3 April 2025 Current Affairs

Supreme Court Addresses Speaker's Indecision on Disqualification Petitions

The Supreme Court is examining whether it can direct Assembly Speakers to decide disqualification petitions within a specified timeframe. The case involves BRS leaders seeking timely action on petitions against 10 MLAs who defected to the Congress in Telangana. The Court questioned whether constitutional courts must remain powerless when Speakers delay decisions on defections for extended periods.

Key Points:

• Justice B.R. Gavai stated a Speaker cannot use indecision to defeat the anti-defection law's purpose
• The Court specifically asked if it could be powerless if defection happened in the first year and the Speaker took no action for four years
• Senior advocate Mukul Rohatgi argued courts have no superintendence power over a Speaker and judicial review is limited to final decisions
• Justice Gavai emphasized the Court is "not powerless" and can invoke extraordinary powers under Article 142 if its requests are not followed
• The Court noted disqualification petitions filed in March-April 2024 only received notice in January 2025, questioning if this was a "reasonable period"

Speaker's Role in Indian Parliament (Background):

The Speaker of the Indian Parliament presides over the Lok Sabha (lower house) and holds several constitutional responsibilities:

• Under the Tenth Schedule (anti-defection law), the Speaker functions as a quasi-judicial tribunal to adjudicate disqualification petitions
• The position is elected from among members of the house after general elections
• The Constitution requires the Speaker to be impartial despite typically coming from the ruling party
• The Speaker's decisions under the anti-defection law are subject to judicial review, but the extent of court intervention in the process remains contested
• Senior advocate C.A. Sundaram highlighted that political partisanship still influences Speakers despite their office requiring impartiality

This case reflects the ongoing tension between preserving the autonomy of constitutional authorities and ensuring they fulfill their duties within reasonable timeframes.

India's Manufacturing PMI Reaches Eight-Month High in March 2025

India's manufacturing activity showed significant growth as the Seasonally Adjusted Purchasing Managers Index (PMI) reached 58.1 in March 2025, up from 56.3 in February. This eight-month high marks the 45th consecutive month of expansion, driven primarily by an increase in new orders and robust sales.

Key Highlights:

• New orders index reached an eight-month high of 61.5, indicating strong domestic demand momentum
• International orders grew but at the slowest pace in three months
• Companies depleted their finished goods inventories at the fastest rate in over three years to meet demand
• Business outlook remains optimistic with 30% of survey participants expecting higher output volumes
• Production volumes increased at the end of fiscal year 2024-25
• Input prices rose to a three-month high but remained below the long-run average
• Price increases for manufactured goods occurred at a softer pace
• Positive business forecasts were supported by favorable demand conditions, improved customer relations, and pending project approvals

Background on PMI Index:

The Purchasing Managers' Index (PMI) is an economic indicator that surveys purchasing managers across manufacturing firms about business conditions. Key characteristics include:

• A reading above 50 indicates expansion in the manufacturing sector; below 50 signals contraction
• The index is compiled monthly by S&P Global (formerly IHS Markit) for many countries
• It measures five components: new orders, inventory levels, production, supplier deliveries, and employment
• PMI is considered a leading indicator, providing early signals about economic activity before official data is released
• The index is seasonally adjusted to account for predictable annual patterns in business activity
• Manufacturing PMI is particularly valuable for assessing industrial output, supply chain conditions, and business confidence

India's consistent PMI readings above 50 for 45 straight months demonstrate remarkable resilience and sustained growth in its manufacturing sector despite global economic challenges.

Trump's "Reciprocal" Tariffs Based on Trade Deficits, Not Actual Tariff Rates

President Trump announced massive tariffs on dozens of nations that were presented as "reciprocal," supposedly matching what other countries charge the US. However, analysis suggests the tariffs were not calculated based on other countries' actual tariff schedules but instead used a simple formula based on trade deficits, potentially causing significant disruption to global supply chains.

Key Points:

• The formula appears to be: (trade deficit ÷ exports to US) × 0.5
• For China, with a $295.4 billion deficit and $439.9 billion in exports to the US in 2024, the calculated "tariff" was 67%
• For India the rate of tariffs has been set at  26%.
• These are not matching actual tariffs but targeting countries with large trade surpluses relative to their exports to the US
• Mike O'Rourke of Jones Trading called it "surplus targeting" rather than reciprocal tariffs
• The approach could particularly harm nations deeply integrated into US corporate supply chains
• Analysts warn these tariffs could "wreak havoc upon the profit margins of major multinational corporations"
• The calculation method was initially identified by journalist James Surowiecki on social media and confirmed by Wall Street analysts
• The administration labeled these calculations as "tariff charged to USA" despite not reflecting actual tariff rates

Background on India-US Trade Relations:

India and the United States have maintained a complex trade relationship characterized by both cooperation and friction:

• Bilateral trade in goods and services has grown significantly over decades, reaching approximately $190 billion annually in recent years
• The US has consistently maintained a trade deficit with India, though smaller than with countries like China
• Major US exports to India include aircraft, machinery, and medical devices; while India primarily exports pharmaceuticals, textiles, jewelry, and IT services
• Longstanding trade tensions have focused on India's tariff barriers, intellectual property protection, and restrictions on foreign companies
• The countries have engaged in negotiations through various frameworks including the Trade Policy Forum and the US-India CEO Forum
• India has previously been a target of US tariffs, including removal from the Generalized System of Preferences (GSP) program in 2019
• Both nations have periodically imposed retaliatory measures in response to each other's trade policies
• Defense trade has emerged as a growth area, with India increasing purchases of US military equipment

The new tariff approach could further complicate this already nuanced trade relationship between the world's largest and fifth-largest economies.

China Conducts Multi-Dimensional Military Drills Around Taiwan

China staged a second day of military exercises around Taiwan on April 2, 2025, codenamed "Strait Thunder-2025A," featuring live-fire drills in the East China Sea and blockade operations. These increasingly frequent and complex drills serve dual purposes according to analysts: preparing for a potential future invasion while also intimidating Taiwan.

Key Points:

• PLA operations focused on "joint blockade and control" and "precision strikes on key targets" in the Taiwan Strait
• Live-fire strikes targeted simulated ports and energy facilities along China's Zhejiang province coast
• China's Shandong aircraft carrier group conducted exercises east of Taiwan, emphasizing "multi-dimensional blockade capabilities"
• Taiwan's defense ministry condemned the drills as "aggressive, provocative, and irresponsible"
• The US State Department criticized "China's irresponsible threats and military pressure operations"
• Taiwan detected 76 Chinese warplanes, 13 PLA vessels, and 4 coast guard ships in 24 hours
• The exercises were described as punishment for Taiwan President Lai Ching-te's "provocations for independence"
• Despite increased military activity, many Taipei residents described the drills as "routine" and not causing alarm
• The codename suggests further "Strait Thunder-2025B" exercises are planned later this year
• China's Eastern Theater Command now conducts near-monthly operations rather than 3-4 exercises annually

Background of China-Taiwan Relations:

Taiwan, officially the Republic of China (ROC), has been self-governed since 1949 when the Chinese Civil War resulted in Communist forces taking control of mainland China while the defeated Nationalist government retreated to Taiwan. Key aspects of this complex relationship include:

• China considers Taiwan an inseparable part of its territory and has never renounced the use of force for reunification
• Taiwan functions as a de facto independent entity with its own democratic government, military, and foreign relations
• The "One China" policy has been diplomatically ambiguous, allowing countries to maintain unofficial ties with Taiwan
• Taiwan has evolved from authoritarian rule to a vibrant democracy, holding its first direct presidential election in 1996
• Economic ties have grown significantly despite political tensions, with substantial Taiwanese investment in mainland China
• The US maintains a "strategic ambiguity" policy, selling defensive weapons to Taiwan while not explicitly promising to defend it
• Chinese military activities around Taiwan have intensified under Xi Jinping's leadership, particularly following high-profile US-Taiwan interactions
• Taiwan's strategic importance stems from its democratic governance, advanced semiconductor industry, and location controlling vital shipping lanes

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