What to Read in The Hindu Editorial( Topic and Syllabus wise)

Editorial 1: ​​Time for action

Context

The Reserve Bank of India made a prudent choice by pausing rate cuts in the face of prevailing uncertainties.

Introduction

The RBI’s decision to pause further rate cuts reflects a cautious stance amid rising global uncertainty. With unresolved tariff tensions, ongoing trade negotiations, and recent monetary easing yet to take full effect, the central bank has opted for strategic patience. This measured approach underlines the need for complementary fiscal action to support India’s growth and stability.

RBI’s Sensible Pause Amid Global Uncertainty

• On August 6, 2025, the RBI’s Monetary Policy Committee paused rate cuts after a cumulative 100 bps cut since February.
• Governor Sanjay Malhotra cited ongoing uncertainty in global trade, particularly evolving tariff scenarios.
• The decision came before the U.S. imposed an additional 25% tariff on Indian imports, escalating trade tensions.
• India is still negotiating a Bilateral Trade Agreement with the U.S., and final tariff levels are not yet decided.
• Additional U.S. penalties on countries purchasing oil from Russia could erode India’s competitive advantage.

Strategic Flexibility for Future Decisions

• By holding rates steady, the RBI leaves room for future actiondepending on how the global and domestic landscape evolves.
• The central bank wants to wait and observethe effect of past rate cuts before initiating more.
• This approach reflects policy prudencerather than inaction, helping prevent premature or ineffective moves.

Transmission of Rate Cuts Still in Progress

• The 100 bps rate cut since February is still working its way through the financial system.
• The RBI noted ample liquidity in banks, indicating that they have enough funds to lend.
• However, slow transmissionof lower rates to consumers and businesses remains a concern.
• The pause allows time to assess whether cheaper credit is reaching borrowersand impacting real activity.

Weak Credit Demand Signals Deeper Issues

• Despite liquidity, credit uptake is weak, especially in key consumer sectors:
  • Consumer durable loans fell by 3%year-on-year.
  • Housing loan growth dropped from 36% to 9.6%.
  • Vehicle loans also slowed by 5 percentage points.
• Industrial credit growth declined to 5% in June 2025, down from 8.1% a year ago.
• These trends indicate that rate cuts alone are not enoughto revive demand or investment.

The Need for Coordinated Fiscal Action

• Governor Malhotra stressed that monetary policy alone can’t ensure growth; structural and fiscal policies must support it.
• The government must act decisively by:
  • Rationalising GST rates, a long-pending reform.
  • Reducing fuel pricesin line with global oil rates to boost consumer confidence.
• While the RBI can afford to wait, the government must take proactive stepsto stimulate demand and support the economy.

Conclusion

While the RBI adopts a prudent wait-and-watch approach, the responsibility now shifts to the government. Mere monetary policy is insufficient to revive the economy. Targeted fiscal interventions, including tax reforms and fuel price rationalisation, are essential to stimulate demand. A coordinated policy response will be key to ensuring sustainable growth in a challenging global environment.

 

Editorial 2: ​​Mending ties

Context

There is a growing willingness from both India and the Philippines to enhance their relationship.

Introduction

The state visit of Philippines President Ferdinand Marcos Jr. to India marked a significant shift in India-Philippines ties, as both nations elevated their relationship to a Strategic Partnership. Against the backdrop of growing Indo-Pacific tensions, the visit highlighted India’s intent to expand its defence cooperation, assert its maritime stance, and deepen diplomatic engagement with Southeast Asia.

Strategic and Defence Alignment Gains Prominence

• Philippines President Ferdinand Marcos Jr.concluded his first state visit to India since assuming office in 2022.
• The visit culminated in the signing of a Strategic Partnership Agreementwith India, giving a hard power edgeto bilateral ties.
• Marcos has taken a firm stance against Chinese incursionsin the West Philippine Sea, aligning with India’s Indo-Pacific stance.
• Joint Naval Exercises:
  • For the first time, the Indian Navyconducted joint maritime exercises with the Philippine Navy in the South China Sea.
  • The drills attracted criticism from China, highlighting the growing India-Philippines alignment.
• India reiterated supportfor the 2016 UNCLOS Tribunal ruling, strengthening its advocacy for a rules-based Indo-Pacific.
• The Philippines appreciated India’s consistent diplomatic backing.

Elevating Defence and Military Cooperation

Area	Details
BrahMos Missiles	Philippines is the first export customer; interest shown in more units
Military Framework	Terms of Reference exchanged for Army, Navy, Air Force & Coast Guard
Other Agreements	MoUs signed to deepen strategic and defence engagement

• The Philippines becomes India’s fifth Strategic Partner, after:
  • Japan
  • Vietnam
  • Australia
  • South Korea

Diplomatic Reset and ASEAN Ties

• The Philippines will be ASEAN Chair in 2026and is the coordinator for the ASEAN-India strategic partnership.
• The invitation to Marcos was seen as a step to repair tensionscaused by:
  • Commerce Minister Piyush Goyal’s abrasive June remarks, where he termed some ASEAN countries the “B-team of China.”
• India is now expeditingtalks to revise AITIGA (ASEAN-India Trade in Goods Agreement).
• Separate discussions have started on a Preferential Trade Agreement (PTA)between India and the Philippines.

Trade and Connectivity: Still Evolving

Aspect	Current Status
Bilateral Trade	Stands at $3.3 billion (2024–25)
Investments	Growing in tech and pharma sectors
Travel Facilitation	Visa liberalisation and direct flights agreed

• Though trade remains modest, private sector collaborations are expanding.

Larger Geopolitical Implications

• The visit sends a strong signal of India’s active outreachin South East Asia beyond the Quad framework.
• It reflects India’s commitment to:
  • Peace and security in the Indo-Pacific
  • Strengthening multi-alignment strategies
  • Engaging with regional players, not just big powers
• The Marcos visit underscores the convergence of interestsbetween New Delhi and Manila in light of regional tensions.

Conclusion

President Marcos’s visit reaffirmed India’s commitment to a rules-based Indo-Pacific, beyond just the Quad alliance. With closer military cooperation, emerging trade links, and efforts to reset ASEAN ties, India signals a calibrated yet firm approach to regional diplomacy. The Strategic Partnership with the Philippines serves as a timely reminder of India’s expanding influence in a multipolar Asia.