India

The Economic Times | English | News | Dec. 12, 2024 | Geopolitical Conflict and Disputes

China is gearing up for a potential trade war with the U.S., implementing new tools to counteract U.S. tariffs following recent AI chip restrictions by the Biden administration. President Xi Jinping has initiated an investigation into Nvidia and imposed bans on the export of select rare materials with military uses, along with limiting sales of key drone components to the U.S. and Europe. These strategies aim to challenge the U.S. while cautiously managing bilateral relations and minimizing economic fallout for China.

To create leverage against the U.S., the Chinese government is using investigations and export controls as pressure tactics without triggering severe retaliation. Analysts view these measures as symbolically important but not significantly impactful on the economies of either country. Meanwhile, China's Politburo signals a shift towards aggressive monetary policies to tackle economic issues like deflation and a slow-moving housing crisis.

Despite preparations for conflict, there are voices in China advocating for a more balanced response. Former central bank Governor Yi Gang has warned about the economic risks of retaliatory actions, highlighting a divergence in strategies. Over the past four years, China has developed a variety of retaliatory tools, yet its recent actions have been cautious, aiming to avoid major economic consequences while still signaling opposition.

China might adopt counter-tariffs on imports in response to future U.S. tariffs, particularly in overlapping sectors. The urgency for companies to transport goods to the U.S. increases as the January 20 presidential inauguration approaches. Concurrently, China's response may involve more anti-dumping measures, while U.S. industrial subsidies under Biden present new avenues for Beijing's retaliation in high-tech industries. As tensions rise, China appears poised to assert its strengths in critical technology supply chains amid escalating geopolitical competition.

Hindustan Times | English | News | Dec. 12, 2024 | UndeterminedInflation

Shaktikanta Das, the outgoing governor of the Reserve Bank of India (RBI), stressed the need to balance inflation and growth during his tenure. He played a key role in guiding India's economy through crises, including the pandemic and global inflation. Das, a former bureaucrat who became RBI governor in December 2018, was succeeded by revenue secretary Sanjay Malhotra on December 9, surprising markets that expected an extension for him.

Das focused on improving the strained relationship between the government and the RBI, successfully harmonizing interactions between the finance ministry and the central bank. He emphasized controlling inflation by maintaining a steady repo rate after significant hikes from May 2022 to February 2023. In his final months, officials like commerce minister Piyush Goyal and finance minister Nirmala Sitharaman advocated for lower interest rates to bolster growth.

Characterized as risk-averse by some economists, Das prioritized monetary policy aligned with economic conditions. His leadership followed Urjit Patel's resignation and included efforts to stabilize financial markets post-pandemic. Notably, he managed responsibilities remotely while recovering from COVID-19 in late 2020. Malhotra's appointment arrives amid slowing GDP growth and rising inflation, posing immediate challenges tied to the balancing act of inflation and growth.

Livemint | English | News | Dec. 11, 2024 | UndeterminedTrade Issues and Numbers

India and Australia recently reviewed their Comprehensive Economic Cooperation Agreement (CECA) over three days, focusing on trade in goods and services, mobility, and agricultural technology. Both nations reaffirmed their commitment to ensuring the CECA yields significant benefits and a balanced outcome, with discussions emphasizing market access aligned with India's food security objectives.

The Australian delegation's visit followed successful negotiations in Sydney in August 2024, facilitating productive dialogue on trade, supply chains, and agriculture. A collective assessment highlighted progress and laid out a roadmap for the timely completion of the CECA.

Chief negotiators Rajesh Agrawal from India and Ravi Kewalram from Australia led the talks, expressing optimism for the CECA and the broader economic partnership. Future collaboration is expected in agricultural innovation, market access, and supply chain resilience, building on the 2022 Economic Cooperation and Trade Agreement.

Trade between the two countries is thriving, with India becoming Australia's fifth-largest trading partner. In the 2023-24 fiscal year, India's imports from Australia reached $16.2 billion, while exports were around $8 billion, marking an increase from the previous fiscal year's $19 billion in imports and nearly $7 billion in exports.