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The pronouncements and appointments of the U.S. President-elect suggest the balance of outcomes may be positive for New Delhi, but it is early days yet. It is now a month since the U.S. presidential elections and the surprise win of Donald Trump, a rank outsider. His political predilections were ambiguous and it was not clear whether, once coming into office, he would continue to adhere to the many apparently improbable and even outrageous campaign promises he had been making — such as building a wall to keep Mexican immigrants out, deporting illegal immigrants, penalising China for currency manipulation and unfair trade, and making U.S. allies pay more for their own defence. For the past month, Mr. Trump has been busy announcing several senior-level appointments in his incoming administration, and these give some indication of the likely changes one should expect in U.S. policies, both domestic as well as external. There have also been some statements from Mr. Trump himself which o...

In a surprising-for-a-rightwing-leader change of heart, Prime Minister Nawaz Sharif has renamed the National Centre for Physics at Islamabad’s Quaid-e-Azam University after Abdus Salam, who, in 1979, became the Muslim world’s first Nobel laureate in Physics. The Ahmadi community of Salam had been apostatised in 1974 in the second constitutional amendment by a “liberal” prime minister, Zulfikar Ali Bhutto, himself hanged in 1979 — the year Salam got his Nobel Prize — by General Zia, a truer Muslim than Bhutto. The chief reporter of a leading daily, Ansar Abbasi, reacted to the PM’s decision by asking why Salam was being honoured in Rabi-ul-Awwal, the month the Prophet PBUH was born. The intent was to highlight that the faith of the community to which Salam belonged had insulted the prophet PBUH by claiming a prophet after him. Muslims don’t like the pagan Nobel statue coming into the hands of their fellow-Muslims. Nobody celebrated Salam, the Nobel laureate, in Pakistan; then an Egypt...

The challenge of automata India must facilitate investments in artificial intelligence and be prepared to address the negative fallouts of the technological revolution.  That the US president elect Donald Trump has spoken up against H-1B visas, which go mostly to Indian IT companies, is no surprise. Last week at a “thank-you rally” in Iowa, Trump promised to end the abuse of Washington’s visa policies by US firms that have replaced American engineers with cheaper foreign skilled workers. He was referring to an incident that involved Disney World in Orlando, Florida and a couple of Indian companies and IT professionals on H-1B visas. Trump did not name India or the companies, but the message was loud and clear. The US policy on H-1B visas has been under fire from many quarters of the US establishment — from the IT trade unions to the liberal New York Times, which ran a series of stories last year, on how the Indian companies had gamed the US visa policy to the detriment of ...

India’s brilliant ex-foreign secretary and a scion of great Indian statesmen, Shivshankar Menon, in his book ‘Choices: Inside the Making of India’s Foreign Policy’ (2016) begins by positing his thesis: “All governments claim eternal consistency and success. Some even claim omniscience, and yet the essence of governance is choice. Choice involves uncertainty, risk, and immediacy; those who must make the choices operate in the contemporary fog that envelops events rather than from the certainty and clarity that come with time, distance, and reflection. Nowhere is this more true than in foreign policy decision-making. Diplomacy offers choices, and those choices must be negotiated with other sovereign actors not subject to a particular state’s customs, laws, and restraints.” The above piece of wisdom can serve as advice to both India and Pakistan. The central idea is that a state has more room for manoeuvre if it keeps its options open, or more importantly, if it contrives to have more ch...

In a rapidly changing world, the Modi government’s foreign policy will require much more imagination than the shock-and-awe tactics of the past two and a half yearsA In June this year, just after Prime Minister Narendra Modi’s visit to Washington, a senior American official spoke of the “Modi Doctrine”, giving formal recognition to the foreign policy choices adopted by India since May 2014. In his speech at the U.S. Congress, Mr. Modi outlined India’s commitment to the partnership with the U.S. as being a “new symphony in play” in order to build an international maritime partnership in Asia, to play a leading role in the South Asian neighbourhood, strategically as well as for humanitarian purposes, and to take a strong position on terrorism or cross-border terrorism emanating from Pakistan. A few months later, Union External Affairs Minister Sushma Swaraj, speaking at the launch of a book, The Modi Doctrine: New Paradigms in India’s Foreign Policy, went on to define it thus: Ind...

The withdrawal of Rs500 and Rs1,000 notes on 8 November has changed the composition of money supply in the economy. A large part of what was currency in circulation is now coming to banks as deposits. The sudden inflow of deposits has given rise to speculation about how these will be utilized by the banks. There are reports that banks will increase lending. Some have suggested that banks’ non-performing asset (NPA) problems will get alleviated. This is not correct. Our analysis suggests that: (1) banks are not in a position to significantly increase lending, (2) their net interest income (NII) may fall over the next few quarters, worsening their capital position, and (3) their NPA situation may get worse, further adding to their capital woes.  Close to 86% of the currency in circulation, amounting to roughly Rs14 trillion, was withdrawn overnight. By 13 November, Rs5.1 trillion   out of this had been deposited in the banking system and Rs0.3 trillion had been exchanged ove...