SATURDAY SAMACHAAR
A 5 min read about all the Matters that Matter
Hey buddy, Glad to see you here! Welcome to Saturday, 28st of October 2023’s Matters that Matter. Happy Reading!
1. Death sentence to 8 Indians in Qatar- what makes it complex
Caught unawares by the death sentence in Qatar to eight Indian nationals (all former personnel of the Indian Navy) India is faced with tough legal and diplomatic challenges as it plots a way out. India will work the levers- relying on political, economic, defense ties and the goodwill the Indian community enjoys- to find a way out but the timing poses a challenge. The charge of espionage, especially if it involves Israel, will have implications and given the mood in the Arab world over the bombing of Gaza, this can be tricky.
The Ministry of External Affairs has expressed "concern" and said that it is "awaiting the detailed judgment". The charges against the 8 men have not been made public by the Qatari authorities. What is known is that the former navy officers were working in their private capacity with a now-defunct company, Dahara Global, to oversee the induction of small Italian stealth missiles. They were arrested in August, last year, apparently on undeclared charges of espionage. A big challenge is the opacity with which the entire trial has been conducted.
How has the India-Qatar relationship been?
The case is poised to test India's ties with the West Asian state. Successive Indian governments have tried to build friendly ties with the gas-rich nation. Then Prime Minister Manmohan Singh's visit to Qatar in 2008 was reciprocated by Emir Sheikh Tamim bin Hamad Al Thani's visit to India in 2015. Prime Minister Narendra Modi visited the Gulf state in 2016 and Doha has hosted EAM Jaishankar multiple times. These visits have laid the ground for a robust economic relationship.
Qatar is India's most important natural gas supplier and several Indian companies, including Tata Consultancy Services, Wipro, Tech Mahindra and Larsen & Toubro, operate in the Gulf country.
Investments by Qatar Investment Authority are substantial in India's new economy.
Defence ties with Qatar are also quite strong and defence cooperation is an important pillar of the bilateral agenda.
Indians have a fair amount of goodwill in Qatar, with about 8 lakh Indian nationals working and living in that small yet powerful and rich country.
However, the upswing in India-Qatar ties has not been without rough patches
The Qatar-financed Al Jazeera channel ran an aggressive campaign against India after the abrogation of Article 370 in 2019. And, while ex-BJP spokesperson Nupur Sharma's remarks about Prophet Mohammed evoked outrage from all Gulf countries last year, Qatar's condemnation was particularly sharp.
A challenge for Delhi is the verdict's timing.
It has come at a time when spying for Israel has political implications for many countries in the Arab world. And, in this polarised environment in West Asia, that poses a significant challenge for the Indian establishment, what offers a glimmer of hope in New Delhi is the very rare use of the death penalty in Qatar. The last execution in the Gulf State was in 2020 and before that in 2003.
Qatar's heft in international diplomacy should also be noted
The Sheikhdom has, in recent years, given evidence of its growing ambitions in West Asia. Doha hosts US military installations while keeping close economic ties with Iran. It has harbored the Taliban and is amongst the major backers of the Muslim Brotherhood, But the West also values Qatar's mediation in the escalating Israel-Hamas conflict. Doha's intervention to secure the release of American hostages from Hamas has earned it the gratitude of President Biden.
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2. Growth of Adani’s presence from just a blip on the country's far western end 10 years ago to every 500 km on average along India's 5,422- km coastline
From just one big port, Mundra (the largest port in India), in 2001, the Adani Group today has grown to be the largest private operator, with as many as 14 ports and terminals handling a quarter of all cargo passing through the country's ports.
This phenomenal expansion, much of it through acquisitions of other private port holders -six in the last 10 years - is becoming a cause of concern in sections of the government since there are obvious risks of market concentration in such a key infrastructure sector.
In 10 years, the total cargo handled by Adani ports jumped nearly four-fold to 337 million tonnes in FY23; its volumes grew at a compounded annual growth rate of 14 % against the industry's barely 2.7% if Adani's share is removed.
The group's market share in total cargo handled has nearly tripled from around 9% in 2013 to about 24% in 2023; that of Central govt-controlled ports dropped to around 54.5% from 58.5% in 2013. In fact, part of the rise in Adani Group’s market share in the ports sector – from 9% to 24% in 10 years – has come at the cost of the Union government-controlled ports.
Amongst ports that are not under the Central government, Adani's market share has crossed the 50% mark.
All this gives Adani Ports and Special Economic Zone Ltd (APSEZ), the port operator and logistics company, a coastal network that rivals the Central government-controlled 12 ports.
Why is it problematic?
The growing dominance of a single player along the entire coastline, from west to east, could potentially lead to a gradual weakening of the negotiating leverage held by shipping companies.
Risks of low competition, high entry barriers for newer and smaller players, high dependencies on dominant players, and higher chances of abuse of the dominant position could arise.
What has heightened concerns regarding this market consolidation in a critical industry like shipping is the context of allegations related to accounting fraud and stock manipulation concerning the Adani Group.
Why are Adani’s ports successful?
On key indicators of port efficiency like turnaround time- the duration between entry and exit of a cargo ship - Adani's ports outperform the government's. In August, the company said that it had an average turnaround time for ships of just around 0.7 days, while the central government-controlled ports had an average turnaround time of around two days
Adani’s ports thus charge higher tariffs for providing better infrastructure, efficient operations, and most importantly, significantly lower turnaround times. Typically, port tariffs usually account for a small share of overall shipping costs, while ship hiring charges are significantly higher. This means that customers usually tend to use ports with lower turnaround times, even if it means paying higher tariffs.
Interestingly, the Adani Group has seen rapid growth across a few other sectors as well. It is the largest private-sector airport operator in India. It oversees eight airports. Furthermore, it has also become the largest cement manufacturer and private-sector thermal power producer in the country.
If this interests you…
While trying to read more about how privatization of some ports can impact other state-owned ports, I came across this paper, you may have a look if you like.
- References and Excerpts from The Indian Express
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