AAPI: May 2019

DELHI, 20th May 2019

Index of this Newsletter

INDIA

INDIA & THE WORLD

21.1. Opinion | Let’s get back to being globally competitive
21.2. OYO to buy Amsterdam-based vacation rental company @Leisure for Rs 2,880 cr
22.1. Indo-US trade could rise to USD 500 billion by 2023-24: IACC
22.2. India's development grants more than double in 5 years
23.1. Initiatives by Commerce Ministry to Boost Trade with African Countries
23.2. New UK-India tech hub in London to nurture tech start-ups
24.1. Amazon India expects e-commerce exports to reach US$ 5 billion by 2023
24.2. Alibaba re-evaluates India strategy, may focus on smaller deals
25.1. Debjani Ghosh: Falling forward to win
25.2. The Unlikely Rise of the Pastel de Nata, and Why It’s Suddenly Everywhere

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DELHI, 20th May 2019

NEWSLETTER, 20-V-2019

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

1.1. Opinion | There’s no fair play without an independent referee

Livemint, 12 May 2019, Rajrishi Singhal

The nation is now consumed with two electoral issues: war games and muscular religiosity

This is perhaps the first time in the history of independent India that regard for independent institutions has plumbed the depths of despair. The fact is that erosion of institutional autonomy has always been a work-in-progress under various political regimes, but the process seems to have accelerated in the past few years. The larger fear is that circumscribed individual rights will be the collateral damage.

Let’s start with the most recent incident. A brilliant exposé by Mint on 8 May revealed the flaws in the new national accounting system, which gives reason to suspect the validity of the quarterly gross domestic product (GDP) figures released by the government. The new methodology for calculating GDP depends on, among other things, a database of companies (MCA-21) maintained by the ministry of corporate affairs. A survey conducted by the National Sample Survey Office (NSSO), a department in the ministry of statistics and programme implementation, found more than one-third of the companies in MCA-21 either do not exist or have dodgy credentials. While this may or may not have led to over-estimation of GDP numbers—only further studies and investigation can confirm that—it has certainly dealt a blow to the sanctity of government data. This also harms the credibility of India’s statistical institutions, which have earned global acclaim over the decades.

Economists have been complaining about the mismatch between GDP growth and the overall lack of economic activity or flagging aggregate demand. This has come on the back of another recent controversy in December, when an NSSO report on jobs was suppressed because it confirmed suspicions that unemployment was at a record high. A petition signed by over 100 economists and social scientists to restore the autonomy of statistical institutions was, astonishingly, countered by another letter from a bunch of chartered accountants; even if one is willing to overlook their lack of domain expertise, their inability to address the core complaint comes as a surprise.

What is even more shocking is that members of India’s bureaucratic services—tasked with watching over the republic’s functioning and protecting citizens’ rights from excesses of the executive—have turned into political apparatchiks by abetting the deliberate fudging of data and propagating contaminated numbers to generate a false sense of well-being. The systematic attenuation of institutional autonomy and individual rights is also finding resonance in the financial system, which also suffers from bureaucratic capture.

The Securities and Exchange Board of India (Sebi), mandated to protect the retail investor, has failed to act decisively after fund houses lent money to businessmen (against the security of their shareholding in these businesses). Worse, when the businessmen failed to repay loans, fund houses delayed redemption of investor money. Ideally, Sebi should have pulled up the fund house management, the board members of the asset management company and the trustees for jointly failing in their fiduciary duty. Even a few months ago, when it had transpired that mutual funds figured among the largest lenders to business house promoters against the security of their shareholding, Sebi failed to step in and put together a viable risk mitigation framework.

Even the Reserve Bank of India (RBI) has not been spared. An ugly and public spat with the government has left many visible scars: a board diminished by the nomination of a political appointee, a governor who resigned prematurely, an inconsequential and ill-timed debate over the right size of the central bank’s reserves. It did not help matters when the central bank was pulled up by the Supreme Court for straying too far from its designated path on the issue of recovering banks’ bad loans. And then, it was reprimanded once again for being too opaque and not sharing information with the public, especially the findings of its annual bank audits. RBI has often been criticized for not spotting the warning signs when banks have failed or suddenly chanced upon lunar-scale craters in their balance sheets. Activists have for many years asked whether RBI’s fealty is to banks or to the public.

The credibility gauge at another independent institution run by former bureaucrats—the Election Commission of India—is looking close to empty. While it might be too early to jump to conclusions about allegations of bias and partisanship levelled against the institution, which has over the years successfully conducted the world’s largest democratic exercise, questions of transparency and fair play are emerging from within the institution. This, when seen in the background of loud complaints about tampering of electronic voting machines, does chip away at the commission’s hard-earned reputation. Pivot to the Supreme Court and two recent events—clerks rewriting judicial orders allegedly at the behest of corporate patrons and allegations of harassment against the Chief Justice of India—again don’t exactly improve the apex court’s credibility quotient.

All this seems to leave the ordinary citizen helpless, without any belief in the fairness of the system. Whatever little faith existed is also disintegrating slowly. There are no guardians of last resort, no untarnished protectors of individual rights. The nation is instead consumed with the spectacle of an election that has only two main issues: war games and muscular religiosity.

Rajrishi Singhal is consulting editor of Mint. His twitter handle is @rajrishisinghal

1.2. Why disclosing the withheld jobs report could improve GDP numbers too

Livemint, 07 May 2019, Pramit Bhattacharya

The lack of reliable jobs data could bring a decade-long effort to improve estimates of informal sector activity (which feeds into GDP calculation) to a creaking halt

New Delhi: The suppression of the National Sample Survey Office’s (NSSO’s) jobs report has been at the receiving end of much criticism, but one fallout of the non-disclosure has gained little attention: the lack of reliable jobs data could bring a decade-long effort to improve estimates of informal sector activity (which feeds into gross domestic product, or GDP, calculation) to a creaking halt.

The origins of the Periodic Labour Force Survey (PLFS) 2016-17 lie in the recommendations of a committee set up by the National Statistical Commission (NSC) in 2009 and headed by one of its members, Amitabh Kundu. He believes “the government should release the (jobs) report and the raw data".

The Kundu committee’s task was to establish a framework for collecting high-frequency (monthly or quarterly) labour market data for the urban areas of the country. And the interest in labour market data was, in part, fuelled by the need to make sense of India’s nebulous and difficult-to-measure informal sector.

The lack of a high-frequency labour market indicator meant that so far India has not fully met the Special Data Dissemination Standard of the International Monetary Fund, established in 1996 to guide member countries “in providing their economic and financial data to the public".

Based on the pilots suggested by the Kundu committee and feedback from other committees that looked into the issue, the NSC recommended a survey questionnaire that was similar to the quinquennial (every five years) employment-unemployment surveys (last conducted in 2011-12), and which would provide quarterly estimates for urban areas, and annual estimates for both urban and rural areas, setting the stage for the launch of the PLFS survey in 2016.

When the report was finalized, it dawned upon the government that this showed a steep spike in unemployment rates compared to the past quinquennial rounds and the report was held back, prompting the resignations of two NSC members. Government officials such as NITI Aayog chief executive Amitabh Kant expressed scepticism about the findings of the report and raised questions about the methodology.

According to independent experts, some of the limitations that were highlighted (such as the under-representation of urban areas) are well-identified problems that the NSSO is in the process of fixing. But they do not affect comparability of the findings since previous surveys also faced these issues. However, some changes in the survey could have affected comparability of results.

“Unlike the earlier surveys, in the PLFS survey, the enumerator revisits a sampled (urban) respondent, and this can change the nature of responses the enumerator gets," said Kundu, who first laid the groundwork for the PLFS. “Even a change in ordering of questions and the technology of canvassing the questionnaire (whether filled using paper or tablets) can change responses."

However, the results should be broadly comparable, Kundu said.

“I don’t think the results would have shown a decline in unemployment had it been conducted in any other way," said Kundu. “The magnitude might have been different but that is an academic debate that should be settled by academics. The raw data must be released."

Kant in an emailed response said he objected to the report because the methodology was finalized by one person and without his knowledge even though he is an NSC member. However, the facts do not bear him out. The NSC annual reports of the past two years, which bear Kant’s signature, show that there were extensive discussions on the sampling frame, stratification strategy, and type of questions that should be used for the survey. Kant did not respond to follow-up questions regarding his degree of involvement.

The release of the report is important because several committees have recommended the use of the PLFS results in estimating annual growth in parts of the informal economy, for which CSO uses (potentially inflated) formal sector indicators. The use of the PLFS in national accounts could provide more realistic estimates of informal sector growth and perhaps improve the reliability of the GDP numbers as well.

2.1. IT industry prospects, beyond TCS and Infosys forecasts

Livemint, 15 Apr. 2019, Siddharth Pai

Though there are some macroeconomic headwinds on the horizon, steady growth is expected over the next several years in the Indian outsourcing industry

This February, the National Association of Software and Services Companies (Nasscom) stopped publishing its yearly estimate for India’s IT exports and refrained from providing guidance for fiscal year 2019-20. Nasscom numbers had long been cited by captains of Indian IT industry for communicating their quarterly results to the world.

Infosys Ltd and Tata Consultancy Services Ltd announced their Q4 results last week, and the rest will follow over the coming days. However, investors cannot act upon the information in the absence of industry-wide data. Since Nasscom is refraining from providing a growth benchmark, investors will look for the vacuum to be filled by analysts and consulting firms.

One such is ISG, my former employer. It puts out a quarterly view of the industry called the ISG Index. Since outsiders’ visibility gets murkier as deals get smaller, it refrains from commenting on deals that are smaller than a certain size ($5 million presently) in annual contract value (ACV). Nonetheless, its methodology is robust, and it produces a startlingly accurate view of the deal cycles in the industry.

I recently met Michael Connors, chairman and chief executive officer of ISG, who along with Bret Breeding, ISG’s data czar, proceeded to give me an education.

This column will focus on numbers, since it will highlight some aspects of ISG’s research that are germane to the current earnings season.

According to Connors, though there are macroeconomic headwinds on the horizon, ISG continues to forecast steady growth over the next several years in both the IT and business service segments globally.

ISG’s trailing 12-month growth numbers for the traditional sourcing industry clock in at 8%, yielding a number of $27.5 billion in ACV. Meanwhile, the “as-a-service" market, which includes everything that is cloud-based, has grown at 37% on a trailing 12-month basis and now almost equals traditional services outsourcing, clocking in at $23.6 billion for the year. Combined, these numbers show a trailing 12-month growth of 20%.

These counts are for the commercial sector only; they do not include government deals and only focus on deals that are above ISG’s $5 million visibility floor. Smaller deals are difficult to trace, but these broader market numbers still suffice as a guide to the overall health of the IT industry.

Interestingly, ISG’s data shows a general decrease in ACV from approximately $20 million to $15 million from 2010 to 2015, followed by stabilization since then at the $15-million mark. The more telling statistic is that there are many more awards coming to the market in the smaller ACV bands. In 2018, the broader market finished with 60% of its awards in the smallest ACV band of $5 million to $10 million versus 2010, when this number stood at 46%. This means that despite splashy headlines, the main battles are not being fought in the mega-deal space, but in the small- and medium-sized bands. For a detailed look at these numbers, I suggest you see the ISG Index here.

What is driving the reduction in deal size?

First, deal duration decreases since software and hardware assets included in previous deals are now accounted for elsewhere and are not depreciated over long-term tenures. The 10-year deal is now a 3.5-year deal.

Second, software applications get replaced or shifted to the cloud. For example, let’s say there were 100 applications that were part of the original deal and that half of those would move to a public cloud during the contract. That means half the service provider’s workload for computing and support would now be shifted to a cloud provider such as Amazon Web Services or Microsoft’s Azure. Meanwhile, other software applications would be replaced by cloud solutions like Salesforce or Workday. This results in decreased spend with the traditional service provider.

However, there is some consolation. New digital services counteract to some extent the revenue losses to the cloud. Nobody can go digital without a service provider. Here’s how digital plays out in different verticals:

One, the digital demand trends for banking and insurance are in cloud migration, cybersecurity and intelligent automation. Digital investments have also accelerated in wealth management and commercial banking. As interest rates rise, enterprises should see their profitability expand, and they will be more optimistic about spending.

Two, in manufacturing, digital spending has begun to rise as companies shrink their product development cycle and reinvent the supply chain from research and development to production to sales to customer care. Investments are aimed at 3D printing, autonomous technology and solutions to meet the demand for digital manufacturing and engineering services.

Three, the energy industry’s volatility comes from the fluctuations in crude oil prices, causing companies to continually evaluate their capital spend to manage profitability. Firms in this vertical tend to invest in the Internet of Things and robotic process automation to enhance efficiency and reduce costs.

Four, retail clients continue to strengthen their digital business channels to enhance frictionless omnichannel experiences, personalized “market of one" retailing and responsive supply chains.

Five, the healthcare and pharma industry shows a growing interest in analytics programmes and an ongoing demand for cloud migration initiatives, but digital has not permeated the sector as much because of stringent regulations in the space. For healthcare providers and payers, the focus remains on improving efficiencies and advancing patient care and satisfaction.

The bottom line is that ISG expects digital growth to stay robust and to top 25% this year while the overall market itself will expand by 3.2% on a constant currency basis. The game has been redefined, but the prize money is still large.

Siddharth Pai is founder of Siana Capital, a venture fund management company focused on deep science and tech in India.

2.2. TCS set to become world’s third-largest IT services company

Livemint, 08 May 2019, Varun Sood

If TCS does surpass DXC, it will only lag behind International Business Machines Corp. and Accenture Plc

TCS grew 9.6%, or added $1.82 billion in new business, to end with $20.91 billion in revenue in the year ended 31 March

NEW DELHI: Tata Consultancy Services Ltd (TCS) is set to surpass DXC Technology Co. to become the world’s third-largest software services provider in fiscal 2018-19, marking the first change in the pecking order of the information technology (IT) outsourcing industry in two years.

If TCS does surpass DXC, it will only lag behind International Business Machines Corp. and Accenture Plc.

DXC Technology, formed by the merger of Computer Sciences with a division of Hewlett Packard in 2017, needs to clock a 5.06% sequential growth in the fourth quarter to end with $20.91 billion in revenue. Most analysts believe it is unlikely that DXC will manage this growth. DXC declares its fourth-quarter earnings on 23 May.

TCS grew 9.6%, or added $1.82 billion in new business, to end with $20.91 billion in revenue in the year ended 31 March.

In the first nine months of 2018-19, TCS generated $15.52 billion in revenue, more than the $15.47 billion in business done by DXC.

TCS’s strong performance over the two years has seen a change of guard at the top. In 2017, TCS entrusted Rajesh Gopinathan, who was then chief financial officer, to take over as chief executive and succeed N. Chandrasekaran, who was named the chairman of Tata Sons Ltd. Still, the company managed to retain all its senior executives and improved its growth and profitability, with the consensus view that this was one of the smoothest management transitions at an Indian corporate entity.

In contrast, DXC has divested and restructured much of its businesses. DXC had $25.39 billion in revenue when it was set up in 2017, while TCS ended with $17.57 billion in revenue. This implies that over the last two years, DXC has seen its revenue decline by more than $4 billion, while during this time TCS has added $3.34 billion in incremental revenue.

Much of DXC’s lost revenue was on account of the company selling its US public sector business, which accounted for $2.8 billion in revenue, to private equity firm Veritas Capital last year.

IBM, which ended with $79.59 billion in revenue last year, does not disclose business from IT outsourcing services. However, the company got $69.76 billion in business from global business, technology services and cognitive solutions, all of which can be clubbed under IT services business. Accenture ended with $39.57 billion last year.

“TCS is widely described these days as the ‘Walmart of IT Services’—the firm can pretty much win any large deal it wants and deliver it," said Phil Fersht, chief executive of US-based HFS Research. “Its size and execution focus put it in a commanding position in the market and this is almost impossible for the likes of DXC to compete with."

“I see Accenture emerging as its principal competitor with its SynOps platform, and these two will duke it out for market dominance over the next 2-3 years," he said. “DXC will likely strip off several business divisions and add more in the future as Mike Lawrie (chairman and CEO of DXC) tries to find a final point to regrow a firm that is, quite frankly, in a lot of trouble trying to compete in an extremely cut-throat market."

TCS’s industry-leading profitability even while recording double-digit revenue growth is another metric that has helped investors repose faith in the company’s stock. TCS ended last year with a 25.6% operating margin, while Accenture and DXC had 14.8% and 14% profitability, respectively.

The IT outsourcing industry is facing threats from newer technologies such as automation software, cloud computing and artificial intelligence-powered platforms, which are redefining—and making redundant—the traditional approach of vendors deploying armies of engineers to manage the information technology infrastructure work for companies.

This is reflected in the declining revenue (of IBM) or slow growth at some of the other large companies (Cognizant Technology Solutions Corp). Last week, Cognizant, which ended with $16.12 billion in revenue last year, slashed its full-year growth outlook to 5.1% in constant currency terms from an earlier forecast of 9%.

For now, Accenture and TCS are the two companies among the large IT firms that appear to have steered through this disruptive period with any degree of success.

“It’s a beautiful industry. There is no other industry that has multi-decadal growth visibility. All we have to do is execute well and to make sure our capabilities are in tune with where the opportunity lies," Gopinathan said in an interview earlier this year.

3.1. India's hydropower to meet target despite varying forecasts by IMD, Skymet

Business Standard, Apr. 26, 2019

Mumbai: The country’s hydropower generation would be good this season despite varying forecasts by the Indian Meteorological Department (IMD) and Skymet, said industry officials. While Skymet expects a below-normal rainfall, IMD sees near-normal rains this year.

“Even if the Skymet prediction is right, it is more than enough for us,” said Balraj Joshi, chairman and managing director of NHPC. With more than 6,900 megawatt (Mw) of capacity, NHPC is the largest hydropower producer in the country.

Joshi said he was not worried for two reasons. “Both IMD and Skymet predictions are more crop-oriented and are for plane areas. Our plants are affected by local rainfall, particularly because our catchment areas are small,” he said, adding 50 per cent of NHPC’s hydro production in rainfall-dependent, while the rest is snowfall-driven.

“The snowfall has been good this year compared to the past three to four years,” said Sharad Mahendra, chief operating officer-energy business for JSW Energy.

JSW is the country’s largest private power producer after its acquisition of two hydro assets from Jaypee Group in 2016 in Himachal Pradesh. The private power producer operates 1,391 Mw of hydropower capacity.

"For Himachal Pradesh, hydropower is dependent on the snowfall and the temperature at which snow melts during summers," said Mahendra, adding snowfall this year has been good and hence he does not expect a generation hit.

According to Central Electricity Authority (CEA), in the April-February 2019, about 126.2 billion units, 5.96 per cent higher from 119.1 billion units in the same period a year back. India's total installed hydro power capacity was at 45,399.22 (Mw) as of February 2019.

"Snow has been very good this season, we are hoping to meet all our targets. It is our projects in the states like Madhya Pradesh that have a total bearing on monsoon. So for majority of our projects which are in the north and north-eastern part of the country we do not see this as a concern," Joshi said.

Mahendra pointed out hydro plants in states like Tamil Nadu, Karnataka are those which see a direct monsoon impact. Others, like Maharashtra State Electricity Distribution Corporation (MSEDCL) are in a wait-and-watch mode. "We will review at appropriate time depending on actual storage in Koyna," said Sanjeev Kumar, managing director for MSEDCL, the state utility which sources power from Koyna Dam's hydro power plant.

A standard process to bridge shortfall arising out a weaker hydro power production involves sourcing power from the spot market. "If there a deficit, we ask the commercial department to source it from the open market," said an official from Assam Power Distribution Company. So far, the need for such procurement looks unlikely this year.

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

3.2. ICRA projects 7-7.5 GW solar power capacity addition in 2019-20

PTI, Apr. 24, 2019

New Delhi: Rating agency ICRA said Tuesday that it has estimated 7-7.5 GW solar power capacity addition during the current financial year, which includes 1 GW of rooftop solar.

"The domestic solar power capacity addition is expected at around 7 GW to 7.5 GW (including around 1 GW of rooftop solar capacity) in FY 2020 as per an ICRA note, based on tendering and awards of projects in the last 12-15 months," the rating agency said in a statement.

By contrast, solar capacity addition is estimated to have remained subdued at around 6 GW to 6.5 GW in the financial year 2018-19 due to weak trend in award of solar projects in the calender year (CY) 2017, according to the statement.

Girishkumar Kadam, sector head and vice-president (corporate ratings), ICRA, said in the statement, "Tendered project awards for solar PV (photovoltaic) projects during CY 2018 stood at about 11 GW against 4.5 GW in CY 2017, providing a healthy pipeline for capacity addition over the next 2-year period."

He also said nearly 56 per cent of the capacity auctioned in 2018 has been accounted for by central agencies, such as Solar Energy Corporation of India and NTPC Ltd, with the balance by state nodal entities and discoms under various state-level programmes.

Apart from the projects awarded through the bid route, ICRA expects about 1 GW to be added through open access or group captive route and grid-connected rooftop, with these additions being facilitated by favourable solar policies for open access route in a few states.

As for tariff, with a decline in PV module price level during 2018 and aggressive bidding by independent power producers (IPPs), the weighted average solar bid tariff during 2018 remained at Rs 2.73 a unit as against Rs 3.01 a unit in 2017 and Rs 5.01 a unit in 2016.

In this context, the viability of such tariffs critically hinges on timely execution of the project as per the PPA timelines, availability of debt with longer tenures at competitive funding cost and the ability of the project developers to keep the cost of modules within the budgeted levels, it added.

There have also been a few favourable regulatory orders for solar IPPs by central power regulator CERC on GST relief in November 2018 and by state regulator SERC in Maharashtra in February 2019, for allowing impact of safeguard duty under change in law for the affected developers. However, timely implementation of these orders remains to be seen and the same remains a key monitorable for the affected IPPs, it said.

Based on the performance analysis of ICRA-rated solar portfolio, almost 60 per cent of the rated capacity has shown the average plant load factor (PLF), or capacity utilisation, in the range of 19 to 21 per cent and 14 per cent of the rated capacity witnessed PLF levels of more than 23 per cent.

PLF performance above 23 per cent pertains to mainly project SPVs (special purpose vehicle) which have achieved commercial date of operation over the past two to three years, with direct current-to-alternate current (DC:AC) ratio varying between 1.2 to 1.4 times.

"Nonetheless, ability of the project developers to ensure prudent operations and maintenance practice and module quality so as to maintain the PLF within the desired level or as per the declared PLF norms under PPA (power purchase agreement) remains critical from the credit perspective," Kadam added.

Further, receivable cycle for majority of the rated portfolio remains within 30 to 90 days except for IPPs with exposure to utilities in Telangana and Tamil Nadu.

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

4.1. Opinion | The relocation of state capitals could boost India’s economy

Livemint, 12 May 2019, Nitin Pai

We must build many new cities not only to decongest the bigger ones but also to create millions of jobs in far-flung areas

Soon after quick counts showed that Indonesian President Joko “Jokowi" Widodo had won his second term, he announced that his government will move the country’s capital out of Jakarta. A few locations on the island of Kalimantan (formerly Borneo) are being considered, as they are centrally located in this vast archipelagic country that stretches over 5,000km east to west, and 1,720km north to south.

The government estimates it will take 10 years to accomplish and will cost $33 billion; environmentalists are horrified of the damage building a new city in the rainforests would cause, but President Jokowi is convinced that for Indonesia to advance it should “have an administrative centre that is separated from economic, business, trading and services centre".

Jakarta’s city centre was planned to support a population of 500,000. Today, over 10 million people live in the city, and another 20 million in the sprawling outskirts. Economic losses from its horrible traffic alone are estimated at $7 billion a year, while the city is sinking a few inches every year due to rampant groundwater extraction. While Indonesia has been planning to move its capital out of Jakarta from the days of Soekarno for political reasons, Jokowi’s decision recognizes facts on the, well, fast sinking ground.

Other than the geological bit, Jakarta’s situation is similar to that of India’s big cities. They are over-polluted, over-priced, gridlocked, ugly, running short of water and have long exceeded the ability of municipalities to govern them. Instead of relieving the sheer demographic pressure on them, India’s response is to pour concrete, steel, funds, trucks, buses, cars and, now, smart sensors into them.

To be sure, greater investment in public infrastructure and services is necessary, but that merely nibbles at the problem. We need lots of new cities, but independent India has built only a handful.

Narendra Modi’s 2014 agenda correctly identified building 100 new smart cities as a solution to this problem, but when it came to delivery, this revolutionary proposal turned into a disappointing, incremental programme to upgrade the infrastructure of existing cities under the Smart Cities initiative. The task of building new cities—some brownfield and some greenfield—remains unattempted. Similarly, once the dust clears on the jobs crisis in India, we will find that we need to create 20 million jobs every year for a decade or more. No amount of tweaking with existing policies—from labour laws, to skill development, to Mahatma Gandhi National Rural Employment Guarantee Act and basic income—will get us there.

One good way to create millions of new jobs, especially ones that can absorb the surplus labour in rural areas, is to build new cities. But how? Unless there is an economic basis for their existence, few people and businesses will want to move there. That’s where Jokowi’s decision makes sense—moving the political and administrative centre to a new location will provide the new city’s economy with a strong starting point. It’s not just the ministers, civil servants and government employees who will move. An entire economic cluster will move. If Indonesia goes through with Jokowi’s plans, it would follow Malaysia and Myanmar in shifting to purpose-built capitals. However, unlike Putrajaya, which is too close to Kuala Lumpur and Naypyidaw, and whose remoteness is intentional, Indonesia plans to create a well-connected urban centre hundreds of miles away from Jakarta.

India should do the same with our state capitals. The Union government can create fiscal and other incentives to encourage state governments to shift their capitals to brown- or green-field locations. Mumbai, Bengaluru, Hyderabad, Chennai, Jaipur or Lucknow, for instance, will continue to thrive even if the state government offices move out. Their respective states will benefit from a new urban engine powered by government.

Of the 50 states in the US, 32 have their capitals in a city different from the biggest one. New York and Los Angeles might be the biggest cities in New York state and California, but the state capitals are located in Albany and Sacramento. Many of those decisions might have been made on the basis of geographic equity, but they also spread out the economic centres and avoid overcrowding.

It is fashionable to criticize purpose-built capitals like Washington DC, Canberra and Putrajaya as being boring and sterile. However, that is merely an expression of preference—those who prefer to live in more exciting places have elsewhere to go. The policy objective of building new state capitals is to create millions of new jobs and economic hubs, and decongest old cities. To the extent that people in power have to live in these new cities, it is likely that they will be better designed and better managed than existing ones. If we can get 20 states to move their capitals, we would begin to address our economic challenge.

Shifting capitals has a bad reputation in India thanks to one Muhammad bin Tughlaq. That 14th century sultan who sought to move his capital from Delhi to a more central Daulatabad was criticized for being far ahead of his times. Seven centuries later, the idea is overdue, at least in our states. Let’s not forget that the National Capital Region, one of the country’s major economic hubs, owes its existence perhaps inadvertently and, in part, to a British viceroy’s decision to move the colonial capital from Kolkata to a brownfield site that became New Delhi.

Nitin Pai is co-founder and director of The Takshashila Institution, an independent centre for research and education in public policy

4.2. More 12 Nuclear Power Plants Coming up Says DAE Chief; Stresses on Clean Power and Betterment of Lives

PTI, Apr. 23, 2019

Chennai: Tamil Nadu, India(NewsVoir) India will have 12 more nuclear power stations shortly to improve the power situation and also ensure there is free flow of uninterrupted power supply for both Industries and residential usage. This statement was made by Mr. K. N. Vyas, Secretary, Dept of Atomic Energy and Chairman, Atomic Energy Commission, India at the International AtomExpo at Sochi in Russia held recently. Nuclear Technology helps in betterment of lives through varied usages and is an irreplaceable source of clean, pollution freeenergy, he added.

Mr. Vyas said, The Founder of Indian Nuclear programme, Shri. Homi Jahangir Bhabha had envisaged that nuclear technology is going to be very essential and not just in the power sector but for other societal uses intended for betterment of life. We believe that when it comes to clean energy, definitely, there is no substitute to nuclear energy as it is sustainable, and without interruption, one can have clean energy, the DAE Chief said in response to a query. He cited the record run of Kaiga Nuclear Power station as an example. A small unit of indigenously-developed 220-250 MW reactor has completed 962 days of uninterrupted run at about 99.3 per cent of capacity. The amount of electricity it has been able to give in tremendous, Vyas contended. The first stage of India's indigenous nuclear power program has now attained maturity with 18 operating Pressurized Heavy Water Reactors (PHWRs). The Eleventh International Forum AtomExpo 2019 was officially opened in Sochi with the motto of this year being Nuclear for better life'. Over 3600 participants from 74 countries participated in the Expo. The new countries represented at the forum were Qatar, Bahrain and Nicaragua.

Peaceful Atom is associated with all aims and goals of the UN Sustainable Development Program. The Forum became a space for discussing the latest technologies thus ensuring a base for the future of our planet, said Alexey Likhachev, General Director of Rosatom State Corporation. The AtomExpo provided a platform to discuss application of nuclear technologies opening up new opportunities in the field of medicine, creation of unique materials, space exploration, exploration of the Arctic region as well as to strengthen the energy base of the economy. The Russian President, Mr. Vladimir Putin in an issued statement also applauded AtomExpo in advancing the stature of Russia in the field of nuclear technology. Indian Nuclear Industry has got a lease of life following the sanction of the Narendra Modi Government for construction of 10 Pressurised Heavy Water Reactors (PHWRs) in fleet mode. Alongside this, plans are afoot for the construction of two light water reactors. Our Indian industries have also gained a lot through the process.

Nuclear energy and instruments requires a guided and systematic way of manufacturing and quality assurance. This raises the standard of industry participating in the manufacturing of equipments, said Mr. Vyas stating the benefits of having a thriving nuclear industry. Not only do Nuclear power plants benefit the manufacturing in India, it also improves the local economy surrounding the areas where these nuclear reactors are located. It overall helps the society at large, he emphasised. Interestingly, nuclear technology is not only meant for generating power, but, is also used by helping doctors and scientists. Huge improvement in technological innovations in the medical field has cancer patients undergoing radio therapy feel better by upto 60 percent.

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

5.1. LTI to hire 3,800 fresher's as it sees order-book swelling this fiscal

PTI, May 06, 2019

Mumbai: Engineering major L&T's software arm LTI will be hiring around 3,800 freshers this fiscal as it expects the business to grow at a faster clip, a top official has said.

The company is working at a very high utilisation level now and wants to hire more to get down the level, chief executive Sanjay Jalona said.

"We will be hiring 3,700-3,800 freshers this fiscal year as against the 3,000 freshers we hired in FY19," he told PTI over the phone.

Additionally, it will also hire laterally as well as per project requirements on a "just-in-time" basis, he said.

Asked whether the necessary talent is available on call, especially given the fact that a lot many companies are depending on the just-in time hiring model, Jalona said talent is the biggest issue which keeps him awake and the concerns have only aggravated lately.

In FY19, the industry added 1.7 lakh new jobs, according to industry lobby Nasscom.

However, industry executives keep expressing concerns over the quality of the manpower available and doubt their skillsets are enough for a dynamically changing industry.

In the year to March 2019, Jalona said LTI has hired over 4,000 people on a net basis, of which 656 were in the fourth quarter alone.

The utilisation rates including trainees had stood at over 82 percent, and the company decided to ramp up hiring, even at the cost of compromising the margin, Jalona said.

The high utilisation is very "unhealthy" for a company of its size which is growing, he added.

LTI reported a 31 percent growth in March quarter net at Rs 378.5 crore on a faster revenue accretion.

Overall revenue grew 29.3 percent during the fiscal to Rs 9,445 crore.

Jalona said the demand environment is healthy for FY20 as the average contracted value during the quarter stood at a healthy USD 100 million per client.

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

5.2. L&T to hire 1,500 people this year

PTI, Apr. 15, 2019

New Delhi: Infrastructure giant Larsen & Toubro (L&T) plans to hire 1,500 people this year, the same as in previous years, a top company official said.

"The company's manpower strength stood at 42,924 as on March 31, 2018 as compared to 41,466 as at March 31, 2017. On an average, we hire close to 1,500 people across functions every year and we see no discontinuity in this practice unless business dynamics change drastically," Yogi Sriram, Senior Vice President - Corporate HR, Larsen & Toubro, told PTI.

Sriram added that L&T's employee attrition rate of around 5 per cent was among the lowest in the industry.

L&T recently made a hostile takeover bid for mid-sized IT services firm Mindtree. However, the company's founders have resisted the unsolicited acquisition bid, citing differences in corporate culture and other factors.

Elaborating on L&T's HR practices, Sriram said: "We are putting a greater emphasis on ensuring wider participation of women and frame policies to enable their career growth."

Women employees are not just deployed in IT and finance roles, but are also present in core engineering jobs like heavy engineering shops, construction projects and defence engineering projects, he said.

Asked whether there will be job cuts as the company opts for digitisation, Sriram said, "There have been no lay-offs and the exits were limited to reasons of non-performance."

The company's Leadership Development Academy (LDA) at Lonavala has been set up for learning interventions, he said, adding that an artificial intelligence driven digitalised platform, called ATLNext, caters to the learning needs of its workforce.

Business magazine Forbes had listed L&T among the 'World's Best Employers' for 2018. The list, based on Forbes' Global 2000 rankings of publicly traded companies in 60 countries, placed L&T at number 22, making it the highest-ranked Indian firm across all sectors.

L&T has acquired Cafe Coffee Day owner V G Siddhartha's 20.32 per cent stake in Mindtree and has also placed an order with brokers to pick up another 15 per cent shares from the open market. Besides, an open offer has been made to buy over 5.13 crore shares, amounting to about 31 per cent stake.

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

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. Goodricke parent Camellia becomes the world's largest private tea producer

Business Standard, Apr. 18, 2019

Kolkata: In a bid to pare debt, Brij Mohan Khaitan’s McLeod Russel India has lost its crown as the world's largest private tea producer, to Camellia Plc, the holding company of the Goodricke Group.

Over the past year, McLeod sold 21 gardens in India, reducing almost 32 million kg in production. Its exit from Rwanda further trimmed around 5 million kg, taking its global output to around 80 million kg. In 2017-18, it had produced 118 million kg of tea.

A McLeod official said only one of the agreements for sale was pending a conclusion. In contrast, Camellia saw its highest-ever production levels through own and managed factories in 2018 at 103 mn kg from 95 million kg in 2017. This is a record for the group. Goodricke has bought two estates from McLeod. Camellia Chairman Malcolm Perkins said in the annual report, “In an important development after the year-end, we acquired two tea estates in Assam, which together with our existing estates, we believe, makes us the largest private tea producer in the world.”

Perkins added: “These are long-term projects, in line with our strategy to diversify our production footprint and add value to our products."

Atul Asthana, managing director at Goodricke Group, said Camellia's achievement was driven by good agricultural practices, which had continuously improved the yield. This calendar year, he said, tea production would rise another 2.5 million kg, taking Camellia's production to 105.5 million kg.

“In India, after the acquisition of two gardens in Assam, we are not looking at further acquisitions. Currently, our production stands at 36 million kg in India, of which 28 million kg is our own production,” he said.

A McLeod official said they'd still retain the position of the largest tea producer in India. After all the sale agreements were concluded, McLeod's India production would be 55-60 million kg.

Amalgamated Plantations, whose 41 per cent is held by Tata Global Beverages, is the second-largest producer in India at 42 million kg a year. Kanan Devan Hills Plantation Company, where Tata Global has a 28.5 per cent stake, has production of 25 million kg but the two are separate corporate entities, said Tata Global.

This is not the first time McLeod would have lost its status as the world's largest producer. In 2001, when the Khaitans and Magors split, the estates under George Williamson Assam — a company controlled by the Magor family but managed by the Khaitans — went with it and consequently a sizable production from the group portfolio.

However, the wheel turned a full circle four years later, when the Khaitans bought out the Magor family stake from George Williamson Assam.

A spate of acquisitions followed — Doom Dooma Tea Company in 2006-07 and Moran Tea in FY08. Between 2009 and 2014, McLeod spread its presence to Vietnam, Uganda and Rwanda.

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

6.2. Nabard announces Rs 700-cr VC fund for agri, rural startups

PTI, May 14, 2019

Mumbai: The National Bank for Agriculture and Rural Development (NABARD) Monday announced a Rs 700-crore venture capital fund for equity investments in agriculture and rural-focused startups.

NABARD has been contributing to other funds till now and this is the first time that the rural development bank has launched a fund of its own.

The fund has been launched by Nabventures, a subsidiary of NABARD, and has a proposed corpus of Rs 500 crore with an option to retain over-subscriptions of Rs 200 crore, called as the greenshoe option, an official statement said.

NABARD has given an anchor commitment for the fund, which will be investing across startups engaged in agriculture, food and rural development space, it said.

The statement said, the fund had its first close but details of the investments done by NABARAD and other limited partners, if any, were not immediately available.

The fund will have a high impact as it will provide a boost to investment ecosystem in the core areas of agriculture, food and improvement of rural livelihoods, NABARD chairman Harsh Kumar Bhanwala said.

Nabventures is now scouting for equity investments in asset-light, innovative, technology-led start-ups in its focus areas, the statement said.

Till now, NABARAD has contributed Rs 273 crore to 16 alternate investment funds, the statement said.

NABARD is now 100 per cent owned by the government, which has been focusing on startups through a slew of measures.

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

7.1. Reliance entry to digitise 5 million kirana stores by 2023: Report

PTI, May 13, 2019

New Delhi: Richest Indian Mukesh Ambani-led Reliance Industries' entry into online retailing will help expand the current 15,000 digitised retail stores to over 5 million by 2023, a study of Bank of America Merrill Lynch said.

As much as 90 per cent of India's USD 700 billion retail market is unorganised, made up mostly of neighbourhood kirana stores selling groceries and other sundries.

These kirana stores are keen to upgrade their tech and this is driving a wave of modernization, the study said.

"This is on the back of growing competition from modern trade and e-commerce," it said. "GST implementation has also acted as a catalyst, creating further modernization pressure as GST compliant bills have to be generated."

Reliance, with a deep footprint in over 10,000 Reliance Retail outlets pan-India, is working to create the world's largest online-to-offline e-commerce platform in the country.

Reliance is looking at installing its Jio MPoS (mobile point-of-sale) device at kirana stores to connect neighbourhood suppliers to its high-speed 4G network that can be used by its customers to order supplies.

It will take on SnapBizz, Nukkad Shops and GoFrugal in this fragmented MPoS space.

While Jio MPoS is available at a one-time investment of Rs 3,000, SnapBiz offers the same machine at a one-time cost of Rs 50,000, the report said.

One-time charge on Nukkad Shops is Rs 30,000 to Rs 55,000 while GoFrugal offers POS software at a one-time investment of Rs 15,000 to Rs 1 lakh.

Jio MPoS has no merchant discount rate (MDR) on any charge and offers a loyalty programme, it said, adding its monetization strategy include merchandise delivery, advertising and supply-side aggregation.

"We believe, with RIL's entry, we could see an increase in merchant adaptability, as the price points will likely come down (RIL's current one time deposit is Rs 3,000) and reach should expand.

"Consolidation is also a possibility; as a big player, RIL is entering an otherwise scattered market. Overall, we expect RIL to help expand the current 15,000 digitized store base to 5 million-plus stores by 2023," it said.

The brokerage said it met with SnapBizz management at their office in Bengaluru. It has 4,500-plus devices installed over seven cities in India or over 30 per cent of the digitised store base.

"The Merchant PoS by SnapBizz is a point of sale platform where merchants can keep a digital record of their inventory, generate GST compliant bills and keep a track of consumer's buying patterns, in addition to making payments," the report said.

For a one-time payment of Rs 50,000, the merchant gets a PoS device with Snapbizz software, a screen space to display ads and a personal app to interact with users.

SnapBizz is working with Israeli start-up Stamp.ee to design targeted couponing/promotions for customers.

SnapBizz has a contractual agreement with retailers to share aggregate level data with third parties; however personal consumer data is not shared, it said.

The brokerage said it visited 15 stores in Mumbai and Navi-Mumbai to get feedback on general MPoS.

"Most retailers we visited were happy with the merchant PoS and believe the return on investment is good," the report said. "Kirana stores liked the ease of billing/generating GST complaint bills the best. The PoS system provides an option of adding in-built discounts and also push offers to the entire customer database via SMS."

Majority of shops visited are not synching inventory in PoS and mainly are using it as a billing device.

Kiranas either found it difficult to enter new inventory items or were reluctant to enter with a fear of sharing data to POS firms.

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

7.2. Amazon rushes to kirana stores to take on RIL's 'new commerce' plans

Business Standard, Apr. 25, 2019

New Delhi: Amazon India seems to be gearing up for the impending e-commerce battle with Reliance Industries (RIL) by systematically adding its own set of kirana stores. As part of this strategy, the e-commerce major has launched a programme to manage the entire business-to-business (B2B) inventory supply as well as kirana stores in three cities in Karnataka, before taking it pan-Indian, sources in the know said.

“Presently, the firm has launched the project in Bengaluru, Mysuru, and Tumakuru. Amazon has consolidated everything under the Amazon Distribution marketplace. Retailers and kirana store owners can order online, and products are delivered to their doorstep the following day,” said one of the sources.

Amazon Distribution division handles the B2B side of fast-moving consumer goods and other products business with retailers and kirana store owners. The company is going to offer a whole bouquet of services that will include goods and services tax (GST) invoices, competitive rates, and managing back-end inventory. Just like RIL, Amazon is fine-tuning and perfecting its online-to-offline (O2O) strategy. The US-based retail giant is running another pilot and has deployed B2B executives who would reach out to retailers and small businesses. The idea is to make these retailers order inventory online on the Amazon Distribution division.

Why kirana stores?

The answer for Amazon and RIL lies in habit formation, according to Paula Mariwala, founder, Stanford Angels & Entrepreneurs. She explained it had a lot to with demand. Grocery follows a pattern and India still shops at mom-and-pop grocery stores, and that’s where demand consistently rises.

Historically, these neighbourhood kirana stores have been averse to the use of technology and have enjoyed the anonymity of not having formal inventory software. This may be the time when Amazon uses its captive audience to boost its use cases and generate a steady supply of orders.

RIL taking its time to perfect the model

While there have been reports that the company has launched a few pilots, sources close to the firm said RIL was not in a rush to launch its ‘new commerce’ business. The company is experimenting with various technologies, business strategies, and is hitting the drawing board from time to time to ensure it does not get it wrong.

“A lot is in the planning and formulation stage. It has not rolled out its point-of-sale (PoS) machines on a large scale. The actual beta-testing is going to happen in a few months,” said a source close to the firm.

Available at a refundable security deposit of ~3,000, these PoS machines would help retailers get hooked to RIL’s larger retail ecosystem from where they order inventory, accept all kinds of digital payments, get database of regular consumers, be part of Jio’s offers and awards programme, as well as secure easy short-term loans.

The company is also giving a 56-day free data pack with the device. This would also help RIL manage the inventory of each and every merchant on their platform.

Same target, different strategies

“RIL doesn’t copy business models, it picks and chooses what works for them,” said Arvind Singhal, chairman and managing director, Technopak. He said that though both Amazon and RIL are inherently facing off in the same market and the same set of customers, the methods are different. “You can’t compare Amazon’s O2O with Jio’s O2O,” said Singhal.

He said there were close to 20 million kirana stores in India. These stores will work as a correspondent, which will do last-mile deliveries, accept orders, and be the central hub for everything that a customer wants from RIL.

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

8.1. Flipkart may invest Rs 5,000 cr in logistics parks, generate 50,000 jobs

Business Standard, Apr. 24, 2019

Bengaluru: Flipkart is acquiring 300 acres in Karnataka, Gurugram and West Bengal to set up logistics parks as the e-commerce major looks at tapping the next wave of e-commerce opportunity in the country.

According to sources privy to this development, the Walmart-owned firm is likely to invest up to ~5,000 crore to set up these logistics parks, which are expected to generate about 50,000 direct and indirect jobs.

These investments are expected to give an edge to Flipkart, which is locked in a fierce battle with Walmart’s US rival Amazon to dominate the online retail market in India.

“The Flipkart team is sourcing land privately in Bengaluru, and has identified four sites. In West Bengal, construction is expected to start soon,” said a person, adding, “For Gurugram, land has already been identified for the purpose.”

The fully-integrated parks will include Flipkart warehouses, improve supply-chain efficiency, and reduce costs by deploying mechanised warehousing. They will act as freight aggregation and distribution hub, and leverage technology for intelligent transport systems.

The Flipkart logistics parks will be built on the principle of sustainability to curb any wastage of valuable natural resources, sources added.

On being asked, a spokesperson of Flipkart said on Tuesday that the infrastructure it is building across the country through these warehouses and logistics parks would help it in tapping the “next 200 million customers”.

Financial services firm Morgan Stanley estimates the Indian online retail market to touch $200 billion by 2028, from about $30 billion last year.

The company also brushed aside rumours around the possible exit of Flipkart Chief Executive Officer (CEO) Kalyan Krishnamurthy, saying those are “completely baseless and inaccurate”. Flipkart said Walmart President and CEO Doug McMillon, who was in India last week, also exuded strong faith in the leadership of Flipkart group companies.

“I met with Kalyan (Krishnamurthy), Sameer (Nigam), and their leadership teams and was excited to see how the Flipkart, Myntra, and PhonePe teams are driving the industry with innovative solutions to serve its diverse and growing ecosystem,” McMillon said in a statement.

“There is tremendous progress and we are making a difference. Kalyan, Sameer, and their teams have our full support to continue executing the growth strategy for our e-commerce business in India,” McMillon added.

In May last year, Walmart paid a whopping $16 billion to acquire around 77 per cent stake in Flipkart, a transaction that valued the e-commerce firm at over $20 billion.

According to Krishnamurthy, the Flipkart group has received tremendous support from the Walmart leadership. “There are many areas where we are already working together and learning from each other, and I only expect that to keep increasing — which is a great indicator of how the partnership is progressing,” said Krishnamurthy.

He said that it is an exciting time to be in Flipkart group, which is focused on delivering the next wave of e-commerce growth in India, supporting opportunity creation for consumers, small suppliers, infrastructure development, and innovation-backed by technology.

“I am super committed to Flipkart and this partnership with Walmart. This is the coolest job in the country,” said Krishnamurthy.

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

8.2. Flipkart launches 2nd data centre in Hyderabad to strengthen e-commerce biz

Business Standard, April 23, 2019

Hyderabad: Flipkart, the country’s largest e-commerce entity, announced the launch of a data centre in the city, besides investment in the state (Telangana) to strengthen its technology infrastructure.

This is Flipkart's second data centre in the country, the first being in Mumbai. It says the new one (built in partnershop with CtrlS) is part of one of the largest cloud deployments in the country, to strengthen its growing marketplace e-commerce business.

"In our growing e-commerce business, data centres play a critical role. We recognise the tremendous opportunity for sustained data-driven transformation in India and are pleased by the support we have received from the state government," said its chief corporate affairs officer, Rajneesh Kumar.

Flipkart had built its own data centre infrastructure much earlier, to store and manage the enormous data that gets generated from online sales, involving customers and sellers. It has developed its own technology tools, without having to depend on the cloud platforms of larger players like Micrsosoft or AWS for its data storage requirements or analytics.

Hyderabad is considered, after Mumbai, the most secure place for data storage and business continuity plans by many companies, which usually keep their data in separate locations to cope with any extreme eventuality. The BSE stock exchange's second data server, for instance, is also in Hyderabad.

Flipkart's technology prowess was publicly hailed last week by Walmart chief executive Doug McMillon (the US retailing giant bought majority control in Flipkart last year) during his visit to the company's Bengaluru headquarters. Among other things, he'd said Walmart would try to use some of Flipkart's superior technology tools across the former's facilities.

Flipkart refused to divulge details of the data centre, citing security requirements. The Hyderabad facility is expected to enhance the company's overall preparedness for large-scale operations, adding to the technology capabilities in its cloud platform software.

"Telangana was the first state to come out with a dedicated policy on data centres. To see such encouraging results come out is very satisfying for all of us. We welcome Flipkart and its team," said Jayesh Ranjan, the state government's principal secretary, information technology.

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

9.1. Indian startups now building products for the world: Advocacy group

PTI, May 02, 2019

Washington: Having graduated from coding or emulating the concepts invented in the west, startups in India have entered a new phase wherein they are successfully building products for the world and raising money from the west, according to a top India-centric US advocacy group.

I think the Indian startups scene is entering a third phase, building products for the world, Mukesh Aghi, president of US-India Strategic and Partnership Forum (USISPF) told PTI.

Noting that the whole Indian IT industry picked up after the Year 2000, he said this area focused more on coding and was more of a labour arbitrage. In a way, it filled a vacuum which was needed, he observed.

The second phase involved Indian companies emulating the concepts invented here in the US, following companies such as Uber, Ola, Amazon and Flipkart, he said, adding that on the healthcare side, there are many similar examples.

Up to a certain extent, this tactic has been successful in India. However, the second phase was not for an export market. It was more targeted towards bringing efficiency to the Indian domestic market, he observed.

In the third phase, what we are seeing is (that) product companies (are) coming up now and these are not only just building these products for India, but they're also building for the world, Aghi said, responding to a question on the Startup environment in India.

These products could range from voice recognition, cybersecurity to healthcare.

I believe they are now showing a pattern of success. You can see this at incubators in India like T-hub in Hyderabad, he said.

There are many promising companies coming up and they're raising Series-C and Series-D funding, which are coming from the US and these companies are also able to also line up customers.

"One example is Zoho, a company from Chennai, which we use for sales and marketing. They are adding almost a couple thousands of customers a year in the US, proving to be highly successful and giving other CRM platforms a run for their money," he said.

So I think there are quite a few other companies in the same area moving and getting market share, he said.

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

9.2. India IT & business services market to reach US$ 14.3 bn by 2020: IDC

PTI, May 08, 2019

New Delhi: India's IT and business services market is likely to grow by over eight per cent to reach USD 13.1 billion by the year-end and expand further to USD 14.3 billion by 2020, according to research firm IDC.

Of the total market, IT services segment contributed about 76 per cent in the second half of 2018, it said in a report.

"The IT services market is slated to reach USD 10 billion by December 2019, growing at 9.1 per cent annually. The Indian government's higher spending on the Digital India and Smart Cities initiatives, and the increased adoption of next-gen technologies by organizations is driving growth in the IT services market," the report added.

IDC estimated that the IT services market will grow at a CAGR (compound annual growth rate) of 8.6 per cent between 2019-2023 to reach USD 14 billion by the end of 2023.

"The India IT & Business Services market is expected to grow annually by 8.8 per cent to reach USD 13.1 billion by December 2019, the report said, adding that the "market is further expected to register an annual growth rate of 8.7 per cent to be valued at USD 14.3 billion by December 2020".

In India, growth in the IT services market is being propelled by the banking, financial services and insurance (BFSI) and the government verticals, IDC India Director Enterprise Solutions Ranganath Sadasiva said.

"The other emerging verticals which are expected to adopt IT Services and futuristic technologies more aggressively in the next 3-5 years are the manufacturing, retail, healthcare and education verticals," Sadasiva added.

Additionally, a number of technology start-ups offering niche solutions in artificial intelligence, machine learning, Internet of Things, blockchain, automation, etc have come up, which is further driving adoption of IT services in the country, he said.

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

10.1. Fabindia may pump Rs 90-100cr in expansion, thrust on

PTI, May 08, 2019

Kolkata: Fabindia, the country's leading lifestyle retail chain, has set its eyes on tier-II cities for expansion of its Fabindia Experience Centres, a top official of the company said.

It all looks at expanding omni-channel model to all its stores to push e-commerce sales, Fabindia managing director Viney Singh said at the sidelines of the inauguration of Kolkata's first Fabindia experience centre.

The measures constitute the company's aggressive retail expansion plan entailing an estimated investment of Rs 90-100 crore in the current fiscal, he told PTI.

Fabindia Experience Center is a relatively new format, which are large stores to showcase maximum products categories under a single roof.

Besides apparels, Fabindia has home furnishings, furniture, gifts, jewellery, organic food and personal care products.

"We want to raise the number of the experience centres to 40 by this fiscal from 13 now. We have covered all metros and tier I cities. Now, we will open these in tier II cities," Singh said.

A Fabindia Experience Centre has opened in Chandigarh and more are lined up for cities like Amritsar, Jaipur, Coimbatore and Thiruvananthapuram, he said adding another 50 regular stores would be added in the current fiscal but through a franchisee route.

The brand has a total of 301 stores spread across the country, of which 230 are owned by the company.

Singh said the size of an experience centres is between 9,000-10,000 sq ft and the investment is between Rs 3000-3500 per square feet.

Based on this, the company's estimated investment would be Rs 90 crore to Rs 100 crore.

Fabindia is emphasising on e-commerce and will expand its omni-channel capability to all its stores from just 100 now. Online sales accounts for less than 5 per cent of its total sales, whose figures the company declined to share.

Fabindia said it is not using the Khadi Tag anymore.

Singh said Khadi account for meagre business of the company but declined to discuss further on the subject as the matter is sub-judice.

Ethnic fashion is a major segment in the total fashion sales of Fabindia, he added.

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

10.2. RIL to acquire British toy-maker Hamleys for Rs 620 cr

PTI, May 10, 2019

New Delhi: Mukesh Ambani-led Reliance Industries Thursday announced it will acquire iconic British toy-maker Hamleys for 67.96 million pounds (around Rs 620 crore) in an all-cash deal.

Hamleys, a 259-year-old toy-maker, has struggled to generate profits in recent times. It reported a profit after tax of 2.44 million pounds in 2018 after suffering a loss of 11.24 million pounds in 2017.

It is currently owned by Chinese fashion conglomerate C Banner International, which had acquired it for 100 million pounds in 2015. C Banner also owns the Chinese units of marquee consumer retail brands such as Steve Madden and Sundance.

"Reliance Brands Ltd, a subsidiary of Reliance Industries, and C Banner International Holdings, a Hong Kong-listed company, today signed a definitive agreement for Reliance Brands to acquire 100 per cent shares of Hamleys Global Holdings Ltd, the owner of Hamleys brand, from C Banner International," the company said in a statement.

Reliance Brands would acquire 100 per cent equity shares of "Hamleys Global Holdings Limited (HGHL) for a cash consideration of GBP 67.96 million", RIL said in a BSE filing.

Hamleys started with a single-store shop, Noah's Ark, in 1760. It now has 167 stores across 18 countries. Besides the UK, it has stores in China, Germany, Russia, India, South Africa and West Asia.

Reliance Retail, Ambani's flagship retailer, already has a pan-India franchise agreement with Hamleys to merchandise its famous toys.

This acquisition will catapult Reliance Brands to be a dominant player in the global toy retail industry, the company said in a statement.

In India, Reliance has the master franchise for Hamleys and presently operates 88 stores across 29 cities.

Reliance Brands President and CEO Darshan Mehta said the worldwide acquisition of the iconic Hamleys brand and business places Reliance on the front-line of global retail.

Personally, it is a dream come true, he added.

"Over the last few years, we have built a very significant and profitable business in toy retailing under the Hamleys brand in India. This 250-year-old English toy retailer pioneered the concept of experiential retailing, decades before the concept of creating unique experiences in brick and mortar retailing became the new global norm," Mehta said.

Hamleys was delisted from the London Stock Exchange (LSE) in 2003 when it was taken over by Icelandic investment firm Baugur Group for USD 68.8 million. In 2012, it was sold for USD 78.4 million to Groupe Ludendo of France.?

Hamleys opened it flagship Regent Street London store in 1881. This flagship store is set over seven floors covering 54,000 sq ft, with over 50,000 lines of toys on sale. It is considered one of London's prominent tourist attractions, receiving over 5 million visitors each year.

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

- INDUSTRY, MANUFACTURE

11.1. US disruption may have singed Indian pharma but it is emerging stronger

Livemint, 07 May 2019, R. Sree Ram

A higher market share coupled with cost-control measures should help Indian firms recoup some of the lost ground
The rise in market share coincides with the change in the competitive landscape in the US drug market

An analysis of pharmaceutical sales trends in the US by Nomura Financial Advisory and Securities (India) Pvt. Ltd shows Indian companies are gaining share in the world’s largest drug market.

The share of Indian companies in total generic prescriptions rose to 45% in the March quarter of this year, compared to 35% at the end of 2017, shows an analysis of the sales data from IQVIA by Nomura. IQVIA is an information and services provider in the healthcare sector.

The rise in market share coincides with the change in the competitive landscape in the US drug market. Consolidation of the market at the purchasers’ end and heightened competition have eroded prices. This crimped prices, impacting the earnings of the generic drugs providers. As a consequence, several market participants, including large drug makers, recalibrated the product portfolios and exited less profitable drugs.

This is yielding ground to Indian drug companies. “Over the years, Indian companies have been gaining market share in US generics. But the pace of gain has increased significantly starting early 2018 when Teva, the largest generic player, decided to exit certain non-profitable products," Nomura said in a note.

The churn is reducing pricing pressure, bringing stability to the generic drug business, added Nomura. The findings corroborate pharmaceutical firms’ commentaries that price erosion in the US generic drug market is reaching a tipping point. “The US generics scenario is slowly but surely improving as highlighted by the managements of most Indian companies in the recent conference calls," ICICI Securities Ltd said in a note last month.

But also note that much of the incremental growth in sales has come from new products for most companies. However, given recent challenges some firms have faced in the ramp-up of new products, sustainability remains a question mark. “The contribution of new launches (products launched over the past two years) to US revenue was the most for Lupin, Cadila and Cipla. However, these products’ specific opportunities may not be sustainable over the long-term, in our view," added Nomura.

Also the gains in the market share should percolate into earnings. Indian companies are gaining share in the low-price market. Besides, a rise in raw material costs and compliance costs have impacted profitability of Indian drug companies. Higher market share coupled with cost-control measures should help Indian companies recoup some of the lost ground. How well the companies deliver on this will determine earnings benefits and stock returns.

11.2. Top Indian drug makers accused of fixing prices

Livemint, 14 May 2019, Teena Thacker ( with inputs from Bloomberg )

Sun, Dr Reddy’s among firms named in antitrust suit filed by 40 US states
The lawsuit accuses 20 pharma firms of conspiring to inflate prices of more than 100 different drugs

NEW DELHI/WASHINGTON: Seven Indian drug makers, including Sun Pharmaceutical Industries Ltd and Dr Reddy’s Laboratories Ltd, and five of their executives have been named in a US lawsuit that accuses Israel’s Teva Pharmaceutical Industries Ltd of orchestrating a conspiracy to raise medicine prices.

The antitrust lawsuit was filed by 40 US states on 10 May and is based on a five-year investigation of the firms. Other Indian generic drug makers named in the lawsuit are Aurobindo Pharma Ltd, Glenmark Pharmaceuticals Ltd, Lupin Ltd, Wockhardt Ltd and Zydus Pharma.

The lawsuit accuses 20 drug makers of conspiring to inflate prices of more than 100 different drugs, significantly broadening a 2016 complaint. In addition to the states, the justice department’s antitrust division is conducting a criminal probe. The complaint is an expanded document of suit, which is still under litigation and was filed by US states in December 2016.

The states claim that the drug makers conspired with one another to fix prices and carve up markets for medicines among themselves, rather than compete on price. Executives used industry dinners, cocktail parties and golf outings to perpetuate the scheme, in addition to communicating through text messages and telephone calls, the complaint said.

Indian pharma stocks declined in Mumbai on Monday. BSE’s healthcare index fell 3.53% to 13,310.47 points. Shares of Sun Pharmaceuticals plunged 21% in intraday trading, but ended the day down 9.39% to ₹396.85 on the BSE. Dr Reddy’s fell 2.5% to ₹2,804.95.

A Sun Pharmaceutical spokesperson said, “We believe the allegations made in these lawsuits are without merit and we will continue to vigorously defend against them."

The US complaint puts Teva at the centre of the conspiracy, saying it colluded with a core group of competitors to follow each other’s price increases. During a 19-month period from 2013 to 2015, Teva significantly raised prices on about 112 generic drugs and colluded with its competitors on at least 86 medicines, the states said. While the size of the increases varied, some were more than 1,000%.

“Teva is a consistent participant in the conspiracies identified in this complaint, but the conduct is pervasive and industry-wide," according to the complaint that was filed in federal court in Connecticut. “Through its senior-most executives and account managers, Teva participated in a wide-ranging series of restraints with more than a dozen generic drug manufacturers, all of whom knowingly and willingly participated."

In a statement, Kelley Dougherty, a Teva vice-president, said, “The allegations in this new complaint and in the litigation more generally, are just that—allegations."

The US states are seeking unspecified damages and penalties from the firms. Potential fines could exceed $2 billion, given that generic drug firms were making higher profits during the time in question, said Steven Tepper, an analyst at Israel Brokerage and Investments. That strikes a blow to Teva, struggling to pay back $29 billion of debt—a sum almost twice its market value.

“We have hard evidence that shows the generic-drug industry perpetrated a multi-billion dollar fraud on the American people," Connecticut attorney general William Tong said in a statement on Friday. “We all wonder why our healthcare, and specifically the prices for generic prescription drugs, are so expensive in this country—this is a big reason why."

The firms have argued that price increases were due to factors such as industry consolidation and regulator-mandated plant closures.

12.1. Daikin India aims to be a Rs 5,000-crore firm in FY20, looks for 20 pc growth

PTI, Apr. 15, 2019

New Delhi: Air conditioner maker Daikin India is aiming to be a Rs 5,000-crore company this fiscal with around 20 per cent growth in sales, helped by rising demand of power-efficient inverter ACs and expansion of sales network, said a top company official.

The company is also expecting to have around 18 to 19 per cent market share of the residential AC market.

Besides, Daikin India, which is currently exporting to African and neighboring South Asian markets, expects volume of shipping to its overseas markets to go up, helped by expansion in its production capacity.

"We are looking at a turnover of Rs 5,000 crore in 2019-20," Daikin India Managing Director and Chief Executive Officer Kanwaljeet Jawa told PTI.

He further said, "Daikin is gearing up sell 10 lakh room AC units and we want to increase our market share to 18-19 per cent."

The company is expecting its turnover for the previous financial year concluded on March 31, 2019, to be around Rs 4,250 crore.

This season, Daikin India is expecting a growth of 18 to 20 per cent in sales, riding on the back of "power availability, increased distribution & sales-service network, tier-III and IV cities demand and brand building".

"We have been consistently growing more than the industry since 2009," Jawa added.

The Indian residential AC industry market is expected to be of around 4.5 million units with more than 20 companies competing in the space, in which Voltas and LG are the market leaders.

Jawa, also expects that sales of high tech inverter range of AC would go up in the industry, as now customers are "more conscious" and are adopting products which "bear the stamp of superior technology & power efficiency".

"As pioneers of Inverters across the globe, we are confident that the inverterisation in the Indian market will lead the way for Daikin dominance in the product category," he said

Currently, Daikin India gets around 45 to 48 per cent contribution comes from non-metro market, Jawa expects this season to remain in the same range as the non-metro trends are positive over the past few years.

"Our channel or distribution of more than 6,400 sales outlets today is powering our growth taking the Daikin products to tier-I, II, III & IV cities," he added.

Daikin, which had two manufacturing units at Neemrana, Rajasthan, and is in the process to set up a third unit in southern region expects exports from its Indian unit to go up, backed by enhancement of its production capacity.

"The exports to East Africa, Sri Lanka, Bangladesh and Nepal will further augment our business growth. And, with the third factory, we will have significant manufacturing edge and cost competitiveness in the Indian market," he said.

Daikin Air conditioning India Pvt Ltd is a 100 per cent subsidiary of Daikin Industries Japan, a global leader in the manufacturing of commercial-use and residential air conditioning systems.

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

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12.2. M&M to deploy 50 electric vehicles on Uber platform

PTI, Apr. 26, 2019

Hyderabad: Automaker Mahindra & Mahindra Ltd Thursday announced the deployment of 50 of its Electric Vehicles (EVs) to Uber, an on-demand ride-sharing company, to provide zero emission mobility here.

Earlier, Mahindra had announced its collaboration with Uber to explore the deployment of electric vehicles (EVs) on its platform in several cities across the country.

To begin with, the companies would deploy 50 Mahindra EVs in the city and scale up over a period of time, a press release said.

Mahindras electric vehicles on the Uber platform would include the e2oPlus hatchback and the eVerito sedan.

To make this model sustainable, Mahindra worked with public and private players who had initially set up over 30 common use charging points across multiple locations here, the release said.

CEO of Mahindra Electric Mahesh was quoted as saying the collaboration with Uber is aimed at accelerating the large-scale adoption of electric vehicles on shared mobility platforms, thereby driving a positive change in daily commute.

"Going forward, we plan to further deploy our vehicles across multiple cities on the Uber platform," he said in the release.

As part of this collaboration, both companies would also explore the deployment of Mahindra electric vehicles in other cities.

Through this tie-up, driver partners on the Uber app can avail themselves of a package which would include Mahindra electric vehicles, the release said.

The package would be priced competitively with attractive financing and insurance premiums as well as comprehensive maintenance packages from Mahindra and its associates, the release said.

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

13.1. The whole digital transformation opportunity is big, growing: HCL Tech CEO

Business Standard, May 10, 2019

New Delhi: Having forecast a revenue growth of 14-16 per cent in the current financial year, HCL Technologies' commentary was far more encouraging than its peers as it announced its fourth quarter and annual results for 2018-19. C Vijayakumar, president and chief executive officer, speaks to Neha Alawadhi. Edited excerpts:

What gives you the confidence to expect 14-16 per cent constant currency growth in this environment?

The whole digital transformation opportunity is very big. Look at the $6-trillion spend in information technology (IT) and services. Of this, $1.2 trillion is getting spent on digital transformation and that’s growing at 18 per cent yearly.

Some of the core capabilities we have invested in over the past three years is putting us in a very strong position to capitalise on this trajectory. We have very strong engineering capability. We have built strong capability on scale, agility, digital, user experience and design thinking. It is reflected in our 28 per cent growth, year-on-year, in our Mode-2 (digital) services. I think we’ve made all the right investments to propel growth on the services side.

The traditional services will continue to have see pressure but firms need to be investing enough to transform themselves. Apart from services, we are looking at products as a very big opportunity. We want to really double up our products business. We are doing that significantly through the inorganic route but we’re also modernising and there is good organic momentum in that area.

You are working on more products that you will take to market this year. What is the strategy there?

We are. There are a lot of products we’ve acquired and these are being launched in a managed services version. There are other areas like AI (artificial intelligence) and machine learning. And, we have the DRYIce (AI-backed automation platform) capability, which is helping us not only in services deals but we are also selling it as a standalone product.

Similarly, a number of things coming from our engineering services, around 5G (fifth-generation technology) and IoT (the Internet of Things), will also drive our products business.

You are now the country’s third largest IT services firm. What in the past year did you do to make this possible?

We remained sharply focused on pursuing large opportunities, especially integrated ones which bring together the capabilities of HCL, like products, infrastructure, applications and all of that. Our IMS (information management system) business has also grown well. The past two quarters have been stellar ones.

What about deal renewals on the infrastructure side?

That continues. There are, of course, certain dynamics of competition, and productivity and automation, but we’re doing fairly well and I remain optimistic on this business.

What is the larger strategy around Mode-2 and Mode-3 (analytics and IP-led business)?

We are already at 28 per cent and believe we will get to 35 per cent next year. I think similar growth momentum will continue if you make the right moves.

Your overall deal pipeline?

Looks good. Compared to the end of last year, we're at least 10 per cent higher. In spite of the good bookings we have, the pipeline also looks good.

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

13.2. Singapore investors bet big on India's real estate sector

Livemint, Apr. 18, 2019

New Delhi: Singapore-based investors are betting big on India’s commercial realty and other sunshine sectors, including logistics and warehousing, real estate consulting firm ANAROCK said in a report.

Top Singapore-based private equity (PE) firms such as GIC, Ascendas-Singbridge and Xander are funnelling billions of dollars into India’s realty sector, particularly in South Indian cities, according to the report.

About one-third of the total $14.01 billion PE investment in India’s realty sector between 2015 and 2018 was made by Singaporean firms, the highest among both domestic and foreign investors, according to ANAROCK’s report Private Equity in Indian Real Estate.

“With funding from banks and non-banking financial companies drying up, Indian developers are being forced to explore debt and equity funding from various PE firms. Singapore investors were on top of the list, followed by PE players from US and Canada. After establishing a strong base in China, India was their next destination of preference," said Shobhit Agarwal, managing director and chief executive officer at ANAROCK Capital.

Singapore-based investors and developers have gained a substantial foothold in India’s property market over the last four years, with their more patient and long-term outlook, he said. They pumped $1.15 billion into Indian real estate in 2015 and 2016, and nearly $3.5 billion in 2017 and 2018. In recent years, they have also started diversifying their portfolios and eyeing sunshine sectors such as logistics and warehousing. In the past four years, GIC has invested close to $2.5 billion, mainly in cities such as Mumbai, Chennai, Bangalore, Hyderabad and NCR.

For Ascendas, the preferred regions have been Hyderabad, Chennai and Mumbai Metropolitan Region.

Meanwhile, US-based investors such as Blackstone, Goldman Sachs, Hines, Warburg Pincus and Proprium Capital have invested nearly $4 billion in India in the last four years. Blackstone infused $2.9 billion in this period. PE firms from Canada, led by Brookefield and CPPIB were the third largest investors with capital infusion of close to $2.3 billion in four years.

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

14.1. How Bajaj Auto has taken on competition to buck the slowdown in two-wheeler sales

Livemint, 06 May 2019, Vatsala Kamat

Bajaj Auto’s aggressive pricing strategy in the entry-level commuter segment has kept its sales ticking
Bajaj’s success in garnering share also needs to be seen against the backdrop of intense competition in the two-wheeler market

MUMBAI: Bajaj Auto Ltd has made a heroic comeback in the domestic motorcycle market. The company has steadily increased its market share to 20% in the fourth quarter of FY19, after sliding to a low of 14% seven quarters ago. In doing so, it has given incumbents such as Hero Motocorp Ltd and Honda Motorcycle and Scooters India Pvt. Ltd a run for their money. Market share of the two companies fell by 100 basis points (bps) and 550 bps, respectively, during the period.

Bajaj Auto’s two-wheeler sales rose by 4.8% year-on-year in April. To be sure, it had grown in double digits for several months in FY2018. Sales of Hero and Honda contracted by 17% and 33%, respectively, in April, continuing the decelerating trend in sales.

What has kept Bajaj Auto ticking through such turbulent times? It seems the firm’s aggressive pricing strategy in the entry-level commuter category, which it adopted about 18-20 months back, has done the trick. It launched variants of existing products at not just affordable prices, but also with additional features that swung customers in its favour. Analysts say its share zoomed by 500 bps in this segment that now earns a fifth of its revenue.

While there is normally many a slip between the cup and the lip, it’s worth noting that the management has met its targeted 20% market share in motorcycles for FY19.

That’s not all. Analysts say Bajaj’s strategy to flood the dealer pipeline with the relatively cheaper non-ABS (anti-braking system) variants in March fuelled wholesale numbers. Note that from April, ABS variants are mandatory.

To add to this, Bajaj’s absence in the scooter segment, which analysts always took a jibe at, turned out to be a boon. For the first time in 10 years, growth rates in the scooters segment has underperformed that of motorcycles. Also, one cannot ignore the presence of a captive auto finance company in the group that gives a leg-up to Bajaj’s sales when the economy is in the grip of a liquidity crunch.

Be that as it may, there is some apprehension setting in on the street even as Bajaj’s management is confident of scaling 24% share of the motorcycle market soon. “We don’t expect Bajaj’s outperformance to continue as base effect catches up and its discounting strategy is unlikely to work in the long run," says Arya Sen, an analyst at Jefferies India Pvt. Ltd. Further, some of the entry-level variants are margin-dilutive, which could weigh on profit growth ahead.

As such, the strategy has taken the juice out of its profits. Ebitda (earnings before interest, tax, depreciation and amortization) margin is down to 16% in the December 2018 quarter from around 21% eight quarters ago. This is despite the higher-margin exports business comprising nearly half of its revenue. But note that the problem of margin erosion has trickled down to rivals such as Hero and Eicher Motors too, albeit to a lesser degree.

Bajaj’s success in garnering share also needs to be seen against the backdrop of intense competition in the two-wheeler market. A CLSA note says the measure of market concentration, Herfindahl-Hirschman Index, shows that the highest competition in the auto universe is among two-wheelers. This is despite the fact that there are more incumbents in the four-wheeler passenger vehicle segment.

Having said all this, analysts fear that rivals will do relatively better if there is a demand reversal due to a relatively low base. Against this backdrop, the Bajaj stock’s outperformance needs to be considered carefully by investors. Shares of two-wheeler firms Hero, Eicher Motors Ltd (representing Royal Enfield motorcycles) and TVS have fallen by 13-17% since January. Only Bajaj’s stock has been an outlier, rising 13% since January. If Bajaj can’t continue its upward climb in terms of market share, its shares could be on a fast downhill journey.

"Against this backdrop, the Bajaj stock’s outperformance needs to be considered carefully by investors. In spite of sales growth, margins may stay range bound, leading to slower earnings growth," says Bharat Gianani, analyst at Sharekhan

14.2. Logistics automation start-up Locus raises US$ 22 mn from Tiger, Falcon Edge

Business Standard, May 14, 2019

Bengaluru: Locus, a logistics automation start-up, has raised $22 million from Tiger Global Management and Falcon Edge Capital, the company said on Monday. The series B round also saw participation from existing investors Exfinity Venture Partners and Blume Ventures.

This is the six investment by Tiger over the past six months, after Ninjacart, Facilio, Fyle, CleverTap and Zenoti. The New York-based investor is focusing on business-to-business (B2B) and software-as-a-service (Saas) deals as it renews pace of India investments after the departure of Lee Fixel. Falcon Edge, which has close ties to Tiger, is an investor in Ola DailyHunt, Quikr, Aye Finance and National Stock Exchange, among others.

Locus offers a Saas platform to delivery and logistics services companies, automating a part of the process that earlier required manual decision making. The company’s logistics optimization solutions includes route optimization, real-time tracking of orders, and analytics, which, it claims, gets more efficient with use.

“Locus provides autonomous supply chain optimization thus minimizing the dependency on human intelligence, built by an incredible team of PhDs & Engineers. Product applications include clubbing of forward and reverse logistics in a single route plan, schedule and on-demand dispatch planning, and automatic escalation management,” Nishith Rastogi, chief executive officer at Locus said in a statement.

The company plans to use fresh capital for expansion and hiring chiefly in the North American markets, and investment in technology,

Serial entrepreneurs Nishith Rastogi and Geet Garg, who earlier started location-based chat forum PinChat and mobility service RideShare, launched Locus in 2015. Locus raised $4 million in series A funding in June last year from investors including Rocketship.vc, Recruit Strategic Partners, pi Ventures, Blume Ventures, Exfinity Venture Partners, BeeNext and growX ventures.

Among its clients today are Blue Dart, BigBasket, LensKart, UrbanLadder, Unilever and Myntra, according to its website. The company is present in US, Indonesia, Singapore, India, and Australia currently.

“We believe the trillion dollar global logistics market is ripe for disruption via technological change, particularly AI and machine learning driven solutions. We are excited to lead a Series B round in Locus, a company that deploys AI/ML/deep tech to drive route optimization outcomes in global logistics markets.. We are excited to help Locus expand its breadth and depth of product and sales reach, moving from route optimization to a full-stack SaaS offering to the enterprise around its logistics needs.” said Navroz D. Udwadia, co-founder, Falcon Edge.

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

15.1. India needs to fix weak exports as oil poses risk for trade deficit

Livemint, 17 Apr. 2019, Aparna Iyer

Exports haven't matched the growth of the Indian economy—they stood at 11% of GDP in FY19, down 5 points from 16% in FY14
India needs more competitiveness in exports and it is unlikely to be achieved by just a depreciating currency

Mumbai: The hallmark of the past four years for the Indian economy was the drop in global crude oil prices that made it easy to manage not just inflation but also the current account deficit. With crude oil showing signs of climbing back, the focus on boosting exports is back on the table.

The good news is that exports showed a healthy growth of 11% in March, which took the growth for the full year to 9%. Exporting farm products was easier, though Indian manufacturers had a tough time selling their finished wares. For them, the situation could get worse before it gets better.

The slowdown in global economic growth is not helping in terms of demand as leading advanced economies are grappling with their own growth issues.

The odds are stacked against exports growth in the coming months, as projections of global economic growth has been cut by multilateral agencies such as the International Monetary Fund (IMF). Indian companies would find it difficult to sell if buyers are not interested because of the size of their own purses is shrinking.

However, what should worry Indian policymakers more is the consistent fall in exports as percentage of GDP over the last five years.

As the chart above shows, exports haven’t matched the growth of the economy. Exports would be 11% of GDP in fiscal year 2019 (FY19), going by the Central Statistics Office’s GDP growth projection.

This is far lower than the peak of 16% achieved in FY14.

India needs more competitiveness in exports and it is unlikely to be achieved by just a depreciating currency. The story has been to gain competitiveness to increase market share so far.

In the wake of a slowing global economy, the narrative is now to protect market share. Gaining competitiveness becomes that much more critical.

As exports get fixed, the benefit from lower crude oil prices could end soon for the current account balance.

The country’s import bill shrank mainly because of the fall in crude oil prices in FY19. However, crude oil has gained 32% since January this year.

As analysts at Nomura Securities Co. Ltd note, crude oil is a key risk for the country’s balance of payments. “Higher oil prices are an upside risk. We estimate that every $10 per barrel rise expands CAD (current account deficit) by 0.4% of GDP," the brokerage firm said in its note.

15.2. Motorola eyes India as export hub on escalating US-China trade war

Livemint, May 14, 2019

Mumbai: Mobile handset maker Motorola Mobility LLC aims to make India its export hub for Latin America and Asia Pacific markets, a top company official told Mint.

“We have invested in our systems to become export ready. From India, we can export to the rest of the world," Prashanth Mani, Managing Director Motorola Mobility India, told Mint in an interview. “This is being done to bring supply chain and cost efficiencies, which would drive our profits. India will act as an alternate base of production for smartphones as it has cost structures similar to China."

The company has a manufacturing plant in Sriperumbudur in Tamil Nadu that was set up about three years ago and currently manufactures phones for the Indian market.

Once a popular player in the affordable and mid-price segment in the country, Motorola’s market share in India has steadily declined due to stiff competition from Chinese smartphone makers. In 2018 Motorola’s India's smartphone shipments declined 70% year-on-year (YoY) basis. Motorola's market share dropped from 6th spot in 2017 to 12th in the domestic market in 2018 according to Counterpoint research a global industry analysis firm headquartered in Hong Kong.

The shift in production base by Motorola Mobility, owned by China’s Lenovo group, assumes significance in the backdrop of the White House raising tariffs on more goods imported from China, which is expected to make Chinese goods more expensive for US consumers, hitting their competitive edge.

On Friday, US President Donald Trump hiked import tariffs on $200 billion worth of goods imported from China to 25% from 10%. The move came after talks between Robert Lighthizer, US trade representative, and Liu He, Chinese vice premier, failed to come through on Thursday. On Monday, China vowed to retaliate by raising its own tariffs, escalating the trade war.

“Presently most of the exports to the US market go from plants in China, while some of Latin American countries, including Brazil, have their own manufacturing units, similar to India. But many countries still import from China," Mani said.

The prolonged trade conflict between Washington and Beijing has hit several smartphone manufacturers, including Apple, the world’s third largest smartphone maker, which saw its shares fall nearly 6% on Monday following reports of renewed escalation in the US-China trade war.

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. Wireless broadband subscriber base touches 532 mn in Feb: ICRA

PTI, Apr. 25, 2019

New Delhi: Wireless broadband subscriber base surged to 532 million in February 2019, onboarding 10.2 million users during the month, with Reliance Jio cornering nearly 56 per cent of the overall wireless broadband market, ICRA said.

"The wireless broadband subscriber base continues to maintain its strong growth trajectory, increasing to 532 million in February 2019, or 45 per cent of the total subscriber base, witnessing addition of 10.2 million during the month. R Jio leads the wireless broadband market, with market share of 56 per cent, followed by Bharti and Vodafone-Idea at 21 per cent each," ICRA said in its latest report.

ICRA noted that 100 per cent of Reliance Jio's subscribers are broadband subscribers, while the same ratio for Vodafone-Idea stood at 27 per cent and for Bharti at 32 per cent.

The wireless subscriber base in India increased to 1,183.7 million in February 2019, adding 1.7 million subscribers over the previous month, the report said.

The active wireless subscriber base remained steady at 1,023 million. It added to the wireless broadband subscriber base maintained strong momentum, demonstrating a growth of two per cent during the month of February.

"The growth in subscriber base in February was primarily driven by RJio, which added 7.8 million subscribers. State-owned BSNL or MTNL (Bharat Sanchar Nigam Ltd/Mahanagar Telephone nigam Ltd) was the only other telco gaining subscribers in the month, adding 0.9 million users," Harsh Jagnani, sector head and vice president - Corporate Ratings, ICRA said.

"The overall active subscriber base remained at 1,023 million in February, as increase in RJio's and BSNL or MTNL's active subscriber base has been at the expense of other industry participants, who lost 10.4 million active subscribers on a combined basis," he added.

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

16.2. Jio sets new 4G availability record in India

IBEF, Apr. 18, 2019

New Delhi: Reliance jio has scored better than all the operators in the world in terms of availability of fourth generation (4G) technology, according to Mobile Network Experience report from London-based analytics company Opensignal. Jio’s score has reached 97.5 per cent. The report adds that achievement of Jio in 4G availability in such a short time is astonishing. Two operator from the US and four operators from Taiwan have reached above the score of 90 per cent but none of them have scored above 95 per cent. Only one operator from Europe’s most advanced market, Netherlands, has the benchmark score of 95 per cent.

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

17.1. Opinion | A blueprint for the university campus of tomorrow

Livemint, 09 May 2019, Kapil Vishwanathan, Lee Polisano

The campus we build today must stay relevant and effective for at least the next 100 years

University campuses are built to last. The Saxon Tower at Oxford University was built in the decades preceding the Norman conquest of England, over 1,000 years ago. The 300-year old Massachusetts Hall, the oldest surviving building at Harvard University, was built before George Washington was born. Closer home, the 150-year old Senate House at Madras University was built around the time Sardar Vallabhbhai Patel was born. The Tsinghua Garden in Beijing’s Tsinghua University is over 100 years old. University campuses have evolved and expanded over time, and have often undergone additions, renovations and rebuilds to keep up with the times.

At a point in time now, when universities are being re-imagined, technology offers limitless access to different types of learning, challenging traditional methods and impacting the physical configuration of university campuses. The flexible campus of tomorrow will need to look nothing like the class-room centric campuses of today.

What if we had the opportunity to create, from the ground up and in one fell swoop, the university campus of the future? How would we provide an environment that embraces interwoven learning, and prepares new generations for the challenges of tomorrow? This requires a new type of university campus—one that puts the student at the heart of the experience and breaks down all the barriers and silos that are so much a part of traditional universities. We must conceive the whole campus as a laboratory, a library, an art gallery and, more generally, a place for learning.

The campus we architect today must stay relevant and effective for at least the next 100 years, which promises to be a period of change and complexity, orders of magnitude higher than the past 100 years. This is very much the challenge before us as we begin to design Krea University’s forthcoming 200-acre campus.

To begin with, we must envision a space model that creates shared learning clusters, interdisciplinary academic pavilions, a library that embraces technology and digital scholarship, and a distributed student centre that will create active student spaces throughout the campus—an academic high street.

We envisage a complete shift away from traditional classrooms to a range of active learning studios that support group working, and a wide range of learning and teaching approaches, with flexible furniture and technology in every studio. Blended learning will also be a key element in the student experience.

Technology must be at the heart of the campus of the future. Rather than traditional campuses, where buildings are often stand-alone entities, all buildings must be part of a connected smart campus system, with an integrated campus management system and real time management of building performance. A comprehensive and dynamic virtual learning environment could enhance student experience and support the development of learning communities. Agile timetabling will be linked to real-time analysis of space use across campus.

Libraries are a central theme in the evolution of universities. Academic libraries typically act as a repository for the university’s book and journal collection. Study spaces in libraries are generally designed to support individual study, and technology use is often restricted to open access computers for student use. On the contrary, the library of the future needs to be radically re-imagined—combining the library with a technology centre to facilitate information management, data visualization and digital scholarship. The library would contain a rich landscape of individual and group technology-enabled study settings, including a shared technology hub with augmented reality studios, simulation spaces and digital maker spaces.

The campus of the future will have no traditional academic faculty or departmental buildings. Faculty will be accommodated in a series of academic pavilions designed to support interdisciplinary research and learning, working with interdisciplinary staff grouped in research centres or teams. These work hubs will be designed to support collaboration as well as traditional individual scholarship. They will integrate faculty and graduate students and include learning commons as a place for students and faculty to interact, collaborate on projects and inspire each other.

From a design standpoint, the architectural master plan must conceptualize a built environment that is practical and responsible within its context. The campus must facilitate coherent relationships between landscape, academic and residential life and new advances in technology. It must seek a greater interaction between academic and residential functions, articulated through the outdoor space that offers opportunities for experimental learning; the campus becomes the classroom. This holistic approach to the campus will offer not only the high standards required of faculty buildings and housing, but also a repertoire of formal and informal spaces for learning and interaction. This would create a sustainable, useful and beautiful place of learning teaching and living.

This new approach to a university campus will support the evolution of needs by providing a flexible and adaptable environment capable of accommodating future priorities. Ultimately, the campus must congregate a community with the vision, culture and values to have a catalytic impact on society and its progress.

Kapil Vishwanathan and Lee Polisano are, respectively, vice-chairman of Krea University and president of PLP Architecture

17.2. Tata Motors ties with Nirma University for B.Tech degree to Sanand plant employees

PTI, Apr. 30, 2019

New Delhi: Tata Motors Monday said it has tied up with Nirma University to provide B.Tech degree to its employees working at the Sanand Plant in Gujarat.

Aligned with the company's strategic objective, the programme aims at enhancing employees' technical skill at multiple levels in the organisation, thus bridging skill gaps that prevail in the automotive industry.

"At Tata Motors we believe by enabling our employees to achieve their full potential in their functional areas, we will be able to build an engaged and competent employee base which is key to our continued success," Tata Motors CHRO Ravindra Kumar GP said in a statement.

The company's partnership with Nirma University is another step in this direction and will enable employees at the Sanand plant to push the boundaries of their technical capabilities and emerge as future-ready and world-class technical talent, he added.

Nirma University is a private university established in the year 2003 as a statutory university under a special act passed by the Gujarat State Legislative Assembly.

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

18.1. GoAir to expand network with 28 new flights from Apr 26

PTI, Apr. 25, 2019

Mumbai: Budget carrier GoAir Wednesday said it will launch 28 additional flights, including eight services from its hub in Mumbai and seven from New Delhi, starting April 26.

Its bigger rivals, IndiGo and SpiceJet, have already announced the roll out of additional flights from the city following the temporary grounding of Jet Airways and subsequently steep reduction in capacity, mainly in the domestic market amid peak demand season.

GoAir announced 28 flight options this summer in addition to our existing flights. There are two sectors that GoAir is launching for the first time, namely, Delhi-Nagpur-Delhi and Delhi-Kochi-Delhi," GoAir managing director Jeh Wadia said in a release.

The airline also announced fare as low as Rs 1,368 on select routes, he added.

As per the company, the roll out of 28 additional flights covering across airports will alleviate the shortage of flights and inconvenience caused to passengers due to the Jet Airways flight cancellations, the release said.

Ahmedabad, Goa, Chandigarh, Ranchi, Jaipur, Lucknow, Patna, Pune and Kochi are the other airports from where new flights are being added, it said.

GoAir also said that all services with flight numbers starting from G82000 to G82999 will depart and arrive at Terminal 2 of the Mumbai airport, effective April 26.

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

18.2. Intel banks on data, gaming, artificial intelligence for growth in India

Business Standard, Apr. 29, 2019

New Delhi: Chipmaker Intel is looking beyond its processors and chips business, and is banking on areas like gaming, data centres and artificial intelligence to drive growth, as well as cloud capabilities.

“We started as a personal computer (PC) company. Now, 50 per cent or so of our portfolio is data centric and that includes data centre, storage, Internet of Things. Drones and many other new technologies are also part of our focus areas,” said Prakash Mallya, vice-president and managing director, sales and marketing group, Intel India.

He said now the customers were looking for ways to manage their data well, which includes all the data they already have.

Intel completed 20 years in India in 2018 and has invested over Rs 30,000 crore in the country to date.

Another focus area for the firm in India is the rising demand for gamers and gaming.

With a growing smartphone user base in the country, the demand for gaming has risen. According to research firm IDC, though the demand for personal computers fell 2.8 per cent annually in 2018, gaming notebooks saw higher demand, a category for which Intel supplies processors.

Traction towards exciting new categories such as branded gaming notebooks continued in the calendar year 2018, clocking growth of 123 per cent year-on-year. IDC in its February report said gaming had been driving the growth of the premium market segment in calendar year 2018.

“When you look at India, the affluence of the consumer is increasing, (so) you have to bet on tad affluence converting into people demanding better experience. So, I do see a lot more gamers in India progressing towards bigger screen consumption whether its desktop or notebook. We’ll see more of these,” said Mallya.

Intel has also built technology around the cloud and data centre to make online gaming go faster. “When you see the gaming ecosystem and the demand evolving in this country, we have seen huge volume increase on the gaming side over the past 12-18 months,” he added.

According to a recent report by the Confederation of Indian Industry (CII) and TechSci Research, the growth in Indian gaming industry is set to reach over $800 million by 2022. Given the quality of game play, affordability, availability of top-end hardware and software and improved internet bandwidth in India, the PC has become the favoured platform among gaming enthusiasts in India.

The focus on gaming has paid off in its global performance too. In its recently announced results for the March quarter, Intel said its data-centric revenue declined 5 per cent while PC-centric revenue grew 4 per cent.

The growth in the PC-centric business was attributed to “strong mix of Intel’s higher performance products and strength in gaming, large commercial and modem,” Reuters reported.

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

19.1. Nasscom, GE Healthcare partner to bring digital healthcare solutions to the market

PTI, May 01, 2019

New Delhi: IT industry body Nasscom Tuesday said it has partnered with GE Healthcare to bring bring digital healthcare solutions to the market.

"The National Association of Software and Services Companies (NASSCOM) through its Center of Excellence-Internet of Things (CoE-IoT) announced a strategic partnership with GE Healthcare.

"The partnership is intended to flourish the start-up ecosystem in the country and work with them to bring digital healthcare solutions to the market," Nasscom said in a statement.

Nasscom CoE-IoT is an innovation hub for start-ups that provides a platform for collaborative innovation.

"We are committed to drive digital adoption in India but we know that we can't do it alone. We need an ecosystem of partners with whom we can work to supplement the work already underway at our research centers. This partnership with NASSCOM CoE-IoT will help us bring to market solutions that improve people's lives," Dileep Mangsuli, chief technology officer, GE Healthcare South Asia said.

The partnership will help GE Healthcare tap the healthtech start-up ecosystem in the country to co-create solutions for real-world healthcare challenges in the areas of digital applications for early detection, productivity solutions, and remote and connected care among others, Nasscom said.

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

19.2. IOC's R&D centre patent filing crosses 1,000-mark

PTI, May 01, 2019

New Delhi: State-owned Indian Oil Corp (IOC) Tuesday said its research and development centre at Faridabad has become the first public sector oil and gas company to cross the milestone of filing 1,000 patents.

The Centre filed the 1,001st patent this week, the company said in a statement here.

"The R&D Centre's IP (Intellectual Property) portfolio comprises 794 active patents, of which 542 patents were granted abroad and 252 in India. The centre has also registered a healthy commercialisation rate for its patents, higher than the global average," it said.

Complimenting the R&D team for lending a competitive edge to IOC's business through innovative products, processes and technologies, company chairman Sanjiv Singh said several quality upgradation projects implemented at its refineries for production of ultra-clean BS-VI grde fuels are based on deep desulphurisation, isomerisation and dimerisation technology patents developed in-house.

IOC's internationally-awarded INDMAX technology patent, successfully commercialised at Paradip Refinery, improves LPG yields by 40 per cent besides ensuring the highest propylene yields in its class, the statement said adding the centre's bio-methanation technology is best-in-class in methane yields and is being implemented at the Namakkal (Tamil Nadu) plant for production of compressed bio-gas (CBG).

Established in 1972, the centre is a pioneer in downstream petroleum sector R&D and has received wide acclaim for indigenising lubricants technology by launching the SERVO brand. With over 5,000 formulations and over 800 active grades covering all conceivable applications, including rail-road and marine oils, SERVO has grown to be the largest selling lubricant brand in India.

From being the birth place of the highly successful, fuel-efficient 'Nutan' kerosene wick-stove in the late 70s, the R&D centre has come a long way in the past four decades.

According to SSV Ramakumar, Director (R&D), IOC, the centre has been focussing on developing high-quality, environment-friendly products and innovative refinery processes that boost resource efficiency, enhance refinery-petrochemicals integration, and offer flexibility in product pattern and yields in line with market demand.

With 50 per cent of its active patents in the refining category, followed by 16 per cent in bio-technology, the R&D team has made considerable progress even in the highly IP-crowded field of Ziegler-Natta catalysts, used in production of polymers (plastics). "We have not only created white space here but succeeded in earning a rich haul of patent grants that are well recognised by global majors," he said.

In line with IOC's business objectives, the R&D centre has expanded its research domain to cover petrochemicals, nano-technology, alternative fuels, energy storage solutions and Hydrogen-based fuel cell research, among others, the statement added.

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

20.1. Aster DM Healthcare to invest Rs 750 cr to add 1,500 beds by Mar 2022

PTI, May 06, 2019

New Delhi: Healthcare services provider Aster DM Healthcare will invest around Rs 750 crore to add 1,500 beds in four new hospitals that it plans to open by the end of March 2022, a top company official said.

The company currently has around 4,400 beds across 12 hospitals in India.

"We will be investing around Rs 750 crore to add 1,500 beds in the four hospitals we will be opening in India by the end of March, 2022," Aster DM Healthcare founder Chairman and MD Azad Moopen told PTI.

The new multi-speciality hospitals will come up at Bengaluru, Chennai, Kannur and Thiruvananthapuram, he added.

"We will also be investing Rs 250 crore for the expansion of our existing facilities and for purchase of equipment," Moopen said.

When asked how the company plans to fund the expansion, he said: "It will be through a mix of internal accruals and debt".

The company which has a strong presence in Gulf Cooperation Council (GCC) countries across hospitals, clinics and pharmacy verticals also plans to open pathology labs and pharmacies in India.

Highlighting the company's roadmap for future growth, Moopen said: "It will be mainly through an asset light model. We will also be opening pathology labs and pharmacies going forward."

Regarding hospitals, the company will continue to focus on opening fairly large multi-speciality hospitals with over 300 beds in metros and large cities, he added.

Aster DM Healthcare currently has 22 hospitals, 113 clinics and 220 pharmacies in nine countries.

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

20.2. InterGlobe Hotels plans Rs 700 cr investment to add 6 hotels in India by 2022

PTI, Apr. 29, 2019

New Delhi: InterGlobe Hotels, a joint venture between InterGlobe Enterprises and global hospitality major Accor Hotels, plans to invest around Rs 700 crore to add six hotels in India by 2022, a top company official said.

The company currently has 19 hotels across the country under 'ibis' brand with 3,559 rooms.

"By 2022 we will have up to 25 hotels in India. We will be adding 6 more hotels in the country. We will be investing around Rs 700 crore for this expansion," InterGlobe Hotels President and CEO J B Singh told PTI.

The new hotels will come up at Bengaluru, Mumbai, Thane and Goa. With the addition of these six hotels, we will be adding around 980 roooms, he added.

InterGlobe Hotels has already invested around Rs 2,000 crore in the portfolio of 'ibis' hotels so far, Singh said.

When asked about the strategy the company follows for expansion, he said; "In our system of development, we look at almost 200 opportunities in a year where we can invest, but we have our own criteria for investment. We focus on the cities and locations where we want to be present".

Secondly, the company also follows the strategy of densifying presence in the cities where we are already present, he added.

On being asked how the InterGlobe Hotels will fund the expansion, Singh said: "It will be through a mix of debt and equity. Around 50 per cent will be equity and 50 per cent will be debt".

Highlighting the need for more hotel rooms in the country, Singh said, "There is a huge need for more hotel rooms at the rate the economy is growing. There is vacuum in the mid-market segment. Opportunity here is enormous".

InterGlobe Hotels was established in 2004 for development of the 'ibis' network of hotels in India, Nepal, Sri Lanka and Bangladesh.

While Accor owns 40 per cent stake in the JV, InterGlobe Enterprises has a 60 per cent stake, Singh said.

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

INDIA AND THE WORLD

21.1. Opinion | Let’s get back to being globally competitive

Livemint, 16 Apr 2019

India’s new export peak does little to make up for our poor performance over a seven-year stretch. ‘Slowbalization’ or not, the Indian economy needs to shape up in order to ship goods out

India’s latest merchandise export figures are out. On the face of it, the numbers look upbeat, with shipments hitting a new peak of $331 billion in 2018-19. However, this does not mean everything is hunky dory.

A review of a longer period shows that exports have been stagnant or in decline over an extended period. The figure was $306 billion in 2011-12, not far below what was recorded last fiscal year. The number was $303.5 billion in 2017-18.

The economy has been growing, so, as a proportion of gross domestic product (GDP), exports have a long way to go before a recovery can be proclaimed on this front. Sure, world trade overall has been hit hard in recent years by anti-globalization forces, but India still needs to up its game. Every major story of economic emergence so far has been underpinned by rising global competitiveness. For this, an ability to make high-quality goods at low cost is just as important as an edge in, say, IT services.

The country had prepared a strategy paper in 2013-14 to drive merchandise exports to $500 billion in three years. Instead of outward shipments, imports reached that number last year, clocking in at $507.4 billion, which has resulted in a record trade deficit of $176.4 billion. The government’s target for goods and services exports, set in 2015, was to double that year’s figure to $900 billion by 2020. Again, this goal is likely to prove elusive.

Unless trends shift, the sobering truth is that India’s share of global exports will not go beyond 2% (it is less than that at present). In comparison, China already accounts for nearly 13% of the world pie, which gives Beijing a significant voice in all trade matters.

Internally, to some extent, India’s approach to trade remains a leftover of the pre-liberalization worldview, by which a jumble of specific incentives and policy measures for various sectors were expected to earn the foreign exchange needed to pay our foreign bills. An excessive focus on domestic demand and must-haves for imports had reduced the flexibility of our responses to world markets, the effects of which have proven too heavy to shake off. Even now, a credit subvention tweak here or an export prop there passes for policy action, even as exporters have found their working capital squeezed by tax-refund delays ever since the goods and services tax came into force.

Trade barriers erected by other countries are a dampener, but raising our own tariffs is not the best response. Global market exposure, after all, pushes local producers to get in shape. Nor should an adverse global scenario serve as an excuse to throw up our hands over India’s dismal export performance.

So long as trade remains a win-win activity, it represents an opportunity. Vietnam and Bangladesh, for instance, have made the most of a chance to fill in spaces vacated by countries such as China in sectors like textile and garments. Also, there is no saying when the myopia of trade wars ends and economic sense returns, in which case India must not miss the boat.

We need a broad plan to address all underlying factors that keep Indian products from being world-beaters. A stable economy would help keep the rupee at an apt level, but the basic emphasis would have to be on setting our output apart, be it in terms of cost, quality or special appeal. Until reforms make that happen, we might as well forget about our lofty targets.

21.2. OYO to buy Amsterdam-based vacation rental company @Leisure for Rs 2,880 cr

Business Standard, May 02, 2019

Bengaluru: OYO is set to acquire Amsterdam-based vacation rental company @Leisure Group from Axel Springer for about 370 million euros, or Rs 2,885 crore, in one of the biggest acquisitions of a foreign firm by an Indian unicorn. The transaction is expected to close by next month.

SoftBank-backed OYO, which is trying to establish bases in Europe, the UK and the US, has been in talks with @Leisure over the past six months. This acquisition would help OYO move a step closer to realising its vision of becoming a global real estate brand while maintaining leadership in the hospitality industry, the company said in a statement.

@Leisure, through its Belvilla, DanCenter, and Danland brands, offers more than 30,000 fully managed holiday homes across 13 countries in Europe. Its Traum-Ferienwohnungen brand offers a subscription-based home management service with over 85,000 homes across 50 countries. This represents a total inventory of 300,000 rooms. Europe will be OYO’s largest market, accounting for up to 40 per cent of supply.

Ritesh Agarwal, who founded OYO as a 19-year-old in 2013, said: “We see vacation homes as a unique opportunity with 115,000 units of homes now getting added to our already growing count of beautiful homes,”

“We are excited to continue maintaining our global industry leadership. @Leisure has proven capabilities in helping develop Europe into a vacation rentals hotspot. It is a business decision closely aligned with our overall mission that has incredible potential,” he said.

In March, diversifying from the hotel and long-term lodging business to co-working spaces, OYO acquired Innov8. Sources said OYO spent between Rs 150 crore and Rs 200 crore for the acquisition.

OYO aims to open more than 35 new co-working spaces in major metropolitans over the next one year. It has also started two new co-working brands — PowerStation and WorkFlo — that will cater to a variety of start-ups and companies. OYO also has plans to provide affordable office and workstation spaces to companies. The company has already made an expansion plan for the whole year.

Globally, OYO is present in over 500 cities across 10 countries and hosts millions of guests in over 18,000 hotels and homes in 515,000 rooms. The company’s sales in December stood at $1.8 billion, growing roughly at 4.3x year-on-year.

The company claims to be the world’s sixth-biggest hotel brand by room numbers.

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

22.1. Indo-US trade could rise to USD 500 billion by 2023-24: IACC

PTI, May 13, 2019

Kolkata: Trade between India and the US could jump to USD 500 billion by 2023-24 from about USD 142 billion at present, the Indo-American Chamber of Commerce (IACC) said on Friday.

Issues relating to e-commerce and high tariffs, however, could slow down trade between the two countries, and need to be resolved, a US government official said.

"Current Indo-US bilateral trade is at USD 142.1 billion and we hope this can jump to USD 500 billion (by 2023-24). There are short-term issues concerning e-commerce, Generalised System of Preferences (GSP) and medical equipment," IACC president S K Sarkar said.

Sarkar was speaking at an event to highlight the 'Select USA Investment Summit' here in presence of the Director General of US and Foreign Commercial Service, Department of Commerce, Ian Steff.

"Whether it is e-commerce issues or high tariffs, these are issues that threaten to slow down the trade relationship that we intend to build. This is something that we need to take care of. I think, we can do so together," Steff said.

India is facing a threat of withdrawal of the GSP scheme, which offers duty-free access to over 3,000 products in the US, valued at around USD 5.6 billion.

Asked whether trade issues with the US and China could rebalance commerce in favour of India, Sarkar said, "India is not in a position to replace China, both in terms of quality and capacity. But it is a good signal... as we hear 200 companies will come out of China and invest in India."

Sarkar also expects medical equipment imports to India to become cheaper by the end of this month.

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

22.2. India's development grants more than double in 5 years

Livemint, Apr. 29, 2019

India’s development partnership assistance, extended to countries through concessional loans, has more than doubled in the past five years as the world’s fastest-growing major economy attempts to sustain its influence in Asia, Africa and Latin America amid growing Chinese presence in these regions.

India extended 278 lines of credit totalling about $28 billion to 63 countries—most of them in Africa and Asia during 2018-19, according to data from the foreign ministry. This is a sharp increase from 195 lines of credit worth $11 billion in 2013-14. Lines of credit are loans extended to foreign governments at concessional rates from money borrowed at market rates by India’s EXIM Bank from the international market. Analysts said the lines of credit—one of the major components of India’s development partnership that includes grant assistance as well as scholarships—helps the country bolster its image as a credible development partner besides aiding the creation of political influence and constituencies. It also helps India shed the tag of being an aid recipient—something common in the 1950s and 1960s.

A key reason for the rise in India’s lines of credit is greater availability of resources at its disposal. The size of India’s economy is estimated at $2.69 trillion in 2019 (taking the rupee/dollar exchange rate as 70) with its GDP clocking more than 7% growth per annum.

“I would say that there is a conscious effort by India to increase its lines of credit portfolio in recent years because of the increased penetration of China in areas and regions seen as India’s traditional strongholds," said former foreign secretary Kanwal Sibal.

Added to this is the stated intention of the government to position India as a “leading power" and this requires such a “footprint," he said.

Some of the big-ticket projects completed by India in the past few years include the presidential office in Ghana, the National Assembly building in Gambia, a cricket stadium in Guyana and the Kosti Power plant in Sudan. India has also helped refurbish a steel plant in Hama in war-torn Syria, scaling up its annual capacity from 70,000 million tonnes to 300,000 million tonnes.

Officials acknowledge that the current projects may not propel India into the league of China—known for its signature infrastructure projects such as ports, roads, airports and bridges across Africa and other parts of the world. But the potential of Indian companies to execute such projects and deliver according to agreed timelines and internationally accepted quality standards is being recognized, one of the officials cited above said.

India scaling up its lines of credit comes as China embarks on its ambitious Belt and Road Initiative (BRI) —that involves building ports, airports, roads and railways across Asia, Africa and Europe. There have been warnings from countries such as the US in recent years that signing up for BRI may mean countries falling into a “debt trap" as the terms favour Chinese companies and inability of recipient nations to repay Chinese loans on time would undermine their sovereignty.

In contrast, “India’s lines of credit and other forms of development partnership are projected as unique. They are demand-driven; they respond to felt needs of people; and they do not impose unacceptable burdens such as debt traps or long-term dependency," said Rajeev Bhatia, a senior analyst at Mumbai-based Gateway House think tank.

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

23.1. Initiatives by Commerce Ministry to Boost Trade with African Countries

Press Information Bureau, May 08, 2019

New Delhi: The Commerce Ministry and Indian High Commissions and Embassies of eleven African countries arranged an interaction over Digital Video Conference (DVC) over two days, on 3rd and 6th May 2019, with the Indian business community in Africa. The interactions with Indian Diaspora were held in Tanzania, Uganda, Kenya, Zambia, and Mauritius, Nigeria, Mozambique, Ghana, South Africa, Botswana, and Madagascar. This initiative was held in order to build an effective engagement withthe Indian Diaspora in Africain order to further deepen and strengthen India-Africa trade ties.

The DVC was attended by over 400 members of Indian business community in 11 African countries.

India’s total trade with the African region during 2017-18 was USD 62.69 billion (8.15% of India’s total trade with the World). India’s share of exports to African countries as a percentage of India’s total exports to the world was of the order of 8.21% in 2017-18. Africa region’s share in India’s total imports from the World accounted for 8.12% in 2017-18.

Today, African countries present immense opportunities for India with the world’s largest land mass, 54 countries, a population growing to be almost equivalent to that of India, huge mineral resources, oil wealth, a youthful population, falling poverty levels and increasing consumption patterns.

Thus, Africa has a huge demand for new business models for market entry, stable market access, entrepreneurship and investments in transport, telecom, tourism, financial services, real estate and construction.

This initiative of the Commerce Ministry emphasizes the need for a multipronged strategy for further enhancing trade and investment ties between the two regions. Commerce Ministry recognizes that for formulating an effective export strategy it is imperative to engage the Indian business community in Africa for mutual gain for both sides as trade relations between the people of same origin instill greater confidence amongst trade partners.

The Indian community in Africa is playing a vital role in all fields like politics, business and education.As per the latest available estimatesthe current strength of the Indian Diaspora in the African countries is 2.8 million out of those 2.5 million are PIOs and rest 220967 are NRIs.Total overseas Indians are 30.83 million of which 17.83 million are PIOs and 13 million are NRIs. (Ministry of Overseas Indian Affairs, 2016). Indian Diaspora in Africa constitutes 9.11% of the total Diaspora of India.

The inherent strength of India in Africa is its rich and vast Diaspora which has established strong links with the political, economic and social fabric of the African continent. In order to formulate astrategy to boost India-Africa Trade & Investment, the Indian Diaspora in Africa has to be leveraged furtherin order to ensure that the strategy is effective. Suggestionswere sought from the India business community.

The major issues highlighted by the Indian Business Community in these 11 countries are:

Improving the Line of Credit system and developing a facility for an affordable and competitive funding.

Setting up of Indian Banks/financial institutions in Africa

Enhanced Buyers’ Credit facility for promotion of trade between the two regions

Reviewing and liberalizing visa policies from both sides

Need for direct flights between the India and African countries

Exploring the possibility of rupee trade to address the issue of shortage of dollars in region.

Creation of common database of buyer-suppliers in the two regions for facilitating matchmaking for enhancement of bilateral trade.

Development of a robust trade dispute settlement mechanism

More frequent and structured country/sector specific trade exhibitions in Africa

Establishment of country chapters of FICCI or CII in Africa

Frequent visits of policy makers, chamber of commerce and investors for familiarization with local business and investment regime for informed decisions

Department of Commerce welcomed the suggestions of the Indian business community and assured them that these suggestions will be shared with relevant stakeholders /Departments in order to incorporate the suggestions in the India-Africa strategy for trade promotion.

Senior officers from Department of Commerce and Ministry of External Affairs were present during the interactions.

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

23.2. New UK-India tech hub in London to nurture tech start-ups

PTI, Apr. 30, 2019

London: A new UK-India tech hub was inaugurated in London on Monday to promote cross-border technology transfer in early stage businesses between the two countries.

The hub, described as a first-of-its-kind collaboration between a venture capital (VC) fund and a business district, has been set up by UK-based VC fund Pontaq at the new Royal Albert Dock business district in East London.

It aims at promoting bilateral investments in the field of financial technology (fintech), artificial intelligence (AI), blockchain and smart cities.

"Brexit or no Brexit, Indian tech companies will always choose the UK as one of the locations of choice," said Dr Mohan Kaul, chairman of Pontaq.

"Both India and the UK are among the top five in the world when it comes to tech start-ups and with this new hub, we feel Indian companies can find a lot of traction and space to go global," he said.

Pontaq, launched as a VC fund focussed on the India-UK corridor last year, has nine companies as part of its portfolio and expects around 40 others to join the ranks over the next three years.

The tech hub, which will serve as Pontaq's UK headquarters, will give its portfolio of companies access to funding as well as office space and mentoring.

The hub is located at the Royal Albert Dock business district, being set up as part of a 1.7 billion pounds investment plan and phase-wise development in east London.

The hub was inaugurated by UK investment minister Graham Stuart, who hailed London as the world's "leading financial centre with best-in-class regulation and world-class professional services," and Indian high commissioner to the UK Ruchi Ghanashyam, who reiterated that Brexit would not dampen the spirit of Indian investments into the UK.

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

24.1. Amazon India expects e-commerce exports to reach US$ 5 billion by 2023

Business Standard, May 01, 2019

Bengaluru: Bullish on growth of its ‘Global Selling’ programme, Amazon India has said it expects e-commerce exports to reach $5 billion by 2023. Amazon rarely gives out any sales projections. However, Amit Agarwal, senior vice-president and country head of Amazon India, said a 56 per cent rise in the number of Indian merchants selling abroad and a billion dollars in e-commerce exports in four years have given the company confidence to come out with this projection.

Launched with just a few hundred sellers in May 2015, it now has more than 50,000 Indian exporters in the programme, selling over 140 million products across the globe.

“The programme has scaled up extensively since then and has reached a cumulative $1 billion in export sales from India. Over the next five years, ‘India to Global’ has the potential to become huge and Amazon is confident that the Global Selling event will hit the $5-billion mark by 2023, fueling growth of millions of Indian manufacturers, exporters and small enterprises,” Agarwal said.

Amazon on Tuesday released the second edition of its annual Export Digest, revealing growth of 56 per cent in the number of global sellers from India in 2018. Amazon’s international marketplaces also saw a rise of 55 per cent in the selection of Indian products offered globally.

The company said it was working extensively with the government on the initiative and planned to increase the number of sellers exporting going forward. According to Amazon, the company has been working with the government on ease of doing global business. “Earlier, one had to file 14 forms but now it has gone down to three. There used to be a limit on how much value one can ship through courier. It has been increased from Rs 25,000 to Rs 5 lakh. The subsidy earlier used to be 2 per cent. Now, it is 4 per cent. Post offices are also accepting more international exports. There used to be many complexities. We have removed it,” Gopal Pillai, vice-president, seller services of Amazon India, said.

Being part of the global selling programme helps sellers take part in various sale events across the world, including Prime Day, Black Friday and Cyber Monday.

Amazon’s global teams also help sellers understand the demand patterns in various countries.

The team also gives guidance on how sellers can improve discoverability of their products on each marketplace. Some of this includes guidance on the type of deals and the kind of advertisements they can run on these platforms.

Sellers day out

Number of sellers exporting from India via Amazon: 50,000

Top 5 states with most e-commerce exporters: Delhi, Rajasthan, Maharashtra, Gujarat and Uttar Pradesh

Most sold categories: Art and crafts, musical instruments, baby products, DVDs, pet products

Top 5 cities in the US from where Indian sellers get maximum orders: New York, Los Angeles, Chicago, Brooklyn, Houston

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

24.2. Alibaba re-evaluates India strategy, may focus on smaller deals

Livemint, 06 May 2019, M. Sriram

The Chinese e-commerce firm is likely to make more vertical e-commerce investments and smaller deals
The potential shift in strategy follows Alibaba’s disappointments at some of its large e-commerce bets in India

MUMBAI: Alibaba Group Holding Ltd is reviewing its India investment strategy that could see the Jack Ma-led Chinese e-commerce giant take a more judicious approach by making more vertical e-commerce investments and smaller early-stage deals, three people aware of the matter said.

The potential shift in strategy follows Alibaba’s disappointments at some of its large e-commerce bets such as online retailers Snapdeal and Paytm Mall, which have widely lagged behind the e-commerce market dominated by Flipkart and Amazon. The Economic Times reported on 22 April that Paytm Mall’s deep discounting strategy and an annual loss of₹1,787 crore made Alibaba realize that Paytm’s volumes, driven largely by cashbacks, would not make it a sustainable business.

To be sure, Alibaba has experienced some robust successes with its investments in India. The company is known for its early bet on Paytm, currently India’s most valuable startup. Alibaba’s other bets in India such as BigBasket and Zomato have also done well. Other key investments of Alibaba in India include e-commerce logistics firm Xpressbees.

Alibaba’s experiences in India have made the Chinese firm reconsider its future investment areas and the size of investments, said the people cited earlier.

“In China as well as other countries, Alibaba has a three-pronged investment strategy of e-commerce, payments and logistics. Now, if e-commerce, the biggest of those, stumbles, it will look for different bets," said one of the three people aware of Alibaba’s plans.

“Alibaba truly believes that e-commerce can change the lives of millions of people. But after their experience in India, today if an e-commerce firm comes to them, they will be a lot more cautious to see how it will differentiate from every other existing game in town," said the second person aware of the matter.

Alibaba did not respond to a detailed query seeking comment.

While Alibaba’s Indian investments are overseen by Raghav Bahl, who was appointed in August, it also launched a $100 million venture capital fund, BAce Capital, which is anchored by Ant Financial, the payments affiliate of Alibaba.

“Alibaba established a separate team for BAce because they needed an independent chain of command and independent valuation procedure to go fast on small deals," said the second person cited earlier. Such deals would range from $250,000 to $15 million across Series A and Series B, a departure from the much larger cheques it writes at later stages.

The team at BAce Capital comprises three former executives of Alibaba and Ant Financial—Benny Chen, former managing director of Ant Financial India and director of strategic alliance for India and South-East Asia; Kshitij Karundia, former senior director of India and South-East Asia strategic investment at Alibaba Group; and Mulyono Xu, former chief international officer of Lazada Indonesia and deputy director of Alibaba Group.

BAce made its first investment, when it participated in an $8 million round in Healofy, a Bengaluru-based pregnancy and parenting platform for Indian mothers. The interest in smaller deals is further evidenced by Alibaba’s $2 million investment in Noida-based Vidooly in February. Vidooly provides online video analytics and marketing software.

Alibaba is also evaluating vertical e-commerce firms in India, which are seeing huge investor traction in segments such as baby-care, online pharmacies and furniture retailing. It had considered an investment of about $150 million in FirstCry, India’s largest online retailer of baby products, Mint reported in October. However, Japan’s SoftBank won the deal eventually and invested $400 million in FirstCry in January.

“The horizontal e-commerce boat has sailed because Flipkart and Amazon have too much capital and a huge customer base. While Alibaba is still bullish on India, it will look for more vertical e-commerce firms to invest in, which will provide support to its existing business," said a third person, who works closely with Alibaba and other Chinese investors.

Alibaba’s strategy could also help it catch up with arch-rival Tencent, whose Indian investment portfolio has surged ahead with bets such as Flipkart, Ola, Swiggy and Byju’s, all of which are among the country’s most valuable internet companies.

25.1. Debjani Ghosh: Falling forward to win

Livemint, 12 Apr. 2019, Nandita Mathur

Nasscom’s first female president, Debjani Ghosh, talks to Mint about Digital India, innovation culture, and the importance of mentorship
Digital talent means you have to be good at technology as a domain, and soft skills—you can’t have a coder who sits alone in a quiet room today, believes Ghosh

I am meeting Debjani Ghosh at the sprawling Nasscom campus in Noida, near Delhi. Ghosh has not had a full night’s sleep for three days but, surprisingly, does not look sleep-deprived. “I love to travel. I travel 260 days out of 365 in a year, perpetually living out of a suitcase, but I would not have it any other way. I get cranky if I am in the same place for too long," she says.

As the president of the National Association of Software & Services Companies (Nasscom), a not-for-profit industry association that supports the $154 billion (around ₹10.7 trillion) IT-business process management (BPM) industry, Ghosh is passionate about accelerating technology adoption in India and working towards the Union government’s vision of Digital India.

She is Nasscom’s fifth president and the first woman head in the three-decade history of the IT software trade lobby. This is a big deal considering that none of India’s biggest software firms has been headed by a woman and the IT sector has been struggling with the issue of gender parity.

According to a Nasscom study, women now make up over 30% of the IT workforce and the majority of them are under the age of 30. While the number of women in leadership positions has increased and companies are hiring or promoting women to senior leadership and C-suite positions, the study points out that the number of companies with gender parity at the C-suite level has seen relatively little increase. Ramping up diversity efforts in the IT industry will result not only in more revenue but diverse perspectives will lead to greater innovation, the study says.

Ghosh’s love for travel goes back to her childhood, when she led a rather peripatetic life owing to her father’s work as a consultant to glass manufacturing factories. She changed schools every year. “My parents were firm believers that we would have the best education if we travelled the world, and it was the best thing that happened to me," says Ghosh. She says it helped her develop a problem-solving and analytical approach, and she learns best by doing and seeing. “I just cannot mug up," she confesses. “In fact they (her office) give me speeches to mug up but by the time I get to the stage, I lose that piece of paper."

Ghosh, who has a bachelor’s degree in political science from Osmania University in Hyderabad and an MBA in marketing from the SP Jain Institute of Management and Research in Mumbai, loved physics, maths and statistics in school but drifted towards management.

One of the defining stints of her career was with tech company Intel. When she interviewed with Intel initially, Ghosh entered the room and saw a woman—this was the first woman leader she had ever seen in a business interview. She was Deborah Conrad, then head of marketing and sales at Intel for Asia Pacific. “She is super-powerful, someone who knew her stuff and was asking me brilliant questions related to my goals, aspirations and career. She did not ask me the usual questions like when I would marry and have kids," Ghosh recalls.

By the end of the meeting, they were on first-name basis, calling each other Deb (a shortening of both their names). “Conrad asked me: ‘Deb, do you want this job?’ I said, ‘Deb, I don’t care about this job but I want to work with Intel and I want to work with you," says Ghosh.

She got the job and cemented her relationship with Conrad, who remains a mentor. But things did not start off well. At the time, Intel India comprised all of five people. The initial few weeks were tough: “I felt like an outsider because firstly, I was a woman, and secondly, not an engineer. I stuck out like a sore thumb." Ghosh remembers mentioning this to a senior colleague, who gave her a piece of advice she has not forgotten: “When you are in a room and you stick out like a sore thumb, remember that everyone is looking at you, so you need to decide what you want to do—either hide under the table or turn the situation to your advantage." She opted for the latter.

From 1996-2017, Ghosh held diverse leadership roles at Intel across South and South-East Asia, including five years as the managing director of the company’s India operations. She had an integral role in developing Intel’s “DigitalNation" strategy to support the country’s digital transformation.

Driving India towards becoming a digital nation has always been a passion with Ghosh, and this was one reason why, after a long and illustrious career with Intel, she moved to Nasscom in November 2017. In a way, it was a leap of faith—moving from a cushy corporate job to a not-for-profit organization that is a kind of melting pot where all the different participants in the ecosystem—government, academia and industry—converge.

For Ghosh, this was the perfect platform to convert her Digital India dream into reality for the IT services industry, which includes small and medium enterprises (SMEs), start-ups and multinational companies (MNCs). And since Ghosh became president of Nasscom, she has been focusing on three things: talent development and re-skilling, working on the innovation culture in the country, and working with governments across the world to open new opportunities for the Indian IT industry. Nasscom’s FutureSkills platform, for instance, offers training in new technologies like robotics and Internet of Things (IoT) and expects to train around two million people in the next four years.

Ghosh is optimistic about India’s potential in terms of innovation and talent. “India is seen as a leader of STEM (science, technology, engineering, maths) talent, and the world is looking for STEM talent," she says. “But the challenge for us is how do we convert this to digital? Digital talent means you have to be good at technology, the domain, and soft skills (design thinking, communication)—you can’t have a coder who sits alone in a quiet room today. You have to interact with the customer to understand the problem before you can figure out the solution."

“India has a tremendous opportunity to strengthen its position if we can help our STEM talent evolve to the next level, and that’s the commitment Nasscom has made. Innovation goes hand in hand with it," she adds.

Ghosh believes innovation can only thrive in an environment of shared learning and collaboration and cites her recent visit to Israel, which follows a culture of strong interconnection that is then able to drive innovation and entrepreneurship. From universities and the government to MNCs and even venture capitalists, everyone is connected to the start-up ecosystem, with a shared mission to strengthen innovation. “Israelis treat innovation as their most precious natural resource and want to ensure that every child has that (attitude). It is a mindset that gets created at school and is nurtured every step of the way. You know, while other moms worry about marriage, the Israeli mom has one obsession—her child must win the Nobel prize," she says.

What impressed Ghosh most was that the Israeli tech ecosystem is built on one key value—that the inventor is the hero and the most crucial part of the tech value chain. Ghosh says this is not true in India and interconnectedness across stakeholders still comes up short.

She says: “The tech start-up ecosystem is growing well in India but the mindset and the culture of co-creation has to grow. We need to build a stronger culture to scale innovation where the government too plays a role."

Ghosh is passionate about mentoring women. She has mentored over 50 women from diverse fields and enjoys these interactions. She is proud of colleagues in the industry who have broken the glass ceiling. “We have women leaders like Rekha (Rekha M. Menon, chairperson and senior managing director of Accenture India), Nivruti (Nivruti Rai, country head, Intel), Aruna Jayanthi (CEO of business services at Capgemini Group) and Vanitha Narayanan (former chairman of IBM India), and, thanks to Nasscom, we are able to come together and shake things up," says Ghosh. She believes Indian corporations are relatively gender-agnostic compared to those in many other countries, and women who are good at their job are taken seriously.

She tells the women she meets not to be shy, to reach out to people, make friends and have mentors—advice she has often relied on herself. She remembers what her mentor N. Chandrasekaran, former Tata Consultancy Services head and now the chairman of Tata Sons, once told her about failure: “What happens when you fail? You have to fall—and you have the option to fall forward or backward. When you fall forward and get up, you have moved one step ahead, and this learning is more valuable than any wins you may have." Falling forward, Ghosh believes, has helped her achieve more goals than she may have otherwise.

When Ghosh is not travelling for work, she travels to South-East Asia on short breaks. She knows the region like the back of her hand, having worked there during her stint with Intel. She loves Vietnam, Indonesia, Thailand and Cambodia—the people, the culture and the food. A food enthusiast, Ghosh is a committed non-vegetarian. “Don’t give me the greens or the yellows," she says.

An avid reader, she can pick up anything from Nordic crime writers to papers on the ethics of Artificial Intelligence and new technologies. Observing people is another pastime, given the amount of time she spends at airports.

***

Your advice to young girls Maintain a good relationship with older women in your family because they will be your support system.

Your favourite book Thomas Friedman’s ‘Thank You For Being Late: An Optimist’s Guide To Thriving In The Age Of Accelerations’.

Your mantra for success The more comfortable you are being uncomfortable, chances of success are way higher because you will start thinking differently.

Food you do not like Fish curry and sweets! My family says I am a fake Bengali.

25.2. The Unlikely Rise of the Pastel de Nata, and Why It’s Suddenly Everywhere

Bloomberg, 15 de abril de 2019, by Alice Kantor

The centuries-old Portuguese treat has become a global brand, and a very modern marketing machine is pushing it.

An unlikely dessert is on its way to becoming as ubiquitous as the croissant.

Not long ago an authentic pastel de nata—the diminutive egg-custard tart with a crispy crust—required a trip to Portugal. But now they’re popping up in supermarkets, coffee shops and bakeries from Manhattan to Singapore. The pastry even earned its own episode on the Great British Bake Off, the global hit that conquered the world with bunting and scones.

The pastel de nata, which just means cream pastry in Portuguese, has similarly become an international hit, centuries after it was said to have been invented in a Belem monastery by monks. In Portugal, the simple treat often costs about a euro ($1.14) at the more famous shops, but they fetch up to 3 pounds ($4) in trendy London cafes. One grocer, Lidl, boasted of selling 2,000 nata an hour in the U.K. in 2018, competing with doughnuts for popularity.

Photographer: Patricia de Melo Monteira/Bloomberg

In Manhattan, chef George Mendes introduced the dessert a year and a half ago at his Michelin-starred, Portuguese-inspired Aldea. Not everyone’s familiar with it—yet. For anyone new to the nata: Don’t use a knife and fork. “You’re supposed to eat it with your hands,” Mendes said. “Preferably with a cup of coffee.” Even Mendes says he’s stunned by the dessert’s meteoric rise.

Less than a decade ago, pasteis de nata—the plural—were languishing in obscurity. Sure, they flourished in pockets of the Portuguese diaspora in places like Newark, New Jersey. Mendes discovered them growing up in Danbury, Connecticut, which has a significant Portuguese community. His mom would bring them home after church from a nearby Portuguese bakery. But as recently as 2012, Portugal’s then-economy minister lamented that they weren’t an internationally known export.

It’s unclear what exactly sparked the boom, but the pastry ticks a few boxes. Culturally, Portugal is a must-try on an international travelers’ bucket list, and budget Lisbon rents are creating a tech hub for millennials priced out of London and New York. The famous, blue-and-white-tiled Pasteis de Belem was made for Instagram bragging, despite being founded in 1837.

The treat also fits into a shift toward more-casual, high-quality food—especially items you can grab and go. Add to that the trend for fad desserts. Looking back, glam cupcakes from Magnolia Bakery or pies from Four & Twenty Blackbirds seem so quaint before people started queuing for the cronut and the Freakshake stormed Instagram. (Incidentally, Mendes and cronut father Dominique Ansel promoted a crossover-egg tart during a limited release two summers ago.)

Perhaps unsurprisingly, the nata’s rise is fueled in part by promotion from the government, which sponsors events like the 2018 Nata Festival in London and funds local businesses. Exports of Portuguese specialties, meat and livestock to other European countries topped 1 billion euros in 2016, more than doubling in seven years. In the last three years, the Portuguese government has spent €50 million per year overseas promoting the country and its products.

But there’s also a more unlikely source of promotion: a tiny business called Nata Pura that sought to do for natas what Dunkin Donuts did for doughnuts. Started in 2013, the company has rapidly expanded, helped by a six-figure investment from Portugal Ventures, an investment firm backed by government agencies.

Founder Mabilio de Albuquerque took a page from international brands like McDonald’s and adapted the pastries to local tastes: matcha green tea and passion fruit for Japan; Brie, Camembert and blue cheese for Paris.

He knew his Portuguese friends would be furious. The original nata made with eggs, flour, milk and butter was sold for centuries without an alteration, and its recipe was feverishly guarded. But de Albuquerque wasn’t trying to please a Portuguese audience. He was creating a brand of nata he could export to the world with his startup Nata Pura from Asia to Europe, to Latin America and eventually the U.S.

Nata Pura wasn’t the first to try to export the pastry, but it was the first to do it in such a methodical way, says Susana Costa e Silva, who teaches the company’s strategy as a case study at Portugal’s Catholic University.

The small company—it only had five employees in 2017—hired marketing and branding professionals, something others hadn’t done, and found foreign partners to help fuel expansion.

Nata Pura received enthusiastic reactions at a food fair in London, where de Albuquerque sold it as a luxury but affordable product with a special history. It held pastry tastings and sponsored events like the London Coffee Festival and BBC Good Food.

The company now sells about 500,000 natas a month in 5,000 stores around the world. De Albuquerque says sales are between 1.5 million and 2 million euros a year, and he expects that to double this year. More than a third of their business comes from South Korea, where one of their customers, the CVS chain, will offer them in 12,500 stores.

For now, Mendes thinks he’s the only high-end chef offering it in Manhattan. He says he won’t be surprised if it becomes more common.

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Saturday 18 May 2019

NEWSLETTER, 20-V-2019

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

– AGRICULTURE, FISHING & RURAL DEVELOPMENT

– INDUSTRY, MANUFACTURE

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

NEWSLETTER, 20-V-2019

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

- INDUSTRY, MANUFACTURE

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