The Hindu Editorial Analysis : 17th July 2024

The Hindu Editorial Analysis

We understand the significance of reading The Hindu newspaper for enhancing reading skills, improving comprehension of passages, staying informed about current events, enhancing essay writing, and more, especially for banking aspirants who need to focus on editorials for vocabulary building. This article will delve into today’s editorial points along with practice questions and key vocabulary.

“India and Russia have doubled their rupee-rouble payments in 2024.”

According to figures provided by Russia’s state-controlled Sberbank, the number of transactions has also risen. Despite Western sanctions, businessmen are encouraging Indian manufacturers to focus on Moscow to counter China’s advances.

• India and Russia have doubled their payments in national currencies (rupee-rouble) since last year, despite sanctions imposed by the U.S. and European Union, according to Russia’s largest state-controlled bank, Sberbank. Sberbank handles the majority of payments for Indian exports to Russia. Additionally, rupee deposits from Indian companies have risen significantly in 2024.
• According to figures shared by Sberbank, the volume of payments processed in January-June 2024 doubled compared to the same period in 2023. Furthermore, the number of transactions by Sberbank increased by 80% in the first half of 2024.
• Sberbank has maintained branches in India since 2010, although sanctions were imposed by the U.S. immediately after Russia’s invasion of Ukraine in February 2022, followed by the European Union in July 2022.
• Economists and Indian businessmen working in Russia anticipate that the surge may increase further following Prime Minister Narendra Modi’s visit to Moscow last week. They warn that without the Indian rupee, Chinese businesses and the yuan will continue to benefit from the “vacuum” left by the exit of Western companies.
• “We are observing an increasing trust in the rupee among our clients. Rupee-denominated current accounts are now a reality, and businesses are expressing significant interest in rupee deposits. A Sberbank spokesperson told The Hindu that the volume of corporate deposits in rupees has surged sixfold since the start of the year.”
• The spokesperson added that the rupee is now “easily convertible” in Russia, and Sberbank hopes to serve as a “Sherpa” for more businesses, aiming to achieve the $100 billion trade target by 2030 set by Prime Minister Modi and Russian President Vladimir Putin during talks.
• Lydia Kulik, Head of India Studies at the SKOLKOVO Institute for Emerging Market Studies at Moscow School of Management, emphasized the significance of Prime Minister Modi’s visit to Moscow, stating it marked the first visit at a time when economic cooperation between the two countries has reached a qualitatively new level.
• Kulik highlighted secure payment mechanisms, insurance, and logistics as critical focus areas. She also suggested that Indian companies should consider exporting to Russia in sectors such as auto and aviation components, chemicals, microelectronics, consumer electronics, machinery, medical devices, and agricultural products.
• A growing number of Indian businessmen in Russia assert that the government must act swiftly, as China has capitalized on the sanctions to occupy the market space left by Western brands. China now enjoys a bilateral trade volume of $240 billion, which is more evenly balanced. Indian companies are reportedly being forced to consider payments in Chinese yuan, they say.
• Sukrit Sharan, a St. Petersburg-based board member of a joint venture between the International Institute for Advanced Aerospace Technologies (IIAAT) and Indian firm Millennium Aerodynamics, stated, “I believe sanctions have created new opportunities, and China has benefited significantly more than India. While the Indian government has been very supportive of trade with Russia, we haven’t achieved the same scale as China.” He urged Indian businesses to enter the market and fill the gaps in the Russian market with Indian products.

Vikram Misri has assumed the role of India’s 35th Foreign Secretary.

• Vikram Misri, a 1989-batch officer of the Indian Foreign Service, officially took charge as the 35th Foreign Secretary on Monday.
• Misri, who previously served as Deputy National Security Adviser, was in China during the 2020 Galwan conflict and is recognized for his extensive connections in conflict-ridden Myanmar, where he was India’s Ambassador from 2016 to 2018. He succeeds Vinay Mohan Kwatra in this role.
• Born in 1964, the diplomat has held various positions in Indian missions across locations including Brussels, Tunis, Islamabad, Washington DC, Munich, and Colombo, where he was Deputy High Commissioner. He also served as India’s envoy to Spain in 2014.
• Given the current situation, Misri is expected to offer policy guidance to the Government of India regarding the dynamics arising from the Israel-Palestine crisis, the ongoing war in Ukraine, and the forthcoming U.S. election.

Two stealth frigates under construction in Russia are set to be delivered soon

• Following a series of delays, two stealth frigates being built in Russia for the Indian Navy are scheduled for delivery starting in September. The construction and delivery were postponed due to COVID-19, the war in Ukraine, and Western sanctions.
• “The first ship, Tushil, is prepared for acceptance by the Indian Navy and could be delivered by September. The commissioning crew arrived in Russia earlier this month,” a defense official stated. “The second ship, Tamal, could be delivered by February 2025.”
• In October 2016, India and Russia signed an intergovernmental agreement for four stealth frigates, with two to be directly imported and two to be manufactured by Goa Shipyard Ltd. (GSL).
• A $1-billion deal was later signed for the direct purchase of the two frigates. In November 2018, Goa Shipyard Ltd. (GSL) signed a $500-million deal with Russia’s Rosoboronexport for materials, design, and specialist assistance to locally manufacture the other two frigates. The agreement between the Indian Defence Ministry and GSL came into force in January 2019. All the ships are equipped with engines from Ukraine’s Zorya-Mashproekt.
• According to the schedule, GSL is expected to deliver the first ship in 2026 and the second one six months later. “Construction at GSL is progressing, and the launch of the first ship will take place in the next couple of months,” a defense source said. The basic structures of the two frigates in Russia were at the Yantar shipyard and are now being completed. The Indian Navy already operates six of these frigates, each weighing around 4,000 tonnes.

Important questions

1. How have recent developments in India-Russia trade, particularly in rupee-rouble payments, been influenced by Western sanctions?
2. What specific sectors did Lydia Kulik identify as potential opportunities for Indian companies looking to export to Russia?
3. What previous roles did Vikram Misri hold before becoming India’s 35th Foreign Secretary, and what key experiences does he bring to this position?
4. What factors have contributed to the delays in the construction and delivery of the stealth frigates for the Indian Navy?
5. What are the specific roles and agreements of Goa Shipyard Ltd. (GSL) and Rosoboronexport in the construction of the stealth frigates for the Indian Navy?

Important vocabulary

1. Rupee-rouble payments: Transactions conducted in the Indian rupee and Russian rouble, emphasizing bilateral trade in national currencies.
2. Sanctions: Restrictions imposed by countries, such as the U.S. and European Union, to influence or penalize another nation’s actions.
3. Bilateral trade: Trade conducted between two countries, highlighting economic exchanges and agreements.
4. Vacuum: A gap or absence in the market created by the exit of companies, often filled by competitors like Chinese businesses.
5. Ambassador: A high-ranking official who represents their country in another nation, often responsible for diplomatic relations.
6. Policy guidance: Recommendations or directives provided to inform and shape government actions and decisions on specific issues.
7. Stealth frigates: Naval warships designed to be less detectable by radar, enhancing their operational effectiveness.
8. Intergovernmental agreement: A formal arrangement between two or more governments to cooperate on specific issues or projects.
9. Commissioning crew: The team responsible for overseeing the commissioning and acceptance of a naval ship.
10. Specialist assistance: Expert support provided for specific tasks or areas, such as design and manufacturing.

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