Pubblicato in: India, Sistemi Economici

India. Consumi elettrici. Aprile -24%, maggio -14.3%.

Giuseppe Sandro Mela.

2020-06-06.

India 013

India. Aprile. Consumi elettrici -24%.

Arun. Centrale idroelettrica condivisa tra India e Nepal.

India. Modi. Una rivoluzione nella politica economica. ‘Self-reliant India’.

India. Tra cinque anni sorpasserà Germania e Regno Unito.

«Overall electricity generation fell 14.3% in May, a Reuters analysis of provisional government data showed, compared with a decline of 24% in April »

«Despite higher consumption by residential consumers, power use was lower as many industries and commercial establishments – which account for over half of India’s annual consumption – were shut or not operating at full capacity»

«Electricity generation from coal …. fell 22%, …. Coal’s contribution to overall electricity generation in May fell to 64.2%, compared with an average of over 70.7% last year»

«Thermal coal imports by India – the second-largest consumer, importer and producer of coal and third-largest greenhouse gas emitter – could fall as much as 18% in 2020 due to lower electricity demand»

* * * * * * *

L’India ha evidenziato l’epidemia da coronavirus alcuni mesi dopo la Cina e l’Europa, motivo per cui i dati macro disponibili sono ancora ragionevoli: il pil annuale è 4.2% (2020-05-29) ma la produzione industriale annualizzata di aprile era già scesa del -16.7%. A maggio le riserve valutarie erano salite a 490 miliardi Usd.

Allo stato attuale dei fatti, verosimilmente i macrodati del secondo trimestre saranno ulteriormente deteriorati.

*


UPDATE 1-India’s electricity generation falls 14.3% in May.

India’s electricity generation in May fell at a slower pace than in April, as higher temperatures lead to greater demand for residential power and the government eased some lockdown restrictions to control the spread of the coronavirus.

Overall electricity generation fell 14.3% in May, a Reuters analysis of provisional government data showed, compared with a decline of 24% in April.

Despite higher consumption by residential consumers, power use was lower as many industries and commercial establishments – which account for over half of India’s annual consumption – were shut or not operating at full capacity.

Electricity generation from coal – India’s primary source of electricity – fell 22%, an analysis of daily load despatch data from POSOCO showed. Coal’s contribution to overall electricity generation in May fell to 64.2%, compared with an average of over 70.7% last year.

India’s electricity demand is likely to fall for the first time in at least four decades this fiscal year, analysts say, adding to the woes of coal-fired utilities, which were already hurting due to a prolonged industrial slowdown.

Thermal coal imports by India – the second-largest consumer, importer and producer of coal and third-largest greenhouse gas emitter – could fall as much as 18% in 2020 due to lower electricity demand, Anurag Sehgal, an analyst at Noble Resources said, a blow to miners in Indonesia and South Africa.

Menwhile, India’s solar power supply grew 12.7% and hydro-powered electricity supply rose 3.6%, while gas-fired power output was 13.8% higher, the data showed. However, wind-powered electricity supply fell 10.8%.

The share of fossil fuels in overall electricity generation in May was 70.71%, compared with 76% the previous year, an analysis of data from POSOCO showed.

Pubblicato in: Banche Centrali, India, Senza categoria

India. Pil Q1 annualizzato 4.2%. Ma il Q2 potrebbe essere negativo.

Giuseppe Sandro Mela.

2020-06-03.

India 013

Pil del primo trimestre, Q1, annualizzato sarebbe 4.2%, riflettendo almeno in parte il ritardo con cui il Covid-19 ha epidemizzato il paese.

«India’s economy slows in March quarter, with worse to come»

«India’s economy grew at its slowest pace in at least eight years in the January-March quarter as the COVID-19 pandemic weakened already sluggish consumer demand and investments»

«Asia’s third-largest economy grew at a faster-than-expected 3.1% in the last quarter, compared with 5.7% a year ago, government data showed on Friday»

«The weakness in manufacturing, construction, trade, hotel, transport, and real estate was clearly visible in the Q4FY20 data»

«The economy had clearly slowed down even before COVID-19 hit India»

«This, in some sense, serves as the warning for the deep slump due in Q1 of FY21. The investment contraction along with an extremely weak private consumption segment will pull Q1 of FY21 into a deep contraction. FY21 real GDP growth will likely be around (-)5.8% though much of the estimation remains in some flux»

«The sharp deterioration of economic performance in FY20 can’t be attributed to 10 days of lockdown in March»

«However, stricter form of lockdown and an uncertainty about its duration will certainly push the country into a deep recession that was not witnessed in several decades»

«While the level of stress during the lockdown period is often high for the lower strata of the economy, with meaningful and targeted policy support, these segments can potentially recover quickly once economic activities normalise and lead the recovery»

«Q4 GDP print came in higher than most economists’ estimates at 3.1%. On the output front, agriculture and mining sectors seem to have held fort»

«Private consumption, gross fixed capital formation and net exports have been disappointing»

* * * * * * *

Il sistema economico indiano aveva già dato segni di rallentamento nel corso dello scorso anno. Se in passato il pil cresceva al ritmo del 6% – 7%, a partire dallo scorso febbraio ha evidenziato una crescita sempre alta, ma decrescente.

Adesso che l’epidemia da Covid-19 inizia a dispiegarsi le attese sono di conseguenza più severe, e nessuno si stupirebbe se il pil del Q2 fosse sostanzialmente negativo.

*


India’s economy slows in March quarter, with worse to come.

India’s economy grew at its slowest pace in at least eight years in the January-March quarter as the COVID-19 pandemic weakened already sluggish consumer demand and investments.

Asia’s third-largest economy grew at a faster-than-expected 3.1% in the last quarter, compared with 5.7% a year ago, government data showed on Friday.

A Reuters poll of economists had forecast a growth rate of 2.1% for the March quarter, compared with a downwardly revised 4.1% rise in the October-December period in 2019.

COMMENTARY

“Real GDP growth of 3.1% was in line with our expectation of 3.4%, especially considering the volatility in the last two weeks of March. The weakness in manufacturing, construction, trade, hotel, transport, and real estate was clearly visible in the Q4FY20 data.

The economy had clearly slowed down even before COVID-19 hit India. The contraction in investment was visible in the pre- COVID-19 period too.

This, in some sense, serves as the warning for the deep slump due in Q1 of FY21. The investment contraction along with an extremely weak private consumption segment will pull Q1 of FY21 into a deep contraction. FY21 real GDP growth will likely be around (-)5.8% though much of the estimation remains in some flux.”

*

“All important activity indicators of the economy — production of coal, crude oil or cement or sales of commercial vehicles or cargo handled at airports or rail freight, etc. — have witnessed a sharp decline in FY20.

The sharp deterioration of economic performance in FY20 can’t be attributed to 10 days of lockdown in March. However, stricter form of lockdown and an uncertainty about its duration will certainly push the country into a deep recession that was not witnessed in several decades.

It will be a formidable challenge for policymakers to tackle both the health and economic challenges simultaneously in FY21.”

*

“The Q4 FY20 GDP growth at 3.1% y/y came in somewhat better than the Street’s expectation, while the broadly-in-line FY20 GDP growth of 4.2% reflects significant downward revisions in previous quarters of the financial year.

Given the prolonged lockdown in the economy and a sudden stoppage in economic activities, Q1 FY21 is set to sink deep into the negative zone. The full-year growth for FY21 is likely to remain materially negative as well, hitting a multi-decade low.

The role of the RBI’s TLTROs and the recently-announced measures by the government will likely hold the key in this context. It is critically important to provide focused support to the lower end of the socio-economic pyramid.

While the level of stress during the lockdown period is often high for the lower strata of the economy, with meaningful and targeted policy support, these segments can potentially recover quickly once economic activities normalise and lead the recovery. We expect continued support in areas such as microfinance, MSMEs, and affordable housing.”

*

“India’s Q4 FY20 GDP growth slowed down to 3.1% yoy, much higher than ours (2.0%) and market expectations (1.6%). This, however, is barely a consolation.

We expect the data for the quarter to be revised down as we get better sense of the actual economic activity going forward by which time more comprehensive data flows in.

Given that the initial sample size for data collection for March for various high-frequency indicators is much lower than the actual sample size, we feel that the pain in the economy, especially that which was undergone by the MSMEs are not truly reflected in the current data.

There is a probability that the impact of the week-long lockdown in March is not necessarily fully priced in, in the GDP data.”

*

“Q4 GDP print came in higher than most economists’ estimates at 3.1%. On the output front, agriculture and mining sectors seem to have held fort. On the expenditure front, government spending seems to have saved the day.

Private consumption, gross fixed capital formation and net exports have been disappointing. There have been material downward revisions in previous quarters’ GDP prints, resulting in GDP growth for FY20 coming in at 4.2%.

April core sector data came in at -38.1%, the worst print ever. Most of the negativity has already been priced in and markets are braced for a shocker of a GDP print in Q1 FY21 as well.

Going forward, markets are more likely to focus on leading and high-frequency indicators to get a sense of the pace of recovery once restrictions on movement are eased. They would be closely tracked alongside the novel coronavirus cases’ curve.”

Pubblicato in: Demografia, Devoluzione socialismo, India

India. Modi. Una rivoluzione nella politica economica. ‘Self-reliant India’.

Giuseppe Sandro Mela.

2020-05-22.

India 013

Il Primo Ministro Modi ha annunciato il varo di una grandiosa quanto ambiziosa riforma dell’India.

Non sono noti i dettagli, ma solo le linee guida generali, le quali potrebbero essere riassunte nel messaggio:

“Self-reliant India”

*

«Prime Minister Narendra Modi said the coronavirus pandemic has presented India with an opportunity to become self-reliant and to emerge as the best across the world»

«Prime Minister Narendra Modi on Tuesday announced stimulus package … The financial package, prime minister announced, will be around 10 per cent of the country’s GDP»

«In India too, people have lost their near and dear ones.I express my heartfelt condolences to all»

«Friends, a virus has destroyed the world. Crores of people around the world are facing a crisis. World all over is engaged in a battle to save precious lives. We have never seen or heard of such a crisis. This crisis is unthinkable as well as unprecedented for mankind»

«it seems that the 21st century is the century for India. This is not our dream, rather a responsibility for all of us.»

«The state of the world today teaches us that a (Atma Nirbhar Bharat) “Self-reliant India” is the only path .It is said in our scriptures – Eshah PanthahThat is – self-sufficient India»

«Today the meaning of the word self-reliance has changed in the global scenario. The debate on Human Centric Globalization versus Economy Centralized Globalization is on»

«We have a proud history of centuries. When India was prosperous, it was called the golden goose, it was prosperous, and then it always walked tall for the welfare of the world. Then the times changed, the country was caught in the chains of slavery, we longed for development.»

«We will make the best products, will improve our quality further, make the supply chain more modern, we can do this and we will definitely do it»

«And today there is a will and there is a way. That is to make India self-reliant. Our combined resolve is so strong that India can become self-sufficient. Friends, this magnificent building of self-reliant India will stand on five Pillars.»

«First Pillar is Economy, an economy that brings Quantum Jump rather than Incremental change»

«Second Pillar is Infrastructure, an infrastructure that became the identity of modern India»

«Third Pillar is Our System»

«Fourth Pillar is Our Demography. Our Vibrant Demography is our strength in the world’s largest democracy, our source of energy for self-reliant India»

«The fifth pillar is Demand. The cycle of demand and supply chain in our economy, is the strength that needs to be harnessed to its full potential.»

«Self-reliance also prepares the country for a tough competition in the global supply chain»

«However, under these circumstances, the country has also seen the resolve and restraint of our poor brothers and sisters, especially the street vendors, hawkers, labourers, those who are working in homes, they have done a lot of penance during this time, they have sacrificed a lot»

«Keeping this in mind, be it poor, labourers, migrant labourers, cattle rearers, be our fishermen, organized sector or unorganized sector»

«Friends, the Corona crisis has also explained to us the importance of Local manufacturing, Local market and Local supply chain. In times of crisis, this Local has fulfilled our demand, this Local has saved us. Local is not just the need, it is our responsibility also.»

«Our responsibility to make the 21st century, the century of India, will be fulfilled by the pledge of self-reliant India»

* * * * * * *

Si rimane francamente stupiti dei cinque ‘pilastri‘, ma due sono di tutta rilevanza.

Lo sforzo di fare emergere i miseri ed i poveri senza depredare i ricchi è già segno di notevole acume.

Ma il clou è l’aver individuato nella demografia uno dei principali punti di forza. Infatti le nazioni non sono mere espressioni geografiche: sono il popolo che le anima, con i suoi retaggi religiosi, storici, culturali e sociali. Ma il popolo, caduco perché soggetto alla morte, necessita di essere grandemente prolifico: senza la numerosità demografica il popolo si estingue.

È una visione da statista.

*


PM Modi announces stimulus package of Rs 20 lakh crore for Covid-hit economy. Read full speech text here

Prime Minister Narendra Modi said the coronavirus pandemic has presented India with an opportunity to become self-reliant and to emerge as the best across the world.

Prime Minister Narendra Modi on Tuesday announced stimulus package of Rs 20 lakh crore and a slew of financial incentives to revive Indian economy which is currently staring at the onslaught of coronavirus pandemic. The financial package, prime minister announced, will be around 10 per cent of the country’s GDP and will play an important role in India’s self-reliance campaign.

The prime minister said the coronavirus crisis has presented India with an opportunity to become self-reliant and to emerge as the best across the world.

Here’s the full text of the prime minister’s speech:

Greetings to fellow citizens, for over four months the global community has been in the fight against Corona virus.

During this period more than 42 lakh people across the world have been infected with Corona. More than 2.75 Lakh people have died tragically. In India too, people have lost their near and dear ones.I express my heartfelt condolences to all.

Friends, a virus has destroyed the world. Crores of people around the world are facing a crisis. World all over is engaged in a battle to save precious lives. We have never seen or heard of such a crisis. This crisis is unthinkable as well as unprecedented for mankind.

However-getting exasperated, losing heart or getting shattered, is not acceptable to the mankind. We have to remain vigilant, closely monitor it, follow the rules of engagement in such a war, save ourselves and move ahead. Today, when the world is in crisis, we must strengthen our resolve. Our great resolve will help overcome this crisis.

Friends, we have been hearing since the last century that the 21st century belongs to India. We have seen how the world was before Corona and the global systems in detail. Even after the infliction of the Corona crisis, we are constantly watching the situation as it unfolds across the globe. When we look at these two periods from India’s perspective, it seems that the 21st century is the century for India. This is not our dream, rather a responsibility for all of us.

But what should be its trajectory?

The state of the world today teaches us that a (Atma Nirbhar Bharat) “Self-reliant India” is the only path .It is said in our scriptures – Eshah PanthahThat is – self-sufficient India.

Friends,

As a nation today we stand at a very crucial juncture. Such a big disaster is a signal for India,it has brought a message and an opportunity.I will share my perspective with an example. When the Corona crisis started, there was not a single PPE kit made in India. The N-95 masks were produced in small quantity in India. Today we are in a situation to produce 2 lakh PPE and 2 lakh N-95 masks daily. We were able to do this because India turned this crisis into an opportunity.

This vision of India – turning crisis into opportunity- is going to prove equally effective for our resolve of self-reliant India.

Friends,

Today the meaning of the word self-reliance has changed in the global scenario. The debate on Human Centric Globalization versus Economy Centralized Globalization is on. India’s fundamental thinking provides a ray of hope to world. The culture and tradition of India speaks of self-reliance and the soul is VasudhaivaKutumbakam.

India does not advocate self-centric arrangements when it comes to self-reliance. India’s self-reliance is ingrained in the happiness, cooperation and peace of the world.

This is the culture which believes in the welfare of the world, for all the living creatures and the one which considers the whole world as a family. Its premise is ‘माता भूमिः पुत्रो अहम् पृथिव्यः’ – the culture that considers the earth to be the mother. And when the Bharat Bhumi, becomes self-sufficient, it ensures the possibility of a prosperous world. India’s progress has always been integral to the progress of the world.

India’s goals and actions impact the global welfare. When India is free from open defecation,it has an impact on the image of the world. Be it TB, malnutrition, polio, India’s campaigns have influenced the world.

International Solar Alliance is India’s gift against Global Warming. The initiative of International Yoga Day is India’s gift to relieve stress. Indian medicines have given a fresh lease of life to the people in different parts of the world.

These steps have brought laurels for India and it makes every Indian feel proud. The world is beginning to believe that India can do very well, so much good for the welfare of mankind can give.

The question is – how?

The answer to this question is – A Combined resolve of 130 crore citizens for a self-reliant India.

Friends,

We have a proud history of centuries. When India was prosperous, it was called the golden goose, it was prosperous, and then it always walked tall for the welfare of the world.

Then the times changed, the country was caught in the chains of slavery, we longed for development. Today, when India is making rapid strides in its progress, it is still committed to the goal of global welfare. Remember, the Y2K crisis at the beginning of this century. Technology experts from India pulled the world out of that crisis. Today we have the resources, we have the power, and we have the best talent in the world.

We will make the best products, will improve our quality further, make the supply chain more modern, we can do this and we will definitely do it.

Friends,

I had witnessed the Kutch earthquake. There was debris everywhere. Everything was destroyed. It seemed as if Kutch had fallen asleep wearing a sheet of death. In that situation no one could have imagined that the situation would ever change. However, Kutch stood up, Kutch started moving, Kutch moved. This is the grit and determination of weIndians.

If we are determined then we can reach our goals and no path will be difficult. And today there is a will and there is a way. That is to make India self-reliant. Our combined resolve is so strong that India can become self-sufficient.

Friends, this magnificent building of self-reliant India will stand on five Pillars.

First Pillar is Economy, an economy that brings Quantum Jump rather than Incremental change.

Second Pillar is Infrastructure, an infrastructure that became the identity of modern India.

Third Pillar is Our System. A system that is driven by technology which canfulfill the dreams of the 21st century; a system not based on the policy of the past century.

Fourth Pillar is Our Demography. Our Vibrant Demography is our strength in the world’s largest democracy, our source of energy for self-reliant India.

The fifth pillar is Demand. The cycle of demand and supply chain in our economy, is the strength that needs to be harnessed to its full potential. In order to increase demand in the country and to meet this demand, every stake-holder in our supply chain needs to be empowered. We will strengthen our supply chain, our supply system built up with the smell of the soil and the sweat of our labourers.

Friends, amidst the Corona crisis, I am announcing today a special economic package with a new resolution. This economic package will serve as an important link in the ‘AtmaNirbhar Bharat Abhiyan” (Self Reliant India Campaign)’.

Friends, in the recent past economic announcements made by the government related to the Corona crisis, which were the decisions of the Reserve Bank. The economic package that is being announced today, if added, comes to around Rs. 20 lakh crores. This package is about 10 percent of India’s GDP. With this various sections of the country and those linked to economic system will get support and strength of 20 lakh crore rupees. This package will give a new impetus to the development journey of the country in 2020 and a new direction to the Self-reliant India campaign. In order to prove the resolve of a self-reliant India, Land, Labor, Liquidity and Laws all have been emphasized in this package.

This economic package is for our cottage industry, home industry, our small-scale industry, our MSME, which is a source of livelihood for millions of people, which is the strong foundation of our resolve for a self-reliant India. This economic package is for that labourer of the country, for the farmers of the country who are working day and night for the countrymen in every situation, every season. This economic package is for the middle class of our country, which pays taxes honestly and contributes to the development of the country. This economic package is for Indian industries, which are determined to give a boost to the economic potential of India. Starting tomorrow, over the next few days, the Finance Minister will give you detailed information about this economic package inspired by the ‘Self-reliant India campaign’.

Friends, it is now imperative for the country to move forward with the commitment of Bold Reforms to create a self-reliant India. You have also experienced that as a result of the reforms over the past 6 years, today even in this time of crisis; India’s systems have looked more efficient. Otherwise, who could have thought that the money sent by Government of India will reach directly in the pocket of the poor farmer! But it has happened. That also happened when all the government offices were closed; the means of transport were shut down.This was just a reform related to Janadhan-Aadhaar-Mobile-JAM’s Trishakti, the effect of which we have just seen. Now the scope of the reforms has to be broadened, giving a new height. These reforms will be in the entire supply chain related to farming, so that the farmer is also empowered and will have minimal impact on agriculture in any other crisis like corona in future. These reforms will be for, rational tax system, simple and clear rules-of-law, good infrastructure, capable and competent human resources, and building strong financial system. These reforms will encourage business, attract investment and strengthen our resolve for Make in India.

Friends, self-reliance is possible only through inner strength and self-belief. Self-reliance also prepares the country for a tough competition in the global supply chain. And today it is the need of the hour that India should play a big role in the global supply chain. Realizing this, many provisions have also been made in the economic package. This will increase the efficiency of all our sectors and also ensure quality.

Friends, this crisis is so big, that the biggest systems have been shaken. However, under these circumstances, the country has also seen the resolve and restraint of our poor brothers and sisters, especially the street vendors, hawkers, labourers, those who are working in homes, they have done a lot of penance during this time, they have sacrificed a lot. Who would not have realized their absence? Now it is our duty to make them strong, to take some big steps for their financial requirements. Keeping this in mind, be it poor, labourers, migrant labourers, cattle rearers, be our fishermen, organized sector or unorganized sector, some important decisions will be announced in the economic package for every section.

Friends, the Corona crisis has also explained to us the importance of Local manufacturing, Local market and Local supply chain. In times of crisis, this Local has fulfilled our demand, this Local has saved us. Local is not just the need, it is our responsibility also. Time has taught us that we must make the Local as a mantra of our life. The Global Brands you feel today were sometimes also very local like this. But when people started using them, started promoting them, branding them, proud of them, they became Global from Local Products. Therefore, from today every Indian has to become vocal for their local, not only to buy local products, but also to promote them proudly. I am confident that our country can do this. Your efforts have increased my reverence for you every time. I recollect one thing with pride. When I requested you and the nation to buyKhadi and said it will be a great support to our handloom workers. Today, the demand and sales of both Khadi and handloom have reached record levels in a very short time. Not only that, you also made it a big brand. It was a very small effort, but the result was very good.

Friends, experts and scientists have pointed out that Corona will remain a part of our lives for a long time. But at the same time, we cannot allow this to happen that our lives will be confined only around the corona. We would wear masks, follow two yards distance and pursue our goals. Therefore, the fourth phase of lockdown, lockdown 4, will be completely redesigned, with new rules. Based on the suggestions we are getting from the states, information related to Lockdown 4 will also be given to you before 18 May. I am confident that by following the rules, we will fight Corona and move forward.

Friends, In our culture, it is said ‘सर्वम् आत्म वशं सुखम्’ i.e. what is in our control, is happiness. Self-reliance leads to happiness, satisfaction and empowerment. Our responsibility to make the 21st century, the century of India, will be fulfilled by the pledge of self-reliant India. This responsibility will only get energy from the life force of 130 crore citizens. This era of self-reliant India will be a new vow for every Indian as well as a new festival. Now we have to move forward with a new resolve and determination. When ethics are filled with duty, the culmination of diligence, the capital of skills, then who can stop India from becoming self-reliant? We can make India a self-reliant nation. We will make India self-reliant. With this resolve, with this belief, I wish you the very best.

*


India’s Turn Toward Economic ‘Self-Reliance’.

What’s India’s new “self-reliance” talk about?

This week, Indian Prime Minister Narendra Modi delivered a national address (full text here) that, among other things, was meant to provide a sense of relief to the country’s 1.3 billion people about how the government was managing COVID-19’s economic and health effects. Many analysts had anticipated that some sort of direct economic relief would be announced and they weren’t disappointed. Modi unveiled a $266 billion package, amounting to around 10 percent of Indian GDP—one of the largest stimulus packages to date by any country, certainly an emerging economy like India, in response to the effects of COVID-19.

The stimulus package was clear enough: It came with a price tag and Modi clarified some of the ends to which it would go. Along with the Reserve Bank of India’s moves to date and earlier relief in March, the Indian government is not holding back on big spending. The country’s COVID-19 response, however, has continued to face criticism for its inadequacies, particularly insofar as the poor and migrant workers are concerned. Tens of millions continue to find themselves untethered from opportunities for income, raising the stakes considerably day-to-day. Indian businesses, too, have taken a major hit across the board as the lockdown’s effect on demand has reverberated over the last nearly two months.

Returning to the economic package, however, Modi unveiled it with a somewhat puzzling message: “This package will work to bring about a self-reliant India,” the Indian prime minister said. Self-reliance is an old idea in India—and, indeed, one of the most prominent political principles in many post-colonial polities. What was it doing in the Indian government’s messaging over its COVID-19 relief measures?

Nirmala Sitharaman, India’s minister of finance, followed up on Modi’s announcement with a few more details, including on how small businesses would be able to leverage new sources of relief without collateral through the end of October. But the “self-reliance” component of the messaging remains somewhat of a mystery. The term’s centrality in the government’s messaging has left more than a few analysts wondering if India might lurch backward toward the Cold War-era days of import substitution policies and embracing a more insular economic mindset. Some of these worries are founded on India’s continued aversion to rapid trade integration in Asia, as encapsulated by Delhi’s reticence on signing up to agreements like the Regional Comprehensive Economic Partnership (RCEP).

It’s possible that “self-reliance” is simply poor branding for what is otherwise meant to be a message about India’s economic resilience (as Tanvi Madan suggests).

Elsewhere, New Delhi’s behavior so far in this pandemic points to opportunity-seeking behavior, such as by reaching out to foreign manufacturers that might be seeking to diversify risk away from China by creating incentives to set up shop in India. Much of this is consistent with initiatives going back to the pre-pandemic era and Modi’s first term in office, such as the “Make in India” push to increase India’s manufacturing capacity. (“Make in India” largely failed to take off in the way originally envisioned, with manufacturing as a share of Indian GDP actually having declined since Modi became prime minister back in 2014.

Pubblicato in: Economia e Produzione Industriale, India, Senza categoria

India. Aprile. Consumi elettrici -24%.

Giuseppe Sandro Mela.

2020-05-13.

2020-05-11__India GDP 001

«The Gross Domestic Product (GDP) in India was worth 2800 billion US dollars in 2019, according to official data from the World Bank and projections from Trading Economics. The GDP value of India represents 2.31 percent of the world economy. …

GDP in India is expected to reach 2950.00 USD Billion by the end of 2020, according to Trading Economics global macro models and analysts expectations. In the long-term, the India GDP is projected to trend around 3100.00 USD Billion in 2021 and 3200.00 USD Billion in 2022, according to our econometric models» [Fonte]

Questi erano dati e previsioni a fine 2019. Poi ha preso campo la pandemia da Covid-19, con conseguenti lockdown, sia pure parziali.

Fitch Solution cuts India’s FY21 GDP growth forecast to 1.8%.

«Fitch Solutions on Monday cut India’s economic growth forecast for the financial year 2020-21 to 1.8 per cent saying private consumption is likely to contract due to large-scale loss of income in the face of worsening domestic outbreak of COVID-19.

“Over the past week, we have continued to adjust down our country-specific real GDP growth forecasts on the back of persistent low oil prices and the widening spread of COVID-19. Our forecasts remain fluid and, even despite the recent downward revisions, we believe that the risks remain skewed to the downside,” the rating agency said.

For India, it said the real GDP growth rate for 2020-21 (April 2020 to March 2021) has been revised down to 1.8 per cent from 4.6 per cent, previously.

“We now expect private consumption to contract, versus a weak expansion previously, due to large scale loss of income across the economy in the face of a worsening domestic outbreak of COVID-19,” it said.

Fitch Solutions also anticipated a deeper contraction in fixed investments as businesses choose to cut back on capital expenditure to conserve cash amid elevated economic uncertainty.

“The slow roll-out of fiscal stimulus by the central government will only exacerbate India’s economic woes,” it added.

For China, it revised downwards its 2020 real GDP forecast to 1.1 per cent from 2.6 per cent previously, to reflect the impact of a worsening global economic outlook.

“Real GDP (of China) contracted by a sharp 6.8 per cent y-o-y in Q1 2020, and our current forecast reflects our view that private consumption and net exports will continue to drag heavily,” it said. “Meanwhile, targeted fiscal stimulus should see fixed investment growth come in relatively flat, while strong government consumption will provide the bulk of support and prevent a full-year contraction in 2020.”»

* * * * * * *

L’attuale situazione del sistema economico indiano può essere ben rappresentato dai dati sui consumi energetici.

«Overall electricity use fell by about 24% in April, the data from POSOCO showed, as all industries and offices not categorized “essential” were shut as a part of a nationwide lockdown to prevent the spread of the coronavirus»

«Industries and commercial plants account for over half of India’s annual consumption of electricity, with residences making up nearly a quarter and agriculture accounting for over a sixth.»

«Consumption in industrial states fell steeply, with states such as Gujarat and Tamil Nadu recording a fall of about 30%, while Maharashtra’s fell over 20%.»

«Electricity generation from coal – India’s primary source of electricity – fell 32.3% to 1.91 billion units per day, the data showed, with its contribution to overall electricity generation falling to 65.5%, compared with an average of over 73.7% last year. »

«India – the world’s second-largest consumer, importer and producer of coal and the third-largest greenhouse gas emitter – expects to remain heavily dependent on coal for electricity»

* * * * * * *

Prendiamo atto che il lockdown da Covid-19 ha indotto un calo dei consumi elettrici del 24% in aprile.

Tenendo conto che la produzione industriale ed il commercio rendono conto di circa la metà dei consumi elettrici, si potrebbe inferire che tali settori si siano contratti del -12%.

*


India doubles down on solar, gas at coal’s expense as electricity use falls

India’s solar and gas-fired electricity generation rose in April even as overall power demand fell at the steepest monthly rate in at least thirteen years, a Reuters analysis of provisional government data showed.

Solar-powered electricity generation rose 16.9%, accounting for a record 5.6% of the country’s total output, while gas-fired power output was 13.7% higher, an analysis of daily load despatch data from state-run power operator POSOCO showed. However, wind-powered electricity generation fell 11.4%.

Electricity generation from coal – India’s primary source of electricity – fell 32.3% to 1.91 billion units per day, the data showed, with its contribution to overall electricity generation falling to 65.5%, compared with an average of over 73.7% last year.

“Solar production was ramped up in the southern states, while gas-fired power plant operators in the west used cheap imported gas to address peak demand,” a senior power ministry official said, adding that many coal-fired utilities were shut for maintenance.

India – the world’s second-largest consumer, importer and producer of coal and the third-largest greenhouse gas emitter – expects to remain heavily dependent on coal for electricity but has pledged that clean energy will account for at least 40% of its installed capacity by 2030, up from about 22% now.

Overall electricity use fell by about 24% in April, the data from POSOCO showed, as all industries and offices not categorized “essential” were shut as a part of a nationwide lockdown to prevent the spread of the coronavirus.

With the lockdown extended with certain relaxations for another two weeks, state-run Coal India Ltd might face higher inventory and lower sales, while Indian utilities could face more financial stress.

Utilities were suffering from a prolonged industrial slowdown before the pandemic struck, with electricity demand rising only 1.2% during the fiscal year ending March 2020 – the second slowest growth rate since 1984/85.

Industries and commercial plants account for over half of India’s annual consumption of electricity, with residences making up nearly a quarter and agriculture accounting for over a sixth.

Ratings agency Moody’s unit ICRA expects annual power demand to fall for the first time during the year ended March 2021, while losses at state-run electricity distribution utilities (DISCOMs) are set to rise to 500 billion rupees ($6.6 billion).

Barring two hilly states in the country’s north east with little industrial load, power use fell across all regions, the data showed. Consumption in industrial states fell steeply, with states such as Gujarat and Tamil Nadu recording a fall of about 30%, while Maharashtra’s fell over 20%.

Pubblicato in: Brasile, Cina, Commercio, Devoluzione socialismo, Economia e Produzione Industriale, India, Russia, Unione Europea

Occidente vs Brics. Debito pubblico. Convitato di pietra.

Giuseppe Sandro Mela.

2020-04-18.

2020-04-05__ Debito Pil Occidente 001

La crisi economica indotta dalla pandemia del coronavirus sta rapidamente assumendo gli aspetti della stagflazione.

Per minimizzare i rischi di contagio, traffici di merci e persone sono stati ridotti quasi a zero così come la produzione industriale. Al lucro cessante si associa il danno emergente.

Gli stati hanno avviato giganteschi piani di sostegno alle imprese ed all’occupazione, e questo comporterà sia una massiccio ricordo al debito sia la generazione di denaro fiat.

Ma questa situazione sembrerebbe dover durare svariati mesi, perché solo a fine epidemia si potrà parlare di ripresa.

Ci si avvia quindi verso un periodo, si spera transitorio, caratterizzato da cospicui incrementi dei debiti pubblici associati a consistenti cali dei prodotti interni lordi. Come conseguenza, il rapporto debito / pil è destinato a schizzare verso l’alto in tutti i paesi.

* * * * * * *

Ma se si considerasse la situazione attuale, si dovrebbe osservare come i paesi della zona economica occidentale siano oberati dal debito pubblico. In Giappone il rapporto debito / pil è 223.8, in Grecia 180.0%, in Italia 131.2%, in Francia 98.5%, in Spagna 96.7%, in Germania 64.1% e negli Stati Uniti 82.3%. L’Unione Europea ha un rapporto debito / pil di 86.8%.

Ulteriori peggioramenti di questo rapporto potrebbero essere l’anticamera dei default.

*

2020-04-05__ Debito Pil NON Occidente 001

Se invece si considerassero i principali stati non incardinati nel sistema economico occidentale, si evincerebbe come la Cina abbia un rapporto debito / pil del 47%, l’India del 51.1%, e la Russia dell’11.8%.

*

È del tutto evidente come questi ultimi stati siano in una posizione debitoria molto migliore di quella dei paesi occidentali, e che quindi dovrebbero avere migliori chance di una ragionevole ripresa del sistema sociale ed economico.

Sembrerebbe proprio essere iniziato il tramonto dell’occidente di cui Spengler parlò un secolo fa.

Pubblicato in: India, Senza categoria

India. Produzione Industriale +4.5% anno su anno.

Giuseppe Sandro Mela.

2020-04-15.

2020-04-15__India 001

Una Produzione Industriale +4.5% anno su anno per l’India non avrebbe lasciato stupiti in tempi ordinari, quando il pil annuale cresceva al ritmo del 5.0% -7.0%.

Nella situazione attuale constatiamo come l’epidemia da coronavirus sia entrata in India alquanto tempo dopo la sua insorgenza nei paesi occidentali, per cui codesto dato potrebbe non essere stato ancora influenzato dal coronavirus.

Pubblicato in: Geopolitica Asiatica, India

India. Débâcle elettorale di Modi nello Jharkhand.

Giuseppe Sandro Mela.

2019-12-24

Bivio_01__

I commenti saranno fatti quando saranno disponibili i risultati definitivi.


India, batosta alle elezioni nel Jharkand per Modi dopo le proteste

Il portavoce del partito, ‘non è stato un voto sulla legge per la cittadinanza’

Il partito di governo Bharatiya Janata Party (Bjp), ha perso le elezioni nello stato orientale di Jharkhand, sconfitto da una coalizione formata da partiti regionali e dal Partito del Congresso, la principale forza di opposizione a livello nazionale. Per il Bjp, la sconfitta nello stato nel quale governava dal 2014 appare, secondo gli osservatori, una bocciatura delle politiche messe in campo dal premier Narendra Modi.

Per il partito nazionalista induista si tratta della seconda sconfitta elettorale a livello statale, dopo la netta vittoria nelle elezioni nazionali di maggio. Secondo il portavoce del Bjp Gopal Krishna Agarwal è “sbagliato” attribuire la sconfitta nel Jharkhand alle proteste legate alla controversa legge sulla cittadinanza

*


Jharkhand election results: BJP concedes defeat amid citizenship row

India’s main opposition Congress party and its allies are set to win Jharkhand state elections in a setback for the ruling Bharatiya Janata Party (BJP).

The Congress and its allies have won, or are leading, in 46 of the 81 seats, while the BJP is on course to take 25.

This is the second key state the BJP has lost since sweeping parliamentary elections in May.

The result will embolden its opponents amid nationwide protests against a new citizenship law seen as anti-Muslim.

With votes still being counted in Jharkhand in the north-east, the regional Jharkhand Mukti Morcha (JMM) has emerged as the single largest party. Together with the Congress it is set to form the new government, results showed.

Senior BJP leaders said they would “accept the people’s mandate”. The party failed to form the government in Maharashtra state last month after falling out with its regional ally, Shiv Sena.

Why the result is crucial

Although the election in Jharkhand was fought largely on local issues, the BJP’s defeat is being seen as a setback for its policies.

Three of the five phases of the election were held as protests took place against the Citizenship Amendment Act (CAA) across the country. More than 20 people have died during the protests, with many of them shot, according to local media.

The law provides citizenship to non-Muslim illegal immigrants from Pakistan, Bangladesh and Afghanistan.

Prime Minister Narendra Modi said the law would “help the persecuted” – but critics say it discriminates against Muslims.

Others – particularly in border states – fear being “overrun” by new citizens.

Speaking at a rally on Sunday, Mr Modi said Muslims – one in seven of India’s 1.35bn population – did not “need to worry at all” about the new citizenship law.

“I must assure Muslim citizens of India that this law will not change anything for them,” he said. “Muslims who are sons of the soil and whose ancestors are the children of mother India need not worry.”

In a speech which lasted nearly 100 minutes, he also denied the law was divisive.

“People who are trying to spread lies and fear, look at my work. If you see any trace of divisiveness… show it to the world,” he said.

What is the controversial law?

The CAA allows Hindus, Christians and other religious minorities to become citizens – if they were persecuted because of their religion in the three countries.

But critics say this is part of a “Hindu nationalist” agenda to marginalise India’s

The act follows a government plan to publish a nationwide register that it says will identify illegal immigrants.

A National Register of Citizens (NRC) published in the north-eastern state of Assam saw 1.9 million people effectively made stateless.

The NRC and the Citizenship Amendment Act are closely linked as the act will protect non-Muslims – but not Muslims – who are excluded from the register.

Thousands across India have continued protesting despite police bans, marking the biggest challenge to Mr Modi’s leadership since he won power in 2014.

Authorities have been battling to restore order – internet services in several states were shut down and thousands have been detained.

Pubblicato in: Banche Centrali, Cina, Devoluzione socialismo, India, Russia

Russia. Riserve Valutarie 539.9 mld Usd. Riserve/pil 32.5%.

Giuseppe Sandro Mela.

2019-11-02.

2019-10-31__Russia_Riserve

Le Riserve Valutarie russe ammontano a 539.9 miliardi Usd.

*

Se è importante il valore assoluto delle riserva valutarie, il loro rapporto sul pil lo è ancor di più, perché testimonia il margine di manovra della banca centrale ed rapporto al sistema economico dello stato che rappresenta.

Pil [mld Usd]

Riserve [mld Usd]

Riserve/pil

Eurozona

13,669.951

827.0

6.05%

Cina

13,368.073

3,092.0

23.13%

Russia

1,657.290

539.9

32.58%

India

2,718.732

440.75

16.21%

Giappone

4,971.767

1,322.6

26.6%

La Russia sta accumulando riserve ben oltre quello che è usualmente ritenuto essere il margine di sicurezza, ossia il 10%. D’altra parte, anche Cina, India e Giappone hanno tenuto rapporti riserve / pil ben oltre tale quota.

Da questo punto di vista, l’eurozona apparirebbe essere molto fragile e difficilmente in grado di far fronte alla recessione in atto.

Pubblicato in: Banche Centrali, Brasile, Cina, Devoluzione socialismo, India, Russia

IMF. World Economic Outlook. Italia a crescita zero.

Giuseppe Sandro Mela.

2019-10-19.

Paris. Saint-Denis. Monumento funebre in onore di Luigi XVI e Maria Antonietta.

Paris. Saint-Denis. Monumento funebre in onore di Luigi XVI e Maria Antonietta. Prima decapitati, quindi onorati.


2019-10-17__IMF 001

L’IMF prevede una crescita del Pil eguale a zero per l’Italia.

2019-10-17__IMF 002

China +6.1, Brazil +0.9, India +6.1, Hungary +4.6, Philippines +5.7, Poland +4.0, Russian Federation +1.1, Romania +4.0,

France +1.2, Germany +0.5, Japan +0.9, Netherlands +1.8, United States +2.4.

* * * * * * *

Fmi taglia stime Italia, ferma nel 2019

– Italia a crescita zero nel 2019. Il Fmi rivede al ribasso le stime per il pil italiano sia per quest’anno sia per il 2020. Dopo il +0,9% del 2018, per il 2019 la crescita è prevista a zero, ovvero 0,1 punti percentuali in meno sia rispetto alle previsioni di luglio sia a quelle di aprile. Per il 2020 la crescita è attesa a +0,5% (-0,3 punti su luglio e -0,4 su aprile). A pesare, afferma il Fondo, è l'”indebolimento della domanda interna, un minore impulso si bilancio e un contesto esterno più debole”.

Per l’Italia è “particolarmente essenziale” un impegno “credibile” per un calo del debito pubblico nel medio termine dice il Fondo. Il Fondo stima un debito pubblico in aumento al133,2 nel 2019 dal 132,2% del 2018. Nel 2020 salirà ancora attestandosi al 133,7%, per poi raggiungere il 134% nel 2024. Il deficit è previsto scendere al 2,0% del pil quest’anno dal 2,1% del 2018. Nel 2020 sarà al 2,5% e raggiungerà il 2,6% nel 2024.Il Fmi taglia le stime di crescita di Germania e Francia e  Gb.

* * * * * * *


L’IMF ha pubblicato il Report

World Economic Outlook, October 2019. Global Manufacturing Downturn, Rising Trade Barriers.

Full Report and Executive Summary

Global growth is forecast at 3.0 percent for 2019, its lowest level since 2008–09 and a 0.3 percentage point downgrade from the April 2019 World Economic Outlook. Growth is projected to pick up to 3.4 percent in 2020 (a 0.2 percentage point downward revision compared with April), reflecting primarily a projected improvement in economic performance in a number of emerging markets in Latin America, the Middle East, and emerging and developing Europe that are under macroeconomic strain. Yet, with uncertainty about prospects for several of these countries, a projected slowdown in China and the United States, and prominent downside risks, a much more subdued pace of global activity could well materialize. To forestall such an outcome, policies should decisively aim at defusing trade tensions, reinvigorating multilateral cooperation, and providing timely support to economic activity where needed. To strengthen resilience, policymakers should address financial vulnerabilities that pose risks to growth in the medium term. Making growth more inclusive, which is essential for securing better economic prospects for all, should remain an overarching goal.

Chapter 1: Global Prospects and Policies

Over the past year, global growth has fallen sharply. Among advanced economies, the weakening has been broad based, affecting major economies (the United States and especially the euro area) and smaller Asian advanced economies. The slowdown in activity has been even more pronounced across emerging market and developing economies, including Brazil, China, India, Mexico, and Russia, as well as a few economies suffering macroeconomic and financial stress.

Chapter 2:  Closer Together or Further Apart? Subnational Regional Disparities and Adjustment in Advanced Economies

Subnational—within-country—regional disparities in real output, employment, and productivity in advanced economies have attracted greater interest in recent years against a backdrop of growing social and political tensions. Regional disparities in the average advanced economy have risen since the late 1980s, reflecting gains from economic concentration in some regions and relative stagnation in others. On average, lagging regions have worse health outcomes, lower labor productivity, and greater employment shares in agriculture and industry sectors than other within-country regions. Moreover, adjustment in lagging regions is slower, with adverse shocks having longer-lived negative effects on economic performance. Although much discussed, trade shocks—in particular greater import competition in external markets—do not appear to drive the differences in labor market performance between lagging and other regions, on average. By contrast, technology shocks—proxied by declines in the costs of machinery and equipment capital goods—raise unemployment in regions that are more vulnerable to automation, with more exposed lagging regions particularly hurt. National policies that reduce distortions and encourage more flexible and open markets, while providing a robust social safety net, can facilitate regional adjustment to adverse shocks, dampening rises in unemployment. Place-based policies targeted at lagging regions may also play a role, but they must be carefully calibrated to ensure they help rather than hinder beneficial adjustment.

Chapter 3: Reigniting Growth in Emerging Market and Low-Income Economies: What Role for Structural Reforms?

The pace of structural reforms in emerging market and developing economies was strong during the 1990s, but it has slowed since the early 2000s. Using a newly constructed database on structural reforms, this chapter finds that a reform push in such areas as governance, domestic and external finance, trade, and labor and product markets could deliver sizable output gains in the medium term. A major and comprehensive reform package might double the speed of convergence of the average emerging market and developing economy to the living standards of advanced economies, raising annual GDP growth by about 1 percentage point for some time. At the same time, reforms take several years to deliver, and some of them—easing job protection regulation and liberalizing domestic finance—may entail greater short-term costs when carried out in bad times; these are best implemented under favorable economic conditions and early in authorities’ electoral mandate. Reform gains also tend to be larger when governance and access to credit—two binding constraints on growth—are strong, and where labor market informality is higher—because reforms help reduce it. These findings underscore the importance of carefully tailoring reforms to country circumstances to maximize their benefits.

Statistical Appendix

The Statistical Appendix presents historical data as well as projections. It comprises seven sections: Assumptions, What’s New, Data and Conventions, Country Notes, Classification of Countries, Key Data Documentation, and Statistical Tables.

Pubblicato in: Cina, India, Russia, Stati Uniti

S-400. Arma militare e diplomatica in Turkia ed in India.

Giuseppe Sandro Mela.

2019-07-02.

Istanbul 004

«I russi hanno un segreto che nessuno è mai riuscito a violare. Come siano riusciti a concepire, progettare, costruire e rendere operativi un così grande numero di sistemi missilistici allo stato dell’arte ed il tutto in così poco tempo ed infine a costi irrisori»

9M729, Iskander, Kalibr, S-400, S500. Putin è un gran costruttore di missili.

Cina. Dispiegati nel sud-est asiatico gli S-400 russi.

Medio Oriente. La Russia fornirà sistemi S-400 all’Arabia Saudita.

Turkia. Firmato contratto S-400. Si dice siano già operativi.

* * *

Nelle abili mani di Mr Putin il sistema di missili anti oggetti volanti S-400 sta transitando da arma temibile a strumento diplomatico. Come arma, l’S-400 sarebbe in grado di intercettare ed abbattere aerei, droni, e missile anche ipersonici con una portata riferita di circa 400 km. Come strumento diplomatico è un mezzo molto utile per gratificare i paesi amici e per stuzzicare l’amicizia degli incerti. Poi, dotarsi di S-400 conferisce allo stato possessore una supremazia locoregionale nei confronti dei paesi viciniori.

Questi sistemi di arma erano una volta appannaggio dei soli Stati Uniti, che li avevano concessi a terzi con grande morigeratezza. Adesso la concorrenza russa inizia a farsi sentire pesantemente.

Il problema si sposta quindi da quello strettamente militare a quello politico: i potenziali acquirenti vogliono rapporti politici paritetici e tollerano ben pochi condizionamenti. I russi faranno pur sempre un’offerta in briciolo più conveniente di quella americana.

«The U.S. has reportedly offered India the MIM-104F Patriot (PAC-3) surface-to-air missile defense system and the Terminal high Altitude Area Defense (THAAD) system in lieu of the S-400»

«A senior U.S. diplomat in a recent congressional testimony expressed deep concerns over India’s decision to procure five squadrons of Russian-made Almaz-Antei S-400 Triumf air defense systems (NATO reporting name: SA-21 Growler) for service in the Indian Air Force (IAF).»

«U.S. Principal Deputy Assistant Secretary for South and Central Asia Alice Wells said in an official testimony before the U.S. House of Representatives House Foreign Affairs subcommittee on June 13 that the purchase of the S-400 defense systems could limit burgeoning India-U.S. military relations»

«At a certain point, a strategic choice has to be made about partnerships and a strategic choice about what weapons systems and platforms a country is going to adopt»

«India and Russia signed a $5 billion contract for the procurement of five S-400 squadrons during last year’s annual bilateral summit held in New Delhi in early October. Indian Prime Minister Narendra Modi and Russian President Vladimir Putin presided over the signing ceremony. The first S-400 squadron is expected to be stood up by the fall of 2020»

«The Modi government has persisted in its decision to purchase the Russian-made S-400s despite strong opposition from the United States and the possible imposition of economic sanctions on India under U.S. legislation known as the Countering America’s Adversaries Through Sanctions Act (CAATSA).»

* * * * * * *

I tempi stanno mutando rapidamente.

Se negli anni sessanta gli Stati Uniti erano potenza militare mondiale egemone e si spartivano tranquillamente con la Unione Sovietica le reciproche sfere di influenza, la situazione attuale è mutata.

Non soltanto vi sono ora tre superpotenze atomiche, ma la forza politica, sociale, culturale, economica e militare dell’America sta deperendo: è ancora molto forte, sicuramente sì, ma non più egemone.

Inoltre gli Stati Uniti sono dilaniati da una furibonda guerra civile con la quale i liberal democratici cercano in ogni modo e maniera di distruggere la persona fisica del presidente Trump, reo di non condividere i loro alti ideali.

Questa lotta intestina danneggia in ultima analisi proprio gli Stati Uniti, con grande gioia di Mr Xi e di Mr Putin.


The Diplomat. 2019-06-17. US Warns India Over S-400 Air Defense System Deal With Russia

A senior U.S. diplomat in a recent congressional testimony expressed deep concerns over India’s decision to procure five squadrons of Russian-made Almaz-Antei S-400 Triumf air defense systems (NATO reporting name: SA-21 Growler) for service in the Indian Air Force (IAF).

U.S. Principal Deputy Assistant Secretary for South and Central Asia Alice Wells said in an official testimony before the U.S. House of Representatives House Foreign Affairs subcommittee on June 13 that the purchase of the S-400 defense systems could limit burgeoning India-U.S. military relations.

The induction of the new long-range air defense systems “effectively could limit India’s ability to increase our own interoperability,” according to Wells, adding that the United States has “serious concerns” about the long-term strategic implications of the purchase for U.S.-India ties.

 “At a certain point, a strategic choice has to be made about partnerships and a strategic choice about what weapons systems and platforms a country is going to adopt,” Wells said.

India and Russia signed a $5 billion contract for the procurement of five S-400 squadrons during last year’s annual bilateral summit held in New Delhi in early October. Indian Prime Minister Narendra Modi and Russian President Vladimir Putin presided over the signing ceremony. The first S-400 squadron is expected to be stood up by the fall of 2020.

The Modi government has persisted in its decision to purchase the Russian-made S-400s despite strong opposition from the United States and the possible imposition of economic sanctions on India under U.S. legislation known as the Countering America’s Adversaries Through Sanctions Act (CAATSA). The legislation seeks to economically and financially punish countries engaging in “significant transactions”–defined as any deals above $15 million–with the Russian state-owned defense industry.

While the Trump administration has been given authority under the 2019 U.S. National Defense Authorization Act (NDAA) to waive sanctions in special cases it is far from clear whether India would be able to obtain exempt status. For one thing, sanction waivers have originally been reserved for cases of Soviet-era hardware costing less that $15 million and not for modern and more expensive platforms like the S-400.

“There is no blanket waiver, or a country waiver, when it comes to S-400, Wells cautioned. “We have serious concerns about a possible S-400 purchase, and we are continuing our conversations on how the United States or other defense providers could assist India.”

Notably, in September 2008, the United States imposed sanctions on the People’s Liberation Army’s (PLA) Equipment Development Department (EDD) for China’s induction of S-400 systems and Sukhoi Su-35S (NATO reporting name: Flanker-E) fourth generation, twin-engine, multirole fighter aircraft.

“Under the Trump administration, we’ve been very clear that we’re ready to help meet India’s defense needs and we are seeking a very different kind of defense partnership building on the ‘Major Defense Partner’ designation that India has received from Congress,” Wells noted.

The U.S. has reportedly offered India the MIM-104F Patriot (PAC-3) surface-to-air missile defense system and the Terminal high Altitude Area Defense (THAAD) system in lieu of the S-400.

Wells testimony comes ahead of U.S. Secretary of State Mike Pompeo’s visit to India later this month.