Morning Brief: Jaishankar Signals Progress In Border Talks As India Slowly Warms To China; Foxconn-HCL JV To Build Semiconductor Unit In UP; Factory Output Grows In July

Dear Reader, start your day informed with our quick roundup of key news and updates.

Jaishankar Signals Progress As India Slowly Warms To China

Two weeks after India and China signalled progress in resolving the military standoff in Ladakh, External Affairs Minister S Jaishankar has said that about 75 per cent of the disengagement issues with China have been “sorted out.” This is the first time Jaishankar has quantified the progress after four years of negotiations. He added that India "can look at other possibilities" when the crisis at the border is resolved.

Just hours later, National Security Advisor Ajit Doval met China's Foreign Minister Wang Yi in Russia. The Ministry of External Affairs noted that the meeting allowed both sides to review efforts for an early resolution of remaining LAC issues and rebuild bilateral relations. In India, Union Minister Rammohan Naidu met a Chinese delegation to discuss resuming flights after a four-year hiatus. There have been other signs of improvement in ties in the last few weeks, with India approving some investment proposals from Chinese companies, which had been on hold for years.

Factory Output Grows Slightly in July

Factory output, measured by the Index of Industrial Production, grew to 4.8 per cent in July from a revised 4.7 per cent in June, but remains lower than last year's 6.2 per cent for July. The sequential improvement was driven by the manufacturing and power sectors, with manufacturing growing at 4.6 per cent and power at 7.9 per cent. Mining contributed with a 3.7 per cent increase. Within manufacturing, the production of electrical equipment surged by 28.3 per cent, significantly boosting overall sector growth.

Government capital expenditure saw a significant increase in July, with Union and State governments (across 25 states) boosting spending by 42.8 per cent to Rs 1.17 lakh crore. Meanwhile, the intermediate goods sector experienced a five-month high growth rate of 6.8 per cent during the same period.

Foxconn-HCL Joint Venture To Build Semiconductor Unit In UP

A joint venture between Taiwan’s Foxconn and IT services giant HCL Group has been allocated around thirty acres near Jewar airport in Noida for a semiconductor assembly and testing unit. If approved by the central government, this will be the first OSAT facility in Uttar Pradesh. Foxconn, investing $37.2 million, holds a 40 per cent stake. HCL Group, the majority partner, has chosen the location due to its headquarters in Noida. HCL Group believes its local presence will facilitate smoother management of the project. Incentives, such as capital and interest subsidies, along with land and infrastructure support, could position UP as a leading hub for semiconductor manufacturing.

Other Developments

Doval Meets Putin With Ukraine Peace Plan

National Security Adviser Ajit Doval met with Russian President Vladimir Putin on Thursday (September 12). Doval's visit follows Prime Minister Narendra Modi's recent trip to Ukraine, where Modi advocated for direct talks between Ukraine and Russia and offered India's support for peace. Sources indicate that Doval brought Modi's peace plan for discussion with Putin. During their talks, Putin expressed hopes that Modi would attend the BRICS summit in Kazan next month. This development comes amid speculation about India's emerging role in negotiating a peace deal between Ukraine and Russia.

Supreme Court To Decide On Kejriwal's Bail Today

The Supreme Court will decide today whether Delhi Chief Minister Arvind Kejriwal will receive bail following his arrest by the CBI in June over the alleged liquor excise policy scam. If the court rules in his favor, Kejriwal could be released almost six months after his initial arrest by the Enforcement Directorate (ED) on March 21 and two months after receiving bail from that case. The AAP leader’s previous bail request was thwarted by the CBI’s subsequent arrest. Kejriwal's lawyer argued that this second arrest was an “insurance” to keep him in custody ahead of February’s Delhi election.

US Sanctions Chinese Entities Over Pakistan Missile Ties

The US State Department imposed sanctions on a Chinese research institute and several companies linked to Pakistan’s ballistic missile program. The Beijing Research Institute of Automation was accused of assisting Pakistan in acquiring equipment for testing rocket motors for the Shaheen-3 and Ababeel systems, and potentially larger systems. Sanctions were also applied to three other China-based firms, along with a Pakistan-based entity and a Chinese national. These entities were sanctioned for transferring equipment that violates missile technology restrictions. This follows similar sanctions imposed on three China-based companies in October 2023.

From The States

Governor Dubs Mamata ‘Lady Macbeth’

West Bengal Governor C V Ananda Bose condemned Chief Minister Mamata Banerjee for failing to understand the state's sentiments and declared he would “socially boycott” her, calling her the “Lady Macbeth of Bengal.” He criticized the state’s rampant violence and pledged support for those protesting the rape and murder of a junior doctor at R G Kar Hospital. Bose vowed not to share any public platform with Banerjee.

Engineer Rashid Criticises Modi And Rahul, But Keeps Options Open

Engineer Rashid, labeled a “BJP proxy” by opponents, announced his willingness to support the INDIA alliance if it commits to restoring Article 370 once in power. Rashid, recently released from Tihar Jail on interim bail, criticized the Modi government’s handling of the Kashmir issue. Rashid emphasised his openness to participating in dialogue with Modi if the Prime Minister genuinely seeks to resolve the Kashmir dispute. Rashid also challenged mainstream leaders Omar Abdullah and Mehbooba Mufti, asserting that his commitment to Kashmir’s cause surpasses their pursuit of political power.

Opposition States Demand 50 Per Cent Share of Central Taxes

Finance Ministers from Opposition-ruled states—Karnataka, Kerala, Punjab, Tamil Nadu, and Telangana—on Thursday demanded a 50 per cent share of Central taxes, criticizing the Union Government's increase in Cess and Surcharges as reducing the effective devolution of funds under the 16th Finance Commission. Hosted by Kerala Chief Minister Pinarayi Vijayan, the meeting saw Karnataka's Revenue Minister Krishna Byre Gowda propose a five per cent cap on cess and surcharges. The South Indian states also challenged the Finance Commission’s use of 2011 population data for fund allocation, arguing it penalizes states with effective population control. They contend that the formula unfairly benefits states with higher populations.

MVA Faces Tensions Over 163 Maharashtra Assembly Seats

Ahead of the Maharashtra assembly elections, the Maha Vikas Aghadi (MVA) alliance has resolved seat-sharing for 125 out of 288 seats, but 163 seats remain contentious. Congress leader Vijay Wadettiwar confirmed that differences over these seats will be addressed after the Ganesh festival, with a seat-sharing pact expected soon. Wadettiwar expressed confidence in MVA's chances of returning to power, citing positive survey results and public sentiment against the current government.

Reports indicate that Congress is seeking over 110 seats based on its Lok Sabha performance, where it was the top party in Maharashtra. The NCP and Shiv Sena also had mixed results in the Lok Sabha elections, affecting their seat demands.

Stay tuned for more insights through the day.