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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.

The Arakan Army: India’s Strategic Ally?

Arakan Army

As Bangladesh grapples with economic challenges and rising radicalism, a new crisis along its Myanmar border is contributing to the chaos. The Arakan Army, a formidable ethnic insurgent group from Myanmar, had recently mounted a significant incursion into Bangladesh’s southern regions, allegedly capturing areas along the border. While the development has alarmed Dhaka, it raises questions about whether this is a fortuitous development or a carefully calculated strategy by India to manage instability in its eastern neighbourhood.


Bangladesh’s internal situation has been deteriorating rapidly ever since the toppling of Sheikh Hasina’s government, which was well-disposed towards India. Economic woes, violent atrocities against minorities, and the radical hostility of Islamist groups — particularly those allegedly aligned with Jamaat-e-Islami and Al-Qaeda — have created a toxic mix. The situation is exacerbated by the leadership of Muhammad Yunus, whose policies are viewed as fostering Islamist sentiments. This environment not only destabilizes Bangladesh but poses a direct threat to India, especially in its border states.


Enter the Arakan Army, an insurgent group that has been steadily gaining ground in Myanmar’s Rakhine State. With its control over vast stretches of the Myanmar-Bangladesh border, the Arakan Army’s rise could serve India’s strategic interests in neutralizing the threats emanating from an increasingly unstable Bangladesh. Reports suggest the Arakan Army has declared its opposition to jihadist groups operating in the region, accusing them of atrocities against Buddhists and Hindus and collusion with international terror networks.


This aligns well with India’s broader security concerns. By supporting or tacitly enabling the Arakan Army’s operations, India could achieve multiple objectives, namely curtailing Islamist extremism.


The Arakan Army’s campaign could weaken the influence of radical groups such as the Rohingya Solidarity Army and Arakan Rohingya Salvation Army, which are reportedly using Bangladeshi soil as a base for operations against India. By bolstering the Arakan Army’s control over the Myanmar-Bangladesh border, India could create a buffer zone that reduces the spillover of jihadist violence into its territory.


A destabilized Bangladesh under Yunus’s leadership makes it harder for India to maintain regional stability. The Arakan Army’s presence could give India leverage to counterbalance any anti-India policies emanating from Dhaka.


Speculation is rife about whether India’s National Security Advisor, Ajit Doval, known for his unconventional strategies, is behind this development. India has long maintained strategic ties with various ethnic armed groups in Myanmar, including the Arakan Army. Given the current geopolitical scenario, it would not be surprising if India were providing covert support—logistical or intelligence—to the Arakan Army as part of a larger game plan to safeguard its eastern flank.


Doval’s focus has often been on pre-emptively neutralizing threats rather than reacting to them. Supporting the Arakan Army fits this modus operandi. It allows India to weaken Islamist networks without direct intervention, keeping its hands ostensibly clean while achieving strategic goals.


The Rakhine region, where the Arakan Army has established dominance, holds immense strategic importance. It not only serves as a corridor for China’s Belt and Road Initiative but also impacts India’s connectivity projects like the Kaladan Multi-Modal Transit Transport Project. A weakened Myanmar military and a strengthened Arakan Army could give India greater access and influence in the region, countering Chinese designs.


If Ajit Doval’s fingerprints are indeed on this development, it could go down as one of his most effective manoeuvres — a masterstroke in securing India’s eastern frontier while subtly reshaping the geopolitical balance in South Asia.

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