What to Read in Indian Express Editorial( Topic and Syllabus wise)

Editorial 1: Saudi-Pakistan Defense Pact: Significance for the Two Countries

Context:

Saudi Arabia and Pakistan have signed a comprehensive defense cooperation agreement, signaling a renewed phase in their long-standing partnership. While both countries already shared cultural, religious, and economic ties, this pact gives structured shape to their defense relationship, covering military training, defense production, intelligence sharing, and joint exercises.

Background of the agreement:

• Pakistan and Saudi Arabia signed this agreement in the aftermath of recent strike in Qatar by Israel. Also, this agreement assumes significance as it is first major defense pact an Arab nation has signed with a nuclear-armed nation.
• The US presence in the Arab peninsula has decreased resulting in weak security guarantees against Israel and Iran.
• The agreement has the provision of joint defense against any aggression from third country on either of the agreement partners.
• This pact reflects the shared commitment of both countries to develop aspects of defense cooperation between the two countries and strengthen joint deterrence against any aggression.

The Saudi-Pakistan relationship:

• It dates back to the 1960s when Pakistani troops were stationed in Saudi Arabia to provide training and protection during the Egypt’s war in Yemen at the time.
• Pakistani Special Forces helped Saudi during Grand Mosque seizure in 1979. In 1982, they signed Bilateral Security Cooperation Agreement that allowed Pakistan troop deployment, training and advisory support on Saudi land. It is key buyer of Pakistani arms and Pakistan trained the Saudi’s Airforce.
• Saudi Arabia supported Pakistan financially during the sanctions due to it nuclear programme.
• Over the years, Saudi Arabia has consistently supported Pakistan during its economic crises—through oil supply at concessional rates, cash deposits, and aid. Pakistan, in turn, has been a reliable security partner, with its military personnel assisting in Saudi defense needs.
• Additionally, the Pakistani Diaspora in Saudi Arabia, numbering in the millions, contributes substantial remittances, making Riyadh a vital economic lifeline. This historical depth explains why the defense pact is seen as a natural extension of their relationship.

Significance of the Pact for Pakistan:

• Economic Support and Relief: Pakistan is grappling with high external debt, currency depreciation, and IMF dependency. Enhanced defense cooperation with Saudi Arabia is expected to bring economic dividends, including investments in Pakistan’s defense industry and potential financial assistance.
• Strategic Leverage: At a time when Pakistan seeks to balance relations with China, the US, and Gulf states, this pact bolsters its presence in the West Asian security equation. It reinforces Pakistan’s image as a crucial security player in the Muslim world.
• Military Modernization: Collaboration may strengthen Pakistan’s defense production sector through joint ventures, technology transfers, and training opportunities. This is especially important for Islamabad, which is looking to upgrade its military capabilities under budgetary constraints.
• Political Prestige: Entering into a formal pact with Riyadh enhances Pakistan’s international standing. It reaffirms that despite its internal challenges, the country remains an important factor in regional geopolitics.

Significance of the Pact for Saudi Arabia:

• Diversifying Security Partnerships: Traditionally dependent on the US for defense, Saudi Arabia has been working to broaden its strategic partnerships. With Pakistan’s large and professional military, Riyadh gains a trusted partner capable of contributing to its security.
• Addressing Regional Threats: With tensions involving Iran, conflicts in Yemen, and broader instability in West Asia, Saudi Arabia values Pakistan’s combat experience and expertise.
• Vision 2030 Alignment: Crown Prince Mohammed bin Salman’s Vision 2030 emphasizes reducing reliance on external actors and creating a more secure environment for economic diversification. Defense cooperation with Pakistan fits neatly into this plan.
• Maintaining Balance: By engaging Pakistan, Saudi Arabia strengthens ties with a traditional ally, while also ensuring that its growing partnership with India does not alienate Islamabad.

Saudi Arabia-India Relation:

• Economic and trade cooperation: India is second largest trading partner for Saudi Arabia, whereas Saudi is the fifth largest trading partner of India. In fiscal year 2023-24, bilateral trade stood at USD 42.98 billion, with Indian exports valued at USD 11.56 billion and its imports valued at USD 31.42 billion.
• Strategic Bilateral Partnership:During the PM Manmohan’s visit in 2010 in Riyadh, both sides upgraded their bilateral ties to Strategic partnership. Following PM Modi visit to Riyadh in 2016, many high level visits from both sides have taken place.
• Diplomatic support during Operation Sindoor:Saudi Arabia was one of the countries who quickly condemned the incident of killing Civilians in Pahalgam attack on April 2025. Saudi has always preferred talk to both India and Pakistan during recent crises. It has avoided taking sides. This strengthens its role as peace negotiator.
• People-to-people ties: The civilization and historical ties between both countries go back to Indus Valley Civilization times. Presently, there is 27-lakh strong Indian Diaspora in Saudi Arabia.
• India has cautiously responded to this agreement by stating that it will study is implications on Saudi-India bilateral relations as well as for regional and global stability.

Way Forward:

The Saudi-Pakistan defense pact is more than a technical military agreement—it is a reflection of evolving strategic imperatives. For Pakistan, it offers much-needed economic support, opportunities for military modernization, and renewed prestige on the world stage. For Saudi Arabia, it secures a capable ally in its regional security environment, reduces overdependence on the US, and aligns with long-term strategic goals under Vision 2030. It strengthens a historical bond while simultaneously reshaping regional dynamics in West Asia and South Asia.

 

Editorial 2: Fed’s Dual Mandate Conundrum: Balancing Inflation and Jobs

Introduction:

The U.S. Federal Reserve (Fed) finds itself at the center of a policy conundrum. Its dual mandate—ensuring maximum employment and maintaining price stability—are now more difficult to balance. As 2025 unfolds, both inflation and unemployment are rising in tandem, leaving the Fed in a predicament where solving one problem risks aggravating the other.

The Context:

• On Wednesday, the Federal Reserve reduced interest rates by 25 basis points (a quarter of a percentage point), its first cut in nearly two years.
• The move came after months of political pressure from former President Donald Trump, who had long argued that high rates were choking growth.
• Current Chair Jerome Powell has had to balance political expectations with economic realities.
• Historically, rate cuts are intended to stimulate growth by lowering borrowing costs, encouraging investment, and supporting employment.
• But this tool also risks fueling inflation if used during a period of rising prices. In the present scenario both the inflation and unemployment are rising. It poses a rare and delicate situation.

The Dual Mandate:

The Fed’s legal responsibilities are twofold:

• Achieve maximum employmentto ensure that the economy creates enough jobs and keeps the labor market healthy.
• Maintain price stabilityto control inflation so that purchasing power is not eroded.
• Normally, these goals move in opposite directions.
• For example: Cutting rates spurs growth and lowers unemployment but can stoke inflation.
• And raising interest rates reins in inflation but risks slowing the economy and rising joblessness.
• When both inflation and unemployment rise together, a condition called “stagflation”, the Fed finds itself in a bind.

Why Did the Fed Cut Rates?

• Despite rising inflation, the Fed cut rates because unemployment had been increasing since January 2025.
• The U.S. labor market which was once very tight has started cooling: job creation slowed, layoffs rose, and workers are finding it harder to secure positions.
• In such a scenario, keeping interest rates too high could worsen unemployment further.
• The Fed likely judged that inflation, while troubling, was not yet at runaway levels. Data showed the Consumer Price Index (CPI) rising from 2.5% in January to 3.9% by August 2025, still moderate compared to past crises.
• Cutting rates was thus seen as a pre-emptive step to prevent deeper damage to growth and jobs.

The Inflation Dilemma:

• Since early 2025, inflation has been trending upward due to rising commodity prices, supply disruptions, and higher wages and tariffs. Cutting rates risks worsening this trend.
• Cheaper borrowing boosts demand for goods and services.
• Stronger demand, in turn, can push prices up if supply cannot keep pace.
• This is the crux of the conundrum: if the Fed tightens to fight inflation, unemployment worsens; if it loosens to fight unemployment, inflation may rise.

Broader Implications:

• Rate cuts reduce borrowing costs, easing monetary supply in the market. But higher inflation erodes purchasing power, especially hitting middle- and lower-income groups.
• Lower rates usually buoy stock markets, but persistent inflation introduces volatility and uncertainty.
• S. monetary policy has worldwide spillovers. Lower rates may weaken the dollar, influencing capital flows to emerging markets.
• Beyond economics, politics complicates the Fed’s job. Trump repeatedly criticized Powell for keeping rates too high, framing monetary easing as essential for growth.
• While the Fed is technically independent, political commentary puts it under constant scrutiny, raising questions about its autonomy. It reduces its credibility as independent monetary policy authority.
• The Fed’s challenge is to strike a balance between inflation and unemployment. Ideally, inflation should ease while unemployment stabilizes, but achieving both requires careful calibration.
• Unlike in past decades, when inflation or unemployment dominated at different times, today both indicators are rising in tandem. This makes policymaking exceptionally difficult.

Way forward:

Federal Bank must cautiously tweak rates to adjust the conundrum of inflation and unemployment. At the same time, the US federal government must reduce economic hurdles such as tariffs, import bans, tighter immigration policy. US must follow the free market principle to allow the economic factors flow unabatedly to US economy. It will also embolden US’s global superpower position by strengthening its economy.