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Chief Minister Kejriwal has been conducting official work while protesting on the streets [EPA]

Delhi chief minister Arvind Kejriwal, who slept the night out on the streets while on an unprecedented 10-day protest against the state police, has appealed to the people to take “off from work and join him.”

He said his “unconventional politics” would usher in a new era in Indian politics.

Kejriwal together with his Aam Admi Party (AAP) ministers and followers have been on a protest since Monday, bringing chaos to areas around the Indian Parliament and key political areas of the national capital New Delhi.

He and his supporters are seeking the suspension of several polilce officers for “dereliction” of duty. Kejriwal, the newly elected chief minister of Delhi, also wants the police to report to the Delhi government, instead of the federal Home Ministry.

On Tuesday he rejected federal Home Minister Sushil Kumar Shinde’s suggestion to shift the venue, “Who’s Shinde to ask us to move?”

Senior police officials and the government want Kejriwal and team to shift their protest to another venue for the annual Republic Day (26 January) parade. “True republic is when people are protected and safe”, retorted Kejriwal to reporters.

Kejriwal told CNN IBN news channel, “How can the home minister sleep when the country’s women can’t? How can the home minister not be bothered about the sad state of police in the country?”

He rejected Shinde’s suggestion that an inquiry report will confirm the charge against the police officers and adequate action will be taken.

Governance critiqued

Metro stations to key government offices and zones around the protest area will be shut to halt people from joining in on Tuesday.

Kejriwal’s activism led to the cancellation of many government appointments. He was shown on TV signing official papers, trying to conduct his office on the streets.

Both Congress party and opposition leaders accused Kejriwal of “gimmickry”, “activism over governance” and disrupting life for common people through mass protests.

India-US row escalates over diplomat’s arrest – News – Al Jazeera English

December 17, 2013 7:24 pm / Leave a comment

India-US row escalates over diplomat’s arrest – News – Al Jazeera English.

Devyani Khobragade was arrested and handcuffed over an alleged visa fraud [Facebook]

The simmering tension between New Delhi and Washington over the arrest of an Indian diplomat in New York has escalated into a major row with the boycott of a visiting US Congressional delegation by India’s political leaders.India has also asked all US diplomats stationed in India to turn in their identity cards. Police barricades outside the US embassy in New Delhi have been removed and access for US diplomatic staff to airports curtailed. More retaliatory measures are expected, reports said.

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On Tuesday, Congress vice-president Rahul Gandhi and federal home minister Sushilkumar Shinde refused to meet the visiting delegation in protest against the “despicable and barbaric” treatment meted to the arrested diplomat Devyani Khobragade in New York.

The five-member delegation to New Delhi, facing a general boycott, is led by Congressman George Holding, representative for North Carolina’s 13th congressional district, who serves on the foreign affairs committee and judiciary committee. The four other Congressmen are Pete Olson, David Schweikert, Robert Woodall and Madeliene Bordallo.

News of Khobragade being lodged in a prison cell in the company of drug addicts and being subject to a strip search have angered India’s mandarins and political bosses. The diplomat was also subject to a DNA swab.

The spat between the United States and India strikes a discordant note at a time when relationship between the two countries is otherwise on a high, especially in the last one decade which has seen unprecedented cooperation in various areas of civilian and defence sectors.

Reacting to the Khobragade’s incarceration, India’s national security adviser Shiv Shankar Menon described the treatment as “despicable and barbaric.”

Media reports quoting Indian government sources said New Delhi is considering “reciprocal steps” later on Tuesday so as to “convey a clear message that this treatment of the diplomat is unacceptable.”

On Monday, speaker of the lower house (Lok Sabha) of India’s parliament Meira Kumar declined to meet the visiting US congressional delegation.

Handcuffed in public

The Indian diplomat, aged 39, was arrested on Thursday as she was dropping her daughter to school. She was handcuffed in public and later freed on bail worth $250,000.

US police accuse Khobragade of lying in her visa application for the purposes of recruiting an Indian national who was employed as housekeeper at her home and was paid less than $ 4 an hour, which is lower than US minimum wages.

Her father Uttam Khobragade, a former IAS officer, was quoted by the NDTV news channel as saying, “My daughter is brave, but I’m worried. There’s more than what meets the eye.”

After her arrest, India’s foreign secretary Sujatha Singh summoned the US envoy in New Delhi, Nancy Powell, and protested over the “unacceptable treatment” meted out to Khobragade, a senior consular officer.

The US has defended its actions saying its Marshals followed standard procedures. Countering India’s stand that the arrest flouted the Vienna convention governing diplomatic immunity, the US said diplomats enjoyed immunity from their courts only in the exercise of their consular functions.

“We understand that this is a sensitive issue for many in India,” said Marie Harf, State Department deputy spokeswoman. “Accordingly, we are looking into the intake procedures surrounding this arrest to ensure that all appropriate procedures were followed and every opportunity for courtesy was extended.”

India has said even if a diplomat is arrested for a purported serious crime, all courtesies must be extended to the diplomat and not be treated like a common criminal.

India struggles to handle onion crisis – Central & South Asia – Al Jazeera English

October 26, 2013 8:37 pm / Leave a comment

India struggles to handle onion crisis – Central & South Asia – Al Jazeera English. (source/link)

India has become so desperate for fresh stocks of the onions it uses in spicy curries that it is trying to import them from neighbours, and is even considering airlifts to ease soaring prices.

Indians go through 15m tonnes of onions a year, using them as the base for traditional dishes such as biryani and bhaji. The country is the second-largest onion grower in the world, after China, and normally exports them.

But retail prices have quadrupled in the past three months, to as high as 100 rupees ($1.62) per kliogram, making the onions an unaffordable luxury for India’s poor.

The soaring prices could become an issue in elections scheduled for next month in five states, including the capital, New Delhi.

To ease prices, the state-run farm cooperative issued a tender this week to purchase onions from abroad.

Supplies from abroad may take weeks to arrive, however; Farm Minister Sharad Pawar proposed on Wednesday importing them by air, because sea transport takes longer.

“The state-run agencies are floating import tenders, but supplies are likely to come only after 3-4 weeks,” said Changdev Holkar, a director at the National Agricultural Cooperative Marketing Federation. “And quantity would be also miniscule compared to demand.”

‘Cheating consumers’

A new crop of onions should be harvested in two or three weeks, but heavy rains are expected in the coming days in several onion-growing states, which could have a disastrous effect on the crops.

The government blames the crisis on both bad weather and speculation by middlemen. KV Thomas, the Indian food minister, accused traders on Saturday of “cheating consumers,” urging them to sell onions at “affordable rates.”

His ruling Congress party fears a backlash from its main support base. “The sky-high prices of onions have given the opposition a potent weapon to attack the government with,” commented the Hindustan Timesnewspaper recently.

Costly onions have a history of political fallout, with the Hindu nationalist Bharatiya Janata Party (BJP) being ousted in 1998 Delhi state polls after surging onion prices soured the voter mood.

In January 1980, the late Congress leader Indira Gandhi rode back to power on the back of rising onion prices, waving huge strings of them at campaign rallies and saying that a government has no right to govern if it cannot control onion costs.

The latest onion price rise has also come in the middle of India’s most important religious festival season, an occasion for multi-day feasts and family dinners.

India looks to China, Iran for onions to cool political heat (theiranproject.com)
Onion prices: Dikshit to meet Pawar, Thomas on Thursday (thehindu.com)
Slipping on onion prices (thehindu.com)
Onions threaten future of Delhi state govt (worldbulletin.net)
India and the Onion (sandyyadav.com)
Onion prices: Sheila Dikshit to meet Sharad Pawar, KV Thomas today (ndtv.com)

US-Iran Talks: India’s Current Account Deficit Hanging in the Balance – Geopolitical Monitor

October 25, 2013 7:46 am / Leave a comment

US-Iran Talks: India’s Current Account Deficit Hanging in the Balance – Geopolitical Monitor. (source)

The global community has witnessed two important events unfold in the Middle East over the past month. One was the temporary defusing of the Syrian crisis and the other was the announcement of a new round of US-led nuclear talks with Iran.

A positive outcome of these nuclear talks would augur well for the immediate region and the wider international community, and if early indications of Iran’s willingness to sign onto the additional protocols of the Non-Proliferation Treaty (NPT) are to be believed, then a positive outcome might just be in the cards. Fruitful negotiations would also allow for the removal of longstanding sanctions, which would let Iranian crude flow once more to the country’s predominantly Asian customers.

Iran exported 700,000 barrels per day (bpd) after the latest round of sanctions were imposed in February 2013, a level that pales in comparison to the pre-sanction figure of 2.2 million bpd in 2012. According to the Energy Information Administration (EIA), Iran’s earnings from crude oil sales have dropped to USD 69 billion, down considerably from its 2011 earnings of USD 95 billion. Iran’s four major customers are China, India, Japan and South Korea. Exports to these countries dropped by 16% in 2013 between January and August compared to the same period in 2012.

However, out of the above countries, India’s stakes are particularly high, primarily because of its payment arrangement with regard to Iranian oil sales. This has made New Delhi very interested in the outcome of US-Iranian talks.

India had been paying 55% of its crude oil imports from Iran in euros via the Turkey-based Halkbank, and the remaining 45% with an Indian rupee account that the National Iranian Oil Company (NIOC) holds with the UCO bank in Kolkotta. However, the euro payment mechanism was discontinued as US-imposed sanctions came into effect this February. Hence, payment into the Indian rupee account of the NIOC continued for the full 100% of the oil trade, favoring India. At present, around USD 5 billion worth of Indian rupees is parked in the UCO bank account of the NIOC, which could be used to boost exports to Iran, as repatriation is prohibited under current US sanctions.

However, the US government recently granted a 180-day exemption for certain countries, including India, from these sanctions on the condition that they reduce their dependency on Iranian oil. The other countries are China, Malaysia, the Republic of Korea, Singapore, South Africa, Sri Lanka, Turkey, and Taiwan. India’s dependence on Iranian crude has gone down considerably since 2011-2012. India imported 18.11 million tonnes from Iran in 2011-12 compared to 13.14 million tonnes in 2012-13. Up until 2010-11, Iran had been India’s second-largest supplier after Saudi Arabia, but it has now been dethroned and relegated to sixth place.

The depreciation of the rupee against the US dollar by 20% since May 2013 has added to India’s woes, pushing its current account deficit (CAD) to USD 21.8 billion, or 4.9% of its GDP in the first quarter.

Factoring in its worsening CAD, the Indian government has embarked on a rupee-centric approach. This envisages bringing down the CAD by cutting down on dollar-denominated oil imports, which is the largest component in India’s import portfolio along with gold. This ran parallel to the government’s decision to rely more on rupee-based crude oil imports from countries like Iran, which is the only country that has offered partial rupee denominated oil trade. At this juncture, it is imperative to state that the reason for Iran offering this concession to India could be to encourage Indian buying in the face of dwindling global exports due to US sanctions. This agreement was a marriage of convenience: Iran needed to sell crude and India needed to buy it without aggravating its CAD any further.

Hypothetically speaking, if India were to maintain the status quo of 13 million tonnes of crude oil imports from Iran this fiscal as in 2012-2013, it would manage to save approximately USD 8.5 billion in the existing 100% rupee payment mechanism. This would give an enormous impetus to reducing the CAD. Factoring this into account, India approached Iran to continue this 100% rupee-denominated deal. However, the proposal has been turned down by Iran under the newly elected President Hassan Rouhani, who seeks to revert to the original 45-55% ratio.

The other option would be to considerably increase the volume of oil imports from Iran. This would reduce India’s imports from other countries denominated in US dollars. However, it would also attract punitive measures against India under the current sanctioning regime, which has sought to restrict the global trade of Iranian oil.

Hence, India is faced with a precarious situation.

The current US-Iran negotiations should be viewed from the above perspective, taking into account the implications for India’s CAD. The general consensus is that talks would result in the US and EU lifting sanctions on Iran. However, there is a different school of thought that regards these talks with skepticism. Hence, there could be at least three possible scenarios playing out in the coming weeks.

Scenario 1: US lifts sanctions, Iran reverses rupee deal

The lifting of US sanctions would free up markets for Iranian oil and allow President Hassan Rouhani some maneuvering space with which to harden his stance vis-à-vis oil exports to India. Any hardening could result in a withdrawal from the partial rupee payment scheme. This would not augur well for India as all of its oil trade would be denominated in US dollars. This in turn could result in large foreign currency outflows and depreciate the rupee further, bloating the CAD along with it.

Scenario 2: US lifts sanctions, Iran maintains rupee deal

Another possible scenario is that Iran could maintain the same 45-55% ratio as a gesture of goodwill towards India for its support throughout the crisis. Free of sanctions, India would benefit immensely by increasing its crude oil imports from Iran to pre-2011 levels of 21 million tonnes, along with a proportionate decrease of dollar-denominated imports from other countries. This would effectively bring down the oil pool deficit and with it the CAD. However, the new regime under President Hassan Rouhani may not be keen on maintaining the same level as it would not be in Iran’s best interest to trade in rupees after sanctions are lifted.

Scenario 3: Status-quo sanction regime is maintained

Lack of progress in the US-Iran talks could also be a possibility. This would put India in a situation where it needed to engage with Iran to find a way out of its CAD dilemma. Iran could relent to a certain extent in the face of continuing sanctions, moving the threshold levels of rupee payment higher, if not to the full 100%. This could also be beneficial to India as it would bring down its oil import bill considerably while simultaneously increasing the exports to Iran which would be paid out of the sale proceeds in Indian rupees held with banks in India.

However, considering the huge stakes involved, the US and EU are much likely to lift the sanctions in a phased manner which would be linked to the progress made in de-weaponizing Iran’s nuclear program- a process that could take years. Past experience and conventional wisdom dictate that a partial lifting of sanctions would be the most likely option at this current juncture, which could result in removing the curbs on import volumes. This would definitely favor India, which could increase its import levels from Iran while maintaining the same 45-55% ratio since Iran would be hesitant to withdraw incentives too quickly.

India, facing any one of the abovementioned scenarios, still must fine-tune its existing crude oil portfolio. It should be exploring the possibilities of similar rupee-denominated trades with other countries. To this end, it is thought that India is already in talks with Iraq to arrange a mechanism where the sale proceeds of oil could be used to boost exports to Iraq.

Either way, the failure or success of talks with Iran could have a huge impact on India’s current account deficit and by extension, its economic fortunes as well.