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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.

Yemen’s Houthis: The New Player in Iran’s ‘Axis of Resistance’

Updated: Oct 22, 2024

Iran’s ‘Axis of Resistance’

As Israel was rallying from the shock attack by the Palestinian militant group Hamas on October 7 last year and fending off guided rockets hurled by the Lebanese Shia terror group Hezbollah on October 8, a third player – Yemen’s Houthi rebels backed by Iran – entered the arena against the Jewish state.

The Houthi group, officially known as Ansar Allah, kicked-off the so-called ‘Red Sea crisis’ on October 19, 2023 when it launched missiles and armed drones at Israel, demanding an end to the invasion of the Gaza Strip.

Israel has few, if any, direct links to Yemen. The two nations share no borders, and prior to the Houthis’ rise, Yemen was a distant concern for Israeli policymakers.

So, what made the Houthi rebels declare war on Israel?

As Middle Eastern expert on the Houthi movement, Allison Minor, noted in a January 2024 Brookings Institution interview, the Houthis are aiming to reinforce a foundational aspect of their ideology, which includes a vehement call for “death to America and Israel” while looking to project themselves as a significant regional power.

Yemenis today are facing unprecedented oppression and a deteriorating economy, and the Houthis are framing their actions against Isarel as a defense against foreign aggression.

After initial attempts to strike Israel directly fell short, the Houthis turned their focus to maritime attacks. They quickly expanded their targets from Israeli ships to include vessels headed to Israel, those with minimal Israeli connections, and even those entirely unrelated to the country.

This strategy serves a dual purpose: it not only generates headlines that elevate their profile but also allows the Houthis to assert their strength and expand their capabilities in an increasingly complex regional landscape.


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When and how did this outfit emerge to destabilize Yemen?

The Houthis emerged from the rugged highlands of northern Yemen in the early 1990s, originally as a small, local Zaydi Shia revivalist group. Named after their founder, Hussein Badreddin al-Houthi, they initially sought to resist Saudi Arabia’s growing influence in Yemen, which was spreading Wahhabi-Salafi ideology into the traditionally moderate Zaydi region. At its core, the movement was driven by socio-religious grievances and regional marginalisation, rather than aspirations for broader geopolitical ambitions.

However, as the group became embroiled in Yemen’s internecine conflicts, it began adopting a more stridently anti-Western and anti-Israel posture, aligning itself ideologically with Iran and Hezbollah.

Twenty years ago, the Yemeni government led by former President Ali Abdullah Saleh launched military campaigns against the Houthis to counter their rising popularity. Instead of being quelled, the Houthis emerged as a resilient fighting force during this tumultuous period.

After widespread protests led to Saleh’s ousting in 2011, the Houthis adeptly adapted, participating in the protests and the subsequent transition. In a surprising twist in 2015, Saleh sought to reclaim power by aligning with the Houthis, but this alliance proved disastrous when they killed him in 2017.

Leveraging Saleh’s extensive resources and network, the Houthis swiftly expanded their control across northern Yemen. They captured the capital, Sanaa, in September 2014, overthrowing the transitional government in the process.

Despite a Saudi-led coalition’s intervention in 2015, which drove the Houthis out of southern Yemen, the group has maintained significant control over northern territories. With Iranian military backing, the Houthis have enhanced their aerial warfare capabilities and consolidated their oppressive regime over the region.

While often viewed as Iranian proxies, the Houthis operate more as partners, asserting their independence in crucial moments when their interests diverge from Tehran's. Their relationship with Iran intensified after the Houthis began posing a threat to Saudi Arabia. Although the Islamic Revolutionary Guard Corps has gained influence in Yemen, it does not dictate Houthi actions, as the group’s resistance to foreign intervention drives their desire for self-sufficiency.

Rooted in a unique interpretation of Zaydi Shiite Islam, the Houthis diverge from traditional Iranian beliefs. While they have begun adopting some practices common to Twelver Islam, such as the observance of Ashura, many Zaydi tenets are more akin to Sunni beliefs, particularly those of Yemen’s Shafi’i school. Nonetheless, they reportedly benefit from the expertise of Iranian proxies, including Hezbollah, and have even sought to fundraise for the group, indicating a growing relationship between the Houthis and these external actors.

Houthi officials have stated that their attacks on shipping in the Red Sea and Gulf of Aden are a direct response to Israel's military campaign in Gaza. Their motivations for engaging in this conflict are multifaceted.

As anthropologist Marieke Brandt explains in her exemplary study ‘Tribes and Politics in Yemen: A History of the Houthi Conflict’ (2017), the civil war in Yemen during the 1960s significantly altered the Saʿdah region, diminishing the power of the former elite, the sādah, while enhancing that of tribal shaykhs. This shift restructured tribal dynamics, paving the way for new influential actors in the Houthi conflict. Empowered by republican patronage, the emerging tribal elite became vulnerable to co-optation, allowing the Yemeni republic to advance its agenda with minimal state-building. Consequently, this incomplete governance, coupled with economic patronage, fostered imbalances and alienated ordinary tribespeople from their wealthy leaders.

Saudi Arabia’s border politics further complicated Saʿdah's tribal and economic landscape, rooted in historical patronage following the 1934 Saudi-Yemeni War. Recent efforts to strengthen borders have strained local tribal loyalty, intensifying tensions with the Houthis.

In recent decades, Yemen’s radicalization reflects a failure of the ‘Traditionist Project,’ aimed at reconciling Sunni and Zaydi-Shia differences. The rise of radical Sunnism provoked Zaydi resistance, driven by cleric Ḥusayn Badr al-Dīn al-Ḥūthī, who galvanized support for the marginalized Zaydi community. This context elucidates the Houthi movement’s dynamics, which led to the expulsion of many shaykhs and a transformation in tribal leadership post-2011.

For Iran, supporting the Houthis against Israel serves multiple purposes. It allows Tehran to open another front against Israel in its broader regional power struggle without direct involvement. Much like Hezbollah in Lebanon and various militias in Syria, the Houthis provide Iran with an asymmetrical tool to pressure Israel and its allies. This also fits within Iran’s strategy of using its proxies to challenge American and Saudi influence across the region.

Ever since the Houthis threatened the Red Sea, a decisive response in form of targeted strikes in Yemen was mounted in February this year by the United States and the United Kingdom, along with allies including Australia, Bahrain, Canada, Denmark, the Netherlands, and New Zealand.

The military actions across Houthi-controlled territories had targeted the rebels’ underground weapons storage facilities and missile storage sites among other capabilities. Yet, it failed to deter them.

Just last week, the Houthis conducted drone strikes in Israel’s Tel Aviv in support of Hamas and Hezbollah’s tussle against the Jewish State.

While the Houthi attacks may be sporadic and largely symbolic, their ability to target Israel underscores the how what was once a localized Yemeni insurgency has metastasized into formidable player in the Middle Eastern arena, intricately linked by ideology, arms, and strategy to the broader Iranian-led axis.

(Tomorrow, we look at why the Arab nations have not really warmed up to the fate of the Palestinians being scorched by the fury of Israel’s onslaught on Gaza, and the complex history of the PLO and the Arab states)

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