Indian Economy News & Discussion - Nov 27 2017

JTull · Post by **JTull** » 02 Dec 2020 23:46

Investment in tech and R&D carry subsidies and incentives in almost every country, so Foxconn will be loathe to lose those advantages in their two 'home' countries. If there's pressure from both US and Taiwan to move production out of China, then Foxconn will be better off doing so.

nam · Post by **nam** » 03 Dec 2020 02:21

DavidD wrote: How do you suppose the Taiwanese government can compel Foxconn et al. move anywhere? It's not like they have a vast internal market as leverage. They can't even keep their companies and talents in Taiwan, you think they can make them move to foreign countries?

The Taiwanese companies will manufacture wherever it makes economic sense, so things like tax breaks will help. The best the Taiwanese government can do is to use similar incentives like tax breaks, grants, etc. which they're already doing.

Why would the Taiwanese gov want it's companies to operate in a country which is constantly threatening it's survival as a country? Would Taiwanese companies (or gov) want to take a risk of their assets being confiscated by CCP in the future? Taiwan is indirectly paying for the upkeep of that threat by having a large operation there.

Everything is about money. Taiwan & Indian government can form a joint fund, to subsidize Taiwanese companies to move their production out of China, where it's assets would be safe from any CCP political or physical pressure. Samsung has already closed it's mobile production unit and moved it to India.

TSMC is opening up a foundry in US. Taiwan is now diversifying it's tech industries, to cater to any future threat from CCP. It is obvious, that these actions are encouraged by the Taiwanese gov.

Suraj · Post by **Suraj** » 03 Dec 2020 02:41

Please stick to conversations about the Indian economy. Further derailment will result in mod action.

vijayk · Post by **vijayk** » 05 Dec 2020 07:37

https://www.ft.com/content/8d3b89fc-007 ... bd81a7360b
Manufacturers look to India to tap market and diversify supply chains
Modi government rolls out incentives to compete with China and Vietnam but analysts are wary

In 2014, Nokia shut production in Sriperumbudur — its largest plant in the world with more 8,000 employees — after a tax dispute with New Delhi and packed up to Vietnam.

Six years later, the abandoned factory is being taken over by Salcomp, the world’s largest phone charger manufacturer. Salcomp is expanding its operations in India rapidly, along with other Apple manufacturers such as Wistron, Foxconn and Pegatron. All are seeking to tap the Indian market and diversify supply chains from China — and reap the benefits of manufacturing incentives offered by New Delhi.

“It was difficult times when Nokia left, everyone moved out,” said Sasikumar Gendham, Salcomp India head, on a tour of the plant where workers, wearing face masks and sitting in booths with plastic barriers to protect themselves from coronavirus, were assembling chargers for Apple, Xiaomi, Oppo and Samsung.

“But now they [the manufacturers] have come back. There is a lot that India has to offer.”

Sixteen electronics manufacturers have also announced investment plans in India under New Delhi’s ambitious production linked incentive (PLI) scheme to boost manufacturing. Foxconn is moving in next door to Salcomp and last week Pegatron announced a $150m investment for its new India unit at a soon to be announced location.

But Salcomp’s Mr Gendham hopes that the new policies will lay the foundation for a new chapter for electronics manufacturing in India. He is certain that authorities have no appetite for another Nokia-like tax debacle.

“That dented the image of India being investor friendly, but things have changed,” said Mr Gendham. “The ease of doing business is still at the back of people’s minds.”

a_bharat · Post by **a_bharat** » 07 Dec 2020 07:44

FLIPPING - ROBBING INDIA OF ITS TAXES, IP & DATA

"Shades of the East India Company type of situation here - Indian market, Indian customers, Indian developers, Indian workforce. However 100% foreign ownership, foreign investors. IP and data transferred overseas. Transfer pricing issues foggy," he tweeted. "Basically institutionalised transfer of wealth away from India while living off the Indian market and Indian labour somewhat like the days of the Company rule."

Profits from such "global exploitation" of IP created in India by Indians retained overseas. "Tax to Indian govt on such profits??? Indian investors shut out,"
...

Flipping is the act of externalizing a company. You take an Indian start-up and transfer ownership of all its shares to an overseas company that has been usually freshly floated just for this purpose. So now the Indian company becomes a 100% subsidiary of the overseas entity. All shareholders will own shares in that overseas company including the founders, employees and current and past investors. This is accompanied by transfer of all Intellectual Property and all data hitherto owned by the Indian company.

All IP developed and all data captured by the Indian entity in the future will also belong to the overseas entity.

This overseas company is substantially outside of Indian jurisdiction and the influence of Indian regulators. Some overseas investors prefer this precisely for this reason. However in my view if this option was not available to them most of these investors would invest in Indian start-ups regardless.

In the short run it doesn’t seem to matter and all seems well – Indian start-ups are getting funded. In the medium to long term however there is significant potentially serious negative impact for the Indian economy.

Do read the full article.

chola · Post by **chola** » 07 Dec 2020 15:07

vijayk wrote:https://www.ft.com/content/8d3b89fc-007 ... bd81a7360b
Manufacturers look to India to tap market and diversify supply chains
Modi government rolls out incentives to compete with China and Vietnam but analysts are wary

In 2014, Nokia shut production in Sriperumbudur — its largest plant in the world with more 8,000 employees — after a tax dispute with New Delhi and packed up to Vietnam.

Six years later, the abandoned factory is being taken over by Salcomp, the world’s largest phone charger manufacturer. Salcomp is expanding its operations in India rapidly, along with other Apple manufacturers such as Wistron, Foxconn and Pegatron. All are seeking to tap the Indian market and diversify supply chains from China — and reap the benefits of manufacturing incentives offered by New Delhi.

“It was difficult times when Nokia left, everyone moved out,” said Sasikumar Gendham, Salcomp India head, on a tour of the plant where workers, wearing face masks and sitting in booths with plastic barriers to protect themselves from coronavirus, were assembling chargers for Apple, Xiaomi, Oppo and Samsung.

“But now they [the manufacturers] have come back. There is a lot that India has to offer.”

Sixteen electronics manufacturers have also announced investment plans in India under New Delhi’s ambitious production linked incentive (PLI) scheme to boost manufacturing. Foxconn is moving in next door to Salcomp and last week Pegatron announced a $150m investment for its new India unit at a soon to be announced location.

But Salcomp’s Mr Gendham hopes that the new policies will lay the foundation for a new chapter for electronics manufacturing in India. He is certain that authorities have no appetite for another Nokia-like tax debacle.

“That dented the image of India being investor friendly, but things have changed,” said Mr Gendham. “The ease of doing business is still at the back of people’s minds.”

We have to grab a chunk of the global supply chain. Atmanirbhar Bharat is great but India's market is simply not big enough at the moment. The global market will always be bigger. Cheen is a perfect example of this obvious fact.

In spite of the US trade war, the bans by India and hated by the world over for unleashing the Wuhan virus, Cheen has seen accelerating exports for the last three months. Its exports expanded 21% in November and their economy is the only major one growing:
https://www.wsj.com/articles/china-expo ... 1607324070

Once the supply lines are established, they take a long time to disengage. Cheen will benefit for a long time to come though we hope that will diminish for them progressively.

For India, the trick is getting those lines in the first place and having the local eco-system built. During that transition period, firms usually need access to supplies from their current factories. This is why Vietnam is the top choice for lines exiting China.

vijayk · Post by **vijayk** » 08 Dec 2020 02:12

https://economictimes.indiatimes.com/ma ... 589698.cms
FDI equity inflows into India cross $500 billion milestone

Foreign direct investment (FDI) equity inflows into India crossed the USD 500 billion milestone during April 2000 to September 2020 period,

In 2016-17, 2017-18, 2018-19 and 2019-20, the investments stood at USD 43.5 billion, USD 44.85 billion, USD 44.37 billion and USD 50 billion, respectively.

vijayk · Post by **vijayk** » 08 Dec 2020 02:23

https://www.fdi.finance/news/industry-r ... nvestments.

In the period of April 2000-March 2020, the Cumulative Foreign Direct Investment (FDI) in the manufacturing sector of India was amounting to US $88.45 billion.

Vadivel · Post by **Vadivel** » 08 Dec 2020 09:02

vijayk wrote:https://www.fdi.finance/news/industry-r ... nvestments.

In the period of April 2000-March 2020, the Cumulative Foreign Direct Investment (FDI) in the manufacturing sector of India was amounting to US $88.45 billion.

Is that a typo? 2000-2020?

If it is correct, isn’t it underwhelming for a 20yr period!

vijayk · Post by **vijayk** » 08 Dec 2020 22:15

^^ Not type .. right info

Trikaal · Post by **Trikaal** » 09 Dec 2020 00:06

vijayk wrote:^^ Not type .. right info

Yeah, doesn't look like a typo. According to this article: https://www.financialexpress.com/econom ... s/1693991/

FDI in the manufacturing sector remained $9.6 billion in 2014-15; $8.4 billion in 2015-16; and $11.9 billion in 2016-17. But thereafter, it failed to cross $8 billion mark in the next two years, according to RBI. Major changes in domestic political and economic policies such as demonetisation and GST also contributed to the uncertainty for foreign investors in establishing a new business in India. Consequently, at $7 billion, manufacturing FDI in 2017-18 remained weakest since 2014-15.

So assuming very low FDI in early 2000s as FDI wasn't really a focus back then, and given the data points from the 2nd article, $88 billion seems like a good approximate figure.

Suraj · Post by **Suraj** » 09 Dec 2020 00:18

Not sure how they classify 'manufacturing' , but the official source of FDI data is the DIPP page list in post 1 of this thread:
DIPP FDI statistics
The latest data is July-Sept 2020:
FDI data for Q2 2020-21
It does not define 'manufacturing' as a category, but look at Table E - it lists computer software and hardware as the second most intensive sector for FDI, after services. Further to note, this sector has seen a major gain in FDI inflow so far this fiscal year - $17.5 billion just for April-Sept 2020 , which is 2x as much as full year investment in this sector in the previous two full fiscal years. This is a result of the major success of the PLI scheme that is driving FDI in electronic/computer component and equipment manufacturing.

Cumulative FDI since April 2000 is $500 billion (Table A, section 2).

Mollick.R · Post by **Mollick.R** » 09 Dec 2020 17:28

India favours easing inflation aim to support growth
By Siddhartha Singh, Bloomberg Last Updated: Dec 09, 2020, 02:13 PM IST

India’s government is considering recommending a looser inflation target for the central bank, allowing it to focus more on economic growth despite price pressures, according to people familiar with the matter. A consumer-price inflation band tracked by the Reserve Bank of India may be relaxed further from the current 2%-6% range, said the people, who asked not to be identified citing rules. The government still needs to hold consultations with the central bank before finalizing a new framework sometime next year.

Read Full Report Here
https://economictimes.indiatimes.com/ne ... 640812.cms

vijayk · Post by **vijayk** » 09 Dec 2020 22:19

https://www.newindianexpress.com/opinio ... 33452.html

OPINION | Tec(h)tonic? Once-in-a-lifetime deep digitization brewing something special for India
There are a host of reasons, from better infrastructure to lower taxes that have fuelled a surge in FDI. But underneath all that, something more fundamental is stirring.

In the world of foreign direct investment (FDI), it has been a momentous year for India.

The country has just crossed $500 billion in FDI equity inflows in the period between April 2000 – September 2020. Between April-August 2020, India received its highest ever FDI for a quarter at a little more than $35 billion. Its national investment promotion agency, Invest India, has won the UNCTAD (United Nations Conference for Trade and Development) award for being the world’s best investment promotion agency.

All of this adds up to something special happening in the world of FDI.

There are a host of reasons, from better infrastructure to lower taxes (India rolled out a major corporate tax cut at the end of last year), that have fuelled a surge in FDI. But underneath all that, something more fundamental is stirring.

A large quantum of FDI this year has been driven by tech giants. The money coming in is seeing not only the technology at play but is investing in the opportunities being churned out in a once-in-a-lifetime deep digitization of a 1.3 billion strong economy and society.

The World Economic Forum has a concept called ‘digital FDI’ which explains why and how, when countries go through digitization or the application of digital technologies at the very grassroots, they unlock value at every level, and become attractive for FDI than ever.

According to estimates made by the Reserve Bank of India (RBI), digital transactions in India which amount to around 100 million a day and worth around Rs 5 trillion at the moment are likely to soar to 1.5 billion transactions a day worth around Rs 15 trillion. The apex bank estimates that between 2016 and 2020, the volume of digital transactions in India jumped five-fold.

The recovery of the Indian economy after the Covid-19 pandemic is being propelled in a large part by the rural economy mainly because of the swift transfer of government benefits and cash transfers to this segment during the lockdown periods. Even the UNCTAD award for Invest India is driven in part due to its digital innovation in building an online Business Immunity Platform to help investors during the pandemic and especially the lockdown periods.

Such digitization not only brings in great investment and unlocks deep value, but it also makes the life of citizens fundamentally easier. From personal experience, my father, who is retired, is delighted that the banking checks and confirmations needed for him to receive his government pension no longer need his physical presence at a bank branch (critical during Covid-19) and can be conducted using digital technology.

From enabling the discovery of small merchants and artisans, thus strengthening their revenues and livelihood, to protecting endangered communities, digitization is changing India ground up. So, whether it is promoting rare honey made by beekeepers in the Sundarbans or Invest India using digital technology to track and deliver rare medicine to a patient during the lockdown, the benefits of deep digitization are myriad. Not least, ever-rising rates of FDI.

vijayk · Post by **vijayk** » 09 Dec 2020 22:21

GhoseSpot @SandipGhose
OMG - what has #COVID19 done to the world. Can’t believe @TheEconomist
is praising #Aadhar and #JDY saying that’s what saved the day for migrants and dissing the US system in comparison. Read below Down pointing backhand index Kudos @narendramodi and @NandanNilekani

https://economist.com/international/202 ... identities

Questions of identity
Covid-19 spurs national plans to give citizens digital identities
MOSIP, an open-source platform developed in India, will be central to many of those efforts

https://www.mosip.io/

g.sarkar · Post by **g.sarkar** » 10 Dec 2020 15:51

https://theprint.in/economy/auto-parts- ... ds/563101/
Auto parts, footwear, chargers, oil — Chinese products flooding India illegally, govt finds
A group of ministers set up to promote Indian manufacturing has flagged various ways through which Chinese goods are evading duties and other restrictions.
Neelam Pandey and Remya Nair, 9 December, 2020
New Delhi: Chinese products are flooding the Indian market, evading existing duties and other restrictions placed by the Indian government, a group of ministers (GoM) set up to promote Indian manufacturing has found in its report. From soybean to telephone equipment to vehicles and their parts, the report found that many Chinese products are being rerouted from other countries to benefit from India’s trade agreements with other nations. It also found that the Indian market is being flooded with counterfeit goods — or cheaper-quality versions of well-known brands — in segments like footwear, clothing, leather, watches and electrical equipment like chargers. Data from the Ministry of Commerce shows that the majority of these items are imported from China.
The GoM is headed by Textiles and Women and Child Development Minister Smriti Irani, and submitted its report to the government in October. ThePrint has accessed a copy of the report. The report has been shared with all ministries concerned for taking action on the recommendations. But the government moved to plug some of these loopholes even prior to the submission of the report. For instance, the Department of Revenue has moved to plug the loopholes under the ‘rules of origin’ provision to ensure that only items genuinely manufactured in countries with whom India has a free trade agreement get the benefit of lower import duties. It has put in conditions like minimum value addition for preferential customs duty to be applicable.
It had also tightened norms around soybean oil imports to prevent misuse of the SAFTA agreement.
Monitoring HS codes
The GoM has advocated strict action to prevent such abuse of the rules. It proposes setting up an India Strategic Trade Agency (ISTA) for monitoring ‘HS code’ changes to identify misuse and ensure identification, and take stringent action against counterfeiting. ‘HS codes’ are used for classification of goods, and are followed across countries for a standardised classification and imposition of tariffs.
The report suggested “stringent checking for identified HS codes — 64 (footwear), 61 (apparel), 42 (leather products), 91 (clocks and watches), 85 (electrical machinery and equipment) — to limit the import of counterfeit products”, and said this could potentially save $15 billion.
.....
Gautam

shaun · Post by **shaun** » 11 Dec 2020 07:01

vijayk wrote:
GhoseSpot @SandipGhose
OMG - what has #COVID19 done to the world. Can’t believe @TheEconomist
is praising #Aadhar and #JDY saying that’s what saved the day for migrants and dissing the US system in comparison. Read below Down pointing backhand index Kudos @narendramodi and @NandanNilekani
https://economist.com/international/202 ... identities

Questions of identity
Covid-19 spurs national plans to give citizens digital identities
MOSIP, an open-source platform developed in India, will be central to many of those efforts

International
Dec 7th 2020
WHEN MILLIONS of migrant workers were forced by India’s sudden covid lockdown to return to their villages from the cities where they worked, many feared destitution. But Aadhaar, the country’s pioneering biometric ID system, came to the rescue. Under an income scheme for farmers launched in 2014 that would have been impossible without Aadhaar, $1.5bn was transferred digitally and at speed into the bank accounts of 30m people, with little waste or fraud and almost no distribution cost.

Because 1bn accounts are linked to people’s Aadhaar identity numbers, India has been able to channel help to where it has been most needed with remarkable efficiency. Contrast that with America, where 90m paper cheques were laboriously sent through the mail, accompanied by a signed letter from President Donald Trump.

Covid has had a way both of exposing the weakest links in societies and of acting as a spur to innovation. Rich countries without national digital-ID systems can scrape through, thanks to myriad other ways people have of proving who they are—driving licences, credit cards, social-security numbers and so on. But for poor countries, the problem of getting covid-related help to their most vulnerable citizens is made infinitely more difficult when you do not know who they are or what services, such as health care and income support, they are entitled to.

Around the world, 1bn people have no formal proof of identity. More than 80% of them live in sub-Saharan Africa and the less well-off parts of Asia. Less than half of African children under five have their births registered. The poorest, women and those living in rural areas are least likely to have officially recognised IDs.

Something as seemingly straightforward but critically important as a vaccination registry to record who has had a jab and who has not, is easy to set up if you have a foundational digital-ID system to build it on, but much harder if you do not. Nandan Nilekani, the co-founder of Infosys, one of India’s largest IT-consulting and systems-integration firms, and the driving force behind Aadhaar, believes that the system will be crucial to authenticating digital certificates as a proof of vaccination.

Many governments in Africa and Asia have been inspired by the success of Aadhaar, which since its inception in 2009 has enrolled 1.3bn people. It has streamlined the delivery of services and payments, cut corruption, boosted financial inclusion and hugely raised participation in India’s digital economy. Before covid struck, encouraged by the launch of World Bank’s ID4D (“Identification for Development”) programme, which started in 2014, countries such as Morocco, the Philippines and Myanmar went to Delhi in search of help. But there is now a new sense of urgency.

However, Aadhaar is a complex system with its own set of application program interfaces, known as the India Stack, that could not easily be replicated. Having learned lessons from Aadhaar, Mr Nilekani proposed a different approach: building an open-source foundational ID platform that could be taken up by any country free of charge. The result is MOSIP, which stands for Modular Open Source Identity Platform.

With financial support from the World Bank, two countries—Morocco and the Philippines—are implementing national ID schemes based on MOSIP, which will be rolled out early next year. Three more—Ethiopia, Guinea and Sri Lanka—are working on pilots. Several others, including Ivory Coast, Togo and Tunisia, are keen on using MOSIP. There are plans for countries across west Africa to have a shared interoperable ID platform, allowing cross-border authentication. The aim is that by 2023, at least ten countries will be operating MOSIP-based digital-ID platforms and it will have become an international standard, each country having learned from the others’ deployments. And the covid emergency is lengthening the queue of countries at MOSIP’s door.

The MOSIP project, which got going in March 2018, is nested in Bangalore’s International Institute of Information Technology (IIIT-B) and endowed with funding of $16m from the Omidyar Network, the Bill and Melinda Gates Foundation and Tata Trusts. What it set out to do was to give countries with far less IT capacity than India’s a basis for establishing a cost-effective foundational identity system that was, in effect, “Aadhaar in a box”. Bangalore, according to C.V. Madhukar, Omidyar’s lead on digital identity, was the obvious place to base MOSIP. It could draw on technical know-how from Mr Nilekani’s original Aadhaar team, who were mostly still there, and on the resources of the iSPIRT Foundation, an organisation of volunteer engineers who donate their time to build software as a public good.

From the outset the MOSIP group, which is led by S. Rajagopalan, the entrepreneurial head of IIIT-B’s Innovation Centre, was clear on two points. The first was that MOSIP should be a standard-bearer for “good” digital ID. It had to be designed with a “citizen-centred” approach that ensured safety (protecting individual privacy and ensuring inclusion) and accountability (policies to limit use cases to those which are of general benefit and which cannot be perverted for purposes such as political suppression).

Countries applying to use MOSIP must assure its governing executive committee that as well as having sufficient digital infrastructure (or adequate funding to put it in place), their intentions for the system are benign and the underlying policy framework is robust. It is not a guarantee against misuse, but it is a worthy statement of principle.

The second was that MOSIP should be open-source, allowing all its protocols to be seen, developed and strengthened by collective effort. As Professor Rajagopalan says: “A lot of eyes are better than a few.” His vision is for MOSIP to become a thriving open-source project in which a community of developers and system integrators contribute to the long-term support and growth of the platform.

It was critical that implementing countries, though still needing to hire a professional systems integrator, would own the underlying identification platform including the software that supports it. Mr Madhukar notes that because national digital-ID systems are inherent monopolies, a key requirement for most countries is to avoid the perils of being locked into a single proprietary technology. MOSIP allows them to work with multiple application vendors, and remain in overall control of the system.

Because of its modular design (which separates the functions of each program into independent and interchangeable components) and configurability (which allows flexible solutions to real-world problems and simplifies deployment and maintenance), MOSIP can be adapted to different country contexts, laws and varying levels of digital infrastructure. Ease of customisation gives countries the option to pick the features they want to buy “off-the-shelf” and those they want to develop bespoke. For example, they can choose different modes of authentication, from biometrics to mobile one-time passwords. Another big decision that MOSIP leaves to its clients is whether to go for hosting the platform on national premises or the quicker, more scalable solution of the cloud. Either way, governments, rather than a third-party outfit, will own all their own data.

Over the next year or so, says Mr Madhukar, the MOSIP team will concentrate on “handholding” implementing countries and learning from them what works (and what does not) and further developing the architecture to integrate with a wide range of commercial software producers, while still avoiding the perils of vendor lock-in.

A big challenge for the future, as the number of countries wanting to use MOSIP grows, will be the capacity of local IT talent to build on the platform and create the data application layers to ensure interoperability with national registries and services. That will require the resources to train local providers and systems integrators, while also building a small community of developers that can be parachuted in to deal with specific problems. Without additional funding from philanthropic donors and the World Bank, or more help in kind from tech giants such as Google and Amazon, those efforts will stall.

That would be a pity. Chris Yiu, who leads the technology and policy team at the Tony Blair Institute for Global Change, is optimistic both about what digital ID in lower-income countries can achieve and how MOSIP can help. The institute is working with Oracle, a business computing firm, to establish vaccination registries across Africa. Mr Yiu says that “covid has played a forcing function” in making countries determined to run their health-care and welfare systems more efficiently and see digital-ID systems as the vital platform for doing so.

Other good things can come from that. Well-designed digital-ID systems, he argues, play a vital role in building trust in both government-to-citizen and citizen-to-citizen transactions, each of which are crucial drivers of social capital (those networks and relationships which are the bedrock of thriving societies) and economic development.

Questions of identity
Covid-19 spurs national plans to give citizens digital identities
MOSIP, an open-source platform developed in India, will be central to many of those efforts

https://www.mosip.io/

shaun · Post by **shaun** » 11 Dec 2020 07:02

vijayk wrote:
GhoseSpot @SandipGhose
OMG - what has #COVID19 done to the world. Can’t believe @TheEconomist
is praising #Aadhar and #JDY saying that’s what saved the day for migrants and dissing the US system in comparison. Read below Down pointing backhand index Kudos @narendramodi and @NandanNilekani

https://economist.com/international/202 ... identities

Questions of identity
Covid-19 spurs national plans to give citizens digital identities
MOSIP, an open-source platform developed in India, will be central to many of those efforts

International
Dec 7th 2020
WHEN MILLIONS of migrant workers were forced by India’s sudden covid lockdown to return to their villages from the cities where they worked, many feared destitution. But Aadhaar, the country’s pioneering biometric ID system, came to the rescue. Under an income scheme for farmers launched in 2014 that would have been impossible without Aadhaar, $1.5bn was transferred digitally and at speed into the bank accounts of 30m people, with little waste or fraud and almost no distribution cost.

Because 1bn accounts are linked to people’s Aadhaar identity numbers, India has been able to channel help to where it has been most needed with remarkable efficiency. Contrast that with America, where 90m paper cheques were laboriously sent through the mail, accompanied by a signed letter from President Donald Trump.

Covid has had a way both of exposing the weakest links in societies and of acting as a spur to innovation. Rich countries without national digital-ID systems can scrape through, thanks to myriad other ways people have of proving who they are—driving licences, credit cards, social-security numbers and so on. But for poor countries, the problem of getting covid-related help to their most vulnerable citizens is made infinitely more difficult when you do not know who they are or what services, such as health care and income support, they are entitled to.

Around the world, 1bn people have no formal proof of identity. More than 80% of them live in sub-Saharan Africa and the less well-off parts of Asia. Less than half of African children under five have their births registered. The poorest, women and those living in rural areas are least likely to have officially recognised IDs.

Something as seemingly straightforward but critically important as a vaccination registry to record who has had a jab and who has not, is easy to set up if you have a foundational digital-ID system to build it on, but much harder if you do not. Nandan Nilekani, the co-founder of Infosys, one of India’s largest IT-consulting and systems-integration firms, and the driving force behind Aadhaar, believes that the system will be crucial to authenticating digital certificates as a proof of vaccination.

Many governments in Africa and Asia have been inspired by the success of Aadhaar, which since its inception in 2009 has enrolled 1.3bn people. It has streamlined the delivery of services and payments, cut corruption, boosted financial inclusion and hugely raised participation in India’s digital economy. Before covid struck, encouraged by the launch of World Bank’s ID4D (“Identification for Development”) programme, which started in 2014, countries such as Morocco, the Philippines and Myanmar went to Delhi in search of help. But there is now a new sense of urgency.

However, Aadhaar is a complex system with its own set of application program interfaces, known as the India Stack, that could not easily be replicated. Having learned lessons from Aadhaar, Mr Nilekani proposed a different approach: building an open-source foundational ID platform that could be taken up by any country free of charge. The result is MOSIP, which stands for Modular Open Source Identity Platform.

With financial support from the World Bank, two countries—Morocco and the Philippines—are implementing national ID schemes based on MOSIP, which will be rolled out early next year. Three more—Ethiopia, Guinea and Sri Lanka—are working on pilots. Several others, including Ivory Coast, Togo and Tunisia, are keen on using MOSIP. There are plans for countries across west Africa to have a shared interoperable ID platform, allowing cross-border authentication. The aim is that by 2023, at least ten countries will be operating MOSIP-based digital-ID platforms and it will have become an international standard, each country having learned from the others’ deployments. And the covid emergency is lengthening the queue of countries at MOSIP’s door.

The MOSIP project, which got going in March 2018, is nested in Bangalore’s International Institute of Information Technology (IIIT-B) and endowed with funding of $16m from the Omidyar Network, the Bill and Melinda Gates Foundation and Tata Trusts. What it set out to do was to give countries with far less IT capacity than India’s a basis for establishing a cost-effective foundational identity system that was, in effect, “Aadhaar in a box”. Bangalore, according to C.V. Madhukar, Omidyar’s lead on digital identity, was the obvious place to base MOSIP. It could draw on technical know-how from Mr Nilekani’s original Aadhaar team, who were mostly still there, and on the resources of the iSPIRT Foundation, an organisation of volunteer engineers who donate their time to build software as a public good.

From the outset the MOSIP group, which is led by S. Rajagopalan, the entrepreneurial head of IIIT-B’s Innovation Centre, was clear on two points. The first was that MOSIP should be a standard-bearer for “good” digital ID. It had to be designed with a “citizen-centred” approach that ensured safety (protecting individual privacy and ensuring inclusion) and accountability (policies to limit use cases to those which are of general benefit and which cannot be perverted for purposes such as political suppression).

Countries applying to use MOSIP must assure its governing executive committee that as well as having sufficient digital infrastructure (or adequate funding to put it in place), their intentions for the system are benign and the underlying policy framework is robust. It is not a guarantee against misuse, but it is a worthy statement of principle.

The second was that MOSIP should be open-source, allowing all its protocols to be seen, developed and strengthened by collective effort. As Professor Rajagopalan says: “A lot of eyes are better than a few.” His vision is for MOSIP to become a thriving open-source project in which a community of developers and system integrators contribute to the long-term support and growth of the platform.

It was critical that implementing countries, though still needing to hire a professional systems integrator, would own the underlying identification platform including the software that supports it. Mr Madhukar notes that because national digital-ID systems are inherent monopolies, a key requirement for most countries is to avoid the perils of being locked into a single proprietary technology. MOSIP allows them to work with multiple application vendors, and remain in overall control of the system.

Because of its modular design (which separates the functions of each program into independent and interchangeable components) and configurability (which allows flexible solutions to real-world problems and simplifies deployment and maintenance), MOSIP can be adapted to different country contexts, laws and varying levels of digital infrastructure. Ease of customisation gives countries the option to pick the features they want to buy “off-the-shelf” and those they want to develop bespoke. For example, they can choose different modes of authentication, from biometrics to mobile one-time passwords. Another big decision that MOSIP leaves to its clients is whether to go for hosting the platform on national premises or the quicker, more scalable solution of the cloud. Either way, governments, rather than a third-party outfit, will own all their own data.

Over the next year or so, says Mr Madhukar, the MOSIP team will concentrate on “handholding” implementing countries and learning from them what works (and what does not) and further developing the architecture to integrate with a wide range of commercial software producers, while still avoiding the perils of vendor lock-in.

A big challenge for the future, as the number of countries wanting to use MOSIP grows, will be the capacity of local IT talent to build on the platform and create the data application layers to ensure interoperability with national registries and services. That will require the resources to train local providers and systems integrators, while also building a small community of developers that can be parachuted in to deal with specific problems. Without additional funding from philanthropic donors and the World Bank, or more help in kind from tech giants such as Google and Amazon, those efforts will stall.

That would be a pity. Chris Yiu, who leads the technology and policy team at the Tony Blair Institute for Global Change, is optimistic both about what digital ID in lower-income countries can achieve and how MOSIP can help. The institute is working with Oracle, a business computing firm, to establish vaccination registries across Africa. Mr Yiu says that “covid has played a forcing function” in making countries determined to run their health-care and welfare systems more efficiently and see digital-ID systems as the vital platform for doing so.

Other good things can come from that. Well-designed digital-ID systems, he argues, play a vital role in building trust in both government-to-citizen and citizen-to-citizen transactions, each of which are crucial drivers of social capital (those networks and relationships which are the bedrock of thriving societies) and economic development.

vimal · Post by **vimal** » 11 Dec 2020 07:38

Again India decided to hand over its IP for free. Any other nation would’ve used this as another tool of leverage.

bharathp · Post by **bharathp** » 11 Dec 2020 11:31

vimal wrote:Again India decided to hand over its IP for free. Any other nation would’ve used this as another tool of leverage.

follow the freemium model. always give platform for free.. let as many join as possible. then you can use Indian IT talent on top of it. this is how android is now on 85% of the world's mobile systems. and besides, there are not much of marginal costs on this. use for long term benefit - not short term benefit.

vimal · Post by **vimal** » 11 Dec 2020 12:25

I really hope that we can leverage a paid model and turn this into a multi-billion dollar business that can be used by India.

Suraj · Post by **Suraj** » 11 Dec 2020 14:25

It’s an open source stack, with the decision made as such in order to assure citizens of privacy and integrity concerns. The real money is in the systems integration job, at which Indian outsourcing companies have plenty of experience. The value is not in the IP; the ability of a government to manage the setup and the ability of IT corps to implement solutions has far greater bearing on this. The domestic IT majors can be very competitive on bids for this project elsewhere. Whether it works well there depends on how good the governments are , and of course the Indian government can offer paid training to their civil servants.

Suraj · Post by **Suraj** » 12 Dec 2020 03:31

Industrial production growth scales eight-month peak of 3.6% in October

Industrial production growth scaled an eight-month peak of 3.6%, year-on- year, in October, driven by inventory building to cater for festive demand. While the recovery in October is better than the 0.5% rise in September, which had recorded the first expansion since February, it came on a favourable base (IIP had contracted by 6.6% in October 2019).

Capital goods output reversed a 21-month slide in October, although it rose by only 3.3%, still reflecting gloomy investment climate.

Consumer durables output, however, jumped by 17.6%, y-o-y, in October, against just 3.4% in the previous month. This was the second rise after 15th straight month of contraction. Non-durables saw a 7.5% increase in October, against 2.5% in September.

Manufacturing rose 3.5% in October, the first increase since February, while electricity output growth hit an eight–month peak of 12.2%, compared with 4.9% in September. However, mining slipped back into contraction, with a fall of 1.5% in October, against a 1.4% rise in the previous month.

Forex reserves rise $4.5 billion to almost $580 billion

The country’s foreign exchange reserves surged by USD 4.525 billion to touch a record high of USD 579.346 billion in the week ended December 4, the RBI data showed.

India’s recovery faster than expected; ADB cuts contraction projection to 8% for FY21

The Asian Development Bank (ADB) on Thursday upgraded its forecast for the Indian economy, projecting 8 per cent contraction in 2020-21 as compared to 9 per cent degrowth estimated earlier, on the back of faster than expected recovery.

Observing that the economy has begun to normalise, the Asian Development Outlook (ADO) Supplement said the second quarter contraction at 7.5 per cent was better than expected.

“The GDP forecast for FY2020 is upgraded from 9.0 per cent contraction to 8.0 per cent, with GDP in H2 probably restored to its size a year earlier. The growth projection for FY2021 is kept at 8.0 per cent,” it said.

Highlighting that India is recovering more rapidly than expected, the report said the earlier South Asia forecast of 6.8 per cent contraction is upgraded to (-)6.1 per cent in line with an improved projection for India.

Growth will return in 2021-22, at 7.2 per cent in South Asia and 8 per cent in India, it added.

Fitch Ratings improves India’s GDP projections; says economy recovered strongly in Q2

Fitch Ratings revised up India’s GDP projection to a contraction of 9.4 per cent due to a strong economic recovery in the second quarter of the current fiscal year. It earlier suggested that India’s GDP may shrink by 10.5 per cent in the FY21. Fitch Ratings further projected an 11 per cent growth and 6.3 per cent growth in the following years. In its Global Economic Outlook, the rating agency said that the coronavirus recession has inflicted severe economic scarring and the country needs to repair balance sheets and increase caution about long-term planning. It is to be noted that following the first-quarter results, Fitch Ratings had revised the full-year GDP projections to a contraction of 5 per cent, from a contraction of 10.5 per cent.

“The rebound in activity was especially sharp in the manufacturing sector as output reached its pre-pandemic level in Q2, and the manufacturing PMI hints at further gains,” the report said. It added that manufacturing is buoyed by strong demand for autos and pharmaceutical products, in particular. On the other hand, the rebound in the services sector was more muted amid continued social distancing, with containment measures scaled back only gradually.

CV sales are typically a leading indicator of growth:
India’s economic revival catches pace; commercial vehicle sales jump in November

The sales of commercial vehicles in India rose significantly in the month of November, as the economic revival caught pace after months of lockdown. As the country witnessed a gradual rise in infrastructure activities and growth in the e-commerce sector, retail sales of commercial vehicles rose 12.7 per cent on-month in November, said a report by Care Ratings. However, the rise in demand was mostly seen in light commercial vehicles. While the demand for the bus segment remained muted as most schools continue to remain closed and a large number of offices still practice the work from home culture, the medium and heavy commercial vehicles also grappled.

The major reasons for low demand for medium and heavy CVs were inflated prices of BS-6 models, sourcing finance, high fuel prices, and no implementation of the scrappage policy, the report added. Compared to passenger vehicle sales, the sales of commercial vehicles is believed to be a more important parameter to gauge economic progress.

vijayk · Post by **vijayk** » 15 Dec 2020 08:48

https://www.financialexpress.com/econom ... p/2146453/
India may regain ‘fastest-growing economy’ tag in 2021; base effect, Modi govt policies to help

In the year 2021, India is projected to grow faster than most major economies, including European nations, developed markets, and emerging markets.

India may dramatically reverse the economic loss it suffered in 2020, and may regain the fastest growing economy tag in the next year. In the year 2021, India is projected to grow faster than most major economies, including European nations, developed markets, and emerging markets. While the low base effect is believed to be the biggest reason for the sharp economic recovery, Prime Minister Narendra Modi government’s measures are also among the significant reasons behind the expected rebound.

From a 23.9 per cent contraction in the fiscal’s first quarter, the Indian economy improved to a contraction of 7.5 per cent in Q2. This has also led to increased optimism for India’s growth in the subsequent quarters. In a series of forecast revisions, many credit rating agencies have raised India’s growth projections.

Meanwhile, Moody’s has also raised the growth forecast for the next fiscal year FY 2021-22 from 10.6 per cent to 10.8 per cent.

Suraj · Post by **Suraj** » 16 Dec 2020 00:48

S&P also upgrades growth forecasts, becoming the second entity to project >10% GDP growth next fiscal:
S&P improves India’s growth forecast for FY21; says, country recovering faster than expected

The trend of rating agencies improving India’s GDP forecasts continues, with the latest revision done by S&P Global Ratings. S&P has revised India’s real GDP growth estimates of the current fiscal year to a contraction of 7.7 per cent, from 9 per cent. Further, in the year 2021-22, the rating agency has estimated the growth to rebound to 10 per cent. The improved perception of India’s growth is due to a faster-than-expected recovery in the current fiscal’s second quarter, rising demand, and a falling rate of Covid-19 infections.

S&P said India is learning to live with the virus, even though the pandemic is far from defeated and reported cases have fallen by more than half from peak levels, to about 40,000 per day. However, the feared resurgence following the recent holiday season is yet to materialise. India is following the path of most economies across Asia-Pacific in experiencing a faster-than-expected recovery in manufacturing production, which is no surprise, said S&P Global Ratings Asia-Pacific chief economist Shaun Roache.

It is to be noted that India’s economy shrank 7.5 per cent in Q2, after a record slump of 23.9 per cent in Q1. While the manufacturing output was nearly 3.5 per cent on-year higher in October 2020, the output of consumer durables rose by almost 18 per cent. On the back of a significant improvement in the macroeconomic numbers, Fitch Ratings had also revised its growth forecast for India to (-) 9.4 per cent, from (-) 10.5 per cent earlier this week.

FDI into India continuously growing, says Piyush Goyal

Foreign direct investments (FDIs) into India have been continuously growing as the country has one of the most facilitative policies to attract overseas investors, Commerce and Industry Minister Piyush Goyal said on Tuesday. He said that during April-September 2020, FDI increased 13 per cent to about USD 40 billion.

The minister said that 100 per cent FDI is allowed through automatic route in almost all sectors. For certain sectors such as telecom, media, pharmaceuticals and insurance, government approval is required for foreign investors. There are nine sectors where FDI is prohibited and that are lottery business, gambling and betting, chit funds, Nidhi company, real estate business, and manufacturing of cigars, cheroots, cigarillos and cigarettes using tobacco.

tl;dr - too much money coming in and RBI can barely keep the Rupee from appreciating:
Wave of foreign money threatens India’s tight grip on rupee

A relentless torrent of funds rushing into India’s markets may tip the central bank’s delicate balancing act in 2021. For most of this year, the Reserve Bank of India has capped currency gains as global investors poured around $50 billion into stocks and stakes in companies. This has boosted rupee liquidity in a banking system that’s already flush with cash from the RBI’s stimulus measures.

Inflows into India’s equity markets have grown to more than $20 billion this year, on course for the most on an annual basis since 2012. Foreign investors have also completed about $30 billion of acquisitions in cash, according to data compiled by Bloomberg.

In India, capital inflows may reach $82 billion by the end of the fiscal year though March, then continue at much the same pace for the following 12 months, according to estimates from Deutsche Bank AG.

“Given the multiple challenges from excess liquidity due to capital flows and inflation, the RBI may be forced to reduce the intervention and allow appreciation,” said Arvind Chari, head of fixed income and alternatives at Quantum Advisors Pvt.

It would not be surprising to see the Rupee appreciate to Rs.65-70/$ in the next 12 months. The factors in play include continuous FDI, the projected growth next fiscal, and multiple PLI driven electronics factories coming onstream, which may enhance exports by up to $30-40 billion a year, potentially moving merchandise trade to near neutral or even a surplus within the next 2-3 years.

nam · Post by **nam** » 16 Dec 2020 01:32

The next step should be to push Walmart & Amazon to start exporting more from India, instead of China. The fact that these two companies are the biggest ecom companies in India, gives us an advantage. CCP prevented these from coming up in China. These two can drive a huge cheap goods ecosystem, which China today makes.

Walmart has already announced it will export around 10B by 2027. Need to get their earlier.

nachiket · Post by **nachiket** » 16 Dec 2020 01:37

Suraj wrote: It would not be surprising to see the Rupee appreciate to Rs.65-70/$ in the next 12 months. The factors in play include continuous FDI, the projected growth next fiscal, and multiple PLI driven electronics factories coming onstream, which may enhance exports by up to $30-40 billion a year, potentially moving merchandise trade to near neutral or even a surplus within the next 2-3 years.

Would the RBI allow such a steep increase without intervention? I highly doubt that. The RBI has always erred on the side of exchange rate stability as far as it could. The article you have linked itself mentions a much more modest appreciation to 72 by end of 2021 and 70 by mid 2022 if the inflows are sustained. Even that would be quite significant assuming it happens.

We also have to look at the medium term impact of the loss of factory output in the NCR and surrounding areas due to the continuing protests and the latest incident at the Wistron factory in Bengaluru and its potential impact on their own plans as well as those of others looking to set up manufacturing facilities.

Avtar Singh · Post by **Avtar Singh** » 16 Dec 2020 01:52

I have always maintained and not really been believed that the INR will be the worlds next;
"mighty Mark" referring to the powerhouse/productivity status of the German economy in the 1980s.

It is the only fiat currency that is not being debased and has positive interest rates...

Not familiar with the bond market but I presume it is not part of the 17trn yielding negative.
Bond market needs to be become the generator of foreign reserves without selling off the family silver.

Growing economy, prospects which cannot be imagined at this point.

So all the constituents that make up a strong currency await India...

If I was a rich man, besides gold and bitcoin my largest fiat currency holding would be the INR.

Uttam · Post by **Uttam** » 16 Dec 2020 01:54

nachiket wrote: Would the RBI allow such a steep increase without intervention? I highly doubt that. The RBI has always erred on the side of exchange rate stability as far as it could. The article you have linked itself mentions a much more modest appreciation to 72 by end of 2021 and 70 by mid 2022 if the inflows are sustained. Even that would be quite significant assuming it happens.

The main tool that RBI has to prevent INR appreciation is to buy USD and other FOREX from open market. That is, to buy FOREX from businesses in turn giving them INR. This increases the flow of INR in the economy increasing liquidity. Liquidity by itself is good but at very high levels it stokes inflation. So, RBI has to deal with two countering forces. A quick appreciation of INR will hurt India's exports and make manufacturing more costly. Trying to depreciate INR (or prevent appreciation) too much may cause inflation. RBI manages INR as a "managed float", meaning RBI allows INR to move from one price to another gradually. I believe it will continue doing so. It will keep buying FOREX to keep INR low and use other actions and open market operations to absorb excess liquidity from the market (such as selling bonds, increasing CRR for banks, etc).

Suraj · Post by **Suraj** » 16 Dec 2020 01:58

'Allow' suggests they have the fiscal means to prevent it. Unlike the PBOC in Beijing, RBI cannot independently issue bonds to sterilize forex inflows. It has to be authorized by the government, and there's a cost associated with this since interest has to be paid on the bonds by the RBI and therefore the government - which has to budget for it.

I'm not in favor of the Rupee moving freely, and a 'dirty peg' where movement upward within a range is telegraphed ahead of time, is best. In the next two years they may have forex reserves anywhere between $650-750 billion. PLI could result in a lot more forex growth that has no associated external debt component that exists in the case of repatriable inflows. Already, in a year where they are strained for stimulus spending, they're constrained by ~$100 billion (+22%) gain in forex reserves over a single year. Paradoxically in that period the Rupee has marginally weakened. This is not a sustainable track, especially if forex reserves increase a further $100-150 billion in the next year or so as estimated in the article.

Please see the DIPP FDI data posted earlier. Just for the July-Sept quarter, FDI fresh inflows were $23 billion ($28 billion including reinvested FDI), more than annual inflows in the recent past. Most of it came after the PLI policy announcement in July, and several more sectors were opened up to PLI in October, the FDI data for which will only show up when DIPP updates and reports the Oct-Dec quarter FDI figures. As the Bloomberg article above states, total FPI + FDI inflows this year are likely to be in the $85 billion range (already over $50 billion a little over half way through the year) - by some distance an all time high.

disha · Post by **disha** » 16 Dec 2020 04:12

The only way GOI can manage to let the Rupee float remain stable and also able to absorb a huge inflow of the dollar is by increasing capital spending behind infrastructure.

For example, India building HSR across the board will result in both rupee and dollar spending. Another great example is more infrastructure spending on ports, opening up dedicated freight corridors (DFC), education and health infrastructure or communication and other services infrastructure will have a goldilocks effect on spending.

That is, the rupee spent actually lowers the inflation! This is counter-intuitive initially since it is assumed as a sacrosanct that more spending will lead to inflation. Instead, if one views inflation as basically demand chasing supply leading to constriction of supply and hence the price rise, all one requires is to efficiently move goods and services to where demand is more. Or one can even turn it around and state that inefficient or insufficient evacuation of supply leads to inflation even if the demand is not rising.

DFC for example solves the evacuation problem. For example, if the onion producing regions in India (Mah/Guj/UP/Ktka) can evacuate their produce efficiently where demand is or in case of adverse weather, import of onions is handled efficiently at the ports, the expected inflationary price rise in onion does arise. Above is a rather simple example.

An example of service will be to remotely send your CT scan or say lung x-rays digitally to radiologists in the cities and get back their evaluation. This has the effect of increasing the productivity of the radiologists (since they can process more in a given unit of time) or more scans can be processed in a given unit of time (a radiologist in Assam is able to process scans from say, Bihar).

Either of the above requires substantial investment in infrastructure. You need to produce more radiologists (education) or have the digital infrastructure in place (fiber net).

The additional dollars give GOI the opportunity to bring appropriate technology from all over the world. Whether it is from Alstom or Toyota or Embraer.

PS: Given the above, do not get surprised if GOI announces a slew of HSR or Expressways or Sagarmala projects or spending on Swaach bharat mission or announcing more solar parks.

Vips · Post by **Vips** » 16 Dec 2020 04:47

Findings of NFHS-5 show India’s population is stabilising: Population Foundation of India.

India’s population is stabilising, as the total fertility rate (TFR) has decreased across majority of the states. Of 17 states analysed in the fifth round of National Family Health Survey (NFHS), except for Bihar, Manipur and Meghalaya, all other states have a TFR of 2.1 or less, which implies that most states have attained replacement level fertility, an analysis by the Population Foundation of India (PFI) has said.

The first set of findings from the fifth NFHS, conducted in 2019-20, was released by the Ministry of Health and Family Welfare on Saturday, December 12, four years after the last survey (NFHS-4, 2015-16).

NFHS 5 merits urgent attention, as this is the most comprehensive and robust data at scale on health and family welfare and emerging issues in this area, stated PFI.

All 17 states have witnessed an increase in the use of modern contraceptives of family planning. The proportion of women with unmet need for family planning, who want to stop or delay child-bearing but are not using any method of contraception, has declined in all states, except Meghalaya and Andhra Pradesh. Except for Manipur, all states have reported an increase in users getting information on side effects of current contraceptive methods, said Poonam Muttreja, executive director of PFI.

Bart S · Post by **Bart S** » 16 Dec 2020 05:13

nam wrote:The next step should be to push Walmart & Amazon to start exporting more from India, instead of China. The fact that these two companies are the biggest ecom companies in India, gives us an advantage. CCP prevented these from coming up in China. These two can drive a huge cheap goods ecosystem, which China today makes.

Walmart has already announced it will export around 10B by 2027. Need to get their earlier.

That counts for diddly squat. They will continue importing from the place that gives them the best margins and has the most efficient logistics and supply chain. There is no easy way around it, India needs to deregulate and reform labour laws and invest rapidly in infrastructure in order to complete. That is the only sustainable way, though maybe pushing Amazon and Walmart might have some minor short-term returns.

Suraj · Post by **Suraj** » 16 Dec 2020 05:15

Please keep this thread focused. If you’re going to say ‘reform labour laws’ two months after major labour reforms then please have some specific arguments about what you consider the shortcomings of the recent reforms. This isn’t a place for banter.

nam · Post by **nam** » 16 Dec 2020 18:30

Bart S wrote: That counts for diddly squat. They will continue importing from the place that gives them the best margins and has the most efficient logistics and supply chain. There is no easy way around it, India needs to deregulate and reform labour laws and invest rapidly in infrastructure in order to complete. That is the only sustainable way, though maybe pushing Amazon and Walmart might have some minor short-term returns.

The advantage is Walmart will be buying to sell in two markets: US & India, while with China, it is buying for one market: US.

Deregulation and labour thing has been discussed multiple times. If companies see the demand, they will set up shop, irrespective of the laws.

chola · Post by **chola** » 17 Dec 2020 06:02

nam wrote:
Bart S wrote: That counts for diddly squat. They will continue importing from the place that gives them the best margins and has the most efficient logistics and supply chain. There is no easy way around it, India needs to deregulate and reform labour laws and invest rapidly in infrastructure in order to complete. That is the only sustainable way, though maybe pushing Amazon and Walmart might have some minor short-term returns.
The advantage is Walmart will be buying to sell in two markets: US & India, while with China, it is buying for one market: US.

Deregulation and labour thing has been discussed multiple times. If companies see the demand, they will set up shop, irrespective of the laws.

No, Nam ji. It is the other way around. There are 438 Walmarts in China. Walmart only runs about 20 storefronts in India under Best Price something -- they cannot use Walmart brand as a retailer in Bharat.

They'll undoubtedly try to leverage sourcing to enter the Indian market.

Bart S · Post by **Bart S** » 17 Dec 2020 06:35

nam wrote:
Bart S wrote: That counts for diddly squat. They will continue importing from the place that gives them the best margins and has the most efficient logistics and supply chain. There is no easy way around it, India needs to deregulate and reform labour laws and invest rapidly in infrastructure in order to complete. That is the only sustainable way, though maybe pushing Amazon and Walmart might have some minor short-term returns.
The advantage is Walmart will be buying to sell in two markets: US & India, while with China, it is buying for one market: US.

Deregulation and labour thing has been discussed multiple times. If companies see the demand, they will set up shop, irrespective of the laws.

Nothing of the sort is happening or will happen in this kind of market space (trading of cheap goods). The market pressure might work for e.g for mobile phones etc where we are a sufficiently large market and can be competitive on cost but not going to happen with these kinds of items unless we get our act together on being more competitive across the land-labour-logistics spectrum.

Almost all Amazonbasics stuff sold in India is imported from China. Same with Flipkart Smartbuy items.

Even reputed Indian brands like Wipro, Bajaj Electricals, Orpat etc basically just import Chinese stuff with their badge stamped on it, as local manufacturing was not competitive or profitable enough vs Chinese imports or lacked incentives.

Oh, and Walmart and the like are sourcing for both China and the US in China, it is we who don't allow them a direct retail presence in the country. Plus most of those Chinese vendors whom they source from also sell to other major firms in the domestic and international market and not just to Walmart, a benefit of having a competitive environment for manufacturing. OTOH IKEA which has a couple of stores in the country, does source some items (still low end and low value, but a start) from India.

hnair · Post by **hnair** » 17 Dec 2020 08:46

When I first went to a khanland IKEA (late 90s), it used to carry stuff sourced from all sorts of places, ranging from India, east europe, ASEAN to africa. You will only see cheen maal occasionally. But recently when I checked out a khanland ikea, it seem to be all cheen maal. It basically crowded out all, by hook or crook. Cheen's brute force method of undercutting all smaller global producers can be bought down only by a concerted "Evil Empire" kind of branding exercise and tangible action. But Walmart and co will lobby DC to not do so.

So Cheen is certainly sitting smug, but then as is their wont, will do something stupid sooner than later to piss off everyone.

V_Raman · Post by **V_Raman** » 17 Dec 2020 08:52

How difficult is it to setup a plant to make high quality plastic spoon/forks/knives that are being imported from china?

Also why is India not making high grade 18/10 and 18/0 stainless steel utensils - like spoon/fork/knife sets? we have so many stainless steel manufacturing in India! Amazon Basics 18/0 set is imported from china...

Bart S · Post by **Bart S** » 17 Dec 2020 09:01

V_Raman wrote:How difficult is it to setup a plant to make high quality plastic spoon/forks/knives that are being imported from china?

Also why is India not making high grade 18/10 and 18/0 stainless steel utensils - like spoon/fork/knife sets? we have so many stainless steel manufacturing in India! Amazon Basics 18/0 set is imported from china...

To be fair, lots of good cutlery (plastic and steel) is made in India. Amazonbasics is their global brand and almost all sourced from China. But they do have the odd Solimo branded item that is sourced locally. But Indian cutlery manufacturers can easily match and exceed the Amazonbasics quality and price if properly incentivized.