While stressing that the Islamic State and al-Qaeda did not yet pose a threat for India, the NSA said the country’s economic development could have a spill over effect that could bind the region together
Ajit Doval, the National Security Advisor (NSA) in the new government of Prime Minister Narendra Modi, said he sees democracy as one of the most powerful tools for dealing with security problems. While stressing that the Islamic State and al-Qaeda did not yet pose a threat for India, the NSA said terrorism is much more intense today than thirteen years ago when the war on terror was declared.
Speaking at the Core Group Meeting of the Munich Security Conference (MSC) last month, Doval said, "The hope lies in the greater unity, understanding and commonality between the great democracies. If they don’t lead, it can lead to a state of anarchy".
Doval also emphasized on a collective response, a systematic convergence, automated systems and institutionalised mechanisms to combat the threat of terrorism. "Though many countries have established military, technical and legal systems to fight terror at the domestic level, at the global level we have failed to make much headway in creating working global systems," he added.
Based on India's experience of a peaceful transition of power, Doval said that one key strategy concerned that question of "what can we do to strengthen democracy […] what can we do to have the relationships with democracies by which we can have bilateral and multilateral arrangements by which the security structure and architecture can be strengthened."
A second key point of strategy Doval referred in his speech was India's neighbourhood. He stressed that "if we had the strong democracy that we have in our country, if we have similar democracies in our region that could be one of the very surest drivers of India's security."
"One important aspect of Indian foreign policy is developing very good neighbourhood relations, and also seeing whether the fruits of India’s economic development could have a spill over effect, which could bind the region together. This could create the vested interest of people to see that India’s growth is nothing that undermines their statehood but probably provides them with new opportunities," the NSA added.
The NSA said India wanted to resolve conflict with any country through talks and negotiations. "We believe that there is no conflict which cannot be resolved through talks in a peaceful way."
Doval ruled out any territorial compromise in the on-going bilateral dialogue with China to resolve the pending border dispute. "Our territorial integrity cannot be compromised but I see positive signals from China and we have to evolve and engage each other rather than work in isolation," he added.
The Indian NSA, said jihadist terrorism like the Islamic State and al-Qaeda did not yet pose a threat for the country. "I don't think there are threats of magnitude from either one of them, which we are not in a position to cope with." He, however, did stress, that the government was very attentive. "We have to watch it very, very closely in case any of these relationships develop and in case they start targeting India or interests of India, we will have to take a very serious view," Doval added.
Calling for a Comprehensive UN Convention against terrorism, Doval, who assumed office just four months back, said, "The new genre of conflicts has no substantially proved correct response. We are just [grasping] at darkness. … We are trying, we are succeeding, we are failing … But most of the time, it doesn’t work."
The Munich Security Conference (MSC) hosted the Core Group Meeting in New Delhi in partnership with the Indian Observer Research Foundation (ORF) to discuss key issues of international security policy with around 70 senior decision-makers from India as well as the Euro-Atlantic, Asian and the Middle East regions.
Video of the entire speech is available here.
If Nifty closes above 8365, the short term rally will continue for some more days
Although market opened marginally lower today it immediately jumped to the day’s high. The indices tried reaching up to the intra-day high hit on Tuesday but were unable to sustain and started moving lower. After hitting the day’s low at around 10.25 am, the indices witnessed range-bound movement. In Tuesday’s closing report we had mentioned that the market is highly overbought in the short term and will move sideways for a few days.
Sensex opened at 27,903 and moved lower to hit a low of 27,740 after hitting a high at 27,981 while Nifty which opened at 8,332 and moved from the level of 8,360 to 8,290. Sensex closed at 27,869 (down 47 points or 0.17%) while Nifty closed at 8,337 (down 1 points or 0.02%). NSE recorded a volume of 102 crore shares. India VIX rose 2.58% to close at 14.1100.
The stock markets were closed on Thursday on account of Guru Nanak Jayanti.
The Ministry of Urban Development said that Singapore has shown keen interest in partnering with India in the urban development sector, including the development of a new smart satellite city and a new capital for the state of Andhra Pradesh.
The Market is now looking ahead to the reshuffle of the cabinet for signals, this could materialise on Sunday.
The Indian government is reportedly considering dropping a provision in the tax treaty between India and Cyprus that exempts capital gains made in India by investors from Cyprus, from tax.
Prime Minister Narendra Modi on Wednesday directed strict monitoring of projects based on monthly completion targets for road, railway, shipping and civil aviation projects. Emphasizing that there is now no delay in decision-making at the highest level, the Prime Minister said it should now be possible to achieve all infrastructure targets. Modi said that a new civil aviation policy is under preparation.
Paris-based think tank Organisation for Economic Co-operation and Development (OECD) has projected a 5.4% growth for the Indian economy this year as global recovery continues at a moderate pace. Earlier in September 2014, it had projected a 5.7% growth rate for India. Growth will strengthen in India as investment picks up, from a 5.4% rate in 2014 to 6.4% in 2015 and 6.6% in 2016, according to the advanced G-20 release of the OECD's latest Economic Outlook. Global GDP growth is projected to reach a 3.3% in 2014 before accelerating to 3.7% in 2015 and 3.9% in 2016, according to the Outlook.
Reserve Bank of India (RBI) Deputy Governor HR Khan reportedly said on Friday that India's inflation has a long way to go before it eases because of high input costs.
Cummins India (8.02%) was the top gainer in the ‘A’ group on the BSE. The stock hit its 52-week high today. It posted a net profit of Rs 202.40 crore for September 2014 quarter as compared to Rs 144.81 crore for September 2013 quarter. Revenue increased from Rs 932.71 crore to Rs 1,144.06 crore for the relevant quarter.
Weak September 2014 quarter results reported by Escorts pulled the stock lower. The stock was the top loser (7.89%) in the ‘A’ group on the BSE.
Dr.Reddy's Labs (4.51%) was the top gainer in the Sensex 30 pack. The stock also hit its 52-week high today. The US Food and Drug Administration said that it has granted final approval to Dr Reddy's Laboratories and the US based firm Endo International Plc to make cheaper copies of Roche Holding AG's anti-viral Valcyte.
Recently GAIL was in news after it announced that it slashed gas supplies to small industries in Gujarat on Oil Ministry orders. Small industries in South Gujarat accused it of arbitrariness and selective targeting, as supplies to similar units in other states have not been touched. The stock was among the top two losers (2.46%) among the Sensex 30 stocks.
US indices closed in the positive on Thursday.
The number of Americans applying for new jobless benefits lingered below 300,000 for the eighth straight week amid the lowest level of layoffs in years. US productivity in the third quarter grew at a 2% annual pace, preliminary data showed, marking the fourth sizable increase in the past five quarters.
Asian indices showed mixed performance. Nikkei 225 (0.52%) was the top gainer while Jakarta Composite (0.93%) was the top loser.
China's central bank vowed to lower funding costs for corporate borrowers amid increasing pressure on the nation's slowing economy.
European indices were showing mixed performance while US Futures were trading flat.
ECB President Mario Draghi said policy makers will be ready to implement further measures if needed as he signaled officials may cut growth forecasts next month.
The European Central Bank, left interest rates unchanged at its policy meeting on Thursday. The ECB's key lending rate, known as the Refi rate, was left at 0.05%, while the rate the ECB pays on deposits held at the central bank remains at minus-0.2%.
According to StanChart, the pace of reforms has picked up since the BJP won two state elections in October and the Modi government is likely preparing to introduce a series of measures in the winter session of Parliament
The National Democratic Alliance (NDA) government led by Narendra Modi started reforms slowly but surely. More of its initiatives were gradually made after the budget, initially focused on micro level initiatives to improve efficiency rather than broad macro initiatives. These micro reforms – often called ‘silent’ reforms – are aimed at improving the ease of doing business in India and would gather pace in next few months, says Standard Chartered in a research note.
The report says, "The government has introduced further macro reforms since the Bharatiya Janata Party (BJP), which leads the NDA, won two important state elections in October. The process is likely to gather pace as we head into the winter session of parliament starting on 24 November. In line with our expectations, initiatives so far include an emphasis on reviving stalled projects, a commitment to fiscal consolidation via further deregulation of fuel prices, the reduction of red tape, further opening of the economy by liberalising foreign direct investment (FDI) rules, and short-term measures to improve food supply."
"Progress on labour reforms, the relaxation of procedurally complex environmental rules, and the removal of bottlenecks in the energy sector have exceeded our expectations. We think the government is on the right track and the role of silent reforms in improving India’s productivity should not be ignored. Such reforms could push India’s GDP growth to around 6% (from below 5% in FY14, year ended March 2014), with a lag. However, the government needs to accelerate unfinished reforms in order to increase growth potential further," StanChart said.
The focus of Modi government has been on micro-level policy changes to reduce bottlenecks and improve efficiency. These changes have taken place in several areas – reducing bureaucratic red tape, providing increased clarity on laws and regulations, introducing large-scale digitisation of government functions, and relaxing environmental and labour rules. StanChart said, "We think these silent reforms are important in improving the ease of doing business in India. However, the economy still faces cyclical and structural headwinds, and the impact of these reforms on economic growth might be felt only with a lag."
The pace of reforms has picked up since the BJP won two state elections in October. The Modi government has taken several steps to address bottlenecks in energy sector and is likely preparing to introduce a series of measures in the winter session of parliament. In particular, StanChart said, it would be keenly watching progress on the GST, banking/financial services reforms, and changes to the land acquisition bill. The government is also trying to relax rules on FDI norms in sectors such as in defence, railways and construction to attract new foreign investors.
"The policy action taken so far has been broadly in line with our expectations, and we are hopeful that macro reforms will continue until the budget announcement in February. Sustained reformist intent could keep asset markets buoyant and keep investors patient as they await a growth recovery," the report concluded.