Pakistan spoiled the talks by talking to Hurriyat: Sushma Swaraj

New Delhi, Jul 16: With India's economic growth sputtering, the Reserve Bank of India was expected to maintain a rate-cutting cycle, but an uptick in near-term inflation could give the central bank's Monetary Policy Committee reason to pause for now.

Having cut its key lending rate by an aggressive 115 basis points (bps) in 2020, on top of 135 bps cuts in 2019, the RBI so far has had little success in spurring credit growth amid varying degrees of lockdowns across India.

Some economists and market insiders argue it may be prudent for the MPC, the policy committee, to hold its fire when it meets early next month.

"It's probably too early to administer a demand stimulus. The RBI still has room to cut rates, but we probably want to be more cautious of the timing," said Venkat Pasupuleti, portfolio manager at Dalton Investments.

"Maybe they should wait a quarter to see how things pan out once the lockdown situation is eased further."

Market participants have factored in at least a 25 bps rate cut by the MPC on August 6 while analysts are predicting a total 50-75 bps cuts over the rest of the fiscal year that runs to March 31.

The spike in the retail inflation rate above the RBI's mandated 2%-4% target range is another reason for the central bank to take a breather, analysts say.

Annual retail inflation rose to 6.09% in June, compared to 5.84% in March and sharply above a 5.30% median forecast in a Reuters poll of economists.

Rahul Bajoria, an economist at Barclays, said the spike in both consumer and wholesale prices "could lead to a tempering in enthusiasm for material front-loaded policy support from here on."

Almost all economists however agreed the RBI cannot move away from its accommodative stance or call an end to the rate cutting cycle just yet.

India's economy grew at 3.1% in the March quarter - an eight year low - and some economists have predicted a contraction of more than 20% in the June quarter and a contraction of up to 5% in the fiscal year.

"Even in the event of a pause, we think the RBI and MPC would want to hold out the promise of more cuts," said A. Prasanna, economist with ICICI Securities.

RBI Governor Shaktikanta Das said in a recent speech the need of the hour is to restore confidence, preserve financial stability, revive growth and recover stronger, suggesting inflation concerns are unlikely to deter the downward trajectory for rates too soon.

"The August policy decision would boil down to a judgment call over whether RBI can maintain easy monetary and financial conditions without the aid of a token rate cut," Prasanna said. 

New Delhi, Feb 1: India on Friday banned the export of personal protection equipment such as masks and clothing amid a global coronavirus outbreak.

It did not give a reason for the ban but it reported its first case of the new coronavirus on Thursday, a woman in Kerala who was a student of Wuhan University in China.

The central Chinese city of Wuhan is the epicentre of the outbreak, and the virus has since spread to more than 9,800 people globally and killed 213 people in China.

Several Indian citizens living in Wuhan will arrive in India by plane on Saturday and be taken to a quarantine centre on the outskirts of the capital New Delhi.

India, the world’s second most heavily populated country after China, has taken measures to ensure that all people arriving from China report to health authorities.

New Delhi, Feb 24: They hail from vastly different backgrounds — Donald Trump is the son of a property tycoon while Narendra Modi is a descendant of a poor tea-seller.

Yet the two teetotallers, loved by right-wing nationalists in their home countries, share striking similarities that have seen them forge a close personal bond, analysts say.

Ahead of the American leader's first official visit to India, which begins in Modi's home state of Gujarat on Monday, the world's biggest democracy has gone out of its way to showcase the chemistry between them.

In Gujarat's capital Ahmedabad, large billboards with the words "two dynamic personalities, one momentous occasion" and "two strong nations, one great friendship" have gone up across the city.

"There's a lot that Trump and Modi share in common, and not surprisingly these convergences have translated into a warm chemistry between the two," Michael Kugelman of the Washington-based Wilson Center said.

"Personality politics are a major part of international diplomacy today. The idea of closed-door dialogue between top leaders has often taken a backseat to very public and spectacle-laden summitry."

Since assuming the top political office in their respective countries — Modi in 2014 and Trump in 2017 — the two men have been regularly compared to each other.

Trump, 73, and Modi, 69, both command crowds of adoring flag-waving supporters at rallies. A virtual cult of personality has emerged around them, with their faces and names at the centre of their political parties' campaigns.

A focus of Trump's administration has been his crackdown on migrants, including a travel ban that affects several Muslim-majority nations, among others, while critics charge that Modi has sought to differentiate Muslims from other immigrants through a contentious citizenship law that has sparked protests.

Both promote their countries' nationalist and trade protectionist movements — Trump with his "America First" clarion call and Modi with his "Make in India" mantra.

And while they head the world's largest democracies, critics have described the pair as part of a global club of strongmen that includes Russia's Vladimir Putin and Brazil's Jair Bolsonaro.

"There are many qualities that Trump and Modi share — a love for political grandstanding and an unshakable conviction that they can achieve the best solutions or deals," former Indian diplomat Rakesh Sood said.

Modi and Trump have sought to use their friendship to forge closer bonds between the two nations, even as they grapple with ongoing tensions over trade and defence.

Despite sharing many similarities in style and substance, analysts say there are some notable differences between the pair.

Modi is an insider who rose through the ranks of the Bharatiya Janata Party after starting out as a cadre in Rashtriya Swayamsevak Sangh.

Trump is a businessman and a political outsider who has in some sense taken over the Republican Party.

"Modi is a more conventional leader than is Trump in that he hasn't sought to revolutionise the office he holds in the way that Trump has," said Kugelman, a longtime observer of South Asian politics.

He added that genuine personal connections between leaders of both countries have helped to grow the partnership.

"George Bush and Manmohan Singh, Barack Obama and Singh, Obama and Modi, now Modi and Trump — there has been a strong chemistry in all these pairings that has clearly helped the relationship move forward," he added.

Trump has also stood by the Indian leader during controversial decisions, including his revocation of autonomy for Kashmir and his order for jets to enter Pakistani territory following a suicide bombing.

Analysts said the leaders would use the visit to bolster their image with voters.

A mega "Namaste Trump" rally in Ahmedabad on Monday will be modelled after the "Howdy, Modi" Houston extravaganza last year when the Indian leader visited the US and the two leaders appeared before tens of thousands of Indian-Americans at a football stadium.

"The success of this visit... will have a positive impact on his (Trump's) re-election campaign and the people of Indian origin who are voters in the US — a majority of them are from Gujarat," former Indian diplomat Surendra Kumar said.

"On the Indian side, the fact that Prime Minister Modi... (shares) such warmth, bonhomie and informality with the most powerful man on Earth adds to his stature... as well as with hardcore supporters."