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Mint
5 days ago
- Business
- Mint
India-US standoff over Russian oil: Let's not waver but resolve it
Next Story Mint Editorial Board US President Trump's tirade over India's crude imports from Russia must not shake New Delhi's principled stance on trade. Yet, oil could plausibly be used as a lubricant for an India-US deal to achieve bigger objectives. It is not to fund any war that India imports essential commodities, but to manage its economy well in a volatile world. Gift this article As trade talks between India and the US enter their final lap, testy grumbles from the White House—aimed ostensibly at influencing the final shape of an agreement—could end up creating schisms in the relationship between the world's two largest democracies. US President Donald Trump's recent denunciation of India's trade framework, expressed mostly on social media in rapid bursts, is well within his usual range of bluster, but cannot be shrugged off. Not one to rest on his outbursts, Trump followed that up with another threat to raise levies 'substantially" for buying Russian oil and a statement on TV saying, 'India has not been a good trading partner." As former US deputy assistant secretary of state Evan A. Feigenbaum has cautioned, Trump's statements risk taking apart painstakingly forged bilateral ties. On its part, India has called the US posture 'unjustified and unreasonable." Amid this standoff, it seems clear that Trump wants us to import hydrocarbons from the US, with such a commitment baked into the deal that's being worked out. With US access to our agri and dairy markets already sticking points, it is unfortunate that a heavily traded commodity like oil has been thrown so noisily into the mix. Economic issues should not be allowed to slip down a geopolitical slope so easily. Also read: Trump tariffs: Is the world watching globalization fall apart? So far, India has held its nerve and stood its ground admirably. While Trump might have his own book of negotiation tactics that include brazen attempts at bullying, New Delhi's stance on securing the nation's economic interests would not waver if a counter-proposal is made that sweetens it for the White House. Oil is a multi-billion-dollar chip of high optical value that could be placed on the table. It was only after Russia's invasion of Ukraine that New Delhi reached out to Moscow for oil; as the ministry of foreign affairs has stated, this was because West Asian oil was diverted to Europe; and as the Ukraine war made oil imports costly, cheaper Russian shipments helped us keep our trade balance in check. The global oil market is still in flux. With the Opec+ cartel easing supplies even as overall demand looks wobbly, expectations of a glut have softened global prices. Layer this with the fact that China, Russia's other big oil customer, is seeking to diversify some of its energy purchases away from the US to Brazil, and it is easy to understand Trump's apparent obsession with tankers that dock in India, whose imports have reportedly averaged 5.2 million barrels per day this year and are set to swell further. It is true that oil shipments from the US are an expensive option, given the distance and freight cost. An agreement to buy limited oil quantities from America may work out reasonable for us if such a pact is accompanied by relief on freight (with low optical value) and it helps us keep agri and dairy products off the deal's table. It is not to fund any war that India imports essential commodities, but to manage its economy well in a volatile world. We must maximize our space to make decisions accordingly. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Mint
6 days ago
- Business
- Mint
PAN 2.0 tax platform: Digital diligence please
Next Story Mint Editorial Board LMIMindtree won the contract for this taxpayer identity system's digital upgrade. Let's hope lessons were learnt from the rushed GST rollout. PAN 2.0 should be pre-tested well. Various portals for PAN-related services are to be unified, with an emphasis on making them user-friendly and easing digital processes. Gift this article Software company LTIMindtree has reportedly won the Income Tax Department's contract for its PAN 2.0 project, which aims to upgrade India's Permanent Account Number (PAN) system for taxpayer identification. Software company LTIMindtree has reportedly won the Income Tax Department's contract for its PAN 2.0 project, which aims to upgrade India's Permanent Account Number (PAN) system for taxpayer identification. From the design and development of PAN 2.0 as a platform to its operation and upkeep, the Mumbai-based firm will serve tax authorities as a 'managed service provider." Also read: Profiteering worries cast cloud over GST cuts Various portals for PAN-related services are to be unified, with an emphasis on making them user-friendly and easing digital processes, but without asking PAN card holders to get fresh ones issued. While taxpayers can look forward to this platform's rollout, scheduled within 18 months, it's vital to minimize any scope for user dissonance that may arise from a rushed job. Speedy reforms are welcome, but not at the cost of digital diligence. At one time, the hope was that Aadhaar would subsume PAN. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Mint
7 days ago
- Business
- Mint
Modi's swadeshi call: A pragmatic approach
Mint Editorial Board The PM asking citizens to favour Indian made products is consistent with his emphasis on Atmanirbhar Bharat. This is a practical approach that needn't be taken as a throwback to the days of India's closed economy. Prime Minister Narendra Modi's public advice on self-reliance should not lead policymakers to shut out foreign goods or overlook avenues of globalization that remain open. Gift this article Prime Minister Narendra Modi has urged citizens to buy locally made products. 'The world economy is facing instability and uncertainty. In such times, countries are focusing solely on their own interests," he said on Saturday, adding that India too 'must remain alert to its own economic priorities." Prime Minister Narendra Modi has urged citizens to buy locally made products. 'The world economy is facing instability and uncertainty. In such times, countries are focusing solely on their own interests," he said on Saturday, adding that India too 'must remain alert to its own economic priorities." Also Read: Survival in times of predatory trade: Is Asia on to something? Though he didn't name US President Donald Trump or his harsh tariff policy, the trigger for this exhortation is unmistakably American. Trump's warped view of fair trade is forcing countries to look inward. This is bad for global trade overall, but a reality we must contend with. That said, while Modi's public advice is in line with his 2020 emphasis on self-reliance under the banner of Atmanirbhar Bharat, it should not lead policymakers to shut out foreign goods or overlook avenues of globalization that remain open. Also Read: Mint Quick Edit | Indian trade is holding up but is that enough? Efforts to promote local manufacturing are consistent with an insistence on industries facing competition that incentivizes them to raise their game and aim for the global league. Being Indian can spell a preference for self-made products without a return to harmful aspects of our pre-1991 closed economy if we leave it to consumer choice. Topics You May Be Interested In
Mint
01-08-2025
- Business
- Mint
Power sector: Get set for the charge of India's battery brigade
Next Story Mint Editorial Board With their global prices softening, storage batteries have the potential to disrupt the country's power market, hasten utility reforms, attract entrepreneurs and empower electricity consumers. This has implications for power utilities too. Battery installations should help power utilities improve their green report card and meet their commitment to clean energy. Gift this article Electricity regulators in Maharashtra and Gujarat recently approved battery projects to be set up by their respective state-owned utilities, marking the adoption of power storage facilities by two large Indian states. Delhi had operationalized one unit a few months ago. These are designed to soak up excess electricity from solar-panel farms for its supply to consumers when the sun doesn't shine. Electricity regulators in Maharashtra and Gujarat recently approved battery projects to be set up by their respective state-owned utilities, marking the adoption of power storage facilities by two large Indian states. Delhi had operationalized one unit a few months ago. These are designed to soak up excess electricity from solar-panel farms for its supply to consumers when the sun doesn't shine. With battery prices having dropped globally by 30% over the past year and the Centre aiding its adoption by providing funds to plug viability gaps, these states have been quick to seize what's arguably the fastest way to gain clean supply stability in the face of solar interruptions caused by cloud cover and sunsets. As we go along, battery installations should help power utilities improve their green report card and meet their commitment to clean energy. However, batteries only store electricity. They do not generate it. As of now, they typically act as stop-gaps for just an hour or two, with their charge rarely lasting beyond the evening's peak demand, let alone overnight. So, even though India's capacity for renewable energy (RE) has been ramped up, its supply remains hostage to the weather, which impacts not just output, but also the ability to charge batteries. To best populate various states with these units, utilities need to study both consumer demand and weather patterns as they get reshaped by climate change. This year, for example, India's peak summer demand was lower than last year's, thanks to less intense heat spells and the early onset of monsoon rainfall. Such an approach will improve the ability of batteries to bridge supply gaps during phases of RE intermittency. This role goes beyond supporting clean energy. They can also plug gaps caused by failures of supply infrastructure, like transformers, assuring us overall reliability. As adoption rises, batteries could help transform an Indian market riddled with tariff distortions. To subsidize households and farms, state-run utilities make commercial users pay more. The grip of these utilities has been loosened by bulk consumers setting up their own solar farms. But they have still had to rely on utilities in fallow RE periods. Cheaper and better batteries will allow them to explore set-ups that reduce their dependence on utilities in terms of volume and load, both of which reflect in their electricity bills. Evolving battery technology brightens such prospects. Non-lithium chemistry, like the use of sodium ions, holds out the promise of lower cost combined with superior safety and reliability. Should battery-linked RE facilities mushroom, it may push utilities to reform—not only their tariffs, but also their operations. This could lead to consumers paying for power at rates that reflect costs more closely, which would relieve over-tariffed businesses in need of lower bills to be competitive. A key measure in this context would be tariffs levied to reflect the real cost of power as it varies around the clock. For these prices to influence demand, users need to know when high or low rates apply. Alas, only around 10% of India's billing meters are digitized, so very few users can look at their billing and shift some usage—say, to charge vehicles or operate a washing machine—to low-rate hours. If the penetration of smart-meters deepens, dynamic pricing could nudge us all to optimize our electricity use. And friendlier pricing may help utilities retain large customers amid a surge in captive supply led by the charge of our battery brigade. Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Mint
31-07-2025
- Business
- Mint
The IMF's ‘World Economic Outlook' is too coy for a Trump-shaken world
Mint Editorial Board The July update of this International Monetary Fund (IMF) report only has hints to offer on a global trade response to the US president's tariff turmoil. India stares at a 25%-plus US levy, but most countries are in the same boat—and could paddle in unison to save the WTO. By openly shunning rules, the US has signalled that might is right, with 'might' measured by what one can get away with. Gift this article At the best of times, the World Economic Outlook (WEO) published by the International Monetary Fund (IMF) does not pose any risk to human vision with blinding new insights. Ditto for its three quarterly updates. But these are not the best of times. On Wednesday, US President Donald Trump used his very own microblog platform Truth Social to declare that 'while India is our friend," imports from here would have to pay a tariff of 25%, plus a penalty for assorted US grievances, from 1 August. At the best of times, the World Economic Outlook (WEO) published by the International Monetary Fund (IMF) does not pose any risk to human vision with blinding new insights. Ditto for its three quarterly updates. But these are not the best of times. On Wednesday, US President Donald Trump used his very own microblog platform Truth Social to declare that 'while India is our friend," imports from here would have to pay a tariff of 25%, plus a penalty for assorted US grievances, from 1 August. Other countries have had to contend with such posts too. As the world's economies toss and turn amid choppy seas of trade uncertainty, policy watchers look to global bodies like the IMF for clues on how to reach calmer waters. Also Read: IMF outlook: The good, the bad and the unsaid The latest WEO update, issued on Tuesday, offers little navigational help. It makes some minor tweaks, generally upward, to its growth estimates released in April. Should we be happy that the world economy is expected to grow 3% in 2025, instead of the 2.8% estimated in April, and at 3.1% instead of 3% in 2026? Certainly, even if these are lower than the rates a post-pandemic world was hoping for and could have achieved had it not been for trade turmoil. The WEO puts the Indian economy's growth prospects at 6.4% for both 2025-26 and 2026-27, 0.2 and 0.1 percentage points higher than its April figures. While this is good news, it's only so in the prevailing context. Also Read: Dani Rodrik: How ideology sometimes trumps material interests As the WEO's April estimates were based on Trump acting out his 'Liberation Day' tariff threats, they assumed sharp hikes by the US and retaliatory barriers erected by its trade partners, with a harsh impact on inflation and growth both in America and elsewhere. Trump's actual import levies have shown some moderation since then. He has announced several trade deals, although the cumulative effect of his policy seems poised to raise tariffs from an average of 2.5% pre-Trump to nearly 18% once his deal-making is done and dusted. But these rates are not the only concern. Trumpian tariffs have turfed out the most-favoured-nation principle, the idea that a tariff levied on imports from one member of the World Trade Organization (WTO) must not be higher than the levy on shipments from another member, except as part of a free trade agreement. Also, the WTO's dispute settlement mechanism has no place in the new order dictated by the White House. By openly shunning rules, the US has signalled that might is right, with 'might' measured by what one can get away with. How should the rest of us adjust to the WTO's abandonment by the world's largest economy and issuer of the currency in which foreign trade is usually invoiced? The WEO update is largely silent. Also Read: India should use Trump's playbook on Trump for a fair trade deal Not that the report has nothing to say on what can be done. It advises structural reforms in areas like labour markets, education, regulation and competition, as well as steps to foster tech advances and the adoption of AI. It does not spell out motherhood and apple pie, but these are invisible appendages to the list. To be fair, the WEO does venture beyond the anodyne to suggest plurilateral or regional solutions, but without any elaboration. Perhaps the rest of the world could forge a pact to abide by WTO norms without the US. It won't please Trump. But we're at the raw end of his bargain anyway. For this, why blame a lack of lodestars in the IMF sky? The fault, as we know, is not in the stars, but in ourselves. Topics You May Be Interested In
