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Correspondent

23 August 2024 at 4:29:04 pm

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local....

Festive Surge

India’s bazaars have glittered this Diwali with the unmistakable glow of consumer confidence. The country’s festive sales crossed a staggering Rs. 6 lakh crore with goods alone accounting for Rs. 5.4 lakh crore and services contributing Rs. 65,000 crore. More remarkable still, the bulk of this spending flowed through India’s traditional markets rather than e-commerce platforms. After years of economic caution and digital dominance, Indians are once again shopping in person and buying local. This reversal owes much to policy. The recent rationalisation of the Goods and Services Tax (GST) which trimmed rates across categories from garments to home furnishings, has given consumption a timely push. Finance Minister Nirmala Sitharaman’s September rate cuts, combined with income tax relief and easing interest rates, have strengthened household budgets just as inflation softened. The middle class, long squeezed between rising costs and stagnant wages, has found reason to spend again. Retailers report that shoppers filled their bags with everything from lab-grown diamonds and casual wear to consumer durables and décor, blurring the line between necessity and indulgence. The effect has been broad-based. According to Crisil Ratings, 40 organised apparel retailers, who together generate roughly a third of the sector’s revenue, could see growth of 13–14 percent this financial year, aided by a 200-basis-point bump from GST cuts alone. Small traders too have flourished. The Confederation of All India Traders (CAIT) estimates that 85 percent of total festive trade came from non-corporate and traditional markets, a robust comeback for brick-and-mortar retail that had been under siege from online rivals. This surge signals a subtle but significant cultural shift. The “Vocal for Local” and “Swadeshi Diwali” campaigns struck a patriotic chord, with consumers reportedly preferring Indian-made products to imported ones. Demand for Chinese goods fell sharply, while sales of Indian-manufactured products rose by a quarter over last year. For the first time in years, “buying Indian” has become both an act of economic participation and of national pride. The sectoral spread of this boom underlines its breadth. Groceries and fast-moving consumer goods accounted for 12 percent of the total, gold and jewellery 10 percent, and electronics 8 percent. Even traditionally modest categories like home furnishings, décor and confectionery recorded double-digit growth. In the smaller towns that anchor India’s consumption story, traders say stable prices and improved affordability kept registers ringing late into the festive weekend. Yet, much of this buoyancy rests on a fragile equilibrium. Inflation remains contained, and interest rates have been eased, but both could tighten again. Sustaining this spurt will require continued fiscal prudence and regulatory clarity, especially as digital commerce continues to expand its reach. Yet for now, the signs are auspicious. After years of subdued demand and inflationary unease, India’s shoppers appear to have rediscovered their appetite for consumption and their faith in domestic enterprise. The result is not only a record-breaking Diwali, but a reaffirmation of the local marketplace as the heartbeat of India’s economy.

Keir Starmer’s Chagos Folly

Trapped between hollow justice and cold realpolitik, the Chagossians are the expendable casualties nobody bothers to count.

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The seven tiny atolls of the Chagos Archipelago in the middle of the Indian Ocean have always been far from the minds of most Britons. Yet, the British island of Diego Garcia, the largest of the atolls, hosts one of the most important American military bases in the world. From there, the United States projected power during the Cold War, launched bombers in the Gulf wars, and continues to monitor jihadis in Africa and the Middle East – as well as the ever-growing influence of China in the region. It has been, and remains, a linchpin in Western security architecture. And yet, curiously, the British Government last week signed a treaty (yet to be ratified in Parliament) ceding sovereignty of the Chagos Islands, which have belonged to the UK since 1814, to Mauritius. It has leased back the island of Diego Garcia for the princely sum of £101 million a year for the next 99 years. The turn of events has left many in the UK (and no doubt in Washington) scratching their heads.


Mauritius has never owned the Chagos Archipelago. Until 1814, the French had chosen to administer both the Chagos Islands and Mauritius (territories about 2000 km apart) as a single colonial entity, a practice the UK continued until 1965 when Mauritius and the Chagos Islands were formally separated, the Chagos Islands to become the British Indian Ocean Territory and Mauritius to become fully independent in 1968. This was part of a deliberate geostrategic decision by the UK and the US, both needing Diego Garcia to be a base secure from any geopolitical instability. But this policy also led to a historic injustice: the forcible relocation of some 1,500 Chagossian islanders, some to the UK and the Seychelles, but many to Mauritius where they faced, and continue to face, both poverty and prejudice.


In October 2022, the spectacularly inept Conservative UK prime minister Liz Truss was supposedly cornered in New York by a delegation from Mauritius and surprisingly agreed to negotiations on ceding sovereignty of the Chagos Islands to Mauritius.


Mauritius bases its claim on a UN principle that colonies administered as a single entity should be decolonised as such, and on a 2019 advisory opinion from the International Court of Justice urging Britain to return the Chagos Islands. But international law binds only those who consent to it. Britain did not, thus rendering the opinion non-binding. Moreover, if Britain or America fears Mauritius might act unilaterally on the ICJ ruling, they needn’t. A 2,000km ocean crossing by a military that barely exists is hardly a credible threat to operations on Diego Garcia.


Complicating matters is the authoritarian drift of Mauritius, now eagerly courted by both Russia and China - a development that ought to alarm London and Washington and prompt caution across the political spectrum. In ordinary times, such concerns might stall any treaty. But these are not ordinary times.


The negotiations begun under Truss’ Conservative government, seemingly going nowhere, were taken up with almost mystifying zeal by Keir Starmer’s Labour government. A treaty with Mauritius was deemed of utmost importance. And this was not just because it was thought that ignoring the non-binding advisory judgement of the ICJ might have a dampening effect on the UK’s future efforts to build partnerships and relationships across the Indo-Pacific at a time of Chinese expansionism. There was an entirely new vision in town – a heady mix of both the legal and the moral. For we are now in the era of the human rights lawyer.


Prime Minister Sir Keir Starmer, a former human rights lawyer, and his attorney general, Lord Hermer KC, have made a virtue of putting international law front and centre with civil servants now instructed to think like The Hague. That Starmer is a close friend of Philippe Sands, the author human rights crusader who both advised Mauritius on the Chagos claim and campaigned for Starmer’s election, adds a curious moral gloss. Britain, it seems, is entering a new era of virtue-led foreign policy where legal piety and personal loyalties blur into diplomatic decisions.


The treaty has drawn flak from across Britain’s political spectrum. The left, broadly indifferent to a handful of Indian Ocean islets, sees it as a welcome gesture of atonement for colonial sins. The right, by contrast, is aghast at the idea of ceding sovereign territory - let alone paying £101m a year for the privilege. What is certain is that Moscow, and especially Beijing, are probably laughing their little cotton socks off with the UK doing their diplomatic work for them, maybe even saving them some hefty bribes or some future strong-arm coercion in Mauritius. As for Donald Trump, he may regard the whole affair with indifference. If Britain wants to squander money on a symbolic treaty, that is its prerogative. It is not, after all, American money - or his own. The long-term security interests of Britain or America are unlikely to trouble him much.


As for the Chagossians - the people actually wronged - their voices have once again been callously ignored. Many wish to return home under British rule, rejecting any tie to Mauritius. But international law draws no distinction between Chagossians and Mauritians. Their wishes simply do not count. Keir Starmer and his human rights allies are probably baffled by the Chagossians’ resistance and the widespread criticism. After all, to them, the law is the law - and international law, surely, serves us all.


The Treaty will probably be ratified by the UK parliament, Keir Starmer having plenty of support from his Labour MPs who, like the UK Civil Service, will now suppose they are doing some good in the world, not giving it much more thought than that. Sadly, the sun will not so much be setting on one of the last remnants of the British Empire but on the Chagossians themselves.


(The writer is a novelist and retired investigator with an abiding passion for Chinese history. Views personal.)

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