AAPI: January 2023

DELHI, January 2023

Index of this Newsletter

INDIA

INDIA & THE WORLD

21. Tech regulation should be in national interest: Satya Nadella
22. ADB sanctions USD 125 million loan to improve urban services in Tamil Nadu
23.1. India's Mahindra has been named as the fastest-growing brand in South Africa for 2022
23.2. Trade agreements with Australia and UAE to help boost exports
24.1. Pharma Cos Told to be Ready with Supply of Covid Meds
e. Demand for Indian Generics Skyrockets
25.1. Opinion: Attracting international students to India – Making the Mission possible!
25.2. Zero to G20: India’s a stage, World notes

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DELHI, JANUARY 2023

NEWSLETTER, JANUARY 2023

INDIA

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

General policy, Infrastructures, Country Finances, etc.

1.1. This Decade Belongs to India

ET, 1 Jan. 2023

Policies put in place before and during the pandemic have laid the foundations for a sea change in India’s economic fortunes — doubling of GDP and attaining the position of third largest economy in the world by the end of this decade.

India’s economic momentum post-Covid-19 has been the inheritance of its own actions it comes from a few years of heavy lifting on policy. The story goes back to 2007, when profit share of GDP was soaring. But the rise got arrested following a major move in policy via the Rural Employment Guarantee Act. Implemented in 2006, this law marked a transfer from profits to wages. Eventually, higher wages should result in higher profits as they lift demand, but this does not quite work in India. Given India’s surplus labour and uneven (and often short) supply of goods and services, higher wages have led to a rise in consumer price inflation and stagflation rather than a rise in real growth. For India, a policy to boost profits — and then investments which create jobs and wages appears to be a more reliable approach to generating higher real growth. Indeed, the experiment between 1999 and 2004, which then caused profits to boom between 2004 and 2007, is evidence of the success of this approach. The government ultimately announced policies to lift the share of profits in GDP starting September 2019. It started with a meaningful reduction in the corporate tax rate, making the regime comparable to the rest of Asia. The rate was reduced from 34.9% (effective) to 25.2%, and a special lower rate of 17% was announced for new manufacturing companies.

Furthermore, the government took calibrated, sector-specific steps and, during the pandemic, has undertaken further policies directed at lifting the share of profits in GDP, including production-linked incentive schemes and increased infrastructure investment. These changes since 2019 top some tough reforms in the preceding five years, including the Goods and Services Tax law, the Real Estate Regulation Act, the Bankruptcy Code and the new inflation framework. The change in policy should not be underestimated since historically India has used tax revenues to fund social spending rather than corporate earnings. During Covid-19, a silver lining emerged for India as global CEOs became more comfortable with both work-from-home and work-from-India. The number of global in-house captive centres that opened in India over the last two years was almost double that for the prior four years. During the two pandemic years, the number of people employed in this industry in India rose from 4.3 million to 5.1 million, and the country’s share of global services trade rose 60 basis points to 4.3%.

In the coming decade, the number of people employed in India for jobs outside the country is likely to at least double to over 11 million, and we estimate global spending on outsourcing could rise from $180 billion per year to around $500 billion by 2030. This will have significant effects on both commercial and residential real estate demand. If India is already the “office to the world”, it is increasingly becoming its factory as well, as manufacturing capex rises helped by government policies, and Morgan Stanley’s multipolar world thesis, which is prompting localisation of supply chains. Multinational companies are seeking to diversify production but are also attracted to India’s growing domestic market, and government policy is making the decision to locate factories in India an easier one. We estimate that manufacturing’s share of GDP will rise from 15.6% currently to 21% by 2031, which implies nominal output jumping from $447 billion to about $1.49 trillion. India is also undergoing digital transformation at population scale driven by the success of Aadhaar, which is designed to process high volumes at low cost with small-value transactions and is the basis for IndiaStack. India’s internet model is different from the world, as it is founded on IndiaStack, a public utility that is a highly inclusive, transaction-led model and provides interoperability, democratises data and is decentralised.

The reasons for the success of IndiaStack include government support for technology-based solutions, its ability to solve market and social needs and open-source, AI-driven technology built at population scale and supporting institutions for implementation (NPCI for UPI, RBI for Account Aggregator, ONDC for digital commerce, UIDAI for Aadhaar). The stack has four layers: eKYC, Digilocker, eSign and multiple payment layers, including UPI. This has changed the way India processes documents, invests and makes payments. The stack adds three significant layers that will alter the way India lends, spends and insures. The first, OCEN (Open Credit Enablement Network), is disruptive to incumbent banks but will simultaneously raise credit penetration by transitioning the system to cash flow-based lending. It also has the potential to lower credit costs due to enhanced data access from multiple systems. This will democratise credit at a population scale for both consumers and businesses. The second, ONDC (Open Network Digital Commerce), will aid the onboarding of merchants across the country, give consumers access to products hitherto available at higher cost, and enable interoperations between buyers and sellers. This is a major disruption to the consumer sector as products move from unbranded to branded and small traders modernise, with OCEN enabling credit at scale. The third new layer, a digital health ID, will enable a unified interface that will be interoperable across health service providers. It will allow customised insurance solutions and give the population better healthcare access.

All these layers are based on user consent, and we expect rapid adoption, as we have seen with payments. India is experiencing a major shift in energy dynamics. Access to energy is fundamental to prosperity. India’s daily per-capita energy consumption is around 800 watts (excluding food). This compares with 9,000W/capita/day for the US. Given the big upgrades to transmission and distribution over the past few years, we see a step change in India’s energy consumption to about 1,300W/capita/day over the next decade, bringing with it economic prosperity. A simultaneous shift in energy sources from fossil fuels to renewables —with twothirds of India’s new energy availability to come from clean sources like solar, biofuels and hydrogen — underpins a major shift, even as legacy capacity using fossil fuels will not be destroyed due to growth in energy consumption. This will improve India’s terms of trade, entail about $726 billion in capex, reduce inflation volatility, improve living conditions by lowering pollution and create new demand for electric solutions. With these changes, by 2031 we expect India’s GDP to more than double to over $7.5 trillion, the stock market to compound annually at 11% to around $10 trillion, a discretionary consumption boom led by a rise in per capita income from $2,000 to over $5,000 and a quintupling of households earning in excess of $35,000/year to over 25 million, a rise in credit to GDP from 57% to 100%, causing a 17% annual compounding of credit growth, and a doubling of India’s share in global exports.

We believe India is set to become the world’s third largest economy and stock market by the end of this decade. As a consequence, India is gaining power in the world economy and, in our opinion, these idiosyncratic changes imply a once-in-a-generation shift and an opportunity for investors and companies. We estimate this New India will drive a fifth of global growth through 2031, led by a combination of offshoring, unique digital infrastructure and energy transition. Of course, many things could go wrong, including a prolonged global recession or sluggish growth, adverse outcomes in geopolitics and/or domestic politics, policy errors, shortage of skilled labour and steep rises in energy and commodity prices. That said, we believe the pieces are in place to make this India’s decade. The author is MD & Head, India Equity Research, Morgan Stanley

1.2. Labour Min Weighs Shift from Minimum to ‘Living’

ET, 29 Dec. 2022

India is considering shifting from the minimum wage to living wages to pull millions of people out of poverty.

India is considering shifting from the minimum wage to living wages to pull millions of people out of poverty. While it can have huge financial implications for India Inc and the government as a living wage is indexed to inflation, the move could be a game changer for the country as it strives to meet its Sustainable Development Goal (SDG) commitment of eliminating extreme poverty by 2030. A living wage is defined as the minimum income necessary for workers to meet their basic needs compared to subsistence wage or a minimum wage which is based on labour productivity and skill sets. The minimum wage is an amount set by law, whereas the living wage is determined by average costs to live, and the difference between the two could range from 10-25% depending on the cost of living in a place. A person familiar with the development told ET that senior labour ministry officials have been asked to weigh the pros and cons of living wages, including financial as well as economic and social implications on the country. “Initial discussions have begun within the labour ministry. India could seek help from the International Labour Organisation (ILO) to arrive at living wages if the idea gets a political backing,” a senior government official said on the condition of anonymity. Members of the ILO, including India, recently requested the United Nations body to contribute to a better understanding of living wages by undertaking peer-reviewed research on concepts and on estimations in that respect and provide assistance to member states in arriving at living wages in their respective countries. India is a founding member of the ILO.

2.1. Delhi govt implemented 77 major projects of education, health, city infra in 5 years: Dy CM Manish Sisodia

ET Gov. 30 Dec. 2022

There are various corridor development projects including the Ashram Chowk underpass and many other underpasses across the city, various bridges, subways, installation of nearly two lakh CCTV cameras, free Wi-Fi, etc.

The Delhi government has implemented 77 major infrastructure projects of the education, health and the public works departments in the last five years, Deputy Chief Minister Manish Sisodia said on Wednesday. Reviewing the projects with senior officials of PWD and the other departments concerned, Sisodia said city infrastructure, health and education have been the top most priorities of the Delhi government. The projects include the construction of over 20,000 classrooms, new sports complexes, hostels for students, hospitals with state-of-the-art facilities, six new and two double-decker flyovers, two new university campuses, installation of more than two lakh CCTV cameras, road beautification, installation of 500 flags and the signature bridge in Wazirabad. "After coming into power, it has been a priority of the Delhi government to provide the best infrastructure, facilities of education and health to the citizens. Delhi is a national capital and deserves the best urban infrastructure. This was neglected by the previous governments but Arvind Kejriwal made this his priority," Sisodia said. He said that out of the 77 projects, 26 of them, worth Rs 8,683.81 crore, have been approved for the education sector in the past five years. "The Delhi government is also constructing two new campuses of Ambedkar University in Rohini and Dheerpur. For Training and Technical Education (TTE), the government has constructed many new academic blocks and hostels in several technical universities. Most of these projects have either been completed or are currently ongoing," he said.

The deputy CM said the Delhi Government has approved 25 major infrastructure projects in the health sector in the last five years and hospital bed capacity will be increased by 20,000. "In the health sector, the Delhi government approved 25 major projects at a cost of Rs 4,452.72 crore which includes the construction of various new hospitals and intensive care units. Road infrastructure has been given a boost with 26 projects worth Rs 6,409.33 crores," he said. In PWD, the Delhi Government has approved 26 major projects at the cost of Rs 6,409.33 crores which include streetscaping projects in pilot phase, construction of double-decker flyovers between Bhajanpura-Yamuna vihar and Azadpur-Rani Jhansi Road. It also includes flyovers at Shastri Park, Asharam to DND flyway, ANVT to Apsara Border, at Nagari and Gagan Cinema Junction and elevated corridor at Loni Chowk. "Apart from these, there are various corridor development projects including the Ashram Chowk underpass and many other underpasses across the city, various bridges, subways, installation of nearly two lakh CCTV cameras, free Wi-Fi and installation of 500 tricolours across the city," he said.

2.2. Centre clears way for construction of 11 more greenfield airports

ET Gov. 27 Dec. 2022

Ten such airports have been operationalized in the country, the latest being the Manohar International Airport in Goa.

The government of India has accorded an 'in-principle approval' for the setting up of 21 greenfield airports across the country. Ten such airports have been operationalized so far in the country, the latest being the Manohar International Airport in Goa, which was inaugurated on December 11 this year, said Union Minister of State for Civil Aviation, Lt Gen (Retd) VK Singh in a written reply to Rajya Sabha. Since 2018, seven airports, Pakyong (Sikkim), Kannur (Kerala), Kalaburagi (Karnataka), Sindhudurg (Maharashtra), Kushinagar (Uttar Pradesh), Orvakal (Andhra Pradesh) and Donyi Polo (Arunachal Pradesh) airports have been operationalized apart from the inauguration of Manohar International Airport at MoPA, Goa. The Airports Authority of India has incurred a cost of Rs 2504.38 crore in 2017-18, Rs. 4297.44 crore in 2018-19, Rs. 4713.49 crore in 2019-20, Rs. 4350 crore in 2020-21 and Rs. 3724.34 crores in 2021-22 for the construction of these airports. During the pre-covid period, in the year 2018-19, the number of passenger footfall at airports across the country increased by 11.6 percent as compared to the previous year i.e. 2017-18. Passenger footfall decreased during the pandemic era. However, post-covid, in the year 2021-22 the trend shows an increase of 63.7 percent over the year 2020-21, wrote the Minister in his reply.

3.1. Tata Power Renewable Energy Bags 255 MW Hybrid Project in Karnataka

ET, 29 Dec. 2022

AgenciesTata Power needs to increase renewable power generation by about 1.5-2 gigawatt every year to avail additional cost incentive

Tata Power Renewable Energy (TPREL), a subsidiary of Tata Power, has received the “letter of award” (LoA) from Tata Power Delhi Distribution Ltd, a joint venture of Tata Power and the NCT of Delhi, for setting up a 255 MW hybrid (wind and solar) power project in Karnataka. The project will be commissioned within 24 months from the PPA execution date. The letter was awarded through an e-reverse auction, a company statement said. The power generated from the project will be supplied to Tata Power- DDL, which supplies electricity to a over 7 million in North Delhi. The letter indicates the current capacity bifurcation as 85MW solar and 170MW wind power with the green-shoe option of additional capacity of 85MW solar and 170MW wind.

3.2. HUL Shortlists Candidates to Take Over the Baton from Sanjiv Mehta

ET, 15 Dec. 2022

Hindustan Unilever, the country’s biggest consumer goods maker, has shortlisted possible chief executive candidates to take over from incumbent Sanjiv Mehta when he steps down from the role.

Hindustan Unilever, the country’s biggest consumer goods maker, has shortlisted possible chief executive candidates to take over from incumbent Sanjiv Mehta when he steps down from the role. Mehta, 62, has been leading the local unit of Anglo-Dutch consumer firm Unilever since 2013 as its managing director and CEO. He was last reappointed for five years, until October next year. Among the front-runners for the corner office include Rohit Jawa and Priya Nair, executives close to the development said. Jawa, currently the chief of transformation for Unilever, is the senior of the two and is seen internally as a strong contender. Nair is the global chief marketing officer of the beauty and wellbeing segment at the parent company. There has been no official confirmation from HUL on succession planning. An HUL spokesperson said the company “would not like to respond to rumour or speculation at a time when Sanjiv is actively leading the business”. HUL has established itself as a CXO factory over the years, the spokesperson said, adding: “This has been enabled by robust and continuous leadership development and succession planning processes for our key talent and roles.” CEO succession has traditionally been a two-horse race at HUL. Internal candidates are identified for the position and prepared accordingly by placing them in different challenging roles with profit and loss responsibility and global roles. Over the past few years, both Jawa and Nair have completed advanced management programmes at Harvard Business School. Earlier this year, HUL’s parent, Unilever, said it was creating five distinct businesses — beauty & wellbeing, personal care, home care, nutrition and ice cream — each division fully responsible and accountable for their strategy, growth, and profit delivery globally.

Several global roles including coordination roles may become redundant as Unilever focuses on a category-led structure, executives said. “Jawa is working closely with Nitin Paranjpe, who took on a new role as chief transformation officer and chief people officer, leading the business transformation, and heading the HR function at Unilever,” said an executive. An MBA in marketing from Faculty of Management Studies, Delhi, 57-year-old Jawa joined HUL in 1988 as a management trainee and has since held leadership roles across sales, marketing, transformation and general management within Unilever. Before taking up the current role at the parent, Jawa was executive vice president for North Asia and chairman of Unilever China, the company’s third largest market after the US and India. He has worked in India, Vietnam, Thailand, Singapore, the Philippines, Indonesia and China with a broad experience across home care, personal care and food sectors. Fifty-year-old Nair is also being groomed for the role and if she gets the role, she would be the first woman CEO at HUL.

Unilever has been focused on leadership and gender balance and had reported a gender balance at the management level in 2019 and 2020. A 1995-batch MBA from Symbiosis Institute of Business Management, Pune, Nair joined HUL as a management trainee in the consumer insights team. Before moving to the parent company, she led both home care and beauty and personal care portfolios over the past decade at HUL. She had led the launch of HUL’s rural mobile marketing initiative, ‘Kan Khajura Tesan’, which received three Gold Lion awards at the 2014 Cannes Lions International Festival of Creativity. Since Mehta joined the firm in September 2013, HUL’s market capitalisation has quadrupled to Rs 6.3 lakh crore now, adding more than Rs 5 lakh crore to the market value — more than the combined market cap of rivals Colgate, Dabur, Marico and Godrej Consumer Products.

He oversaw the Indian business outpacing Brazil to become the second largest market behind the US in terms of sales for Anglo-Dutch consumer products giant Unilever. In addition, HUL's operating margins are at its highest ever at 23.8% now, jumping nearly 8 percentage points over the past nine years, even as sales doubled. However, the near-term operating environment remains challenging for HUL, often considered to be a proxy for consumer sentiment in India. The FMCG market growth in the country is subdued with 5% value growth and nearly 7% volume decline during the quarter ended September. “HUL’s initiatives of growing the core, premiumisation and market development to build new categories and digital and e-com portfolio in beauty and personal care and foods suggest it has the right to win. Though rising inflation remains a cause for concern, the management seems to be confident about maintaining margins at around 24%, given its cost-cutting project ‘Symphony’ in control," Centrum analyst Shirish Pardeshi wrote in a recent investor note.

4.1. Incentivise Taxpayers for Shift to Exemption-less Regime: Debroy

ET, 26 Dec. 2022

Debroy said this govt has generally been fiscally conservative, and the fiscal consolidation cannot be thrown to the winds.

Individual taxpayers need to be incentivised to migrate to an exemption-less income-tax regime, Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister, told ET, pegging India to grow at about 6.5% in the next fiscal. According to Debroy, the government’s capital expenditure focus will continue in FY24 while setting aside higher spending on social sectors including health and education. It may target a fiscal deficit of 5.8% of GDP for next year, he said in an interview. He said inflation is moderating a bit and the Reserve Bank will have to take a stance keeping in mind that much of the inflation is not very amenable to monetary policy. India’s retail inflation eased to an 11-month low of 5.9% in November. He said there was a case for relooking at the inflation band used by the Reserve Bank of India to decide on interest rates. At present, the RBI is mandated to target a 4% inflation with a 2% tolerance limit on either side. Debroy felt this inflation rate can increase to 5%. The said government will face the challenge of retaining the capital expenditure in the Budget for 2023-24 considering that revenue expenditure is kind of frozen with little flexibility and the Centre is committed to sticking to a fiscal consolidation path. He expects the economy to grow by about 6.5% in FY24.

“With a lot of uncertainty globally, net exports from India will no longer be the drivers of economic growth unlike the years when India clocked 9% growth with one-third of it coming from exports,” Debroy said. Finance minister Nirmala Sitharaman will present the Union Budget 2023-24 on February 1, which would be the last full budget for the government before the general elections in 2024. “The government is likely to continue with what it has been doing since 2014 and I don’t see any sudden disruption in the upcoming budget,” Debroy said. The government must incentivise individuals and corporates to opt for the exemption-less regime instead of sticking to the old system. ‘Fact of the matter is that people have not volunteered that much for the exemption-less system, which means one needs to look at this and figure out some ways to incentivise this,” he said, adding that one way of doing it was introducing differential rates under the two regimes. He said this government has generally been fiscally conservative, and the fiscal consolidation cannot be thrown to the winds. The government has a fiscal glide path of lowering the deficit to 4.5% of GDP in FY26 from 6.4% in the current fiscal. “Considering that the government sticks to the timeline of bringing down the fiscal deficit target to 4.5% by 2025, I think the budget will target a fiscal deficit of 5.8% for next year, and anything lower than that will be over-ambitious,” he said. Debroy, however, is optimistic about a rebound in private consumption expenditure.

“Consumption expenditure has been recovering. I don’t think it is completely explained by a recovery from covid,” he said. “Discretionary consumption expenditure is particularly postponed if there is uncertainty or inflationary expectations. To the extent that both are coming down, consumption expenditure should also take off,” he said. PLI scheme Debroy said while it was too early to gauge the success of the Production-Linked Incentive (PLI) schemes, as they have not been around for a long time, theoretically, there is a case for them when the global market is distorted. He said more sectors could be added and there is a case for tightening, and one would expect some amount of tweaking of PLI, which is linked to investments. “The government can look at incentivising incremental employment generation, expand PLI to more sectors and introduce a monitoring mechanism to avoid any misuse of subsidy under the scheme,” he said.

4.2. India set to surpass 1 billion Internet users, $400 bn online spending by 2030: Report

ET Gov. 26 Dec. 2022

An average Indian spends around 7.3 hours per day on their smartphone, one of the highest in the world.

Growth in UPI payments and the comfort of paying online have led to ~110 million paid online gamers in India, second only to e-commerce.

At 780 million, India is home to the second-largest internet user base in the world, which is more than 2X of the US population. With the accelerated growth of internet and smartphone adoption, India is expected to surpass 1 billion Internet users by 2030, according to a recent report by Redseer Strategy Consultants. An average Indian spends around 7.3 hours per day on their smartphone, one of the highest in the world. The time spent is across online messaging, social media, YouTube streaming, OTT content and short form video. Cheaper data costs and affordable smartphones (starting at US$60) have been the fundamental drivers of increasing online time. This sets the stage for high digital opportunities for consumer internet players, said the report launched at Redseer's new-age business summit Ground Zero 7.0. The firm identified typical internet users into three cohorts – explorers, transactors and mature users. Given that the internet users’ growth has exploded over the last 3-4 years, a large number of them (400-450 Mn) are in the early phase of digital life – they are exploring digital services. As the user builds comfort using the digital services and trusts them, they graduate from one cohort to another.

“India has ~350 Mn online transactors across e-commerce, shopping, travel and hospitality, and OTT. We estimate there are 40-45 Mn mature users; these are the users who spend a considerable share of their wallet online (more than 50%). We expect online transactors to become 2X by 2030, with mature users being the faster-growing cohort. We also estimate that these mature users would account for $400 bn online spending by 2030,” says Mukesh Kumar, Engagement Manager, Redseer Strategy Consultants. The majority of online service users come from tier 2+ cities, tier-2 and beyond - this is where most of the action is. There is a new trend in content consumption where the time spent on user-generated content is 2X of platform-generated content, it showed. “Leading global apps are more targeted to metro and tier-1 users (mostly English-speaking users); this is where new-age domestic players have emerged and are solving for the needs of smaller cities. Social commerce, for example, has built trust amongst small city users with its reseller model. They have also been a platform where users shop online for the first time. On the other hand, vernacular and regional content focused platforms have been able to serve the needs of Tier-2+ users in their digital content consumption. As a result, we have seen leading app focusing on Tier-2+ users see maximum growth in users over the last 1-2 years,” adds Mukesh.

Growth in UPI payments; Gaming holds lion's share With the increasing digital India push and explosive growth of UPI transactions, internet users are becoming comfortable paying online on digital platforms. As comfort with paying online increases and customers evolve in their journey, Redseer expects this to drive growth in transacting users, where users will shift their offline wallet spending to online. Growth in UPI payments and the comfort of paying online have led to ~110 million paid online gamers in India, second only to e-commerce. Gaming is adding ~2 Mn paid users per month, it added. According to the report, every second internet user is a gamer in India, and every 3rd transacting user in India is a paid gamer. Gaming has almost 450 Mn users in 2022, and the market will see a 33% rise in paid gamers by 2026. These users come from across India and pay for real money games like Rummy, Poker or make in-app purchases on casual/core games.

5.1. India plans $2 billion incentive for green hydrogen industry, says report

IBEF, Dec. 28, 2022

By 2030, the Indian Government plans to invest US$ 96 billion (Rs. 8 trillion) in green hydrogen and its derivative green ammonia. Moreover, the government is planning a US$ 2.2 billion (Rs 180 billion) incentive in the upcoming budget, that aims to reduce the production cost of green hydrogen by a fifth, over the next five years. Green hydrogen is produced by splitting water using electrolysis. The current cost of green hydrogen is around US$ 3.62 (Rs 300) to US$ 4.83 (Rs 400) per kg and the incentive provided by the government is expected to be US$ 0.60 (Rs 50) per kg for 3 years.

Indian companies like Adani have partnered with a French multinational, TotalEnergies to create the world’s greatest green hydrogen ecosystem. Many more companies like Reliance Industries, Indian Oil, NTPC, JSW Energy, and Acme Solar have big plans for green hydrogen.

Strategic Intervention for Green Hydrogen Transition (SIGHT), a green hydrogen proposal would be divided into the manufacturing of electrolysers for US$ 543 million (Rs. 45 billion) in five years and US$ 1.63 billion (Rs 135 billion) for green ammonia and green hydrogen production for the next three years. Moreover, the estimated global demand for green hydrogen is expected to exceed 100 million tonnes by 2030. Thus, the Indian government seeks to export 70% of the production to foreign countries (like South Korea, Japan, and European Union) and plans to develop 5 million tonnes of green hydrogen annually by 2030 along with achieving a capacity of 15 gigawatts of electrolyser manufacturing by 2030.

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

5.2. Bids to be Invited for 8 GW Wind Projects Every Year Till ’30

ET, 13 Jan. 2023

The government will invite bids for 8 GW wind power projects every year from 2023 to 2030 under a new auction process, a notification from the Ministry of New and Renewable Energy said on Thursday.

The government will invite bids for 8 GW wind power projects every year from 2023 to 2030 under a new auction process, a notification from the Ministry of New and Renewable Energy said on Thursday. The power generated from these projects will be pooled and offered to procurers at a "pooled tariff", the ministry said. The bids will be on a single-stage 'two-envelope' basis. The bids will also specify the capacity to be installed and the cumulative capacity in any of the eight windy states will not be more than 2 GW. The Solar Energy Corporation of India may determine the maximum and minimum size of bid size based on the wind renewable energy purchase obligation. The lowest tariff discovered through bidding in 2022 was around ₹2.84 a unit. The total installed capacity of wind power in India is around 42 GW.

- AGRICULTURE, FISHING & RURAL DEVELOPMENT

6.1. FMCG Rural Demand Shows Signs of Green Shoots after 2 Years

ET, 25 Dec. 2022

Rural demand for packaged fast-moving consumer goods (FMCG) has begun showing signs of revival after nearly two years of slowdown, companies said.

Rural demand for packaged fast-moving consumer goods (FMCG) has begun showing signs of revival after nearly two years of slowdown, companies said. “The month of November saw rural volumes growing 6-7%, compared to 2-3% in the previous two quarters," said Mayank Shah, senior category head at Parle Products, which crossed $2 billion in annual revenue in FY22. “We believe this is on account of a good harvest season and inflation tapering off.” India’s villages, which contribute more than 35% to overall annual FMCG sales, are crucial for overall revival of the sector. Executives said good seasonal harvests, resulting in improved liquidity in the hands of farmers, higher government spending on infra, and the wedding season are aiding consumer sentiment in India’s villages.

“We are seeing recovery in rural demand since the last three weeks, specially for our low unit packs (LUPs),” said Ankush Jain, chief financial officer at Dabur India, which makes Vatika shampoo and Fem bleach. “We are also observing some moderate recovery in discretionary categories like our personal care products, which we believe is because of the wedding season.” The company, which derives about 47% of its sales from rural India, said it is stepping up direct distribution to cover more than 100,000 villages as demand starts recovering in rural areas. “We are seeing indications of demand improvement in rural markets, which is core to our business,” said Emami managing director Harsha Agarwal, maker of BoroPlus cream. “We are hopeful this will sustain and improve more in the coming quarters, in preparation of which we are stepping up investments on product availability, direct distribution and reach," Agarwal said. Rural markets contribute about 45% to Emami’s annual sales. The market was squeezed over the past two years by the pandemic-induced disruption of supply chains and distribution channels, followed by unprecedented inflation of commodities, fuel and packaging. This led companies to increase prices of packaged goods, including daily essentials, forcing consumers to either buy cheaper packaged goods, or buy less of grocery and personal care products.

"Higher minimum support prices for key crops and increased spending on rural infrastructure by the government, would aid rural growth and help gradual recovery in rural demand," ratings agency Crisil Ratings said in its quarterly outlook update. Executives at Marico, Wipro Consumer and Britannia also said rural demand has begun showing signs of recovery after five-six quarters. Neeraj Khatri, CEO at Wipro Consumer Care, which makes Santoor soap, said: "Rural growths are trending better after a few quarters and with inflation stabilising, should do better next year." Lux soap and Brooke Bond tea maker Hindustan Unilever had forecast in its September quarter earnings announcement that it expected demand in rural markets to begin recovering from the December quarter onwards, with inflation easing and better consumer sentiment on account of a good harvest. Finance minister Nirmala Sitharaman said in the Rajya Sabha on Wednesday that the government is keeping an eye on inflation, which was purely extraneous due to the prices of fuel and fertiliser. Wholesale inflation has dropped to a 21-month low.

6.2. Basmati rice: the new authenticity rules aiming to remove sub-standard varieties from the market

Down to Earth, 30 Dec. 2022, Katherine Steele

If we don’t maintain today’s standards, it may harm the industry — and crucially the farmers who work so hard to produce this beautiful rice in the first place

Basmati is the most popular speciality rice in the UK, adding extra flavour and subtlety to everything from curries to pilafs to kedgerees. Nearly three-quarters of the world’s basmati is produced in India, and the UK buys three per cent of it — plus substantial amounts from the second-largest producer, Pakistan.

All has not been well with this delicious staple, however. A huge number of newly cultivated varieties have been permitted in the UK and EU since 2017, and some have turned out to be sub-standard, lacking the unique popcorn-like fragrance that helps to make this rice so sought after.

New rules are being introduced at the beginning of 2023 that aim to take these lesser varieties of basmati off the market. So will this solve the problem?

Basmati and the code of practice

Basmati rice has been cultivated for thousands of years in the fertile alluvial plains between the Indus and Ganges rivers. To qualify as basmati, grains must meet certain standards related to things like fragrance, grain length and width, as well as cooked texture. They must also have a mid-range level of amylose, a part of the starch in rice.

Fraudsters nevertheless became notorious for cutting basmati with lesser rice grains, drawn by the fact that it is up to 50 per cent more expensive per kilo. Several decades ago, it wasn’t uncommon for imported basmati to be more than 50 per cent impure.

To get around this problem, the UK Rice Association introduced a code of practice in 2005. Also followed across the EU, the code specified that basmati could be no more than seven per cent impure, as well as introducing a list of 15 permitted varieties: nine traditional ones that could be imported duty free and a further six that were modern cultivars. We at Bangor University devised the system of DNA fingerprinting that is used to enforce the code and has sometimes led to prosecutions for infringements.

The system worked well until 2017, when the code was updated to add 25 new modern cultivars. This followed an explosion in new breeding in the 2000s and 2010s to address the problem that traditional basmati varieties are tall, low-yielding plants which fall over if they are fed with too much fertiliser.

Breeders overcame this by using crossing and selection to add the so-called “green revolution” semi-dwarfing gene, which is also bred into most other modern rice varieties.

India and Pakistan had successfully persuaded the UK and EU that these 25 new varieties were as high in quality as the existing 16, but several years later we were able to show that this wasn’t entirely right.

By developing alternative DNA markers for fingerprinting, we showed that six of the new varieties — five from India and one from Pakistan — had not been properly bred for fragrance.

Some did not even contain the version of the BADH2 gene that makes basmati fragrance possible in the first place. Although India and Pakistan have rigorous systems for testing rice quality, they don’t necessarily do the gene testing that would have picked up the problem.

The future

The Rice Association has responded to this discovery by publishing a new code of practice that removes the six varieties from the permitted list. Coming into force on January 1, the code also adds five new varieties that do pass muster. As a result, consumers should once again be able to buy basmati rice in the knowledge that it is of the highest possible quality.

But this isn’t the end of the story. For one thing, the seven per cent impurity rule remains. I have long argued that the Rice Association should adopt the same one per cent rule that applies in many products — non-GM foods, for example. There’s no real reason for the basmati exception, and it is also arguably easier to enforce a one per cent rule because of the way that DNA testing works.

Secondly, rice breeding is not standing still. Breeders have started focusing on making crosses to allow basmati varieties to inherit genes that will mean they need less fertiliser, resist disease so they need fewer or no pesticides, and even withstand drier growing conditions or salt-contaminated soils.

These varieties aren’t quite ready to hit the market but are urgently needed to increase the sustainability of rice production. But if such varieties are to be sold labelled “basmati”, they too will have to be monitored to ensure they meet the same high standards that consumers expect. The same goes for varieties created by gene editing, which have not yet started emerging but probably will do over the next couple of decades.

If we don’t maintain today’s standards, it may harm the industry — and crucially the farmers who work so hard to produce this beautiful rice in the first place. It’s an interesting case study in how cutting edge technology and the right regulation can ensure that an ancient industry remains fit for purpose in the 21st century.

Katherine Steele, Senior Lecturer in Sustainable Crop Production, Bangor University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

7.1. Startup India Seed Fund Scheme: 126 incubators approved, 656 startups selected so far

ET Gov. 26 Dec. 2022

The scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization.

Minister of State for Commerce and Industry Som Prakash

Under the Startup India Seed Fund Scheme (SISFS) being implemented from April 1, 2021, a total of 126 incubators have been approved and they have selected 656 startups as on November 30, 2022, said the Minister of State for Commerce and Industry Som Parkash in reply to a parliamentary question on Friday. The scheme aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization. The SISFS has been approved for a period of four years starting from April 1, 2021 with a corpus of Rs 945 crore.

As per provisions under the SISFS, the government has constituted an experts advisory committee (EAC) which is responsible for the overall execution and monitoring. The EAC evaluates and selects incubators for funds under the scheme. These incubators shall select the startups based on certain parameters outlined in the scheme guidelines. The approved incubators and selected startups for 2021-22 were 80 and 304 respectively and for 2022-23 (as on November 30) have been 46 and 352 respectively, the minister said.

7.2. WayCool expands agri-input portfolio with Yara India deal

Asiafruit, 15 Dec. 2022, Maura Maxwell

Indian food and agri-tech platform WayCool has announced that it is to sell nutrition and nitrogen fertilisers through its AI-driven ‘phygital’ farmer engagement platform, Outgrow.

The WayCool and Yara India teams

As part of this move, it has entered a strategic partnership with Yara India, the world’s largest producer of nitrogen fertiliser. WayCool said its aim is to offer superior crop nutrition while facilitating chemical and environmental solutions that have minimal impact on soil health and drip irrigation systems, to enhance overall crop productivity.

WayCool will list and promote Yara’s products amongst Outgrow’s 100 network partners and 200,000 farmers across various locations in Tamil Nadu, Karnataka, Andhra Pradesh, Telangana and Maharashtra. and share Package of Practices for 20 crops.

Sanjay Dasari, co-founder of WayCool Foods, commented, “Against the backdrop of global concern for food security, India and Indian farmers have a pivotal role to play. WayCool is transforming the entire food supply chain to a demand-driven one making it profitable for them.

“We welcome Yara India to WayCool’s partner family in contributing to this mission. We believe this strategic partnership will be the final piece of WayCool integrating the food value chain puzzle, making us a comprehensive soil-to-sale organisation.”

WayCool’s head of outgrow and farmer engagement, N Sendhil Kumar, said the partnership would enable the company’s farmers to access the best global practices and existing Indian practices.

“At Outgrow, we ensure next-gen tech and know-how accessible to farmers, and have successfully demonstrated how natural farming adds to profitability. This partnership with Yara India adds-on to our comprehensive offering by making responsible farm inputs available as well,” he said.

Sanjiv Kanwar, managing director of Yara South Asia said the company is committed to achieving climate neutrality and decarbonising agriculture in the coming years, while also improving farmer diversity.

“With this shared vision, we are delighted to partner with WayCool, who are working towards transforming India’s food economy besides being meticulous about the footprint they create, and we are certain that this association will make agriculture sustainable and fruitful.”

8.1. Investments worth US$ 1.2 billion (Rs. 10,000 crores) in the pipeline for Andaman and Nicobar

IBEF, Dec. 27, 2022

Union Minister of State for Fisheries, Animal Husbandry, Dairying, Information and Broadcasting, Dr L. Murugan, informed that the centre has put in US$ 3.6 billion (Rs. 30,000 crores) for the development of Andaman and Nicobar Islands over the last eight years, and investments worth US$ 1.2 billion (Rs. 10,000 crores) are in the pipeline.

The proposed mega infrastructure project on the Great Nicobar Island includes the development of a trans-shipment hub, a greenfield international airport, a township, and a diesel/solar power plant. The minister expressed that this project would generate a lot of employment opportunities for the local youths and help in boosting Andaman and Nicobar’s economy.

"Nearly 62,000 water connections have been provided and more than 95% of work for 1,338 houses under the PM Awas Yojana is complete," he said, and further added that the Union Territory has around 15,500 beneficiaries under the Prime Minister Kisan Scheme.

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

8.2. Over 2.62 lakh active retail shops to be converted into PMKSKs in phased manner: Union minister Mansukh Mandaviya

ET Gov. 31 Dec. 2022

Tele-consultation will be provided at PMKSKs for consulting specialists and experts for agriculture related support.

Union Minister for Chemicals & Fertilizers Mansukh Mandaviya interacts via video conference with farmers and retailers gathered at 9,000 PMKSKs, from his office in New Delhi on Thursday.

In a significant move to benefit farmers across the country, the government is planning to convert 2,62,559 active fertilizer retail shops into Pradhan Mantri Kisan Samriddhi Kendras (PMKSKs), the Union Minister for Chemicals & Fertilizers Mansukh Mandaviya said on Thursday. While virtually interacts with farmers and retailers from over 9,000 PMKSKs across the country, Mandaviya said these PMKSKs will act a nodal point for all agriculture related activities, and disseminate the latest innovations, best practices, knowledge, techniques and tests that will help the farmers to not only increase their productivity but also reduce cost of production. He interacted with farmers and retailers of PMKSK of six states--Ramnagar (Uttar Pradesh), Kota (Rajasthan), Dewas (Madhya Pradesh), Vadodara (Gujarat) and retailers from Eluru (Andhra Pradesh) and Rajapura (Punjab). "Our aim is to create a vibrant ecosystem for farmers. The PMKSKs will make our farmers capable in doubling their income and in turn will act as a significant step in India’s food security and growth story,” he observed adding that over 2.62 lakh active retail shops in the country will be converted into PMKSKs in a phased manner.

Mandaviya said that the conversion process will ensure that the wide range of products and facilities to be provided at PMKSKs will reach all the farmers of the country. With this the PMKSKs will prove to be a major platform for the farmers in the future that will help in overcoming the daily issues faced by the farmers and address their concerns at the shortest possible time. Highlighting the significance of PMKSKs, the minister said, “Opening PMKSKs is a major step, which will help in catering to a wide variety of needs of the farmers like providing agri-inputs such as fertilizers, seeds and pesticides and testing facilities for soil, seeds, and fertilizers. They will also promote awareness among farmers, provide information regarding various government schemes and ensure regular capacity building of retailers at block/district level outlets.” Appreciating the contribution of the scientific community, Mandaviya said, “India is developing several alternative solutions that will not only be pocket friendly for farmers but will also be better in terms of production levels and environment friendly.” He assured that in the coming days approval of nano DAP will also be given that will be a better alternative for the conventional DAP. He thanked the scientists for these innovations in agriculture sector and requested the farmers to adopt these innovative fertilizers and technology. Expressing their gratitude over the innovative steps being taken by the government, the farmers highlighted the availability of crop literature at the PMKSKs, soil testing facilities and information about other government schemes. The retailers informed that more and more farmers are now using drones for the purpose of application of fertilizers and pesticides, which is saving them money and time.

Arun Singhal, Secretary Dept of Fertilizers, Neeraja Adidam, Addl. Secretary along with senior officials from the ministry were present during the event.

9. Micro and small enterprises corner 55% of total orders placed on the GeM portal

IBEF, Jan. 12, 2023

As per a senior government official, since 2019, the Micro and small enterprises (MSEs) have cornered about 55% of the total orders placed on the public procurement platform - Government Electronic Market (GeM), which was launched in 2016 for online purchases of goods and services by all the central government ministries and departments.

The Chief Executive Officer (CEO) of GeM, Mr. P.K. Singh said that the public procurement policy for MSEs constitutes 25% of buying of goods and services from these units and over 3% MSEs owned by women. He added that out of the total order value of US$ 31 billion (Rs. 257,263 crores) on the GeM portal, about 55.2% (worth US$ 17.14 billion (Rs. 141,887 crores)) is constituted by MSEs and 8% of the MSEs are owned by women (worth US$ 1.4 billion (Rs. 11,373 crores)).

In consideration of an increase in the buying activities by different ministries and departments, the procurement of goods and services from the government portal GeM has crossed US$ 12 billion (Rs. 1 trillion) so far.

The portal provides a wide range of products from office stationery to vehicles and automobiles, computers, and office furniture are currently the top product categories. In addition to it, the services including transportation, logistics, waste management, webcasting, and analytical, are listed on the portal.

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

10.1. Blockchain to be Used to Push Farm Exports

ET, 2 Jan. 2023

India’s natural farming could soon get a technological push through blockchain, as the government plans to use the technology across all export-driven crops to increase the country’s food shipments and incentivise farmers to take up chemical-free processes. The Niti Aayog has launched a pilot project in collaboration with the Himachal Pradesh government on apple farming, to ensure quality production while also monitoring the produce across the entire storage and supply chain. “Lack of quality produce and traceability has hampered India’s food exports apart from disincentivising growers. Blockchain technology can help bridge this gap,” a senior government official told ET. “By recording information about products at every stage of the agricultural supply chain, a blockchain helps remove redundant processes, ensure quality control and monitor storage conditions,” the official added. After the completion of the pilot project on apples, the technology will be replicated across other crops including mangoes, bananas, grapes and pomegranates, besides vegetables. India ranks second in fruits and vegetable production in the world, after China, but its share in the global fruits and vegetable market is just 1%.

Under the blockchain technology, IoT sensors are used to generate crop data and its storage, distribution of grown crops to the food processing companies, supply of processed food to wholesalers and retailers and its storage. Through this, even consumers can back-trace the supply chain to ensure quality products while buying. According to the Agriculture and Processed Food Products Export Development Authority, India exported fresh fruits and vegetables worth about $1.52 billion in 2021-22, with fruits accounting for $750.7 million and vegetables for $767.01 million. Exports of processed fruits and vegetables totalled $1.73 billion. These included about $1.12 billion of processed vegetables including pulses and $610.69 million of processed fruits and juices. Major destinations for India’s fresh fruits and vegetables include Bangladesh, the UAE, Nepal, the Netherlands, Malaysia, Sri Lanka, the UK, Oman and Qatar.

10.2. Madhya Pradesh awards contract to L&T for SCADA-controlled lift irrigation system covering 500 villages

ET Gov. 4 Jan. 2023

The state-of-the-art automation system with field instruments and automated valves will ensure round the clock supply of water during the Rabi season.

The Madhya Pradesh government has awarded a contract to L&T for execution of two lift irrigation projects to irrigate 2,05,000 Ha of culturable command area covering more than 500 villages of Dewas and Dhar districts in the state on a turnkey basis. The scope of the project includes survey, design, engineering, procurement, construction of pump houses, laying of rising & gravity mains, distribution network and SCADA for controlling and regulating the entire system. The micro irrigation projects will lift 60 cumecs (a cubic meter per second) of water from the Narmada river to irrigate the farmlands benefitting 3,00,000 farmers in the process. The state-of-the-art automation system with field instruments and automated valves will ensure round the clock supply of water during the Rabi season, L&T said in a press release. It added that the order reaffirms L&T’s credentials in the irrigation sector and reinforces customer trust in its capability to aid the development of agriculture in the state.

- INDUSTRY and MANUFACTURE

11.1. Siemens Bags ₹26k-cr Deal from Rlys to Supply e-Locos

ET, 25 Dec. 2022

These 9,000-horsepower electric engines for hauling freight trains will be supplied over an 11-year period, the railway ministry said in a news release.

The Indian Railways has awarded a contract worth around ₹26,000 crore to Siemens India for manufacturing 1,200 electric locomotives. These 9,000-horsepower electric engines for hauling freight trains will be supplied over an 11-year period, the railway ministry said in a news release. The local unit of the German multinational will also be responsible for the maintenance of the locomotives for 35 years. “The estimated value of the contract is about ₹26,000 crore (about $3.2 billion), excluding taxes and price variation,” it said. Prototypes of the locomotives need to be delivered in the next two years. Under the contract, Siemens will be modernising the nearly a century-old Dahod railway workshop. “The Dahod unit will be fully constructed for manufacturing these locomotives within two years. Siemens, selected as technological partner, will manufacture these locomotives at the Indian Railway’s Dahod (facility) and maintain these locomotives at four maintenance depots — Vishakhapatnam, Raipur, Kharagpur and Pune — for 35 years utilising railway’s manpower,” the statement said.

These locomotives are planned for use primarily on the Western Dedicated Freight Corridor and on the graded sections of the railways for hauling container freight trains in double stack configuration of 4,500 tonnes at 75 km per hour. The Indian Railways is looking to improve the average speed of freight trains to around 50-60 kmph compared with the existing 20-25 kmph. There is also a provision under the contract to manufacture and supply standard-gauge locomotives for exports once the domestic requirement is satisfied. Siemens will provide training to railway staff at Dahod for manufacturing and at the four depots for maintenance of the locomotives. The company will ensure 95% availability and 1,50,000 km of trouble-free operation of the locomotives based on guaranteed key performance indicators, the news release said.

12.1. Auto components industry grows by 34.8% to US$ 32 billion (Rs. 2.65 trillion) in the first half of FY22-23

IBEF, Dec. 22, 2022

The Auto components industry of India recorded a growth of 34.8% to US$ 32 billion (Rs. 2.65 trillion) in the first half (H1) of FY 2022-23, as per the Automotive Component Manufacturers Association (ACMA). The domestic demand came particularly from the passenger vehicles segment.

The exports of auto components during this period increased by 8.6% to US$ 10.1 billion (Rs. 79.03 trillion), whereas the imports jumped by 17.2% to US$ 10.1 billion (Rs. 79.8 trillion).

Mr. Sunjay Kapur, President, ACMA said that the availability of semiconductors, high input raw-material costs and non-availability of containers helped in driving the first half of FY22-23.

Mr. Vinnie Mehta, Director General, ACMA said, “in the first half of FY22-23, 47% of revenue to the supply to the Original Equipment Manufacturers (OEMs), which is US$ 28.6 billion, came from passenger vehicles. Interestingly, in the first half of last fiscal, the passenger vehicles accounted for about 38% of our revenue from the OEM". He further added that the demand has shifted towards SUVs and the two-wheelers market performed well as it accounted for 21% of the revenue in H1. The components industry last year closed with a trade surplus of US$ 700 million and it has become finely balanced in the current fiscal. "The sharper growth in the import has been because of the uptick in the domestic market, very much correlated to growth in the domestic market for the OEM segment," he added.

ACMA stated that the aftermarket segment registered an increase of 8% to US$ 5.4 billion (Rs. 42,007 crores) in H1 2021-22.

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

13. Budget 2023 Wish List: India needs to emphasize on capacity building for emerging sectors, aid startups for country's march to the top

ET, 31 Dec. 2022

There is enough context and case for the potential impact on the economy that the finance minister and her team should consider the wish list from this sector - Ashish Wadhwani

It’s that time of the year when the festive spirit is palpable in the air – the much-needed break to be spent with family and friends. However, if we draw the biblical reference of Santa into our business conversation, probably it is apt to say that as everybody looks forward to Santa granting them their wishes, the business community looks forward to the Finance Ministry taking note of their budget wish list. Yes, this is the time of the year when the government and business community get ready for the upcoming Union Budget 2022-23. The government is aware that the next budget is very crucial from the POV of the country’s economic empowerment – especially when the world is grappling with geo-political tension and inflation. In this regard, one must applaud the government for its proactive initiatives for the startup ecosystem – the driving force of the Indian economy since 2014. However, the pre-requisite for our Hon’ble Finance Minister to determine if she should indeed act on the wish list is to determine whether the industry is deserving enough.

(Tax breaks, jobs or plan to beat China: What will Budget 2023 offer? Click to know) The state of the start-up ecosystem and why the FM needs to pay attention Until five years ago, experts and commentators had falsely argued for over two decades that India would continue to be reliant on IT services and did not have the DNA for building products and platforms. The other myth that India can never succeed in manufacturing is being put to test in the days to come. More recently, unemployment (commonly understood to mean lack of government jobs) is going to be the bane of our economy. Luckily for India, Indian Entrepreneurs, in general, and startups in particular are critical in debunking these myths and proving that it is India’s decade. India has over 83,000 startups and currently ranks 3rd in the global startup ecosystem. It has over 100 unicorns on the last count. Indian upstart-ups attracted about $112 bn of investment in the 8 years alone and have directly created millions of jobs in the country. The collective valuation of these startups is upwards of 400b USD. The sector has achieved scale and is a crucial link between growth, innovation, employment, and even exports.

This year the global macroeconomic environment has changed and the higher cost of capital and lower appetite for risk is most likely going to make the journey of startups much tougher. Valuation will correct significantly, and rightly so, several weaker startups will shut down but the underlying technology supercycle coupled with the new-found zeal of entrepreneurship has a long runway ahead and therefore the further expansion of the startup ecosystem is a given if one takes a 10-year view of things.

"Tapping and incentivizing entrepreneurs and investors to participate and drive the growth in these new-age industries is critical" — Ashish Wadhwani

In addition, with the Make-in-India and Atmanirbhar Bharat programs, India is trying to seed and grow several new industries such as electronics, semiconductors, manufacturing, and renewables. Tapping and incentivizing entrepreneurs and investors to participate and drive the growth in these new-age industries is critical for the success of these programs. Finally, India will continue to have a savings-to-investment deficit for at least the next decade. Attracting global capital flows to participate in our emerging industries and provide an exit to our startups via IPOs and M&A is critical in maintaining the robustness of the startup ecosystem. There is enough context and case for the potential impact on the economy that the finance minister and her team should consider the wish list from this sector. The finance minister is probably used to endless wish lists of incentives, tax breaks, subsidies, etc. I am going to focus my wish list mostly on capacity building with a few pointers to tax and regulations. The wish list, therefore, is divided into two parts:

1. Capacity and Capability Building 2. Improving Regulatory and Fiscal Framework 1. Capacity Building a) Seeding Entrepreneurship in Emerging Industries: There is a need for the government to set up Fund of Funds for Industry oriented early-stage capital – just like PLI, early-stage funding of funding in some sectors such as space, Agritech, hardware, Industry 4.0, and Energy to promote entrepreneurship and drive new investments in these sectors. The ROI for this is visible globally. Singapore’s Pharma/Biotech R&D and Israel’s defence sector are great good examples of this approach. Similarly, providing seed capital for R&D and IP filing to encourage R&D in our higher institutions and enable commercialization of the IP will help increase its R&D spending as well as increase the number of patents filed (we are currently 1/10th of filings in India and 1/60th that of China). Such an attempt also encourages VC funds to partner with these institutes to drive innovation and R&D.

Continuing on the adage of “data in the new oil” and AI will take over most repetitive work, the government should seed industry-focused Sandboxes in key industries health, Agri-tech, financial services, smart cities, industries and make them available to startups to build their products on. Ensure startup procurement programs in PSUs and incentivize Large Indian corporates to do the same.

b) Expanding Domestic LP base and widening the Capital Pools: Building LP capacity and capability within the country, and building a larger pool of domestic capital for this sector, is critical for the long terms sustainability of the sector and the ability to capture returns for domestic savers. In this regard, allowing Pension Funds to invest in private equity and venture capital, reduces friction for insurance companies to invest in Venture Capital, particularly for allowing their portfolio companies to internationalize. Similarly aligning the LTCG tax for the resident investor (currently 20%) with that of NRI investors (10%) will incentivize domestic investors to increase their allocation to this asset class. India restricts investment in AIF to a minimum Ra 1 cr per program. This is designed to protect retail investors. In most jurisdictions including Singapore and US and HK, the protection is enabled by allowing only accredited investors to invest in this asset class (defined usually by income and asset size). This is a better framework and allows investors to invest smaller amounts of capital as long as they are sophisticated enough (accredited). While we have a robust angel investor base and over 300 incubation networks, we need to deepen and widen pools of capital. Internal regulations in the fund-of-fund program seem to disincentivize the scale for funds.

This results in the shortage of domestic players in the later-stage VC space for several years. Allowing Pension funds to participate and increasing the allocation of insurance companies will also result in improving the landscape for domestic later-stage funds. The government should also consider regulations around crowdfunding and angel funding platforms. There is a need to bring them to international best-in-class levels to enable more transparency as well as permit more avenues for startups to raise money. The government’s own efforts to bring international fund houses to set up in Gift City will also help. This should be accelerated.

2) Building Paths to Exit The first set of tech IPO has been disappointing, largely because of aggressive valuation and steep market correction. This should not put an end to tech IPOs. It is not prudent to throw the baby with bath water. Tightening regulations for IPO will help in ensuring more alignment of interest between exiting investors, founders and IPO investors. The government should also provide incentivize investors to participate in MSME listings will help improve the liquidity of the listing of smaller startups. Similarly encouraging domestic institutional investors to participate in this market will also improve liquidity and therefore attractiveness to list on the exchange. The government should rationalize the path to dual listings and encourage domestic exchanges to partner with other exchanges eg Singapore, Tokyo, Canadian exchanges, and Australia to help attract a wider set of investors to invest in mature Indian startups. Finally, the path to close companies should be shortened since it is inevitable that startups will fail. Building Talent Pool: Talent is the major raw material along with capital to tap the emerging opportunities. Cost, Availability, and quality of talent have become a constraint for many startups. This problem is likely to get worse in the coming decade. The government has a key role to play in the setup of training institutes or building skill development infrastructure and partnerships in new areas such as manufacturing, agri-tech, drones, IOT, etc. This may take the form of skilling subsidies linked to employment or in setting up infrastructure and providing funds at par with the core sector to encourage the private sector to participate in these programs and increase the capacity and capabilities of the labor market in India. This also goes a long way in ensuring the competitiveness of emerging sectors and in alleviating the employment challenges in the country.

3) Improving Fiscal Regimes Several areas of tax and regulatory rationalization will help improve the competitiveness of the domestic VC and startup industry, attract more investors to invest, and provide a more certain regulatory environment. Some of them include the following: Introducing new structures such as Variable Capital Companies in Singapore to provide greater flexibility for fund management companies to set up vehicles at a lower cost. The trust structure which was originally designed to manage wealth has been retrofitted to use as a fund vehicle and does not always meet the requirements of a new-age fund management company

 Enable a regime for innovation in financing to allow for more financial instruments quasi debt and equity to fund social enterprise and startups in sectors that typically don’t attract

 Modify and align regulations to remove the lacunae on GST on carried units and management fees

 Removing practical challenges of having to file advance tax for exits done late in March, which ends up attracting penal interest from investors

The startup ecosystem and the Private capital space in India is an important pillars for India’s growth aspirations in the coming decade. Strengthening the ecosystem and building capacity is an important policy direction for the government. The industry has the potential to become one of the largest and most attractive ecosystems in the world. (The author is a managing partner at IvyCap Ventures)

13.2. Mahindra’s new ₹10,000 cr EV factory to come up in Pune

MINT, 14 Dec. 2022, Alisha Sachdev

Mahindra & Mahindra Ltd, India’s largest tractor maker, announced plans to invest ₹10,000 crore over the next 7-8 years to develop and manufacture electric vehicles (EVs) in Pune

Mahindra & Mahindra Ltd, India’s largest tractor maker, announced plans to invest ₹10,000 crore over the next 7-8 years to develop and manufacture electric vehicles (EVs) in Pune.

The investment has been approved under the Maharashtra government’s industrial promotion scheme for electric vehicles. The funds will be used to establish manufacturing facilities and develop and produce M&M’s upcoming EVs, which will be based on the INGLO EV platform and launched under the XUV brand and the new all-electric brand BE.

The factory will come up in Chakan, Pune, where Mahindra’s existing manufacturing facility is located.

“The government’s focus on ‘ease-of-doing-business’ and progressive policies, together with Mahindra’s investment, will act as a catalyst for Maharashtra to become India’s EV hub, attracting further Indian and foreign direct investment," said Rajesh Jejurikar, executive director, auto and farm sectors at Mahindra.

The investment in EVs is part of Mahindra’s broader strategy to become a leading player in the global EV market. The company has been developing its own EV technology and recently showcased some of its upcoming EVs at an event in Oxfordshire, UK. M&M is also partnering with other companies to develop EVs and charging infrastructure. Jejurikar added that Maharashtra has been Mahindra’s “home" state for over 70 years, and the company is committed to investing in the region.

In August, Mahindra anno-unced plans to launch five new electric sports utility vehicles for both domestic and international markets. The first four are expected to be released between 2024 and 2026. In September, the company unveiled the XUV400, which is set to go on sale in January. It will be manufactured at the company’s existing facility.

The Indian government is promoting the adoption of EVs as part of its efforts to reduce air pollution and decrease the country’s depen-dence on fossil fuels. To support this, the government has int-roduced incentives such as subsidies for EVs, tax breaks for EV manufacturers, and inv-estments in charging infrastructure.

a. Twenty Three for 2023: 23 ‘boats’ that must rise this year for India’s economy to weather the storm

ET, 2 Jan. 2023

Solar and wind energy will gather pace in 2023 as local supplies improve, helping India cut emissions. India will have to aim for at least 20-25 GW of renewable energy in 2023, and in the years ahead, to achieve the 500 GW target by 2030

iStockIndia will find itself at the centre stage of global geopolitics in 2023.

There are a few things that India needs to be in its favour if it has to successfully navigate the gathering global storm. The Indian economy has been sailing safely and speedily in a sea of global uncertainty, but the ride may get turbulent in the new year. Here are 23 ‘boats’ that must rise in 2023 for India’s economy to weather the storm.

1 The Renewables: Will the energy transition speed up? Solar and wind energy will gather pace in 2023 as local supplies improve, helping India cut emissions. India will have to aim for at least 20-25 GW of renewable energy in 2023, and in the years ahead, to achieve the 500 GW target by 2030. The huge potential is driving interest in the sector with over Rs 2 lakh crore ($25 billion) investment expected in the EV ecosystem, manufacturing of solar equipment, energy storage tech, and production of green hydrogen. Though wind equipment is produced locally, solar is heavily import-dependent — up to 90%. The good news is that over `8,700 crore of domestic capacity is expected soon. Big corporate investments with global-scale economics look to be taking off. Adani Solar has begun manufacturing large-sized monocrystalline silicon ingots in India while RIL is readying to launch its battery packs in 2023. A Rs 19,500 crore PLI scheme will fire around 40GW capacity with bids expected in 2023. Bids for 4GW offshore wind projects and manufacturing of electrolysers will also roll out in the new year. Blending of ethanol with petrol will gather steam, bringing some relief to the import bill although green hydrogen may have to wait longer before making a debut.

2. In the Crypt: Can crypto survive its hunters? The year 2022 was a wake-up call for cryptocurrency investors. The collapse of FTX and the two popular digital currencies and stablecoin TerraUSD earlier in the year, drove home the risks. Back home, RBI governor Shaktikanta Das has warned the next financial crisis will occur due to private cryptocurrencies. The new calendar is not likely to bring any cheer. Global risk aversion, regulatory uncertainty over cryptocurrencies, and better appreciation of risk are likely to weigh down the asset that many saw as a way to super wealth. The decentralised nature of Web 3.0 makes regulating these virtual digital assets difficult, which means they will continue to face curbs with many central banks and governments unwilling to allow a free run to a parallel currency. That money laundering, terror financing and illicit fund flows are part of the crypto discussion does not help. As per WazirX, crypto trade volumes in January-November 2022 were 76% lower at $10 billion, from $43 billion in the same period last year. The year 2023 could well be when the crypto winter sets in, dealing a blow to many hoping to ride the boom. Over 80% of Indian investment in crypto assets in 2022 came outside of metros, from places like Lucknow, Jaipur, Pune and Patna, among others.

3. ReStartup: Will the startup ecosystem come out of the funding winter leaner, meaner? As 2022 draws to a close, what’s clear among top startup entrepreneurs, investors, and internet industry executives is that the new year may have more pain in store — at least initially — for new-age firms before any relief comes their way. Venture funding has slowed significantly for growth-oriented startups, with 2022 already a weak year. According to Venture Intelligence, startups saw nearly $24 billion in funding in 2022 as of December 28, down from a peak of $35.46 billion last year. Correction in interest rates in the US from record highs and an improvement in sentiment will be crucial for the needle to move again in favour of startups. With over 100 unicorns in India, startups are emerging as one of the largest job generators as well as wealth creators via esops, buybacks, and mergers and acquisitions. Almost all startups, across stages, are hunkering down to extend their runways and cut costs at every possible opportunity. New startup launches have also slowed in 2022. Easing liquidity and financing conditions will be needed for more startups to be birthed in the country, leading to potential disruptions in large industries. The first quarter or two might see more struggle among startups to survive, but a relatively better second half could lift up 2023 for India’s internet economy, making it better than the year gone by.

4. Telecom Call: Will 5G change everything? Blistering 5G speeds of up to 10 Gbps promise to transform the lives of millions of mobile users hooked to data, as 2023 rolls in. Thrills of superfast gaming, enhanced virtual reality and highresolution videos, to name a few, will be here soon as Reliance Jio and Bharti Airtel roll out countrywide 5G coverage. The 5G networks are set to disrupt processes, businesses and social interactions while creating opportunities. The networks will loop in smartphones, cars, homes, machines, robots and household gadgets, lighting up a true Internet of Things (IoT) ecosystem. A host of enterprise apps across industry verticals will emerge to ride this disruption, creating startups, wizards and billionaires. For the telcos, enterprise services, including captive private networks to power smart factories, will bring in untapped revenues going beyond voice and data. Ericsson sees 5G business services as a $17 billion revenue opportunity by 2030 for telcos in India. The paucity of mass-level 5G devices, which still straddle the premium range, means 4G services won’t go away anytime soon. 5G device penetration may improve in 12-18 months. Meanwhile, telcos may slice networks to reserve a chunk of 5G bandwidth for premium 5G enterprise services. Yes, data and network security will be more urgent as 5G permeates and the maze of connected devices becomes vulnerable.

5. Auto-matic: Will EVs gear up and gather pace? After a breakthrough 2022, EV sales are set to gather pace in the new year with Tata Motors, Mahindra and MG Motor India rolling out half a dozen models in the mainstream segments. Over 100,000 EVs are expected to be sold next year, double the 50,000 in 2022. High fuel prices, increased offerings, and government incentives amid growing consumer awareness will speed up the shift to electric in the two-wheeler and three-wheeler segments. The charging infra is catching up, too, addressing the key concerns of buyers, while environmental concerns are providing the nudge. In the three-wheeler segment, where nearly half the vehicles sold are electric currently, the proportion is expected to increase further, driven by demand from the ecommerce sector, say industry executives. Electric two-wheeler makers say they can sell 2.5 million units next year, up from 624,189 in 2022 and about 233,000 in 2021, provided their incentive bills are cleared. Incentives of `1,100 crore under FAME II are pending because of an inquiry into the localised content as reported by some electric twowheeler makers. All niggles aside, 2023 could be a year when EVs go mainstream.

6. Flyover: Will Indians’ revenge travel and tourism continue? Two years of pent-up travel demand has led to steep room rates, choc-abloc hotels, and airport congestion. The holiday season has never been better for the Indian hospitality industry. In late November, India’s domestic carriers flew over 400,000 passengers for two straight days, jumping to pre-Covid levels. Such has been the demand and the rush to travel domestically that most key travel operators and hospitality firms have seen business outperforming prepandemic levels by a sizeable margin. Recent data released by Airbnb shows overall nights booked in India grew by almost half, while domestic nights booked grew by 80% in the third quarter of 2022 compared with the third quarter of 2019. The Covid-19 outbreak in China and some other countries threatens to upend the recovery in the global travel and tourism industry. But the local industry is unfazed. Sector insiders do not see domestic revenge travel cooling off in 2023 if there is no sizable uptick in cases and curbs are not imposed. The party is set to continue in the new year.

7. Date with Data: Will the Digital India Bill finally give us privacy? India, one of the largest data markets in the world, astonishingly does not have a contemporary legislation for governing the internet. The 22-year-old IT Act does not even mention the internet. The proposed Digital India Bill gives citizens hope that their non-personal data would be safe while the Digital Personal Data Protection Bill in 2023 would protect their personal privacy. The twin bills will change the way the internet is governed. Tech-savvy Indians will be regulated with legislation much more in tune with global standards. Social media platforms, ecommerce sites and fact-checking portals can also heave a sigh of relief as they are likely to be classified into different categories, with specific regulations for each. With emerging arenas such as blockchain and metaverse under the purview of the proposed law, entities operating in these spaces will get legal backing. The recently amended IT Rules allow for appellate panels to hear grievances against decisions of social media firms on hosting contentious content. The new amendments impose a legal obligation on companies to prevent barred content and misinformation. It may all come together in 2023.

8. Naturally AI: Will artificial intelligence tools move into the mainstream? ChatGPT, a new chatbot that can almost appear human, has taken the artificial intelligence (AI) scene by storm. AI was a buzzword in 2022 even as the wider tech sector took a plunge. It’s stealthily permeating everything from business to finance to daily life, and the potential is limitless. India may not be at the cutting edge of AI development, but the country’s enormous tech sector is helping adoption worldwide. Experts say AI will soon go beyond customer support to facilitating end-to-end transactions — be it bill payments, submitting documentation for a loan, or even booking a flight. Industry leaders believe there are massive possibilities for AI to provide ‘India first’ solutions in sectors like agriculture, education, and health. For farmers, it could predict soil quality or weather, while predictive healthcare applications could warn of risks of certain diseases. In education, AI could take the load of teaching fundamental concepts, allowing teachers to focus on complex concepts. However, India Inc needs to catch up with policymakers. AI seems to be higher on the agenda of the government than business, perhaps deterred by the geopolitical complexities over data, the core of AI. Policymakers will need to use huge datasets to the country’s advantage, while companies will have to invest more in 2023 to harness AI’s potential.

9. Building Value: Will we witness a real estate boom after the pandemic bust? After years of sluggishness and being laid low by Covid, 2022 was good for the real estate sector. But a confluence of risks — rising rates, global slowdown, inflation and the lingering pandemic — looms over the sector that’s among the biggest employers. The industry is hopeful the 2022 uptrend will sustain in 2023 and various segments — housing, offices, warehousing and data centres — will continue to shine. Interest rates have risen but not as sharply as feared and, with inflation moderating, they may not go higher. The residential market may be able to take this in its stride. The consolidation in the favour of large and established developers will continue. Commercial real estate, which was hit drastically by the pandemic, has made a steady comeback in 2022 and the office segment is expected to witness significant growth in 2023 with at least 40% higher absorption. The global slowdown will be a dampener, while the pandemic is not seen as a major drag. The big consumer market and India’s tech strengths will provide steady demand for data centres and warehousing. A favourable regulatory backdrop and the government’s emphasis on infra spending will provide a favourable environment for the industry.

10. Market-Savvy: Will more Indians take to the markets to beat inflation and risk higher returns? Investors are likely to ride the bullish momentum in Indian equities as prospects of steady economic and earnings growth outweigh the current multiple threats — rising US interest rates, pandemic fears, geopolitics and worries about a global recession. The continued outperformance vis-à-vis overseas peers is likely to keep most investors firmly rooted in equities even as rising interest rates tempt some into fixed-income instruments amid immediate jitters. “Equities will continue to see investor interest because that is one asset class that has the potential to give double-digit returns into 2023 and beyond,” said Pankaj Pandey, head of research, ICICI Direct. Despite steep drops in December, the Sensex and Nifty have given 2-3% positive returns against deep cuts in most major equity markets worldwide after many central banks began raising interest rates to beat down decade-high inflation levels. Since the start of 2013, the Nifty has risen 200%, data showed, despite the 2013 taper tantrum and the pandemic knock. “Investors should continue with their long-term equity investments instead of timing the market for quick returns. Equity is one such asset class that can consistently offer inflation-beating returns,” said Deepak Jasani, head, retail research, HDFC Securities.

11. Prosperity Prospects Will systematic increase in prosperity (SIP) kick in with the Sensex seen inching towards 70,000?

Over the last three years, the Covid crash and the strong bouts of optimism when the pandemic abated saw the Sensex swing between 25,000 and 63,000. India’s millions of systematic investment plan (SIP) subscribers who hung on through this gut-wrenching ride were rewarded with once-in-a-decade returns as they averaged their purchases down and markets recovered. Having seen the much-advertised benefits of SIP, it is likely most of these investors will continue to set aside monthly sums as the Sensex journeys towards the next milestone of 70,000 and the Nifty marches to 20,000. A pickup in credit, slower but still strong economic growth and the start of a new capex cycle are likely to keep the markets buoyant and investors interested. SIP inflows into mutual funds hit a record `13,307 crore in November. This has provided support to Indian markets despite global turbulence, reinforcing belief in the product where a fixed amount is invested every month. While financial planners point out the benefit of rupee cost averaging, the proponents of behavioural finance say the product allows mature investing, steering clear of spur-of-themoment decisions based on the tape.

12. Smartsizing: Between layoff sprees and big-money hiring, will the balance be found? India’s job market has been a curious mix of the Great Resignation wave followed by widespread layoffs, and robust hiring in some sectors in recent months. The talent landscape also continues to be competitive. Amid mounting global recession fears, the Class of 2023 across seven of the older IITs got more than 130 offers with pay packages of `1 crore and above. Will India’s talent market find a balance between layoffs and big-money hiring in 2023? Experts say simultaneous layoffs and big-ticket hiring can co-exist, and are signs of a maturing job market. The bigger challenge for companies is likely to be twofold — dealing with a competitive talent environment, and the pressure to reduce costs. The job market is likely to stay steady despite global turbulence. India Inc’s hiring plans seem robust and the job market is off to a sound start in 2023, according to the Teamlease Employment outlook report for January-March 2023. Hiring experts predict moderate hiring in IT. Sectors such as hospitality and tourism, FMCG, healthcare, auto (especially EVs), and infra are likely to drive hiring in the next few quarters.

13. Dream Stream: Will entertainment & sport move bulk content over to digital from DTH/cable? Video streaming is the business of the future, but the industry is not writing off linear TV yet. DTH and cable TV service providers have lost lakhs of subscribers to OTT platforms and DD Free Dish. Yet, given India’s population and diversity in income profiles, there is possibly room for all mediums to flourish. India has 300 million households, of which only 210 million have TV, as per BARC. More TVs will be purchased. An Ormax study shows there are 119 million active, paid OTT subscriptions — an average of 2.4 subscriptions per paying member, an indication of the potential. Media companies will continue to follow dual strategies for linear TV and OTT. While linear TV content attracts family viewers, OTT consumption is at an individual level. Both businesses are at different stages of evolution though. While TV has an established revenue model, OTT is still trying to find its monetisation mix. Digital video content spending is expected to match TV content spending by 2027.

14. Manufacturing in R&D: Make-in-India semiconductor, a chip off the new block? Thirteen months after a `76,000-crore incentive splash, the Centre may finally roll out approvals for at least two applicants this month to make semiconductors, display fabs, assembly and test facilities. India’s semiconductor dreams look close to fruition. Industry is understandably fidgety, having waited years for the country to get its ecosystem and incentives aligned. Three investors have together promised over $26 billion to set up three semiconductor factories. They are Mumbai-based ISMC Analog, backed by Israeli tech company Tower that Intel is buying; a Vedanta-Foxconn JV; and Singapore’s IGSS Ventures. Fabs are capital-intensive, energy- and water-guzzling investment megaliths. Geopolitical developments have imparted greater urgency with countries looking to cut dependence on China for anything critical to national security. The US is clamping down on American firms looking at China for advanced semiconductors. From an important cog in electronics supply, semiconductors are now strategic necessities. Stakeholders are keeping their eyes peeled for incentive approvals that will get the wheels rolling for India’s semiconductor dreams.

15. Big Bank Theory: Will savers throng banks? For bankers, an enduring social media image of 2022 could be the Canara Bank executive campaigning for deposits in a Mumbai marketplace with microphone in hand. That must be music for savers who have been deprived of reasonable returns for years by RBI efforts to keep borrowing costs low for companies. After chasing risky assets such as equity and even cryptos, savers seeking reasonable returns can probably have a remunerative 2023, with FDs yielding at least 7%. That may get higher, at least in the first half of the new year. Two factors point to high returns from deposits. One, rising loans growth at 17% while deposit growth lags. The second is the impending merger of HDFC and HDFC Bank that would require the bank to chase deposits to replace maturing bonds of the mortgage lender. “Deposit growth may continue to lag GDP for 12 months,’’ said Prakhar Sharma, analyst at Jefferies. “This would mean banks will chase deposits with higher rates for medium term.’’ Banks have sought tax sops for deposits up to `5 lakh. The FM will have to decide on letting banks and other asset managers fight for the savings pie. An equity selloff would be a blessing for banks.

16. United States of India: Will there be broad agreements across states on reforms such as labour codes? The year 2023 will be crucial for the labour codes ahead of the general election in 2024. In a significant reform, 29 labour laws, some as old as half a century, have been amalgamated into four codes. But these reforms have not been rolled out as the follow-up rules are yet to be finalised. Since labour is a concurrent subject, both the Centre and states must be on board. The Centre and relevant stakeholders, including the states, employers and trade unions, have held extensive parleys to arrive at a consensus on some of the controversial provisions. Any delay beyond 2023 could put the codes on the back burner because of a fear of trade unions’ backlash ahead of elections. Experts have said that as states firm up rules, the Centre must lay out a road map for the implementation with an April 1, 2023, deadline — either in one go or in a staggered manner. This will help industry prepare for procedural changes and manage cost implications. India should not miss the opportunity for attracting investments when the world is eyeing the promising market, say industry experts. Nor can India afford to deprive 90% of its workforce and gig and platform workers of any social security envisaged in the codes.

17. Capex Predator: Will private capital expenditure kick off? The latest ‘State of the Economy’ review included in RBI’s monthly bulletin for December points to indicators “heralding the beginning of an upturn in the capex cycle in India which will contribute to a speeding up of growth momentum in the Indian economy”. For many years, this private capital investment boom has been a mirage for India. High growth has not unleashed private investment, as capacity utilisation has remained low, even as the insolvency law has freed up locked-up factories. Things may be finally turning. Capacity utilisation has crossed trend levels in a number of industries. Credit offtake was up 17.5% yearon-year for the fortnight ended December 2 on the back of fresh capex demand, among other factors. Both corporate and banking balance sheets are stronger than ever and India Inc is bullish on new opportunities as global supply chains readjust to geopolitics. Will India Inc hit big or will caution prevail amid economic uncertainty arising from the pandemic, the Russia-Ukraine war and the global economic slowdown triggered by the tightening monetary conditions?

18. Maidens Over: Will women’s IPL become the Next New IPL? It was a landmark year for women’s cricket. Having remained on the margins of professional cricket for many years, women’s cricket stepped up big time. India lost the recent T20 series to Australia 4-1, but it was much closer than the scoreline suggests. Spectators flocked to grounds with attendance crossing 46,000 in second match. In a show of confidence, the ICC separated the media rights for men’s and women’s cricket. Disney Star and its pre-bid partner Zee walked away with consolidated ICC media rights for India, marking the start of the commercialisation of women’s cricket. Closer home, the BCCI announced a pay equity policy to bring the match fee of female cricketers on a par with male counterparts. The BCCI also launched a five-team Women’s Indian Premier League (WIPL). The biggest challenge for the BCCI is the lack of bench strength that is needed to sustain a multi-team event. But the event could actually be the solution to the problem.

19. Box-Out Office: Will Indians binge on Netflix and Prime at home, deserting theatres? After a string of box-office duds, including by the biggest names in Indian cinema, there is concern that over-the-top (OTT) platforms may be killing cinemas. While the impact of OTT platforms on the cinema exhibition business cannot be wished away, industry experts say the Indian market is an “and” market and not an “or” market. OTT and theatres offer a different experience and hence will coexist, they say. While OTT content viewing is individualistic in nature, the big screen offers a community viewing experience. There has been a growing trend globally among studios to follow the traditional movie release model by going first to theatres, followed by OTT and linear TV. Even Netflix has experimented with exclusive theatrical releases for a couple of its movies in the US. However, the future growth of the cinema exhibition business is tied to the quality of movies produced. The content preferences of Indians have evolved due to exposure to global content, and Bollywood’s earlier templates may not work anymore. Good movies will see theatre footfall, as evident in the success of some regional and small-budget films.

20. Aggressive Agri: Will Indian farming be more S&T-driven and expand from its still limited pool? Hydroponic spinach to basil and lettuce are all available on popular grocery delivery apps. Hydroponic farming — soil-less, water-based agriculture possible even in tiny spaces — is here and growing by leaps. Instead of employing soil for plant nourishment, crops are supplied with nutrient-rich water, which eliminates much of the baggage associated with soil-based approaches. Smart farming with soil testing-based decisions and automation using AI focused on precise application inputs in agriculture is here. Sensors and drones will be used for precision, quality and environmentally cost-effective farming. Traditional farmers will not be left behind as technology pervades farming. Dependence on chemicals and fertilisers will drop as technology facilitates more efficient application and data permits more scientific usage based on soil type, including the use of organic products. And, like elsewhere, drones will change the whole process of cultivation and harvesting. Industry estimates suggest that the use of drones could increase crop yields by 15-20%. The government has already flagged off 100 Kisan Drones in different cities to spray pesticides on farms across the country.

21. Trade Winds: Will free trade agreements struck in 2022 come home to roost? The year 2023 could be a defining one for India’s push for bilateral trade agreements amid faltering multilateral arrangements under the WTO. The government is expected to engage in intense negotiations with the UK, Canada, the EU and the Gulf Cooperation Council in 2023 to ink bilateral free trade agreements (FTAs). India is seeking to secure certainty in market access and national treatment across maximum services sectors through these pacts as it aims to raise the share of its exports in global trade to 3% by 2027 and 10% by 2047 from the current 2.1%. Slowing global trade, slowdown, new geopolitical imperatives following the Russia-Ukraine conflict and non-tariff barriers amid rising protectionism could prove to be hurdles. As per officials, negotiations for the IndiaBangladesh Comprehensive Economic Partnership Agreement are expected to start soon as the two sides are keen to conclude the talks before Bangladesh sheds its least-developed country status. While the India-UAE pact took effect from May 1, the India-Australia agreement came into force on December 29, and talks for a broader FTA with Australia could start in January.

22. Consumer Counting: Will Made-in-India electronics become the go-to for buyers at home and away? From assembling to manufacturing — for the local market and the world — India has embarked on a massive plan to get factories humming again. Right from TVs to ACs, laptops and smartphones, the China-plus-one strategy adopted by Apple, LG, Samsung, Haier, Midea, Lenovo and Bosch has put the spotlight on Indian manufacturing. The year saw a subtle shift towards India as companies scrambled to keep production going, even as frequent lockdowns in China due to its ‘zero-Covid’ policy disrupted supplies. Apple started assembling its latest iPhone model in India within a month of its global launch — a record. Already, Apple suppliers are making a beeline for India as the phonemaker explores production beyond iPhones. Others are not far behind. Samsung and LG are expanding their exports from India and going into manufacturing high-value components. Lenovo plans to locally source half the components for its computers by March and then start exports. Oppo, Vivo and Xiaomi, too, are shifting some production from China to India. Even Indian companies such as Voltas and Blue Star are investing in component manufacturing. The year 2023 could well be a pivotal year for establishing the consumer electronics industry value chain in India.

23. Taking The Global Centre Stage: Will India Offer Hope to the World? India will find itself at the centre stage of global geopolitics in 2023. It will host the G20 summit at a time the world is coping with several shocks — the economic fallout of RussiaUkraine war, the looming threat of Covid, and supply chain worries caused by an aggressive China. With working channels of communication open to key powers, India is positioned uniquely to provide an effective conversation bridge. However, it will remain constrained by its own negative security dynamic with China. To compete and cooperate at the same time will prove to be a challenge. The year will also see India play host to the SCO summit. That means, if all goes as per plan, the leaders of China, Russia and Pakistan will visit India at least once in 2023. It would be an achievement if India is able to host Joe Biden, Xi Jinping, Vladimir Putin and heads of some 35 countries. The new year is also likely to see the Quad — India, US, Australia and Japan — deepen their agenda of cooperation. Equally significant will be India’s outreach to the Islamic world. Challenges will continue from Pakistan as it enters UNSC as a non-permanent member.

b. Green Hydrogen: India’s green hydrogen pitch first needs to find locally made electrolysers, fix production cost

ET, 3 Jan. 2022

India wants to become a hub for production and export of green hydrogen. But, as of now, the country doesn’t have an electrolyser manufacturing ecosystem required for producing green hydrogen. Can joint efforts by the government and India Inc make it happen?

It became a big talking point in India last year after Union transport minister Nitin Gadkari reached Parliament on a hydrogen-powered Toyota Mirai. While the use of green hydrogen as a fuel for running industrial units or cars is still a rarity in the country, efforts are being made worldwide to make it mainstream. India, too, has chipped in to make the country a hub for the production and export of green hydrogen. The government last year announced the National Hydrogen Mission. India Inc was quick to respond and expressed interest in investing in the green hydrogen production ecosystem. So far, more than 50 countries have either announced or are working on a national hydrogen policy. The key cog in the wheel, however, is electrolyser manufacturing. Even as India is trying to put its weight behind the use of green hydrogen as a renewable-energy resource, the country doesn’t have an electrolyser manufacturing ecosystem and almost everything is imported. But this could change by as early as 2025, as around 8GW of electrolyser manufacturing capacity is expected to get ready. A total of nine companies across seven projects — three joint ventures and three solo investments — the biggest of which are 2GW factories built by Belgium’s John Cockerill in partnership with India’s Greenko, and Nevada-based Ohmium, will set the ball rolling for electrolyser manufacturing in India. Mukesh Ambani-owned Reliance Industries has said it plans to build an electrolyser unit in Gujarat. The company plans to build four 1GW factories in partnership with Danish engineering firm Stiesdal.

The road to producing Green hydrogen

Hydrogen is used at a massive scale in a bunch of key sectors such as petrochemicals, fertilisers, steel, cement and semiconductors among others. The problem lies in the way hydrogen is produced. Currently, around 70 metric tonne of hydrogen is used globally every year. But 76% of this hydrogen is made through the use of fossil-fuel electricity that emits carbon and greenhouse gas into the atmosphere. India currently consumes around 6 million tonne of grey hydrogen largely concentrated in industrial uses in refining and as feedstock to produce ammonia and methanol. Almost 60% of the hydrogen the country uses is produced using a technique called steam methane reformation (SMR), wherein methane and steam react with each other at high temperature to give carbon monoxide and hydrogen. The carbon monoxide is further reacted with water in a process called water gas shift reaction (WGS), which gives CO2 and hydrogen. The overall process of SMR and WGS releases 9 tonne of CO2 for producing 1 tonne of hydrogen. Coal gasification, which makes up almost 20% of hydrogen production, is even worse, releasing 20 tonne of CO2 for getting 1 tonne of hydrogen. This means over 900 million tonne of CO2 is released every year, which is equivalent to the emissions by the UK and Indonesia put together. This type of hydrogen with massive CO2 emissions is known as ‘grey hydrogen’. In order to reduce the impact of climate change and meet the pledges set in the COP26 meeting, it is crucial to replace grey hydrogen with a cleaner source of hydrogen production. What we need is green hydrogen, which will stop emitting greenhouse gases into the atmosphere. But its high cost of production is a key roadblock. The cost challenge At USD5-USD6/kg, green hydrogen is four times more expensive than grey hydrogen available at USD1.5-USD2/kg. One of the key reasons for the steep green hydrogen price is the high cost of the electrolyser systems, the devices used for water electrolysis. Currently, most commercial electrolysers are of two types — alkaline water electrolysers (AWE) and proton exchange membrane electrolysers (PEM). Other types of electrolysers that are being introduced in the market are anion exchange membrane electrolysers (AEM) and solid oxide electrolysers (SOE).

The following numbers will give you a hint of how expensive electrolysers are: The capital costs of electrolysers range from USD1,000-USD2000 per kW for AWE and PEM systems. It is more than USD2000/kW for AEM and SOE systems. This is very high when one compares it with the capital cost for solar cells (USD300-USD500 per kW) or batteries (USD150-USD200/kWh). One of the major factors driving the cost of electrolysers is the price of the raw materials needed for making them. Although there are several important components that go in an electrolyser, the three critical components in current commercial electrolysers are: · The anode on which the water is oxidised to oxygen · The cathode on which the water is reduced to hydrogen · The membrane is used to keep the hydrogen and oxygen separate, while allowing a specific ion to pass through. The price of these three raw materials alone can cost 35%-60% of the total manufacturing cost of the electrolyser. Hence, the cost of green hydrogen will only come down if the cost of the raw materials used in electrolysers is brought down. At present, AWE and PEM electrolysers are two commercially available technologies for green hydrogen production.

Advanced electrolyser technologies like SOE and AEM are nearing commercial deployment as well. Electrolysers have three key sub-sections: power electronics, stack, and balance of stack. Stack and power electronics determine the electrolysers’ performance and contribute to their cost as they comprise high-value components. Manufacturing and supply of these components are confined to a few geographies and are practically non-existent in India, adding to the cost factor. Kiran Malla, partner at EY-Parthenon, says, “India must consider end-to-end manufacturing to truly bring down costs and create value in the manufacturing space. The policy incentives should facilitate the creation of an end-to-end electrolyser manufacturing ecosystem and domestic supply chain of critical high-value sub-components.”

According to the International Energy Agency (IEA), electrolysis currently makes up about 2% of global hydrogen production. The cost of electrolysers and electricity make up for the largest share of the production cost, and thus, developing more efficient electrolysers will give a major boost to green hydrogen generation in India. The rates for renewable electricity needed to produce green hydrogen are falling, as is the price for the electrolysers that are used to split water into hydrogen and oxygen. “India has access to electricity on a large scale, along with sea water, which are two key components for making hydrogen. In India, we currently need 8 million tonne of hydrogen every year and this comes from natural gas. This calls for a scalable technology for a meaningful transition. The current electrolysers used contain rare-earth materials like titanium, gold, platinum and other membranes which are not readily available since they are not found everywhere,” a senior official at NTPC tells ET Prime. Will prices soften in the future? At present, the cost of hydrogen production through electrolysis ranges from USD4.10-USD7 per kg based on the technology used and other associated costs (operating costs, transmission and distribution costs, wheeling costs for electricity and the local duties and taxes in India), according to a report by the NITI Aayog.

With a price decline for both electrolysers and renewables, the NITI Aayog expects the cost of green hydrogen to fall to approximately USD1.60/kg by 2030 and USD0.70/kg by 2050. Ahead of the Union Budget 2023-24, the domestic industry demanded that the import duty on electrolysers should be brought to nil. This will help reduce the cost of its raw materials. Declining prices, coupled with growing urgency for decarbonisation will mean the global demand for green hydrogen will grow by almost 400% by 2050. According to experts, the cumulative value of the green hydrogen market in India could be USD8 billion by 2030 and USD340 billion by 2050. The electrolyser market size could be approximately USD5 billion by 2030 and USD31 billion by 2050. Currently, only about 0.03% of global hydrogen production is made by electrolysis. Despite its environment-friendly pitch, green hydrogen production has a huge water input requirement. One million tonne of green hydrogen corresponds to around 11GW-13 GW of electrolyser capacity. For producing 1kg of hydrogen, 9kg of water as input is required. Accordingly, a large-scale (1GW) electrolyser, operating with 75% efficiency for 8000 hours (about 11 months) per year and producing 0.15 million tonne of hydrogen, would consume about 3 million tonne of water based on 20kg of water use per kg of hydrogen consumption. The bottom line A shift to green hydrogen as a new renewable source won’t happen in a hurry, as energy transitions in general take a long time. Over the course of 60 years — starting from the time it was introduced between 1840 and 1900 — coal went from 5% of the world's energy supply to nearly 50%.

But in the 60 years from 1930 to 1990, natural gas reached just 20%. So, the transition to hydrogen will also take time. With high uptake of green hydrogen-based methanol production, India can abate 150 million tonne of carbon emissions cumulatively between the years 2020 and 2050. Most of these reductions will be achieved post 2040, with an increasing share of green hydrogen-based production. There is a huge gap between the amount of clean hydrogen required and the quantity produced. To close this gap, India needs to massively scale hydrogen production by electrolysis for which it needs to solve a few critical challenges as mentioned above. As more countries foster deep decarbonisation strategies, green hydrogen produced from renewables via water electrolysis is expected to be at the very heart of energy transition. But the needle won’t move unless production costs come down.

15.1. Debt-hobbled Glenmark is looking to boost earnings. Execution will be key to winning back investors

ET, 12 Jan. 2023

Coping with a tough US generics business and high R&D spends,nGlenmark’s earnings growth has been muted. To realign with the changing business environment, the company has set new goals for the next four-five years, which includes doubling down on India, its stronghold. What’s will the company need to achieve its new targets and reclaim investor confidence?

Six years ago, Glenmark Pharmaceuticals had come out with a blueprint of its growth plan for the next decade. The key theme was to transition from a being a pure-play generics player to a company with an optimal mix of generics, specialty, and research-driven innovative products. The growth plan was largely centred on the US market. The company had then said that by FY25, 30% of its total revenue would come from specialty and innovative products. Unfortunately, things didn’t turn out as expected, and in fact worsened. When Glenn Saldanha, chairman and managing director of Glenmark unveiled the blueprint in December 2016, little did he know how difficult the next few years were going to be for his company. The structural changes in the US generic-drugs market such as consolidation of the distribution channel, increased competition, and elevated price erosion hit the company hard. Glenmark faced challenges in building the specialty drugs franchise, and there wasn’t much progress on developing and out-licensing innovative drug molecules. Glenmark’s share price and market cap declined sharply in the last six years. The stock was among the worst performers in the pharma space.

The company’s sore point is its debt. While the debt-to-Ebitda ratio of 1x in FY22 is not too bad, and has come down from 2.2x in FY19, the issue is that cash generation from the business has not improved much, and the company had to take steps like selling non-core assets or raising funds through equity to keep debt levels in check. Despite several efforts and promises, Glenmark has not been able to substantially bring down debt over the years, while many of its peers in the sector are cash rich, which has dampened investor sentiment. This is because, unlike its peers, Glenmark is doing novel or innovative drugs research, which requires high investments. The company has been spending around USD100 million annually on innovative drugs R&D for several years now. Saldanha hoped that his company becomes the first one from India to bring out a new innovative drug globally. While the ambition is great, it takes years to develop a new drug with high chances of failure and the investment is huge. Saldanha took that risk and developed a pipeline of innovative drugs over the last two decades. But with a smaller balance sheet of a generic drug company, continuously funding this R&D engine was always a challenge. Glenmark had to rely on debt. The company initiated novel drugs research in 2002 and was able to monetise some of its innovative assets and earned around USD300 million by out-licensing them to global pharma companies. But since 2015, the out-licensing activity has largely fizzled out.

With the US generics business taking a beating and R&D spends remaining high, Glenmark’s earnings growth has been muted in the last few years. Investors are also concerned that debt remains a challenge even after the company has taken steps like selling some of its brands in Indian market and demerging and listing its active pharmaceutical ingredients (API) business – Glenmark Life Sciences – on the stock exchanges. To address these challenges and to align with the changing business environment, Glenmark has set new goals for the next four-five years. In an investor meet in November, Glenmark said it expects 10-12% revenue growth and improvement in margins to 23% from 19% over the next four years. It aims to enhance cash generation, attain zero debt by FY26 and increase return on capital employed (RoCE) to 22% by FY27 from about 17%. The company plans to drive growth with prudent capital allocation. While these steps seem to be in the right direction, can the company restore investor confidence? What’s will the company need to achieve these targets? Road to recovery The deteriorating generics business in the US has been the main problem for Glenmark.

The company has invested heavily in the US in terms of product pipeline as well as in setting up a plant in Monroe, North Carolina. But returns and profitability in the US business have declined considerably. Moreover, the Monroe plant has been under the scanner of the US Food & Drug Administration (USFDA) and hasn’t started commercial operations yet. As a results, costs remain high. The company is working to resolve the USFDA issues at the Monroe plant and expects a re-inspection sometime in the fourth quarter of this fiscal. It is hoping to commercialise products from the plant next year. Glenmark has six to eight injectable products filed from this plant. It is planning to file products for respiratory therapy, including inhalers, in the US, which has a sizeable market opportunity and limited competition. Apart from that, the company has 47 product applications pending with the USFDA, of which 20 are first-to-file opportunities. If these plans fructify, US business may see some improvement. But the main thing is that from hereon, the focus on US will recede, and branded markets including India will be the key drivers of growth. For Glenmark, the India business has been a stronghold and a saving grace. It is among the fastest growing companies in the domestic pharma market. The company plans to focus on India and other branded markets in Asia, Europe, and Latin America. By FY27, the revenue contribution from branded markets is likely to increase to 66% of total sales from 55% currently. These markets are relatively stable, and companies have better pricing power.

Specialty, innovative products hold the key Glenmark is also banking on its main specialty products Ryaltris, used in the treatment of allergic rhinitis, to give a push to its earnings. Ryaltris has been launched in 21 countries so far either directly by Glenmark or through partnerships. The company plans to launch it in another 13 countries in the next four years. The peak sales for Ryaltris are pegged at USD100 million-USD150 million globally by FY27, with this product likely to account for 4%-5% of the company’s consolidated revenue in FY27, Glenmark says. While these factors can boost earnings, the key step will be to reduce debt. The company plans to curtail its R&D spends to 8-9% from FY24 from 10-11% earlier and reduce capital expenditure. But getting external funding for its R&D arm Ichnos, which houses its innovative R&D assets, and monetising the assets will be crucial. The road so far hasn’t been easy. The innovative assets under development are mainly in oncology. With this therapy area seeing intensive research globally, the company’s molecules need to stand out if they are to succeed. Moreover, many biotech and Big Pharma companies want more evidence that the molecule is working. That means the interest is low if the molecule is in the pre-clinical stage or phase I clinical-trial stage. Glenmark has two assets in phase 1 clinical-trial stage and other three or four in the pre-clinical stage. Ichnos is expected to reach key inflection points in 2023 and beyond. The company is likely to go for an IPO in the US in the next couple of years. In a research report, brokerage firm Nuvama Wealth Management said Glenmark has laid out pragmatic targets up to 2027, which include clear focus on branded markets and the core therapies of dermatology, respiratory, and oncology; not entering the biosimilars space; reducing the cash burn of Ichnos to USD60 million (from USD90 million) in FY24 and ensure it is self-funded by FY27; snipping capex to INR7 billion in FY23; and one commercial launch of innovative asset by FY27.

“Glenmark’s roadmap is promising, but until deleveraging takes shape and Ichnos’s cash burn is curtailed, re-rating looks unlikely,” it said. A fund manager on the condition of anonymity says the company has overpromised and under-delivered in the past, resulting in low investor confidence. Tangible results can help get that trust back. However, given its low valuations, some investors might be interested. Considering the moderate earnings growth over the next two years, regulatory hurdles at the Monroe, Baddi, and Goa plants, and commercial opportunities from niche products to be more back-ended (FY25 onwards), “we maintain our ‘Neutral’ stance on the stock”, broking firm Motilal Oswal Securities said in a report. As the company tries to reach its new goals, investors are in a wait-and-watch mode. Execution will be crucial.

15.2. Make in India' TV shipments rise by 33% to reach five million units

IBEF, Jan. 11, 2023

According to a report by Counterpoint Research, the television (TV) market in India witnessed an exponential increase in the festive season of 2022 and the ‘Make in India’ TV shipments grew by 33% during the July-September period to reach five million units. The ‘Make in India’ TV shipments were led by Dixon and followed by Radiant.

In the electronic wearables category, the true wireless stereo (TWS) segment led in terms of local manufacturing with almost 37% of its shipments being manufactured in the country. The top four brands which contributed to the locally manufactured TWS shipments were Bharat FIH, Padget, Avishkaran, and Optiemus.

In the third quarter of 2022, the top five manufacturers contributed to more than 55% of the locally manufactured TV shipments. It has also been revealed that the local manufacturing industry for the segments like smartwatches, TWS, tablets, and neckbands is also growing robustly. In the tablets category, Samsung, Dixon, and Wingtech contributed to more than 90% of the locally manufactured shipments. Whereas, in the smartwatch category, Optiemus dominated the local manufacturing and contributed to more than 90% of the shipments.

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

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

16.1. Russia, India Plan to Drop Use of $, E in Bilateral Trade: Kabulov

ET, 25 Dec. 2022

Russia and India plan to drop all use of the US dollar and the euro in bilateral settlements and conduct all trade transactions in rupee and rouble, a senior Russian official has said.

Russia and India plan to drop all use of the US dollar and the euro in bilateral settlements and conduct all trade transactions in rupee and rouble, a senior Russian official has said. While it’s a fundamental decision by both sides, it is necessary to address the imbalance in trade for a full-fledged transition to national currencies, Zamir Kabulov, head of India division in Russia’s ministry of foreign affairs, said. Officials are currently trying to address this issue, the Russian diplomat who is also its special envoy for Afghanistan told Russia’s state-run news agency RIA Novosti. India currently buys from Russia five times more than it sells. The move to address trade imbalance would involve expansion of Indian exports to Russia based on Moscow’s request for exports of certain items, ET has learnt.

Foreign minister S Jaishankar had discussed the issue to increase Indian exports to Russia during his Moscow visit last month. India’s trade with Russia is growing, led mainly by the energy sector but also involves fertilisers, coal, coking coal among other commodities. Bilateral trade has reached $27 billion this year mainly due to imports of large volumes of oil and fertilisers from Russia. India’s ambassador to Moscow Pavan Kapoor suggested that “Russian businessmen look at India as the main source of their activities” to make trade between the two countries “more balanced”. , “This concerns not only pharma, but also agricultural products, ceramics, and chemical products,” he said. “We are trying to conduct as many transactions in national currencies as possible, for which balanced trade is required as one side accumulates more, while the other [accumulates] less, and we should search for solutions to this situation,” Kapoor said at Russia-India Business Dialogue Forum on Thursday. He suggested several ways to balance two-way trade, including the use of surplus rupees accumulated by Russian banks in India for imports from India and investments in manufacturing backed by the production-linked incentive (PLI) scheme. If the two countries switch to rupee-rouble settlement without addressing trade imbalance, then Russian banks that accept rupee payments from Indian buyers and release the corresponding amount to Russian sellers in rouble will see a huge pile-up of the rupee even after buying back all the rouble Russian buyers pay for Indian products and services. Meanwhile, Indian exporters and investors are being encouraged to expand trade and invest in Russia. If the two countries switch to rupee-rouble settlement without addressing trade imbalance, then Russian banks that accept rupee payments from Indian buyers and release the corresponding amount to Russian sellers in rouble will see a huge pile-up of the rupee even after buying back all the rouble Russian buyers pay for Indian products and services.

16.2. Ayush launches ‘SMART’ program to promote quality research in Ayurveda colleges and hospitals

ET Gov. 4 Jan. 2023

The ‘SMART’ program will have a deep long term rejuvenating impact on research in the field of Ayurveda and it will be a great service to the nation.

Officials launch SMART program in New Delhi on Monday.

The National Commission for Indian System of Medicine (NCISM) and the Central Council for Research in Ayurvedic Sciences (CCRAS), the two premier institutions for regulating medical education and conducting scientific research respectively, have launched ‘SMART’ (Scope for Mainstreaming Ayurveda Research in Teaching Professionals) program aimed to boost scientific research in priority healthcare research areas through Ayurveda colleges and hospitals. The program was launched on Monday by Vaidya Jayant Deopujari, Chairman, NCISM and Prof. Rabinarayan Acharya, Director General, CCRAS in the presence of Prof. BS Prasad, President of Board of Ayurveda, NCISM and other senior officials. Lauding the initiative, Deopujari said, “I am confident that this program has the potential to transform clinical research in Ayurveda. It was observed that the research potential of the large community of Ayurveda teachers remains under utilised mostly. The ‘SMART’ program will have a deep long term rejuvenating impact on research in the field of Ayurveda and it will be a great service to the nation, I congratulate CCRAS for this initiative and ensure all support on behalf of NCISM.” While highlighting key points of ‘SMART’, Prof. Acharya said, “The proposed initiative is conceptualised with an objective to identify, support and promote innovative research ideas in healthcare research areas including Osteoarthritis, Iron Deficiency Anaemia, Chronic Bronchitis, Dyslipidemia, Rheumatoid Arthritis, Obesity, Diabetes Mellitus, Psoriasis, Generalised Anxiety Disorder, Non-alcoholic fatty liver disease (NAFLD).” The eligible Ayurveda academic institutions may apply by 10 January, 2023. All details regarding contact information, eligibility criteria and application process has been shared to all recognized academic institutions and hospitals through NCISM, he added. Prof. Prasad stated that the large network of Ayurveda colleges and hospitals across the country is an asset for the country in terms of its healthcare needs. This network has not only been offering healthcare services in hardest times, but it also has contributed significantly in terms of healthcare research in the country. The ‘SMART’ program will certainly motivate teachers for taking up projects in designated areas of healthcare research and create a large database, he added.

17.1. Centre launches incentive scheme to boost digital health transactions under Ayushman Bharat

ET Gov. 25 Dec. 2022

The incentives under this scheme would be provided to hospitals and diagnostic labs and also to the providers of digital health solutions.

The National Health Authority (NHA) has announced a Digital Health Incentive Scheme (DHIS) to give a further boost to digital health transactions in the country under the Ayushman Bharat Digital Mission (ABDM). The incentives under this scheme would be provided to hospitals and diagnostic labs and also to the providers of digital health solutions such as hospital/health management information system and laboratory management information system, the NHA said in a statement. Under DHIS, eligible health facilities and digital solutions companies shall be able to earn financial incentives of up to Rs 4 crore based on the number of digital health records they create and link to the Ayushman Bharat Health Account. This incentive can be availed by those registered with ABDM's Health Facility Registry and fulfilling the eligibility criterion specified under the scheme. NHA CEO R S Sharma said this scheme will encourage more and more healthcare facilities and digital software companies to come forward and join ABDM for providing patient-centric healthcare. "Through this financial incentive scheme, we're encouraging the adoption of digital health. Further, we're also including solution providers in the incentive scheme so that they handhold other health facilities to come on board and facilitate strengthening of the ecosystem. Incentives have played a catalytic role in driving early adoption of other citizen-centric programmes such as UPI, notification of TB cases, Janani Suraksha Yojana," he said. Incentives would be provided to health facilities having 10 or more beds, laboratory/radiology diagnostics centres, digital solution companies providing ABDM-enabled digital solutions. (With PTI inputs)

17.2. Centre taking measures to enhance public health by quality drugs and devices: Union minister Mansukh Mandaviya

ET Gov. 25 Dec. 2022

The Central Drugs Standard Control Organisation is playing a crucial role in manufacturing, importing and distribution of health products along with ensuring their safety efficacy and quality.

The Centre is on a mission to safeguard and enhance public health by ensuring top notch quality drugs, cosmetics, and medical devices along with maintaining their safety and efficacy in the country, Union Health Minister Mansukh Mandaviya said on Thursday. Virtually inaugurating the new building of CDSCO Bhawan, South Zone in Chennai, he said that this will further facilitate the government's vision of providing safety and regulatory best practices, especially for the southern states/UTs including Tamil Nadu, Puducherry, Kerala and Lakshadweep. "Clubbing the spirit of Azadi ka Amrit Mahotsav along with expertise from the land of Saint Ramanuja, India is working towards a Swasthya and Samrudh Bharat," he said. Highlighting the Central Drugs Standard Control Organisation's (CDSCO) significance, Mandaviya said that it "is playing a crucial role in manufacturing, importing and distribution of health products along with ensuring their safety efficacy and quality.

They have facilitated the right medicine at the right time for our citizens, especially during the Covid pandemic". He further added that "owing to the significance of CDSCO, the Government of India has expanded its capacities. As part of strengthening the drug regulatory system in the country, the government has approved various projects, construction of new CDSCO offices, new drug testing labs and upgrading of existing labs, mini labs at ports etc., under the 12th Five Year Plan". Given the rapid progress in the field of pharmaceuticals, diagnostics and medical devices sector, Mandaviya reiterated the clarion call made by Prime Minister for "Make in India" and "Aatmanirbhar Bharat" which has provided impetus for manufacturing medical products indigenously and foster public health goals. He said that the government is focusing on the key areas like quality, accessibility, and affordability of medicines as well as encouraging the industry players and other stakeholders. He also highlighted the government's willingness towards adapting new technologies and innovations like drug trials through humanoid chips. "The government is also bringing new drugs, cosmetics and medical device bill which will replace the existing act and rules. These steps will further help us in creating ease of doing business, preventing harassment of innovators and in turn, creating a vibrant drug and cosmetics Industry along with a robust regulatory system." With 578 blood centres, 700 drug manufacturing units, 251 cosmetics manufacturing units, 9 vaccine manufacturing units, 85 medical devices manufacturing units, 40 analytical labs and 12 BA/BE centres under its remit, CDSCO Bhawan South Zone will help in monitoring the quality of drugs through joint inspections and other licenses for blood banks, vaccines and sera, large volume parenterals, r-DNA products, medical devices, etc.

18.1. From whistle-blower, Dinesh Thakur’s long road to reforming India’s pharma industry

ET, 9 Jan. 2023

Thakur rose to prominence when he busted data fabrication and other misdeeds of Ranbaxy for its supplies in the US. In a no-holds-barred conversation, he explains the objectives of his relentless campaign to clean up the system and how he is building a body of evidence that could someday make India’s public-health system more robust.

His name splits the Indian drug industry down the middle. Dinesh Thakur is either admired for his tireless zeal to bring about reform in India’s drug-regulatory system, or tempers flare up at the mention of his name. His motives are often questioned for chasing an “agenda” to malign drugmakers of India, which prides itself on being the pharmacy of the world. But a closer look reveals the merit in his assertions. Thakur has studied India’s regulations minutely, and the compliance lapses he brings up are undeniable. On the one hand, the regulatory agency lacks the wherewithal to audit thousands of manufacturing sites. On the other, the enforcement machinery, split between the central agency and several state drug authorities, is weak, which results in serious violations either going undetected or being let off with minor penalties.

Thakur says he worked hard to bust data fabrication and other misdeeds of Ranbaxy for its supplies in the US, but similar instances at home brazenly continue unchecked. He wants to change that. India must ensure transparency in drug-approval processes, and a single quality of medicine must be supplied across the world. Thakur says the deaths of children in Gambia in Africa and Uzbekistan are clear red flags that tarnish India’s reputation as a reliable supplier of medicines.

In a candid interaction with ET Prime, Thakur charts his relentless campaign and how he is building a body of evidence to improve the quality of discourse, which can someday make the public-health system more robust. Edited excerpts from the conversation: Ever since you busted Ranbaxy’s data fabrication in the US a decade ago, you have focused on exposing the gaps in India’s drug-regulatory system. Although there has hardly been any change despite your efforts, what keeps you motivated?

The fact that not much has changed since 2013 when Ranbaxy pleaded guilty to seven counts of criminal felony, is one of the reasons I continue to focus on this issue. The US Food & Drug Administration (USFDA) made changes to its international inspection framework after the Ranbaxy episode. In the last decade, all that the CDSCO [India’s Central Drugs Standard Control Organization] has done is to continue denying the problem. Unless someone keeps bringing it up and holding up a mirror to them, how will things change?

The Truth Pill: The Myth of Drug Regulation in India, your new book authored with lawyer Prashant Reddy, is the most exhaustive account so far of what ails the Indian drug regulations and the industry. What would you like to see changing for the better in the Indian drug industry? In the last chapter of our book, Prashant Reddy and I make some recommendations based on our research. On top of our list is transparency. While overhauling the colonial-era Drugs and Cosmetics Act is our long-term objective, in the short term, we just want the CDSCO to be transparent about the way it functions, so that people can see for themselves in whose interest the agency is working. Critics say you have an ‘agenda’ to malign the Indian generic drug industry. As the industry has been a trusted source of medicines and vaccines for scores of low- and middle-income countries, they ask, why is Thakur not recognising the achievements? How do you view this? What specifically is it that they want me to do? I have said many times on record that the Indian generic manufacturing industry is a key player in ensuring healthcare not just in countries like the US and in western Europe, but, more importantly, in low- and middle-income countries.

"The problem is that until now, the industry and the drug regulator never had someone who pointedly questioned them. They are uncomfortable because they cannot respond with facts."

— Dinesh Thakur

All I see from the industry is threats. It goes with the territory, I guess. And, by the way, who are these ‘critics’? I am not in the business of responding to anonymous allegations. If somebody wants to throw mud at me, they should have the courage to do so on record. The deaths of children in Gambia took mysterious turns. First, the World Health Organization pointed out contamination in the cough syrups. Thereafter, the CDSCO found lapses during its inspections. Then news reports emerged that the Gambian government had not yet confirmed that the cough syrups caused the deaths. Now Swiss lab reports and a detailed report from the Gambian parliamentary committee affirm the unacceptable levels of toxins in the cough syrups. However, the CDSCO now says everything was okay in its test reports.

How do you view the opacity in test reports and what should be the ideal way to deal with such a situation? The Gambian government never said that the deaths were not caused by the cough syrups. It was propaganda spun by the industry and the CDSCO. The Gambian government said that it was investigating the deaths. Its parliamentary select committee published a 50-page report that looked at all aspects of this tragedy — epidemiology, pathology, toxicology, analytical testing, and the state’s capacity to regulate imports. The fact that someone like you, who follows this field so closely, thinks they did say all this shows how effective the propaganda is.

How this was handled is a classic case of how we as a country respond. Not once did we condole the deaths or express empathy. Rather, we blamed the WHO. Until now, we used to work off the same data set. Now, we are creating our own data sets to justify our position. This is a very slippery slope. These countries that buy from us [India] are not going to take this kindly. The issue is not just opacity, it is our hubris, too. Often industry representatives here feel you have not highlighted the many ills of the US healthcare system while staying there. Any comments? Again, who exactly are these industry representatives? Why can’t they identify themselves first? If anyone bothers to follow what I say publicly, they will know this [allegation] is not true. I am and have been critical of issues in the US healthcare system. But I don’t understand false equivalence — why do I have to say anything about a topic that I don’t know as much as I do about drug regulation in India? I have developed some understanding of this topic. I profess to only have a perfunctory understanding of the US healthcare space, and I don’t like to talk about things I know little about. I don’t understand this whataboutery. India’s health minister says there is a conspiracy against the Indian healthcare industry. Have you been called for any representations to the ministry of late? How do you intend to break this communication barrier? No, I have not been called. All I can do is continue to speak out publicly and hope someone in the ministry listens. The units at the bottom end of Indian pharma probably keep a low bar of manufacturing standards. They claim their standards meet WHO’s GMP [good manufacturing practices] specifications. Since we are seeing major lapses, how should the industry modernise while keeping costs low? The willingness to build plants that meet USFDA standards is largely missing.

How can the industry achieve a single global standard — for US, Europe, or Africa? Is complying with the norms of ICH [International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use] an option? This is a big topic. Every industry goes through a cycle where consolidation happens. The pharma industry, especially the SME [small and medium enterprises] segment, has grown with little consolidation so far in our country. I question the presumption that those at the bottom comply with WHO-GMP specifications.

What data do they have to support that claim? Do they have inspection records or compliance assessments of these units? The second issue is pricing. The industry’s narrative is that modernising and complying with cGMP [current good manufacturing practices] will make medicines unaffordable to our masses. This has been debunked by Shirish Kulkarni in his review of the report on the functioning of the Indian Pharmacopeia Commission (IPC). There has been really good reporting on ICH, the IPC, and this narrative in the last few months. I hope people take the time to read it and judge for themselves. There is a big difference between GMP standards and ICH standards — they deal with different processes. Technically, Schedule M, which is mandatory in India, is based on an earlier draft of WHO-GMP standards.

All licensed manufacturing units are meant to be compliant with Schedule M — that is the law. Now, what is the level of enforcement of these standards? We have no clue because the inspection reports are not made public in India. How does anyone claim compliance when the data is not available? Coming to ICH standards, the question is whether Indian pharmacopoeia needs an upgrade in quality standards. On this count, there are divisions even within Indian pharma. The Indian Pharmaceutical Alliance and some others are ready to bite the bullet on the ICH standards but the Indian Drug Manufacturers Association appears to be reluctant. There is an urgent need to have a public discourse on bringing the industry to an acceptable standard for manufacturing good-quality medicines. Sadly, that is sorely lacking in our country.

"We take our positions, but refuse to engage with each other. All I get from the ministry is threatening letters. How about having a conversation?"

— Dinesh Thakur

You don’t have to accept 100% of what we say, but don’t question my motives. I have the same objective at heart as you have — that people of this country should get good quality, affordable medicines because primary health in much of rural India is about access to good quality medicines and not a clinical diagnosis. Do you think the bigger Indian drug makers are better in terms of compliance? Or is the problem universal, since a lot of the larger drug makers outsource their manufacturing to smaller companies? The data that the USFDA publishes tells me that even the larger manufacturers have systemic issues when it comes to [quality and data] compliance.

"The problem is that we encourage two different standards of quality. It is impossible for any company to not let the lower standards permeate the better."

— Dinesh Thakur

You cannot expect people to check their habits at the door when entering a manufacturing facility that supposedly makes products for export [and, therefore, adhere to a higher standard of quality], which they practised until the day earlier at the facility down the street that doesn’t even use distilled de-ionised water to make injectables for the local market. That is the issue.

"You cannot run two facilities — one catering to a higher standard [supposedly for export to the US] and one that doesn’t even provide basic training in GMP to its employees — and expect to maintain a Chinese wall between the two."

— Dinesh Thakur

The Thakur Foundation is helping build investigative stories on the Indian healthcare system. Can you lay out some of your plans? The foundation’s goals are much broader than what my focus is — drug regulation. We are trying to enable evidence-based policymaking for healthcare to the extent we can. Let me give you an example. Earlier this year, the ministry said it was proposing a public-health cadre for the country. There wasn’t a single academic study that documented the current state of healthcare delivery in the states. How can the ministry formulate a policy in the absence of such data? The foundation had commissioned a nationwide study in 2020, which was published earlier this month. It provides a rich data set from many states. We hope the policymakers use it. Likewise, we did a bottom-up review of educational institutions and curriculum that trains our public-health professionals. We found many gaps in the skills that the country needs. We published this study earlier this month. Unless we look at data carefully and formulate policies based on evidence and not ideology, how are we going to help improve access and affordability? It is a start, and we hope we can make a small contribution towards advancing the conversation in this area. (Originally published on Jan 9, 2023, 04:15 AM IST)

18.2. Govt plans rollout of vax in push against cervical cancer

MINT, 30 Dec. 2022, Priyanka Sharma

The disease affects around 125,000 women—reported and unreported cases—in India every year, and kills over 75,000. Nearly all cervical cancer is due to HPV—a virus that also causes several other cancers in women. (Mint)

Cervical cancer is the fourth most common cancer in women after breast, lung and colorectal cancer, with India accounting for nearly a fourth of the world’s cervical cancer deaths.

NEW DELHI : In India’s biggest push against cervical cancer—one of the biggest killers of women—the union budget to be presented on 1 February may announce a roll-out of the country’s first indigenously made vaccine against the human papillomavirus (HPV), which causes the cancer.

Cervical cancer is the fourth most common cancer in women after breast, lung and colorectal cancer, with India accounting for nearly a fourth of the world’s cervical cancer deaths.

The vaccine, CERVAVAC, has been jointly created by the Serum Institute of India (SII) and the Department of Biotechnology (DBT).

The budget is likely to include it as part of the Universal Immunisation Programme, said an official aware of the matter.

As of now, all that is available in India is an imported HPV vaccine, and that too only at private hospitals for ₹3,500 to ₹4,000 per dose. Two doses are required to complete the vaccination.

The union government now plans to target girls in the 9-14 years age group for vaccination against cervical cancer, with Serum Institute keeping the price of the vaccine at around ₹200-400 per dose.

Cervical cancer is a cancer of the cervix or the lower-most part of the uterus, where the malignant tumour can be prevented by screening and an HPV vaccine.

“There is a proposal from the health ministry on the HVP vaccine considering women health as a priority. The inclusion of HPV vaccine under universal immunisation programme may be highlighted in the union budget and free jabs for eligible girls," said the official cited above, requesting anonymity.

The Serum Institute had earlier said that the company would be able to launch the vaccine by November. However, production got delayed due to the covid-19 pandemic.

“HPV vaccine is likely to be rolled out by the first half of the upcoming year (2023), said another person aware of the matter from Serum Institute. However, queries sent to the health ministry and Serum Institute spokesperson did not elicit any response.

Cervical cancer is among women’s diseases that require urgent government intervention.

Health experts have sounded a warning over the lack of awareness of the cervical cancer in India which is one of the leading cause of deaths in females despite the disease being largely preventable.

The move was welcomed by women’s health specialists.

“Any female who is above 11 years of age or sexually active or has a high risk for cervical cancer should take the HVP vaccine. The central government is making a good move to include HVP vaccine under universal immunisation programme because it will prevent the disease as cervical cancer is one of the leading causes of death in women," said Dr Archana Dhawan Bajaj, a gynecologist and IVF expert at The Nurture Clinic in Delhi.

“Those individuals who have family history of cancer or have multiple sexual partners and not using protection are pre-disposed to developing cervical cancer. Ideally, the vaccine should be given when the female is not sexually active but can also be given between 11-45 years of age," said Dr Bajaj.

According to the International Classification of Disease by the World Health Organization (2022), in India, 65,978 females were detected with cervical cancer in 2015. The figure climbed to 75,209 in 2017 which is expected to reach 85,241 in 2025.

c. PM Modi flags off world’s longest river cruise ‘MV Ganga Vilas’ from Varanasi

ET Gov. 14 Jan. 2023

The cruise will cover 3,200 kilometres across 27 river systems in five states and Bangladesh in 51 days.

In a move to ramp up smart infrastructure while developing new waterways to boost tourism across the states, Prime Minister Narendra Modi on Friday flagged off the world’s longest river cruise, MV Ganga Vilas, from Varanasi. The cruise will cover 3,200 kilometres across 27 river systems in five states and Bangladesh in 51 days. MV Ganga Vilas is the first-ever cruise vessel to be made in India and it began its journey from Varanasi in Uttar Pradesh and will reach Dibrugarh in Assam via Bangladesh. “Beginning of cruise service on River Ganga is a landmark moment. It will herald a new age of tourism in India,” PM Modi said in a tweet. While flagging off the cruise service on river Ganga, PM Modi said that it was a landmark moment, which will herald a new age of tourism in India. PM Modi also invited foreign tourists to come to India and explore the vibrancy of the country. The international cruise is managed by Antara Luxury River Cruise and the first cruise is fully booked entirely by a Switzerland company. The next voyage is likely to be held in September. As per the company the per day ticket price for a 51 day cruise comes around ₹25,000 to ₹50,000. The total cost for the entire trip will be around ₹20 lakh for each passenger. The ship has the capacity of carrying 36 passengers. PM Modi maintained that the river cruise will promote tourism and create new job opportunities. He also said more river cruise systems are being developed in various parts of the country. According to the Union government, the luxury cruise has three decks, 18 suites on board with a capacity of 36 tourists, with all the luxury amenities. As per the statement, MV Ganga Vilas cruise is curated to bring out the best of the country to be showcased to the world. The 51-day cruise is planned with visits to 50 tourist spots including world heritage sites, national parks, river ghats, and major cities like Patna in Bihar, Sahibganj in Jharkhand, Kolkata in West Bengal, Dhaka in Bangladesh and Guwahati in Assam. The journey will give the tourists an opportunity to embark upon an experiential voyage and indulge in the art, culture, history, and spirituality of India and Bangladesh, the statement said.

d. Delhi administration to run DMRC e-bus fleet, add 380 new feeder e-buses in 2023

ET Gov. 29 Dec. 2022

To further strengthen e-mobility in the national capital, the Delhi administration plans to operate additional 380 electric buses across six new stations

In a latest e-mobility push, the Delhi government plans to take over the existing Delhi Metro Rail Corporation (DMRC) electric bus fleet to strengthen last mile connectivity following a recent Cabinet approval. According to the Delhi government, under the latest plan the NCT administration will take over 100 existing e-buses and also operate additional 380 feeder e-buses under its transport department in 2023. DMRC has been operating feeder e-buses in East and North clusters since December 2019, from the Shastri Park and Majlis Park depots. Following the move these e-buses will be run by the transport department through Delhi Integrated Multi-Modal Transit System (DIMTS). To further strengthen its e-mobility in the national capital, the Delhi administration plans to operate an additional 380 electric buses across six new stations that have already been identified. These new stations include Welcome, Kohat Enclave, Rithala, Nangloi, Mundka and Dwarka. The DMRC will be constructing the bus depots at these locations. The transport department shall operate all these feeder buses on a per km basis which means the operators will be paid by the distance covered by them during the day. The new move comes as a part of the recommendation by the route rationalisation study conducted by the transport department. In October 2022, the first phase of the study was implemented with the standard (1- metre) buses operating across 26 new routes, including Trunk (2), Central Business District (CBD) (3), Primary (18) and Airport routes (3) with a frequency of 5 to 20 minutes during the peak hours.

The study recommended the use of mini buses to operate in the areas where the 12-metre long DTC and Cluster buses can't operate due to the smaller width of the road or the passenger load not being very high. In these routes and to serve the rural parts of Delhi, operating smaller size buses offers better financial sustainability and convenience to the commuters, connecting their areas to nearby transit hubs. “Under the leadership of Chief Minister Arvind Kejriwal, Delhi government is committed to make public transport more affordable, safe and convenient for the citizens. The comprehensive study helped us understand the actual origin and destination of the bus commuters in the city, which led to designing of new routes with a faster frequency of buses in the required areas. We are also ensuring that all new buses being added are electric in a bid to make our public transport completely pollution-free,” Delhi transport minister Kailash Gahlot said.

20.1. India set to surpass 1 billion Internet users, $400 bn online spending by 2030: Report

ET Gov. 15 Dec. 2022

An average Indian spends around 7.3 hours per day on their smartphone, one of the highest in the world.

Growth in UPI payments and the comfort of paying online have led to ~110 million paid online gamers in India, second only to e-commerce.

The firm identified typical internet users into three cohorts – explorers, transactors and mature users. Given that the internet users’ growth has exploded over the last 3-4 years, a large number of them (400-450 Mn) are in the early phase of digital life – they are exploring digital services. As the user builds comfort using the digital services and trusts them, they graduate from one cohort to another. “India has ~350 Mn online transactors across e-commerce, shopping, travel and hospitality, and OTT. We estimate there are 40-45 Mn mature users; these are the users who spend a considerable share of their wallet online (more than 50%). We expect online transactors to become 2X by 2030, with mature users being the faster-growing cohort. We also estimate that these mature users would account for $400 bn online spending by 2030,” says Mukesh Kumar, Engagement Manager, Redseer Strategy Consultants. The majority of online service users come from tier 2+ cities, tier-2 and beyond - this is where most of the action is. There is a new trend in content consumption where the time spent on user-generated content is 2X of platform-generated content, it showed. “Leading global apps are more targeted to metro and tier-1 users (mostly English-speaking users); this is where new-age domestic players have emerged and are solving for the needs of smaller cities. Social commerce, for example, has built trust amongst small city users with its reseller model. They have also been a platform where users shop online for the first time. On the other hand, vernacular and regional content focused platforms have been able to serve the needs of Tier-2+ users in their digital content consumption. As a result, we have seen leading app focusing on Tier-2+ users see maximum growth in users over the last 1-2 years,” adds Mukesh.

20.2. India's internet industry to reach US$ 5 trillion valuation by 2030

IBEF, Jan. 3, 2023

The Indian internet industry is likely to grow and reach a valuation of US$ 5 trillion by 2030, as per a report. India has the second largest internet user base in the world, with around 780 million internet users. An average Indian spends approximately 7.3 hours per day on their smartphones, according to data by market intelligence firm Redseer Strategy Consultants.

Most online users come from tier 2 cities, and they spend their time mostly on online messaging, social media, YouTube streaming, Over-the-top (OTT) content, and short-form video.

The report said that India is likely to witness a massive surge in digital advertisement investments instead of driving sales, as most consumers from tier 2 and beyond cities are adopting short video commerce.

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

INDIA AND THE WORLD

21. Tech regulation should be in national interest: Satya Nadella

Mint, 05 Jan. 2023, Prasid Banerjee, Sruthijith K.K.

Satya Nadella says Microsoft wants to do more with AI, across the length and breadth of all products.

The Microsoft CEO sat down with Mint for a wide-ranging conversation on AI, tech regulation, startups, modern work and India’s public digital infrastructure.

Eight years after he was named chief executive of Microsoft—only the third in the 47-year history of the Redmond, Washington-based firm that pioneered personal computing—Satya Nadella can be pleased with the bets he has made. His focus on cloud computing and artificial intelligence (AI) positioned Microsoft aptly for an era when the world embraced digital services and the web at an unprecedented rate, accelerating demand from businesses. Acquisitions such as LinkedIn ($26.2 billion in 2016), GitHub ($7.5 billion in 2018) and Nuance ($20 billion in 2022) have been both marquee and celebrated among some 90 acquisitions the company has made under Nadella. At a time the world embraced remote working, Microsoft’s Teams platform has become the most popular way for workers around the world to collaborate. All of this has meant that the company’s market capitalization has grown 450% in the time Nadella has been CEO (from $381 billion in 2014 to $1.7 trillion now).

The company’s $1 billion investment in Open AI LP, the for-profit arm of Open AI Inc.—the buzzy non-profit behind Chat GPT that is all the rage in the tech world right now, is being seen as giving Microsoft an advantage in fusing AI into search to usher in new ways in which we seek information online.

During his ongoing four-day visit to India, the Hyderabad-born Nadella sat down with Mint for a wide-ranging conversation on AI, tech regulation, startups, modern work, India’s public digital infrastructure and how he views his run at Microsoft. Edited excerpts:

Are you looking at Bing launching with ChatGPT or another language model built in?

We are very excited about the work we’re doing with OpenAI, and you can expect us to do a lot with foundational models. Like what we did with GitHub co-pilot was an early taste of what I think can be the fundamental change in what happens when large foundational models and products like GitHub come together to empower people. A software developer today is able to be so much more productive, creative, and able to really flatten the learning curve. We want to do more with AI, quite frankly, across the length and breadth of all Microsoft products. So, I would say wait and see because we are just getting started.

In terms of accuracy in search results, are these language models really there yet?

I think search and large language models will be brought together in very novel ways. There are fundamental challenges around any model—about how you ground the model and how you keep the freshness of the model—those are all good technical challenges that I think will have good technical answers. And in due time, you will see the output of all of that.

Because the English language is what such models are mostly getting trained in, what happens in countries like India, where there is a multitude of languages?

That’s a great question. I think we should not think of it as just this one shot. It’s the continuous refinement of the model, with human feedback and content that the AI generates. So, suppose I wanted to read Lorca translated into Hindi or English. I can do that today. Is that then a Hindi poem? Is it English transliteration? Is it a Spanish poem?

What is considered knowledge in one language can be consumed in another language and perhaps modified in another language, which then makes it back. So we should think about the fact that more all the people in the world consume these large models in all languages and add to it; that’s how we truly get to democratize these differences and also biases. Ultimately, collective human judgement is the only test against bias.

What do you think people do not fully understand about where AI stands today?

I would say the thing that perhaps needs to be better understood is some of the scaling effects and the emergent behaviour of large models. I’m not saying that this is the be-all and end-all or the last development there is going to be of model architectures.

But GPT3 or 3.5 are not linear steps. So the question is, where is the nonlinear advancement coming from? There are these studies where if you train a large model on a corpus of, let’s say, all math equations. It gets good at that. But if you train it on all math equations plus all web text and all of the world’s literature, it gets better at math than just the corpus that it was trained on.

And you could say, why is that? That’s less intuitive because you and I didn’t go to school and only learn math. We learnt history, we learnt languages, and we learnt a lot of other things, which, by the way, created the general circuits (in our brain) that helped us get better at math. So that, I think, is the key.

In the evolution of India’s tech industry, we have large legacy tech services firms. We have more recently seen a wave of consumer startups. Are we about to see another wave of startups that exploit AI and the cloud?

One of the things that give me great optimism for India, quite frankly, is all the different ways in which technology is getting used. I got to spend time with a small business called Senco Gold which is expanding its retail stores using tech. I met a gentleman at the State Bank of India who is visually impaired and was building an app using Power Apps to automate a set of workflows.

India already has the second largest number of developers, and is No.1 on AI repositories, which means Indian developers are seeking out every open-source AI repository and becoming core committers. So, the simple answer to your question would be, in the long run, there will be a lot more intense use of AI. One of the things that you should talk about, even in India, is the intense use of new technology, whether it’s a gentleman at SBI using AI or the latest unicorn, because both are super valuable for India’s development.

As the super boss of both Microsoft Teams, as well as LinkedIn, what can you tell us about how work has changed in the post-pandemic world?

There are three data points in terms of the post-pandemic world that we are all learning. One is there is this paranoia about productivity. Some leaders say we are being productive enough, while employees say we’re getting burnt out because am I working at home or sleeping at work? I think the way to bridge that is through data. Have aligned outcomes. Every organization has to be competitive, and, ultimately, work needs to get done. Using that versus being dogmatic about any particular way the workflow worked pre-pandemic is probably useful.

The second data point is people come for other people; they don’t come for policy. I think we all as leaders have to learn some soft skills on how to convene people together. Learning better soft skills on how to create connections, I think, is important.

The last thing is, just because you recruit them once doesn’t mean you don’t get to re-recruit them every day. None of us can take anything for granted, especially in a market like India.

What role do you see India playing in the overall regulation of technology, and have our current regulations affected your business?

I think every country is going to have regulations so that the technology that’s both been brought into the country and that’s been created in the country ultimately serves its social purpose. We welcome it and also are not waiting for regulation in order to have a fundamental trust in technology and business models of technology. That’s how I approach it.

It’s a continuous evolution of regulatory regimes and technology, and things have to keep pace. And just because the regulation cannot keep pace with the technology that’s going to come, it’s incumbent, quite frankly, on people like us who are in this business to say how we have core foundational trust in what we build, by design.

Some of what I’m seeing in India, even on data privacy and data flows, is very enlightening. Ultimately, India has three things. One is we are making in India by building our data centres and human capital so that others can make more in India—whether it’s Senco Gold, SBI or InMobi.

But they’re not just making in India for India; they’re making in India for the world. So then you have to have regulation that accounts for all that. Data doesn’t come from one place. It may have gotten created somewhere else, and it should have come to India. Then in India, people should be able to use it, add value to it, and then have it go out of India and have others use it. That’s the way for regulators to think about it. And by the way, it should all be done in the national interest. It’s not about benefiting anybody else other than the people of this country.

When you took over as CEO, you had very large shoes to fill. Now you’re being spoken about as among the great CEOs of the world. How do you look back at your tenure at Microsoft?

I feel that if I have to live the culture that I espouse, I have to be more focused on the mistakes I make each day so that I can learn from them and get better tomorrow. And if anything, all of us are temporary stewards of institutions that hopefully, if we do things right, should far outlast us.

If there’s one thing that I learned from my Indian civil servant father, it’s that the institution being stronger after you leave more important than whatever you achieved during your tenure.

I want to make sure that I, personally, and everyone at Microsoft has the confidence to acknowledge our imperfections.

22. ADB sanctions USD 125 million loan to improve urban services in Tamil Nadu

ET Gov. 28 Dec. 2022

The financing is the third and the last tranche of the USD 500 million multi-tranche financing facility to build priority water supply, sewerage, and drainage infrastructure in Coimbatore, Madurai, and Thoothukudi.

The Government of India and Asian Development Bank signed the loan on Tuesday.

The Government of India and Asian Development Bank (ADB) on Tuesday signed a USD 125 million loan to develop climate-resilient sewage collection and treatment, and drainage and water supply systems in three cities in the state of Tamil Nadu. The signatories to the tranche 3 loan for Tamil Nadu Urban Flagship Investment Program were Rajat Kumar Mishra, Additional Secretary, Department of Economic Affairs in the Ministry of Finance who signed for the Government of India, and Hoe Yun Jeong, Officer-in-Charge of ADB’s India Resident Mission on behalf of ADB. The financing is the third and the last tranche of the USD 500 million multi-tranche financing facility (MFF) for the program approved by ADB in 2018 to build priority water supply, sewerage, and drainage infrastructure in strategic industrial corridors across 10 cities in the state. The tranche 3 loan covers Coimbatore, Madurai, and Thoothukudi.

After signing the loan agreement, Mishra said that the ADB financing will help ensure universal access to basic water and sanitation services and improve resilience against floods in the project target areas which are also the industrial hubs of Tamil Nadu. “Through this project, ADB continues to support developing and improving urban services in the state by deploying new approaches such as build and operate modality, automatic meters for bulk water users, and real-time monitoring through supervisory control and data acquisition systems,” said Jeong. “ADB’s urban investments are aligned to support strategic industrial corridor development in Tamil Nadu,” he added.

The financing will support the development of two sewage treatment plants in Coimbatore with 529 km of sewage collection pipelines, install 14 pump and lift stations and build 14 km of sewage pumping mains. In Thoothukudi, climate-resilient stormwater drainage system will be developed. In Madurai, the project will support the commissioning of 813 km of new water supply distribution pipelines that will connect 163,958 households to 115 newly established district metered area with smart water features to reduce nonrevenue water. In Coimbatore and Madurai, two all-female self-help groups will be trained on the benefits of household connection to sewage collection system, water conservation, sanitation, and health and hygiene.

23.1. India's Mahindra has been named as the fastest-growing brand in South Africa for 2022

IBEF, Jan. 13, 2023

According to a report by the National Association of Automobile Manufacturers of South Africa (NAAMSA), Mahindra, the Indian auto manufacturer has been named as the fastest-growing brand in South Africa for the year 2022.

The report said that Mahindra South Africa (SA) increased its sales volume by over 78% as compared to 2021, which is highest of all the brands of vehicles that report their sales to NAAMSA and more than five times the market average. The total sales of Mahindra in the passenger vehicle market grew by 80% to 4,027 vehicles in 2022 and the sales of light commercial vehicles grew by 77% to 8,885 vehicles. For the first time, the company’s annual sales figure reached close to 14,000 units for the year. It was also the second year for Mahindra since 2019 to be crowned as South Africa’s fastest-growing brand. Mahindra recorded a compound annual growth rate of 23.6% over that period.

The XUV300, the safest car in Africa as tested by the Global New Car Assessment Programme (GNCAP) and was the fastest-growing compact SUV in this segment, with 2,079 units purchased in 2022.

Mr. Rajesh Gupta, CEO of Mahindra SA, attributed the sales success and the title of ‘South Africa’s fastest growing vehicle brand’ to the entire network, including the assembly plant in Durban and the dealers of the company.

Mahindra SA is a fully owned subsidiary of Mahindra and Mahindra India, and the company has dealers in the nine provinces of South Africa. The company has sold over 75,000 vehicles since its opening in 2004.

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

23.2. Trade agreements with Australia and UAE to help boost exports

IBEF, Dec. 29, 2022

Trade agreements signed by India with the UAE and Australia, have been praised by several export promotion councils (EPCs), who said that these agreements will help India in boosting its exports by granting preferential access to those markets for Indian products.

India has benefitted from UAE’s preferential market access on over 97% of its tariff lines, which accounts for 99% of Indian exports to the country in value terms, Engineering Exports Promotion Council (EEPC) said.

Mr. B.B. Agarwal, Eastern Regional Chairman, EEPC said that this was seen after the India-UAE Comprehensive Economic Partnership Agreement (CEPA) came into effect on May 1, 2022. Whereas, the India-Australia Economic Cooperation and Trade Agreement (ECTA), which is to come into effect from today, that is, December 29, 2022, is expected to create 10 lakh job opportunities and increase Indian merchandise exports to Australia by US$ 10 billion. He further added, ECTA will allow zero duty on 100% tariff lines and provide cheaper raw materials to the steel and aluminium sectors.

According to Mr. Bipin Menon, Development Commissioner, Noida Special Economic Zone (SEZ), India is Australia’s sixth largest trading partner. India’s bilateral trade in goods and services with Australia saw a 106.5% increase to US$ 25.04 billion in FY2022-23. Additionally, he said, CEPA with the UAE is also expected to increase the total value of bilateral trade in goods to over US$ 100 billion and in services to over US$ 15 billion within the next five years.

Other industry experts also stressed on the fact that ECTA will open a new chapter in the India-Australia association, which would thereby, help in enhancing India’s merchandised exports, and would also help in increasing India’s gem and jewellery exports to Australia. Mr. Lalit Agarwal, Regional Chairman of the Plastics Export Promotion Council (PLEXCOUNCIL), stated that India’s export potential of plastics stands at US$ 5 billion to the UAE, and for Australia, it is US$ 6 billion. The import duty under CEPA has been reduced to 0% from 5% and Australia has also reduced all tariff lines for plastic products.

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

24.1. Pharma Cos Told to be Ready with Supply of Covid Meds

ET, 30 Dec. 2022

PTINew Delhi: Union Minister for Health and Family Welfare Mansukh Mandaviya speaks with the media at Parliament House complex during Winter Session, in New Delhi.

Union health minister Mansukh Mandaviya on Thursday held a meeting with representatives of pharma companies to review the local availability of essential medicines, following an upsurge in Covid-19 cases in several countries including China. Mandaviya asked the companies to keep a watch on the global supply chain and ensure adequate stock of drugs used in Covid treatment. The minister reviewed the adequacy of drugs required for the management of Covid and the production capacities so as to ensure that India is equipped to effectively handle any situation. “This review meeting was taken in view of the spike in Covid-19 cases in some countries worldwide,” the ministry of health and family welfare said in a statement. “India’s pharmaceutical industry is robust, resilient and responsive. It is due to their strength that we could not only meet our own demand during the pandemic, but also be in a position to supply medicines to 150 countries,” Mandaviya said during the meeting. This was achieved without any fall in quality or a hike in the price of medicines, he added. During the meeting, the companies were asked to closely monitor production and availability of active pharmaceutical ingredients (API) as well as formulations of essential medicines for Covid management, the ministry said. “They were asked to ensure adequate stocks and availability of all drugs including Covid drugs in the supply chain up to the retail level. They expressed confidence that they will be able to manage the supply chain of Covid drugs,” it said.

e. Demand for Indian Generics Skyrockets

ET, 9 Jan. 2023

The demand for Indian generic drugs has shot up in China amid the massive Covid surge in the country. Due to the massive short supply of Paxlovid, demand for Indian generic versions has gone up through Chinese e-commerce platforms.

The demand for Indian generic drugs has shot up in China amid the massive COVID surge in the country, with Chinese experts cautioning that fake versions of these drugs are flooding the market. China's National Health Security Administration said on Sunday that Pfizer's Paxlovid oral medication, which is used to treat Covid-19, could not be included in the "register of drugs in the basic medical insurance", because the company's quotation was too high, media reports here said. Due to the massive short supply of Paxlovid, demand for Indian generic versions has gone up through Chinese e-commerce platforms. "On the Chinese e-commerce platforms... At least four generic COVID drugs produced in India - Primovir, Paxista, Molnunat, and Molnatris - have been listed for sale in recent weeks. Primovir and Paxista are both generic versions of Paxlovid, while the other two are generic versions of Molnipiravir," Chinese media outlet Sixth Tone reported. All four drugs appear to have been approved for emergency use by the Indian authorities, but are not legal for use in China, it said. He Xiaobing, the head of Beijing Memorial Pharmaceutical, told Sixth Tone that India was "the only country where we can source reliable and affordable COVID drugs with guaranteed therapeutic effects". "But the strong demand was used by illegal groups who produce counterfeit drugs. This will badly affect patients' treatment," he said. China's health system catering to 1.4 billion people is under strain especially due to the heavy costs of drug supply which were controlled by multinational pharmaceutical giants. India has been persuading China to permit its pharma products to reduce costs for its citizens and to decrease the massive trade deficit between the two countries. At one time, Indian cancer drugs have become very famous for their efficacy and affordability. Considering their popularity, a Chinese film by the name "Dying to Survive" showing the survival of cancer patients on the banned imported Indian drugs had a successful run in China.

25.1. Opinion: Attracting international students to India – Making the Mission possible!

ET Gov. 3 Jan. 2022, Gunjan M. Sanjeev

Data on both credit courses and non-credit courses being pursued by foreign students in India should be accounted for and country-wise preferences should be carefully analyzed.

The National Education Policy 2020 has elucidated the agenda of internationalization of higher education very clearly. There is a clear emphasis on promoting India as a global study destination by attracting international students from across the world and achieving the goal of Internationalization at home. There is no debate that there should be more and more international students in the country. The main agenda should now be – How? How to augment the slowly elevating numbers? Let’s recollect that the 'Study in India' initiative launched by the Government of India in April 2018 is a beautifully designed path-breaking programme to attract 200,000 international students to Indian universities by 2023. A welcome move by UGC as announced on September 30, 2022, has been that Higher Education Institutions (HEIs) may create supernumerary seats for international students, over and above their total sanctioned enrolment. The next step is to see how this can be executed efficiently by attracting international students so that all seats are suitably filled up. As per the latest reported data by AISHE 2019-20, an annual survey conducted by the Ministry of Education, Government of India, the total number of foreign enrollments is 49,348 a little higher than 47,427 and 46,144 for the years 2018-19 and 2017-18 respectively. It is important to identify those large steps that must be executed to leapfrog to the next level - the level of a colossal goal. Identifying the specific needs of students from each country Foreign students come to India from 168 different countries across the globe. The top 10 countries comprise 63.9% of the total foreign students enrolled. These are Nepal (28.1%), Afghanistan (9.1%), Bangladesh (4.6%), Bhutan (3.8%) and Sudan (3.6%). These are followed by the United States of America (3.3%), Nigeria (3.1%), Yemen (2.9%), Malaysia (2.7%) and UAE (2.7%). The AISHE report does a brilliant task of putting the massive data together. It presents the country-wise number of international students and the programme-wise data for foreign students that give us some excellent trends. However, if we can go a little deeper to understand the country-wise needs, we can do focused efforts to design not only the programmes but also do focused outreach efforts in respective countries. It is quite an acceptable belief that as the Indian higher education system commands a high reputation in certain regions across the globe, we find several students from South Asian and African regions gravitate to India for their higher education spanning a wide array of disciplines.

Do you observe anything interesting in the above list of countries? I do. Right in the top 10, we have the USA, a country that leads higher education on several fronts across the globe. A popular belief is that the flow of student mobility to this magnificent country is generally outward and not many American students would want to come eastward to pursue their higher education. However, the USA figures at the 6th position out of 168 in terms of inward mobility in India. Therefore, it would be interesting to know what programmes the American students are coming to India for. Similarly, Canada and UK, the other two major countries, have a presence in India with 1.38% and 0.35% respectively. Therefore, let’s not underestimate the power of these small percentages. These numbers could open huge opportunities for the Indian higher education sector. Further, it is suggested to notice the non-credit courses that students are coming to India for. The Open Doors Report 2021 clearly states that 252 institutions in the US reported that 11,256 students travelled abroad in the year 2019-20 for non–credit experiential activities. Such data, if captured and subsequently analyzed well, can give us enormously meaningful insights. These are not only indicators of assessing interest for foreign students in India, but these interest areas can be harnessed further to create innovative credit programmes to suit everyone’s diverse interests and needs. Therefore, data on both credit courses and non-credit courses being pursued by foreign students in India should be accounted for and country-wise preferences should be carefully analyzed. This will result in not only creating focused programmes to suit the country-specific needs but also allowing the educators to adopt focused marketing and outreach efforts in respective countries. Broadening the scope of the Study in India initiative from 'scholarship' to 'all-embracing and showcasing' Currently, the Study in India scheme strictly partners with higher education institutions which are eligible as per the following norms: NIRF Top 100 in any category except medical or NAAC grading of >=3.26. Here, I would like to emphasize that for a country like India where we have several hundreds of universities, we need to have a higher representation of Indian universities participating in internationalization initiatives. The AISHE 2019-20 states that there are 1,043 universities operating in India. The top 100 merely comprise 10% of the total. While the current 'Study in India' initiative focuses on full or partial scholarship offerings by the Govt of India only to a top few Indian universities, it is suggested that this initiative should be extended to more Universities as per the well-defined criteria. For example, The USA News included 1,452 schools in the 2021 rankings, though the US Department of Education tallies nearly 4,000 colleges and universities which accounts for around 36% of the total. To be eligible for inclusion in the Best Colleges rankings, the criteria is that a school must be regionally accredited and offer four-year undergraduate degree programs. Colleges that offer only associate degrees are not ranked, nor are schools with fewer than 200 students. It is not just scholarships that foreign students are looking at in India. Thousands of them may be willing to come without scholarships as well just to experience higher education in India. Therefore, expanding the number of ranked institutions in NIRF will give a wider choice to the global student fraternity through higher visibility, credibility, and transparency in the Indian higher education system. If executed well, more and more Indian universities and institutions will be visible and foreign students can freely make their choices – which could be based on location, discipline, safety or even infrastructure. Scholars are most welcome for sure. But the sentiment needs to be extended to - all are welcome! Collaboration with universities in target countries for the Study in India initiative The NEP 2020 envisages global institutions to be promoted through special efforts, research collaboration and student exchanges between Indian institutions. The UGC (Academic Collaboration between Indian and Foreign Higher Educational Institutions to offer Twinning, Joint Degree, and Dual Degree Programmes) Regulations, 2022 clearly brings forth various arrangements between Indian institutions and foreign institutions for academic collaboration. These are great opportunities for students at Indian universities to get global exposure at the premier universities worldwide. This mechanism promotes outward mobility for students studying in India. Similar initiatives should be targeted for the inward mobility of foreign students as well. Indian institutions should be encouraged to sign articulation arrangements with institutions in target countries for SI where students could do part of their program in their home institutions and then take transfer to Indian institutions to complete their program. Thus, this route will be very helpful as this is institutionalized and the international students will get all the required support for smooth entry into India as they will be guided by members from both institutions. Collaborations with target SI countries could be a gateway to a goldmine. And the real wealth is the diversity that these young minds will bring to the learning environment in the country. The diversity of culture, ideas and some best practices they have experienced in their respective countries! Some final thoughts. Understanding foreign students’ needs in terms of disciplines, showcasing the Indian higher institutions with transparency and credibility and institutionalized efforts towards smooth entry into India will go a long way. Execute it as a package and then the numbers will not be just 200,000, they can be way higher. Not only will the presence of foreign students add to a great diverse learning environment in the Indian institutions, but it will also enhance the global rankings of our institutions as the number of international students is an important parameter in most rankings today. Moreover, the Indian higher education industry can take immense pride in contributing some valuable numbers positively to the GDP of the country. Some right efforts can certainly make the MISSION POSSIBLE! (The author is Vice President-RBEF of Amity Education Group and Director of International Affairs; views are personal.)

25.2. Zero to G20: India’s a stage, World notes

ET, 30 Dec. 2022

While more than 40 years ago India hosted NAM and Commonwealth Summits, G20 presidency is an opportunity to present the diversity that is India to the world.

In less than a year’s time from now, India will host its maiden G20 Summit showcasing its intellectual heft to give direction to the world and the Global South in particular, sending a clear message on strategic autonomy amid tumultuous geopolitics and geoeconomics that have polarised the world into two camps. While over 40 years ago, India hosted NAM and the Commonwealth Summits, the G20 presidency is an opportunity to present the diversity that is India to the outside world. The current India is among the world’s top five economies and is increasingly being courted by the international community in the backdrop of an aggressive China.

“India’s G20 is not merely a diplomatic meeting. It is a great opportunity for India and for every Indian. Our prime minister has said, ‘Today, there is an unprecedented curiosity in the world to know and understand India. Today, India is being studied in new light. Our current successes are being assessed and unprecedented hopes are being expressed about our future’,” according to PK Mishra, principal secretary to the PM. He was speaking at the G20 University Connect: ‘Engaging Young Minds Programme’ earlier this month. Launching with the Sherpa meeting in Udaipur that brought all different ideologies under one roof, India will host over 200 G20 meetings under different formats — ministerial, working group and engagement group meetings, and associated events — in 56 locations touching all states and union territories during its presidency. Narendra Modi’s vision of India’s G20 presidency, is reflected in the theme ‘Vasudhaiva Kutumbakam’, or ‘One Earth One Family’. In the words of Modi, India’s presidency will be “inclusive, ambitious, decisive and action-oriented”. Briefing envoys of G20 states and invitees at a meeting in Andamans, Sherpa Amitabh Kant referred to shared priorities in areas such as (i) public digital goods and digital infrastructure; (ii) climate action, climate finance and technology collaboration; (iii) clean, sustainable, affordable and inclusive energy transition; (iv) accelerated progress on sustainable development goals; (v) women-led development; and (vi) multilateral reforms. Building on the Indian PM’s mass movement on Lifestyle for Environment (LiFE), India will work closely on critical enablers for climate action that the G20 Leaders agreed at the Rome Summit, namely affordable financing, technology transfer, and action on SDG 12 — that is sustainable consumption and production. India is going to focus on accelerating the progress on achieving the Sustainable Development Goals (SDG), by raising the profile of development issues throughout the G20 working streams. The emphasis will be on transformative areas and transitions that can catalyse multiplier effects on all SDGs such as women-led development, digital transformations, and just green transitions. India has always been a strong and vocal voice of the developing world at various international fora, including the G20. India intends to bring to the fore issues relevant to developing countries during its G20 presidency. “India is widely perceived as the ‘voice of the Global South’, which puts a greater responsibility on New Delhi,” according to country’s G20 chief coordinator Harsh Vardhan Shringla. “India’s G20 presidency will be a golden chance to correct the long-standing anomalies that go against the developing countries, especially in the domain of agriculture and food subsidies.” The 2023 G20 Summit would promote ‘Brand India’, encourage tourism and digitisation in India, support B2B contacts, and set India’s priorities and narratives on the global agenda, he said. “By setting an effective agenda, New Delhi can navigate a turbulent world beset by problems such as post-Covid economic recovery, Russia-Ukraine conflict, slowing down of the SDG agenda, debt crisis, and the looming recession,” Shringla said. “India’s sound credential as a peaceful nation oriented towards growth and digital transformation, and is sensitive about climate change and green development, will help her lead the G20 with vigour, efficiency and conviction,” he said. G20 needs to work to create post-pandemic resilient societies. “Sustainable lifestyles need investments in education, nutrition, and health,” Shringla said. “We need to work with our partners to promote and mobilise investments in these vital sectors for the benefit of all, especially the developing world.” In the words of Pradeep Mehta, secretary general, CUTS International (India’s leading public-policy and advocacy body), “India gave the number zero to the world without which no science or technology would have progressed. Professing our civilisational history, including the zero or even yoga, we need to use the opportunity of the G20 Summit to put in motion paradigms which can help the world to deal with the extraordinary situations of climate and economic depression. To ensure the COP27 recommendation of a damage and loss fund to compensate the vulnerable states, and debt forgiveness, we must advocate for a neutral fund collected from the Tobin or Financial Transaction Tax which can help raise money without burdening any state to use for world’s rejuvenation”. In a unique initiative, India, during its presidency, will invite Bangladesh, Egypt, Mauritius, the Netherlands, Nigeria, Oman, Singapore, Spain and the United Arab Emirates as guest countries for the Summit. Oman and the UAE are also attending all G20 related events in the run-up to the Summit.

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NEWSLETTER, JANUARY 2023

– GENERAL POLICY, INFRASTRUCTURES, COUNTRY FINANCES, ETC.

General policy, Infrastructures, Country Finances, etc.

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INDIA AND THE WORLD