Daily News - Wednesday, 4 December 2024
Centre wants Banks to Push Pedal on Special Vostro Accounts Mechanism (The Economic Times)
The Indian government is urging banks to address operational challenges in implementing the Special Rupee Vostro Accounts (SRVA) mechanism to boost rupee-based trade settlements with countries like Russia, Sri Lanka, and Nigeria. While the system aims to reduce costs and strengthen bilateral ties, banks are cautious about sanctions, exchange rate determination, and the transfer of surplus rupees to foreign currencies, prompting a planned meeting with stakeholders to resolve these issues. This move gains global relevance as U.S. President-elect Donald Trump has strongly opposed the BRICS bloc’s efforts to transition away from the dollar, emphasizing the need for robust alternatives in global trade.
India, Vietnam may gain from US-China chip war (Financial Express)
The US-China trade tensions have escalated with the US imposing new export restrictions on high-tech equipment and China retaliating by banning exports of gallium, germanium, antimony, and other critical materials with potential military applications. This ongoing trade war highlights opportunities for neutral economies like India, Vietnam, and Mexico, whose exports to the US have risen as China’s share has declined since 2019, benefiting from the geopolitical shift. According to IMF’s Gita Gopinath, current trade fragmentation is more costly than during the Cold War due to higher global trade-to-GDP ratios (45% now versus 16% then) and increasing protectionism, with non-aligned countries playing a crucial role in mitigating the economic impact of growing global fragmentation.
Trump hints at tariffs on steel imports; could impact Indian exports (The Indian Express)
The Indian steel industry faces dual challenges as exports decline by 36% and imports surge by 41% in the first half of FY 2024-25, driven by international dumping and depressed global steel prices. Amidst this, US President-elect Donald Trump has proposed tariffs and other measures to protect the American steel industry, signalling potential global shifts in trade dynamics, which could further strain Indian steel exporters. While domestic steel consumption grew by 13% and India plans to reach 300 million tonnes of capacity by 2030, the Steel Ministry is considering measures like a 25% safeguard duty or increased customs duty to address profitability concerns and inventory buildup.
₹22K cr worth of defence proposals get govt nod (Business Standard)
The Defence Acquisition Council (DAC), chaired by Defence Minister Rajnath Singh, approved five capital acquisition proposals worth ₹21,772 crores, aimed at strengthening India’s defence capabilities. Key procurements include 31 water jet fast attack crafts and 120 fast interceptor crafts for the Navy and Coast Guard, enhancing coastal defence, surveillance, anti-piracy missions, and search-and-rescue operations. Additionally, the DAC approved advanced electronic warfare systems for the IAF’s Su-30 MKI aircraft, boosting their ability to evade enemy radar and weapon systems during high-risk missions.
Biden admin okays sale of $1.17 bn helicopter equipment to India (Business Standard)
The Biden Administration has approved a $1.17 billion sale of MH-60R multi-mission helicopter equipment and related systems to India, aiming to bolster India’s anti-submarine warfare and broader defence capabilities. The package includes advanced systems such as 30 MIDS-JTRS tactical radios, forward-looking infrared (FLIR) systems, external fuel tanks, and munitions, with Lockheed Martin as the principal contractor. This significant defence sale, announced weeks before President-elect Donald Trump’s inauguration, reflects continued US-India defence cooperation amid evolving regional security challenges.
