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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.

Putin’s Nuclear Gambit in a New Age of Brinkmanship

Updated: Oct 21, 2024

utin’s Nuclear Gambit in a New Age of Brinkmanship

In American filmmaker Sidney Lumet’s 1964 classic ‘Fail-Safe,’ a technical malfunction sends American bombers hurtling towards Moscow, triggering a countdown to nuclear war. As the clock ticks down, both the United States and the Soviet Union are trapped in a desperate struggle to avoid mutual annihilation. The film captures the chilling fear of miscalculation and the terrifying consequences of nuclear brinkmanship - a reality that seems far from fiction once more. This week, Russian President Vladimir Putin issued a stark warning to the West: if Russia were struck with conventional missiles by Ukraine, it could respond with nuclear weapons.

Furthermore, Moscow would consider any assault on it, backed by a nuclear power, as a joint attack - a signal that the risk of escalation has returned to center stage in global affairs. Putin’s warning followed after Ukrainian President Volodymyr Zelensky’s recent impassioned appeal for military support at the United Nations, following which the Russian President unveiled a ‘draft’ nuclear doctrine. Putin and his aides have been indicating a potential shift in Russia’s nuclear doctrine for some time now, the doctrine being the document which governs the deployment of its extensive nuclear arsenal - said to be the largest in the world.

Since the onset of Russia’s full-scale invasion of Ukraine in February 2022, Putin and his inner circle have consistently invoked the specter of nuclear deterrence.

The Kremlin has urged the West to take Vladimir Putin’s latest nuclear threat seriously. In response, U.S. President Joe Biden, while confirming the provision of additional long-range munitions to Ukraine - including the Joint Standoff Weapon (JSOW) – but reiterated the restrictions on using these weapons against Russian targets. During a meeting with Ukrainian President Volodymyr Zelenskyy at the White House, Biden reiterated the U.S. commitment to supporting Ukraine against Russian aggression.

The question is if Putin’s latest gambit is a calculated bluff, like so many of the threats during the Cold War. History offers stark reminders of how easily these games of chicken can spiral out of control. The Cuban Missile Crisis remains the archetypal example of a nuclear standoff. In October 1962, the United States discovered Soviet missiles in Cuba, sparking a tense 13-day confrontation during which the world came terrifyingly close to a nuclear apocalypse.

During the standoff, a Soviet submarine, surrounded by American ships, had nearly launched a nuclear torpedo, only to be stopped by a last-minute intervention from one of its officers

In his definitive account of the Cuban Missile Crisis ‘Abyss’, distinguished historian Max Hastings sharply criticizes Nikita Khrushchev’s decision to send nuclear missiles to Cuba, despite the Soviet leader’s memoirs justifying it as a response to U.S. missiles near Soviet borders. Initially, most American leaders, including US President John F. Kennedy, had backed military strikes, risking nuclear war. However, Hastings credits Kennedy’s restraint -choosing a naval blockade and warning Khrushchev, who withdrew the missiles - as an act of rare statesmanship. He argues that many successors would have chosen war, making Kennedy’s decision pivotal in averting disaster.

But this would not be the last time the world faced such peril. In 1983, NATO’s military exercise ‘Able Archer’ nearly triggered a Soviet pre-emptive nuclear strike.

The war games simulated the escalation of conflict into nuclear warfare, but the Soviet Union, interpreting the drill as a cover for an actual attack, put its forces on high alert. It was the intervention of Oleg Gordievsky, a KGB defector working with British intelligence, that alerted the West to Soviet paranoia, thus preventing a possible Armageddon.

In another instance of the perilous fallout of Cold War brinkmanship, in March 1986, the Soviet nuclear submarine K-219 sank in the Atlantic following a missile tube explosion, raising fears of sensitive nuclear material falling into enemy hands. The U.S. Navy deployed ships to monitor the situation, heightening tensions as both sides grappled with the incident’s implications. While direct confrontation was avoided, the incident starkly underscored the risk of accidental escalation.

Putin’s rhetoric, like Khrushchev’s during the Cuban Missile Crisis, may well be aimed at rattling Western nerves. But the stakes are different now.

The prospect of nuclear escalation is also compounded by the erosion of communication channels between Moscow and the West, given the steady deterioration of relations since the past decade. During the Cold War, hotlines between Washington and Moscow had often played a critical role in defusing crises.

Today, however, the collapse of arms control agreements and the deterioration of diplomatic relations have left the West and Russia without many of the safeguards that once existed. The New START treaty, the last remaining nuclear arms control pact between the U.S. and Russia, is now on shaky ground. Without these structures in place, the risk of miscalculation rises significantly.

Putin’s current posturing bears uncomfortable similarities to these Cold War episodes. His nuclear posturing, like the fictional bombers of ‘Fail-Safe,’ puts the world on a terrifying countdown. Whether the West can steer clear of the same disastrous miscalculations that nearly brought the world to the brink in 1962 and 1983 will depend on cool heads and a renewed commitment to diplomacy in both the US and the European Union. As history has shown time and again, the line between threat and catastrophe is perilously thin.

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