- 12 hours ago
Iran has submitted a fourteen-point peace proposal to the United States via back-channel negotiations, seeking a permanent cessation of hostilities, the lifting of economic sanctions, and the reopening of the Strait of Hormuz.
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00:03good evening you're watching india first with me maria shakil after weeks of diplomatic deadlock
00:09and uneasy silence a potential breakthrough appears to be taking shape in the west asia
00:14conflict iran has formally submitted a comprehensive 14 point proposal to the u.s
00:20channeled through pakistan marking a significant step in back channel negotiations and according
00:26to sources familiar with the discussions tehran is pressing for a permanent cessation of hostilities
00:33complete lifting of all economic sanctions and the full reopening of the strait of humus a critical
00:40artery for global oil trade the sensitive nuclear file sources say has been kept for subsequent
00:48rounds of talks a senior iranian official has told reuters that washington has displayed notable
00:56flexibility including willingness to discuss caps on iran's nuclear program however gaps remain
01:03wide on the economic front while the u.s has so far committed only to a phased unfreezing of 25
01:12percent
01:12of iran's pros and punts tehran is insisting on the immediate and complete release of all assets
01:19in fact iranian state media further reports that washington has agreed in principle to suspend
01:25sanctions on iranian oil exports for the duration of the negotiations a move that could provide
01:32immediate economic relief to tehran the developments come amidst mounting international pressure to
01:38de-escalate tensions that have roiled energy markets and raised fears of a wider regional conflict
01:44in fact diplomatic circles in islamabad and regional capitals are closely watching whether this latest
01:51iranian overture can bridge the trust deficit and translate into concrete progress on the ground let
02:00me bring in pranay upadia uh so pranay are we to believe that negotiations finally are on track and
02:08tehran seems to be really extracting its pound of flesh this will be too early to say that the uh
02:15the
02:15negotiations are yielding or heading towards some kind of a conclusive uh you know result but we
02:21have to see we have to wait and watch because this is the second proposal sent by uh the iranian
02:26side
02:26through the pakistani interlocators and in fact recently the pakistani foreign pakistani home minister
02:32a pakistani minister for interior repairs mohsan nakwee was in tehran he spent two days there and he had
02:38uh rounds of negotiation with the iranian authorities uh and in fact uh the iranian speaker of the iranian
02:45parliament of mohammed galibaf has also been designated as the point person uh for iran china
02:50affairs also because recently in china president donald trump said that uh he uh that president xi
02:56jinping has also extended uh uh his help uh to to solve the issue so a lot of things are
03:02happening uh and
03:03meanwhile you know maria let me tell you that just few hours ago iran uh has not only reached out
03:08with
03:09oman and uh confirmed uh iranian foreign ministry has confirmed that they are in touch with the omani
03:14authorities for the management of the state of hormuz but they have also made a social media account
03:19active and live for as the persian gulf state authority pgsa to monitor for the for the world to
03:27monitor that what exactly is happening in the persian gulf and as far as the state of hormuz is concerned
03:31so on one side iran is trying to show that they are being rational here they are trying to manage
03:36things here then it is the united united states uh naval blockade which is complicating the situation
03:42on the other side we have to see that the president donald trump who is repeatedly posting on social
03:47media that his patience is running out time is essence and uh iran is running out of time they
03:52should come with some concrete proposal let's see that you know what what reaction come from white
03:57house as far as this uh this overture or this proposal is concerned but before i let you go
04:03pranay uh there have been multiple back and forth between the two sides uh what gives uh you know you
04:10hope that this particular pointed 14 point agenda which has been sent now by tehran could mean a possible
04:20breakthrough as i said maria this would be too early to say that this can actually lead to some kind
04:27of
04:27breakthrough because the pointers of these 14 points are largely the same that removal of the
04:32urius led sanctions uh defreezing of the iranian assets uh opening up of the state of hormuz or
04:39recognizing the iranian authority over the state of hormuz because it falls under the territorial waters
04:45of oman and iran uh these are these are the similar points but as far as the critical point is
04:50concerned
04:51that uh you know what will happen as far as the iranian nuclear program is concerned
04:56will they be committing something uh as as a moratorium up to 20 years what united states is
05:02demanding what will happen to that 450 kilogram of the enriched uranium will they agree to to hand over
05:08that enriched uranium to either china or russia uh these are all proposals in in you know in in back
05:15channels okay okay pranay thank you so much for uh bringing us that piece of breaking news of course
05:22that's coming uh through us via news agency reuters shifting focus now remember tensions in west asia
05:28have flared up dramatically once again sending shock waves through global energy markets and raising fresh
05:35fears of a wider economic crisis despite a fragile april ceasefire between washington and tehran a drone
05:44strike near uae's baraka nuclear power plant and multiple interceptions over saudi arabia have
05:52triggered a dangerous new escalation energy infrastructure across the gulf is once again
05:57under repeated threat the state of hormuz the world's most critical oil choke point remains highly
06:04vulnerable while international shipping aviation and tourism in the region are already taking a
06:10severe hit brent crude has now surged past 111 dollars per barrel piling massive pressure on already
06:21strained global economies in paris g7 finance ministers voiced serious concern today over rising public debt
06:30volatile bond markets and the broader risk of economic instability triggered by the west asia crisis
06:37this volatile mix of geopolitical risk and energy shock is now the top story dominating global headlines
06:46first of the story and then i bring in the guest who will be able to put this in context
06:50for us for the entire west asia
07:07from attacks on energy hubs to disruptions in the strait of hormuz the iran conflict has triggered an
07:15economic shock wave across west asia gulf economies are facing soaring oil prices collapsing tourism
07:22grounded flights and billions in losses a drone attack on the uae triggered a fire near the baraka
07:29nuclear power plant on sunday saudi arabia too has claimed intercepting three drones that
07:35entered from iraqi airspace the escalation clubbed with the impact of stalled peace efforts caused brent
07:41crude futures to climb 211 a barrel on monday marking the highest level since may 5th and countering
07:49donald trump's promise of prices falling soon the gas will go down as soon as the war's over it'll drop
07:56like a rock there's so much others all over the place sitting all over the oceans of the world
08:02and it'll be it'll go down but what won't happen is if iran had a nuclear weapon and used it
08:10then the whole world is a different place you're not going to have to pay a little bit more for
08:15gasoline the gasoline the oil will go down rapidly as soon as the war is over
08:21since the war began on february 28th iran has repeatedly targeted gulf nations hosting u.s military
08:28bases around 80 energy facilities including refineries pipelines and production plants have
08:35reportedly been attacked damage estimates from the attacks now stand at nearly 58 billion dollars
08:41the biggest shock has come from the effective closure of the strait of homos that has triggered
08:46the worst oil supply crisis in modern history the energy crisis has exposed discord among gulf nations
08:53and the uae quit oil producers group opec at the start of this month saudi arabia and the uae have
09:00managed to cushion the oil blow using alternative export pipelines saudi arabia is rerouting nearly seven
09:06million barrels of crude daily through its east-west pipeline to the red sea the uae is exporting up to
09:121.8 million barrels a day through its hub shan fujaerah pipeline but other nations in the gulf are
09:19staring at a full-blown economic crisis unlike saudi arabia and the uae qatar cannot bypass the strait of
09:26homos iranian strikes on the ras lafan industrial hub have already cut production capacity by 17 percent
09:33the imf has predicted that qatar's economy could shrink by 8.6 percent this year kuwait's economy too has
09:41been projected to decline by 6.4 percent further the war is damaging the gulf's image as a safe business
09:48and tourism hub dubai's hotel occupancy is projected to crash from 80 percent to just 10 percent this
09:55quarter the war has also drastically disrupted air travel as per reports jet fuel prices the biggest
10:03variable cost to airlines have surged 90 percent on the annual average gulf carriers such as emirates
10:09etihad and qatar raives have come under financial strain over 30 000 flights to west asia were
10:16cancelled in the first month of the war alone for gulf nations what began as a threat to regional
10:22security is now about economic survival and with no u.s iran deal in sight west asia's economic
10:29turbulence may only deepen in the months ahead preksha jain for india today
10:37and let me go straight to riad where dr john espachianakis who is the chief economist at the gulf
10:45research center in riad who's also an advisor to the saudi finance minister ministry former economist at
10:52the un and world bank and associate fellow at chatham house is joining us live thank you so much
10:59john you have warned the west asia conflict could tip the world towards recession and you had said
11:07that the scale of disruption depends on how long the conflict lasts we are now 79 days into this war
11:15is a global recession still a warning or has it already begun
11:22i think it's very much at the beginning of the recession that the world is experiencing
11:29we already see added inflation we're beginning to see markets being quite jittery we're beginning to see
11:38consumption falling we are also seeing demand destruction in terms of oil consumption and asia in
11:47particular is very much affected by this and as we continue this crisis it will impact the developed
11:55world in terms of jet fuel in terms of holidays airlines and so forth so i think we are at
12:02the
12:02beginning of what seems to be a slowdown if not a recession okay so you're calling it a slowdown not
12:10really a recession let's look at the strait of hormuz the closure of the strait of hormuz through which
12:16roughly 20 percent of the world's oil trade passes has been called the largest supply disruption in
12:25the history of the global oil market so john as someone who has spent decades advising global economies
12:33did the world uh simply sleepwalk into a crisis that was entirely foreseeable
12:42uh no not at all i think that uh most of my colleagues including myself never expected the
12:49strait to shut we thought and we continue to believe that there will be a resolution but we never expected
12:58that the strait will be shut in such a significant way and for such a long period of time and
13:04everybody
13:06expected this to be expected this to be a black swan it seems that the global economy is a little
13:11bit
13:11more resilient and markets are more resilient and let me juxtapose the following had we seen this crisis
13:20when the u.s was not independent from oil and gas that is natural gas probably we would have seen
13:28the price of oil jumping to anything above 200 to 250 dollars a barrel today the u.s is independent
13:36so whatever geopolitically is happening in the middle east seems to be um something of uh of an occurrence
13:43but not a huge disturbance to the u.s economy yet i say yet because we're still far more dependent
13:50the world is interdependent on the supply chains and at some point petrochemicals
13:57and plastics will impact everybody yes so because there is interdependence how will self-reliance
14:06really work because there are projections that gulf state gdp could be down over eight percent in 2026
14:14one would say that this is a contradiction calling it resilience when the numbers are telling a different
14:20story yeah so it comes to the following the gulf will be impacted and is being impacted no doubt in
14:30terms of gdp in terms of revenues saudi arabia and the ue are exporting oil a little bit less than
14:38what
14:38they used to but they're still exporting oil but bahrain not much and kuwait nothing iraq zero and qatar
14:48natural gas uh is zero so these are impacted more of course the longer this drags out it will impact
14:55more so even the countries such as saudi arabia and the ue so they are impacted in terms of tourism
15:02in terms of uh standing and credibility in the world economy and so forth everybody is impacted from such
15:10a crisis but nobody could predict the longevity of the crisis and nobody thought that we will be
15:16towards the end of may and we will still be waiting for this trade to open so now let's talk
15:23about the
15:24alignment and realignment that is happening the uae has exited opec and opec plus um john you have
15:33described this as fully aligned with the u.s position but doesn't this effectively fracture opec at the
15:41worst possible moment when the world needs coordinated supply management the most
15:50yes um it has fractured opec but um each country in the region will go in its own way and
15:58the uae
15:59believes quite clearly that they need to increase production they have already announced that they
16:05will extend the pipeline that is exporting already through the port of ujira petroleum they will expand
16:12in 2027 and they'll be able to produce and export much more product they don't want to be aligned with
16:20opec and saudi arabia because they see the world differently so is saudi arabia uh will the end of
16:28opec come well uh we need to see but of course it's a severe blow and saudi arabia will need
16:34to go
16:34its own way to provide and cater for its own national needs from this crisis the gulf is not
16:42absolved uh there is going to be an impact short term and medium term and of course long term
16:47because the longer this continues the more the gulf states will be forced to divest away from the u.s
16:55and developed markets and bring back their reserves into their own countries to support
17:02the development okay so since you're talking about realignment um in uh west asia particularly the
17:09middle east uae are you then sensing that this could also mean uae exiting the arab league or perhaps
17:17gcc um itself next how serious is that threat i think that it should be taking
17:25into serious account exiting the arab league and gcc is something that i will not be surprised
17:33i think the uae is chartering its own path and again that is something that a crisis is bringing
17:41the crisis is creating a new gulf nothing is going to be normal or the way we knew it one
17:49for the middle
17:50east and two for the gulf countries and the gulf countries vis-a-vis asia relations with india will
17:56enter into a new uh platform relations with pakistan and saudi arabia have already entered into a new
18:04phase and the way gulf views china and the rest of asia is going to be reassessed again from a
18:12national
18:12interest perspective nothing is going to remain the same so uh saudi arabia and uae are now pulling
18:19in opposite directions on oil policy uh does this fracture the gulf's united front permanently
18:29i think if we continue to see the same kind of fracture yes is this good for the region probably
18:36not but the crisis has created all kinds of uh injection pools that takes uh each country into
18:45a different direction they have to survive and in that survival mode everybody needs to be food
18:52independent food secure energy secure also revenue secure what if the strait continues to be shut for
18:59six months from now what will the world do how will airlines fly the europeans already found a
19:05solution they will use a different type of jet fuel that will allow them to import jet fuel from the
19:11us
19:11can the us sustain this kind of demand forever no something has to give and something will break
19:19and both sides in this conflict will have to find a medium in order to negotiate there is no zero
19:26sum game in this world as we found out both sides will need to accommodate negotiations means that
19:33both sides need to give something in return for something else uh you've made an important point with regards to
19:42uh the food supply because one third of global fertilizer actually passes through the strait of
19:50formos so john and the depression uh disruption is actually hitting the northern hemisphere just as planting
19:59season is about to begin which is threatening harvests and food prices through the year this isn't just an
20:06energy crisis anymore uh are we looking then at a compounding food crisis that nobody is perhaps
20:14talking about loudly enough yes it could be and in in this there are two sides that we tend to
20:22forget
20:23um one is the markets and the other is the analyst and government uh side of things governments seem to
20:31be all
20:32singing the same song that we're not entering a crisis as if they don't want to disturb the waters of
20:39their
20:39societies not to alert them to the kind of seriousness we're entering uh the two the second bit is the
20:46analyst
20:47trading community uh it seems that there is a certain numbness uh we are seeing a unique crisis the strait
20:56is shot
20:5714 million barrels of oil are out of the market and oil is hovering around 110 for 110 dollars for
21:07brent oil
21:08as if this is a normal thing and equity seem to be performing as if there is no crisis in
21:15the world
21:15and i think there is something that talks about the psychology of all this i think we're going to see
21:22definitely a crisis unfolding if we don't see a solution a food crisis that is on fertilizers
21:30urea and other products plastics as i said before it's quite critical that these products are seen but also
21:39at the same time there is a silent event happening which is surprising as well that there is product
21:46credit uh crude oil coming out of the strait that we don't seem to be taking notice there is some
21:56vessels
21:56going through as if there is a silent agreement between the two warring sides that needs to be accommodated
22:06for so that is also that i would like to bring to the table that there is an underlying a
22:13crisis but
22:13also an underlying kind of silent passage of product and crude oil so why is there silence over this
22:21crisis let me give you an example of india india has spent 174.9 billion dollars on crude and petroleum
22:28products last year uh 22 of total imports that's what it means india also relies on hormuz for
22:35uh 50 percent of its crude 60 of its lng and almost all of its lpg and moody's is actually
22:42saying that
22:42india's output could fall nearly four percent from its baseline is india then the most exposed large
22:49economy in the world right now uh india is one of the most but it's not the most um india's
22:59neighbor
22:59pakistan is facing a huge crisis regardless how they presented to the wider public but also the
23:07philippines faces a similar crisis south korea faces a similar crisis and what i was saying prior
23:14is that governments are trying to keep a lid on the sadness and badness of the news not to panic
23:21the
23:22wider public because that panic will push prices upwards and it will create a huge disturbance
23:30to the political normality that we're facing be it in asia or in europe or in the developed world
23:37clearly in in africa they are facing uh and the enormity of the crisis by having queues and having
23:45fuel shortages and so forth so there seems to be a two-line type of growth one is the numbness
23:53as i
23:53said to the market and the other is kind of um the reality on the ground which is quite severe
24:00so the reality on the ground is very very severe it's a beginning of a slowdown is what uh dr
24:07john
24:07here is saying really appreciate your time i'm sure we'll continue this conversation as we have been
24:12doing ever since the war began so thank you appreciate your time the west asia war has uh
24:18shaken the global economy uh from soaring crude prices to crashing markets and weakening currencies
24:26india too has felt the impact with the rupees sliding to a record low of 96.35 against the dollar
24:35and
24:35benchmark indices falling sharply since the conflict began but compared to many economies battling
24:42uh runaway inflation and fuel shocks india has managed to weather the storm relatively well
24:49despite crude prices surging uh nearly 50 percent globally petrol and diesel prices in india have
24:56gone up by only three rupees per liter with the government and oil companies in fact absorbing much
25:02of the pressure the center has also assured citizens that there is no shortage of petrol diesel or
25:08cooking gas in fact prime minister narendra modi has pushed for an austerity measure and has said that
25:16this is about you know spending wisely among this entire global crisis take a look at this report and then
25:23i
25:23bring in the guests
25:28the global economy has borne the brunt of the west asia war
25:34and india too is feeling the impact though relatively less compared to many other economies
25:41the rupee has slipped sharply against the dollar from 90.99 before the u.s iran conflict began
25:49on february 27th to an all-time low of 96.35 today stock markets too have taken a hit even
25:58though they have
25:59shown signs of recovery in may the sensex was above the 81 000 mark when the u.s and israel
26:07jointly
26:07struck iran today the benchmark index is hovering just above 75 000 a fall of nearly 6 000 points
26:17the nifty two has slipped from over 25 000 to the 23 650 mark
26:25global oil markets have been among the biggest casualties of the conflict with the state of
26:31ormuz virtually shut crude and brent prices have surged by nearly 50 percent since february 27th
26:40but even on this front india has managed to cushion the impact
26:46petrol and diesel prices have gone up by only around three rupees per liter with the oil companies and the
26:53government absorbing much of the global oil shock commercial lpg cylinders however have seen the
27:00sharpest spike from 1740 rupees before the conflict to over 3071 rupees now domestic lpg cylinder prices
27:10have seen a spike of only 60 rupees from 853 rupees to 913 rupees while cng prices have increased from
27:2077
27:21rupees per kilogram to 80 rupees amid fears of panic buying the center has moved quickly to reassure
27:29citizens that there is absolutely no shortage of fuel or cooking gas anywhere in the country
27:35in the country
27:37if you look at the product supply of petrol diesel lpg or natural gas can be sufficient stocks
27:44and no shortage of any lpg distributership or retail outlet can be dry out
27:50not be dry out in the country
27:51the cooking lpg gas can be insured to ensure that any distributor can be dry out in the country
27:59commercial LPG supply is now made up of 70%.
28:03Prime Minister Narendra Modi's austerity message
28:06has also helped India manage the economic pressures of the war
28:10by pushing tighter spending controls.
28:14At a time of global crisis, India's economy has shown resilience,
28:19absorbing external shocks while ensuring stability in essential supplies.
28:25Bureau Report, India Today.
28:31Let's put the spotlight on India.
28:33Joining me on the show tonight, Nilesh Shah,
28:35part-time member of Economic Advisory Council of Prime Minister Modi.
28:39He's also the managing director of Kotak Mahindra Asset Management Company Limited.
28:45Madhan Subnovus is chief economist, Bank of Baroda.
28:49We have Santosh Mehrotra visiting Professor, Centre for Development,
28:53University of Bath, UK.
28:54Nilesh Shah, beginning with you, straight off Hormuz, 79 days,
28:58under threat.
28:59India sources 60% of its crude from Gulf.
29:02Has the market fully priced this?
29:06Or is the real shock still coming?
29:09The market is optimistic about length as well as severity of tenure.
29:16And they keep on getting messages which probably are on the counter direction.
29:24And which is why we are seeing markets which is going up and down
29:27rather than going down or going up.
29:30So, I will say your headline, Indian economy under pressure but not in panic,
29:37is also reflected in market.
29:39Market is in pain but not in panic.
29:42Okay.
29:43So, it's under pressure but not panic is the big headline that's coming in from Nilesh Shah.
29:49Mr. Subnovus, let me take that question to you.
29:52Put a number on this.
29:52What has this war already cost India?
29:56Energy, import bill, freight insurance, currency pressure.
30:01How bad is the damage?
30:03Well, in fact, all the elements which you've spoken of have been affected on account of the war.
30:08Difficult to say at this point of time which is more severe.
30:11Because the way in which the transmission has taken place is it all starts from the oil price,
30:16gets into inflation.
30:17Then there are measures taken by the government to bring about austerity.
30:22So, we have duty on gold and silver.
30:24So, we see some kind of a price push coming from that particular direction.
30:29Then look at the way in which the government has tried to protect the household from the high price of
30:34crude oil.
30:34So, they took up part of the burden on the fiscal numbers.
30:38That is in terms of cutting off the excise duty.
30:40There will probably be an increase in the fertiliser subsidy.
30:44So, that is something which is going to affect the budget.
30:46And finally, of course, they have increased the retail price of petrol, diesel and CNG.
30:50Which means that overall, I would say that the inflationary impact is something which is something which will be never
30:57expected.
30:58So, if you even go back towards what kind of forecast we had of inflation before the war began,
31:03we were looking at something in the region of 4% or maybe even lower than that.
31:07Today, we are really talking of inflation being in the region of 4.5% or 5%, depending upon the
31:12severity of the war and the way in which this price hikes are implemented by the government.
31:17The currency, I would say, is something which has definitely something which has been affected the most because for different
31:23kind of reasons.
31:24You know, the war has actually impacted the trade deficit.
31:26But the kind of withdrawal we're seeing from FBIs, I think that has been a kind of a concern because
31:31it was happening even before the war began.
31:34But that is something which is having a direct impact on the currency on a day-to-day basis.
31:38And then last of all is whether the dollar is strengthening or weakening.
31:41Every time the dollar strengthens, we see that all currencies are weakening and rupees also weakening.
31:45So, although, if I have to summarize, I would say the inflation impact and the currency impact have been more
31:50distinct.
31:51And the government on its part has made sure that there are no shortages.
31:54I think so credit has to be given out there because the physical aspect has been tackled.
31:59But the price hikes are not.
32:01Yes.
32:02So, Professor Mehrotra, 79 days into the war, how are you looking at the India story?
32:11Has India managed it so far well?
32:16I'm afraid that the government is still not cushioning the impact on the poorest people of the country.
32:23It's interesting that your own report didn't say a word about how much is the price increase in the LPG
32:33cylinder for five kilogram cylinders.
32:36That's the cylinder that is consumed by the poorest people in this country, the migrant workers,
32:43who populate the slums of this country.
32:47And the price of that has increased dramatically by 260 rupees.
32:54If the government of India had windfall gains because oil prices have, for the last 10 or 12 years,
33:05been nowhere greater than $60 a barrel, which has been the case ever since this government came to power,
33:13it has had a windfall gain.
33:16And that means the fiscal resources exist to cushion the poorest people, 0.1, 0.2.
33:29Petrol prices have been raised.
33:31They should have been raised two months ago.
33:34Of course, we know perfectly well why they were not raised.
33:38Please don't tell me that that's hardly any increase, because I've been in programs where it has been argued
33:47that the United States has experienced a 50% increase in petrol prices.
33:52Does anyone know that in the United States, the price of a gallon of petrol is still less than the
34:02price of a gallon of drinking water?
34:04So let's not compare an economy of $80,000 per capita income with a $3,000 per capita income.
34:13Point three, diesel prices should never have been raised, because it's going to feed into an inflationary spiral.
34:23Inflation is only just beginning to show.
34:26It's going to continue to increase.
34:28We already know what the impact on WPI has been, and CPI is also going up.
34:36What the government, fourthly, what the government needs to do in order to reduce its fiscal deficit is to raise
34:45the price of urea.
34:47You know what the farmers are paying for urea today?
34:50350 rupees.
34:51You know how much it costs the government?
34:533,500 rupees.
34:55The result?
34:57Soil quality of our farmers is declining, because urea is being overapplied.
35:04There's no reason for that to be overapplied.
35:08So it's critical that you raise the price of urea.
35:1385% of our fertilizer subsidy is accounted for by urea.
35:20If you increase the price of urea, you will benefit the farm.
35:26And it will actually benefit the fiscal situation.
35:34Professor Merutra, you made an important point, particularly about the poorest Indian households, which are perhaps most energy price sensitive.
35:41Cooking gas, transport, food.
35:44So certainly when it is about the human cost of this war, they are the ones paying it.
35:48But when you look at the overall WPI, sir, of course it is showing an increasing trend.
35:55But then given the nature of this war and how critical the choke point of Hormuz is, would you then
36:03say that India so far has managed it okay?
36:09No, I'm sorry.
36:11This is exactly what I'm questioning.
36:14I gave you four points.
36:16And I'm saying to you that it has not managed it very well.
36:21Had it managed, let me turn to now the foreign exchange side.
36:25I have not said a word about the foreign exchange side.
36:27On the foreign exchange side, we've already seen the rupee tumble by five rupees in the last three months since
36:38before the war.
36:39Now, clearly, if I was sitting in the RBI, I would be intervening to prevent this from happening because this
36:48is going to feed into an inflationary spiral that I've been hinting at.
36:53The inflationary spiral is going to come from the diesel price increase.
36:58It's going to come from the LPG price increase and, of course, the petrol price increase.
37:10So the point is that you have to prevent that from happening.
37:14If you want to prevent that from happening, then the rupees must not be allowed to depreciate any longer.
37:22Okay.
37:23We've got a massive broadcast of foreign exchange reserves.
37:27Okay.
37:28Nilesh, particularly with regards to the concerns around the Indian rupee, that it's almost going to touch 100 rupee for
37:37a dollar.
37:38That's a massive concern.
37:40And do you think, as reports are suggesting, that it was artificially controlled, that it was not allowed to depreciate,
37:50and that was done because India wanted to send a message to the world.
37:56But right now, it appears to be in a position that you cannot control that depreciation anymore.
38:31I don't think so.
38:32So, one can say that there was FPI selling, there was net FDI becoming zero.
38:43And on top of it, higher current account deficit thanks to higher oil prices.
38:49All this combined has pushed rupee to depreciate.
38:53But to say that RBI was setting a level of rupee and now they are letting it go, that will
39:01be slightly unfair to the RBI.
39:05But Nilesh, is the fear then real that this could go really down further?
39:11I mean, it could go, if it is in the free fall, then it could be, it could cross 100
39:17and reach a different mark then.
39:20How do you control the depreciating rupee?
39:24Normally, rupee moves or all currencies moves around what is known as real effective exchange rate.
39:31There was a time when rupee was a bit overvalued.
39:35RBI's intervention actually helped build their reserves and stop rupee's further appreciation.
39:42Now, rupee is a bit undervalued.
39:45So, I think, let market forces figure out what is the right level of rupee.
39:51Let RBI intervene to manage volatility so there is no unnecessary speculation.
39:57And let government take corrective action.
40:01For example, India is the only country which is sitting on some 30,000, 35,000 tons of gold, which
40:08is 125% of GDP.
40:10And yet, last year, we spent 72 billion dollars in import of gold.
40:15How do we recycle our existing gold?
40:18If that happens, automatically, pressure on rupee could come down.
40:23So, let government take their action.
40:26Let RBI manage the volatility.
40:28And let market determine the level.
40:31Okay.
40:32So, every institution should do their own job.
40:36Madan Sabnavis, come in now.
40:38Now, India's strategic bet on Iran, which is the Chabar port, is it now an asset India can continue to
40:47rely on?
40:48What does that mean for investor confidence in India's geopolitical investment decisions?
40:53I think I look at it more in terms of a long-term strategy.
40:57And I think that is where we are quite clear about where exactly we should be aligning ourselves with.
41:02So, I don't think this is something which is major as far as India is concerned for our overall growth
41:07story and overall prospects and investor sentiment.
41:10I think this will be more of a minor thing which has come up because of the fact that we
41:14have the war going on today.
41:15So, to my mind, I don't think this is a major issue.
41:19And it is something which we will probably persevere with, depending upon the judgment of the government in which were
41:25the parties which are involved.
41:27But I just wanted to, if you don't mind, I would like to comment on the currency because I think
41:32that was something on which I felt that the currency has been managed very well by the Reserve Bank of
41:39India.
41:39And just like what Nilesh had said, I think the RBI has never been targeting a particular level.
41:44Now, the thing is that should be concerned if it's going to the level of 100.
41:48I think if the fundamentals dictate that we should go towards 100, that would be the right kind of value
41:52for the rupee.
41:53So, I think probably the range of 95, 96 would be the right kind of value.
41:58Because today, if you see a lot of these currency movements are happening on account of valuation changes.
42:03Okay?
42:04And that is what is also affecting our reserves.
42:07And today, you're looking at a way in which the dollar is moving.
42:10So, we have this external factor which has been putting a lot of pressure on the currency.
42:14So, today, in fact, when we say that the rupee touched a new high, which is happening almost every day,
42:19it's primarily on account of the fact that the dollar has been strengthening.
42:23But otherwise, if you look at the overall fundamentals of India, yes, there is an oil problem.
42:27There is an SPI withdrawal.
42:28But otherwise, there has been nothing very dramatic from what was happening even prior to the war.
42:32So, I don't think there's much concern out there.
42:34And to this idea of saying that we should be using our reserves, I don't think it makes any sense.
42:39Because the moment the market gets to know that you're selling reserves, the RBI is selling dollars in the market.
42:44They assume that something is wrong in the market and there will be more speculative forces coming in.
42:49So, I think this has been handled in a very, very prudent manner to ensure that what action the RBI
42:55does doesn't lead to further speculative forces coming into the market.
42:58Okay. Professor Mehrutra, a quick word from you and then I'll give the last word to Nilesha.
43:03Please go ahead.
43:07I watched the real effective exchange rate very carefully.
43:12As long as the rupee was at around 90 and had been falling and had fallen to 90, the real
43:21effective exchange rate had come back to a base of 100 and that was good.
43:26Now, the point is, in the last few months, it has dropped by 5% almost.
43:34Clearly, it was just admitted by Madan that it is now weaker than it should be.
43:41This is the time for the RBI to intervene.
43:44There's no point in, you know, Nilesha and Madan taking an ideological position of when the RBI should intervene, when
43:52it should not.
43:53Fact of the matter is, it's going to hurt the economy and therefore, you know, the RBI should be intervening
44:01because it's going to affect the inflationary spiral.
44:05We don't want to get into a stagflation situation.
44:09Okay, Nilesha, 79 days already into this war, if it continues, because there are still no signs of when will
44:18this war end.
44:19What is the one economic variable you are watching most closely for India?
44:32Yes, you have to unmute yourself.
44:34As of today, it is the oil prices.
44:37All problem of India starts with higher oil prices and it automatically resolves if oil prices come down.
44:45More importantly, this time we also have to worry about availability of energy.
44:51So, price of oil and availability of supply, these are the two critical things to watch out for.
44:58All right, Nilesha, Madan Sabnavis and Professor Mehrotra, really appreciate your time.
45:04Thank you so much.
45:05Of course, this discussion on the impact on the Indian economy is going to continue as well.
45:10And as the world grapples with the West Asia war, economic uncertainty and shifting geopolitical equations,
45:18Prime Minister Narendra Modi is on a major diplomatic outreach aimed at strengthening India's strategic and economic partnerships across Europe
45:27and the Gulf.
45:28From energy and defence deals in the UAE to strategic technology partnerships in Europe,
45:35the five-nation visit is being seen as India's push to diversify trade, secure supply chains and boost its global
45:44influence amidst growing instability.
45:47The Prime Minister has also been conferred with his 31st and 32nd international honours during the visit,
45:54Sweden's Royal Order of the Polar Star and the Grand Cross of the Royal Norwegian Order of Merit,
46:00reflecting India's growing strategic importance and expanding influence in global geopolitics.
46:06I'm leaving you with this report. Thanks so much for watching.
46:31Five countries, six days, one mission.
46:37Deepening India's strategic relations with Europe and the Gulf at a time when the world is navigating conflict,
46:43economic uncertainty and growing geopolitical shorn.
46:47That has been the highlight of Prime Minister Narendra Modi's ongoing five-nation diplomatic outreach.
46:58The Prime Minister is in Norway today,
47:03where he held bilateral talks with his Norwegian counterpart,
47:08focused on green energy, maritime cooperation, Arctic engagement, trade and investment.
47:25Prime Minister Narendra Modi was also bestowed with the Grand Cross of the Royal Norwegian Order of the Merit,
47:32the highest honour in Norway.
47:38Before Norway, Prime Minister Modi travelled to Sweden,
47:43where he was conferred with the Royal Order of the Polar Star,
47:47Sweden's highest honour awarded to a head of government.
47:50India-EU Freight Trade Agreement.
47:54India-EU Freight Trade Agreement рдкрд░ рд╕рд╣рдорддреА рдмрди рдЪреБрдХреА рд╣реИ.
47:58рд╣рдорд╛рд░рд╛ рдкреНрд░рдпрд╛рд╕ рд╣реИ рдХрд┐ рдЗрд╕реЗ рдЬрд▓реНрдж рд╕реЗ рдЬрд▓реНрдж
48:04рдЗрдВрдкреНрд▓рд┐рдореЗрдВрдЯ рдХрд┐рдпрд╛ рдЬрд╛рдП.
48:08Security and Defence Partnership
48:12рддрдерд╛ рдореЛрдмрд┐рд▓рд┐рдЯреА рдЕрдЧреНрд░рд┐рдореЗрдВрдЯ рдиреЗ рднреА
48:16рд╣рдорд╛рд░реЗ рд╕рд╣рд┐рдпреЛрдЧ рдХреЛ рдирдИ рджрд┐рд╢рд╛ рджреА рд╣реИ.
48:33In the Netherlands, Prime Minister Modi was welcomed with ceremonial honours in The Hague
48:41and held extensive talks with Dutch Prime Minister Rob Shetton.
48:47The visit marked a major diplomatic breakthrough
48:50with India and the Netherlands elevating ties to a strategic partnership
48:53and signing 17 agreements.
49:05Before Europe, Prime Minister Modi began the diplomatic outreach
49:08in the United Arab Emirates,
49:10where he received a grand ceremonial welcome in Abu Dhabi.
49:16The India-UAE talks focused on energy security,
49:19defence cooperation and infrastructure investments,
49:23amid rising instability in West Asia.
49:28Prime Minister Modi also reiterated India's position
49:31that dialogue and diplomacy remain the only path
49:34towards lasting peace and ongoing global conflicts.
49:37The India-UAE talks about the
49:41dialogue and diplomacy of the country.
49:47The people who are free, open and safe are made.
49:54This is our biggest challenge.
50:08The final leg of the visit will take the Prime Minister to Italy, where talks with the Italian
50:14Prime Minister Giorgio Ameloni are expected to focus on defence, clean energy, manufacturing
50:20and technology partnerships.
50:23Bureau Report, India Today.
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