, and unique, feature of the FTA in favour of New Delhi is the European block's commitment for direct investments of $100 billion in India in the next 15 years. The India-UK free trade agreement announced on May 6 this year is the second. The India-UK FTA, which is currently undergoing legal scrubbing and expected to be enforced in a year, is expected to double bilateral trade to over $120 billion by 2030. The other advantage of the deal is its impact on the India-European Union free trade negotiations. A bilateral trade agreement with a dominant European country and the world's sixth largest economy has accelerated India-EU negotiations, and another FTA is expected to be announced soon. And on February 13, India became the first country to announce that it was negotiating a Bilateral Trade Agreement (BTA) with the US after Donald Trump took over the presidency for the second time. Modi and Trump on February 13 agreed to forge a BTA to double bilateral trade between the two countries to $500 billion under the Mission 2030. This commitment came before Trump's April 2 announcement imposing 10% baseline tariff on all partners and different reciprocal tariffs on about five-dozen countries, including India. US commerce secretary Howard Lutnick earlier this week outlined the contours of a potential trade deal seeking 'reasonable' access to the Indian market and a reduction of the trade deficit. 'India has put the right person on the other side of the table. We have managed, I think, to be in a very, very good place. You should expect a deal between the United States and India in the not-too-distant future because we've found a place that really works for both countries,' Lutnick said at an event hosted by the US-India Strategic Partnership Forum. Third, investment. India incentivised foreign investors to participate in India's growing prosperity by liberalising the foreign direct investment (FDI) regime. The budget on February 1 announced the government's decision to raise the FDI limit in the insurance sector from 74% to 100% with the condition that the enhanced limit would be available to those foreign firms that invest the entire premium in India. Gross FDI, as per data from the RBI, increased from $71.3 billion in 2023-24 to $81 billion in 2024-25. Despite global headwinds and geopolitical turmoil, India achieved record goods and services exports of $825 billion in 2024-25. Similarly, gross Goods and Services Tax (GST) revenues in April touched ₹2.37 lakh crore with 12.6% annualised growth, the highest ever monthly collection since launch of the indirect tax regime in July 2017, reflecting resilience of the domestic economy backed by robust contributions of almost all states. The Budget 2025-26 spelled out exports as one of the four growth engines for the Indian economy with agriculture as the first engine followed by micro, small and medium enterprises (MSMEs) and investments. In her budget speech on February 1, Sitharaman said that the four engines would propel India's journey of development, fuelled 'reforms' with 'our guiding spirit' of 'inclusivity' and the destination is 'Viksit Bharat'. India's exports, as seen in GDP data, grew at 6.3% in 2024-25 compared to 2.2% in 2023-24. The focus on trade is crucial for the growth of the Indian economy as steady performance in both goods and services exports, besides remittance inflows have served as an important buffer for the country's current account. 'The Indian rupee strengthened in April 2025 and remains one of the best-performing major currencies against the US dollar. With this stability and a stronger external position, India's foreign exchange reserves remain adequate, providing an import cover of approximately eleven months,' the latest issue of the finance ministry's monthly review, released on May 27, said. And finally, the fisc. The government has signalled that its consolidation approach will continue while keeping a focus on capital spending. In the Budget, it was clear that the government had tried to balance the demands of managing the fisc alongside boosting growth and not getting into a self-defeating consolidation exercise. This was important given that the 2024-25 nominal GDP growth ended up almost a percentage point — 9.7% instead of 10.5% — lower than what the July 2024 budget assumed.
Mint
17 minutes ago
- Mint
Trump, Xi Speak by Phone as Trade, Technology Dispute Roils Ties
US President Donald Trump and Chinese President Xi Jinping spoke Thursday, according to Chinese state media, amid trade tensions that have roiled relations between the world's two largest economies. The phone call between the leaders marked their first known formal contact since Trump took office. The last known conversation between Trump and Xi took place in January before the US president's inauguration. The White House did not immediately respond to a request for comment. US equity futures jumped to a session high after the call was reported by Xinhua. Relations between the two rivals have soured in recent weeks, with both sides accusing the other of violating a trade truce that brought down tariffs from massive highs. With the fresh conflict threatening the fragile detente, market analysts were hopeful the conversation would pave the way to a trade off-ramp. Rare earths have emerged in recent days as a key flashpoint. The US has accused China of reneging on a promise to relax export controls on such metals needed for cutting-edge electronics. Beijing has been frustrated by fresh US restrictions on the sale of chip design software and plans to start revoking visas for Chinese students. Trump has long said direct talks with Xi were the only way to resolve differences between the nations, but the Chinese leader had thus far been reluctant to get on the phone with his American counterpart — preferring that advisers negotiate key issues. Relations between the two rivals have soured in recent weeks, with both sides accusing the other of violating a trade truce that brought down tariffs from massive highs. With the fresh conflict threatening the fragile detente, market analysts were hopeful the conversation would pave the way to a trade off-ramp. Trump has long said direct talks with Xi were the only way to resolve differences between the nations, but the Chinese leader has been reluctant to get on the phone with his American counterpart — preferring that advisers negotiate key issues. Export controls and US actions on student visas and technology curbs will likely be central to future negotiations. US and Chinese trade chiefs only agreed in Geneva last month to lower tariffs for 90 days, as they worked toward a broader deal. History suggests that any final deal could be a long time coming. In 2018 during Trump's first term as president, the two sides agreed to put their dispute 'on hold' after a round of negotiations, but the US soon backed away from that deal, leading to more than 18 months of further tariffs and talks before the signing of the 'Phase One' deal in January 2020. One goal for China this time around will be seeking relief from US export controls on cutting-edge chips vital for AI and military advancement. That's likely to be a sticking point in Washington, with both Democrats and Republicans in rare agreement that Beijing poses a national security threat. Beyond strains in economic ties, geopolitical frictions are also growing. Foreign Ministry officials this month protested US Defense Secretary Pete Hegseth's assertion at a gathering of military chiefs in Singapore that China poses an imminent threat to Taiwan, a self-ruled island claimed by Beijing. With assistance from Josh Xiao, Alan Wong, Colum Murphy and Akayla Gardner. This article was generated from an automated news agency feed without modifications to text.
