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Saturday 18 July 2020

NEWSLETTER, 20-VII-2020











DELHI, 20th JULY 2020
Index of this Newsletter


INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC. 


1.1. Cabinet approves developing of Affordable rental housing Complexes for urban migrants / poor
2.1. The great games at play in wind and solar
2.2. Renew Power plans to double power generation capacity to 10,000 megawatt in five years
3.1. In 2 years' time, MSMEs will contribute 60% to India's exports: Nitin Gadkari
3.2. 99% businesses in India now in MSME category
4.1. Economic revival now hinges more on services sector
4.2. India on the cusp of the age of super apps
5. Cos go all out to get back migrant workers


– AGRICULTURE, FISHING & RURAL DEVELOPMENT


6.1. Amul forays into edible oil business with launch of Janmay
6.2. Rural sector will be transformed by constitution of 10000 Farmers' Producer Organizations
7. Italy brings state or art food processing tech to India
8. India's ambitious plan to help small businesses does little to save them
9.1. Surplus milk, drop in demand: How Nandini kept farmers smiling through lockdown
9.2. Kiranas leveraged technology to stay relevant during the lockdown: EY Survey
10.1. ITC sets sights on contract farming
10.2. Cargill to partner with Indian firm for chocolate plant


– INDUSTRY, MANUFACTURE


11.1. Welspun looks at re-purposing biz to align with changed ecosystem; e-commerce emerges priority areas
11.2. Flipkart signs MoU with Karnataka govt to promote local art, craft and handlooms
12.1. Arcelor Mittal plans Rs 2,000 crore investment in Odisha
12.2. Atmanirbhar Bharat: Samsung and OnePlus to manufacture most TV sets in India
13.1. HPL acquires majority stake in Lummus Technology for enterprise value of US$ 2.725 billion
13.2. KKR to acquire controlling stake in JB Chemicals
14.1. Apple supplier Foxconn plans to invest US$ 1 billion in India: Sources
14.2. Sports goods giants plan local production
15. Surat diamond industry works out new protocol to fight Covid


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


16.1. Digital transformation to be a key driver for growth, says Tata Consumer Products
16.2. Oracle sharpens focus on India with new cloud data centre in Hyderabad
17.1. GOOGLE to invest US$ 10 billion in India
17.2. With 350 mn shoppers, India's e-tail mkt to clock GMV of over $100 bn by 2025: Report
18.1. RIL announces strategic initiatives at AGM, raises hopes of investors
18.2. Walmart to pump $1.2 bn in Flipkart for e-comm battle
19.1. Amazon expands Pantry service to over 300 cities in India
19.2. Amazon India waives off fees for artisans, weavers, women entrepreneurs for 10 weeks
20.1. Tata group retail arm Trent looking to pursue 'accelerated expansion’
20.2. 90% sellers back on Flipkart, 125% rise in new MSMEs


INDIA & THE WORLD 

21.1. Asia to remain dominant player in garment manufacturing in coming decade: Report
21.2. Vietnam’s export story is strikingly similar to China’s
22.1. Tectonic disruption in the e-commerce and retail space: eBay India
22.2. HIL India Ltd. supplies 25 MT Malathion 95 per cent ULV Insecticides to Iran for Locust Control Programme
23. Serum Institute of India to supply pneumonia vaccine to low-income nations
24. Bangladesh has some readymade lessons for India
25.1. Republic of Mali awards Project Management Consultancy contract to NTPC for development of 500 MW Solar Park
25.2. Sellers need to mention 'country of origin' on products for GeM platform


* * *

DELHI, 20th JUlY 2020

NEWSLETTER, 20-VII-2020



INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC. 



1.1. Cabinet approves developing of Affordable rental housing Complexes for urban migrants / poor
IBEF, Jul. 09, 2020

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval for developing of Affordable Rental Housing Complexes (AHRCs) for urban migrants/poor as a sub-scheme under Pradhan Mantri Awas Yojana – Urban (PMAY – U) by: 
  • existing vacant government funded housing complexes will be converted in ARHCs through Concession Agreements for 25 years. Concessionaire will make the complexes liveable by repair/retrofit and maintenance of rooms and filling up infrastructure gaps like water, sewer/ septage, sanitation, road etc. States/UTs will select concessionaire through transparent bidding. Complexes will revert to ULB after 25 years to restart next cycle like earlier or run on their own. 
  • special incentives like use permission, 50 per cent additional FAR/FSI, concessional loan at priority sector lending rate, tax reliefs at par with affordable housing etc. will be offered to private/ public entities to develop ARHCs on their own available vacant land for 25 years. A large part of workforce in manufacturing industries, service providers in hospitality, health, domestic/commercial establishments, and construction or other sectors, labourers, students etc. who come from rural areas or small towns seeking better opportunities will be the target beneficiary under ARHCs.
An expenditure of Rs 600 crore (US$ 85.12 million) is estimated in the form of Technology Innovation Grant which will be released for projects using identified innovative technologies for construction. Approximately, three lakh beneficiaries will be covered initially under ARHCs.

ARHCs will create new ecosystem in urban areas making housing available at affordable rent close to the place of work. Investment under ARHCs is expected to create new job opportunities. ARHCs will cut down unnecessary travel, congestion, and pollution.

Government funded vacant housing stock will be converted into ARHCs for economically productive use. The scheme would create a conducive environment for Entities to develop AHRCs on their own vacant land which will enable new investment opportunities and promote entrepreneurship in rental housing sector.

Background:

Ministry of Housing and Urban Affairs (MoHUA) has initiated an Affordable Rental Housing Complexes (ARHCs) for urban migrants/poor as a sub-scheme under Pradhan Mantri Awas Yojana (Urban). The scheme was announced by the Hon'ble Finance Minister on 14 May 2020. This scheme seeks to fulfill the vision of 'AtmaNirbhar Bharat’.

COVID-19 pandemic has resulted in massive reverse migration of workers/ urban poor in the country who come from rural areas or small towns for seeking better employment opportunities in urban areas. Usually, these migrants live in slums, informal/ unauthorized colonies, or peri-urban areas to save rental charges. They spend lot of time on roads by walking/ cycling to workplaces, risking their lives to cut on the expenses.

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


2.1. The great games at play in wind and solar 
Livemint, 14 Jul. 2020, Tanya Thomas

In the middle of a possible recession and a collapse in power demand, renewables are shining bright. Will it last? 
With long-term renewables contracts being seen as safe bets, especially during a pandemic, foreign capital that has few places to go to has begun chasing these assets MUMBAI: In April, a week into the national lockdown—when factories and offices had shut, shops had closed and India’s 1.2 billion people stayed indoors—the country’s electricity demand crashed by 22%. Power generators scrambled to scale down operations and state-owned electricity utilities turned down expensive purchases. Punjab, for instance, told some of its solar power suppliers that they need not feed into the grid anymore, violating the “must-run" status bestowed on renewable power in the country’s energy mix.

Within days of Punjab’s decree, the Ministry of New and Renewable Energy stepped in to clarify that all utilities were obliged to continue procuring renewable energy at the same rate, despite falling demand. If distribution companies needed to reduce power supply, they could stop buying from coal power plants instead.

“Must run status" means that utilities cannot curtail power procurement from solar or wind power plants except for reasons that threaten the stability of the grid or grid equipment. The data shows that utilities did indeed toe the government line during the lockdown. Although the aggregate demand for power fell in April and May, renewables gained a larger share of the overall pie. Electricity procurement from coal-fired power in India’s energy mix fell from 75% in early March to 63% in May, while the contribution of clean energy sources—solar, wind and hydroelectric power—rose from 16% to a never-before-seen 28%, according to data from the national load despatch centre.

Given this experience, India’s target of clean energy (renewables, small hydro and nuclear) accounting for 40% of the energy mix by 2030 appears within striking reach. To be sure, much of this sudden, unexpected change is unfolding in an uncertain world wrought by a pandemic.

India’s solar and renewable push has been riddled with contradictions and paradoxes. An aspirational shot at global leadership even as the country imports nearly 80% of solar equipment from China; regular inflows from foreign private equity funds into solar even as the sector was beginning to show signs of stress; and, now, hopes of a revival in a year when overall power demand is expected to fall.



Last November, Mint had explored the many reasons behind the dark clouds plaguing Indian solar. In an effort to push falling clean energy tariffs even lower, developers, already operating on razor-thin margins, were cutting corners on the quality of power plants they were setting up. Bills piled up at state utilities; some like Andhra Pradesh even refused to pay. National electricity demand growth had begun to crawl due to an economic slowdown and developers had stopped bidding for new projects. The sector was on the verge of implosion. That implosion did not come because of one key reason—the Indian renewables industry is now awash in foreign capital that has few other places to go. And the quest for safe havens may only heighten during a pandemic, turning India’s renewable energy farms into a terrain for great games.

The bets

Prateek Jhawar, director and head of Infrastructure and Real Assets at Avendus Capital, is an investment banker who has over a dozen deals ongoing in the renewable energy space. “There’s foreign capital of about $10 billion so far committed towards India’s infrastructure assets that will be deployed over the next few years. This is mostly from foreign pension funds, sovereign wealth funds and private equity," he told Mint.

If you exclude the current year, an outlier because of covid-19, Jhawar says the investment community views India’s future economic growth favourably to that of the global north. In India, a rupee into renewables can give an investor a standard return on equity of 12-15%; that’s 7-10% on the dollar, Jhawar says. “That’s far above anything that global capital can earn in OECD countries."

“Within the infrastructure space in India, renewable energy projects, transmission lines and operating toll roads are the only sectors that have matured significantly in terms of returns profile and stable government policies, compared to thermal energy, waste management, water management, power distribution or urban infrastructure. The other segments haven’t scaled up enough to absorb these massive investments, or in the case of thermal energy, are no longer kosher for overseas capital with sustainability goals," he added.

The pool of foreign investors willing to take a bet on India is also deepening. Till a few years back, the large foreign investments were mostly from pension funds and sovereign wealth funds from Canada, the Middle East and Singapore or energy firms in Europe with green commitments. “Now, every few months, there are 2-3 new names making direct investments in India from across Europe, the Middle East, Asia and South Asia" he says, listing ib vogt GmbH from Germany, FRV from Spain, Phelan Energy Group in South Africa, CNIC from China, and Mubadala from the UAE as new entrants into the space.

Global private equity firm KKR, which has long been invested in India, dipped its toes into the sector in April buying out 317 MW of solar power plants from the Shapoorji Pallonji group for $204 million, marking its first energy investment and its second in infrastructure in India.

This influx of capital is already changing the ownership structure of Indian renewable energy assets, with foreign investors creating platforms that buy out portfolios belonging to different developers for long-term returns, or bringing in equity stake that turbocharge a developer’s ability to bid for more greenfield projects. The largest home-grown developers from a few years ago have sold either controlling or significant equity stake to overseas investors, injecting the latter with the cash necessary to place bids at lower and lower tariffs.

“Every gigawatt of capacity requires close to $600-700 million of investment across debt and equity," Bruce Hogg, Managing Director, Head of Power and Renewables, CPP Investments, told Mint in an email interview. CPP Investments is the investment manager for Canada Pension Plan. “The early stage of the life cycle for renewables and the opportunity to help build India’s power capacity are among the reasons why we are attracted to the sector."

Crashing prices

The developer’s ability to access cheap capital is meanwhile driving down tariffs, a key determinant in a utility’s decision to buy or forgo power from a new project. In the most recent reverse auction by the Solar Energy Corporation of India (Seci) to build 2 GW of greenfield solar power plants, Spain’s Solarpack Corporación Tecnológica bid ₹2.36 per kilowatt-hour (kWh, or unit), marking its Indian debut with a new tariff record and winning 300 MW in the process.

“Overseas, there is a strong move in favour of reducing the carbon footprint of private enterprise," Dhanpal Jhaveri, vice-chairman, Everstone Capital, said. When he spoke to Mint, Jhaveri had just closed an investment of $70 million by oil and gas major BP into the Green Growth Equity Fund, a joint venture between Lightsource BP and Everstone Capital, which invests in low carbon energy solutions.

“This change is coinciding with the existing build-and-flip model, which the first set of renewable energy developers in India used, running its course. There’s a migration of new assets towards long-term investors who intend to stay invested for the lifetime of the project, lasting over 2 decades sometimes."

Jhaveri explains that money is coming into renewable power because it’s the only viable alternative to coal in India. “Globally, natural gas, hydro and nuclear play a larger role in a nation’s energy mix than they do in India. When electricity generation was first privatised in India 15 years ago, companies were free to set up power plants, but access to fuel (coal) was controlled. With renewables, the resource is free and you’re investing in a country where consumption rates can only go up in the long-term."

The challenges

Despite the momentary euphoria, developers who have longer experience with India still sound a note of caution. Sanjiv Aggarwal, partner (energy) at Actis Llp, although bullish on India isn’t blind to the inherent difficulties that persist. “None of the basic problems in states—like land acquisition, or issues in right of way while setting up new plants—have gone away, but the central government has shown its strong support," he told Mint.

These structural issues extend to power utilities whose combined outstanding dues crossed ₹1 trillion in June, igniting calls once again for a government bailout. The Andhra Pradesh government is locked in litigation with its renewable suppliers, wanting to renegotiate older power purchase agreements (PPAs) at higher tariffs for lower ones that match prevailing market rates. Recently, Mint reported that Punjab is following Andhra Pradesh’s lead, indicating it wants to replace older contracts as well.

“How low you can go with your tariff is essentially a function of your capital cost, since equipment prices are falling for everybody," Aggarwal said. That is one of the reasons for the mad dash behind foreign funds since equity is a better hedge than taking on debt.

India is also pursuing an agenda of self-reliance in the energy sector, which, rather counter-intuitively, raises the immediate project cost. Prime Minister Narendra Modi is keen to reduce imports of solar photovoltaic cells from China and encourage domestic manufacturing instead by levying a 20% customs duty on modules, cells and inverters from August, replacing an existing safeguard duty of 15%. However, with installed module manufacturing capacity today meeting only about a fifth of annual demand, the prices of imported equipment will simply rise.

Ultimately, the question that remains, as with all power supply, is what price India would be willing to pay for clean power. The answer depends on who you’re asking. Foreign capital investors with generous bank balances brought prices down to an all-time low of ₹2.36 a unit last month; until then, solar and wind energy prices that domestic developers had bid for had corrected to ₹2.7 a unit last year in central and state government auctions.

“India’s renewable programme must succeed if we are to achieve cleaner energy and self-reliance but we need to recognize that the true cost of renewable energy is over ₹5 a unit," said Vipul Tuli, MD, Sembcorp Energy India. “Today. interstate transmission is free for renewables because distribution companies bear the cost. In addition, since renewable energy plants run at only 20-40% load factors, utilities must also pay fixed charges to conventional power plants to supply the remaining load, which makes the full cost of this power far higher than what the reverse auctions reveal."

Jhawar of Avendus believes that developers start losing money at tariffs below the ₹2.70 benchmark or when the cost of debt is over 10% a year. Essentially, India has two classes of developers pulling tariffs in opposite directions.

Despite the brief window of optimism within the sector these days, India’s immediate renewable energy targets are still out of reach. The government wants to build a total capacity of 100 GW of solar power, 60 GW of wind, 10 GW of biomass and 5 GW of small hydroelectric projects by 2022 while aggregate installed capacity today is just 87 GW. The destination may take a while yet to reach, but the journey is bound to be interesting.


2.2. Renew Power plans to double power generation capacity to 10,000 megawatt in five years 
IBEF, Jul. 15, 2020

Renew Power, India’s largest clean energy firm, plans to double its portfolio of running plants and projects under implementation to 10,000 megawatt (MW) in five years, an ambitious growth plan that has cheered its major investor Goldman Sachs.

An investment of around Rs 40,000 crore to Rs 50,000 crore (US$ 5.67 billion to US$ 7.09 billion) is required for expansion, going by the average cost of projects in the industry. Though, no financial details were shared by the company. The projects vary across the country, depending on the cost of land and the intensity of sunlight or wind.

Mr Sumant Sinha is leading the Renew Power’s aggressive expansion project, which is part of the growing corporate interest in the sector in which Mr Gautam Adani is also expanding his presence with the aim of becoming the world’s biggest renewable energy company with a capacity of 25,000 MW.
"This year despite the impact of COVID-19, the government has been actively bringing out new bids in the renewable energy space and companies have responded enthusiastically," said Renew Power chairman and managing director Mr Sumant Sinha.

According to Goldman Sach’s MD of merchant banking division Mr Michael Bruun, these growth prospects are exciting. "We are excited about our investment in Renew and the journey ahead as the company continues to grow and becomes more integrated across the value chain," Mr Bruun said.
Around 48.6 per cent share in Renew Power are held by Goldman Sachs, which has backed the company for a long time. The company has also raised debt and equity from other major global investors including Abu Dhabi Investment Authority, Canada Pension Plan Investment Board, JERA and Global Environment Fund. The company has attracted foreign direct investment of over US$ 1.4 billion from various investors since its inception 10 years ago.

Renew has the country’s largest operation capacity of 5,600 MW, which along with capacity in the pipeline adds up to 10,000 MW.

In May 2020, Renew won a first of its kind 400 MW round-the-clock (RTC) bid, which promises an 80 per cent plant load factor (PLF) annually at Rs 2.90 (US$ 0.04) per unit. In order to ensure the PLF efficiency, company plans to set up a plant with capacity higher than 1 gigawatt (GW), bringing the total to 2 GW in the past six months. These will be online in the next two years, Mr Sinha said.

Around 800 MW, out of the 2 GW, worth of bids were won during the COVID-19 period.

The RTC bid will allow RE companies to provide stable power to the grids, plugging a major challenge against coal-based power plants and other conventional energy sources.

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


3.1. In 2 years' time, MSMEs will contribute 60% to India's exports: Nitin Gadkari 
ET Now, Jul. 04, 2020, Ruchi Bhatia

'Need to increase employment potential, without that economy cannot go ahead'

The Indian industry is not depending on Chinese investment, says Minister of Road & Transport and MSMEs.

The Prime Minister has given a call for self-reliant Bharat, an Atmanirbhar Bharat; as a Minister for Roads and Highways and MSMEs, your task is cut out as MSMEs contribute 30% or one-third to India’s GDP. I want to understand what is your prescription for making sure that India becomes Atmanirbhar?

Well, 48% of the exports are from the MSME sector and up till now, MSME has created 11 crore jobs. The most important thing is that it is related to the village industry. The turnover of the village industry up to March comes close to Rs 88,000 crore.

The Prime Minister's dream is to make India a super economic power and a $5 trillion economy with Rs 100 lakh crore worth of infrastructure; so the MSME’s role is very important. Changing the definition of MSME is the most historical and remarkable decision for the Indian economy taken by the government under the leadership of Prime Minister. From the last 15 years, there was discussion related to the change of definition but nothing was happening then. Earlier, there were two classification - manufacturing sector and service enterprises - but now we have merged it as one; manufacturing and servicing are now one. In the micro industry, the criteria was investment in plant and machinery equipment of Rs 25 lakh but now under the new definition, we have increased it to Rs 1 crore which is four times more. Regarding turnover, it was Rs 10 lakh earlier and now we have taken it Rs 5 crore. Under small industry, the investment criteria have been raised to Rs 10 crore from Rs 5 crore and turnover to Rs 15 crore from Rs 2 crore.

The most important thing is related to the medium industries where the investment was Rs 10 crore and now we have taken it to Rs 50 crore and turnover to Rs 250 crore from Rs 5 crore. Exports are the most important thing related to the Indian economy. Now the majority of industries will get the advantage of MSME. All types of facility will be available to them and that is the most important thing. Prime Minister's mission is that we have to make India free from unemployment. It is a big problem and whatever poverty we are facing it is because of unemployment. We need to increase employment potential, without that the Indian economy cannot go ahead.

How will you ensure that the MSMEs are self-reliant and we do not isolate our MSMEs? There has been a tremendous pressure to ensure that Indian MSMEs also come up to speed but the concern really here is that our MSMEs are not that deeply entrenched in the global supply chain. So how will you ensure that Indian MSMEs also become a part of the global supply chain?
Already the MSMEs contribute 48% to the exports of our country. I am giving you the assurance that within two years, MSMEs will contribute more than 60% to the exports. That is the way in which we are planning. We are facing a sub-period but sometimes it is a blessing in disguise. Now it is an opportunity for the MSMEs to upgrade their technology. At the same time, we are giving a special scheme of Rs 50,000 crore to MSME. The government will support the MSMEs that have a good track record in exports, bank turnover, income tax and GST by simplification by methodology. We can give them a rating on the basis of that. We have already appointed an independent, impartial and fair committee who can give permission to them and the government will contribute. MSME department will contribute up to Rs 15 crore of equity.

Now, I am telling you a small thing, I had a discussion with an investor in Dubai and also one of the financial companies arranged a discussion with an American investor and I really appreciate the attitude and approach of the investors. In the present world situation, they are keenly interested to invest in India and this gateway of MSME is open for them. So we will get foreign investment in MSME, we will get foreign investment in banks as well as NBFCs and also in infrastructure, road, railways, aviation, shipping, port and power and that going to increase the liquidity in the market and will help industry export more and that is exactly the way of Atmanirbhar Bharat.

You are saying that we will be attracting more investments from other nations but it seems that we want to put a halt or some sort of a full stop on investments coming in from China; how will you ensure that that happens? How will the checks and balances be maintained in areas such as MSMEs as well as the highway sector?. You recently said that with respect to investments coming in from China, India will be watching out for them very very closely.


The Indian industry, Indian infrastructure is not depending upon the Chinese investment. Majority of the investments which we are getting are from the whole world and that countries are known. Today, the whole world's economic point of view is that they do not want to deal with China and that is a blessing in disguise for the Indian industry to get more export order. I am giving you a small example, two months ago, we had taken a special flight to get PPE kits from China to Delhi because we had a shortage. Today our MSME industry is manufacturing 5 lakh PPSE kits per day. Today, the commerce ministry, the finance ministry is giving permission to our manufacturers to export. Our MSMEs are now exporting their PPE kits to the different parts of the world and it is exactly the way of Atmanirbhar Bharat.

But how will our country ensure that we do not turn protectionist because a lot has been talked about imposing some sort of tariff barriers? And currently, the Indian industry is heavily dependent on imports coming in from other nations. How will we ensure that our own industries' interest does not get hurt? Look at some of the imports that we are currently getting from China; much of it is stuck at various ports due to the customs department halting these shipments as we want to take a very tough stance against China. But have we put our own industry in jeopardy? How will we ensure that protectionism does not harm our own industry?

To be very clear as I have the given example of PPE kit, you can take the example of the casting industry, particularly automobile spare parts. In India, we have the availability of all type of technology and our people are fully competent. Now is the time for major Indian industries to encourage small scale industries to fix their requirements.

Let me give you example of agarbatti sticks. We increased the 30% duty on agarbatti sticks, now Khadi Gram Udyog is going to launch a scheme for giving special machinery to the MSMEs for making agarbatti sticks and at least I am confident that within two-three months there will be employment potential. We are going to create employment for some 25 to 40 lakh people. This is exactly what we are expecting. The things which we are importing from China, India already has got the ability to produce it. Probably, initially, there may be some rise in the rate but after that when they standardise their production and increase productivity, ultimately, it will become of reasonable value.

Now it is time for India industry to find out the way out for producing things we are importing from China. We need to upgrade the technology, reduce the cost, we have to make these things without compromising with the quality. It is a challenge for the Indian industry to manufacture all this type of items in India and as a government, we are ready to support them. We will facilitate them and we will give them all type of support in the Make in India mission.

Niti Aayog CEO Amitabh Kant said the government will ensure that they will handhold the entrepreneurs, they will handhold the small industries at this point of time but do not expect subsidies when you are saying that the Indian government will do whatever it takes to support our industries. What kind of steps are we really talking about to ensure that Indian industry also becomes globally competitive?

I am giving you an example of the automobile industry. The present turnover of the automobile industry is Rs 4,50,000 crore; this is an industry which is creating maximum employment potential in India. The exports by automobile industry are of Rs 1,45,000 crore. Presently, all our automobile companies are producing electric bikes to cars, trucks, busses where we have import-export. I really appreciate that Bajaj Scooter and TVS Scooters are exporting 50% of their production. This is what we are expecting from the automobile industry. This industry also is going to create more ancillaries in India. I am now requesting all the major industry of automobile to not depend upon China, it is the time for the Indian economy and Indian industry to upgrade the technology. After getting a good volume, the ancillary can reduce the cost. If the volume has increased 100%, they are all in a position to give spare parts at a reasonable price. We will be in a position to export this from India to abroad. This is exactly what we are expecting. This is possible. India has got the talent, engineering expertise and steel power and we have got all types of technology. From a technological point of view, we can enter into a joint venture with good technology. We can get a low-cost capital investment through FDI. This is a golden opportunity and the Indian industry should take advantage of it.

You were talking about the auto sector, you speak to them very closely, you are working with the auto sector on the scrappage policy as well. Pawan Goenka, Mahindra & Mahindra boss also said that for the auto sector to be self-reliant, the OEMs and tier I suppliers will have to pledge to ensure that the components and the tooling imports are reduced to almost half in the next three years. I want to understand from you is that really possible and if yes, then what kind of policy support will be provided to the auto component manufacturers, a lot of them also come under MSMEs?

You are absolutely correct. Since the last two years, I am constantly pursuing scrapping policy but we have to take at of approvals from the different department and state governments. So, that policy was delayed. But now whatever the situation is, we have decided to launch this policy. We are in the final stage. The problem is that because of this COVID-19 I am in Nagpur and our secretary has already prepared the draft, only after going to Delhi, I am going to clear it and we are going to declare it. So by this scrapping policy, there will be the lability of raw material such as copper, aluminium, plastic, steel and rubber and recycling will be possible through industrial clusters and by this, we can reduce the cost that Mr Pawan Goenka was speaking about. He is absolutely correct and this can be a great achievement for the side. We want to implement it as early as possible and that will help and support the industry to reduce their cost. They do not need to import then. So definitely, as early as possible we will make the decision and this is going to boost our automobile industry, increase their production and it will be a great advantage for our export also.

You were talking about making the Indian industry more cost-competitive but many experts believe that will not happen until and unless the government bites the bullet on critical reforms like land and labour. How will we ensure that we increase our cost competitiveness and turn this for us to turn this crisis into an opportunity?

Actually the majority of the state governments are ready to accept labour reforms, not for their existing industry but the new industry and the new investment which is coming to the state. They are ready for them but these laws are not against the labour and therefore it can be a strength for attracting foreign investment in the country. The most important thing related to the industry is foreign investment. Secondly, I feel that India has got a huge market, the big population is the big strength for India and that is the reason majority of investors want to come to India. The skilled manpower is our strength; already our doctors and software engineers are doing excellent work in the whole world and that is the reputation of Indian people and the reason that they are now interested to come to India.

Regarding technology, we can enter into joint ventures. Take the example of EVs: Already our Indian companies have launched electric bikes, electric scooters; they are in the market. Everything is possible. Indian business and Indian engineering ability are very high. We have got the manpower. The secret behind China's success story is making industrial clusters. One city is only working on furniture, one is working only in LED light and allied products. So for Delhi-Mumbai express highway, where the land acquisition cost is very reasonable, NHAI has taken a decision that we will acquire the land and we will develop industrial clusters, smart cities and smart villages and the land cost is very reasonable. It is from the backward and tribal areas of Haryana, Rajasthan, Madhya Pradesh, Gujarat and Maharashtra. I am ready to give the land for industrial clusters, MSMEs are with me and NHAI is with me. Total attitude, approach and vigil of the state government has also changed. We are going towards creating a land bank and the land will be available, it will not be a problem. There is reform in labour laws and as per the World Bank ranking, there is an ease in doing business. Our number has already increased, still, we are taking a lot of reforms. I feel that it can be possible to bring in more foreign investors to India.

You recently said that your ministry will keep Chinese players out from the new highway project and even for investments in MSMEs, Chinese investments will not be entertained. Let me play the devil’s advocate here. China has spread its tentacles very far and wide in terms of investments in other countries as well. How will you ensure in terms of checks and balances that Chinese investments are specifically kept at bay?

In infrastructure, NHAI is the most important success story of India. We have got the largest highway network in the world our economic viability on project concern is good. Today, we are concentrating on getting FDI. A 100% FDI is allowed in infrastructure. We are dealing with BRICS Bank, ADB, World Bank, pension fund, insurance fund. Already some of the proposals are in the final stages and we are making new innovative models not only DOT, PPP but different types of models. We are going to the market and we are getting good response from global investor. We have received a lot of offers and I am quite confident that we will get foreign investment at low cost. This can be made possible in MSME also. I had video conferences with investors in America in Dubai. I observed that majority of investors are keenly interested, even in the current economic situation, to invest in India. They believe they'll get maximum returns on their investment in India and they are keenly interested to invest here. We are opening MSME by the stock exchange, foreign investors can invest in MSME, they can invest in NBFCs, they can invest in banks, they can invest in infrastructure. I feel it can be an opportunity for them and we will get very good response from all type of investments in infrastructure and MSME.

Do you foresee that with us trying to keep China out, there will not be any funding crunch in terms of our infrastructure sector?

I feel that there will be no problem. We do not have any big investment in infrastructure from China. Actually, because of our technical and financial prequalification, there were a lot of Chinese company. They were coming with joint ventures but now we have prohibited that. We have liberalised and diluted our norms by which India contractor will be technically and financially qualified for the big projects.


3.2. 99% businesses in India now in MSME category 
TNN, Jul. 08, 2020, Sidharta

An entity can be classified as a micro enterprise if investment is up to Rs 1 crore and turnover does not exceed Rs 5 crore.

NEW DELHI: A change in definition of micro, small and medium enterprises (MSME) has turned India into a country of small businesses as nearly 99% of the entities now fall under the category based on the twin parameters of investment and turnover.
An entity can be classified as a micro enterprise if investment is up to Rs 1 crore and turnover does not exceed Rs 5 crore.
The corresponding figures are Rs 10 crore and Rs 50 crore for small and Rs 50 crore and Rs 250 crore for medium enterprises .

Investment in plant and machinery has been the traditional parameter on which MSMEs have been classified, enabling them access to various sops such as concessional finance, though the main benefit of excise duty relief has been lost ever since the GST regime was implemented.
Government sources told TOI that numbers with the GST authorities show that 99% of the entities have a turnover that fits into the MSME definition. More than half the businesses registered with GST Network have less than Rs 20 lakh turnover, the earlier registration threshold.

As an added relief, export turnover has been excluded to enable more units to get the benefit. Similarly, income tax department’s analysis showed that when it comes to investment, the written down value of assets, that is after depreciation, there are a few thousand entities in India that have investments in plant and machinery or equipment that exceed Rs 50 crore, the ceiling for medium enterprises.
The numbers have come as a surprise to policymakers as the definition was finalized before looking at them in detail.

It is only now that the MSME ministry has sought to plug the gaps as it detected that by using one Aadhaar number, five Udyog Aadhaar Numbers could be generated, encouraging businesses to split their units into five separate entities and claim all the benefits. It has now decided to tap the income tax and GST database to get a better picture of enterprises claiming benefits.


4.1. Economic revival now hinges more on services sector 
Livemint, 05 Jul 2020,Vivek Kaul

In 2004-05, services constituted 43.5% of the economy. By 2019-20, the proportion had jumped to 50.4%. Given this, any recovery can only happen with the revival of services. Mint takes a look.

The importance of services in the Indian economy has gone up over time. In 2004-05, services constituted 43.5% of the economy. By 2019-20, the proportion had jumped  to  50.4%.  Given  this,  any  recovery can only happen with the revival of services. Mint takes a look.

What is manufacturing sector’s share?

Historically, it has been seen that countries first develop a vibrant manufacturing sector before creating a vibrant services sector. As Ruchir Sharma writes in The Rise and Fall of Nations: “As factories pop up around cities, service businesses emerge to cater to the needs of the growing industrial middle class... The manufacturing share of gross domestic product rises steadily before peaking between 20%-35%." However, Indian economy has not followed the historical development formula. The size of manufacturing sector has varied between 15%-16% of the economy in the last decade and a half.

How do you explain growth of services?

As Sharma writes: “Building factories generates funds for upgrading them, which then increases pressure to invest in improving roads, bridges, ports, railroads, power grids, and water systems." All this creates jobs, which pay people and give them the purchasing power to demand services. With the manufacturing sector not creating enough jobs, people have had to fend for themselves to earn a living. This is reflected in the informal services sector, with the huge number of street vendors and small businesses seen across cities. The number of people trying to make a living like this is huge.


What other activities form part of services?
Everything from trade, hotels, transport, financial services, real estate and public administration come under services. Ever since the imposition of covid-induced lockdown, most of these sectors have either been asked to remain shut or norms of social distancing have ensured that people are staying away. Cinema halls are shut and people have stopped going out to eat.

Why is the revival of services important?
Services form half of the economy. As Care Ratings points out in a research note: “[Two-thirds] of the economic sectors would broadly be operating at 50-70% capacity by end Q3 [December]… The balance may not even reach this state this year. In particular, services like hospitality, tourism, travel, entertainment, would take a much longer time… to [reach] anywhere close to normal." Hence, as long as social distancing norms are to be followed, services (including the self-employed) will continue to remain unviable.

What concerns need to be addressed?
As the Report on Fifth Annual Employment-Unemployment Survey (2015-16) has pointed out: “67.5% of self-employed workers had average monthly earnings [of] up to ₹7,500." Even four years later, things could not have improved much. Hence, the ability of the self-employed to survive is limited. Given that most of them haven’t done much business since end- March, economic revival is not possible unless these individuals get back to business.

Vivek Kaul is the author of Bad Money.


4.2. India on the cusp of the age of super apps 
Livemint, 12 Jul 2020, Mihir Dalal
  • Business is down, of course, but the internet economy has received a big digital push thanks to the pandemic 
  • Most shoppers still use different apps across e-commerce, travel, food delivery and other sectors. With the increasing depth and width in the internet economy, this could change 
BENGALURU: India’s first nationwide lockdown in late March did not spare internet businesses. The internet market shrank to about 15% of pre-covid levels over the next month. But starting from May, when lockdowns were eased and the initial disruptions in supply chains were largely resolved, the internet ecosystem has been seeing a slow and steady recovery driven by sectors like e-commerce, online pharmacies and digital education.

In June, the internet market rose to an annualized $45 billion, well below its pre-covid level of $75 billion annualized, but up sharply from its April number of $10 billion, according to a report by market research and advisory firm RedSeer Management Consulting Pvt. Ltd.

The numbers are the latest proof that the outbreak of the novel coronavirus has battered internet businesses. The pandemic’s impact, however, has been extremely uneven. While sectors like travel, hospitality and mobility have collapsed, it has brought about an unprecedented boom in sectors like online grocery and digital education.

In an effort to identify the internet companies that have benefited most from the lockdown, RedSeer has compiled a Covid Impact Leadership Index that it shared in a report with Mint. To arrive at a score, RedSeer used three parameters: resilience, which looks at metrics like new customer additions and time spent; innovation, which captures consumer perception of new products, services and features launched by the internet platforms during the lockdown; and empathy, which measures the consumer perception of the health focus and charitable contributions of the internet companies.

According to the index, the big winners of the lockdown were BigBasket, Flipkart’s grocery ordering app Supermart and Amazon’s grocery business. These were followed by Grofers, Netflix and PharmEasy. Other top performers in the index include Amazon Prime, Medlife, Paytm and PhonePe.

The index is entirely based on consumer surveys. RedSeer surveyed more than 7,000 internet users across 30 cities to compile the index, which covers about 100 internet companies. All these users were people who had bought products from the companies in the index. The index covers the period from late March to late May.

The RedSeer report shows that millions of people who were earlier buying only a small number of products and services on the internet were forced to move a large part of their overall spending to the digital medium from offline.


In the last three months, customer retention rates have shot up anywhere between two to three times for internet platforms. At the same time, their customer acquisition costs plunged as much as 80%, and even more in some spaces like online grocery, e-pharmacies and online education, RedSeer data shows.
Given that internet companies spent up to $3 billion on customer acquisition in 2019, the savings will provide a boost to the companies’ bottom-lines this year. For the winners, it’s a dream combination: add millions of new users and retain most of them while spending far less money to attract them.

Notwithstanding the short-term hit, these trends indicate that the pandemic has triggered some structural shifts in consumer spending habits and usage patterns that will bring huge benefits to internet companies over the coming years.

The report’s findings confirm what entrepreneurs in spaces like online grocery, e-pharmacies and digital education have been saying. Companies like BigBasket, Grofers, Practo, 1 mg, Byju’s and Unacademy are all registering a spike in usage and sales even as India braces for a sharp economic contraction this year. These companies are all in talks to raise large amounts of capital at soaring valuations amid a broader funding downturn for internet startups.

State of the internet

The recovery in the internet economy has been driven by a strong rebound in e-commerce. Compared with January levels, online retail was up by more than 10% to an annualized $33 billion in June, compared with January. In the first six months of 2020, private consumption spending dropped by as much as 33% from last year’s levels. Given the drop in offline retail, e-commerce comprised 4.5% of India’s overall retail market in June, a big jump from 3% in January.

Pent-up demand and clearance sales have driven recovery of e-commerce across sectors, RedSeer said. Still, more than 50% of the people in the survey said that they will “trade down"—buy cheaper brands—over the next six months in discretionary categories like fashion, electronics and personal care, reflecting worries about the poor economy and income losses. This means that the private label products of online retailers like Flipkart and Amazon India may become a key area of focus.

Within e-commerce, nearly all categories, except fashion, grew in size in June compared with January. The sharpest expansion came in online groceries, large appliances and other electronic products. Products like laptops and televisions are seeing high demand as people across large and small cities are forced to continue working from home.

The growth in online groceries has sustained despite the partial reopening in cities. RedSeer said that e-groceries has seen the addition of two major sets of customers: middle-age people in metros and affluent users in tier II cities and below. Previously, online grocery services were mostly used by millennials in big cities.

Sales of fashion products, however, are still down from pre-covid levels, as people working from home have cut back spending on clothes and footwear. Still, even within fashion, online firms have fared much better than offline chains like Shoppers Stop and Future Group that are struggling to attract customers after reopening their stores in some cities.

Three other sectors have benefitted from the pandemic: online healthcare, digital education and entertainment content. Scores of patients and doctors both have been forced to rely on digital health platforms to treat fevers, coughs, mental illnesses and other ailments as many clinics remain shut. More people are ordering medicine online. Internet penetration in digital health doubled to 2% of the overall market in June from January, RedSeer data shows.

With schools and colleges shut, and the fear of transmission leading to a cancellation of offline tuition classes, digital education has seen a surge in demand. Digital education doubled in size in June from pre-covid levels. By 2022, the sector will grow to $3.5 billion from about $750 million last year, according to RedSeer estimates. Audio and video entertainment apps like Netflix, Amazon’s Prime Video and Jio’s Saavn have seen usage jump to all-time highs. By adding dozens of new films, TV shows and other content and offering flexible pricing plans, their subscription numbers have increased too.

Travel, expectedly, has collapsed. The size of the online travel market shrank to $2.2 billion in June from nearly $22 billion in January, according to RedSeer’s data. All affected companies, including Oyo, MakeMyTrip, Yatra, Treebo and others have cut thousands of jobs since March.

Another sector badly hurt by the pandemic is mobility. In May, bookings at mobility firms like Ola, Uber, Bounce, Vogo and others were less than 10% of their pre-covid figures. These firms, too, have cut hundreds of jobs and other expenses to conserve cash in order to tide over the crisis.

Demand for food delivery has also slumped, hurting both Swiggy and Zomato. In June, the food delivery sector was at just 40% of its regular size, according to RedSeer. People have cut back on ordering food in favour of cooking meals at home. Restaurant and bar visits were completely halted till the end of May. Though some state governments began to allow restaurants to open last month, only 20-30% of all dine-in restaurants in India are operating, as per RedSeer estimates. Even these are now struggling to attract customers.

However, both Swiggy and Zomato were among the top 15 in RedSeer’s index, mostly because people surveyed said they appreciated the efforts of the two companies to protect the health of their workers and customers by introducing measures like contactless delivery and temperature checks of delivery executives. Swiggy’s expansion of its grocery service was also well-received by customers.

In terms of recovery of the struggling sectors, the survey showed that people expect the mobility and food delivery spaces to regain 90% of their old business by December. Travel, however, could take far longer to recover.

Cross-platform usage

In 2019, of the 583 million internet users in India, only 232 million people paid for any service or product online at least once (the rest used the internet primarily for messaging and browsing), according to RedSeer. And even among the 232 million, only 135 million bought products from e-commerce platforms, indicating the relative shallowness of the internet economy.

According to RedSeer, it is largely the same set of users that has driven the recovery in the internet economy since May. What’s different is that users who were earlier only buying something once or twice a year in the past have now been forced to buy both more frequently and a wider range of goods and services.

“There hasn’t been much expansion in the overall number of transacting users, but there is a steep growth in the number of serious or holistic users who are shopping on multiple platforms," said Mrigank Gutgutia, an associate director, RedSeer.

RedSeer said that this change could finally sustain so-called super apps in India.

Super apps are dominant in China’s internet space where platforms owned by Tencent, Alibaba and Meituan-Dianping offer a wide range of products and services like e-commerce, travel bookings, food delivery and cab bookings all within the same app. In India, so far, this concept hasn’t worked. Most online shoppers still use different apps across e-commerce, travel, food delivery and other sectors. With the increasing depth and width in the internet economy, this could change, potentially providing a boost to Paytm, PhonePe and Amazon Pay, which are attempting to become super apps.

“From the customer surveys, what has emerged is that there are now a very large number of online users who are using multiple platforms. We believe that this is the right time for a super app to emerge," Gutgutia said.


5. Cos go all out to get back migrant workers 
TNN, Jun. 24, 2020, Namrata Singh & Rupali Mukherjee

Companies are using a combination of measures — right from convincing village heads and the workers themselves of their safety, to arranging for their transportation — to bring them back from various states. Hiring agencies TOI spoke to said that with limited sources of income back home, a number of workers had themselves evinced an interest to return to the workplace.

Mumbai: After the exodus, it’s now the return of the migrant workers. They made a difficult trek back home during the lockdown as factories downed shutters without any warning. But organizations are now rolling out the red carpet to get them back to work.
Companies are using a combination of measures — right from convincing village heads and the workers themselves of their safety, to arranging for their transportation — to bring them back from various states. Hiring agencies TOI spoke to said that with limited sources of income back home, a number of workers had themselves evinced an interest to return to the workplace.

Faced with labour shortages over the last three months, a Mumbai-based pharma company with plants in the Western belt organized buses to get its employees back. Many of these are working in key functions of research and development. Since pharmaceuticals fall under essential services, drug manufacturing plants were operational during the lockdown imposed due to Covid-19. Units located at Baddi (Himachal Pradesh), Indore (Madhya Pradesh), and western belt of Vapi (Gujarat) and Daman were particularly hit by labour woes. Coupled with shortage of raw materials, packaging materials and logistics, average capacity utilization at pharma manufacturing plants across the country was affected by 40-50%. Now, it has limped back to near-normal levels, and is around 80% in most units, with the labour issue getting sorted.

RPG group company KEC International, where half of its migrant workers had left for their hometowns, has seen a significant number returning to the project sites. KEC International MD & CEO Vimal Kejriwal said, “Pre-lockdown, we had 30,000 people at various sites. This had come down to 15,000 during the lockdown. Now, we have crossed 20,000. In a way, two-thirds of our workers are back with the company. While we can’t say whether we will return to 30,000 workers in a couple of months, we are definitely receiving feelers from a lot who want to come back.”
KEC International tapped into its employee database, engaged with supervisors who handled workers and the sarpanch at villages to reiterate that the workers and their safety will be taken care of on their return. “We are making arrangements to bring them back, whether it’s buses or arranging for their trains tickets. For some locations, we are even considering getting them by flights,” said Kejriwal. In addition, the company has also hired locally to ensure operations are not hampered. Kejriwal said 95% of the company’s sites are now operational.

JSW Cement also arranged for transportation in mid-May to get a few groups of employees for some of its plants after getting the relevant permissions from local administration. Its plants are located in Andhra Pradesh, Karnataka, Orissa, Maharashtra and West Bengal. However, as part of its risk-mitigation strategy, JSW Cement has now decided to employ a greater portion of local labour for its packing operations. At present, migrant workers account for 80% of loading and packing operations in a cement plant, while the rest is local labour. “We want to change the proportion to 80% local labour at our loading and packing facilities,” JSW Cement CEO Nilesh Narwekar said. “With 70-80% labour at the packing operations, we can run the plant without any hiccups in any crisis, going forward,” he added. Typically, 90-130 people are employed in each plant for packing operations. Most of them, employed as contract labour, left for their homes in Uttar Pradesh, Bihar, Orissa and Rajasthan.

On the other hand, to ensure that essential commodities reach consumers across the country during this pandemic, ITC went through an extensive process of mobilizing the entire supply chain. “There were instances where we had to convince villagers that our facilities adhere to the highest levels of safety norms. We created awareness through videos, demonstrated our safety precautions by bringing people to our facilities and gave them the confidence required to repose faith in our operations,” said an ITC spokesperson. Today, the whole supply chain of ITC is running end-to-end. “Inter-district movement was a challenge. We had to relocate people to a district, help them stay there, find accommodation within that district so that we could manage workforce requirements,” said the spokesperson.

Dabur India, too, has recruited workers from villages and towns in the areas near its manufacturing units. Executive director Biplab Baksi said, “Wherever we are facing a shortage, we have sought and received permissions from state authorities to hire workers from other states. We have gone to states like Jharkhand to hire workers and have arranged transportation for them to reach our manufacturing units. All safety protocols mandated by each state, like social distancing, etc., are being followed during the transportation, and once they reach our manufacturing units.”


- AGRICULTURE, FISHING & RURAL DEVELOPMENT 

6.1. Amul forays into edible oil business with launch of Janmay 
ET Bureau,  July 10, 2020, Madhvi Sally

“With an objective of providing stable and remunerative price to edible oilseed growers of Gujarat and become atmanirbhar in domestic edible oil production as envisaged by Prime Minister Narendra Modi, we are launching a range of edible oil under the Janmay brand,” said RS Sodhi, MD of Amul.

Amul has entered the edible oils business with the launch of Janmay brand in Gujarat and hopes to provide remunerative prices to oilseed farmers, the company said in a statement.
“With an objective of providing stable and remunerative price to edible oilseed growers of Gujarat and become atmanirbhar in domestic edible oil production as envisaged by Prime Minister Narendra Modi, we are launching a range of edible oil under the Janmay brand,” said RS Sodhi, MD of Amul. He added that the dairy cooperative has the experience of marketing mustard and other oils under the Dhara brand in the 1990s.

India is the world's largest importer of edible oils and spends around Rs 75,000 crore annually on edible oils import. “Currently, India is importing 65% of the total demand of edible oil. It is important to note that India had liberalised edible oils import despite having 90% self-sufficiency in 1990's at the cost of domestic producers,” he said.
The Palanpur-based Banaskantha District Cooperative Milk Producers Union of Amul will be processing 200 tonnes of oilseeds daily. It has already procured mustard and groundnut this year from its farmer’s networks and will be purchasing other oilseeds in the season ahead, said Sodhi.

He said Janmay means “newly born” or “fresh” and as the brand name suggested, the oil range is promoted as farm fresh. Janmay oil range includes groundnut oil, cottonseed oil, sunflower oil, mustard oil and soya bean oil, which will be sold across 30,000 stores in one litre pouch, five litre jar and 15 kg tin packing.
“Indigenous oils like groundnut oil, mustard oil contribute around 25% of total oil consumption in India. Our 3.6 million milk producers of Gujarat Cooperative Milk Marketing Federation are also farmers and some of whom cultivate oil seeds like groundnut, cottonseed, mustard etc in Gujarat,” he said.


6.2. Rural sector will be transformed by constitution of 10000 Farmers' Producer Organizations 
IBEF,  Jul. 06, 2020

Union Agriculture and Farmers’ Welfare Minister, Shri Narendra Singh Tomar today said that a new dimension is going to be added to farmers’ groups with the creation of ten thousand new Farmers’ Producer Organizations (FPOs). He said that 86 per cent farmers in the country are small and marginal farmers, who will strengthen the rural economy through these FPOs, which will not only help in agricultural progress, but also create new avenues for the development of the country. The Union Agriculture & Farmers’ Welfare Minister was addressing a meeting of Laghu Udyog Bharati and Sahakar Bharati through video conference, in which Ministers of State for Agriculture & Farmers’ Welfare, Shri Purushottam Rupala and Shri Kailash Choudhary, and Union Minister of State for Water Resources Shri Arjun Ram Meghwal were also present.

Shri Tomar said that in the beginning, the minimum number of members in the FPOs would be 300 in the plains and 100 in the North-East and hilly areas. The FPOs which are being formed for the benefit of small, marginal and landless farmers, will be managed in such a way that these farmers get access to technological inputs, finances, and better markets and prices for their crops, so as to fulfil the target of doubling farmers’ incomes by the year 2022 as envisaged by Prime Minister Shri Narendra Modi. The FPOs will help to reduce the cost of production and marketing, also help to improve production in the agricultural and horticultural sectors. This will also help to increase employment opportunities.

Shri Tomar said that in the Budget 2020-21, there is a proposal to adopt cluster approach for horticultural produce through “One district – One Product” scheme so as to give a fillip to value addition, marketing and exports. This is a central scheme; with total budget of Rs 6,865 crore (US$ 973.90 million). All FPOs will be provided professional support and handholding for 5 years. 15 per cent of the FPOs are to be constituted in aspirational districts and will be formed on priority basis in scheduled tribal areas. This is a produce cluster-based scheme. The FPOs will also boost organic and natural farming.

Further elaborating on the scheme, Shri Tomar said that it will be implemented through agencies like NABARD, SFAC and NCDC. They will be provided facility of equity grant up to Rs 15 lakh (US$ 21,279.61) on matching equity basis for financial stability. There will be credit guarantee fund with NABARD and NCDC, under which suitable credit guarantee up to Rs 2 crore (US$ 0.28 million) per FPO will be provided. To understand the importance of capacity building, training and skill development of the stakeholders, there is a provision to provide training in organizational management, resource planning, marketing, and processing through national and regional level institutions.

Several suggestions were received from the representatives of the participating organizations and discussion on various issues was held.

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


7. Italy brings state or art food processing tech to India 
ET Bureau July 14, 2020, Dipanjan Roy Chaudhury

Italy encompasses a lot that is charming, beautiful and great tasting. However, the land of the pantheon, pasta and the Leaning Tower of Pisa is more than just that. The country is a leading builder and exporter of food packaging and processing equipment that help companies around the world innovate and progress.


NEW DELHI: Learn about the art and cutting edge technology around food processing the Italian way. Attend webinars, virtual exhibitions and B2B meetings with the leading builders and exporters of food packaging and processing equipment from Italy to help your food processing business innovate and grow at the ‘Digital Indo Italian Business Mission on Food Processing’ on July 15 and 16.
Italy encompasses a lot that is charming, beautiful and great tasting. However, the land of the pantheon, pasta and the Leaning Tower of Pisa is more than just that. The country is a leading builder and exporter of food packaging and processing equipment that help companies around the world innovate and progress.

In fact, In 2016 alone, Italy produced over $8.5 billion worth of packaging machinery and $7.5 billion worth of food processing technology, and exported more than 70 percent of both to other countries.
In 2019, Italy exported to India packaging machines worth $54.9 million. When it comes to food processing, Italy is the fourth largest supplier to India, after China, Germany and USA, exporting food processing machines worth $137.31 million last year.
Italy’s combination of tradition and innovation are the basis of its continuous transformation in food processing and technology.
Italian manufacturers of food technology machinery and equipment have a strong understanding of the realities, challenges and opportunities of the industry, which is reflected in their standard operating practices (SOPs) and the state-of-the-art technology they adopt to process a wide range of food items - fruits and vegetables, cereals, milk and other dairy, meat and poultry etc.

To share their leading expertise in the technology of food packaging and processing with Indian food processors, the Embassy of Italy, New Delhi, is hosting ‘The Digital Indo Italian Business Mission on Food Processing’ on July 15 and 16 - a mega virtual event featuring digital conferences, trade fair, B2B meetings, webinars and much more.
The Digital Indo Italian Business Mission on Food Processing will showcase Italian technologies in the areas of fruits and vegetable processing,milk and dairy products processing, cereal processing, packaging and bottling and more while facilitating networking opportunities between Italian technology providers and Indian food processors.
The two-day event will feature some prominent entities from both the governments of India and Italy, stakeholders of the food technology industry, leading industry and trade associations and ambassadors, among others.

The digital conference will commence with an opening remark by Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), followed by keynote addresses by Hon’ble Smt. Harsimrat Kaur Badal, Union Minister for Food Processing Industries; Manlio Di Stefano, Italy’s Undersecretary of State for Foreign Affairs in charge of International Trade, and Ambassador Lorenzo Angeloni, Director General for Economic Promotion, Ministry of Foreign Affairs and International Cooperation, Italy and presentations by Carlo Maria Ferro, President, Italian Trade Agency (ITA), Barbara Beltrame, Vice President of Confindustria in charge for Internationalization and Deepak Bagla, MD and CEO of Investindia, among others.

The inaugural session of the The Digital Indo Italian Business Mission on Food Processing will be concluded with a talk by the Ambassador of Italy to India, Vincenzo de Luca.
“We are proud to have organised with our Indian partners Italy’s first digital business mission in the world. The initiative is part of a process aimed at establishing a long term strategic partnership between Italy and India in the food sector,” Ambassador de Luca recently stated.
The inaugural session will be followed by presentations on the investment opportunities in India, the Indian food processing market, financing solutions to support trade and investments between the two countries and Mega Food Parks and its business opportunities, among others.
While the focus of this event is to help Indian food processing businesses to understand the innovative spirit of Italian tech providers and learn some of the best practices of the industry, it will also showcase India as a great investment opportunity to expand its food technology and processing capabilities.

While Day One will deep dive into aspects across sectors including fruits and vegetables, milk and milk products and cereal processing and packaging, followed by a brief introduction on meat processing, Day two will be dedicated to webinars on packaging and bottling for the food and beverage industry and mega food parks.


8. India's ambitious plan to help small businesses does little to save them 
Reuters, Jul. 10, 2020, Manoj Kumar and Nupur Anand

Prime Minister Narendra Modi's programme to help small businesses back on their feet through $40 billion of government-guaranteed loans is too little and may not be enough to save the many companies that form the backbone of India's economy, nearly three dozen entrepreneuers Reuters spoke to across the country said.

MEERUT/MUMBAI: India re-opened for business in June after months of lockdown but for thousands of small entrepreneurs in the town of Meerut, near Delhi, the blow has been devastating.
Businesses from textiles to sports goods and furniture are shuttered or working at a bare minimum, and cows roam streets that would be normally packed with workers and vehicles.
Prime Minister Narendra Modi's programme to help small businesses back on their feet through $40 billion of government-guaranteed loans is too little and may not be enough to save the many companies that form the backbone of India's economy, nearly three dozen entrepreneuers Reuters spoke to across the country said.

Some said their business was so hamstrung by the pandemic that taking on new debt made little sense. They would rather the government had helped them by cutting the goods and service tax or waive off the interest on loans.
Others said that despite Modi's promise to open up the credit lines, it was not easy convincing bankers to lend because of the death throes their businesses were in.
Ashok, whose near 10 million rupees ($133,000) annual turnover company based in Meerut made steel furniture for hotels and schools, said he had fired eight of his 10 workers and was thinking of shutting down the operation.
"It would be better for me to close the unit than to run from pillar to post to get a loan," said Ashok, who did not want to give his full name.

He said his banker told him his creditworthiness is low as his business is struggling.
The Finance Ministry, which has made the loan support scheme the centerpiece of the rescue effort, did not respond to a Reuters request for comment on the problems faced by businesmen.
Small businesses that account for nearly one-quarter of India's $2.9 trillion economy and employ more than 500 million workers are the worst affected by the pandemic.
Nearly 35% of the 650 million small businesses across the country could shut down soon in the absence of government support, the Consortium of Indian Associations said in a letter to Modi's office seen by Reuters.

DOLE OUT LOANS
Bankers said there is government pressure to dole out loans, but businesses are not coming forward as demand remains tepid.
Till now, lenders have paid out 561 billion rupees, barely 19% of the sum earmarked, and approved loans worth 1,145 billion rupees since the third week of May, according to government data.
Businesses say that the lenders are either asking for increased paperwork or the ones in desperate needs are being deemed ineligible.
"I was asked to provide a collateral and also buy an insurance for getting this loan whereas it is supposed to be collateral free," said an entrepreneur in Modi's home state of Gujarat.

But two bankers said that securing money from the government even in a fully-backed sovereign guarantee scheme is not easy.
"The experience is unpleasant," said the former corporate head of a state-owned bank.
"You lend to most of these businesses only because government has directed but when it comes to getting back the money, one has to spend considerable resources and time which makes little sense," he added.
Businesses have been pushed to the wall as their suppliers have not paid and orders have trickled to zero while fixed costs including electricity, wages, instalments for earlier bank loans have drained their funds.

"We have not got a single rupee relief from the government," said Sanjeev Rastogi, a garment manufacturer in Meerut who is running his factories at 25% of the production capacity.
Rastogi has incurred a loss of 3.5 million rupees in the last two months and believes he may have to close down his business in the next three months.
About 25% small factories out of over 10,000 textile units in Meerut could shut down and default on bank loans in the next few months, said Anurag Agarwal, chairman of the Meerut chapter of Indian Industry Association.
Rastogi is making last ditch efforts to remain in business.
"Otherwise, I will sell the factory at any price to save some money for my retirement."


9.1. Surplus milk, drop in demand: How Nandini kept farmers smiling through lockdown 
ET Bureau, July 02, 2020, Akshatha M

At the onset of the lockdown, KMF and 14 associate milk unions stared into the immediate challenge of not just collecting milk from farmers in 254,000 villages, but supplying to over 10 millions customers within Karnataka, and across the border.

BENGALURU: On March 24, the day Prime Minister Narendra Modi announced a 21-day nation-wide lockdown to contain the Covid-19 pandemic, unease gripped top managers at Bengaluru headquarters of the Karnataka Co-operative Milk Producers’ Federation’s (KMF), owner of India’s second largest dairy brand Nandini.
If swathes of rural Karnataka have a semblance of economic stability, it is brought upon by milk that they supply to the cooperative behemoth. The Rs 14,000 crore the formidable brand generates in revenues touches families of nine lakh dairy farmers, lifting them from abject poverty and hunger.
At the onset of the lockdown, KMF and 14 associate milk unions stared into the immediate challenge of not just collecting milk from farmers in 254,000 villages, but supplying to over 10 millions customers within Karnataka, and across the border. “It was an unprecedented situation that none of us were prepared to handle. But we had to respond quickly, to keep the supply chain going and keep both dairy farmers and customers happy,” KMF managing director B C Sateesh told ET.

What went behind the scenes on the night following the announcement and the weeks that followed was one of meticulous planning, data gathering and impeccable execution. “Problems were plenty. We faced issues in terms of transportation, shortage of labour, maintaining hygiene and sourcing of packaging materials. It required coordinated work from all our field staff and officials,” Sateesh said.
Among the first things the KMF management and officials did soon after the lockdown was enforced was to turn offices into their temporary homes. With sections of drivers and workers at chilling and processing units reluctant to work for fear of contracting the virus amid other transportation issues, officials decided to make themselves available in offices and chilling plants 24X7. “We had to lift the spirit of our employees,” said Mrutyunjaya Kulkarni, KMF director (marketing).

About 15,000 employees work for the federation and its affiliated units. Nearly 4,000 vehicles are deployed to collect and distribute milk.
Soon, the KMF also announced doubling of salary to employees attending work during the lockdown. “We supplied them food, arranged for transport, introduced hygiene practices in dairy and chilling units. A combination of interventions helped boost the morale of our workers,” Kulkarni said.
While labour and transportation issues were set right, the major challenge before the management was a sudden fall in demand for milk. KMF sources on an average 68 lakh litres of milk from farmers everyday, of which 47 lakh litres of milk and curd is sold in Karnataka and eight lakh litres are transported to Tamil Nadu, Maharashtra, Goa, Andhra Pradesh and Telangana.

“Within 48 hours of the announcement of the lockdown, the demand for milk in Karnataka fell to 36 lakh litres. Our milk supply to neighbouring states came down to 1.5 lakh litres. Suddenly, we had surplus milk of about 16 lakh litres,” said D N Hegde, KMF director (animal husbandry).
On normal days, Karnataka converts 13 lakh litres of milk into powder or into milk-based products of a long shelf life. The drop in demand pushed the cooperative body to find ways to deal with an additional 16 lakh litres of milk. “Our conversion capacity was limited to maximum 16 lakh litres and not all milk powder plants were functional,” Hegde said.
That is when the Karnataka government came to KMF’s rescue that, by extension, helped farmers. Lockdown had left many migrant workers and low income families in deep trouble. No job meant no food to their family members quite often.

In the first week of April, Chief Minister B S Yediyurappa announced to purchase seven lakh litres of milk from KMF everyday and distribute it free of cost in slum areas and labour colonies. “By the end of April, the state had purchased 2.11 lakh litres of milk at a cost of Rs 80 crore. It came as a big relief to plan for the coming weeks,” Sateesh said.
Although the state bought out surplus milk, KMF was still left with nine lakh litres of milk, caused largely by the shutdown of the hotel industry, offices and temples. During the breathing time in the first two weeks of April, the KMF management decided to increase its milk conversion capacity by repairing some of its dysfunctional plants. One such plant was at Ramanagaram near Bengaluru. “The plant was waiting to be commissioned,” D N Hegde said.

The challenge, however, was Karnataka did not have the engineers to commission this fully-automated state-of-the-art plant. They had to come from big brother Gujarat. That is when Daniel J, a driver at KMF, pitched in. Amid the stringent lockdown, Daniel offered to drive to Gujarat.
“I reached Vadodara, 1,400 km from Bengaluru in 18 hours. Roads were empty, restaurants and dhabas were closed. I lived on bread and biscuits,” Daniel said. He covered a distance of 3,800 km and was back at Bengaluru office on the fourth day. Soon, Ramangaram plant started taking seven lakh litres of milk load.
Around the same time, the dairy giant faced yet another problem: shortage of packaging stuff. KMF partially manufactures milk pouches in its own factory unit, but is also dependent on Goa, Daman and Diu and Kerala for the supply of plastic and carton boxes. “Although we had a stock to last for a month, we could run short of supply by the end of April,” the KMF managing director said.

But states that were supplying materials were facing a massive shortage of workers. “We approached the Union Home Ministry. Their war room coordinated with various district authorities on a daily basis and ensured smooth supply of materials,” Sateesh said.
As the federation and unions worked relentlessly to collect and supply milk, dairy societies and farmers too swiftly adapted to the Covid-19-induced system of a new hygiene culture. For instance, in Kolar-Chikkaballapur dairy union area, where a large number of families are dependent on dairying, milk societies have mandated strict social distancing and face cover.
“Dairy farmers have shown immense maturity and are following all precautionary measures. Societies do not accept milk from Covid containment zones,” said H V Thippa Reddy, MD, Kolar-Chikkaballapur milk union.

K R Srinivasa, a farmer from Kolar who sells 40 litres of milk everyday said he faced no glitches in supplying milk to the society. “Society took milk even on the first day of lockdown. The money has been credited to my account,” he said.
As Karnataka struggles to come back to normalcy, with restaurants barely getting customers and offices mostly closed, the demand for milk is yet to fully pick up. “We have regained the demand by about 8% in June and we are hoping that it will gradually improve,” Kulkarni said.
But some good practices adapted during the lockdown like milk vendors and drivers switching to cashless transactions when the milk is unloaded, stringent hygiene practices such as using gloves and sanitisers are likely to stay. “Lockdown has taught us how to supply milk during a crisis of this magnitude and turn challenges into opportunity,” the KMF MD said.


9.2. Kiranas leveraged technology to stay relevant during the lockdown: EY Survey 
ETRetail, Jul. 06, 2020, Smita Balram

The survey, which took a deep dive into the impact of the pandemic on kiranas, showed that about 20% of kirana store owners started leveraging online delivery platforms and nearly 40% want to partner the platforms to stay relevant for the urban consumer.

Bengaluru: The Covid-19 crisis propelled the kirana ecosystem to adopt technology to maintain the supply of essentials amid nationwide lockdown, said the latest report by consultancy firm EY India. The survey, which took a deep dive into the impact of the pandemic on kiranas, showed that about 20% of kirana store owners started leveraging online delivery platforms and nearly 40% want to partner the platforms to stay relevant for the urban consumer.

The pandemic along with the certain restrictions imposed in the country led to a sudden shift in consumer behaviour which reflected in the changing relationship between individual consumers and and the local kirana stores. The survey highlighted that the pandemic led to a surge in new consumers visiting kirana stores in metros and non metros. About 79% of the respondents in non-metros and 50% in metros stated that new consumers started visiting their stores post lockdown. These were consumers who earlier shopped online or from supermarkets but now preferred to buy from local kirana stores to avoid long queues and its traceability factor.
Several kiranas, which could not partner online delivery platforms, used chat apps as a medium to take orders, provide contactless deliveries and digital payments during the lockdown.

“The way the kirana store owners have adopted digital payments, changed operating models and reduced friction towards technology to cope with the pandemic is commendable. Beyond this crisis, growth for kirana stores will come from partnerships and symbiotic relationships,” said Shashank Shwet, partner - customer experience and design thinking at EY India.
The survey insights were collected through 27 interviews across 12 cities, five metros and seven non-metros with participants who represented small and big kiranas across socio-economic backgrounds.


10.1. ITC sets sights on contract farming 
ET Bureau, Jun. 22, 2020, Madhvi Sally

ITC’s business head for agriculture and information technology S Sivakumar said international buyers were diversifying their sources of supply in the wake of the pandemic.

NEW DELHI: ITC is planning to create export-oriented fruit and vegetables clusters, grabbing the opportunities created by recently announced agricultural reforms, such as allowing contract farming and the expected change in global purchasing patterns.
ITC’s business head for agriculture and information technology S Sivakumar said international buyers were diversifying their sources of supply in the wake of the pandemic. “For example, the Middle East countries will be keen to procure fruits and vegetables from diverse sources, both fresh and as well as processed products,” he said.


The company plans fruit and vegetable clusters closer to the ports to create logistics infrastructure for exports. Sivakumar said the company is exploring various options in view of the agricultural reforms announced by the government. It hopes to use contract farming and involve farmer producer organisations (FPOs), which the government is actively promoting.
Sivakumar said greater consumer awareness about food safety and hygiene in the domestic market will encourage investment at farms, improved supply chains and remunerative prices to farmers.

To begin with, ITC is planning three clusters in six to seven months in various parts of the country. The company is already in talks with customers and building the supply chain to export to Europe, the US and the Middle East.
The government recently approved three ordinances to reform agriculture.
Legalising corporate farming—The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance 2020—is expected to provide for a national framework on farming agreements that protects and empowers farmers to engage with agri- business firms.

Further, the amendment to the Essential Commodities Act will remove the existing restrictions on stocking food produce. The Farmers’ Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020 allowed farmers and traders to sell and purchase through competitive alternative trading channels.
“Horticulture crops like onions, tomatoes and potatoes, all of these had the stock limit under the Essential Commodity Act. Now, with the amendment, we can also explore creating those clusters and put in investments,” he said.
Apart from fresh fruits and vegetables exports, ITC also expects wheat and rice exports to pick up.


10.2. Cargill to partner with Indian firm for chocolate plant 
ET Bureau,  Jun. 24, 2020, Madhvi Sally

In India, Cargill markets edible oils such as Nature Fresh, Sweekar, Leonardo Olive and markets wheat flour under the Nature Fresh brand.

US food major Cargill is partnering with a manufacturer in India to launch its first chocolate manufacturing operation in Asia. It is expected to begin operating by mid 2021 and will manufacture chocolate compounds, chocolate chips and chocolate paste, catering to customers in the bakery, ice cream and confectionery industries.

“The facility in west India is expected to begin operating mid-2021 and will initially produce 10,000 tonnes of chocolate compounds,” said Francesca Kleemans, managing director at Cargill Cocoa & Chocolate Asia-Pacific. “We will be supporting the local economy with the addition of 100 new manufacturing jobs.”

The chocolate industry is annually growing at 13-14% in the domestic market, according to Cargill. India is a key growth market for Cargill, said Kleemans. "This new partnership reinforces our commitment to increase our regional footprint and capabilities in Asia to better support the needs of our local Indian customers as well as multinational customers in the region,” she said.
According to her, the consumer preference for chocolate has increased with a shift from traditional sweets to chocolate gifting and year-round consumption of ice cream besides baked goods and premium chocolate products.
Industry estimates the market size of chocolate in the confectionery sector alone to be 260,000 tonnes.

“The per capita consumption of chocolate is low in India compared to global markets, creating a huge potential for growth. Combining local insights from our experience and long presence as a food ingredient supplier in India with our global cocoa and chocolate expertise, we aim to become the leading supplier,” Kleemans said.
With the addition of the new manufacturing plant in India, Cargill is prepared to develop and scale up operational capabilities to support future growth for our customers locally, regionally and globally, said Kleemans.
In India, Cargill markets edible oils such as Nature Fresh, Sweekar, Leonardo Olive and markets wheat flour under the Nature Fresh brand.


- INDUSTRY & MANUFACTURE

11.1. Welspun looks at re-purposing biz to align with changed ecosystem; e-commerce emerges priority areas
PTI,  June, 15, 2020

When asked if the company is looking to partner with existing online marketplaces, Goenka said, "We work with Amazon, we work with Flipkart in India, we are working with Myntras of the world. We are working on marketplaces, but we also have our websites."

With the coronavirus pandemic hitting businesses globally, home textiles major Welspun India Ltd is looking at how can it re-purpose its businesses to align with the changed ecosystem, with e-commerce emerging as one of its priority areas to reach end consumers, according to a top company official. The company, which has been a supplier of towels to the prestigious Wimbledon tennis tournament, said that despite the cancellation of this year's event, its orders have been honoured and overall, with big retailer across the globe coming back, it expects two of its plants to run at least 70-80 per cent of full in the ongoing year.

"This is the time to look at how we can re-look at our businesses, the purpose of business, what we are looking at, and if we can really continue to do what we are doing. And we have our heads up. That's something that we are doing," Welspun India Ltd CEO and Joint Managing Director Dipali Goenka told. She was responding to a query on how the company is reacting to the challenges thrown up by the global health crisis. Goenka said the company reacted swiftly to the changing situation.
"We got to work as coronavirus-struck with a sense of purpose of looking at how we can re-purpose our businesses...how can we re-purpose our factories and be prepared to work with the protocols of COVID-19? We did that. How do we re-purpose our product that was done. How do we look at e-commerce as a different channel?" she said.
Elaborating on how the company is looking to ramp up activities on the online channel, Goenka said, "We are working on a whole line of reaching out how do we go about it... We want to look at innovative ways to go to our customers. Can we work on e-catalogue, targeting customers and work with our distributors as partners and reaching out to the customers directly through them?"

She further said that has become a real opportunity for the company. "This is something in inception right now but the whole idea is, the bottom line is, we all will have to re-purpose ourselves. Think innovatively and look at doing businesses in a different manner."
Commenting on the potential of the online space, she said the company's existing portals in India and the UK have witnessed exponential growth in traffic during the pandemic.

When asked if the company is looking to partner with existing online marketplaces, Goenka said, "We work with Amazon, we work with Flipkart in India, we are working with Myntras of the world. We are working on marketplaces, but we also have our websites."
On the overall impact of the COVID-19 pandemic and the cancellation of events like Wimbledon tennis championships this year, Goenka said, "Wimbledon has been cancelled but the kind of commitment that Wimbledon has, they are taking all our stock and they are meeting all our targets. What they have committed to, they have taken that."
She further said that as the global impact wears on the whole world, the whole economy was disrupted. "For us, the big retailers who we are working with globally, they are coming back to working. We have been supplying them. Our plants have been chugging along since May.

Exuding confidence that Welspun India will recover better, she said, "We can see visibility coming soon though it is not what we had planned for. The COVID-19 impact is there everywhere but our plants, if I look at the annual picture, we look at least 70-80 per cent of both our plants full." She also said the company has insulated its workers and employees from the impact of the pandemic.
"We have taken care of our people. All salaries are paid on time. We continue to do so for our people. The only thing I would say is that this is also the time for Welspun India to look at how we can work efficiently. That's something which we definitely are working on. Looking at automation, digitisation, looking at upskilling our people that's where our energies are focussed on."


11.2. Flipkart signs MoU with Karnataka govt to promote local art, craft and handlooms 
PTI,  Jul. 10, 2020,

Both the Government of Karnataka and the Flipkart Group will focus on creating avenues to increase business and trade inclusion opportunities for these underserved segments of the society, thereby adding further thrust to Made in India efforts.

Bengaluru: Homegrown e-commerce marketplace Flipkart on Friday said it has signed an MoU with Karnataka MSME and Mines department to promote the states arts, crafts and handloom sectors by bringing them on to e-commerce and providing market access.
The partnership under the Flipkart Samarth programme will enable local artisans, weavers and craftsmen of Karnataka to showcase their hallmark products to a pan-India customer base, the company said in a release.

Both the Government of Karnataka and the Flipkart Group will focus on creating avenues to increase business and trade inclusion opportunities for these underserved segments of the society, thereby adding further thrust to Made in India efforts, it said.
The partnership will see renowned Karnataka based brands- Cauvery - Karnataka Handicrafts Development Corporation and Priyadarshini Handlooms, part of Karnataka Handlooms Development Corporation joining the Flipkart Samarth programme.
"The collaboration with Flipkart will be instrumental in driving commercial and social development in the state.

This partnership will help in taking the local handicrafts and handlooms businesses of Karnataka to a national consumer base," Principal Secretary, Department of MSME and Mines, Maheshwar Rao said.
He said MSMEs in the state will also benefit from skills of branding, digital marketing and financial management while showcasing the locally made high-quality products.
Flipkart said its Samarth programme seeks to break entry barriers for artisans by extending time-bound incubation support, which includes benefits in the form of onboarding, free cataloguing, marketing, account management, business insights and warehousing support.
"These are challenging times, and as a homegrown platform, we believe it is our responsibility to boost local businesses and catalyse ecosystem partnerships to help transform them," Flipkart Group Chief Corporate Affairs Officer Rajneesh Kumar said.


12.1. Arcelor Mittal plans Rs 2,000 crore investment in Odisha 
IBEF, Jun. 15, 2020

ArcelorMittal Group plans to invest Rs 2,000 crore (US$ 283.73 million) in Odisha, said its Group Chairman and CEO Mr L N Mittal. Mr Mittal was interacting with Odisha Chief Minister Mr Naveen Patnaik through a video conference.

ArcelorMittal Group is the world's largest steel maker.

"We already have a Rs 2,000 crore (US$ 283.73 million) investment plan in Odisha which is already going on with support of your administration, your people and your guidance. You have a great experience and you have managed the COVID crisis very well which is good news," said Mr Mittal to Mr Patnaik during the interaction.

Mr Mittal added that the "company could not produce in Hajira, the full production, we would produce in Odisha and export pellets".

"But, what we like is that we have a lot of ideas to continue our expansion in Odisha. We are working on two mines - Sagasai and Thakurani," he said.

The company won one of the two mines through auction, which was organised in a very transparent manner.

"So, I see that this auction process which you designed is one of the best auction processes. The people have seen the transparency in governance. That is the most important thing as an international company. We see this as very important for us," Mr Mittal said.

Mr Patnaik assured Mr Mittal to provide all support from the state government and added that the Chief Minister's Office will interact with the ArcelorMittal office so that your (Mittals) project gets headway very soon.

Mr Patnaik also provided advise to the company to add value to the mineral resources procured from Odisha in the state itself so that more employment opportunities are created and help in the development of the state economy.

In the meantime, a statement released by the Chief Minister's Office said that the company is planning to expand its pellet plant at Paradip and increase its production capacity from 6 million tonnes per annum (MTPA) to 12MTPA.

There are also plans to expand its iron beneficiation plant at Baduna in Keonjhar district from 5 MTPA to 16 MTPA.

ArcelorMittal and Nippon Steel acquired Essar steel. The Essar plant has 6 MTPA pellet plant at Paradip. ArcelorMittal Nippon Steel India (AM/NS India) is the new name of Essar Steel India after it was acquired by a joint venture between ArcelorMittal and Nippon Steel Corporation.

With the acquisition of Essar Steel at a cost of more than Rs 50,000 crore, as much as US$ 7 billion has been invested in India, which is considered as one of the biggest foreign direct investment (FDI), the CMO statement said.

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


12.2. Atmanirbhar Bharat: Samsung and OnePlus to manufacture most TV sets in India 
ET Bureau, June 16, 2020, Writankar Mukherjee

This comes within days of Centre’s ‘Atmanirbhar Bharat’ initiative where it wants all companies to set-up local production and supply-chain. The country’s largest television brand Samsung will now make in India almost 85-90% of the televisions they sell in the country.

KOLKATA: Two leading brands Samsung and OnePlus have decided to locally manufacture most of their televisions in India to take advantage of zero import duties of the key component - open cell TV panel - and prevent any possible disruptions in supply chain like it happened earlier this year due to Covid at a time when the TV market has revived in the country.

This comes within days of Centre’s ‘Atmanirbhar Bharat’ initiative where it wants all companies to set-up local production and supply-chain. The country’s largest television brand Samsung will now make in India almost 85-90% of the televisions they sell in the country.

Three senior industry executives said both Samsung and OnePlus have partnered with Chinese electronics firm Skyworth to manufacture television sets in its Hyderabad facility which it runs as a joint-venture with an Indian partner.
Samsung has also expanded the existing partnership with home grown contract manufacturer Dixon Technologies to include smart TV models from 43 to 58-inches. Till recently, Dixon was manufacturing the 32-and 43 inch models for Samsung in India since January this year. Skyworth will be producing the 32 and 43 inches as of now.

For OnePlus, this is the first time it will make televisions in India after it entered the segment as a global first in the country last year. The company has recently said it plans to expand its television portfolio in the country to include smaller screen sizes.
Incidentally, Samsung had exited TV production in India in 2018 after the government had imposed duties on open cell TV panels and the Korean giant instead started importing finished products from Vietnam at zero duties through the free trade agreement route.
The government eventually last year brought down the duties on open cell panels back to zero. Open cell accounts for almost 70% of a television’s manufacturing cost. OnePlus has been importing its televisions from China.

A senior industry executive said Samsung’s decision to produce locally is to be self-reliant, take advantage of zero import duties and since there was pressure on the company to restart TV manufacturing in India as its exit was against the government’s make in India initiative.
While OnePlus and Skyworth said they have nothing to share at the moment, emails sent to Samsung India and Dixon remained unanswered till Tuesday press time.
All leading TV manufacturers such as LG, Sony, Xiaomi and Panasonic have already been making in India.
The TV market bounced back after the Covid-19 lockdown, growing sales by 35-50% since last month over pre-Covid period in January and February and even the same period last year. Companies like Sony, Samsung and Panasonic said they have reported 1.5 to 2 times sales growth in large screen models.
The market had declined by 2% each in 2018 and 2019 as per sales tracker GfK. In contrast, the market had grown by 22% in 2015, 17% in 2016 and 3% in 2017.


13.1. HPL acquires majority stake in Lummus Technology for enterprise value of US$ 2.725 billion
IBEF, Jul. 02, 2020

Haldia Petrochemicals Ltd (HPL), flagship company of The Chatterjee Group (TCG), and Rhone Capital, a global private equity firm, have jointly acquired the US-based Lummus Technology from McDermott International for an enterprise value of US$ 2.725 billion.

As per the press statement released by HPL, Lummus Technology is a leading master licensor of proprietary technologies in the refining, petrochemicals, gas processing and coal gasification sectors, as well as a supplier of proprietary catalysts, equipment and related engineering services. It has around 130 licensed technologies and more than 3,400 patents and trademarks.

Lummus Technology will operate as an autonomous entity with the acquisition.

“This development would accelerate India’s progress towards self-reliance in the materials technology space. HPL, with two decades of experience in manufacturing polymer products and downstream chemicals, would partner Lummus in evolving technological improvements for these segments," added the press statement.

This deal is expected to provide required boost to HPL’s initiative to pivot upstream investments in the 'oil to chemicals' sector.

“Our investments are both strategic and long-term, most of which span 25 to 30 years. We have primarily focused on knowledge-based enterprises, and as such, Lummus is a great addition to our portfolio," Mr Purnendu Chatterjee, founder Chairman of TCG, said in the statement.

State Bank of India was the lead banker in the deal.

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


13.2. KKR to acquire controlling stake in JB Chemicals 
IBEF, Jul. 03, 2020

KKR, US private equity giant, will acquire about 54 per cent stake in Mumbai-based drug manufacturer JB Chemicals and Pharmaceuticals, one of the oldest pharma companies in India, for Rs 3,100 crore (US$ 439.78 million). This is the second KKR investment in India in the past two months. In May, company agreed to invest Rs 11,367 crore (US$ 1.6 billion) in Reliance Industries’ digital assets subsidiary Jio Platforms for a 2.32 per cent stake, its largest investment in Asia till date.

J.B. Chemicals has a portfolio in the areas of cardiac, gastrointestinal, and anti-infective therapeutic across the branded formulations market. 

It has four flagship brands in India, Cilacar, Metrogyl, Nicardia and Rantac. Currently, it exports its branded formulations to more than 40 countries around the world.

The company has contract manufacturing capabilities that allows it to partner with large, international brands to develop a diverse range of innovative specialty products, including tablets, injectables, creams and ointments, lozenges, herbal liquids, and capsules.

Mr J.B. Mody, Founder, Chairman and Managing Director of J.B. Chemicals, said, “For more than four decades, J.B. Chemicals’ mission has been to deliver affordable, high-quality pharmaceutical products that improve the lives of individuals living in India and around the world. We are thrilled that KKR – with its deep knowledge of the pharmaceutical industry and experience in investing in the sector, as well as its extensive investments in India – will take our mission forward and build on the foundation of core values that our family has instilled in this company. This will also create growth opportunities for our people to progress."

Mr Sanjay Nayar, Partner and CEO of KKR India, said, “We are pleased that the promoters of J.B. Chemicals have selected us to take over their rich legacy and to help the company continue its expansion, which is clearly driven by its diversified product portfolio and state-of-the-art manufacturing capabilities. We believe J.B. Chemicals has an opportunity to accelerate its growth and leverage its strengths to enter new therapeutic areas. We look forward to working with the management team to build on the company’s strong foundation and believe this investment underscores KKR’s ongoing commitment to India’s long-term economic prospects and the potential of its companies."

KKR has a history of supporting companies in the pharmaceutical and healthcare sectors globally. In India, KKR’s pharmaceutical and healthcare investments include Max Healthcare and Radiant Life Care, which collectively comprise the largest hospital network in North India. It had also invested in Gland Pharma, an Indian pure-play generic injectable pharmaceutical products company that was the first company in India to get US Food and Drug Administration approval for pharmaceutical liquid injectable products. 

This transaction is subjected to regulatory and other customary approvals. Company will provide funds from its Asian Fund III.

Financial advisor to the Promoters of J.B. Chemicals for this deal was Avendus Capital, and Platinum Partners (Mumbai) acted as legal counsel. To KKR, Moelis & Company served as financial advisor, EY as accounting and tax diligence advisor, and Shardul Amarchand Mangaldas & Co. and Simpson Thacher & Bartlett LLP acted as legal counsel. 

ICICI Securities Limited will be acting as the manager to the public tender offer.

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


14.1. Apple supplier Foxconn plans to invest US$ 1 billion in India: Sources 
IBEF, Jul. 13, 2020

Foxconn plans to invest up to US$ 1 billion to expand a factory in southern India where the Taiwanese contract manufacturer assembles Apple iPhones.

This is can be considered as a move by the company to shift its base because of the disruptions from a trade war between Beijing and Washington and the coronavirus crisis.

"There's a strong request from Apple to its clients to move part of the iPhone production out of China," according to one of the sources with direct knowledge of the matter.

Though, there was no official statement by Foxconn or Apple regarding the matters.

The investment is planned over the course of next three years in the Sriperumbur plant, where Apple's iPhone XR is made some 50 km west of Chennai. It is expected to manufacture other iPhones models at the plant.

Foxconn is headquartered in Taipei and will add some 6,000 jobs at the Sriperumbur plant in Tamil Nadu state under the plan. The company also operates a separate plant in the southern Indian state of Andhra Pradesh, where it makes smartphones for China's Xiaomi Corp, among others.

Last month, Foxconn Chairman Mr Liu Young-way has said it would ramp up its investment in India, without giving details.

In India, the world's second-biggest smartphone market, Apple holds about 1 per cent of smartphone sales here. iPhones is status symbol in India because of its pricey nature.

This move is also expected to help Apple save on import taxes that further push up its prices.

Apple assembles a few models through Taiwan's Wistron Corp in the southern tech hub of Bengaluru. Wistron is also set to open a new plant, where it plans to make more Apple devices.

“With India's labour cheaper compared with China, and the gradual expansion of its supplier base here, Apple will be able to use the country as an export hub," Mr Neil Shah of Hong Kong-based tech researcher Counterpoint said.

The government of India has been working to boost electronics manufacturing by firms such as Foxconn and launched a US$ 6.65 billion plan last month, offering five global smartphone makers incentives to establish or expand domestic production.

This is move of manufacturing locally is expected to be a boost for Prime Minister Narendra Modi's flagship "Make in India" drive, aimed at creating new jobs.

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


14.2. Sports goods giants plan local production 
TNN, Jul. 06, 2020, John Sarkar

The move comes against the backdrop of a growing anti-China sentiment, and these brands fear the backlash could impact their overall sales in India. For large players — including Puma, Adidas and Nike — imports from China account for 10-30% of the products they sell in India.

NEW DELHI: Global sportswear makers, who get a large chunk of their domestic portfolio from China, are looking to shift sourcing and manufacturing to India and Southeast Asia for the products they plan to sell in the country.

The move comes against the backdrop of a growing anti-China sentiment, and these brands fear the backlash could impact their overall sales in India. For large players — including Puma, Adidas and Nike — imports from China account for 10-30% of the products they sell in India. For most other global players, who have a smaller presence here, the share is much higher. “Consumers are coming to our stores and demanding to see where the products are made,” said the MD of a multinational sportswear brand. “I just finished a call with my team to move whatever production we do in China for the products that we sell here to India and other countries such as Vietnam and Indonesia.”

The government is mandating the disclosure of ‘country of origin’ even on e-commerce marketplaces, with some such as Myntra adding it for new product additions. While the final production or assembly may shift to other countries, there will be a significant part of the inputs from China.

The sportswear companies, however, said that manufacturing in India will push up costs. “Initially, we will absorb the extra cost as we feel the anti-China sentiment is here to stay for some time,” said the CEO of a large global footwear company. Senior industry executives pointed out that domestic manufacturers have not yet developed scale, as a result of which brands will find it dearer in the beginning to move sourcing and production of finished goods to India.

“It will cost them around 10% more to make in India, but so was the case when they first shifted production to China,” said the MD of a home-grown footwear manufacturing company that makes shoes for most global sportswear companies. “China has scale and makes for the world, while we only make for domestic consumption. We, too, will achieve similar scale over time.” He said conversations to move part of the sourcing and production from China to India are under way and, at the current pace, it will take these brands around a year or two to achieve the same.

“Prior to GST, footwear imports from China were expensive as the countervailing duty (CVD) was linked to the maximum retail price (MRP),” said a senior executive at a footwear retail chain. “But CVD got absorbed in GST and, despite the government taking efforts to ramp up duty on goods coming in from China, a large part of the hundreds of containers that arrive on Indian shores every day are under-invoiced. This is counterproductive for domestic manufacturers.”

Other global retailers and brands, too, are ready to hedge sourcing to different markets other than China for the goods that they sell in India. “China contributes a negligible proportion of our imports,” said US sportswear brand Under Armour MD Tushar Goculdas. “Under Armour’s merchandise suppliers are based around the world. We do not foresee any significant impact on our India business as a result of any duties or curbs that the government may introduce.”


15. Surat diamond industry works out new protocol to fight Covid 
ET Bureau, June 23, 2020, DP Bhattacharya

Speaking to ET, President of Surat Diamond Association Dinesh Navadia said that under the new protocol, every polishing unit will have only two workers working on them instead of usual four.


As the diamond industry trudges itself back to operation, concerns are now rising with growing number of Covid positive patients among the diamond workers. On Monday, Surat Diamond Association held a meeting with the Municipal Commissioner and the Mayor to thrash out a new protocol to fight the spread of the virus. So far around 300 positive cases have been reported from the diamond polishing units, which have started operating.
Speaking to ET, President of Surat Diamond Association Dinesh Navadia said that under the new protocol, every polishing unit will have only two workers working on them instead of usual four. Secondly the workers will be provided with ayurvedic medicine along with warm water throughout the day and the ventilators will be kept open for the buildings which are centrally air conditioned.

Navadia further said that it has been decided that for the multi-storied polishing units, in the case one worker reports positive from a certain floor, the entire floor will be quarantined for an week and in case of more than three workers reporting positive entire unit will be shut down for a week. Single storied units will be shut for a day with one workers reporting positive.
While the workers are now being asked to download Arogya Setu app, those workers with hypertension, diabetes or above fifty-five years of age will not be asked to work, he added. The diamond market as well as the safety vault will remain closed on Saturdays and Sundays, he added further. Earlier a demand was made to shut down the entire industry for a week.

Recently, the managers of diamond units emerged as the super spreaders among the workers as they are the ones who distribute packets of diamonds to the polishers and thus come in contact with a large group of people. Diamond unit owners were asked to sanitize the packets before giving them to workers. While the lockdown dealt a crushing blow to the industry with many workers returning home, the industry started working albeit at a very slow pace with unlock-1 being announced. However, Katargam area, the hub of diamond industry has emerged as a new hotspot for Corona in Surat.


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

16.1. Digital transformation to be a key driver for growth, says Tata Consumer Products 
PTI, June 13, 2020

As part of its strategy, TCPL is innovating with new marketplace models and expects a larger play in the foods and beverages businesses, where TCPL is expanding its portfolio and sharpening capabilities for the longer term.

NEW DELHI: Tata Consumer Products Limited (TCPL) sees 'digital transformation as a key driver' for growth of the company and it is strengthening capability in this area, according to the company's annual report. The Tata Group firm expects a long term shift in consumer behaviour due to the coronavirus pandemic, while in short term an increase at-home consumption with a reduction in orders for take-out or deliveries is expected.
As part of its strategy, TCPL is innovating with new marketplace models and expects a larger play in the foods and beverages businesses, where TCPL is expanding its portfolio and sharpening capabilities for the longer term.

"We see digital transformation as a key driver for growth and we are strengthening our capability in this area, including a digital platform for commodity buying, enabling the entire supply chain from demand planning to procurement and embedding digital technology and decision-making at the frontline of the sales organisation," said TCPL Managing Director and CEO Suni D'Souza in the company's annual report for 2019-20.
Recently, the company has tied up with several delivery providers and e-commerce partners to enable direct delivery to consumers.
"We are innovating with new marketplace models. We have tied up with delivery providers and e-commerce partners to enable direct delivery to consumers. We are also accelerating our digital agenda to take advantage of the new world realities," he said

According to him, there have been significant changes in consumer beliefs, habits and buying patterns during the pandemic and the recent lockdowns.
TCPL, which owns popular brands like Tata Salt, Tata Tea, Tetley, Eight O' clock and Himalayan Water, said it has marked a new strategic direction for the company with accelerated expansion into the Rs 6,00,000 crores Indian FMCG industry.
"We perceive a large and transformational market opportunity ahead of us and we aim to leverage our strengths to become a formidable player across the three segments of in-the-kitchen, on the-table and on-the-go, offering products that are high in quality, innovative, delightful and made with goodness and care," the company said.

On the outlook, the company said there will be a stronger focus on quality and hygiene - resulting in consumer preference shifting from unbranded to branded options.
"Consumers will proactively look at health & wellness options in their purchases, including traditional and preventive measures. There will be higher growth and demand of staple products (such as Salt, Pulses, Tea and Coffee - also part of essential commodities) for in-home consumption, in comparison with discretionary items - which is in direct contradiction to the trend witnessed in the last few years," said TCPL.
Besides, there would be a rise of consumers who are more price and value-conscious in their choices, given the uncertainty of the COVID-19 pandemic.

After merging the consumer products business of Tata Chemicals with Tata Global Beverages, the company was renamed TCPL.
Besides, the company, which had recently announced to acquire the stake of beverage major PepsiCo in their JV NourishCo Beverages, is strengthening its play in the fast-growing ready-to-drink beverages portfolio.
"We are focusing on strengthening our ready-to-drink beverages portfolio. We are in the process of acquiring PepsiCo's stake in NourishCo Beverages Limited, a 50:50 JV between the two companies. We will look to scale up NourishCo's capabilities and footprint further and build a differentiated portfolio in this segment," he added.

While talking about their JV Tata Starbucks, TCPL said by the end of May 2020, it had 60 stores opened for takeaway and deliveries in 10 out of the 11 cities we are present in.
Tata Starbucks had added 39 new stores opened during the year, the report said.
"Our growth in Tata Starbucks was however impacted a bit in the fourth quarter, due to the onset of COVID-19, which led to the closure of all our stores for more than two weeks in the month of March. Some of our stores have now opened for delivery and takeaways and will progressively normalise over the next few months," it added.
TCPL has also acquired the branded business of Dhunseri Tea Industries to strengthen its market presence in Rajasthan.


16.2. Oracle sharpens focus on India with new cloud data centre in Hyderabad 
IBEF, Jun. 30, 2020

Technology major Oracle Corp. launched its second cloud data centre in Hyderabad to support the increased customer demand for enterprise cloud services. This is in line with the Oracle’s global plan to operate 36 “second generation" cloud data centres or regions by the end of 2020.

In 2019, Oracle launched its Mumbai cloud region, making India its latest country with multiple cloud regions available. India has now joined US, Canada, Japan, Australia, South Korea, and the European Union in having multiple Oracle Cloud regions that enable better disaster recovery strategies.

“Hyderabad’s data centre launch is part of Oracle’s dual-region strategy. Both our Mumbai and Hyderabad are second generation cloud regions, helping our customers meet India’s stringent requirements for data privacy and residency," said Mr Shailender Kumar, regional managing director, Oracle India.

“It is aimed at enabling customers to comply with local data-related regulatory compliances and address operational issues related with operating in multiple countries. Also, customers get an unmatched BCP (business continuity planning) environment spanning two different seismic zones, inter-connected by low-latency Oracle backbone," Mr Kumar said.

Despite of increase in its growth, both globally and in India, Oracle is believed to be a late entrant to the cloud business. Its cloud services and licence support revenues grew 1 per cent y-o-y to US$ 6.8 billion even as total revenues declined 6 per cent y-o-y to US$ 10.4 billion for the fourth quarter ended 31 May 2020. Oracle follows the June-May fiscal year.

As per the company, India has been the “best performing" region for Oracle within Japan and Asia-Pacific region consecutively for the last four years. “We have been clocking double digit growth for the last 5 years, doubling our overall customer base from 7,500 to 15,000 in the same timeframe," Mr Kumar said.

Oracle has signed up a five-year contract with leading non-banking financial company Manappuram Finance Ltd to deliver its cloud solutions earlier this year. “With Oracle Cloud, we will gain 2-3x performance improvements over the next 5 years vis-à-vis our current IT setup, while also unlocking 30-40 per cent additional cost savings," said Mr Raveendrababu BN, executive director, Manappuram Finance.

The company is also providing help to enterprises in India through artificial intelligence (AI)-enabled digital assistants in their core business processes. For example, Bajaj Electricals is using ‘Bajaj Paddy’, an AI chat bot to transform its customer interactions, said Mr Suhas Uliyar, vice president-Digital Assistant, AI & Integration, Oracle.

“Most importantly, there are no privacy issues and we can easily comply with the country regulations. All the data resides with our customers and we are not using customers’ data to train our models," Mr Uliyar said.

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


17.1. GOOGLE to invest US$ 10 billion in India 
IBEF, Jul. 14, 2020

Google plans to invest US$ 10 billion over the next five to seven years to help accelerate the adoption of digital technologies in India.

Mr Sundar Pichai, who was born in the country and is currently chief executive officer of parent Alphabet Inc., made the announcement at the annual Google for India event via video conference. The outbreak of the coronavirus has pointed out the importance of technology for conducting business and for connecting with friends and family.

He added, “This is a reflection of our confidence in the future of India and its digital economy".

The US$ 10 billion funds are expected to be invested in partnerships, operations, infrastructure, the digital ecosystem, and equity investments. Google will focus on several key areas: 
Providing affordable access and information for every Indian in their own language, including Hindi, Tamil, and Punjabi 
Developing new products and services focused on India’s unique needs 
Encouraging businesses as they continue or embark on their digital transformation 
Utilising technology and artificial intelligence for social good, in areas like health, education, and agriculture 

Google was founded in 1998 in Silicon Valley and entered India six years later with offices in Bangalore and Hyderabad. During its initial years, the focus was on search services to provide help to people in finding relevant information on everything from Bollywood news to cricket scores, Mr Pichai said.

Since then, the India business has grown into one of the company’s most important one. There are more than 500 million internet users in India, second only to China, with growth that has drawn all the American technology giants.

There has been slow down for the U.S. search giant in other markets in recent months. In April 2020, Mr Pichai told employees in an email that Alphabet would slow hiring for the remainder of the year as it battled an advertising slowdown from the coronavirus.

“The entire global economy is hurting, and Google and Alphabet are not immune to the effects of this global pandemic," he wrote.

Earlier this month, Google stopped its plans to offer a new cloud service in China and other politically sensitive countries due in part to concerns over geopolitical tensions and the pandemic, as per reports.

Whereas India has witnessed a surge of foreign interest in its digital economy. In the last few months, investors including Facebook Inc., Qualcomm Inc. and Intel Corp. have put around US$ 16 billion in the digital services unit of India’s largest conglomerate, the retail-to-telecom giant Reliance Industries Ltd.

Google, Facebook, Amazon.com Inc., and others are investing billions into the market to gain users and set the foundation for future revenue growth. India is considered as a fertile ground for the companies to become the gateway for first-time internet users going online to buy products, stream content, find information and make payments.

Google has successfully launched several products in India, including a Google internet Saathi service to bring women in rural areas online and its popular Google Pay service.

“This mission is deeply personal to me," Mr Pichai said. “When I was young, every new piece of technology brought new opportunities to learn and grow. But I always had to wait for it to arrive from someplace else. Today, people in India no longer have to wait for technology."

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


17.2. With 350 mn shoppers, India's e-tail mkt to clock GMV of over $100 bn by 2025: Report
PTI, Jun. 17, 2020, 

The report titled 'How India shops online?' prepared in collaboration with Flipkart, pointed out that the USD 850 billion Indian retail market is the fourth largest in the world, but is largely unorganised.

New Delhi: India's e-retail market is geared to touch Gross Merchandise Value (GMV) of USD 100-120 billion by 2025 with nearly 350 million shoppers logging onto digital platforms to make purchases, a report by Bain & Company said on Tuesday. The report titled 'How India shops online?' prepared in collaboration with Flipkart, pointed out that the USD 850 billion Indian retail market is the fourth largest in the world, but is largely unorganised.
"This market is on the cusp of a transformation, led by the emergence of e-retail and its growing influence on Indian shoppers. The e-retail industry in India has seen an upsurge in the last five years and there is significant headroom for further growth," it said.

Online retail penetration currently is estimated to be at 3.4 per cent.

Spurred by cheap, ubiquitous mobile data, growing online spends by 'Digital Natives' and supply-side innovations like vernacular-based user interfaces, voice and visual search, the Indian e-retail market is primed to reach nearly 300 to 350 million shoppers by FY2025, it added.
This will propel the online Gross Merchandise Value (GMV) to grow at 30 per cent CAGR to USD 100-120 billion by 2025 (from USD 30 billion in FY20), the report said, adding that fashion categories are expected to play a critical role in acquiring customers online, similar to mature markets of the US and China.

"Online shoppers in tier-II and smaller towns make up nearly half of all shoppers and contribute to three out of every five orders for leading e-retail platforms. These customers from tier-II and smaller towns buy similar categories of products as customers from metro cities or tier-I towns with only a marginal difference in average selling price," it said.
The report noted that COVID-19 has caused an inflection in e-commerce penetration globally, driven by consumers' need for safety and convenience, and online shopping is gaining salience in India also.
"To win the next wave of online customers, it is critical to harness a strong ecosystem which will play a much larger role in influencing purchase decisions.

"Ecosystems attract a huge customer base, which in turn attracts retailers who want easy access to a critical mass of consumers. And customers gain a one-stop shop for all their needs," Arpan Sheth, partner and leader of Bain & Company's Asia-Pacific Technology, Vector and Advanced Analytics practices, said.
The report highlighted that over the past year, consumer engagement with online platforms has increased, but a visitor spends less than nine minutes per visit on an e-retail platform.

Also, one in two visitors browses the image gallery and only one in 15 click the detailed product description, indicating that brands and sellers should invest in high quality product images and high impact summary product descriptions.
Interestingly, online shoppers browse more than 20 product pages before making a purchase. For categories like mobiles and women's ethnic wear, consumers browse about 50-60 product pages before purchasing one.


18.1. RIL announces strategic initiatives at AGM, raises hopes of investors 
Livemint, 15 Jul 2020, Mobis Philipose, Pallavi Pengonda
  • The big announcement in the AGM pertains to the partnership with Google 
  • The end-product and its pricing will be key in determining the success of the new JioPhone 
For the fifth straight year, Reliance Industries Ltd (RIL) has used its annual general meeting (AGM) as a platform to announce strategic initiatives. It all started with the launch of Reliance Jio’s 4G services in 2016, followed by the launch of JioPhone in 2017, JioGigaFiber in 2018 and the plan to become a net debt-free company last year.

In the 2020 AGM, the big announcement pertains to the strategic partnership with Google, with the intent to build an Android-based smartphone operating system. The idea is to target the price-sensitive 350 million odd feature phone users with a new JioPhone.


Before Google, chip-maker Qualcomm invested in Jio Platforms Ltd through an investment arm. It almost looks all the pieces of the puzzle for building a new customised phone are in place. Needless to say, the more technology partners Jio has, the more difficult things get for its competitors.

But good partnerships are no guarantee of success. As they say, the proof of the pudding is in its eating. The end-product and its pricing will be key in determining the company’s success in weaning away feature phone users from Bharti Airtel Ltd’s and Vodafone Idea Ltd’s networks.

Note, the first JioPhone was announced amid much anticipation in the 2017 AGM. The number of feature phone users then stood at around 500 million, and the company had said its target was to migrate the majority of the users to JioPhone. A year after its launch, JioPhone users amounted to only 25 million, and the last available number suggests the subscriber base of the 4G feature phone stands at around 100 million. “Feature phone users are not only price-sensitive, but also tend to use handsets for a far longer duration, and churn rates tend to be low in this segment," said an analyst at a domestic brokerage.

Progress has been far slower for the JioGigaFiber product announced in the 2018 AGM. While it had initially set a target of 50 million subscribers, analysts said at last count there were only around 1 million. “Last-mile connectivity challenges were hugely underestimated by the company," says the analyst mentioned above.

Of course, the flagship Jio product has grown by leaps and bounds, and the rush of financial and strategic partners suggests there is further room for upside. In the past three months, RIL has raised over $20 billion selling about a 33% stake in Jio Platforms. “If PE firms were only buying Jio for its telco operations, they have overpaid by about 25%. The premium is for the optionality from Jio’s super-app ambitions," said an analyst familiar with the thinking of a PE firm which invested in Jio Platforms. Of course, Jio still needs to demonstrate how its super-app ambitions can be monetized.

While investors await this, RIL raised hopes of another form of monetization – a stake sale in Reliance Retail Ltd, where its new commerce venture is housed. For a market driven by hope, RIL’s AGM had an ample dose.


18.2.Walmart to pump $1.2 bn in Flipkart for e-comm battle 
TNN, Jul. 15, 2020

The investment — which will be done in two tranches this financial year — values the company at $24.9 billion, over 13% premium from $22 billion at the time of the acquisition in 2018. Walmart’s shareholding will go “little over 80%” with this round of infusion.

BENGALURU: US-based retail giant Walmart is leading a fresh infusion of $1.2 billion in Flipkart, two years after it acquired 77% stake for $16 billion, as the battle for the online retail market gets ready for the entry of Mukesh Ambani’s Reliance Industries. The investment — which will be done in two tranches this financial year — values the company at $24.9 billion, over 13% premium from $22 billion at the time of the acquisition in 2018. Walmart’s shareholding will go “little over 80%” with this round of infusion.
The companies said in a statement that “group of existing shareholders” also participated in the round, though it did not specify names. The remaining major shareholders include China’s Tencent and New York-based Tiger Global, both of which own 5%, besides Microsoft and co-founder Binny Bansal.

The capital will be used for the online retail business of Singapore-registered Flipkart — which also includes fashion portal Myntra — where the company has been locked in market share battle with US-based Amazon. The group’s payments unit PhonePe has been looking to raise capital separately and spin-off its business to unlock further value. TOI had reported last year that PhonePe is in talks with existing backers like Tencent to raise $1 billion and has been seeking a valuation of at least $8 billion.
“Flipkart continues to leverage its culture of innovation to accelerate growth and enable millions of customers, sellers, merchants and small businesses to prosper and be a part of India’s digital transformation,” said Judith McKenna, President and CEO of Walmart International, in a statement.

Walmart’s buyout of Flipkart has been one of the largest M&A deal in India’s corporate history, but the company also faced setbacks due to changes in FDI norms for e-commerce in early 2019 which led to the company restructuring the operations. It has also seen exit of Group CEO Binny Bansal after allegations of improper conduct, while Kalyan Krishnamurthy runs the e-commerce business and Sameer Nigam runs PhonePe reporting directly to Flipkart board.
Satish Meena, the senior forecast analyst at market research firm Forrester, said the competition among Walmart, Amazon India and Reliance’s Jio Mart will get more aggressive that will play out in the next 12-18 months as the pandemic pushes online commerce growth. In terms of areas where Walmart’s new capital will be allocated, Meena said, there are three primary segments--grocery and food retail, digitising small sellers and businesses and experiments around video and social-commerce. “They are looking at aggressive expansion in grocery, which wasn’t in focus earlier but that has changed after Covid-19. Their food retail license was not approved but they are rectifying it and you can expect significant investment to go there,” he added.

Flipkart said that it has surpassed 1.5 billion visits per month and reported 45% growth in monthly active customers and 30% growth in transactions per customer for FY20. It has 150 million products across more than 80 categories. TOI recently reported that both Flipkart and Amazon India have seen their shipments increase to 120-140% of pre-Covid-19 pandemic levels as consumers increasingly prefer online sales rather than venture out to physical stores.


19.1. Amazon expands Pantry service to over 300 cities in India 
PTI, Jun. 30, 2020

The online grocery segment has witnessed strong growth amid the COVID-19 pandemic as people logged onto digital platforms to order household items while practicing social distancing.

NEW DELHI: Amazon.in on Tuesday said it has expanded its 'Amazon Pantry' service that allows users to buy grocery items from the platform to over 300 cities across the country.
An Amazon India spokesperson said the service was available to customers in 110 Indian cities till March this year.
The company has aggressively expanded the Pantry service to enable customers to shop for essentials without stepping out of their homes amid the COVID-19 pandemic.
"The past few months, we focused our efforts to deliver essentials in more and more pin codes across the country, so that people can stay at home. Today, 'Amazon Pantry' has expanded to over 300 cities in India," Amit Agarwal, SVP and Country Manager, Amazon India said in a tweet.

The expansion will help customers in locations like Allahabad, Bareilly, Deogarh, Jammu, Kozhikode, Malda, Pathankot, Rajkot, Shimla, Udaipur and Varanasi among others to order groceries on Amazon Pantry, Amazon India said in a statement.
Amazon Pantry offers 3,000 products from more than 200 brands and allows delivery in 1-2 days. In select cities of Bengaluru, Delhi, Mumbai, Chennai, Hyderabad, Kolkata and Pune, Amazon allows customers to schedule their Pantry deliveries.
Sellers participating on Amazon Pantry offer selection ranging across staples, cooking essentials, personal care, pet food and baby food among other items, the statement said.
"At Amazon, we are committed to be an 'everything' and 'everyday' marketplace for our customers and constantly focus on increasing selection, convenience, ease and speed of delivery across the country...With this expansion, customers in more than 300 cities and towns can get access to safe doorstep delivery of grocery essentials," Amazon India Director - Category Management Saurabh Srivastava said.

The online grocery segment has witnessed strong growth amid the COVID-19 pandemic as people logged onto digital platforms to order household items while practicing social distancing. The segment also witnessed growth as e-commerce platforms were allowed to deliver only grocery and healthcare items during the lockdown that was put into place in March to curb the spread of the COVID-19 infection.


19.2. Amazon India waives off fees for artisans, weavers, women entrepreneurs for 10 weeks
ET Online, Jul. 01, 2020, Garima Bora

This is part of the e-commerce giant’s new initiative Stand for Handmade to help over 10 lakh entrepreneurs.

Amazon India on Wednesday announced 100% SoA (Selling on Amazon) fee waiver for 10 weeks for artisans, weavers and women entrepreneurs hit by the economic disruption caused by COVID-19. This is part of the e-commerce giant’s new initiative Stand for Handmade to help over 10 lakh entrepreneurs- more than 8 lakh artisans and weavers from Amazon Karigar program and more than 2.8 lakh women entrepreneurs from Amazon Saheli program.

Pranav Bhasin, Head - MSME Empowerment & Seller Experience, Amazon India, told ET Digital, “There are multiple things that have impacted all businesses. For example, during covid time frame, suppliers started asking for money upfront and therefore merchant capital became more critical in just running the business. The logistics of doing business offline got completely impacted. For Karigars and weavers, a lot of the business we used to do was dependent on the offline haats and since those haats were not organised and prepared for the supply chain disruption, there was no way for them to bring products to customers.”

The Stand for Handmade storefront is dedicated to help generate customer demand for the locally crafted, handmade products from Karigar and Saheli sellers. Customers can discover and purchase products from artisans and women entrepreneurs from different parts of the country by visiting specific pages created for selection from North, South, East, West and Central India. The store also showcases traditional handicrafts & handlooms along with highlighting stories of craftsmen and their works.

Amazon.in has also partnered with 22 Government Emporiums and five Government bodies to increase market connectivity. Today, Karigar showcases over 60,000 products, including 270+ unique arts and crafts from over 20 states.
The firm has on-boarded Himadri Emporium (Uttarakhand Handloom & Handicraft Development Council) and Shabari Chhattisgarh State Emporium with the aim to help over 10,000 artisans and weavers associated with them.

Gopal Pillai, Vice President, Seller Services at Amazon India said in a statement, “The artisan & weaver community and women entrepreneurs have been amongst the most impacted by COVID-19. The initiative will help generate demand for their products online while helping them with working capital needs as they look to rebound from the economic disruption caused by this unprecedented pandemic.”


20.1.Tata group retail arm Trent looking to pursue 'accelerated expansion' 
PTI, Jul. 09, 2020

The company said India continues to be amongst the most attractive retail markets globally with its strong demographics and growing consumption, factors which will continue to play out over medium to long term.

NEW DELHI: Tata group retail firm Trent Ltd is looking to pursue "accelerated expansion" in the future once its existing stores are back in business after being impacted by the coronavirus pandemic, according to the company's annual report.
The company said India continues to be amongst the most attractive retail markets globally with its strong demographics and growing consumption, factors which will continue to play out over medium to long term.
"We will continue to pursue our store expansion agenda once we have our existing portfolio back in business. Given both internal as well as external challenges, we did not meet our aspiration for store additions in FY20," Trent Ltd said in its annual report for 2019-20.

However, the company said, "We are committed to resolving the challenges and pursuing accelerated expansion in the future. We also continue to monitor the existing stores and refresh the portfolio through multiple initiatives including absorption/refurbishment of brand diluting stores."
In FY2020, Trent Ltd had over 330 stores across 90-plus cities in India.
Bullish on India, Trent said the country "continues to be amongst the most attractive retail markets globally with its strong demographics and growing consumption. These factors shall continue to play out over medium to long term."
Overall, it said, "We are very positive on the underlying case for sustained growth of branded retailing in India over the coming years. The intent going forward is to continue scaling up our presence."

Even as the world is still dealing with COVID-19 that has already resulted in severe economic disruption, the company said, "Our customer value proposition across segments offers compelling product choice in a safe shopping environment together with attractive pricing. We believe this proposition is even more relevant as India reopens to business."
Stating that it has taken significant steps to mitigate risks in this period, the company said it envisages that its "brands will emerge stronger and better placed to leverage the large opportunity that our businesses address".

"We are confident that following this unprecedented pause, our growth and profitability will continue to accelerate on the back of sustained focus on differentiated brands and customer experience across our concepts and strong expansion of the store network in the year ahead," Trent Ltd said.
The company said for its future expansion it will focus on key aspects of brand, supply chain, reach and sustainability.
It will focus on bolstering its "portfolio of own brands across concepts" while straddling retail space with unique brands to address multiple customer segments and value positioning and choose brands to anchor on differentiated products, sharp pricing, lifestyle experience and wide reach.

While scaling up supply chain to support growing business, the company said it will have "continued emphasis on strong inventory related disciplines across concepts" and sustain "delivery of world class retail availability levels, freshness of offer and effective controls".
In terms of reach, Trent Ltd said its focus will be on store expansion across attractive micro-markets for the key concepts, actively managing store portfolio based on performance and brand experience and continued delivery of highly differentiated and brand enhancing store portfolio with benchmark standards.
The company will also pursue a sustainable online business model and digital reach, it added.
Trent said its operations have been impacted by the various Covid-19 pandemic related developments. It had temporary closed all stores, offices and warehouses as applicable under the lockdown regulations. However, food stores operated by joint venture/subsidiaries and their offices (to the extent required) and dealing in essentials continued to operate with significant measures to ensure the safety of colleagues, customers and associates.
As of date, 70 of the stores have commenced operations in accordance with local regulations and adoption of various safety procedures, it added.


20.2. 90% sellers back on Flipkart, 125% rise in new MSMEs 
IANS, Jun. 27, 2020

Flipkart has also seen 125 per cent rise in new seller signing-up on the platform, in comparison to its existing seller base, in the April-June period, the company said in a statement.

Bengaluru: As India gears up for unlock 2.0, ecommerce platform Flipkart on Saturday said it has enabled more than 90 per cent of its sellers to resume operations on its marketplace.

Flipkart has also seen 125 per cent rise in new seller signing-up on the platform, in comparison to its existing seller base, in the April-June period, the company said in a statement.
Local MSMEs from Uttar Pradesh, Maharashtra, West Bengal, Delhi and Tamil Nadu have shown maximum interest in taking their businesses online.
These sellers operate in various categories, ranging from women's clothing, personal care, food and nutrition, home improvement tools and baby-care products, said the company.

"By allowing MSMEs, artisans and smaller traders in India to bring greater efficiencies in their operations with a strong market reach, e-commerce is further empowering these businesses to generate livelihood opportunities," said Flipkart.
The most important need of the seller community, in these times, is that of working capital.
To address this, Flipkart ran a special offer on loans through its 'Growth Capital' programme which is designed specifically to enable independence for MSMEs who operate online.

"Through the programme, most of the transacting sellers can avail credit at competitive interest rates with an approval time of one day and disbursal within 48 hours. A 3-month moratorium period has been implemented on existing loans," informed the company.
Further, any additional amount on sellers' existing loans sanctioned during this period will have an extended financial limit with a 6-month moratorium period.
Flipkart also extended certain ongoing premium services availed by sellers to include the lockdown period in their subscription terms so that their investment is not hampered for a stipulated period of time.
Under the 'Flipkart Samarth' programme, it has supported the livelihood of over 500,000 artisans, weavers and micro enterprises across the country.


INDIA and the WORLD


21.1. Asia to remain dominant player in garment manufacturing in coming decade: Report 
PTI, Jul. 15, 2020

The outlook for the textile sector highlighted that India and Indonesia, which offer low-cost cheap labour and large domestic markets, may lose out due to the lack of conducive business conditions.

NEW DELHI: Asia is expected to remain a dominant player in garment production over the coming decade even as China looks to reduce its apparel manufacturing operations and move up the value chain, analytics firm Fitch Solutions said in a report on Tuesday. The outlook for the textile sector highlighted that India and Indonesia, which offer low-cost cheap labour and large domestic markets, may lose out due to the lack of conducive business conditions.
Even as China moves up the value chain, many other countries in Asia benefit from favourable labour market dynamics for apparel production, sufficiently predictable logistical connections to serve external trade, free trade agreements that ensure preferential access to major consumer markets, and geographic proximity to raw material producers in China and India, the report said.

"Accordingly, we have already started to see Vietnam benefiting from these trends and expect to see more investments into the country. In addition, we expect Bangladesh, Cambodia and Myanmar to see greater gains in the coming years as costs in Vietnam also rise," Fitch Solutions said.
It identified India and Indonesia as potential recipients of manufacturing shifts and growth in terms of global apparel export share.
However, according to the report, the two countries' annual growth rates will look less impressive compared with the other four countries including Vietnam, Bangladesh, Cambodia and Myanmar.
"The countries' large populations, at 1.4 billion in India and 274 million in Indonesia, make them the second and fourth-most populous nations, respectively, in the world and suggest strong growth potential for domestic consumption," said the report.

However, a lack of preferential trade access to the US and EU markets, as well as higher labour costs, will act as obstacles for these markets, it observed.
"We at Fitch Solutions expect rising labour costs in China to continue pushing out low- to mid-range manufacturing to cheaper cost centres across Asia.
"However, we believe that it will be exacerbated by rising trade protectionism globally and geopolitical risks attached to operating in China, as relations between China and the West deteriorate. This trend has already taken place for at least half a decade," said the report.
It estimates high growth potential for textile manufacturing in neighbouring countries such as Cambodia, Myanmar, Bangladesh and Vietnam, supported by large and growing active populations and low labour costs.


21.2. Vietnam’s export story  is  strikingly similar to China’s 
Livemint, 30 Jun. 2020, Vivek Kaul

Vietnam has been a major success story on the exports front over the last decade. Its exports between 2008 and 2018 have increased at a very fast pace from $69.7 billion to $259.5 billion. Can Vietnam become the next China over the coming decade? Mint takes a look.

What‘s led to Vietnam’s comparison with China?
Vietnamese exports had fallen to $66.4 billion after the financial crisis of 2009. However, they have risen ever since, reaching $259.5 billion in 2018. In 1992, Chinese exports were $66.8 billion. By 2001, they had reached $272.1 billion. As such, the increasing exports of Vietnam have followed a trajectory almost similar to that of China, leading to comparisons. The trouble is that Indian exports followed an almost similar trajectory between 2000-2009, increasing from $60.9 billion to $273.8 billion, a jump of close to 350%. However, the growth in exports from India slowed down majorly between 2009 and 2018.

Is there another reason for the comparison?
One reason for the success story of Chinese exports is that the manufacturing sector has become a part of global supply chains, which make network products. As the Economic Survey of 2019-20 puts it: “In general, these products are not produced from start to finish within a given country. Instead, countries specialize in particular tasks or stages of the good’s production sequence…Labour abundant countries, such as China, specialize in low-skilled labour-intensive stages of production such as assembly, while richer countries specialize in capital, skill-intensive stages such as R&D." Vietnam is moving along a similar line.

What part of Vietnamese exports are network items?
The share of network products, such as electronic and electrical equipment, telecommunication equipment in the Vietnamese goods exports in 2000 stood at 6%. By 2018, this had jumped to 47%. During the same period, China’s share increased from 34% to 52%. In Vietnam’s case, these exports include assembled end products, and parts and components.

What are the reasons for Vietnam’s success?
As the Economic Survey points out: “Bangladesh, China, and Vietnam… have more than 80% of market value of exports by large enterprises, India has 80% by small enterprises. Moreover, in India it can take 7-10 days to reach a port whereas in countries like China, Bangladesh and Vietnam it takes less than a day." Network products are made across countries and, hence, need quick turnaround times. In Vietnam, it takes 0.3 days for a consignment to reach a port. In Bangladesh it takes about a day.

What about Vietnam’s agreement with EU?
In early June, Vietnam ratified a free trade agreement with the European Union. This will mean tariffs on most products that the country exports to the European Union will either be cut or eliminated totally. Hence, it makes even more sense for companies moving their operations out of China to move to Vietnam now. Meanwhile, in India, we are still harping about our low-cost advantage. While that matters, it is not the only factor.

Vivek Kaul is the author of Bad Money.


22.1. Tectonic disruption in the e-commerce and retail space: eBay India 
IANS, Jul. 02, 2020,

"Currently, our focus is purely on B2C cross border business. We would not want to speculate the future or make any statement on plans for e-commerce within India", Naini said.

New Delhi: In an interview with IANS, Vidmay Naini, Country Manager, eBay India said the unprecedented times have called for a tectonic disruption in the e-commerce and retail space.
The e-commerce industry has witnessed a huge spike in demand and order volumes. Consumers are seen ordering in things that they would usually buy from a physical store, for example, products in the grocery and personal care category, he added.
He added that consumers have also been making use of the lockdown to develop new hobbies hence an upward trend in demand for products in the Origami, home & gardening activities as well as cooking and baking essentials has been observed at eBay.
"The one thing that I have derived from all this is that online shopping is here to stay and the recent digital - adoption will be permanent. The convenience and safety offered by moving online will continue to be as important as it is today because consumers might still be paranoid about stepping out in crowded areas like malls", he added.

eBay's focus in India is to facilitate Cross Border Trade (CBT) for Indian sellers. "Our CBT business has been in operation for over a decade wherein we provide our platform(s) to help Indian sellers list and sell merchandise to over 174 million buyers who shop on various global platforms of eBay whether in US, UK, Germany, Australia etc.", he added.
"Currently, our focus is purely on B2C cross border business. We would not want to speculate the future or make any statement on plans for e-commerce within India", Naini said.
Given the current situation and the suppression in the economic activity, MSMEs are trying to revive their businesses and get back up. More and more businesses are realizing the significance of expanding to global markets, he added.

Q: What is eBay India's emphasis on cross border trade?
A: eBay's focus in India is to facilitate Cross Border Trade (CBT) for Indian sellers. Our CBT business has been in operation for over a decade wherein we provide our platform(s) to help Indian sellers list and sell merchandise to over 174 million buyers who shop on various global platforms of eBay whether in US, UK, Germany, Australia etc.
Our efforts are largely focused on building the enablers for sellers on the platform like eBay's global shipping (an aggregation of global logistics providers), expanding the business development teams across the country (to bring new sellers on board). We are committed to fostering the culture of entrepreneurship in India and all Indian sellers, MSME's, artisans & brands can fulfil their global aspirations with the help of the eBay platform as we offer true partnership & a dynamic marketplace with global reach.
I would also like to add that we believe our seller's success is our success. We feel proud to support small business owners (SMBs, MSMEs & Artisans). In a nutshell we not only provide a dynamic marketplace to sell to other countries but also, we provide all the support which is needed from our end to nurture and grow seller's business at eBay.

Q: How many sellers from India are on the platform?
A: There is a diversity of sellers on eBay who wishes to take advantage of retail e-commerce export. We have mix of small, medium and large business selling globally today on our platform who have been able to turn their dreams into business successes. We have over 10,000 active Indian sellers- SMBs, artisans, entrepreneurs, MSMEs, & large enterprises who leverage the eBay platform to sell internationally. These sellers are everywhere - metros, non-metros, and smaller cities/towns.

Q: Will eBay look at e-commerce within India?
A: Currently, our focus is purely on B2C cross border business. We would not want to speculate the future or make any statement on plans for e-commerce within India. We are committed to enabling the B2C cross border business which is to my mind is a massive opportunity for Indian sellers. Also, all our energies and synergies are aimed towards building a robust system for Indian sellers to take local Indian products to global markets.

Q: How are MSMEs responding to global trade opportunity?
A: MSME contributes 30 per cent of India's GDP & close to half of the country's total export. They are the backbone of Indian economy; while they can tap new markets in-country, they have enormous potential for an enhanced CBT.
Given the current situation and the suppression in the economic activity MSMEs are trying to revive their businesses and get back up. More and more businesses are realizing the significance of expanding to global markets. At eBay we make sure that Indian sellers are cognizant of the opportunity and have the necessary insights to address the global demand.

Q: What are the changes expected in consumer behaviour as digital gains traction?
A: The unprecedented times have called for a tectonic disruption in the e-commerce and retail space. Consumer behaviour is consistently evolving. There is a significant shift in what the consumers shop for and how. The e-commerce industry has witnessed a huge spike in demand and order volumes. Consumers are seen ordering in things that they would usually buy from a physical store. For example, products in the grocery and personal care category.
Consumers have also been making use of the lockdown to develop new hobbies hence an upward trend in demand for products in the Origami, home & gardening activities as well as cooking and baking essentials has been observed at eBay. However, the category that saw a significantly high never-seen-before uptick was the WFH Essentials category. eBay sellers witnessed a surge in orders of -webcams, headsets, Wi-Fi adapters, office furniture and speakers etc.

The one thing that I have derived from all this is that online shopping is here to stay and the recent digital - adoption will be permanent. The convenience and safety offered by moving online will continue to be as important as it is today because consumers might still be paranoid about stepping out in crowded areas like malls. The current situation calls for a new order and a new normal. Hence, more and more efforts should be driven towards creating a congenial and user-friendly platform for a better customer experience.


22.2. HIL India Ltd. supplies 25 MT Malathion 95 per cent ULV Insecticides to Iran for Locust Control Programme
IBEF, Jun. 16, 2020

HIL (India) Limited, a PSU under Ministry of Chemicals and Fertilizers and one of the leading manufacturers of insecticides in the country, has supplied 25 million tonnes (MT) Malathion 95 per cent ULV to Iran under Government-to-Government initiative for Locust Control Programme.

India had recently approached Iran and Pakistan for coordinated response to counter desert locust menace in the region. Iran has expressed its willingness to the proposal and accordingly Ministry of External Affairs placed an order with HIL (India) Limited, to manufacture and supply 25 MT of Malathion 95 per cent ULV to Iran. The consignment is expected to reach Iran by 16th June 2020. 

As per the reports of the Food and Agriculture Organisation (FAO), the hopper stage population of locust is building up in Sistan-Baluchistan Region of Iran, which shall migrate to India in coming months leading to further crop devastation. Government of India has taken an initiative to counter the locust menace at its breeding ground itself and approached Iran for coordinated efforts. 

Desert Locust after severe crop devastation in Horn of Africa, East Africa and Arabian Peninsula has entered into India in March/April 2020 and it has affected the field crop, horticulture crops and other plantation in the State of Rajasthan, Madhya Pradesh, Gujarat, Punjab and Uttar Pradesh. The country is experiencing worst locust invasion, which was last observed more than 25 years back. 

HIL (India) Limited is also supplying Malathion 95 per cent ULV to Ministry of Agriculture and Farmer’s Welfare Locust Control Programme in the country. From 2019 till date, company has supplied more than 600 MT of Malathion 95 per cent ULV for this programme.

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


23. Serum Institute of India to supply pneumonia vaccine to low-income nations 
IBEF, Jun. 18, 2020

The Serum Institute of India will provide ten million doses of the pneumococcal conjugate vaccine, which helps to prevent severe pneumonia, every year to lower-income countries for the next decade under a new supply agreement with the UNICEF that helped dramatically decreased the price of pneumonia vaccine for those nations.

“Pneumonia is the biggest single killer of children, claiming the life of a child every 39 seconds. By being able to provide this quality-assured pneumococcal conjugate vaccine at such an affordable price, we can save millions of children’s lives," Director of UNICEF’s supply and procurement headquarters Ms Etleva Kadilli said.

The Pune-based Serum Institute of India is a leading manufacturer of immunobiological drugs, including vaccines.

“Our innovative approach has incentivised industry to bring this vaccine at scale to the market. The result means more countries – including middle-income countries – that have not yet introduced this vaccine into their routine immunisation due to previously prohibitive pricing, will have an affordable option to accelerate access for all children," Ms Kadilli said.

Under the supply agreement between UNICEF, Vaccine Alliance Gavi’s procurement partner and the Serum Institute of India, lower-income countries across the world will be able to access life-saving pneumococcal conjugate vaccines for US$ 2 per dose.

This is the eighth such supply agreement to take place under the Vaccine Alliance’s AMC mechanism, and the first to include a developing country manufacturer.

This has reduced the prices and now the revised price represents a 43 per cent reduction from the Gavi price of US$ 3.50 at the start of the Advance Market Commitment (AMC).

The Indian company will offer 10 million PCV doses to Gavi-supported countries each year for the next ten years.

The pneumococcus bacterium is responsible for severe pneumonia and is a main cause of morbidity and mortality worldwide. It is responsible for most of the deaths in lower-income countries and include a disproportionate number of children under the age of two, UNICEF said.

Gavi’s Managing Director for Resource Mobilisation, Private Sector Partnerships & Innovative Finance Ms Marie-Ange Saraka-Yao said, “The successful mechanism will now be used as a model to help ensure the world’s poorest countries get access to COVID-19 vaccines at the same time as the wealthiest, making it integral to the global effort to defeat this pandemic”.

The AMC was launched by Gavi in 2009, with the support of donors Italy, the United Kingdom, Canada, Russia, Norway and the Bill & Melinda Gates Foundation – to “solve a clear example of market failure: complex vaccines like PCV would normally reach low-income countries, where the disease burden is often highest, ten to 15 years after their introduction in industrialised countries."

The PCV vaccine is now available in 60 lower-income countries, where coverage rates, at 48 per cent, are higher than the global average of 47 per cent.

It is estimated that more than 225 million children will have been vaccinated, and that over 700,000 deaths will have been prevented by the end of 2020.

The UNICEF added that with the new supply agreement, AMC will be closing this year having facilitated the entry of the new manufacturer to the market as well as a record-setting low price for Gavi-supported countries that will result in an estimated millions of dollars in savings for both Gavi and lower income countries’ vaccine budgets.

Gavi’s Managing Director for Vaccines and Sustainability, Ms Aurelia Nguyen said, “due to the “visionary model", there is a healthy PCV market that is producing enough vaccines to supply both rich and poor countries and, as a result, hundreds of millions of children are now protected against one of the world’s deadliest diseases”.

Gavi launched the Gavi Advance Market Commitment for COVID-19 Vaccines (Gavi Covax AMC), a new financing instrument aimed at incentivising vaccine manufacturers to produce sufficient quantities of eventual COVID-19 vaccines, and to ensure access for developing countries.

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


24. Bangladesh has some readymade lessons for India 
Livemint, 08 Jul. 2020, Vivek Kaul

Readymade garment exports of Bangladesh fell 18.1% to $27.95 billion in FY20 because of the negative impact of covid-19. Yet, it continues to export more readymade garments than India. What can India learn from Bangladesh on this front? Mint takes a look

When did Bangladesh’s exports overtake India?
This happened in 2006-07, when Bangladesh exported readymade garments worth $9.21 billion and Indian exports stood at $8.89 billion. In 2019-20, readymade garment exports of Bangladesh fell 18.1% to $27.95 billion, while that of India fell by 4% to $15.48 billion. As per a paper titled What explains India’s poor performance in garments exports? by Saon Ray of Indian Council for Research on International Economic Relations (ICRIER): “Bangladesh produces simple apparel such as t-shirts, shirts in bulk... While India manufactures superior quality woven and knitted products." Covid has hit low-end exports more.

How did Bangladesh become competitive?
One of the major reasons for Bangladesh’s competitiveness is that it is cheaper to produce goods in Bangladesh than in India. According to a working paper titled Automation and Future of Garment Sector Jobs: A Case Study of India written by Pankaj Vashisht and Nisha Rani of ICRIER: “The unit labour cost of producing a cotton shirt in the United States is around $7, while the unit labour cost of producing the same shirt in India comes at around 50 cents, whereas in Bangladesh the unit labour cost is only 22 cents." This gives Bangladesh a competitive advantage over the rest of the nations, including India.

What helps Bangladesh in producing cheap goods?
According to the Economic Survey of 2019-20: “Bangladesh… [has] more than 80% of market value of exports by large enterprises, India has 80% by small enterprises." Readymade garment exporters in Bangladesh, therefore, have economies of scale. Also, Bangladesh’s exports to the European Union and Canada are largely duty-free.

Why do Indian garment exporters lack scale?
As T.N.Ninan writes in The Turn of the Turtoise: “Rigid laws prevent flexibility in manning for a seasonal industry… India has only three or four garment makers with turnover in excess of $100 million." Hence, the turnaround time of Indian firms from order to delivery is 63 days. In Bangladesh, this turnaround time is far less at 50 days. Also, it takes only one day for a consignment to reach a port in Bangladesh. In India, it can take as many as 10 days for a consignment to reach a port. All such factors are barriers to creating scale.

What can India learn from  Bangladesh?
In order to increase exports of readymade garments, Indian firms will have to grow bigger. It is also worth noting that if there are more jobs in the garments sector, it will provide a working opportunity for women. Increasing employment for women leads to several benefits. As the Economic Survey of 2016-17 points out: “In Bangladesh, female education, total fertility rate, and women’s labour force participation moved positively due to expansion of the apparel sector."

Vivek Kaul is the author of Bad Money.


25.1. Republic of Mali awards Project Management Consultancy contract to NTPC for development of 500 MW Solar Park
IBEF,  Jun. 25, 2020

Republic of Mali has awarded Project Management Consultancy contract to NTPC, a central PSU under Ministry of Power, for development of 500 megawatt (MW) Solar Park. In an event held on 24th June, 2020, chaired by Shri R. K. Singh, the Minister of State for Power, NRE, Skill Development and President of International Solar Alliance (ISA), and Mr H.E. Sekou Kasse, the Ambassador of Mali, handed over the Project Management Consultancy award letter to Mr Gurdeep Singh, CMD NTPC, for development of 500 MW Solar park in the Republic of Mali.

ISA is an international, inter-Governmental organization, based in India, created with the vision and leadership of Prime Minister, Sh Narendra Modi and announced jointly with President of France during COP21 held in Paris in 2015. ISA’s vision is for a large-scale solar revolution, hinges on creating a facilitative international ecosystem that enables access to science and economic resources, reduces the cost of technology and capital, facilitates price reduction, and enables development of storage technology and innovation. With its scale and authoritative understanding of the energy transition opportunities of diverse economies, ISA is the world's foremost energy transition catalyst for bringing a change from energy poverty to energy empowerment. 

The event was hosted by ISA in the Ministry of Renewable Energy, New Delhi, and graced by the dignitaries, Director General ISA- H.E Upendra Thripathy, Secretary (Power)- Sh Sanjeev Nandan Sahai and Secretary (MNRE)- Sh Indu Shekhar Chaturvedi and Secretary (Economic Relations) ShvRahul Chhabra among others.

The Republic of Mali has been taking various initiatives towards energy security of the country, especially to increase access to electricity for its citizens, with a focus on solar power and applications. Development of Solar Projects in Mali will make a considerable impact in socio-economic growth of Mali.

NTPC, a Government of India Enterprise and a leading global power company with 62,110 MW installed capacity has vast experience in setting up of Solar Projects and handling various solar programs like the National Solar Mission in India. In 2019, ISA endorsed NTPC as a Project Management Consultant through a competitive process for the member countries to avail the services of NTPC. Earlier the Republic of Togo engaged NTPC for similar PMC support for development of 285 MW Solar Park in Togo. NTPC plans to anchor 10,000 MW of solar parks in ISA member countries in next two years. Solar parks are being showcased as a best practice from India which had started solar parks as a novel concept and has commissioned a number of projects, thus bringing down cost of solar energy substantially, bringing in investment, creating employment and benefitting the environment in the process.

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


25.2. Sellers need to mention 'country of origin' on products for GeM platform 
PTI, Jun. 23, 2020

Government e-Marketplace (GEM) has also enabled a provision for indication of the percentage of local content in products with a view to promote Make in India.

NEW DELHI: The government procurement portal GeM has made it mandatory for sellers to mention 'country of origin' on products they wish to sell through the platform, a move aimed at promoting Aatma Nirbhar Bharat (Self-reliant India), a senior official said on Tuesday.
Government e-Marketplace (GEM) has also enabled a provision for indication of the percentage of local content in products with a view to promote Make in India.
"GeM has taken a significant step towards Aatma Nirbhar Bharat and has made it mandatory for sellers to enter the country of origin while registering all new products on GeM," the portal's CEO Talleen Kumar told PTI.

Sellers, who had already uploaded their products before the introduction of this new feature on GeM, are being reminded regularly to update the country of origin, with a warning that their products will be "removed" from the platform if they fail to update the same, he said.
"With this new feature, now, the country of origin as well as the local content percentage are visible in the marketplace for all items. More importantly, the Make in India filter has now been enabled on the portal. Buyers can choose to buy only those products that meet the minimum 50 per cent local content criteria," he said.
Kumar said that since its inception, GeM is continuously working towards promoting 'Make in India' initiative and the portal has facilitated entry of small local sellers in public procurement.

Earlier this month, the government modified public procurement norms to give maximum preference to companies whose goods and services have 50 per cent or more local content, a move aimed at promoting ''Make in India'' and making the country self-reliant.
The revised public procurement (Preference to Make in India), Order 2017, has introduced a concept of Class-I, II and non-local suppliers, based on which they will get preference in government purchases of goods and services.
GeM is also coming up with a more dynamic, transformational and vibrant portal by adding advanced features such as powerful search engine, revamped brand and product approval process and faster creation of categories for goods and services through tender analysis.

Government e-Market (GeM) portal was launched in August 2016 for online purchases of goods and services by all the central government ministries and departments.
Government departments, agencies and public sector units can now procure products made by tribal communities from the GeM portal as it has added over 4,000 such items, including paintings, handmade showpieces and statues.
Currently, government departments, ministries, public sector units, state governments, and Central Armed Police Forces are allowed to carry out transactions through this portal.
The portal provides a wide range of products from office stationery to vehicles. Automobiles, computers and office furniture are currently the top product categories. Services, including transportation, logistics, waste management, web casting and analytical, are listed on the portal.
So far, 3,94,461 sellers and service providers are registered with the portal to sell 18,30,688 products and several services.

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