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Tuesday 15 May 2018

NEWSLETTER, 20-V-2018











DELHI, 20th May 2018
Index of this Newsletter


INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC. 


1.1.  India’s Achilles heel
1.2.  The immensity of the job creation problem in India
2.1.  RInfra alliance bags ₹7,000-cr Mumbai sea-link project
2.2.  Electric vehicles market in India set to see several new entrants
3.1.  Maharashtra now an open defecation-free state: CM Devendra Fadnavis
3.2.  Leisang lights up, now every Indian village has power
4.1.  Dilip José Abreu: an elegant and creative economist
4.2.  Indian music industry grew by 27% last year to hit Rs 725.6 cr
5.1.  India to hit 140 MT steel production level in 2018: Minister
5.2.  JSW Infra plans Rs8,800 crore ($1,36 bn) investment in next 3 years


– AGRICULTURE, FISHING & RURAL DEVELOPMENT


6.1.  India exports record 3.95 lakh tonnes of coffee in FY18
6.2.  India's seafood exports increase 13% despite fall in global shrimp prices
7.1.  Food regulator wants packaged food labels to display if they contain GM ingredients
7.2.  Tea exports touch record 256.5 million kilos in FY18
8.1.  IBM India says cyber security a gold mine for jobs
8.2.  With an eye on polls, Centre plans mass campaign for flagship insurance schemes
9.1.  BigBasket eyes $500 million war chest as Walmart, Amazon loom
9.2.  Organic food market to grow at 20-25%: 24 Mantra Organic CEO
10.1. Khadi: All dressed up and going places
10.2. FMCG topline may rise by 300-400 bps in FY19 on rural demand'


– INDUSTRY, MANUFACTURE


11.1. Maruti Suzuki gets lion’s share of Suzuki R&D budget
11.2. Volkswagen to decide on Skoda India’s €1 billion FDI plan
12.1. Jewellers see 10% export growth in FY19
12.2. Makers of smartphone parts keen to invest in India: Huawei’s Peter Zhai
13.1. Lockheed Martin sees India as next big aerospace, defence hub
13.2. Manufacturing of Planes under Make In India and Safety & Security in Aviation Sector to be top priority: Suresh Prabhu
14.1. A good competitor is good for HUL: Sanjiv Mehta
14.2. Future Group stocks soar on hopes of more online-offline partnerships
15.1. Rampant evergreening in Indian pharma industry
15.2. Engineering exports grow 17% to $76 bn in FY18


– SERVICES (IT, R&D, Tourism, Healthcare, etc.) 


16.1. TCS becomes first $100-bn IT company
16.2. HCL will focus on next-gen tech: Vijayakumar
17.1. What does it take to save a newborn’s life?
17.2. Aurobindo launches $1.6 billion bid to buy Novartis generics unit
18.1. Walmart buys Flipkart for $16 billion, shifts battle with Amazon to India
18.2. Food can be the first contact point between Ikea and Indian customers: Patrik Antoni
19.1. Bangalore airport's capacity to grow 3x by 2028, expansion to cost US$ 2 bn
19.2. India's domestic air traffic surges 28%, maintains double digit growth
20.1. Human Resource Development Ministry Launches Unnat Bharat Abhiyan 2.0
20.2. MAHE to set up 3 more campuses


INDIA & THE WORLD 

21.1. Study in India programme of HRD Ministry launched with the launch of 'Study in India Portal' by Smt. Sushma Swaraj and Dr SatyaPal Singh in New Delhi today
21.2. India can re-emerge as global powerhouse in education: Vice-President
22.1. IISc, IIT Bombay among top universities in emerging economies
22.2. Tata Chemicals looks at Bolivia to feed growing appetite for lithium
23.1. Why is Bangladesh’s economy booming?
23.2. Middle East, Africa seek India’s help to light up their villages
24.1. LNG diplomacy: India plans to build terminals in 4 nations
24.2. What the future holds for Indian exports
25.1. WTO: India, China warn US on ‘unilateral’ trade moves
25.2. Energy ties with US: Time for India to strike a balance


* * *
DELHI, 20th May 2018

NEWSLETTER, 20-V-2018



INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC. 



1.1. India’s Achilles heel
BusinessLine, 25 Apr. 2018, Anisha George

Bottom rung: Data shows that most crimes against dalits have been perpetrated on women. Indian women hold candles and placards during a protest march against two recently reported rape cases . - ReutersThe failure to bridge gender and caste inequalities will impair India’s growth story irreparably

India is witnessing an intense summer of discontent. Barely a week apart from each other, the dalit protests against the dilution of the SC/ST (Prevention of Atrocities) Act, 1989, and the anger against the Kathua and Unnao rape cases have raised the tempo of agitation and debate across the country. These two agitations speak to the two biggest structures of social inequality and injustice, among others: caste and gender. Whilemany have predicted the Bhartiya Janata Party (BJP)’s dubious stands on these fronts, the same maybe saidfor the future of one of the youngest populations in the world.

The Supreme Court judgement in Subhash Mahajan vs State of Maharashtra 2017 instituted a procedural safeguard, in a bid to arrest the alleged misuse of the Atrocities Act, deferring the immanent arrest of the accused pending a police inquiry. Far from protecting the innocent from false accusations, this would embolden perpetrators and create further hurdles in the path of those seeking justice. Predictably, the move was greeted with severe criticism and protest from dalits, adivasis and civil society in general, culminating in the massive Bharat Bandh on April 2, 2018 and prompting the government to announce a review petitionagainst the Court’s order. A week later, news of two cases of rape of minor girls, one in Jammu and the otherin Uttar Pradesh shook the nation.

Yet, beyond the immediate disturbing milieu, we need to confront the deeper malaise that pervades our society. In a country that exploits its deep-rooted sociopolitical inequalities, what keeps us from overthrowing our present political system is the continued domination of a class relegated to permanent servitude — dalits, adivasis, and women. Thus, crimes against these groups are perpetuated both as structural privilege and as a pedagogic exercise (to teach them a lesson as it were). Such acts operate within the feudal ethos syndromesof “honour” and “humiliation”. On a daily basis, it translates into a variety of practices — pollution-purity withinthe household and public spheres, surveillance of women’s mobility, devaluation of work for women and dalits,and the severe opposition to inter-caste marriages, among others. When multiple social deprivations or disabilities overlap, they produce such orgies of violence as the Mathura rape case, the Bhanwari Devi gang rape, the Manorama rape and murder, Khairlanji, Badaun, and Kunan Poshpora, among others. In India, diversity of identity has for long been brandished, even celebrated, to cloak the entrenched hierarchy and disparity.

It is telling that the allegations of the misuse of law in India have most commonly been heard and alleged in cases of domestic abuse and sexual harassment filed by women (citing fears of breaking up families and harassing innocent men) and in cases of atrocities filed by dalits (citing fears of perpetuating casteism and harassing neighbours).

Data compiled by the National Crime Records Bureau reveals that crimes against dalits have been steadily increasing — 40,801 atrocities against dalits were reported in 2016, up from 38,670 in 2015. The data also revealed that most of the reported crimes against SCs were crimes against women, and that included assault, sexual harassment, stalking, voyeurism and insult to modesty. A reporting bias notwithstanding, these figures testify to the social reality of caste violence in modern-day India. With a conviction rate of less than two-three per cent, there is a swelling fearlessness of the law among the accused as well as hopelessness among dalits and women with regards to securing justice.

A close examination of either of the above categories gives us a sense of how difficult it is for victims to even file an FIR, no matter how grievous the crime and how difficult it is for the complainants, their families and supporters to keep up the fight in the face of social isolation while the perpetrators turn belligerent rallying wider support. Kathua and Unnao are but fine demonstrations of these struggles. The advocacy surrounding cases of sexual violence has been incredible, however we are a long way away from accepting the operation of caste in every sphere of life.

The present political moment calls for deeper introspection. Much time and energy has been wasted in the public and private realms negating the existence of caste and gender inequalities, and rather counter- intuitively arguing that reporting on these issues leads to the perpetuation of these structures. Such denial of systemic and structural violence must end to pave way for an examination of privileges and a commitment to justice. This must be abetted by stronger, not diluted, laws that capture the intersectional nature of caste and sexual violence in Indian society and reinstate the role of the state in mending social antipathies.

In his last speech to the Constituent Assembly in November 1949, Dr BR Ambedkar warned his colleaguesthat “political democracy cannot last unless there lies at the base of it social democracy.” His premonition captures the essential contradiction of the contemporary Indian polity. India’s growth story has hinged on its political resilience and robustness, internationally considered India’s ultimate advantage over China. The present developments undoubtedly raise fears over this aspect. What is at stake is not just the promise of India but the very idea of India.

Anisha George is assistant editor with the Economic & Political Weekly


1.2. The immensity of the job creation problem in India
Livemint, 6 May, 2018, Vivek Dehejia

Both across states and across districts within each state, this is a wide, and widening, disparity in economic activity across regions

Amidst all the recent furor on job data, and what they do and do not mean, we have perhaps lost sight of amore basic fact: that India, in many ways, remains a “dual” economy, with wide (and burgeoning) disparitiesbetween an urbanized modern sector and a lagging rural hinterland. While it has become fashionable to arguethat the old, hackneyed distinction between “India” and “Bharat” has now become irrelevant, with everyoneconverging towards the same modernity, the reality is that the gulf between the two—in economics and geography, if not necessarily in culture—is as stark as night and day. Indeed, this is almost literally true, as we shall see in a moment.

The spatial dimension of economic disparity in India is well documented, including in my joint research with Praveen Chakravarty, published in these pages and elsewhere. In developing our research results on intra-(as opposed to purely inter-)state income inequality, we had to reckon with the paucity of reliable district-level data on economic activity. Our solution was to deploy a novel dataset of “nightlights” luminosity, generated bysatellites of the US National Aeronautics and Space Administration (Nasa). At the IDFC Institute, wedeveloped a statistical concordance between Nasa’s India-wide nightlights data and the map demarcation ofdistricts, allowing us to develop a unique “panel” (that is, both cross-section and time-series) data set of luminosity values, by district and over time.


The chart shows this data for 2013 and reveals a very stark picture indeed. Note that we have arrayed districts from the lowest to the highest luminosity on the horizontal axis, with the corresponding luminosity levels on the vertical axis. (For the statistically-minded, this is therefore a “density” function of luminosity over districts.) Theluminosity is essentially all but flat at a very low level and then turns up sharply towards the very end, becoming almost vertical. There is then a further flattening at the very top, disguised somewhat in the data by the fact that luminosity levels are top-coded. The data, therefore, clearly has an S-shaped or “logistic”distribution.

Put in simpler and starker terms: Most of India is virtually dark at night, with a few bright spots representing the major cities. This is a reality worth recalling at a time when the government claims credit for having electrified the very last village—a process well in train under the previous government, when our last data was captured in 2013. Electrified in theory most of the rural hinterland may be, but it is not emitting terribly much light at 
night—suggesting that the levels of economic activity in these regions remain low as compared to the dynamic metropolitan areas.

The other relevant context here is the jobs debate, in which the government and its critics debate whether India produced 15 million jobs last year or only one million or some number in between. Whatever the truth, India remains a dual economy in the sense of the late Nobel economist Sir W. Arthur Lewis, in which a rural hinterland living under subsistence conditions provides labour — in “unlimited supplies”, in Lewis’ famousphrase—to an expanding urban, capitalist sector.

This reality also speaks to the parallel debate on the number of people entering the workforce every year— is it 12 million, as typically asserted, or a somewhat smaller number, as argued recently by economist Arvind Panagariya? Whichever the case, the truth is that the concept of the number of people entering the labour force every year is notional at best—a far larger number of people remain parked in unproductive agriculture, waiting to make the transition to more productive manufacturing or service sector economic activity if the opportunity arises.

The last element that must be stressed is that there is an important spatial dimension to the dualistic economic structure that the luminosity data reveals. In other words, both across states and across districts within each state, this is a wide, and widening, disparity in economic activity across regions. No, it is not that the rich get richer while the poor get poorer, but that the poor are not getting richer fast enough to close the gap with the already rich.

In the context of our federal polity, this regional dimension to income inequality — as opposed to the classical notion of inequality in the personal distribution of income and wealth—creates the possibility, not only of social disharmony, but of political discord, as populous, poorer regions attempt to extract greater redistribution from less populous, richer regions —whether within or across states.

The policy challenge is immense. The moral imperative, captured by that large area of darkness on the map, is equally daunting.

Vivek Dehejia is a Mint columnist and resident senior fellow at the IDFC Institute, Mumbai. Read Vivek’s Mintcolumns at livemint.com/vivekdehejia.


2.1. RInfra alliance bags ₹7,000-cr Mumbai sea-link project
BusinessLine, 7 May 2018

Anil Ambani-led Reliance Infrastructure (RInfra) has received a letter of award from the Maharashtra State Road Development Corporation (MSRDC) for the 17.17-km Versova-Bandra Sea Link project in Mumbai, the company said in the statement.
Reliance Infrastructure bagged the engineering, procurement and construction (EPC) contract project in partnership with Italian construction major Astaldi S.p.A after bidding ₹6,993.99 crore, lower than other bidders, but higher than MSRDC’s initial estimate of ₹5,500 crore.

Joint ventures of ITD Cementation-Hyundai Engineering and L&T Infrastructure-Samsung C&T were among the other bidders.
The Versova-Bandra Sea Link, part of an ambitious coastal road project connecting south Mumbai to the western suburbs, is expected to be completed within five years.

Metro project
MSRDC is yet to get the environmental clearances for the project.
Earlier this year, the consortium of Reliance Infrastructure and Astaldi won a ₹1,584-crore order for construction of three packages of the Mumbai Metro Line 4 project.
The new contract takes Reliance Infrastructure’s EPC order book – that includes orders for several road, metro and railway projects and thermal and nuclear power plants – to around ₹27,500 crore.
RInfra had last month reported a 291 per cent rise in its consolidated net profit for the fourth quarter of 2017-18. The company’s net profit increased to ₹160 crore from ₹41 crore for the same period a year ago.


2.2. Electric vehicles market in India set to see several new entrants
Business Standard, May 14, 2018

Mumbai: The electric vehicles (EV) market in India is set to see the entry of a flurry of new players of foreign origin and home-grown start-ups in the two- and three-wheeler segments, even as the established Indian automobile firms such as Hero MotoCorp, Bajaj Auto and TVS Motor Company have chosen to adopt a calibrated and wait-and-watch approach before they jump onto the EV bandwagon.

The government’s ambitious National Electric Mobility Mission Plan 2020 envisages achieving 6-7 million sales of hybrid and electric vehicles by 2020. A series of flip-flop on policies and a non-existent charging infrastructure are the biggest challenge in achieving the target. But is not deterring the newer entrants.Japan’s Terra Motors, which has been selling e-rickshaws since 2014, now planning to launch electric auto-rickshaws that will target the 500,000 per annum three-wheeler market by January next year. Artem Energy Future, another home-grown electric vehicle technology firm, has announced plans of launching Artem M9,which it claims is the world’s safest e-scooter. It also boasts of advanced driver-assistance systems seen only in luxury cars.

The auto market’s size and potential for electric vehicles in countries like India and rest of South Asia has prompted Terra Motors to set up its base in India. Akihiro Ueda, managing director, Terra Motors, toldBusiness Standard, “We are looking to bring all the functions of the headquarters to India so that we can tap the South Asian market better,” adding that the company has been encouraged by the Indian government’spush for electric vehicles and the commitment to curb air pollution.

Japan, with its highly developed public transport system and its preference for a hybrid over pure electric, has prodded Terra to look at markets outside, he said.
Terra will be launching the e-auto-rickshaw by January. With a top speed of 50-60 kph, the vehicles will run on lithium ion batteries. As a run up to the launch, Terra will set up charging infrastructure. It is seeking support from the Japanese government for the same that will lobby with Indian transport authorities for the same. “At80,000 units per annum, the market for e-rickshaws is very limited. We are therefore looking at the e-automarket,” said Ueda. It is presently selling e-rickshaws in Assam, Bengal and Bihar and now targeting the northern markets. Since its launch in 2014, it has sold 12,000 units.

The influx of South East Asian companies is set to gather momentum. In April, the Society of Manufacturers of Electric Vehicles (SMEV) signed an agreement the Taiwan External Trade Development Council (TAITRA) to put in joint efforts for the EVs through the exchange of information and technology. Later this month, the two will be hosting a delegate of 11 Taiwanese companies which make parts and electric vehicles. Thesecompanies, including Kwang Yang Motor Company (KYMCO), world’s fifth largest scooter maker, will be visiting India, said Sohinder Gill, director corporate affairs, SMEV said. “There is lot of interest among theTaiwanese companies to tap into the EV space in India,” he said.

Meanwhile, with safety and technology as its unique selling proposition, Artem, the latest among the EV start- ups, is looking to create a niche in the electric two wheeler space. It claims it is taking a unique approach to EV practicality by allowing the M9 to be charged by an on-board fast charger, as well by swapping batteries.“Range anxiety is a key factor against the adoption of electric vehicles. With the M9, we mitigate this by cracking that psychological barrier of 100 km of range, as well as provide the flexibility of charging or swapping, as is convenient,” said Rajit Arya, founder and chief executive at the firm.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


3.1. Maharashtra now an open defecation-free state: CM Devendra Fadnavis
Livemint, Apr. 19, 2018

Mumbai: Maharashtra on Wednesday declared itself an open defecation free (ODF) state, having provided access to toilets to all its residents. In October 2017, the state declared its urban areas as ODF and now, rural Maharashtra has followed suit, chief minister Devendra Fadnavis said at a press conference.

“It is an astounding achievement for a government and for a government scheme. In 65 years sinceIndependence, only 45% of the population could be provided access to toilets but in just three-and-half years we have covered the remaining 55%,” the chief minister said.
The ODF programme is part of the Narendra Modi government’s Swachh Bharat mission which has a 2October 2019 deadline.
Fadnavis claimed that no other state in India had performed as well as Maharashtra in completing phase one of this mission.

Between October 2014 and 31 March 2018, the Maharashtra government built nearly 5.5 million toilets, including 280,000 public toilets. Under the Swachh Bharat and Swachh Maharashtra mission, the centre and the Maharashtra governments have so far spent Rs4,500 crore on the ‘Access to Toilet’ phase.
“Work has already started on the second phase which is getting the beneficiaries of phase one to actually use the toilets. From innovative campaigns like ‘Darwaja bandh’ (close the door) in which Amitabh Bachchan isparticipating to forming good morning squads of students who blow the whistle if they spot someone defecating in public when toilets are there, we will work harder on this phase,” Fadnavis said.
Fadnavis said when the Swachh Bharat Mission was launched in 2014, Maharashtra discovered that only 5million families had access to personal or public toilets. “More than 6 million families did not have this access in progressive Maharashtra in 2014. In just three-and-half years, we have covered all 34 districts ofMaharashtra, 351 tehsils, and 40,500 villages,” Fadnavis said.

He pointed out that a leading district like Pune had 2 lakh families without access to toilets.
“Many districts have put in an impressive performance. For instance, Nanded district was earlier thought to be lagging behind, but the district administration there built 2 lakh toilets in last one year itself. Remote and backward districts like Yavatmal, Nandurbar and Gadchiroli have together built more than 7 lakh toilets,”Fadnavis said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


3.2. Leisang lights up, now every Indian village has power
Livemint, 29 Apr. 2018, Utpal Bhaskar

Electricity now reaches all 597,464 census villages, bringing Modi’s aim of providing all homes access topower a step closer to reality

New Delhi: When the bulbs lit up in Leisang village in Manipur’s Senapati district at 5.30pm on Saturday, itbecame the last village in India to be linked to the national power grid.
With electricity now reaching all 597,464 census villages, Prime Minister Narendra Modi’s aim of providing allIndian households access to electricity is a step closer to reality.

“Yesterday, we fulfilled a commitment due to which the lives of several Indians will be transformed forever! Iam delighted that every single village of India now has access to electricity,” Modi said in a tweet onSunday. Mint had on Saturday first reported that all Indian villages had been provided access to electricity. In his Independence Day speech on 15 August 2015, Modi had set a 1,000-day deadline to electrify villages that still did not have access to electricity.

While only around 1,500 villages were electrified at the time of India’s independence in 1947, the numberreached 481,124 in 1991. According to government data, 63,955 villages were provided electricity access during the 10th plan period (2002-07) and 45,955 villages during the 11th plan period (2007-12). Of India’s597,464 census villages, 579,012 villages, or 97%, were electrified by 31 March 2015.


There were 18,452 unelectrified census villages in 2015 before the government allocated Rs75,893 crore for the Deen Dayal Upadhyaya Gram Jyoti Yojana with the aim of providing electricity access to all villages. It was later found that another 1,275 villages also didn’t have access.
The task was challenging, given that the last of the unelectrified villages were in remote locations, in states such as Jammu and Kashmir, Arunachal Pradesh and Chhattisgarh. Moving men and material was difficult not only because of inhospitable terrain, but also because some villages in Chhattisgarh were located in areas affected by Maoist violence.
It was an uphill task, power secretary Ajay Kumar Bhalla said, adding that the Indian Air Force helped out by dropping material in some far-flung areas.

As of 28 April, all these villages had electricity access either through the national grid or off-grid solutions. Also, 1,236 villages are uninhabited and 35 have been notified as grazing reserves. The scheme will also helpimprove India’s per capita power consumption of around 1,200 kWh, among the lowest in the world.
The last village to be provided off-grid electricity access was Pakol in Churachandpur district of Manipur.
“The next step is to provide electricity connections under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana(Saubhagya),” Bhalla said over the phone. A village is declared to be electrified if 10% of its households canaccess power along with public institutions such as schools, the panchayat office and health centres.
Experts said the Saubhagya scheme holds the key to universal electricity access by providing connections to more than 40 million families in rural and urban areas by March 2019.
“This is indeed a historic moment in the seven decades of socioeconomic journey of this nation,” said Debasish Mishra, partner at Deloitte Touche Tohmatsu in India. “Now this momentum must be maintained tomake Saubhagya scheme successful, to make reliable, affordable and sustainable electricity available to every household in the country.”


4.1. Dilip José Abreu: an elegant and creative economist
Livemint, 02 May 2018, Rohit Lamba

It is the pursuit of a good question, Abreu’s work teaches us, that creates a beautiful theory; one that tells aconvincing story, or helps make sense of Big Data

In the small but growing pantheon of economic legends from India, history will arguably place Dilip José Abreu front and centre. You may not have heard of him yet, but that is because like many classical academics he does not seek the limelight. The depth of his work, though, inspires awe among students, Nobel whispers among peers, and if we are lucky, eventually a Bollywood incarnation.

What makes people cooperate with others against their own immediate interests? Which institutions encourage cooperation or reinforce conflict? How do societies with diverse goals implement acceptable policies? Why does a financial bubble sustain even when everyone may know there is a bubble? These questions, their elegant answers, and more crown the Abreuvian legacy.

I first met Abreu in the pages of the Ratan Tata Library at the Delhi School of Economics. In an undergraduatetext on game theory surfaced a remarkable theorem. It was marked “Abreu 1988”. The references disclosedan Indian first name—Dilip, an oddity in the domain of Greek, Renaissance and American icons. Google revealed that he too had read through the pages of this library. Perhaps he too drank chai at that rustic café before class as we all did. V.S. Naipaul captures the emotion well: “After all, we make ourselves according to the ideas we have of our possibilities.” It was the first tinge of academic ambition that many a 20-year-old may have felt on reading his work in that spot.

Princeton University witnessed a revolution in economic theory in the 1980s. Under the mentorship of the venerable Hugo Sonnenschein, a group of enthusiastic graduate students set out to shift the paradigm. Inmidst of this dazzle, Abreu wrote his PhD thesis on repeated games. “It changed everything,” David Pearce, aluminous economist and an old friend, reminisces with excitement.

A theory is a lens that distils the key elements of a complicated reality into a simple mathematical framework. Game theory is the study of cooperation and conflict among “players” whose actions affect each other’s well- being. One of the central insights of the subject is that players settle on inferior outcomes because of strategic considerations. It is hard to get nations to emit less carbon in a global effort to temper climate change becauseit individually benefits them to do the opposite, especially if others commit to do their part. So in “equilibrium”everyone pollutes a lot.

Sometimes the threat of adverse outcomes can be used to discipline current behaviour. The theory of repeated games seeks to explain this, specifically the sustenance of cooperation or conflict when constitutional diktat is hard to enforce. It illustrates the constant give and take and gradual relationship building in long-term relationships. Marriage is an example, so is the evolution of social norms. It formalizes why certain communities, such as the 11th century Maghribi traders or modern Gujaratis, are able to run successful businesses across lands and oceans.

Think about collusion. How do airlines A and B collude to keep prices high when one of them could attract more fliers by reducing its price? If airline A deviates to a lower price, airline B can unleash lower prices, hurting both their profits. The key tenet of repeated games is that players can be induced to cooperate against their short-term interests. However, the threat of retaliation must be credible; it must be in the long-term interest of the retaliator to retaliate. All credible actions of form—if you do this, I’ll do this, but if you do that,then I’ll do something else and so on —need to be explored. How can we make sense of this complex space?On a crisp 1980s afternoon, Abreu emerged with the answers. Pearce remembers it vividly: “Since he wasdoing the first two years of the PhD in one, Dilip was terribly late on the ‘second year paper’, typically a modestfirst pass at research that does not make it to the thesis. As I arrived at the department the morning after it had finally been submitted, I heard a commotion upstairs. The brilliant young professor who was assigned to readthe manuscript was waving Dilip’s paper at the top of the stairs and calling out to passersby: ‘Have you seen? Have you heard? Everything has changed’.”

By carefully designing regimes of rewards and punishments, Abreu had uncovered a simple way to identify thebest and worst possible outcomes in any equilibrium and hence the space of all eventualities. “How much cooperation and conflict can credibly be sustained, and in what way,” Sonnenschein announces animatedly.“Just a deep, a very deep understanding of a basic idea of how the world works.”

Abreu’s PhD, finished in three years, earned him a postdoctoral fellowship at the University of Minnesota andan assistant professorship at Harvard. Over these years, he honed and further developed ideas from his thesis with his friends Pearce and Ennio Stacchetti. They provided a general methodology of finding all equilibria in repeated games. The trio came to be referred as APS, and their work would go on to have a profound impact on economics.

Soon Abreu heeded the azan of his alma mater, returning to Princeton—now as a professor. This followed an epoch of foundational explorations in the theory of implementation, bargaining, and financial bubbles.
As a child, my mother’s bargaining techniques in the bazaar amazed me. She would strategically signal thatshe is about to walk away to force the seller to reduce the price. And, she invariably succeeded, even when I knew she would have been willing to pay the higher price. Abreu and Faruk Gul formalized this intuitive way of thinking about bargaining. Both negotiators assume stubborn thresholds and try to build reputation until one ofthem eventually gives up. “The way to gain a good reputation,” Socrates had said “is to endeavour to be what you desire to appear.”

Before Abreu-Gul came along, bargaining was framed mainly in terms of waiting costs; if you can haggle longer, you win. Their paper crystallized the connection between reputation and bargaining. It is now standard in graduate syllabi.

In the late 1990s, as Abreu started to develop an interest in financial markets, a young Markus Brunnermeier, now a leading financial economist, joined Princeton. The duo teamed up to write a paper that explained why financial bubbles sustain. Investors are uncertain of when others will start trading against the bubble, making it worthwhile to continue riding it until its painful burst. For example, in the prelude to the 2008 financial crisis, banks kept issuing subprime mortgage backed securities, even as it was becoming clear that the mountain of debt was going to collapse. The then chief executive officer of Citigroup, Chuck Prince, uttered the now iconicwords, “As long as the music is playing, you’ve got to get up and dance.” Bubbles emerge and persist in manysuch situations, breaking the hypothesis that prices internalize all possible information. It was as if Prince had received the Abreu-Brunnermeier memo, but a tad late. Brunnermeier is effusive in his respect for Abreu: “He has been a mentor... He sets very high standards for himself. As we worked through many models of bubblesand I grew anxious as an assistant professor, he joked that bad papers take a lot of time too, so let us justwrite a good one.” And boy they did.

Abreu’s research is often described by his peers as elegant and creative. When asked what elegance means, Abreu suggests “elegance is a deep conceptual understanding expressed through a minimal set of ideas.” Elegance he exclaims “is visceral, is transparent, is self-evident”. A creative theory lends relevance toelegance; it condenses a complex reality into a hitherto unexpected yet intuitive system of mathematicalequations. “Dilip’s work is truly creative,” Gul exclaims with pride. “It’s highbrow and widely applicable.”

In the age of Big Data, the demand for theory is shrinking, be it economics, computer science or physics.While part of the reason is a current fad, another part, many argue, is theory’s own misguided obsession with elegance. “Elegance,” Abreu observes, “can also be treacherous as it can become an end in itself...ultimately the theorist ought to offer tools and constructs that are useful to the wider (economics) community.” Gul andPearce point out that questions about collusion and anti-trust attracted Abreu to repeated games.

Brunnermeier recollects that Abreu was open to all kinds of ideas in building a theory of bubbles. It is thepursuit of a good question, Abreu’s work teaches us, that creates a beautiful theory; one that tells a convincingstory, or helps make sense of Big Data, or in Pearce’s words, provides a narrative that “makes us look at reality differently”.
Abreu grew up in South Mumbai. He attended St Mary’s School, which counts music legends Freddie Mercuryand Zubin Mehta, and technology giant Azim Premji as its alumni. He questioned everything, even going tochurch. “My instincts in terms of friends and world view were aggressively secular, growing up in a cosmopolitan Mumbai, a Mumbai recalled in (Salman) Rushdie’s writings.” He would spend his summers in anancestral abode in Goa, wherein reside many of his fondest childhood memories. It was somewhere in this harmony that Abreu imbibed a sufiana clarity, which Sonnenschein calls “a secure strength of character, andoriginality”.

The brilliance though does come with its quirks. Abreu’s polite but notoriously high standards are a fabled fearamong potential mentees. Perhaps he could attract a larger pool of good PhD students if he let their initially
mediocre ideas meander for a bit. He also values infinite flexibility. “An iron law of Abreuvian dialectic”, Gul remarks, “is that every plan with Dilip contains within it the seeds of its own cancellation”.
On the day of his Nobel prize announcement, in an emotional address, Tom Sargent talked about a life oflearning from people around him. I was fortunate to be there. “There were these three young boys at Minnesota,” he said, “who were changing the way we thought about dynamic interactions.” He was, of course,referring to the APS trinity. In that moment I was transported back to my first rendezvous with Abreu in the library and I thought how we learn not only from people we meet but also from those whose mere existence gives us the audacity to learn in the first place.

The Dilip Abreu Top 5:
1. On the theory of infinitely repeated games with discounting, Econometrica 1988. Based on his PhD thesis, which opened the floodgates to economic thinking on strategic long-term interactions such as between a government and its citizens, or two firms competing for the same product.
2. Towards a theory of discounted repeated games with imperfect monitoring (with David Pearce and Ennio Stacchetti), Econometrica 1990. Provided a very general methodology to find out the universe of predictions in repeated games. Its application now pervades economic modeling.
bVirtual implementation in iteratively undominated strategies: incomplete information (with Hitoshi Matsushima), unpublished 1992. If society is willing to choose its desired objectives with some imperfections, it can do so in a strong way. Provided a creative new take on a widely discussed question.
4. Bargaining and reputation (with Faruk Gul), Econometrica 2000. While negotiating, both parties try to build a reputation of being tough, until one of them eventually finks. Presented a masterful perspective on the oldest economic reality- bargaining.
5. Bubbles and crashes (with Markus Brunnermeier), Econometrica 2003. Why does a financial bubble sustain even when the stakeholders know of its existence? They are unsure of when others will start trading against the bubble. So, everyone rides it until its painful burst. Elegantly explained an oft-observed inefficiency in financial markets.

Rohit Lamba is an assistant professor of economics at Pennsylvania State University. He did his PhD at Princeton University, where he learnt game theory from Dilip Abreu.


4.2. Indian music industry grew by 27% last year to hit Rs 725.6 cr
PTI, Apr. 20, 2018

Mumbai: Led by the increasing demand for digital streaming, the music industry in the country clocked a 27 per cent growth in revenues last year to touch Rs 725.6 crore, said a report.
The total industry revenues increased from Rs 570.7 crore in 2016 to Rs 725.6 crore in 2017, the largest rise since 2011, according to an Indian Music Industry release which quoted the data from the International Federation of the Phonographic Industry (IFPI).

The revenues from music streaming grew at a rate of 37.26 per cent and revenues from digital music now amounts to over 91 per cent of the Indian recorded music industry revenue, the release said.
The digital revenue in 2017 was Rs 665.6 crore, which is greater than the combined industry revenue of in 2016, it added.

The release attributed the growth in digital music consumption to increased data consumption because of cheaper data rates and increasing smartphone penetration.
"Last year's figures were phenomenal and we were expecting the market to do well this year as well, but a 27 per cent growth in 2017 has exceeded our forecasts," Indian Music Industry chairman and Sony Music president Shridhar Subramaniam was quoted as saying in the release.

"Going into 2018, our aim is to make music even more accessible, affordable and unlimited. To sustain this growth the industry will start laying the groundwork for a subscription eco-system," he added.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


5.1. India to hit 140 MT steel production level in 2018: Minister
PTI, Apr. 23, 2018

New Delhi: India's crude steel output is expected to soar by 38 per cent to 140 million tonnes (MT) by the end of this year, Steel Minister Chaudhary Birender Singh said.
The country produced 101.4 MT steel in 2017.
Domestic crude steel production is likely to be 140 MT in this year, Singh told PTI.

The minister has earlier asked the industry to make full use of the resources available in the country to increase steel output.

India outstripped Asian industrial giant Japan to become the second largest steel producer in February as its crude steel output grew by 3.43 per cent to 8.434 million tonnes (MT) in the month against 8.296 MT of the latter.
According to global steel body Worldsteel, China occupies the top global position as far as steel production is concerned.

Under the National Steel Policy (NSP), the government has set a production target of 300 MT by 2030-31. The NSP also aims at more than doubling the per capita steel consumption to 158 kg by 2030-31, from 70 kg at present.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


5.2. JSW Infra plans Rs8,800 crore ($1,36 bn) investment in next 3 years
Livemint, 01 May 2018, Tanya Thomas

JSW Infrastructure’s port in Maharashtra will take the bulk of the funds as its capacity will be raised to 80mtpafrom 40mtpa

Mumbai: JSW Infrastructure, the privately held ports arm of Sajjan Jindal’s JSW group, plans to invest Rs8,800 crore over the next three years to expand cargo handling capacity from the current 75 million tonnes per annum (mtpa) to 200mtpa by 2020.
The expansion plan is in line with the company’s ambition to shift from handling only sister concern JSWSteel’s cargo to accepting third-party cargo as well.
Half of this investment would be funded through loans and the remaining through internal accruals, B.V.J.K. Sharma, joint managing director and chief executive of JSW Infrastructure said in an interview.
The company’s largest port by capacity at Jaigarh in Maharashtra’s Ratnagiri district will take the bulk of thisinvestment as its capacity will be increased from 40mtpa at present to 80mtpa over the next three years. By the end of March 2018, the port had handled 14mtpa of cargo this year. “JSW Steel’s Dolvi plant expansionwas deferred by two years but at the port, we had already invested to be ready to handle the additional cargofrom the plant. Once Dolvi’s new capacity comes on stream in March 2020, we’ll see higher utilization here,” Sharma said, explaining the reason for the port’s low capacity utilization at 35%.
“We’ve already spent Rs2,700 crore on building road connectivity, coastal berths, rail connections for theJaigarh port. The planned capex for the port will be Rs4,600 crore by 2020,” he added.
Capacity at the Dharamtar port will be increased from 15mtpa to 40mtpa, at Goa from 10mtpa to 15mtpa; the Paradip iron ore berth will be enhanced to handle 18mtpa and the coal berth will hit 32mtpa, while the port facilities in Tamil Nadu will increase to 15mtpa.


Sharma also said the company’s long-term plan is to increase the share of business in third-party cargo. Today, the cargo that JSW Infra handles is almost exclusively for the group’s businesses. “By FY21, we’re looking at a 60:40 mix of group to third party cargo,” he said. “We’re tying up with container players and want to build facilities in LPG, LNG, chemicals and bulk cargo.”

On Tuesday, JSW Infra and H-Energy Gateway Pvt. Ltd (the energy arm of the Hiranandani group) launchedthe country’s first floating storage re-gasification unit-based LNG terminal at Jaigarh. The terminal will offer LNG storage, re-gasification, re-loading, fuel bunkering and truck loading facilities. Once it becomes operational by the end of the year, the re-gasified LNG will be supplied to customers through a 60-km tie-in pipeline which shall be connected to national gas grids at Dabhol.

The terminal, at 4mtpa capacity, will be owned and operated by H-Energy, while JSW Infra is the sub-concessionaire which will provide infrastructure and cargo handling services. “If demand for LNG servicesfrom Jaigarh picks up, we can invest in shore-based storage units which will increase capacity to 10mtpa,”Sharma added.


- AGRICULTURE, FISHING & RURAL DEVELOPMENT


6.1. India exports record 3.95 lakh tonnes of coffee in FY18
PTI, Apr. 20, 2018

New Delhi: Coffee exports from India, Asia's third-largest producer and exporter, reached an all-time high at 3.95 lakh tonnes in the 2017-18 fiscal on strong demand for instant coffee, according to state-run CoffeeBoard.
The country had exported 3.55 lakh tonnes of coffee in the previous year.
"The coffee exports were at all-time high in FY 2017-18 because of increased shipments of value-added products, especially instant coffee," a senior board official told PTI.
There was an increase in instant coffee output because of improved production capacity with setting of up new units.

The country largely exports Robusta variety of coffee, the volumes of which also showed a jump in the 2017- 18 fiscal in view of strong demand and record domestic production.
The top three export destinations are Italy, Germany and the Russian Federation.
The board has pegged coffee output at a record 3.50 lakh tonnes for the 2017-18 crop year ending September 2018 as against 3.12 lakh tonnes in the previous year.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


6.2. India's seafood exports increase 13% despite fall in global shrimp prices
Business Standard, May 04, 2018

Bhubaneswar: India exported seafood worth $5.64 billion during the first 10 months of 2017-18, compared to $4.98 billion a year ago, registering a growth rate of 13.27 per cent. The increase in exports is despite an oversupply from major shrimp-producing nations and stringent testing norms. Quantity-wise, India exported 1,085,378 tonnes of seafood till January in FY18 against 954,744 tonnes shipped in the corresponding periodof FY17. The growth in quantity was 13.68 per cent.

“India’s export of seafood remained on the upward curve despite a fall in global shrimp prices triggered by anoversupply from major shrimp-producing countries and more stringent test regimes imposed by the EU to detect antibiotic residues in frozen shrimp consignments. Also, we had to face competition from countries like Ecuador and Argentina,” said A Jayathilak, chairman, Marine Products Export Development Authority.

“Still, we were able to sustain the growth momentum on export front, which is a proof of the resilience of India’s seafood sector. We have initiated steps for export-oriented organic shrimp production, and launched new strategies to boost aquaculture and improve vigilance to stop faulty consignments,” he added.
The US, South East Asia and the EU continued to be the three major importers, while the demand from Japan registered a substantial increase during the period.
Frozen shrimp continued to be the top export item of the marine products basket with a share of 42.05 per cent in quantity and 69.95 per cent of the total earnings in dollar.

The US, which imported 203,837 tonnes of Indian seafood worth $1.917 billion, remained the major importer with a share of 33.99 per cent in dollar terms. Export of frozen shrimp to the EU region decreased by 6.98 per cent and 3.26 per cent in quantity and dollar value, respectively.
Japan emerged as the major market for Black Tiger shrimp with a share of 49.38 per cent in dollar terms, followed by the US (18.09 per cent) and South East Asia (15.06 per cent). Import by Japan, the fourth largest destination for Indian seafood, increased by 17.51 per cent in quantity and 6.7 per cent in dollar terms.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


7.1. Food regulator wants packaged food labels to display if they contain GM ingredients
TNN | May 8, 2018, Vishwa Mohan

NEW DELHI: Seeking to introduce GMO labelling for the first time in India, the country’s food regulator hasproposed all packaged food products containing genetically modified (GM) ingredients must clearly state it on their labels.
The Food Safety and Standards Authority of India (FSSAI) also suggests mandatory declaration by packaged food manufacturers about nutritional information such as calories, total fat, trans fat, sugar and salt per serve on the front of the pack.

Since the country has no provision for GM labelling in its regulatory mechanism presently, consumers areclueless whether packaged food items they buy have genetically engineered (GE) ingredients amid ‘unproven’concerns in certain quarters about adverse affects such transgenic food can have on human health.

The FSSAI had last month released a 42-page draft notice - Food Safety and Standards (Labelling and Display) Regulations, 2018 - making it mandatory to label such food stuffs as “Contains GMO/Ingredientsderived from GMO” if such items contain 5% or more GE ingredients.
The authority will notify the provision for implementation after analysing stakeholders’ opinion on the issue.Pitching for a colour code, the draft proposes that the high fat, sugar and salt will be coloured ‘red’ in case the
value of energy from total sugar is more than 10% of the total energy provided by the 100 grams or 100 ml of the product. It has similar provisions for trans-fat and sodium content.

Draft says that the nutritional information may additionally be provided in the form of bar code. The colour coding will make it easier for consumers to know about the nutritional value of food products and help them make choices as per their requirements.
The issue of labelling of food products having GM ingredients has, however, drawn flak from certain quarters. Stakeholders have flagged that the move is inconsistent and ultra vires for FSSAI to issue any regulation on this matter when GM foods itself are not allowed to be sold in India.

Sridhar Radhakrishnan, co-convenor of the Coalition for a GM-Free India, who sent the group’s objections onthe draft to the FSSAI told TOI that that the labelling move will, in fact, allow the GM foods to enter food supplychain when it is anyway illegal to sell GM foods in India currently. “We need preventive action at this juncture rather than regulatory action”, he said.


7.2. Tea exports touch record 256.5 million kilos in FY18
PTI, May 09, 2018

Kolkata: Tea exports during 2017-18 touched an all time high of 256.6 million kg as compared to 227.63 million kg in the previous fiscal.
Production of tea during the last financial year reached 1325 million kg, an increase of almost 75 million kg in 2016-17, a press statement issued by Tea Board said today.

Export realisation in the last financial was USD 785.92 million. In 2016-17, export realisation was USD 95.19 million lower, the statement said.
The growth in exports was primarily driven by countries like Egypt (a rise of 7.5 million kg), Iran (an increase of 6.95 million kg), Pakistan (increase of 4.96 million kg), China (a rise of 2.91 million kg) and Russia (an increase of 2.89 million kg).

The earlier record for highest quantity of tea exports was during 1976-77 when the total quantum exported was 242.4 million kg, the statement added.
Total production during the last fiscal was also an all-time high of 1325 million kg.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


8.1. IBM India says cyber security a gold mine for jobs
PTI | May 13, 2018

MUMBAI: Global technology major IBM has said there is a massive shortage of cyber security professionals in the country, urging young graduates to look this segment, which is a high-margin segment for companies, as a lucrative career option.
The company, which looks at India both as a market as well as a talent pool to serve the global markets on cyber security, said a whopping 3 million cyber security professionals are required in the country but the supply is not even 1 lakh now, Kartik Shahahni, integrated security leader for IBM India and South Asia, told PTI here.

"Can I find people, yes I can. But can I find enough number of people? There is obviously an opportunity for more number of people than we actually have now," Ananda K Vaideeswaran, director and global integrated leader, chipped in saying.

Shahahni explained that security solutions currently contributes in "double-digit percentages" to IBM India's revenue at present, whereas its share of the total staff is much smaller.
Stating that the cyber security professionals are "more productive" as it is a margin accretive vertical, he said,
"the amount of revenue a security professional can bring to us is far higher than the amount of revenue a non- security professional can."
The comments come amid rising concerns about the information technology sector from a workforce intake perspective. As more and more tasks get automated with the advent of newer technologies such as artificial intelligence and machine learning, fewer number of people are required by the USD 160-billion domestic IT sector to do the same work compared to the past when the industry was one of the leading job creators absorbing millions annually.

The IBM executives declined to give a clear answer whether cyber security can emerge as a much-needed succour from an employability perspective, but explained that different skill sets and approaches are required for grabbing such jobs.
Vaideeswaran said there is a need for changes from the school and graduation level to the post-graduate level, which will help the industry get the right kind of people.

For those who do look at cyber security, there is a need to look beyond ethical hacking, he said, adding this branch represents only 5 per cent of the security needs.
"Not enough youngsters look at cyber security as a job opportunity. That is probably an area where we can do a lot as an industry," he said.


8.2. With an eye on polls, Centre plans mass campaign for flagship insurance schemes
BusinessLine, 29 Apr. 2018, Surabhit

Banks, insurers to ensure policy renewals; no hike in premium or tweaking of provision

Ahead of the General Elections next year, the government is likely to come out with a large-scale campaign for its mass financial inclusion schemes for life and accident insurance.
According to sources, the government is likely to start large communication programmes for renewal of policies under the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).

The Finance Ministry is likely to soon ask life insurers and banks to ensure that policy renewals under both the schemes take place seamlessly, starting next month, through auto debit facility. Additionally, it will also ask participating banks and insurers to advise and educate customers on the benefits of the two schemes. However, a significant change in the design of schemes — with higher premium or a longer exclusion period, as has been sought by many in the insurance industry — is unlikely.

“These schemes have been doing exceedingly well and have been a great source of benefit to the people. It is felt that at present, there is no need to change its design,” said a government source, adding that it has been one of the government’s key financial inclusion programmes, along with opening bank accounts in the Pradhan Mantri Jan Dhan Yojana and direct transfer of subsidies.

“To change the provisions of the schemes at present is not something that is being considered. It can belooked at next year,” he added.
Sources said that these have been flagship schemes of the NDA government and should not be tweaked at present.

Launched by Prime Minister Narendra Modi in May 2015, the PMJJBY provides life insurance cover of ₹2 lakh at an annual premium of ₹330 while the PMSBY provides accident insurance cover of ₹2 lakh at just ₹12 per year to all bank account holders.

Industry view
However, the insurance industry has been seeking a hike in premium on the grounds that insurers have been making 15-20 per cent loss while settling claims.
“For some insurers, especially in life insurance, the PMJJBY has proved to be a problem due to high losses.There has been an active discussion with the government on the issue. But it is felt that the numbers are highenough to make up for the losses,” said an executive with an insurance firm.

Gross enrolment to the PMJJBY has nearly doubled in the last two years to 5.33 crore. As many as 89,766 claims were paid in 2017-18 involving ₹1,795.32 crore. Similarly, gross enrolment in the PMSBY touched 13.48 crore in 2017-18. A total of 16,454 claims were paid involving ₹329.08 crore last fiscal.


9.1. BigBasket eyes $500 million war chest as Walmart, Amazon loom
Livemint, 07 May 2018, Anirban SenMihir Dalal

BigBasket does not require additional funds immediately, it wants fresh capital because the grocery business will likely be a priority for both Walmart and Amazon

Bengaluru: BigBasket, India’s largest grocery start-up, is in talks with investors to build a large war chest to prepare for a long-drawn-out battle with deep-pocketed rivals Amazon India and Walmart Inc., which is nearing a deal to buy online retailer Flipkart, three people aware of the discussions said.
BigBasket, which raised $300 million from Alibaba Group Holding Ltd and others in February, is in talks to raise between $300 million and $500 million from Alibaba and new investors, the people cited above said, adding that the talks are at an initial stage. All three people requested anonymity.

While BigBasket is in talks with new investors, it is possible that the funds could be raised entirely from existing investors led by Alibaba, one of the three people said.
Although BigBasket does not require additional funds immediately, it wants fresh capital because the grocery business will likely be a priority for both Walmart and Amazon and they are expected to pump in hundreds of millions of dollars into the business, the people cited above said.

Additionally, given that the start-up ecosystem is currently enjoying a favourable fundraising environment after more than two years, BigBasket wants to fill its coffers.
“For BigBasket, it makes sense to take advantage of the funding environment and raise money while it can,”said.

BigBasket is also aggressively expanding and undertaking a number of new initiatives. Some of its initiatives include launching offline stores and kiosks, as well as a subscription service. The company is also looking at acquisitions of two smaller rivals, Milkbasket and DailyNinja, Mint reported last month.
BigBasket is also attempting to strengthen its capabilities in the so-called micro-delivery space—the delivery of a relatively small number of daily essentials such as dairy products, fresh fruits and vegetables, within a few hours of an order being placed.

According to the second person mentioned above, BigBasket is also in the middle of re-organizing its supply chain to make it more efficient and to help strengthen its capabilities for same-day deliveries.

“It’s not like BigBasket is scared of the prospect of battling Amazon and Flipkart-Walmart. But they recognizethat with Walmart’s entry, this will be a long-drawn-out battle against even deeper-pocketed rivals and that itneeds to have a big enough war chest to have a reasonable shot at maintaining its leadership position,” saidthe second person.

BigBasket did not respond to emails seeking comment.
The firm, operated by Supermarket Grocery Supplies Pvt. Ltd, is currently the market leader in the online grocery segment and on the back of its recent fundraising, is going all out to ensure that it keeps its lead. BigBasket had previously raised $150 million from investors such as Sands Capital, International Finance Corp. and Dubai-based private equity investor Abraaj Capital and is easily the most well-funded grocery start- up in the country. The Bengaluru-based start-up, which was valued at $950 million after its last fundraise, was founded in December 2011.


9.2. Organic food market to grow at 20-25%: 24 Mantra Organic CEO
Livemint, May 03, 2018

New Delhi: Organic produce is an emerging market in India, clocking a turnover of Rs3,350 crore in 2016, and is expected to treble it by 2020. According to N. Balasubramanian, CEO of 24 Mantra Organic, among the largest organic food companies in India, rising consumer preference for safe food and emergence of companies who are working directly with farmers is driving this growth. Edited excerpts from an interview:

Give us a brief idea about the business model of 24 Mantra, how you are working with farmers and how farmers are benefiting by shifting to organic.
Our business model is based on the vision of helping small and marginal farmers earn better livelihood, provide safe food to consumers and improve the environment. We work directly with more than 45,000 small and marginal farmers across 15 states of India, managing more than 90 agricultural commodities. We have 200 associates managing and helping these farmers produce food without use of chemical fertilizers and pesticides. We get the land and produce certified by accredited international agencies to meet US, European and Indian norms. The produce is then processed, sorted and graded in 25 units across India and made available to consumers through 10,000-plus stores across 145 cities of India and retail stores in 21 countries. In the US, we are available in more than 800 Indian ethnic stores and 600 stores of Kroger’s.
The key person in this is the farmer who earns between 10-20% price premium (compared to wholesale mandi rates) depending on crops and location.

As one of the largest organic food companies in India, do you see a gradual shift in consumer preference towards safe food?
Consumer preference is shifting towards better food... the momentum picked up in the past few years. With higher disposable incomes and rising awareness of health and wellness aspects, consumers are opting for healthier alternatives, especially for children and in post mid forties age group when the fear of lifestyle diseases kicks in.

When you work with farmers, how much of a challenge is certification, getting them used to the stringent norms of growing organic food? Does it significantly add to costs?
The challenge is reduced by our team which spends a lot of time and effort to identify and train farmers who are open to organic cultivation. Many farmers are aware that they are using more and more fertilizers to maintain same production levels due to depleting soil conditions. Therefore, they recognize that unless they change their farming practices, they will face major issues some years down the line, if not immediately. Our team hand-holds them to help them migrate to organic cultivation in the mandatory 3-4 year transition period. The process of certification is expensive, but we bear the costs.

Do you see organic food becoming cheaper and affordable for the common man as the market grows?
Organic food value chain for 24 Mantra—and this may not be true for other companies—has three major cost components: the additional price paid to farmers, cost of honesty such as no mixing of varieties, maintaining high-quality processing facilities, and paying minimum wages to all factory employees and an extra 10% margin to retailers for stocking organic food. So, even as economies of scale kicks in, organic food in India would sell at 40-50% premium compared to conventional food in the next 4-5 years. This number is close to 30% in large markets like the US. Despite the price difference, we expect the organic food market to grow at 20-25% over the next few years. Better awareness about health and rising incomes will help this growth. Our aim is to extend our reach to a million households through one lakh farmers with a total of half a million acres under organic cultivation by 2020.

What are the primary challenges in the safe food business—say at farmers, marketing or regulatory levels?
The biggest challenge is to stay true to our vision of helping farmers earn a better livelihood and provide consumers the option of safe and quality food, while building a sustainable business. However, there is little or no support from banks and regulators though there is a lot of lip service on priority sector etc.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


10.1. Khadi: All dressed up and going places
BusinessLine, 24 Apr. 2018, Virendra Pandit

Chairman Vinai Kumar Saxena upbeat on growth as KVIC draws up a plan for global markets

Khadi, the symbol of India’s self-reliance during the Independence movement, is no longer ‘humble’ or afossilised memory. In its new avatar, it is going places, literally: after a sojourn to Russia recently, it goes to South Africa this month. The Khadi and Village Industries Commission (KVIC) has chalked out ambitious plans to double the sales of khadi to ₹5,000 crore in the next two financial years. In an aspirational India, khadi has emerged a silent, transformational force: it is also a major job creator in Bharat that is India.
And, for the first time, KVIC is being helmed by a Chairman who is not from bureaucracy or political leadership, but from the corporate world, and a CEO from the IPS—Preeta Verma, (Bihar, 1991 cadre), a tough, no-nonsense, go-getter woman. Together, they are making efforts to clean up the mess accumulated over the decades and turn around KVIC.
If your postman turns up in khadi, don’t be surprised: about 90,000 of them have been given khadi uniforms.Similarly, ONGC and other PSU majors, the corporate world and the security forces etc, are also being brought into the khadi fold across India. Excerpts from an interview with Vinai Kumar Saxena, Chairman, KVIC:

Times have changed. It’s nearly a hundred years after Mahatma Gandhi left South Africa... how are youshowcasing khadi in that country?
We are going to be part of a textile event in South Africa on April 29 and 30. Noted fashion designer Gavin Rajah would choreograph a 20-minute textile event, aimed to project Khadi in a modern and trendy style. The venue is Sandton Convention Centre in Johannesburg. We are showcasing khadi during the concluding session of the two-day India-South Africa Business Summit, as a ‘The Tribute to the Mahatma and Madiba(Nelson Mandela)’. The programme is being held in the memory of 125 years of the Pietermaritzburg incident, in which Gandhiji was thrown out of a train by White supremacists. This event coincides with Mandela’s birthcentenary.

KVIC also showcased khadi in Russia recently?
Yes. Last month, we had participated in the ‘India Sourcing Fair’ at St Petersburg in Russia, where KVICproducts won accolades. Other overseas exhibitions are also in the pipeline.

How has this transformational revival taken place in the khadi sector since 2014?
Prime Minister Narendra Modi became khadi’s foremost evangelist. By donning it himself, he set off a craze for this signature fabric among the youth. There has been no looking back since. The low-profile, handspun cloth has seen its demand grow among the common people and the corporate worlds, suddenly witnessing a 34 per cent sales growth. The average growth of production in the khadi sector was only 6.24 per cent in the decade 2004-14, which has risen to 26.43 per cent in 2015-17.
In fact, this is the only sector in the Indian economy to register a double-digit growth in the last three years. Khadi has now set a sales target of ₹4,000 crore for 2018-19 and ₹5,000 crore for 2019-20.

There were reports in a section of the media recently that seven lakh people had allegedly lost their jobs in the khadi sector but production has gone up by 32 per cent. What is your take on this?
This is an interesting story on how this industry was bleeding over the years. We discovered that out of nearly 11.60 lakh artisans getting subsidy (marketing development assistance, or MDA)—the number was constant for the preceding 10 years!—as many as seven lakh were fake or ‘ghost beneficiaries’. After theimplementation of Aadhar-seeded payment of subsidy directly in the bank account of genuine khadi artisans in 2016, KVIC was able to identify and scrutinise this bleeding by many khadi institutions, and stopped it. That was how we saved over ₹153 crore in two fiscal years —2015-16 and 2017-18. With KVIC’s forensic audits,as many as 503 institutions, apparently running on ghost artisans, stopped claiming subsidy! That was how we weeded out nearly seven lakh fake artisans and paid subsidy only to the 4.6 lakh genuine artisans.

What steps has KVIC taken to make khadi catch the customer’s eyes in India and overseas?
KVIC plans to open khadi outlets to promote the products in the global markets. We have received interest from Dubai, Chicago, Mauritius and South Africa, under the franchisee model. Raymond has started selling khadi in some of their stores abroad. To make khadi apparels perfect as international brands, KVIC has also set up a garment designing and stitching unit at Ghaziabad in Uttar Pradesh. It would be formally inaugurated in May 2018, in which 72 world-famous designers would showcase their creativity in the presence of 35 Ambassadors/ High Commissioners of different countries in India.

In India, KVIC has taken initiatives to involve corporate brands and PSUs to provide the largest spectrum for khadi. Raymond has purchased more than 2.5 lakh metres of grey fabric from us and showcasing it in their 150 stores across India. Arvind Ltd also plans to buy one million metres of khadi denim every year. The Aditya Birla Fashion and Retail Ltd (ABFRL) is tying up with KVIC to develop a product line ‘Khadi Peter England’.Besides, KVIC has also signed an MoU with NIFT for better design development and training at different Khadi institutions. Also, KVIC recently organised an interaction with CEOs of retail chains and designers at WTC, Mumbai, to give retail presence to Khadi in major malls and retail stores. Subsequently, convergence has been established with Globus, a unit of Raheja Group and Khadi Korners have been opened at Noida, Ahmedabad and Mumbai, to be followed by Chennai and Varanasi. KVIC had already inked MoUs with Cotton Bazaar and Big Bazaar in January. Big Bazaar has started Khadi Korners at their seven stores in Mumbai.Another innovation is in form of ‘Khadi Mitra’ on cards, where homemakers could sell khadi with a very nominal capital investment initially.

With the PM promoting yoga internationally, the KVIC had also approached the United Nations (UN) to promote khadi in their various rehabilitation programmes as it is the most environment-friendly product andprovides sustenance to millions of people. The Government is making efforts to promote ‘khadi’ as a globalproduct identity of India. Even a recent survey revealed that after yoga, khadi has second most recollection by non-Indians towards India in the world.

KVIC has started aggressively promoting bee-keeping as a village industry and job-creator in the rural and tribal areas. How has it succeeded?
With the PM giving a call for a “Sweet Revolution”, the KVIC is all set to distribute one lakh bee-boxes across India by October 2018, which would produce nearly 4,000 tonnes of honey annually. The bee-keeping movement is expected to generate additional incomes of up to ₹50,000 per annum to the rural and tribal families and prevent them from migrating to the urban areas in search of livelihoods.

How do you see KVIC performing now onwards?
Only two years back KVIC, essentially a not-for-profit body dedicated to the socio-economic upliftment of the people, saw its first profit coming that made it financially viable and more sustainable. From 1947 through 2014, this sector could not even touch the double digits growth. The highest growth rate recorded in this untapped sector in those 65-odd years was a mere 8 per cent. Last year, the KVIC products saw sales worth ₹52,000 crore for the first time in India, including Khadi sales worth ₹2,007 crore.

Products manufactured in villages by small-scale industries and social entrepreneurs, mostly by women, also saw huge demand. This feat was made possible through a constant push by the Government and the increasing trend of using organic products worldwide. The sales of village industry produce, or Gramodyog, grew 24 per cent in the last fiscal. The khadi products also achieved sales of Rs 2,007 crore in 2016-17, up 33 per cent from ₹1,635 crore in 2015-16. In 2016-17, khadi production grew by 32 per cent to ₹1,404 crore, while village industries saw a 23 per cent rise to ₹49, 997 crore – thus contributing towards the excellentgrowth of the sector. After Modi’s inspiration to promote yoga as an international event, the KVIC too launched an exclusive Khadi Yoga kit for the first time in May 2016 and earned nearly ₹76 lakh in less than one month’stime. Ever since, khadi and yoga are going together. Clearly, khadi is back in the reckoning.


10.2. FMCG topline may rise by 300-400 bps in FY19 on rural demand'
PTI, May 09, 2018

Mumbai: A revival in rural demand may help boost the topline growth of the Rs 3.4-trillion fast moving consumer goods (FMCG) sector by 300-400 basis points to 11-12 per cent this financial year, said a report.

The FMCG sector is likely to report 11-12 per cent rise in revenue in fiscal 2019, up 300-400 basis points from 8 per cent in fiscal 2018, driven by revival in rural demand and new product launches, domestic rating agency Crisil said in a report today.
This will lead to a significant improvement in their operating performance and benefit credit profiles, it added. The rural economy may get a leg-up from the higher minimum support prices (MSP) announced by the Centre and also a favourable monsoon rainfalls, more non-agriculture rural employment, which in turn will increase farmers' disposable income, leading to consumption demand.

From the marketers' side, continuing product launches and greater acceptance of ayurvedic and herbal products will also help.
"Therefore, revenue growth from the rural segment which contributes 40-45 per cent of the total income of the sector, will improve to 15-16 per cent in fiscal 2019 compared to 10 per cent estimated for fiscal 2018," the report said.
Growth had recovered partially from the 5-percentage point range during fiscals 2016 and 2017, according to Crisil, a period that saw sluggish rural demand resulting from weak monsoons, intense competition and demonetisation.
On the other hand, revenue growth from the urban segment is expected to stay steady at 8 per cent in FY19. While mid-sized and medium-sized firms will have an edge because of better operating efficiencies in the GST regime and may clip at 15-17 per cent, according to the report, large firms are seen growing topline by 300- 400 bps to 11-12 per cent.
On the other hand, smaller firms will continue to be buffeted by competition and GST, and register modest growth.

"Given the prospects, we see large and mid-sized firms augmenting growth through two flanks: acquisitions and new launches," said Anuj Sethi, senior director, Crisil Ratings.
"Small regional players with established brands are likely to be acquired by larger peers, even if such deals are expensive, to reduce time to market," he added.

Operating profit of large and mid-sized firms is expected to sustain at double-digits but rising cost and higher promotional spend will largely be offset by savings on logistics, transportation and from supply chain efficiencies.
On improvement in credit profile of these companies, the report expects the positive trend in credit ratio to sustain for large and mid-sized firms driven by improving business profiles.

According to Amit Bhave, director, Crisil Ratings, healthy cash generation and prudent working capital management, along with deep pockets will allow for higher spend on acquisitions.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


- Industry, Manufacture


11.1. Maruti Suzuki gets lion’s share of Suzuki R&D budget
Livemint, 13 May 2018, Malyaban Ghosh

Suzuki Motor ’s $1.5 billion R&D budget will be used to upgrade Maruti Suzuki cars to Bharat Stage VIemission norms, and develop hybrid and electric cars so as to maintain its over 50% market share in India

New Delhi: Most of the $1.5 billion allocated by Suzuki Motor Corp. for its research and development (R&D) activities will be spent on its most profitable unit Maruti Suzuki and help the Indian firm maintain its 50% market share amid increasing competition from European and Korean manufacturers.
The money will be used to upgrade Maruti Suzuki’s existing models to Bharat Stage VI emission norms—most stringent globally—by 2019, to develop an entire range of hybrid vehicles and other alternative technologies, two people aware of the matter said.

Reuters on 10 May reported that Osamu Suzuki, chairman, Suzuki Motor Corp., in a post-earnings conference call said the company needs to find ways to maintain its current market share in India till 2030 when the Indian passenger vehicle market is tipped to touch the 10-million mark annually.

According to one person aware of the matter, Maruti Suzuki has a huge task at hand in upgrading its existing 14 models to comply with the BS-VI emission norms, which will takes effect on 1 April 2020.
A full range of hybrid vehicles—from the current SHVS or mild hybrid, to full hybrid and plug-in ones—will also be developed by the company in association with Toyota.

“The company will focus on making the full range of hybrids as meeting the CAFE (corporate average fuelefficiency) norms will be impossible without hybrids,” said this person.
The new spends on R&D will take a toll on Suzuki’s earnings (and of Maruti Suzuki to an extent) for thefinancial year ending 31 March 2019.

The operating income of the company would decrease by 9.1% to 340 billion yen as a consequence of higher research and development expenses and appreciation of yen against the dollar. The net income or the net profit of the company would decrease by 5% to 205 billion yen, Suzuki said in a forecast.

In FY18, Suzuki’s net sales grew by 18% to 3757.2 billion yen, while operating profit jumped by 40% to 374.2billion yen. Consequently, net income increased by 34.9% to 215.7 billion—the highest since 1977—on the back of surging sales in India and recovery in European markets.
The company would also invest in developing electric vehicles and related infrastructure like charging stations and making other components of electric vehicles. The development of more fuel efficient gasoline engines is also on the cards, said the second person.

In a first, Suzuki has also tweaked its organization structure globally to include a new department to develop electric vehicles.

“Suzuki has the technology, but it is not adequate enough to meet the competition. Hence, investment needsto be there. New technologies have to be developed as the government of India is very serious about it,” R.C.Bhargava, chairman, Maruti Suzuki, said.
The Indian government initially planned to promote only electric vehicles and wanted to shift 30% of the total vehicles on the road to electric by 2030.

“Developing these technologies is not a one-day affair and it takes a long time. The company will have to work on these things for a long time now. By 2030, if 20%-30% vehicles shift to electric then the rest 70% will leavea huge opportunity for hybrids to grow as they will pollute less,” said the second person.


11.2. Volkswagen to decide on Skoda India’s €1 billion FDI plan
Livemint, 30 Apr. 2018, Arushikotecha and Amrit Ray

The Volkswagen board is expected to evaluate Skoda’s strategy and take a decision within two months

Mumbai: Skoda Auto India Pvt. Ltd, tasked by parent Volkswagen AG to lead the group’s India operations, willpresent an ambitious India investment plan of more than 1 billion euros to the German company’s board intwo-three weeks.
If approved, this will be the largest inflow of foreign direct investment (FDI) into the Indian auto sector.

Skoda India seeks to create the Volkswagen (VW) group’s first engineering centre in India and simplify the business structure of the group in the country, according to two people aware of the development.
The company also seeks to build at least six new body styles on the MQB (Modular Transverse Matrix) platform and develop India as an export base for such models, the two people cited above said, requesting anonymity.

The VW board will evaluate the strategy and take a decision within two months, said one of the two people with direct knowledge of the matter.

“Skoda has been entrusted with the responsibility of driving VW Group operations in India and Russia.According to that, the Indian team has prepared a business plan that proposes to invest more than €1 billion inIndia—the single largest such investment in the sector,” the person said.


Email queries sent to Skoda India did not receive responses till press time.
Seeking to drive greater volume on a global level, VW, at the end of 2016, decided to task the local subsidiary of the Czech carmaker with the entire re-development of the MQB platform—the current global architecture that underpins almost all small and mid-size VW group cars—for developing countries, including
India. Mint reported this first in August.
The move was result of a feasibility study that VW had conducted on its partnership with Tata Motors Ltd, which was later called off.

Skoda has not really picked up pace in the Indian car market after debuting more than 15 years ago. According to data provided by industry body Society of Indian Automobile Manufacturers (Siam), Skoda Indiaclocked a mere 17,387 units in FY18 sales, an increase of 26.8% from a year ago. In comparison, India’sluxury car market leader Mercedes-Benz India Pvt. Ltd sold 15,330 units during the period.
Volkswagen India Pvt. Ltd sold 45,329 units in the fiscal year gone by, a decline of 22.5% from a year ago. At least six new body styles will be developed by Skoda India, starting from the B-segment, according to the new business plan, Mint has learned. These include small cars such as the Hyundai i20, Suzuki Swift andSkoda’s own Fabia.

While some of the new brands will be introduced based on the MQB platform, the plan is to retain the premiummodels of both Skoda and Volkswagen. The new models will have “significantly different styling” so that theycan be used by both Skoda and Volkswagen.
There are also plans to simplify the structure of VW group companies in India, as the current structure doesnot give complete authority to any of the group’s Indian subsidiaries such as VW, Skoda or Audi. While these subsidiaries have their independent sales and service units, they share two manufacturing units in Aurangabad and Chakan, which are affiliated to an independent entity.


12.1. Jewellers see 10% export growth in FY19
Business Standard, Apr. 27, 2018

Mumbai: After a five per cent decline in FY18, jewellers believe there would be a 10 per cent jump in India’sgem and jewellery export for the current financial year.

They point to demand from new markets, depreciation in the rupee against the dollar and increases in diamond prices.
India’s $41-billion gem and jewellery export industry has been exploring opportunities in Latin America, Southeast Asia and Cambodia. Also, a sharp rise in segment export to the European Union, led by the United Kingdom and France, has raised hope.

Additionally, the traditional markets — America, China and UAE, among others — showed a recovery in demand towards the end of FY18.

“We have attained growth in cutting and polishing, and proved India’s leadership. The next phase of growth would come from diamond price rises. Also, recovery in the US economy means more disposable income forconsumers; the US takes around 45 per cent of India’s overall gem and jewellery export,” said Colin Shah,vice-chairman, Gems and Jewellery Export Promotion Council (GJEPC).

Diamond prices have risen at a compounded annual rate of around 3.5 per cent during the past 10 years. The rupee has lately fallen by about two per cent. New markets would add to the orders, says Shah.
Gem and jewellery export fell a little below $41 billion (Rs2,641 billion) in 2017-18, from $43.2 billion (Rs2,892 billion) in 2016-17.

Growth in the sector was primarily driven by the cut and polished diamonds (CPD) segment, up 4.2 per cent to $23.7 billion in FY18. Total volume here was 34.86 million carats, as compared to 32.21 million carats in FY17. Gold jewellery export rose 10.9 per cent to $9.7 billion .

“While India is undisputed leader in CPD export, with 14 out of 15 roughs mined globally being processed here, the country is facing stiff competition in gold jewellery from Dubai, Hong Kong, Turkey and other centres.But, our gold jewellery export would continue to grow at the same pace in FY19,” said Pramod Agarwal,chairman, GJEPC.
Our gem and jewellery export to the United Arab Emirates (UAE) were hit due to a five per cent value addedtax by the government there, effective January 1. UAE’s share in India’s overall gem and jewellery export fellto 25 per cent for FY18, from 32 per cent the previous year.
Shah said India’s export business was shifting to Hong Kong from the UAE, mostly for redirection (meaningfurther export to other destinations).
In the wake of the Nirav Modi/Mehul Choksi/Punjab National Bank scam, GJEPC says it is seeking stringent Know Your Customer rule implementation from its 6,000 members, including 2,500 exporters.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


12.2. Makers of smartphone parts keen to invest in India: Huawei’s Peter Zhai
Livemint, 24 Apr. 2018, Navadha Pandey

Huawei has a single original equipment manufacturer partner Flex in Chennai for its mobile devices business in India, and is planning to set up manufacturing capacities

New Delhi: China’s Huawei is encouraging its global suppliers to come invest in India in order to build amobile phone components ecosystem as the company aims to locally manufacture 90% of its phones by the end of this year, Peter Zhai, president, Huawei India Consumer Business Group, said.
The firm, the third largest after Samsung and Apple in global smartphone sales, is also planning to step up manufacturing capacities. Huawei has a single original equipment manufacturer partner Flex in Chennai for its mobile devices business in India.
The firm runs two mobile phone brands in India—Huawei and Honor—with the former focusing on the high-end segment. “We are keeping very close touch with all our component suppliers and we are also encouragingthem to invest in India. Let’s see. It will take time but I believe made in India will be the right direction. We will follow that,” Zhai said.

Zhai was in Delhi to launch the flagship P20 series smartphones—Huawei P20 Pro at Rs64,999 and Huawei P20 Lite at Rs19,999. The phones will be exclusively available on Amazon from 3 May.

“They (component suppliers) are interested and they have the planning... Our suppliers are also global. Huawei has a significant share of the world smartphone business, that’s why our opinions are also very important to influence decisions. Since we have decided to develop the India market, I believe a lot ofsuppliers will be willing to support us and be willing to follow us to enter this market,” he added.

This comes after the government on 2 April imposed a 10% basic customs duty on import of smartphone components such as camera modules and PCB assemblies. Prior to this, there was no import duty on these components.

Moreover, in the budget, the centre had increased customs duty on mobile phones to 20% from 15%.
The measures are in line with the government’s Phased Manufacturing Programme, which aims to boost localmanufacture of phones.
In its first phase, the government had targeted production of various components for three years—mechanics, die-cut parts, microphones and receivers, keypads and USB cables in 2017-18; printed circuit boards, camera modules and connectors in 2018-19; and display assemblies, touch panels, vibrator motors and ringers in 2019-20.
Huawei’s rival in India, Xiaomi, has already hosted 50-odd suppliers, which manufacture components such as touch panels, camera modules and LCD and LED panels for it, on a three-day tour of Uttar Pradesh and Andhra Pradesh to explore investment opportunities.


13.1. Lockheed Martin sees India as next big aerospace, defence hub
BusinessLine, 25 Apr.2018,Vrishi Kumart

US aerospace and defence major Lockheed Martin expects India to be next major defence and aerospace hub with several major deals set to be finalised with the Government and between Governments.
The diversified company, which already has presence in India for more than 25 years, and now with a manufacturing/assembly facility, in partnership with Tata Advanced Systems Ltd, in Hyderabad, is closely watching the progress of major defence deals, which could trigger development of the local industry and manufacturing.

After the commissioning of a new facility in partnership with TASL at the aerospace park in Adibatla near Hyderabad international airport, senior executives of Lockheed Martin explained how aerospace and defence in India could be next major opportunity and have potential to become big like the automotive sector over the past few decades.

Phil Shaw, Chief Executive, Lockheed Martin India, Abhay Paranjape, Chief Operating Officer of Tata Lockheed Martin Aerospace Ltd, and John R Losinger, Integrated Fighter Group Communications, explained how the corporation was keenly watching the progress of some of the large defence procurement deals, which could trigger big local development.
Paranjape said Lockheed Martin had initiated a process for Indian manufacturing about 7-8 years ago even before the Government initiated the defence offset policy. Significantly, the manufacturing facilities that get created in India have the potential to not only serve the Indian requirements but also play a role as a regional hub.

F-16 hub
“Potentially, India could emerge as a manufacturing hub for F-16. Just as the aviation industry has grown in Turkey over the years for F-16 and fighter planes, there is potential for India to become a major hub for F-16s,”Losinger said. The beauty of F-16 is it could potentially put India in the large global supplies chain. But the outcome depends on the Government procurement decision, he said.

Shaw said, “There are more than 70 suppliers with whom we are in touch who could become our suppliers. They include a number of small and medium enterprises. We are prepared and we have a head start.”

Helicopters, javelin
“Over the years we have supplied C-130s in 2010 and another 6 last year. Other areas of interest for us are Navy helicopters, multi-role helicopters. That is one areas where Lockheed Martin and Sikorsky are looking to

Government and are ready to offer Seahawk Platform that is proven and operates around the world,” Shaw explained. “We can help navy acquire them quickly as we have a line up,” he said.
“We continue to be in discussions with the Government and there also Government to Governmentengagement on various deals. The latter includes Javelin weapon systems, anti-tank guided missiles andvehicle mounted capable ones,” he explained.

The navy helicopter and multi-role helicopter progress has immense potential for development work.
Shaw explained: “Defense procurement world over is a long process and India is no exception. However, the quicker the orders come, the better.” These defense deals have potential to strengthen business back home while also creating new jobs in the US and India, Shaw said.


13.2. Manufacturing of Planes under Make In India and Safety & Security in Aviation Sector to be top priority: Suresh Prabhu
Press Information Bureau, Apr. 27, 2018

New Delhi: Sh. Suresh Prabhu, Union Minister for Civil Aviation today stated that aircraft and aviation equipment manufacturing under the Make in India programme and safety and security in the aviation sector would be one of his top priorities along with creating world-class passenger and cargo hubs in India. He also stated that air passengers must have a delightful travel experience and private sector must be responsive to customer requirements. He was chairing a meeting of airline industry stakeholders, including CMDs of different airlines, airport directors and others who are involved in airport operations, on wide-ranging issues like passenger service, security, public-private partnership, infrastructre, air connectivity etc. Shri Rajiv Nayan Choubey, Secretary, Ministry of Civil Aviation and senior officers from the Ministry were also present in the meeting.

Shri Suresh Prabhu informed that such meetings would be conducted at regular intervals to ensure that the growth in aviation sector industry is as per world standards. He also stated that PPP should mean private partnership not only with the Government but with the public at large. He also stressed on the need for a demand survey of the air-traffic potential from various cities that needs to be made. The issues discussed in the meeting included transforming India as an air cargo hub and working towards e-national air cargo community system and e-freight cargo.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


14.1. A good competitor is good for HUL: Sanjiv Mehta
Livemint, 26 Apr. 2018, Amrit Raj and Arushi Kotecha

HUL chairman Sanjiv Mehta, along with his leadership team, will focus on making investments and forming strategies around areas such as data and artificial intelligence to ward off competition from Patanjali Ayurved

Mumbai: Amid stiff competition from Patanjali Ayurved Ltd, Hindustan Unilever Ltd has sharpened its focus on India by dividing the market into 14 independent verticals. Besides, Hindustan Unilever has now divided into 15 verticals, which the company calls country category business teams, which are fully empowered and have been given full responsibility to run the business, Sanjiv Mehta, who is now executive chairman of Hindustan Unilever, said in an interview on 5 April.

Mehta, along with his leadership team, will focus on making investments and forming strategies around areas such as data and artificial intelligence. And that gives Mehta confidence of fending off competition coming from yoga guru-turned-entrepreneur Baba Ramdev’s company. Edited excerpts:

The monsoon prediction has come out. That must have made you very happy?
I am always delighted. India is a country where... you forget my business, anything which is good for India is good for my business.

But, how do you look at this financial year?
I won’t be very liberal with my opinion. We are at a closed period. We have had some fundamental changes inthe economy with the GST (goods and services tax) and all and whenever you have such fundamentalchanges in the economy, of course there is a turbulence. So, that’s now behind us. Our channels have settleddown, though the full benefit of GST will come in when e-way bills come into effect. We have always been big supporter of GST. Anything that brings the level playing field or anything that brings efficiency to the supply chain should augur well for the industry.
I remember after your quarter two results, you spoke about waiting for a trend to emerge after demonetization...
If you go back to my precise word, I would have said wait for a couple of quarters and then a trend shapes... India is such a fragmented market where you have millions of stores, you do not want to jump to a conclusion based on one or two data points. When you are talking about a trend then you need to see very clearly a pattern emerging before we can say that yes a trend has emerged.

What about the other disruption caused by Patanjali?
From my perspective, a good competitor is good for Hindustan Unilever. Despite all the competition, local, international, in the last five years, our delta turnover has been more than Rs12,000 crore. This is more than the absolute turnover of most of the competitors. India is not a zero sum game. So, while we look at our competitor very closely, our obsession is always with consumers.

But they (Patanjali) have made deep inroads into the Indian market...
What has changed in your business strategy after the emergence of Patanjali?
Two things. One, a corporation cannot live on its past (glories). And you have to continuously reinvent yourself. So, that is the continuous journey for us. We are making huge investments in terms of data, analytics, AI, etc. across the whole value chain. From an organization perspective, for us, speed, agility and resilience are so important.
In the last two years, we have done two big things. One is winning in many Indias—breaking up India into 14clusters. We don’t make strategies pan-India. We make strategies at a cluster level because India is not a homogenous entity. Competitors are different, penetration levels are different. So, these are very different. Second is what we call country category business teams where we have got 15 CCBTs in the company, which are fully empowered, which have been given full responsibility to run the business for the year and my leadership team now spends more time on things like innovation in near-term and beyond; disruptions, talent, capabilities, and that has unleashed huge amount of energy into the company. This has happened now for more than year.

Will you be able to maintain your leadership?
Absolutely. I am completely confident of it. At the end, what makes a consumer goods a great company? Two important things: Great brands and a great set of people. We are employer buy choice and we recruit amazing talent. And great people make great brands


14.2. Future Group stocks soar on hopes of more online-offline partnerships
Livemint, 10 May 2018 Nasrin Sultana

Shares of Future group companies gained on Thursday following the Walmart-Flipkart deal, riding hopes that the deal will spur more online-offline partnerships in India’s retail sector

Mumbai: Shares of Future group companies gained on Thursday following the Walmart-Flipkart deal, riding hopes that the deal will spur more online-offline partnerships in India’s retail sector.
After clocking intraday gains of 5-17%, shares of Future Lifestyle Ltd, Future Retail Ltd, Future Consumer Ltd and Future Enterprises Ltd closed 2.11%, 4.67%, 3.87% and 8.83% higher on the BSE, a day after world’slargest retailer Walmart Inc. agreed to buy 77% of online retailer Flipkart for $16 billion.

According to Edelweiss Securities Ltd, the deal values Flipkart at 4.5 times FY18 enterprise value/sales.“Though this may look expensive on absolute basis, the valuation is at a discount to that of Avenue Supermarts and at a significant premium to that of Future Lifestyle Fashions, Future Retail & Shoppers Stop—our preferred picks in the retail sector. This merger... reiterates our conviction of boom in domestic organized retail sector, which is estimated to catapult to $115 billion by FY20 from $55 billion in FY16, higher than 20%compound annual growth rate (CAGR),” it said in a 9 May note.

As per Edelweiss estimates, valuation of Avenue Supermarts stands at 6.1 times of FY18 EV/sales while that of Future Lifestyle Fashions is at 2 times FY18 EV/sales and Future Retail is at 1.5.
The brokerage firm said the Walmart-Flipkart deal envisaged to change the domestic retail industry as online and offline partnerships are likely to get a fillip, online discounting may not necessarily increase as Walmart may drive private labels rather than focus only on gross merchandise volume (GMV) while FMCG companies are likely to benefit as Walmart’s expertise lies in hypermarkets and grocery retailing.

“This deal is icing on the cake for FMCG players considering that they have already sharpened focus on directdistribution, modern trade and e-commerce channels. Also, subject to regulations, there is likelihood ofWalmart’s cash & carry business being integrated with Flipkart at some point in time—an added kicker,” itsaid.

Prabhudas Lilladher Pvt. Ltd believes that after the deal, there could be further consolidation in the organized retail space in India which could benefit some of the domestic listed and unlisted players. “We expectincreasing competition in organized retail, not only in fashion, lifestyle retailing and durables but also in food, grocery and general merchandise. Future Retail Ltd is leading the industry consolidation in the Hypermart andSupermart format and has acquired Bharti Retail, Heritage Fresh, HyperCity retail etc. in the past few years,”Prabhudas Lilladher said in a note on 9 May.

According to Kotak Institutional Equities, in the long term, Walmart may look to provide a seamless omni- channel experience to customers and gain a larger chunk of the India retail pie.
“Walmart’s global expertise in sourcing products cheaply, and focus on staples leads us to believe that it will invest significantly in improving sourcing of food items direct from farms, and build supporting infrastructure inthe form of transport and warehousing facilities,” it said in a report on 10 May.

Kotak added that Walmart’s acquisition of Flipkart will effectively consolidate the Indian e-tail sector into a two- player market while the ensuing balance sheet strength will drive investments in infrastructure, efficiencies,and be ultimately positive for the Indian consumer. “That said, this also reflects the larger trend of foreign strategic players dominating various Indian e-commerce verticals. Offline players such as Future Retail andAvenue Supermarts will sharpen focus on their hyperlocal offerings,” Kotak said.

Meanwhile, the Economic Times reported on 10 May that the Future Group is looking to sell at least 10%stake to a global retailer. Future Group founder Kishore Biyani was quoted in a news report, “I will sell a minority stake to the strongest global retailer”


15.1. Rampant evergreening in Indian pharma industry
Livemint, 27 Apr. 2018, Feroz Ali and Sudarsan Rajagopal

Pharmaceutical companies commonly used legal argument, as opposed to demonstrating proof of therapeutic efficacy, to overcome anti-evergreening objections

Every new drug in the marketplace has a long history leading up to its appearance on the countertop at your local pharmacist. Photo: Bloomberg
India has been at the forefront of developing an alternative model of patent law which many developing countries have since emulated. A key highlight in the Indian law is Section 3(d) of The Patents Act, 1970, which was introduced in 2005 as a yardstick to distinguish real innovation from trivial tweaks. Section 3(d) was instrumental in the Indian Patent Office (IPO) rejecting the patent for Novartis’ drug Glivec (imatinib mesylate).Its constitutional validity was challenged and upheld before the Madras high court. The decision rejecting the
patent for Glivec was upheld by the Intellectual Property Appellate Board (IPAB) and later by the Supreme Court in 2013. Though the law with regard to anti-evergreening, upheld and clarified by Indian courts, remains in the books, its application by the IPO has been far from satisfactory.

Every new drug in the marketplace has a long history leading up to its appearance on the countertop at your local pharmacist. The first step that pharmaceutical corporations take on discovering an entirely new drug is to secure intellectual property rights for it in the form of a patent. A primary patent, covering a new molecular/chemical entity, rewards innovation with a free reign over the marketplace for a period of 20 years, which is the term of the patent. However, this also sets the clock ticking, since innovators need to reap the fruits of their inventive labour and maximize revenue within this period.

Once this expires, generics enter the fray with cheaper versions and compete in this lucrative marketplace to drive prices down. One would expect innovators to do what they do best—innovate—going back to cranking out the next life-saving drug. This entails going through an entire cycle of discovery, clinical trials, marketing and distribution, replete with the risk of failure at every step— since the vast majority of discovered drugs don’tmake it to market.

The convenient alternative for corporations would be to extend the existing exclusivity in the market as long as possible, fending off the arrival of generics. Since it is not possible to extend the term of the initial patent filed, this requires creative alternatives. Innovators instead seek to reset the 20-year clock by subsequently filing patents that are minor variants of the parent compound, called secondary patents. This practice, known as evergreening, allows a prolonged monopoly that unfairly denies the public access to medicines at equitable prices. Such variants to previously known drugs are usually arrived at as a manner of routine experimentation in the pharmaceutical sciences, and hence may not be truly innovative. Nevertheless, they might still hold tremendous value if they demonstrate a relative improvement in some properties over their antecedent. Different countries hold up patent applications for such innovation to differing standards.

Section 3(d) of The Patents Act, 1970 in India was an innovation in its own right, albeit one in law, which deals specifically with such inventions. The statute clearly defines the standard for follow-on patents on drugs as one of therapeutic efficacy, where applicants may need to supply some clinical evidence. This standard was testedand upheld by the Supreme Court in a landmark decision in 2013 involving a patent application for Novartis’anti-cancer drug Glivec. This was heralded by many as an example of India leading the charge on curbing evergreening, thereby safeguarding its access to public health.

Despite such measures, we discovered that evergreening practices may be rampant in India, based on a study of about 2,300 patents for drugs granted between 2009 and 2016. In our study titled Pharmaceutical Patent Grants In India, we have shown that the IPO could be operating with an error rate as high as 72% for secondary patents, despite provisions to keep them in check. Secondary patents granted by the Indian Patent Office were in contravention of the anti-evergreening provisions contained in The Patent Act, which also include Sections 3(e) and 3(i), apart from Section 3(d).

While Section 3(d) sets the bar high for secondary patents with the mandated requirement for clinical evidence, others such as Section 3(e) set less well-defined thresholds. The easiest way patent applicants overcame the need to produce efficacy data was by proffering convoluted legal argument, which is an easy thing to do in an esoteric field like patent law.
Most prominently, patent applicants repeatedly blunted the effect of Section 3(d), by claiming an incorrect application of Section 3(d) by the IPO. They would direct the attention of the IPO to another provision which has traditionally governed the grant of patents for combinations—Section 3(e). Section 3(e) stipulates a requirement of demonstrating synergy (of any property, not solely therapeutic) where the invention is an admixture of known substances. Since the proof for synergy is a nebulous standard at best (in common parlance, it is explained as where the sum of 2+2 is 5), and one that applicants could readily overcome, applicants would steer the argument away from the exacting evidential requirements that a Section 3(d) citation would warrant.

By doing this, applicants were able to get over the Novartis standard set by the Supreme Court which required patent applicants to prove significant improvement before getting a patent granted on follow-on improvements. By misdirecting the attention of the IPO from Section 3(d) which required the applicants to prove therapeutic efficacy before the IPO—a hard ask for trivial innovations—the applicants were happy to show that their patent involved a combination and that it had synergy.

The argument pharma companies had against Section 3(d) was that it would affect the incentive to innovate. What has been demonstrated in the cases under study, is that by overcoming Section 3(d) they only have an incentive to tweak and not innovate. Over the years, the IPO has developed a reputation for separating the wheat from the chaff by applying the anti-evergreening provisions. When it comes to pharmaceutical patents, maintaining the quality of grants is inherently linked to the issue of access to medicines. There is very little room for error here.

Feroz Ali and Sudarsan Rajagopal are, respectively, the IPR chair professor at IIT, Madras and a London- based patent analyst


15.2. Engineering exports grow 17% to $76 bn in FY18
PTI, May 01, 2018

Mumbai: Engineering exporters' apex body EEPC India today said India's exports grew by 17 per cent to USD 76 billion in financial year 2017-18.
The engineering exports, which account for over 25 per cent of the country's total merchandise exports, grew to USD 76 billion against USD 65.23 billion in FY17 on the back of robust performance of the sector, the Engineering Export Promotion Council (EEPC) India said in a release.

"The stellar performance of the sector is mainly attributed to the metal pack even as the US remained the top market for us," EEPC India chairman Ravi Sehgal said.
Iron and steel exports registered a 29.42 per cent growth during FY18 to USD 11.20 billion, from USD 8.66 billion in FY17.

Products of iron and steel recorded growth in exports by 14.82 per cent to USD 6.76 billion during FY18, against USD 5.89 billion during FY17, according to the release.
The US continued to be the top most exporting destination for India's engineering products, registering a 44.3 per cent growth for the last financial year.
"The US economy is growing at a steady and a rapid pace and we should be able to take advantage. However, at the policy level, we are expecting lot more support from the government, including faster clearance of tax refunds," said Sehgal.
The US was also the largest importer of Indian industrial machinery with a 25 per cent year-on-year growth, followed by the UK with 44 per cent increase in shipments, the apex body said.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


- SERVICES (Education, Healthcare, IT, R&D, Tourism, etc.)


16.1. TCS becomes first $100-bn IT company
BusinessLine, 24 Apr. 2018 Varun Aggarwal

Fourteen years after it listed its shares, IT behemoth Tata Consultancy Services has become the first and only Indian company in the sector to cross market capitalisation of $100 billion.

The crown jewel of the Tata Group has surpassed its global rival in the IT services space, Accenture, in market valuation.

TCS, which listed on August 25, 2004, had a stellar debut, claiming a 27 per cent premium to its issue price of ₹850. Even at listing, the company was worth over $10 billion, with revenues of over $1 billion.
Rebasing the listing price to adjust for two bonus issues, in July 2006 and June 2009, each in the ratio of 1:1, the stock has given returns of around 1,260 per cent in about 14 years.


After posting staggering fourth-quarter results on Thursday, TCS made history, with its market-cap soaring
to ₹6,79,332 crore in intra-day trade on Monday before closing at ₹6,53,767 crore.
“It is a very proud moment for all of us,” Tata Sons Chairman N Chandrasekaran said in a statement. “TCShas been able to create value consistently by making the right investments, not only in terms of technology, but also in terms of creating capabilities, building leadership and talent, seeding new markets and developing scalable world-class solutions. I would like to thank our shareholders for their continued support.”



As organisations are transforming into real-time enterprises driven by data, analytics and automation irrespective of their business, TCS is well positioned to make an impact and continue to deliver value, he added.
According to PTI, TCS is the country’s most valued firm, followed by RIL with a market capitalisation of ₹5,92,428 crore, HDFC Bank (₹5,01,644 crore), ITC (₹3,35,801 crore) and Hindustan Unilever Ltd (₹3,14,939 crore) in the top-five list.








16.2. HCL will focus on next-gen tech: Vijayakumar
BusinessLine, 02 May 2018, Swathi Moorthy

In the last two years, the company invested $100 million in creating digital infrastructure such as experience design centres, IoT and Cloud labs. The company is investing in start-ups that offer cutting-edge technology as well. In a interview with BusinessLine, Vijayakumar shared the company’s future strategy, growth prospectsand why India is not a focus market. Excerpts:

Start-ups are next big thing which all established players are looking at. Is HCL Technologies also proposing to work with any one of them?
The company has already started investing in couple of start-ups. HCL Technologies invested close to $2-3 million in Moogsoft, which offers AI solutions for IT operations.
It is also working on start-up venture partnerships through Morado Ventures, in which HCL has invested, for funding more start-ups. These are helping us gain some capability in cutting-edge disruptive technology.

What are the growth drivers for your company?
Though company’s major share of revenue comes from engineering, services, applications and infrastructurethat constitute Mode 1, revenues from next-gen services (Mode 2) and IP offerings (Mode 3) are also on the rise. For the fiscal ended March 2018, Mode 2 and Mode 3 offerings accounted for 23.4 per cent of overall revenue compared to 18.6 per cent the previous fiscal.
As corporate enterprises re-image their businesses spending on traditional technologies will see a compression. But, it will be compensated by the investment in emerging technologies and IP offering. The company has invested close to $1.2 billion in IP partnerships, in-house IP creation and acquisition in the last two years.

Are you open to more acquisitions?
We are open to more acquisitions if opportunities were to arise and investments will be in line with previous years. The company is also looking to strengthen its presence in Germany, Australia, Canada and South Africa.

Does it mean India is not a focus market...?
India is not one of the focus market. Though there are projects in India, as a strategy we are reducing our focus. On the enterprise and niche segments, we will continue to participate, but we will be selective.
Though technology consumption is on the increase in the country, we have to figure out what it means for the company and how it fits in with their priorities.

The primary reason for reducing focus in India is the long-gestation period for SI projects and lot of capital gets stuck.
HCL has a large revenue base. Almost 99.9 per cent of the clients are global clients. So we want to focus on them, protect our revenues and also grow the revenues.


17.1. What does it take to save a newborn’s life?
Livemint, 26 Apr. 2018, Junaid Nabi

Although India is undeniably on a path toward economic prosperity, losing millions of children every year to preventable deaths undermines this progress

In February, the United Nations International Children’s Emergency Fund (Unicef) released a reporthighlighting the grim state of the Indian health system for newborns. With an average newborn mortality rate of 25.4 deaths for every 1,000 live births, India leads the list of lower middle-income countries with the highest number of newborn deaths—a staggering 6.4 million per year, or about a quarter of the world’s total. AlthoughIndia is undeniably on a path toward economic prosperity, losing millions of children every year to preventable deaths undermines this progress.
With the inclusion of vaccines against diarrhoea and pneumonia in the national immunization programme, India was able to reduce the under-five mortality rate by 34% between 1990 and 2006. However, because causes of newborn deaths are different, immunization programmes are unable to prevent these deaths. Some 80% of newborn deaths result from complications from labour and delivery: premature birth, low-birth weight, neonatal infections, and birth trauma. Out of these, infections such as pneumonia and diarrhoeal diseases, account for half of all newborn deaths.
In a perfect world, every health system would be adequately funded, with ample staff, training and equipment to care for the community. While asking for more resources is often warranted, we put poor populations at risk when we focus only on money instead of looking for ways to improve the capacity of the existing health system.

The reality is, simple interventions around the time of birth—such as hand washing, cleaning the umbilical cord with a regular antiseptic, ensuring the newborn is warm, dry, and fed—are affordable and more effective than previously thought and can reduce newborn death rates in low-resource settings. Most of these strategies do not require a specialist.

These practices form the basis for the World Health Organization’s (WHO’s) Essential Newborn Care.Essential Newborn Care is a set of activities that each newborn child needs, irrespective of place or condition at birth. WHO offers brief training courses and provides simple checklists that ensure all the essential steps are carried out at the time of birth.
In public health, we call this approach task-sharing. It strengthens the capacity of the health system by distributing essential responsibilities among a larger group of health workers and emphasizing shared responsibility for high-quality outcomes. For instance, in obstetric care of a newborn, a trained birth attendant or midwife can handle routine cases, freeing up an experienced surgeon or obstetrician to handle complications.

Recent evidence from Karnataka revealed that WHO birth attendant training in Essential Newborn Care reduced perinatal mortality to 36 per 1,000 live births, from 52. Stillbirth rates decreased by about 40%, to 14 per 1,000 live births, and early neonatal death fell by about one-fourth to 22 per 1,000 live births.
Better training of midwives can also reduce newborn deaths. About 70% of the Indian population currently resides in rural areas. Midwives already play a crucial role in delivering obstetrical care in these areas. Most midwives, however, have never been trained in practices of infection control or umbilical cord care. A comprehensive study on the role of midwives in obstetric care reported in the Lancet revealed that strengthening midwifery practices through education, training, and regulation in low- and middle-income countries resulted in more efficient utilization of resources and improved outcomes for both pregnant mothers and newborn children.

So why aren’t these various, relatively simple measures in wider practice? One reason is resistance fromprofessional societies. Doctors may worry about quality, safety, and the dilution of professional obligations. But the fact is that these low-cost and high-impact interventions can save millions of lives. Medical and nursing professional societies play a critical role in this solution. They can also work together to formulate curricula that promote task-sharing practices, so that quality improvement initiatives can be implemented. If these task- sharing practices work in the short term, doctors and nurses may find that this approach could have merit as a long-term solution to improve health outcomes, particularly in resource-poor settings.

Further, there is ample evidence to suggest that obstetric outcomes, such as newborn death and complications, do not increase when task-sharing is implemented. In 2011, the British Medical Journal published an analysis of controlled studies which demonstrated no difference in outcomes for caesarean section and perinatal death between physicians and ancillary staff.

It is not reasonable, moral or practical, to wait until the capacity of the national health system develops sufficiently to handle this public health crisis. Doing so is allowing professional hubris to kill newborn children. Instead, we must empower and train healthcare providers who work in remote communities and serve populations that are unable to access safe and affordable obstetric care in the current health system. Losing almost a million lives every year to preventable causes is a travesty of sound health policy. The cost of inaction is too high.

Junaid Nabi is a fellow in bioethics and a global health policy researcher at Harvard Medical School, Boston, and a 2018 new voices fellow at Aspen Institute.


17.2. Aurobindo launches $1.6 billion bid to buy Novartis generics unit
Livemint, 6 May 2018, Deborshi Chaki

Aurobindo Pharma is the only Indian company that has put in a bid for the assets, which includes an array of dermatology brands, production facilities and associated infrastructure, mostly in the US

Mumbai: Aurobindo Pharma Ltd has submitted an initial bid to buy Novartis AG’s dermatology generics drugbusiness for about $1.6 billion, two people directly aware of the development said on condition of anonymity. Hyderabad-based Aurobindo Pharma is the only Indian company that has put in a bid for the assets, which includes an array of dermatology brands, production facilities and associated infrastructure, mostly in the US, said one of the two people, both of whom declined to be named.

“Aurobindo has already put in a non-binding bid for the asset which has also drawn interest from other suitors which include private equity funds and other drug companies,” the person said. “Aurobindo is being advised by Credit Suisse on the transaction.”
The last date for placing binding bids is 15 June, said the second person cited above.

Emails sent to Aurobindo and Credit Suisse were not answered till press time.

Novartis is considering a sale of its dermatology generics drugs business under the Sandoz brand as it seeks to sell some of its less profitable businesses, Bloomberg reported in November.
If Aurobindo is successful, it will be the biggest outbound transaction by an Indian drug maker, the previouslargest being Lupin Ltd’s acquisition of Gavis Pharmaceuticals Llc. and Novel Laboratories Inc. for $880 millionin 2015.

The transaction, if it goes through, will be the second overseas acquisition by Aurobindo in less than twoyears. In January last year, it agreed to buy Portugal’s Generis Farmaceutica SA from Magnum CapitalPartners for €135 million.


18.1. Walmart buys Flipkart for $16 billion, shifts battle with Amazon to India
Livemint, 9 May 2018, Shrutika Verma, Mihir Dalal and Aniban Sen

US retail giant Walmart buys 77% in India’s top e-commerce firm Flipkart , valuing it at $21 billion

Delhi/Bengaluru: Walmart Inc. has agreed to pay $16 billion for a 77% stake in Flipkart, valuing India’slargest start-up at about $21 billion in what is one of the biggest acquisitions in the country.
The deal will redraw the retail landscape in India as Walmart takes its battle in the US with arch-rival Amazonto the world’s fastest growing major economy. It will also give a massive boost to entrepreneurship and thestart-up ecosystem in India, which has struggled to provide exits.
The buyout, which is Walmart’s biggest acquisition and the biggest e-commerce deal globally, marks the end of an era as Flipkart co-founder and chairman Sachin Bansal will leave the company and sell his 5.5-6% stakein the company. Flipkart’s other founder Binny Bansal will continue as Flipkart group CEO and Kalyan Krishnamurthy will retain his position as Flipkart CEO.

The deal will need to be approved by India’s anti-trust regulator. Walmart’s journey in India hasn’t been smooth. In 2007, the world’s largest retailer set up a joint venture with Bharti Enterprises Ltd for wholesale stores. Bharti exited the joint venture six years later.


“India is one of the most attractive retail markets in the world, given its size and growth rate, and ourinvestment is an opportunity to partner with the company that is leading transformation of e-commerce in themarket,” Walmart chief executive officer Doug McMillon said.
Walmart brings to the table its experience of running a big retail business globally. It plans to help Flipkart in scaling its business fast and at the same time bring in cost efficiencies.
Singapore-registered Flipkart, which owns fashion retailers Myntra and Jabong and the mobile payments app PhonePe, has seen its valuation jump to $21 billion from just $10.2 billion a year ago.
Walmart will invest $2 billion directly into Flipkart and buy the rest of its stake from existing Flipkart investorsincluding SoftBank Group, Accel Partners, Naspers and eBay Inc. Tiger Global Management, Flipkart’s mostinfluential shareholder, is also selling much of its 20% stake. According to a person familiar with the matter, Walmart may invest more money into Flipkart after a year.

“It’s interesting as we are now seeing the converging of offline and online,” said Kishore Biyani, chief executive officer, Future Group.
The sale will lead to windfall gains for Flipkart’s earliest investors Accel, Tiger Global and Naspers. TigerGlobal partner Lee Fixel, who was the driving force behind the deal, has now established himself as one of the most important start-up investors in the world.

Flipkart’s largest shareholder SoftBank will sell its 20%-plus holding entirely over time, marking a massive gain on a $2.5 billion investment only made last August.
Binny Bansal, Tencent Holdings, Tiger Global and Microsoft will retain some portion of their shareholdings in the company. Tencent and Tiger Global will retain their board seats; Walmart will add new members toFlipkart’s board including independent directors.

JP Morgan was the lead financial adviser for Walmart, along with Barclays. Law firm Shardul Amarchand Mangaldas & Co. was one of the legal advisers to the American company. Flipkart was advised by Goldman Sachs Group Inc.
Walmart said it is in talks to bring new investors into Flipkart. One person familiar with the matter said that Flipkart is in discussions with Google, Intel and existing investor Microsoft to raise more capital.

Walmart said that the Flipkart Group recorded gross merchandise value of $7.5 billion for the year ended 31March, an increase of 50% over the previous year. Flipkart’s net sales also jumped by 50% to $4.6 billion. Walmart, which will retain the Flipkart brand, said it supports “Flipkart’s ambition to transition into a publiclylisted, majority-owned subsidiary in the future”.

But a listing of Flipkart is unlikely any time in the next few years, given that the company will need to keep spending lots of cash to keep its leadership position amid the battle with Amazon India.
Analysts expect Amazon to increase its $5 billion commitment toward expanding its India business.Walmart’s wholesale business in India will continue to be led by Krish Iyer. The company operates 21 BestPrice cash-and-carry stores and one fulfilment centre across nine states.

At 9pm IST, Walmart shares were trading down 4.04% on the New York Stock Exchange.


18.2. Food can be the first contact point between Ikea and Indian customers: Patrik Antoni
Livemint, 01 May 2018, Sounak Mitra

The Ikea store will house a 1,000-seater restaurant—one of Ikea’s largest globally, as the company believesfood will be the first contact point between Indians and Ikea

New Delhi: Ikea, the Swedish furniture retailer which has been sourcing from India for more than 30 years, will be opening its first store in Hyderabad in July. The Ikea store will house a 1,000-seater restaurant—one ofIkea’s largest globally, as the company believes food will be the first contact point between Indians and Ikea,its deputy country manager Patrik Antoni said in an interview. Edited excerpts:

Restaurant is an important part of Ikea stores. And Ikea is known for its meat balls. Are you bringing the same experience here?
Food can be the first contact point for Ikea in India. The 1,000-seater restaurant in the Hyderabad store, whichis one of largest for Ikea globally, will have a lot of vegetarian options. We’ll have the meat balls, including the vegetarian options and fish dishes, but we’ll not sell beef and pork in India. About 50% of food will be Indian cuisine and the rest will be Swedish dishes. We would like about 30-40% of the people living in the city visiting our store in the first year.

Ikea has been sourcing from India for more than three decades. With the store, will that increase?
We have been sourcing textiles and other cotton products. About 90% of food ingredients are sourced from India. Currently, we have 56 suppliers for textile, other cotton products and sofa (to West Asian countries). For food, we have about 20 suppliers.
We have been working on possibility of sourcing wood products, big furniture. But sourcing has to be sustainable and we need certification of wood. We have already initiated talks with state governments of Karnataka and Maharashtra. In the long-term, we want to source about 50-60% of our products from India.

India is a price sensitive market. How would you address that?
Ikea stores in India will have about 1,000 products that will be priced below Rs200, which we believe would work as a point of introduction.
This the lowest price point for Ikea globally. About 2-3% of the 10,000 products that our stores will have will be India specific.

We have localized a lot of products after studying 1,000 Indian homes during the past few years. With local sourcing and the flexible labelling of MRP (maximum retail price), we’ll have the pricing advantage. We arepushing affordability and focus on value for money products in India.

Ikea has approval for Rs10,500 crore of investment in India. Will that be sufficient?
No. We’ll need much more. We can manage next couple of years with the approved Rs10,500 crore. We’llhave to seek approval for more. But we are yet to decide on a number. The potential for Ikea in India is huge, especially because of the fast urbanization.
All big cities in India will have more than one Ikea store. We are also piloting with smaller-format stores in Mumbai.

Do you plan to leverage online as a medium for sales?
Yes. We’ll start selling online in 2019 in a phased manner. Home delivery and assembly will be outsourced.And we’ll have our team for services.


19.1. Bangalore airport's capacity to grow 3x by 2028, expansion to cost US$ 2 bn
Business Standard, May 07, 2018

Chennai: Fairfax-owned Bangalore International Airport (BIAL) is expected to see a capacity expansion in with an investment of around $2 billion. This will help the airport handle 65 million passengers a year by 2028, against 20 million passengers at present.
In a letter to shareholders enclosed with Fairfax India's annual report and shared with shareholders recently, Prem Watsa, chairman and chief executive of Fairfax Financial Holding, said: "This (BIAL) is indeed a very exciting investment for Fairfax India."
A second runway is under development with 2019 as the deadline for completion. A second terminal is scheduled to be completed in 2021, for which the phase 1 schematic design has been completed and detailed planning is ongoing.

"The investment required to complete the expansion projects is approximately $2 billion and will be funded through internally generated funds and debt. The financing plan, based on a debt to equity ratio of 80:20, and negotiations with banks are well underway," he said.
In March 2017, Fairfax India had acquired 38 per cent of BIAL for $385 million (including 33% from GVK Group, BIAL’s promoter), implying an equity value of above $1 billion for the whole company. Based on BIAL’s March 2017 financial statements, the purchase price valued BIAL at a price-to-earnings ratio of 14.5, the price-to-book value of 4.7 times and price-to-free cash flow of 8.7 times, without considering the value of the real estate that can be monetised.
In July 2017, Fairfax India acquired the final 10 per cent of BIAL-owned by GVK for $200 million.
"The higher price being justified by this purchase enabling Fairfax India and the other remaining shareholders to reconstitute BIAL’s Board, to appoint the best-qualified person as BIAL’s CEO, and generally to allow it to be managed according to Fairfax India’s standards of corporate governance and guiding principles", said the Indo- Canadian businessman.

Watsa said that zero revenue has grown at a CAGR of 22 per cent from 2009 to 2017. This is the revenue earned for providing services such as landing, take-off, parking, ground-handling, ground safety, facilities, amenities and services to airlines and passengers.
The tariffs for these services are set for five-year periods and are fixed so as to yield a regulated 16% Return on Equity (ROE). The regulatory authority treats 30% of non-aero revenue as aero revenue.
All revenues other than zero revenue, including cargo handling, fuel sales, food and beverage sales and duty- free shops, grew at a CAGR of 19% from 2009 to 2017 and are expected to grow substantially due to an increase in passenger growth rates.

On real estate monetisation, he said, BIAL also has around 460 acres of land adjoining the airport that can be developed. All of this land is undeveloped, except for a small piece on which BIAL has built a hotel.Bangalore’s historical population areas are getting congested, so the city is expanding in the airport’sdirection. BIAL anticipates significant upside, over time, from monetisation of this real estate, he said.

BIAL's passenger traffic grew 12.9 per cent in 2017 to 25 million passengers and cargo handled was up 8.1 per cent. Revenue increased 16 per cent to $231 million and profit after tax grew 25 per cent to $105 million. Free cash flow after maintenance capex grew 15% to $151 million. This implies a free cash flow yield of 12.3% if 100% of BIAL was valued on the basis of the aggregate purchase price of Fairfax India’s 48% interest.
For the second terminal, which is scheduled to be completed in 2021, detailed planning has commenced. The investment required to complete the expansion projects is around $2 billion and will be funded through internally generated funds and debt. The financing plan, based on a debt to equity ratio of 80:20.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


19.2. India's domestic air traffic surges 28%, maintains double digit growth
PTI, May 04, 2018

Mumbai: India maintained double-digit growth in domestic air traffic for the 43rd straight month in March, growing by 27.9 per cent against an average global domestic demand of 7.8 per cent in the previous month, propelled by route network expansion by local airlines.
Besides, India also reported the highest load factor among the seven major global aviation markets at (87.8 per cent, an increase of 6.7 per cent over March 2017, International Air Transport Association (IATA) said today.
The over 280-member strong airlines grouping IATA collates traffic data from seven major aviation markets, the US, Russia, China, India, Japan, Australia and Brazil, each month.

India market posted double-digit annual growth for the 43rd consecutive month at 27.9, up from 22.9 per cent in February, with passenger demand continuing to be supported by a combination of strong economic and network growth, IATA said.
India also posted the highest load factor of all domestic markets (87.8 per cent), which was 6.7 percentage points higher than the seat factor recorded by the airlines in March 2017, it added.

The seat factor is a measure of how much of an airline's passenger carrying capacity is used or average percentage of seats filled in an aircraft.
According to IATA, the overall air traffic (international and domestic) rose 9.5 per cent, compared to the same period a year ago, the fastest pace in 12 months.

Domestic demand rose 7.8 per cent in March, which was a slight deceleration from 8.2 per cent growth recorded in February, driven primarily by developments in the US market, it said.
The international passenger demand during the month rose 10.6 per cent compared to March 2017, which was up from 7.4 per cent year-over-year growth recorded in February.

All regions showed strong increases, IATA said.
"Demand for air travel remains strong, supported by the comparatively healthy economic backdrop and business confidence levels. But rising cost inputs, particularly fuel prices, suggest that any demand boosts from lower fares will moderate going into the second quarter," IATA's director general and chief executive officer Alexandre de Juniac said.
The strong first quarter provides healthy momentum heading into the peak travel period in the northern hemisphere, he said adding benign economic conditions are supporting, and being supported by good demand for air travel.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


20.1. Human Resource Development Ministry Launches Unnat Bharat Abhiyan 2.0
Press Information Bureau, Apr. 26, 2018

750 Higher Education Institutions to get together for Development of Rural India

New Delhi: Human Resource Development Ministry today launches Unnat Bharat Abhiyan 2.0 in New Delhi. Addressing the launching ceremony at AICTE headquarters through video message, Minister of Human Resource Development Shri Prakash Javadekar said that the students are the real agents of change who can develop, empower and brighten the future of the country.

Shri Javadekar said that Unnat Bharat Abhiyan 2.0 is in line with Prime Minister Shri Narendra Modi's vision to transform India, in which students from colleges and universities will go to nearby villages to get acquainted with the life of the village people and the problems faced by them in day to day life.
He reiterated the quote of Mahatma Gandhi that India lives in villages and every village has its own specialty and challenges also. He added that this unique initiative of HRD ministry will serve as real Bharat Darshan for students and it is also an opportunity for them to learn about the basic challenges faced by rural people and to bring out practical solutions for their betterment.

The Minister advised students to involve local village people at every stage of problem identification and solving issues relating to health, cleanliness, waste management, plantation, financial inclusion, women and child development etc. Shri Javadekar informed that the Ministry will bring out a practical handbook relating to Unnat Bharat Abhiyan. The Minister also congratulated the delegation from across India present on this occasion and gave his best wishes for the success of this endeavour.

Addressing the launching ceremony of Unnat Bharat Abhiyan 2.0, the Minister of State for Human Resource Development, Dr. Satya Pal Singh said that India had witnessed the migration of rural population in the past, but now the process of sustainable development through the Unnat Bharat Abhiyan 2.0 will help to reverse this migration. He congratulated the Human Resource Development Ministry for launching the higher version of Unnat Bharat Abhiyan and expressed the confidence that commitment of the HRD Ministry will make this campaign a success. He appealed to the professors and students of the Higher Education Institutions to motivate the rural public, particularly the young generations for social economic development of the villages through various schemes and initiatives of rural development. Dr. Satya Pal Singh also congratulated the Indian Institute of Technology – IIT Delhi for developing excellent technology to take the development process to the rural areas.

Speaking on this occasion, the Secretary (Higher Education) of Human Resource Development Shri R. Subrahmanyam appealed to the student community to take the lead of this programme to make it a nationalmovement. He said that 750 institutions chosen in the first lot have participated in today’s seminar; however, thousands of institutions have offered their willingness to joint this movement. He said that to cover the 45000 villages of the country under this movement, we need the participation of 8252 institutions of Higher Education. He said that Prime Minister Narendra Modi wants the participation of every single institute of Higher Education in Unnat Bharat Abhiyan 2.0 to make it a people’s movement. He said that Higher Education Institutions are largely funded by Government and people’s money and their participation in this campaign will be a payback time. He said that the knowledge of Higher Education Institutions should be translated in to field in the social and economic growth of rural people. He said that this is the two ways process, and Higher Education Institutions will also learn from the wisdom of rural people while sharing their knowledge.

Unnat Bharat Abhiyan is a flagship programme of the Ministry of Human Resources Development, with the intention to enrich Rural India. The knowledge base and resources of the Premier Institutions of the country are to be leveraged to bring in transformational change in rural developmental process. It also aims to create a vibrant relationship between the society and the higher educational institutes, with the latter providing the knowledge and technology support to improve the livelihoods in rural areas and to upgrade the capabilities of both the public and private organisations in the society.
Under the Unnat Bharat Abhiyan 2.0, the institutions have been selected on a Challenge Mode and the scheme has been extended to 750 reputed Higher Educational Institutes (both public and private) of the country. Also, scope for providing Subject Expert Groups and Regional Coordinating Institutes to handhold and guide the participating institutions has been strengthened. IIT Delhi has been designated to function as the National Coordinating Institute for this programme and the Ministry intends to extend the coverage to all the reputed Higher Educational Institutes, in a phased manner. Each selected institute would adopt a cluster of villages / panchayats and gradually expand the outreach over a period of time.

Institutes through their faculty and students, will carry out studies of living conditions in the adopted villages, assess the local problems and needs, workout the possibilities of leveraging the technological interventions and the need to improve the processes in implementation of various government schemes, prepare workable action plans for the selected villages. Such knowledge inputs would make their way into the development programmes in rural areas. The Institutes would be expected to closely coordinate with the district administration, elected public representatives of panchayat / villages and other stakeholders and will become very much a part of the process of development planning and implementation.

In this process, faculty and students of such institutes would be re-oriented and connected to the rural realities so that their learning and research work also becomes more relevant to the society.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


20.2. MAHE to set up 3 more campuses
BusinessLine, 25 Apr.2018, AJ Alvinayak

Manipal Academy of Higher Education (MAHE), which got deemed university status 25 years ago, is planning to launch three more campuses, including one abroad, in the coming months.
In an exclusive chat with BusinessLine in Manipal on Wednesday, H Vinod Bhat, Vice-Chancellor of MAHE, said it is now looking at opening new campuses in Jamshedpur and Bengaluru in India, and in Sri Lanka. MAHE is looking to set up a new campus in Jamshedpur in collaboration with Tatas. The deemed university wants to set up a medical school, nursing and allied health institutes in the first phase in Jamshedpur, he said.Though MAHE has a campus in Bengaluru, it is planning to set up a larger campus in the metro. “We want tobring more programmes and institutions such as design, architecture, economics, liberal arts and humanitiesto the new campus,” he said.

On the Sri Lanka plans, Bhat said the campus will be located at a place called Kalutara, around 40 km from Colombo. MAHE is planning to offer engineering, management, pharmacy, hospitality and humanities in Sri Lanka.
Asked when these campuses are likely to be started, he said MAHE is waiting for the notification on autonomyfor it from the government. “I think at least the India campuses should be up in the next 12 months,” he said.

Stating that the silver jubilee year is a special year for MAHE, he said it has reached quite a high level in terms of getting international recognition also during the year.
“We are the highest ranked private university in India by the QS World ranking,” he said.



INDIA AND THE WORLD


21.1. Study in India programme of HRD Ministry launched with the launch of 'Study in India Portal' by Smt. Sushma Swaraj and Dr SatyaPal Singh in New Delhi today
Press Information Bureau, Apr. 19, 2018

Institutes of National Importance to be opened to foreign students in the first ever initiative of its kind, 160 Institutions offer 15,000 seats under the programme in the first round

New Delhi: Students across the world will now be able to pursue the education in prominent Indian Educational Institutions. In another ground breaking initiative of HRD Ministry, Union External Affairs Minister, Smt Sushma Swaraj and Minister of State for HRD, Dr. Satya Pal Singh jointly launched the Study in India programme of HRD Ministry by launching the ‘Study in India’ portal (www.studyinindia.gov.in) at the India Habitat Centre in New Delhi today. The integration of e-SANAD portal and NAD – National Academic Depository (of HRD Ministry), was also launched by Smt Sushma Swaraj on the occasion.

While addressing the occasion, Smt. Swaraj said the quest for knowledge has always been fundamental toIndia’s culture and civilization. Throughout our history, India has made seminal contributions to humanthought, philosophy and development. Our ancient philosophical concepts, such as Vasudeva Kuttumbakamand Sarva Dharma Sambhava, remain eternal. The "Study in India’ is an innovative initiative to attract students from our partner countries in South Asia, South-East Asia, Middle East and Africa to come and experience the very best of academic learning from the top institutions in India. This will be achieved through systematic brand-building, identifying quality institutions for receiving the students, creating suitable infrastructure and facilitation structures. The "Study in India Portal” will become a single window to cover all aspects relating tostudying in India for foreign students.

In a video message on this occasion, Union HRD Minister Shri Prakash Javadekar said ‘Study in India’ initiative will open the gates of prominent educational institution of India for foreign students. He said that to begin with the focus is on students of 30 Asian, African, Middle East and Commonwealth of Independent States (CIS) countries and hope that families from America will send their children to India for under graduate courses one day. India was the education hub of the world education with long heritage of Nalanda & Takshashila . Now, India is again surging ahead in education sector with more than 40,000 colleges & more than 800 universities. Top most colleges have been granted graded autonomy. Graded autonomy will help educational institutions to expand on their own; they can improve their programs, launch new programs as per the need. They can take in foreign faculty & foreign students , the HRD Ministry added. Shri Javadekar further said that because of the recent reforms in education sector, now India has become a prominent center for affordable and quality education.

While speaking on the occasion Minister of State for HRD, Dr. Satyapal Singh said that India believes in thetheory of ‘Vashudhaiva Kutumbkam with the rich history of educational institutions like Takshashila andNalanda. He said that with the integration of e-SANAD and NAD – National Academic Depository, the education system in India is now more transparent. Expressing gratitude towards the External Affairs Minister Mrs. Sushma Swaraj for launching the Study in India portal, Dr. Satyapal Singh said that for the first time, prominent Indian Educational Institutions have been opened up under this programme which will be of benefit not only to the foreign students but also to India.

Delivering the welcome speech, Secretary (Higher Education) of HRD Shri R. Subrahmaniyam said that India is a place of wisdom and believes in knowledge without borders. This year 15, 000 seats have been offered by 160 Institutions under the programme, the secretary disclosed. Dr. S. B. Majumdar, Founder President, Symbiosis International University was also felicitated by Smt. Sushma Swaraj on the occasion.

The Study in India programme would provide one stop solution through the creation of a centralised portal www.studyinindia.gov.in. The website will be supported by an App and a Helpline number. The website will not only provide information on the latest offerings on Indian education but also facilitate admissions to the foreign students and help them make informed choices based on individual aptitudes and career goals. EdCIL (India) Limited, a Mini Ratna Category I CPSE is the implementing agency of the Ministry of HRD for the Study in India education campaign. NIRF ranked and NAAC accredited institutions with a 3.26 score have been included in the programme. The Study in India programme is a joint initiative of Ministry of HRD, Ministry of External Affairs, Ministry of Home Affairs and Ministry of Commerce and Industry.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


21.2. India can re-emerge as global powerhouse in education: Vice-President
Press Information Bureau, May 01, 2018

Education System should aim at the creation of a new, inclusive society; In future, all courses must be taught in their local languages; Inaugurates new campus of Central University of Kerala

The Vice President of India, Shri M. Venkaiah Naidu has said that India has the chance to re-emerge as the global powerhouse in the field of education and called for revamping the syllabi and improving the infrastructure to impart world class quality education.
He was addressing the gathering after inaugurating the new campus of the Central University of Kerala and dedicating the educational institution to the nation, in Kasargod, Kerala today. He said that India was once known as ‘Vishwaguru’ and people from across the globe used to come here to study and acquire knowledgeand expertise in different domains.

The Vice President said that from private educational institutions to Central Universities like this, every academic organization must work in a mission mode to revamp the educational architecture in tune with the requirements of the 21st century to make India a leading nation in the field of education and innovation.
He said the education system should aim at the creation of a new, inclusive society, non-violent and non- exploitative, consisting of highly cultivated and motivated individuals inspired by love for humanity and guided by wisdom. He asked the students to be the torch bearers of our culture, traditions, ethos and customs. There is nothing wrong in adopting and assimilating good practices from elsewhere, but always remain rooted to our age-old culture and heritage, he added.
The Vice President recollected the famous words of the Father of the Nation - “I do not want my house to be walled in on all sides and my windows to be stuffed. I want the culture of all lands to be blown about my house as freely as possible. But I refuse to be blown off my feet by any”.

The Vice President said that Education must lay the foundation for the progress of a nation adding that higher education, in particular, has an important role in building a knowledge-based society of the 21st century. He further said that higher education system should expand qualitatively and quantitatively for the betterment of the nation and society. Graduates need to be competitive not only in a local or national context, but in an increasingly global market, he added.

The Vice President said that in this ‘global village’ our graduates as future leaders need a new kind ofintercultural understanding, respect for common rules and fair play, an understanding of different interests, views and ways of thinking, and the ability to analyze and synthesize, he added.
The Vice President expressed the hope that in future various courses, including science & technology, will be taught in respective local languages in various States.

Expressing his concern over the increasing atrocities on women and girls, he said that the mindset has to be changed to address this menace. He emphasized the need for people to collectively fight against social evils like atrocities on women and caste discrimination.

Following is the text of Vice President's address:
"I am extremely delighted to inaugurate the new campus of the Central University of Kerala at Tejaswini Hills and dedicate the educational institution to the nation.
I extend my greetings to all the eminent educationists, faculty members, non-teaching staff, students and the civil society of Kerala on this momentous occasion. I also take this opportunity to congratulate the academic and administrative leadership of the university.
At the very outset I would like to convey my deep sense of appreciation to the people of Kerala for making the State a pioneer in education and social development. Enlightened leadership of persons like Sree Chithira Thirunal, inspiration from reformers like Sri Narayana Guru and a long history of investment in education by missionaries and local social reform bodies has made Kerala almost a fully literate society. Yet there are persistent challenges too.

Kasaragod district is rich in culture and history. It was part of Dakshina Kannada before state reorganization which took place on November 1, 1956. Kasragod was part of Kannur district until 1984 and since then it became the northern most district of Kerala. Kasaragod has several popular arts and traditions like Theyyam, Poorakkali and Yakshaganam. It is rich in languages and reflecting the multi lingual tradition, Kasaragod is also known as Sapthabhasha Bhumi.
The presence of Central University of Kerala in Kasaragod is a blessing for the people of North Malabar. The region requires a thrust in education, health and infrastructure. I am sure that the presence of the Central University of Kerala will not only meet the educational requirements but also contribute towards improving the quality of life in Kasaragod in particular and Kerala in general.
Opening of a new campus today will hopefully open new vistas for the students and the faculty as they continue their quest for academic excellence and ensure that this institution on the Tejaswini Hills spreads its ‘tejas’ or illumination far and wide, transforming the world view and also the world.

Sisters and Brothers, education lays the foundation for the progress of a nation. Higher education, in particular, plays an important role in building a knowledge-based society of the 21st century. All the higher educational institutions, including Central Universities have an onerous responsibility in transforming the country into an focal point of knowledge and innovation.
If you recall, India was once known as “Vishwaguru” and people from across the globe used to come here to study and acquire knowledge and expertise in different domains. However, the situation changed following foreign invasions and the British rule and India lost its pre-eminent position in the field of education. Today, the country has a chance to re-emerge as a global powerhouse in the field of education. But this requires tremendous transformation from reorienting the syllabi to improving the infrastructure with the sole objective of imparting world class quality education.

Although there are more than 800 universities in India, none of them figures in the top-ranking educationalinstitutions in the world. We cannot adopt ‘business as usual’ approach if we want to change the situation.From private educational institutions to Central Universities like yours, every academic organization must work in a mission mode to revamp the educational architecture in tune with the requirements of the 21st century to make India a leading nation in the field of education and innovation. Owing to the scope and pace of change, society has become increasingly knowledge-based and the institutes of higher learning and research are the main vehicles for cultural and socio-economic development of individuals, communities and nations.

Even though, India has the third largest higher education system in the world, its Gross Enrolment Ratio is only 25.2%. Considering the huge demographic dividend the country is blessed with, it is imperative that higher education system should expand qualitatively and quantitatively for the betterment of the nation and society. Ultimately, it should aim at the creation of a new, inclusive society, non-violent and non- exploitative, consisting of highly cultivated and motivated individuals inspired by love for humanity and guided by wisdom. Education is not only for employment and the purpose of education is to enlighten, empower and develop a holistic individual whose moral compass will never swerve from the righteous path. Education must build character, caliber and capacity, besides promoting rightful conduct.

Dear students, always remember that you are inheritors of a great culture and heritage with a rich civilizational history. You should be the torch bearers of our culture, traditions, ethos and customs. There is nothing wrong in adopting and assimilating good practices from elsewhere, but always remain rooted to our age-old culture and heritage. Here, I would like recall the famous words of the Father of the Nation : “I do not want my house to be walled in on all sides and my windows to be stuffed. I want the culture of all lands to be blown about my house as freely as possible. But I refuse to be blown off my feet by any”.

Higher Education has profoundly changed in the past two decades. While it may not yet be possible to think of higher education as a global system, a considerable convergence can be seen among the world's universities and higher education systems. As a result of globalization, our graduates need to be competitive not only in a local or national context, but in an increasingly global market. In this ‘global village’ our graduates as future leaders need a new kind of intercultural understanding, respect for common rules and fair play, an understanding of different interests, views and ways of thinking, and the ability to analyze and synthesize.

I am glad to know that since its inception in 2009, Central University of Kerala has carved a niche for itself bygiving impetus to education in this backward region. The students’ enrolment went up from 17 in 2009 to 1426during the year 2017-18. It is projected to achieve student enrolment of 5000 by 2022. Coming from 16 States, the students represent the national character of this university.

I am happy to know that the university is providing the best teaching and learning environments to the students. The right atmosphere will facilitate their creativity to flourish. I would like the University to give thrust to research in a big way as also establish linkages with industry so that the courses are in tune with the requirements of the industry.
As we all know, today’s universities are models of teaching excellence, research, innovation and collaboration.

The barriers to the advancement of education must be removed to fulfill the full potential and for the students to take full advantage of their educational opportunities and credentials. For bringing about a substantial change and development, the solution to major challenges require strong involvement not only of the government and the institution, but also of all stakeholders including students and their families, teachers and community as a whole.

I was informed that the University was accredited to the NAAC in the year 2016 and awarded B++ in its first cycle of evaluation. The NIRF ranking is between 100 and 150 and rated in top 5% of all educational institutions of our country. While appreciating these recognitions, I would like to remind all the stake holders to be conscious of improving the NAAC grade in the next cycles.

The university must implement specific teaching and learning strategies and design mechanisms and instruments to improve the quality of education. With diminishing resources and increasing competition, the challenges may seem insurmountable. Nevertheless, the institutions must continue their efforts to foster quality teaching and improve student learning outcomes. The Central university of Kerala has still a long way to go. While on the one side there is a great need to have dedicated teams with focused vision and mission to take the current activities to surmountable heights, on the other hand, we continuously need to be open- minded for reaching new heights.

Thank you all once again for your esteemed presence and attention on this eventful occasion!

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


22.1. IISc, IIT Bombay among top universities in emerging economies
Business Standard, May 10, 2018

New Delhi: Indian Institute of Science (IISc) and some of the Indian Institutes of Technology (IITs) were ranked among the top 50 varsities in the Times Higher Education Emerging Economies University Rankings 2018, issued on Wednesday. IIT Kharagpur climbed 26 places to break into the top 50 universities.
IISc was ranked 13th, up from its previous position of 14, IIT Bombay maintained its ranking of 26. IIT Kharagpur was placed at 45th position. National Institute of Technology, Rourkela was the highest riser, with a jump of 57 positions. This jump was attributed to its research work and increase in citations.
Overall, 42 Indian institutions participated in the ranking this year, up from 27 last year. The Indian varsities were competing against 350 universities and institutions from 42 emerging economies, including China, Taiwan, Russia, Brazil and Indonesia.

However, most Indian universities, including the IIT at Kanpur, Delhi and Chennai, slipped in ranking. IIT Kanpur fell from 32nd to 49th position this year, whereas IIT Delhi came down to 63th position from its previous ranking of 32. IIT Madras was down to 70, from its previous position of 35.
Phil Baty, editorial director of global rankings for Times Higher Education (THE), said India’s plan to increase international student numbers was encouraging. “The new Institutions of Eminence initiative, which closely aligns with THE’s own world-class excellence model, certainly has the potential to elevate its selected universities on the global stage. Similar strategies have raised standards in many other emerging economyhigher education systems, including China, and there is cause for optimism here, too,” he said.

India has taken several measures to improve global rankings of its universities in the recent past. These measures include establishing its own ranking process and allowing graded autonomy to some institutions for hiring foreign faculty and designing new courses. India is also in the process of setting up 20 institutes of eminence, with an aim to break into the world’s top 100 universities.
Overall, Chinese universities continue to dominate with rankings. China’s Peking and Tsinghua universitiesclaim the top two spots for fifth consecutive year. However, the gap between its elite universities and the rest has widened.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.


22.2. Tata Chemicals looks at Bolivia to feed growing appetite for lithium
Livemint, 23 Apr. 2018, Malyaban Ghosh

Tata Chemicals eyes opportunities related to exploration, import of mineral to India and other places it operates in

New Delhi: Tata Chemicals Ltd is looking at business opportunities related to the exploration and import of lithium from Bolivia to India and possibly to other countries where the company operates.
A team of senior executives from the company recently visited the South American nation, which has the largest deposits of lithium in the world, and held meetings with government officials there, two people aware of the development said.

One of India’s largest Indian manufacturers of chemical, crop nutrition and consumer products, Tata Chemicals’ interest in lithium is guided by the fact lithium and cobalt are the two most important commoditiesneeded to develop batteries for electric vehicles (EVs), the thrust vehicles for automobile manufacturers in India and across the world.
At present a lithium-ion battery accounts for 40% of the total cost of an electric vehicle.
Lithium has other uses such as in mobile phone batteries and solar panels.

According to the first of the two people mentioned above, this can be a great opportunity for Tata Chemicals as demand for lithium will only increase in the coming years in the domestic market and globally.
“With companies like Tata Chemicals thinking of getting into mining and import of lithium, it is testament to thekind of demand this commodity will have in the future. Though nothing has been decided by the company as of now, representatives of the company have been to Bolivia and met the authority there which is quite astatement,” added the person.

Bolivia has the capacity to supply 15,000 tonnes of lithium per annum, which is far short of the global demand for the mineral.

Currently, most of the lithium exploration is done by Bolivia’s state-owned companies along with Chinese ones.
Hence, exploration is a promising opportunity for Tata Chemicals. “Tata Chemicals is one of the biggestcorporate houses in Bolivia who have started to look at business opportunities related to lithium. Other small companies have also approached the country as everyone is sensing an opportunity with lithium in the comingyears,” said the second person requesting anonymity.

In the first three quarters of FY18, revenue of Tata Chemicals declined by 4% to Rs 7,790 crore.
Its profit increased by 57% to Rs976 crore during the same period.
“While Tata Chemicals does evaluate business opportunities on a regular basis, we would not like to commenton any speculative reports,” said a spokesperson of Tata Chemicals in response to an email query.
The Union government in India is focused on promoting electric and hybrid vehicles in the years to come, and vehicle makers such as Suzuki Motor Corp. have already announced its plans to manufacture lithium-ion battery for electric vehicles.

According to experts, the biggest hindrance to the adoption of electric mobility in India and across the globe is the scarcity of lithium.
Apart from the auto industry, most of the mobile handset manufacturers have plans to manufacture their handsets in India, which would also require lithium.

“Lithium is tipped to be what oil was in the 20th century, and the demand will only increase in the coming years, when lithium-ion battery manufacturing for electric vehicles will gather scale. So, it is natural for Indian companies to explore possibilities in Bolivia, which has one of the largest deposits of lithium,” said an analystrequesting not to be identified.


23.1. Why is Bangladesh’s economy booming?
Livemint, 25 Apr. 2018, Kaushik Basu

Bangladesh will overtake Pakistan in terms of per capita GDP in 2020, but there are risks to the country’sprospects that policymakers will need to factor in Bangladesh has become one of Asia’s most remarkable and unexpected success stories in recent years.Once one of the poorest regions of Pakistan, Bangladesh remained an economic basket case—wracked by poverty and famine—for many years after independence in 1971. In fact, by 2006, conditions seemed so hopeless that when Bangladesh registered faster growth than Pakistan, it was dismissed as a fluke.

Yet that year would turn out to be an inflection point. Since then, Bangladesh’s annual gross domestic product (GDP) growth has exceeded Pakistan’s by roughly 2.5 percentage points per year. And this year, its growth rate is likely to surpass India’s (though this primarily reflects India’s economic slowdown, which should be reversed barring gross policy mismanagement).

Moreover, at 1.1% per year, Bangladesh’s population growth is well below Pakistan’s 2% rate, which means that its per capita income is growing faster than Pakistan’s by approximately 3.3 percentage points per year. By extrapolation, Bangladesh will overtake Pakistan in terms of per capita GDP in 2020, even with a correction for purchasing power parity.

To what does Bangladesh owe its quiet transformation? As with all large-scale historical phenomena, there can be no certain answers, only clues. Still, in my view, Bangladesh’s economic transformation was driven inlarge part by social changes, starting with the empowerment of women.
Bangladesh has made significant strides towards educating girls and giving women a greater voice, both in thehousehold and the public sphere. These efforts have translated into improvements in children’s health and education, such that Bangladeshis’ average life expectancy is now 72 years, compared to 68 for Indians and66 for Pakistanis.

The Bangladesh government also deserves credit for supporting grass-roots initiatives in economic inclusion. Among Bangladeshi adults with bank accounts, 34.1% made digital transactions in 2017, compared to an average rate of 27.8% for South Asia. Moreover, only 10.4% of Bangladeshi bank accounts are “dormant”,compared to 48% of Indian bank accounts.

Another partial explanation for Bangladesh’s progress is the success of its garment manufacturing industry.That is itself driven by a number of factors. One notable point is that the main garment firms in Bangladesh are large—especially compared to those in India, owing largely to different labour laws.

All labour markets need regulation. But, in India, the 1947 Industrial Disputes Act imposes heavy restrictionson firms’ ability to contract workers and expand their labour force, ultimately doing more harm than good. Thelaw was enacted a few months before the August 1947 independence of India and Pakistan from British imperial rule, meaning that both new countries inherited it. But Pakistan’s military regime, impatient with tradeunions from the region that would become Bangladesh, repealed it in 1958.

Thus, having been born without the law, Bangladesh offered a better environment for manufacturing firms to achieve economies of scale and create a large number of jobs. And though Bangladesh still needs much stronger regulation to protect workers from occupational hazards, the absence of a law that explicitly curtails labour-market flexibility has been a boon for job creation and manufacturing success.

The question is whether Bangladesh’s strong economic performance can be sustained. As matters stand, the country’s prospects are excellent, but there are risks that policymakers will need to take into account.
For starters, when a country’s economy takes off, corruption, cronyism, and inequality tend to increase, andcan even stall the growth process if left unchecked. Bangladesh is no exception.

But there is an even deeper threat posed by orthodox groups and religious fundamentalists who opposeBangladesh’s early investments in progressive social reforms. A reversal of those investments would cause asevere and prolonged economic setback.
In its early years, Pakistan’s economy performed moderately well, with per capita income well above India’s.And it was no coincidence that during this time, cities like Lahore were multicultural centres of art and literature. But then came military rule, restrictions on individual freedom, and Islamic fundamentalist groups erecting walls against openness. By 2005, India surpassed Pakistan in terms of per capita income, and it has since gained a substantial lead.

But this is not about any particular religion. India is a vibrant, secular democracy that was growing at a remarkable annual rate of over 8% until a few years ago. Today, Hindu fundamentalist groups that discriminate against minorities and women, and that are working to thwart scientific research and higher education, are threatening its gains. Likewise, Portugal’s heyday of global power in the 15th and 16thcenturies passed quickly when Christian fanaticism became the empire’s driving political force.
As these examples demonstrate, Bangladesh needs to be vigilant about the risks posed by fundamentalism. Given Prime Minister Sheikh Hasina’s deep commitment to addressing these risks, there is reason to hope forsuccess. In that case, Bangladesh will be on a path that would have been unimaginable just two decades ago: toward becoming an Asian success story.©2018/Project syndicate

Kaushik Basu is a professor of economics at Cornell University and a non-resident senior fellow at the Brookings Institution.


23.2. Middle East, Africa seek India’s help to light up their villages
Livemint, 13 May, 2018, Utpal Bhaskar

Jordan, Syria and nations in sub-Saharan Africa have evinced interest in state-run Rural Electrification Corporation (REC) bringing electricity to their villages

New Delhi: Impressed by India’s rural electrification drive, West Asian countries such as Jordan and Syria and some countries in sub-Saharan Africa have evinced interest in state-run Rural Electrification Corporation (REC) bringing electricity to their villages, said a person aware of the development.
This comes in the backdrop of electricity finally reaching all of India’s 597,464 census villages on 28 April, setting the stage for universal household electrification. REC, India’s largest power sector lender, is the nodalagency that executed the scheme.

“Given our experience and expertise in the field of electrification, we are prepared to provide a range ofservices and financing for developing power sector in other emerging economies,” said P.V. Ramesh,chairman and managing director, REC.
The interest from Syria is for the electrification reconstruction work, given that its power sector has been badly affected due to the civil war.

The West Asian country has witnessed a bloody civil war over the last seven years. The unrest began as the so-called Arab Spring or pro-democracy protests that overthrew long-ruling presidents of Tunisia, Egypt and other countries in the region spread to Syria with the opposition Syrian National Council fighting to overthrowthe country’s President Bashar Hafez al-Assad.

India has been looking at rebuilding infrastructure in Syria, including a power plant in the country, Mintreported on 12 August 2016.

“We will extend our support and help in such countries,” said an REC executive who didn’t want to be named.With some areas in Jordan yet to be electrified, the country has sought REC’s help. Also, some sub-Saharan African countries are interested in REC doing the entire rural electrification package ranging from financing to technology transfer, detailed project report (DPR) preparation to execution.

In the nine months to December, REC’s loan book was Rs2.24 trillion, with a net worth of Rs36,567 crore. India has been stepping up its engagement with Jordan, seen as part of India’s extended neighbourhood to itswest. Prime Minister Narendra Modi had visited the Gulf Arab states of Jordan, Palestine, the United Arab Emirates and Oman in February this year.
“We are working in some countries in areas of transmission through Power Grid Corp. of India Ltd (PGCIL).We are willing to provide consultancy to those who seek assistance through the consulting arms of PGCIL andREC,” said power secretary Ajay Kumar Bhalla.
State-run PGCIL is already present in 20 countries with its consultancy business.

Some of its clients are in countries such as Kenya, Nepal, Bhutan, Bangladesh, Kyrgyz Republic, Tajikistan and Afghanistan. A case in point being PGCIL implementing the 220KV transmission link in Afghanistan from Kabul to Pul-e-Khumri that brings power from Uzbekistan to Afghanistan.
Queries emailed to India’s ministry of external affairs and Syrian embassy in New Delhi on Tuesday remainedunanswered. Jordan’s embassy in New Delhi couldn’t be reached.

The National Democratic Alliance (NDA) government had set a target to achieve universal household electrification by 31 March 2019. With electricity reaching all 597,464 census villages last month, thegovernment’s focus is now on providing electricity connections under the Pradhan Mantri Sahaj Bijli Har GharYojana (Saubhagya). The government plans to provide electricity connections to all Indian homes by December 2018, with REC being the nodal agency for implementing Saubhagya.


24.1. LNG diplomacy: India plans to build terminals in 4 nations
Livemint, 30 Apr. 2018, Uptal Bhaskar

The ambitious move to supply clean fuel comes in the backdrop of increasing Chinese influence in some of these countries that New Delhi has traditionally considered within its sphere of influence

New Delhi: In what may boost India’s role in creating a new energy security architecture for its neighbours, state-run Petronet LNG Ltd (PLL) is planning to set up liquefied natural gas (LNG) terminals in Myanmar, Bangladesh, Sri Lanka and Mauritius at an investment of around $2.5 billion.
Also, Petronet, promoted by four Indian state-owned firms—GAIL (India) Ltd, Bharat Petroleum Corp. Ltd, Indian Oil Corp. Ltd and Oil and Natural Gas Corp. Ltd—is exploring a similar opportunity in the Maldives. These terminals, totaling around 15 million tonnes per annum (mtpa), will reconvert natural gas shipped in a liquid form into gas and would help India exert economic and strategic influence in the region.

The ambitious move to supply clean fuel comes in the backdrop of increasing Chinese influence in some of these countries that New Delhi has traditionally considered within its sphere of influence.
Prabhat Singh, managing director and chief executive of Petronet, told Mintthat the firm was looking at setting up these terminals in Bangladesh (7.5 mtpa), Sri Lanka (2.6 mtpa), Myanmar (3.5 mtpa) and Mauritius (1 mtpa).

“Petronet has been till now actually focusing inwards within the domestic market. Now, the time has come to make global forays starting with the neighbouring countries first,” Singh said.
The firm set up India’s first LNG terminal at Dahej (15 mtpa) in Gujarat, and another at Kochi (5 mtpa) in Kerala.

Of the four such overseas terminals planned, the ones with Sri Lanka and Bangladesh have already gained traction. A memorandum of understanding (MoU) and heads of understanding has been inked between Petronet and Bangladesh Oil, Gas and Mineral Corp., (Petrobangla) for the 7.5 mtpa terminal. An MoU has been inked with the Sri Lankan Government, with the island nation also issuing a Letter of Intent for the terminal to come up on its western coast.

While presentations have been made to the Myanmar government, PLL is among the firms shortlisted to set up the LNG terminal in Mauritius. Earlier this month, Petronet had also announced its plans to partner with state-run ONGC Videsh Ltd (OVL) to pick up a stake in an upcoming exploration and LNG project in Qatar. Fostering cross-border energy trade is an important part of Prime Minister Narendra Modi’s South Asia- focused neighbourhood-first policy, with India also pursuing long-term deals with its neighbours for supplying domestic cooking gas and other petroleum products.

“Since, this is the golden age of gas, for sure the abundance of gas supply and the low cost is going todominate at least for the next two decades. So, this is a great time to really proliferate one’s business and to grow in terms of creating infrastructure which is the need of the hour today,” Singh added.
Singh’s comments come at a time when India, the world’s fourth-largest LNG importer, has been trying to leverage the glut in global LNG supplies. Also, apart from the US, new natural gas suppliers such as Mozambique, Tanzania, Egypt, Israel, Canada and Cyprus are expected to enter the LNG market, helping consumers get better prices.

Queries emailed to spokespersons for India’s ministries of external affairs and petroleum and natural gas on Tuesday remained unanswered.
India has been setting up the building blocks of this new energy partnership with its neighbors. Apart from building power projects in Bhutan, Nepal and Bangladesh, India already has power grid links with Bhutan, Nepal, Bangladesh and Myanmar, and plans to develop power transmission links with Sri Lanka. Also, power-
starved Bangladesh wants to buy at least 2,000 megawatts (MW) of electricity from large solar parks being set up in Gujarat and Rajasthan Mint reported on 16 April.
India is also championing for a South Asian Association for Regional Cooperation (Saarc) Energy Initiative to create sub-regional hydrocarbon infrastructure such as gas networks. This is on the lines of the Saarc electricity grid which envisages meeting electricity demand in the region. Saarc groups India, Pakistan, Nepal, Bhutan, Bangladesh, Sri Lanka, Afghanistan and the Maldives.


24.2. What the future holds for Indian exports
Livemint, 8 May, 2018, Anmol Agarwal and Suchika Chopra

Recent macroeconomic events provide a favourable opportunity for a rebound of Indian exports in the near future

The Economic Survey of 2017-18 identified exports as the biggest source of upside potential for growth in FY18. The optimism seems appropriate with exports growing for the fifth consecutive month in January. But do the recent macroeconomic developments pose a threat or an opportunity for Indian exports?
The US Federal Reserve hiked the benchmark funds rate from 1.5% to 1.75% in March amid mounting concerns over the impact of Trumponomics —fiscal loosening and trade protectionism—on inflation in the US. An interesting development is the expectation of a more aggressive monetary tightening in the future, with successive hikes over the next couple of years. Such a hawkish stance has tremendous implications for the rest of the world, especially the emerging market economies. A significant capital outflow, stock market downswing, depreciating currency and growth slump are what usually follows. However, there is a silver lining and it is exports.

The ghosts of the May 2013 taper tantrum still haunt Indian policymakers. In anticipation of higher yields in the US, foreign institutional investors pulled out a huge chunk of their capital from India (around $13 billion) sending the rupee into a free fall—from 54.39 to 62.68—in the next three months. The upside: exports grew at 12.98% on a year-on-year basis in Q2 2013-14, the highest in a quarter for the five-year period between 2012- 13 and 2016-17.

The current situation provides a favourable opportunity for an exports rebound in the coming quarters. There are at least four factors that augur well.

First is the spillover effects from dollar appreciation. A Nomura report forecasts the 10-year US treasury yields to rise to 3.25% in Q3 2018 from 2.95% currently. It identifies Q3 2018 as a quarter holding significant potential for dollar appreciation. This has implications not only for Indo-US trade but also for India’s trade withother countries, as over 88% of Indian exports are invoiced in dollars. Consider an Indian trader shipping goods to Japan and invoicing in dollars. Since most exporters set prices in rupee and invoice in dollars, the Japanese importer will have to pay less when the rupee weakens against the dollar, further stimulating Indianexports. This wouldn’t have been the case if the invoicing was done in the Indian rupee or Japanese yen.

Second, the inevitable trade war between the US and China offers another opportunity. US President Donald Trump imposed tariffs on $50 billion worth of imports from China, to which China retaliated immediately and equally. US importers from China cannot just shift this entire demand to US manufacturers as the localeconomy is already operating at close to full employment. Moreover, “reshoring” of labour-intensive assembling in the high-wage US will be too expensive. India can take advantage of the situation and further strengthen its trade ties with the US. With factory wages in China escalating to the highest in emerging Asia, India can enjoy an export boom in sectors otherwise dominated by China like electronics and apparel.

Third is a revival of demand from the European Union (EU). Financial crisis and PIIGS (Poland, Italy, Ireland,Greece, Spain) debt crisis broke the back of EU’s economic growth. This led to a decline in demand from EUfor Indian exports. Arguably, 2017 marked the onset of growth revival in EU when it grew at 2.5%, the fastest since 2007. The projections for 2018 remain good, according to a European Commission report. With the EUregaining the share in India’s total exports it lost between 2008-09 and 2014-15 (from 21% to 16%), the resurgence in demand from the West will act as a boon for Indian exporters.

Fourth is the diversification of China’s manufacturing sector. The growth in the manufacturing sector inFebruary was at its lowest in the past 18 months due to a crackdown over pollution in major industrial provinces. Understanding the long-term limitations, China has started diversifying its trading pattern by focusing more on technology-driven sophisticated goods and developing a comparative advantage in this segment. It has already become a major exporter of green tech. This is creating a vacuum in the manufactured goods export segment. Chinese micro, small and medium enterprises, riding on the back of lowwages, cost of capital and an undervalued currency, have been eating India’s lunch when it comes to low-end, labour-intensive manufacturing. India should now capitalize on the opportunity.

However, it’s easier said than done. The real challenge for India lies not in the volume of its exports but thestructure. One look at the top exports is enough to spot the conundrum. The biggest labour-intensive export industry—gems and precious metals—provides one-time value addition with negligible power to boost real economic transformation. Even in the context of seizing the opportunity in labour-intensive sectors such as apparels and electronics, India struggles for comparative advantage against low-end manufacturers, such as Bangladesh and Vietnam. This weakening competitiveness needs to be addressed to sustain employment- generating export growth. Although India may not be able to cater to the world market like China did for two decades, it should not lose out to rivals like Bangladesh and Vietnam.

India hasn’t missed the bus yet. The key lies in improving infrastructure, easing land acquisition and boostinghuman capital.

Anmol Agarwal and Suchika Chopra are, respectively, research associate at CAFRAL, RBI, and staff writer at Mint.


25.1. WTO: India, China warn US on ‘unilateral’ trade moves
Livemint, 29 Apr. 2018, D. Ravi Kant

Several countries voice concern, say US measures could trigger full-blown trade war

Geneva: India joined China and several other countries on Friday at the World Trade Organization (WTO) towarn the US about its “unilateral” trade measures imposed under Section 301 of the US Trade Act of 1974,saying it risks provoking “a full-blown trade war”, people familiar with the development said.
On Friday, the office of the US Trade Representative (USTR) placed India on the Special 301 priority watchlist on grounds that New Delhi failed to provide “sufficient measurable improvements, particularly with respectto patents, copyrights, trade secrets, and enforcement.” India’s administration of intellectual property provisions also raised “new issues that have negatively affected US (IP) right holders over the past year (last 12 months),” the USTR said.

At a dispute settlement body meeting, China called all members “to join with each other to take actions againstthe unilateralism and protectionism manifested in the US conduct, so that what happened time after time in thepast will not repeat itself in the future.”

The continued unilateral measures imposed by the US under its Section 301 provisions posed a systemic threat to the global trading system.
“The US has initiated 125 investigations under Section 301 of the Trade Act of 1974 and retaliated in 17 instances,” China said.

“Twenty-seven years after the establishment of the WTO (in 1995), Section 301 of the Trade Act of 1974continues to serve as the tool of the US to take unilateral actions against other members,” China said. A WTOdispute settlement panel in 2000 clearly pronounced that any actions taken under Section 301 must be basedon the “rulings and recommendations” issued by the DSB (dispute settlement body).
“What certainly has happened today,” according to China, “is that the unilateral nature of Section 301 isrevised and is now challenging the foundation of the rules-based multilateral trading system.” China launched a trade dispute against the US’ Section 301 last month at the WTO.

Without naming the US, India said “adoption of unilateral measures by members will erode our long-cherished principles of predictability and non-discrimination and can lead to a real risk of a full-blown trade war.”
“As a firm supporter of the rules-based multilateral trading system,” India said, “gaps, imperfections and unfairelements in trade rules need to be discussed and reformed in the WTO.”

“Unilateral measures, on the other hand, could stop the fragile global economic recovery in its tracks, with consequences for jobs, GDP growth and development that would harm us all,” New Delhi argued.
Several other countries—Pakistan, Russia, Hong Kong, Taipei, the European Union (EU), Brazil and Norway—cautioned the US about the dangers unilateral actions posed to the global trading system. Taipeiand the EU said while they share the US’s concern about China’s alleged violations of intellectual property rights (IPRs), the best way to address the matter was through the multilateral trading system.

The US said it had already catalogued the Chinese abuse of IPRs in its trade dispute complaint filed lastmonth. “Instead of addressing its damaging and discriminatory policies, China accuses the US of“unilateralism,” Washington maintained.


25.2. Energy ties with US: Time for India to strike a balance
BusinessLine, 29 Apr. 2018, Richa Mishra

Warming up to Washington must not affect relationship with traditional partners, say industry experts

As India moves forward aligning itself with America to satisfy its energy appetite, a challenge before New Delhi would be to strikea perfect balance between the US and OPEC as well as Russia, without damaging relationship.
Warming up to the US in the energy space is largely being seen as India’s attempt to take forward what PrimeMinister Narendra Modi and US President Donald Trump had announced after the Washington summit in June 2017. But, it is also sending a subtlemessage to OPEC that India has other partners to manage its supplies.However, Kabir Taneja, Associate Fellow, Observer Research Foundation, says, “Purely from a geopoliticalperspective, I think policy wise India is not going to be glaringly pro-US on energy. There are some issues thatmay deter India from doing so, first being it would not want to let go of its balance.”

On whether the partnership will ruffle feathers with its traditional partners —Arab countries, Iran, Russia, Taneja argues that a state needs to be like a spider for energy security, many legs in many barrels, so tospeak. “If one is on fire you still have seven more,” he said.
According to him, Iran can become a problem if the JCPOA (Joint Comprehensive Plan of Action) deal falls through on May 12 and sanctions are imposed again on Tehran.

Aashish Chandorkar, public policy commentator, says “I would say we are co-opting the US and looking for alternatives. The US fits well enough, especially with the Trump mercantile view of life, but too early to call it afull shift.”

But, Sachin Chaturvedi, Director General, Research and Information System for Developing Countries (RIS), feels India should not let go of its ties with its traditional partners. According to Chaturvedi, “such partnerships are absolutely essential and we should not get swayed away as far as policies are concerned.”

Quick decision-making
However, if India is serious about this American partnership, then New Delhi has to act now. While they believe that issues of free trade agreement (FTA) and pricing can be dealt with, what is required is quick decision making.
Businesses in the US are governed more on commercial basis, so a lot will depend on how quickly Indianfirms move in. “Though importing (oil or gas) all the way from the US could add to the costs and make itexpensive, there is always an option of swapping,” said a player in India’s energy space.

On FTA challenges for importing gas from America — as New Delhi does not have an FTA with Washington and gas can be sourced only from projects that are approved to sell to non-FTA countries — it may not be a concern now as we already have got GAIL deal as an example where exemption has been given, the executive said.

And India must not miss the bus, as those associated with the energy space believe that the golden era of gas pricing will last 15-20 years with American shale gas revolution.
“India should act now. Indian companies could form a consortium and bid for assets in the US — exploration, LNG liquefaction plants — and not remain only with buyers because the onus of debottlenecking theinfrastructure has shifted from the producer to the consumer,” said Prabhat Singh, Managing Director & CEO,Petronet LNG.

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