Signs of cold war 2.0, sweet victory for India, and rising fuel consumption: Three things Teji Mandi investors should know on July 2, 2021
Signs of cold war 2.0, sweet victory for India, and rising fuel consumption: Three things Teji Mandi investors should know on July 2, 2021

Cold War 2.0 in the Making?

Chinese president Xi Jinping chose the occasion of the Communist Party’s 100th anniversary to pass on some tough messages to its global adversaries.

President Jinping's message was loud and clear that the era of China being bullied is gone forever, and any such attempt will face bloodshed.

The message holds significance as a few united voices are raised against China in recent times over its role in the spread of COVID-19, its treatment of Taiwan and Hongkong, border skirmishes with India, and the condition of Uyghurs Muslims in the country. It is also in a tense relationship with the US over the trade deal, which is yet to be resolved.

The current world order is quite similar to the era of the cold war between the US and the Soviet Union. And, with China's rise, history seems set to repeat itself. Importantly, China has learned a lot from the failures of the erstwhile USSR and is unlikely to repeat those mistakes. Add its aggressive expansion policies to it, and the world is looking at a dangerous proposition to deal with for years to come.

A Sweet Victory

India's tough stance with the European Union over the inclusion of Covishield in its Green Pass program has created the desired impact.

As many as nine European countries have approved Covishield. It includes seven EU member nations: Germany, Slovenia, Austria, Greece, Ireland, Estonia, and Spain. The rest are the non-member states: Iceland and Switzerland.

Covishield's non-inclusion in Green Pass had created a massive uproar in India. Many called it a biased stance as AstraZeneca's Vaxzevria vaccine was approved while Covidshield was not. Covishield is produced using the same technology as Vaxzevria.

India retaliated against this by not recognising the EU’s digital COVID-19 certificate. India's tough posture created the desired impact as several EU members came forward, recognising Covishield. It is a diplomatic victory that matters and signifies India's growing clout in the global hierarchy.

Signs of Revival

India's fuel demand rebounded in June as the economy has gained momentum with COVID-19 related restrictions easing off. Petrol sales rose 5.5% to 2.12 million tonnes YoY in June, which was at 90% of pre-COVID levels. The sale of diesel was down 1.84% YoY, but its intake increased on a monthly basis. Diesel consumption in June remained at 82% of pre-COVID levels.

The recovery is driven by state governments reopening economies. Oil Minister Dharmendra Pradhan believes fuel demand will recover to pre-pandemic levels by the end of 2021. However, the possibility of a third COVID-19 wave is a blind spot here. As per the latest development, the Maharashtra government has delayed further reopening in Mumbai and closed down malls in Pune again.

(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

Free Press Journal