There are two aspects to the news- knowing the headline and understanding the intricacies of it. We at The Connectere focus on both. While The First Forum edition gives a brief about the headlines, The Weekly Analysis Edition is meant to educate the reader on what do various news mean and what are their intricacies. This initiative is meant to educate the reader on how to understand the important news. In the Sixteenth Edition we are covering the following news:
1. IAF versus PLAAF
2. India considering 20-25% import tax on solar modules
3. Understanding the repercussions of the H1B suspension
4. Why is the surge in the Money Supply not directed towards consumption?
5. Trial of the United States

(Written by Gunika Vij, Shitij Goyal, and Aashika Deb)

Galwan Valley

IAF versus PLAAF

On 15th June 2020 there was a violent clash in Galwan. In spite of mutually agreeing to disengage in the contentious region across the LAC, China has reportedly been increasing troop concentration in the region. The ground situation across the LAC is one of parity and for any tactical advantages on the ground, the Indian Army needs a numerical superiority of 5:1. Therefore, the Indian Army’s winning shot is the Air Force.  However, the use of airpower on the border with China has been a subject of major contention ever since the Jawaharlal Nehru government decided against it in 1962.

But first, we have to weigh the advantages and disadvantages before more blood is spilled. According to recent operational assessments, the IAF enjoys both a qualitative and quantitative advantage over the People’s Liberation Army Air Force (PLAAF). It’s higher fleet of 4th generation aircraft(Su-30 MKIs, Mirage-2000s, and MiG-29s) are superior, it has more operational bases close to the LAC and there are reasonable redundancy and survivability to withstand an initial attack on IAF bases by the PLA Rocket Force (PLARF) – all these add up to significant advantages for the IAF over the PLAAF.

However, much has changed in the last few decades. The PLAAF has moved quickly to counter the growing qualitative advantage of the IAF. By a research estimate, the PLAAF’s current inventory of fourth-generation platforms could have crossed 850, or about 40 squadrons. One can project that this figure will go up to approximately 50 squadrons of fourth-generation fighters by 2025.  Based on multiple studies, it is reasonable to assume that there is currently an even balance between the IAF and the PLAAF.

Even in the best-case scenario, the IAF will not have many fighter squadrons by 2030. However, to IAF’s advantage, the rapidly growing asymmetry in total numbers will not translate into a proportional ability of the PLAAF to induct fighter squadrons into TAR to create a significant force advantage because with 10–12 forward tier IAF airfields already capable of sustaining intense fighter operations, the IAF could still retain a numerical advantage in an aerial battle; and good stand-off weapons capability will ensure that the IAF will continue to have a marginal qualitative advantage over the PLAAF. IAF is more battle- efficient and flexible than PLAAF and the only air force with application of asymmetric combat power. India, however, doesn’t have an aircraft or weapon comparable to China’s inventory of H-6 strategic bombers.

There is also the matter of surveillance: India must leverage its existing space-based and airborne surveillance assets to counter China’s Yaogan series of low earth orbit surveillance satellites.

India must keep an eye on the future and ensure that the rapid modernization of China’s air force does not erode the IAF’s competitive advantage which will be possible only if India steps up on the induction cycle of cutting-edge platforms, sensors and weapon systems, and improves the integration of its air and land operations.

India considering 20-25% import tax on solar modules

India is considering imposing an import tax of 20-25% on solar modules and 15% on solar cells for a year beginning in August, its power minister said on Thursday. India doesn’t currently levy a tariff on imports of solar cells and modules but contains a safeguard duty to guard its local industry which expires in July.

R.K. Singh, India’s Power Minister said in a virtual press conference that within the second year, we are looking to impose a 40% tax on solar modules, adding that cells are taxed at 25% within the second year. The energy-hungry nation imports most of its solar cells and modules from China, during a bid to fulfill Prime Minister Narendra Modi’s target installing 100 gigawatts of solar power by 2022.

Electricity generation from non-fossil fuel sources has been steadily rising and is predicted to achieve 40% by 2022, and over half of the total output by 2030, Singh said. Tensions between India and neighboring China are rising since May. Soldiers from the nuclear-armed countries fought with rocks, metal rods, and wooden clubs at the Galwan Valley this month after a weeks-long standoff.

Major Indian traders have called for a boycott of Chinese goods, while some trade associations and stakeholders have argued that it’s going to not be feasible. India’s Supreme Court on Monday rejected a plea by power producers to increase a deadline to put in equipment to cut emissions by two years to 2024. Power producers had asked the government to join them in asking the supreme court for an extension earlier this month.

China accounts for about 14 percent of India’s imports and is a  major supplier for sectors like cell phones, telecom, power, plastic toys, and significant pharma ingredients. As tensions simmer at the border between India and China, what’s more concerning is that the economic fall out of the souring relationship between the two countries. This can be because the economic interdependence of the two neighbours is simply too deep to be ignored.

China and also the US are the biggest two trading partners of India. While Indian exports to the US outnumber the imports from the country, the same isn’t true when it involves China. And hence, to become friends-turned-foes with India would have business repercussions in China, too.

Understanding the repercussions of the H1B suspension

With the US President’s decision to suspend H1B and other non-immigrant work permits till December 31, the “American” dream has been put on hold for many. But is it just a roadblock for foreign employees? A decision such as this is bound to have repercussions in the American soil as well because up till the pandemic, the US issued 85,000 H1-B visas every year out of which Indians reportedly got about 60,000 visas. Therefore, the move could now severely affect the Indian industry especially the IT sector.

The H1B visa is a non-immigrant visa that allows US companies to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields. The numbers clearly show that high-skilled Indian professionals bring important skill sets, bridge technological gaps, and impart a competitive edge to the US economy especially in the IT sector and they have also been a critical component of the workforce during the pandemic.

This decision is a reflection on how the country views foreign employees as competitors against its own citizens. Due to the pandemic, the overall unemployment rate in the US has nearly quadrupled between February and May and millions of Americans remain out of work. Under extraordinary circumstances, such as this very pandemic, when the economy is contracting, it is hard to see foreign employees as healthy competition and contributor to its economy especially as they pose a threat to the employment of American workers.

However, it is not a blow just for the employment sector, several families in the US will feel enormous stress as there will be a long delay in getting spouses, children, and relatives to join them. There is a fear of being stranded in the US because of international travel restrictions, there is the fear of deportation and mostly, there’s uncertainty.

If Trump extends the ban, families will be needlessly separated and there will be legal challenges because of certain grey areas. Multiple lawsuits are likely to be filed as several US employers depend on high-skilled H1B workers, especially in healthcare and technology. In the long run, there are concerns regarding this decision as a second-term Trump administration that is not beholden to anyone may really slow immigration and naturalization, especially because H1B remains a politically charged category of visa on both ends of the political spectrum.

However, on the upside, Canada, which has a more open immigration policy, has reported a sharp increase in job inquiries over the last few weeks. If there is a surge in workforce immigration, which is highly likely, then it will spring Canada’s recovery out of the pandemic. Also, before the coronavirus induced lockdown, Canada had said it would like to attract 1 million permanent residents between 2020 and 2022.
Clearly, as one door closes, a new one opens, yet it remains to be seen how far the ban goes.

Why is the surge in the Money Supply not directed towards consumption?

There has been a surge in currency in circulation as people hoard cash or park money inaccessible deposits to safeguard themselves against salary cuts or job losses because of uncertainty during the pandemic. India’s M3 money supply rose 6.7% in the first five months of this year which is the highest growth in seven years.

Usually, a rise in the money supply is a leading indicator of growth in consumption. However, this time it’s not directed towards either consumption or business investments. It probably reflects higher cash withdrawal by depositors to make ends meet till normalcy returns.

Gross capital formation fell 7% in the March quarter, a seven-year low, and analysts expect a further deterioration due to the pandemic. Lenders too are unwilling to take risks. On the one hand, individuals are putting money in bank deposits, and on the other hand, lenders aren’t lending because of uncertainty.

Data shows that since the end of March, currency held by the public rose 8.2% compared with a 4.1% increase in term deposits. People aren’t sure of their income when so many offices and industries are still either locked down or not functioning at full capacity and many employees have faced salary cuts. So, they’ve curtailed their discretionary spending, which means they are saving more than they are spending, hence consumption hasn’t increased at the same rate as the money supply.

Trial of the United States

In March, the International Court of Justice which sits in Hague, Netherlands unanimously authorized an investigation into the atrocities committed by the troops of the United States armed forces in Afghanistan from May 1, 2003, till date as well as other alleged crimes committed since July 1, 2002, in the Central Intelligence Agency’s so-called black sites in Poland, Romania, and Lithuania. The court overturned a 2019 pre-trial chamber decision and admitted the 2016 preliminary findings of the ICC’s chief prosecutor, Fatou Bensouda. Ms. Bensouda’s report claims systematic atrocities of torture, summary executions, forced disappearances, and rape, in which the Taliban, the Haqqani Network, and Afghanistan’s defense forces were also implicated.

In a recent move to protect its forces, President Trump has authorized new sanctions to be imposed on the International Court of Justice. Mr. Trump’s June 11 executive order, which decries the investigations of U.S. personnel as a threat to American national security and foreign policy, slapped asset freezes and family travel bans on investigators. The U.S. has always refused to recognize ICC jurisdiction over U.S. personnel on the grounds that it is not a party to the Rome Statute that underpins the court. In 2002, the George W. Bush administration suspended its signature to the Statute, when it failed to win backing to restrict the court’s remit solely to cases where the accused belonged to a ratifying state. On the other hand, the 1998 Rome Statute provides for the prosecution of crimes committed in the territory of any one of the 123 states-parties, even if the accused come from a non-member nation. This is the basis for the current investigation wherein Afghanistan and the three European nations, the location of the alleged crimes, are within the ICC’s jurisdiction, even if the U.S. remains outside.

Meanwhile, after nearly 20 years of Afghanistan’s brutal civil war, which claimed hundreds of thousands of lives, the country’s political future seems highly uncertain. Kabul’s government was excluded from the February agreement between the U.S. and the insurgent Taliban; the latter did not even commit to a lasting ceasefire. On the contrary, its leaders laid down the release of some 5,000 Taliban fighters as a precondition to begin negotiations with the government.

We must understand, that it is extremely unfair on the part of one country to invade the land of another on the pretext of protecting the host country’s sovereignty against insurgent groups and/or terrorist organizations. Every time something like this happens, it is the common people that have to suffer, crimes against humanity are committed women and children are raped, men die and everyone has to suffer but there is no justice. Nowhere can these people go and demand justice, how can a few people fight against a country so powerful it considers itself an autocratic ruler of the world.

Afghanistan and its people have been suffering for too long. The country is a battleground of power and politics between the USA, the Taliban and the government. The people it seems to have little or no say in it. Similar is the situation in Kashmir, the Indian government is fighting against the Pakistani Government and the insurgent groups the one group left unheard is the citizen of Kashmir. Think about it, what justifies the actions of the United States, how and why is it is so powerful that it can even impose sanctions on the court, and make sure the justice is not delayed it is denied.

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